Decision on Lease Restrictions Seen as Determining Rollout of Services on EBS Frequencies

The key question is whether the FCC will impose a 15- year term on leases. NIA and CTN want term limits so their members can reevaluate whether to use or keep leasing their spectrum. Firms wanting to lease the spectrum said no one will invest the requisite billions without a long-term lease.

NTA and CTN have spoken with staff and want face post-holiday time with comrs. “The 15-year limit is something that is highly desired from an educational perspective,” said Todd Gray, counsel to NTA. “It is necessary for the FCC to maintain it for the perceived educational benefit to be realized the way that the FCC contemplated it in the order last year.”

Allowing leases longer than 15 years would be tantamount to letting institutions sell off spectrum, Gray said. “If you allow people to lease their spectrum for an unlimited time, you permit to happen what the FCC didn’t want. They've essentially sold their spectrum.” Gray said the 2 groups will keep working with wireless operators on EBS rollout, but on lease terms they differ irreconcilably. “This isn’t a nasty fight. There’s no name calling going on,” he said. “We have lease negotiations going on all over the place… We all get along. But on this particular issue they have decided they want to grab more.” If the FCC allows longer lease terms, educational institutions will have little choice but to accept those terms, he said. “The reality is whatever is the ceiling becomes the floor,” Gray said. “If they change it to 30 years or 50 years or 99 years that is the only thing that would be offered to anybody.”

Gray said EBS lease holders have little leverage as they negotiate terms. “You've got essentially one very large company [Sprint] and one upstart company [Clearwire] trying to sign up all these channels,” he said. “Both of them are adamant you have to do these longer deals.” Gray said that if his members refuse to sign: “They're left with nothing.”

Paul Sinderbrand, counsel to the Wireless Communications Assn., said the issue for Sprint Nextel, Clearwire, Nextwave Broadband and other companies is the need for certainty before investing. Nextwave and Clearwire have met with Chmn. Martin. Sinderbrand said his side plans to meet with comrs. “This is [about] the future of the band, at least the EBS portion of the band,” Sinderbrand said. “The reality is the advanced broadband network that the Commission wants at 2.5 GHz… can’t attract investment dollars if the access to the spectrum can only be assured for 15 years… If we're limited to 15 years the investments are going to other spectrum where licensees can own the spectrum and the uncertainty can be eliminated.”

WCA said in a filing this week: “If the Commission unduly restricts the length of EBS excess capacity leases, many potential EBS lessees will be driven to other spectrum that can either be acquired outright or leased for longer terms.” WCA said companies have alternatives for investment, including 700 MHz, the Wireless Communications Service at 2.3 GHz and Advanced Wireless Service at 1.7/2.1 GHz.

“Reinstating that 15-year lease cap would prevent both the educational licensees and wireless carriers from negotiating terms that are mutually agreed to,” a Sprint spokesman said: “In every other matter the FCC has supported the marketplace determining the terms of the negotiation. To do otherwise, we believe, would be inconsistent with previous decisions.”

WCA and wireless broadband operators have backing from various EBS lease holders, including the Hispanic Information & Telecom Network -- the largest EBS license holder, with 70 channel groups in 65 markets. “The Hispanic Information and Telecommunications Network doesn’t believe that the Commission should restrict the duration of lease terms,” said attorney Rudolph Geist, who met with Comr. Adelstein on behalf of the group: “That will have harmful effects on the ability of licensees to roll out service.”