O'Rielly Says He Plans Only Minimal Changes to Rules for 3.5 GHz Band

In June, 17 companies and associations urged the FCC to make very limited changes, saying big changes would slow opening of the much-anticipated band (see 1706010059). Also in June, CTIA and T-Mobile asked the FCC to make fairly major changes, especially to rules for priority access licenses -- the licensed leg of the three-tier sharing regime (see 1706200081). The FCC sought comment on the industry petitions, and replies are due next week. O’Rielly said he plans to read all the comments.

“I have heard concerns from some that the recent petitions filed at the commission will mean that your tireless efforts will be undone, investment may be stranded, or that deployments will be delayed,” O’Rielly said. “That is not my intention, nor do I believe it will occur. … I am not predisposed to disrupt the three-tier structure; I just want all three tiers of this so-called ‘experiment’ to work.”

O’Rielly said the rules mustn't favor PALs, federal incumbents or the unlicensed tier. “The band should be designed to permit as many uses as possible and the market should decide the highest value use for this spectrum,” he said. O’Rielly believes the PAL structure “was flawed and needed to be fixed.” He noted smaller carriers, not just the big four, are interested in the band.

It was apparent early on the debate would focus on "the request of certain stakeholders for (1) longer license terms, (2) renewability, and (3) larger geographic areas,” O’Rielly said. He questioned whether it's plausible to think the FCC would auction PALs for all 74,000 census tracts, the current license size, since that would be “quite the auction.”

O’Rielly favors changing the PAL auction structure. The FCC also should change emission limits “so that, for instance, entities who obtain more than one PAL can aggregate them more efficiently to provide 4G LTE or 5G service,” he said. “The current rules would require licensees with multiple PALs to use less power, which could hinder the types of services they can provide.”

Harold Feld, senior vice president at Public Knowledge, questioned why "O'Reilly has so little interest in experimenting with regulatory models." The models "to which O'Reilly rigidly adheres, such as exclusive licensing by auction and renewal expectation, were daring experiments and heresy 20 years ago," Feld said: "Unless the commission has the opportunity to experiment, we will remain locked in the same business cases.”

The Wireless ISP Association appreciates O’Rielly’s focus on the band, said Mark Radabaugh, WISPA FCC Committee chair. “Our members are looking more and more to these bands as a solution to the digital divide in which spectrum can serve as low-cost infrastructure.” WISPA agrees out-of-band emission rules should be relaxed to allow aggregation, he said: “We trust that the commissioners will see the tremendous support in the record from WISPs and others interested in using these bands.”

Converting PALs into traditional cellular industry licenses, “as CTIA proposes, is a spectrum industrial policy that makes PALs prohibitively expensive and uneconomic for all but the largest national and regional mobile carriers,” said Michael Calabrese, director of the Wireless Future Program at New America. “By defining licenses as small-area building blocks that are re-auctioned after an initial six-year period, the current rules use a more market-driven approach to determine what is the highest and best use in each local area.”

CTIA is pleased with O’Rielly’s “leadership in working to modify the 3.5 GHz rules to incentivize investment and to make mid-band spectrum available for America’s 5G wireless networks,” said Paul Anuszkiewicz, vice president-spectrum planning.