FCC Amends, Clarifies 800 MHz Rebanding Rules

In rules adopted last year, the FCC sought to end interference to public safety communications in the 800 MHz band caused by the incompatibility of 2 types of system used by public safety and Enhanced Specialized Mobile Radio (ESMR) and cellular licensees. A Dec. Supplemental Order clarified and revised parts of the original 800 MHz Order. Affected parties challenged both orders, but the Supplemental Order resolved some issues in the reconsideration petitions filed in response to the 800 MHz Order.

In an order released late Wed. the FCC amended and clarified eligibility rules limiting access to the ESMR portion of the band. Answering requests by Airpeak Communications, North Point Communications and others, the agency provided a “broader” definition of “800 MHz cellular systems” that may operate in the ESMR portion. The new definition continues to exclude conventional “high site” systems but allows iDEN-based and other cellular systems. The FCC also modified and clarified the relocation rights of 800 MHz incumbent licensees, based on requests by Airpeak and the Safety & Frequency Equity Competition Coalition. For example, the FCC granted Airpeak’s request that all site-based cells now integrated into an ESMR network be deemed eligible for relocation into the ESMR band.

“It’s a positive order for Airpeak and Airtel [Wireless],” said Elizabeth Sachs, who represents Airpeak and Airtel: “Airpeak and Airtel are the only entities in the country who deployed iDEN networks before the proceeding began, other than Nextel and SouthernLINC… so we wanted [them to] continue to operate the systems they invested in, and the Commission made sure they aren’t disadvantaged by the rebanding.” Although the FCC didn’t grant all the firms’ requests, Sachs said: “The FCC addressed all our issues and tried to provide a responsive answer consistent with other factors that they had to consider in this very complicated proceeding.”

The FCC restated its authority under the Communications Act to implement 800 MHz band reconfiguration, including the authority to modify Nextel’s licenses to permit operations in the 1.9 GHz band. The FCC last year said Nextel should be compensated for spectrum it would surrender at 800 MHz and its costs for band reconfiguration by getting nationwide access to 10 MHz of the 1910-1915 MHz and 1990-1995 MHz bands. That decision was contested by at least 4 petitioners. “In the Auction Reform Act of 2002, Congress clearly indicated its approval of the Commission considering allocating spectrum outside the 800 MHz band in order to resolve the interference problems in the 800 MHz band,” the FCC said. It said “spectral separation” was “the only feasible means to protect public safety licensees from unacceptable interference, now and in the future.” The agency also rejected a Coastal SMR Network argument that the Commission violated the Anti-Deficiency Act or the Miscellaneous Receipts Act.

The FCC wouldn’t revalue 1.9 GHz and 800 MHz spectrum involved in the proceeding. The agency has said the fair market value of the 1.9 GHz band replacement spectrum rights is $1.70 MHz-pop or about $4.86 billion. A petitioner demanded the FCC revalue that spectrum using a July 8, 2004, Verizon Wireless purchase of 10 MHz of PCS spectrum in N.Y. for $930 million rather than using a VW/Northcoast transaction in which VW paid only $481 million for 10 MHz in N.Y. Doing so, the petitioner argued, would raise the 1.9 GHz spectrum rights’ fair market value to $2.19 MHz-pop. But the FCC said it could “see no reason to revisit the valuation based on Verizon or any subsequent transaction. We believe that continuing to alter our valuation based on the latest transactions would create continuing uncertainty, undermine the band reconfiguration process and violate the cardinal regulatory principal of administrative finality.”

The FCC said it wouldn’t reevaluate its order in light of Nextel’s recent merger with Sprint. “The combination of the 2 licensees’ financial resources suggests that the merged entity would be better equipped to bear the cost of band reconfiguration,” the FCC said in response to Duncan’s challenge: “Accordingly, we decline to revisit the fair market value of the 1.9 GHz spectrum based on any alleged ‘cost savings’ Nextel will receive as a consequence of the merger.”

A Sprint Nextel spokesman said the company is “pleased the FCC has provided additional certainty for licensees regarding the 800 MHz reconfiguration process.” He said the decision is “another step toward eliminating interference to public safety radios at 800 MHz.” Christine Gill, who represents SouthernLINC, said her client is “pleased the FCC resolved the issue in Atlanta. It will allow the rebanding to go forward.”

The Transition Administrator (TA) will “move promptly” to carry out directions the FCC provided in the order, said TA representative Robert Kelly. The TA is “pleased” the FCC permitted it to follow a calendar year for reporting schedule purposes, Kelly said: “The change in the schedule will allow better coordination with other regulatory agency requirements” and will enable the TA to better report to the FCC on fiscal and other aspects of reconfiguration progress.

The FCC also: (1) Declined to exempt some public safety licensees from freezing processing of applications region by region, but said it would “expedite an evaluation of requests for waiver of the freeze filed by public safety entities.” APCO, a primary public safety representative in the proceeding, had no comment. (2) Narrowed the Expansion Band in the Atlanta region. (3) Let Nextel get credit in the 800 MHz “true-up” process for relocation of certain additional BAS incumbent licensees whose licenses were issued before Nov. 12, 2004. (4) Clarified the definition of “unacceptable interference” and “critical infrastructure industries” (CII).

The FCC declined to: (1) Publish a table of frequency assignments as part of band reconfiguration. (2) Require frequency coordination for all band reconfiguration applications. (3) Let CII licensees relocate out of the Expansion Band. (4) Extend mandatory negotiation periods for bcst. auxiliary service (BAS) incumbents in the 1.9 GHz band. (5) Amend reimbursement rights accorded mobile satellite service licensees that commenced operation in the 1.9 GHz band subsequent to the BAS relocation deadline but before the 800 MHz true-up period. (6) Address 900 MHz interference and spectrum trafficking issues outside the proceeding’s scope.