Wireless Spectrum Auctions

Now that the high court has ruled in Brand X, “the role of wireless is going to become more important,” Barry Ohlson, advisor Comr. Adelstein, said Wed. at the Wireless Communications Assn. (WCA) conference. “People will look more toward wireless, because they won’t be able to use the same tools that were previously available,” he said.

FCC hopes to circulate a draft order this week revising an Oct. 2003 advanced wireless services (AWS) spectrum band plan, an FCC source said. The new 1710-1755 MHz and 2110-2155 MHz band plan urged by the Wireless Bureau incorporates parts of proposals by T-Mobile and the Rural Telecom Group (RTG), and Verizon Wireless, the source said. The order, expected to be scheduled for the July 14 FCC meeting, also would resolve other issues raised in reconsideration petitions.

Council Tree Communications urged the FCC to “repair, improve and ultimately preserve” designated entity (DE) incentives in advanced wireless services (AWS) spectrum auctions. Council Tree asked the Commission to: (1) Raise from 25% to 35% the maximum DE bidding credit offered in AWS auctions. (2) Provide an additional 10% bidding credit for DEs that serve underserved populations. (3) Not allow large incumbent wireless carriers to have any material investment, financial or operating relationship with a DE if they have licenses with material geographic overlap. (4) Not allow individuals with a net worth exceeding $3 million to have a controlling interest in a DE. “These proposals will ensure that DE benefits are limited and applied only where needed, and will provide meaningful entry points for new competition in the wireless industry,” Council Tree said, adding the proposals can be implemented “on a non-disruptive basis well in advance of the first AWS auction” expected in mid- 2006.

Sen. McCain (R-Ariz.) blamed broadcasters for “thwarting” congressional efforts to pass legislation to set a date for return of analog spectrum -- as he introduced a bill Tues. setting Dec. 31, 2008, as the deadline. McCain’s bill, akin to legislation he introduced last year, would let public safety organizations to begin using 24 MHz of the spectrum Jan. 1, 2009, and require the FCC to auction recovered spectrum after Dec. 16, 2006, and before April 2, 2008.

The wireless and satellite industries asked the FCC to reconsider rules on non-federal govt. wireless operations in the 3650-3700 MHz band. The contention- based protocol the Commission required licensees to use to prevent interference drew criticism in all petitions for reconsideration. Petitioners included the Wireless Communications Assn. (WCA), WiMax Forum, Intel, Redline Communications, Alvarion, BRN Phoenix, as well as Motorola and the Enterprise Wireless Alliance (CD June 13 p8).

PCIA backs a joint proposal by T-Mobile and the Rural Telecom Group (RTG) to revise a plan for advanced wireless services (AWS) in the 1710-1755 MHz and 2110-2155 MHz bands (CD March 15 p8), PCIA said. While leaving Blocks A, B and C unchanged, the proposal calls for breaking the existing 30 MHz E Block at 1740-1755/2140-2155 MHz into 3 parts to create a 6th AWS license block. The proposal would let up to 6 entities acquire spectrum in different markets, making at least 20 MHz of spectrum available in each. “By allowing up to 6 market entrants, the FCC can further promote competition for advanced wireless services in the wireless marketplace,” PCIA said: “This would facilitate the Commission’s goals of technological innovation and foster additional investment in communications systems and infrastructure, providing more service choices to users.” PCIA also backed expansion of Block D at 1735-1740/2135-2140 MHz -- through getting 10 MHz (1740-1745/2140-2145 MHz) from current Block E -- to 20 MHz of spectrum for the smallest market areas (MSAs/RSAs), as T-Mobile and RTG proposed. “This auction methodology would permit largely rural carriers access to affordable, adequate spectrum for voice and advanced data services in market sizes suitable to their existing service footprints,” PCIA said. Breaking a 30 MHz block into 3 parts “provides for more attractive secondary market transactions, as auction winners could aggregate additional spectrum in smaller increments to supplement existing holdings,” the group said: “The joint proposal eliminates the potential for unnecessary transaction costs of purchasing unduly large spectrum blocks in the secondary market.” The T-Mobile/RTG also has support from U.S. Cellular, Ericsson, Nokia, SunCom Wireless, NTCA and Alcatel. Cingular supports only those parts of the proposal that would convert the D Block into a 20 MHz license by taking 10 MHz of spectrum from the E Block, and retain the RCA/MSA designation. Verizon Wireless proposed an alternative band plan that would boost the number of blocks to 6, shift the MSA/RSA license location and eliminate a 30 MHz license (CD June 1 p5).

The FCC wants input on rule changes needed to implement the Commercial Spectrum Enhancement Act (CSEA), signed in Dec. by President Bush as part of a wider HR- 5419 legislation creating a spectrum relocation trust fund. The fund guarantees use of eligible frequency auction revenue to compensate federal agencies for moving off the 216-220 MHz, 1432-1435 MHz, 1710-1755 MHz, 2385- 2390 MHz bands. The Act requires all auctions of eligible frequencies to raise at least 110% of total estimated federal users’ relocation costs, but doesn’t define “total cash proceeds.” The Commission in a declaratory ruling Thurs. defined “total cash proceeds,” for purposes of CSEA, as “winning bids net of any applicable discounts, such as small business bidding credits.” The FCC asked for comments on possible modifications to implement CSEA and update its spectrum rules, including: (1) Revising the reserve price rule to ensure auctions of frequencies eligible under SCEA aren’t concluded without raising 110% of the estimated federal user relocation costs. (2) Options for preserving availability of tribal land bidding credits in eligible frequencies auctions. (3) Increasing FCC discretion with respect to amounts of interim bid withdrawal and additional default payments. (4) Setting procedures in advance of each auction for apportioning bid amounts among licenses in a package. (5) Changing payment rules and procedures for broadcast construction permits won at auction to conform to those for non-broadcast licenses. (6) Facilitating use of small business consortia. The action moves the Commission closer to auctioning spectrum for advanced wireless services (AWS), the agency said. The 1710-1755 MHz band accounts for half the spectrum the Commission plans to auction as early as June 2006 for AWS, including 3G services. Wireless Bureau interim chief Catherine Seidel told reporters the FCC is “on target for the June 2006 [AWS] auction date but there are a number of things that need to happen between now and then, [especially] acting on reconsideration petitions” pending before the Commission. The FCC is expected to act on petitions for reconsideration of the AWS I (1710-1755 MHz and 2110-2155 MHz) rules in the next couple of months, sources said. NTIA is expected to notify the FCC in Dec.

Verizon Airfone and United Airlines became the first to get Federal Aviation Administration (FAA) authorization to install Wi-Fi devices on domestic commercial aircraft, the companies said Mon. But the service won’t be available until after the FCC’s scheduled air-to-ground spectrum auction, in which service rights and spectrum will be awarded to one or more providers. That auction isn’t likely until early 2006. “Once a service provider is selected by the FCC, United is positioned to act quickly to bring this service to customers,” United said. The approval was granted after Verizon Airfone and United showed that use of 802.11 b/g wireless technology in the cabin doesn’t affect aircraft operations. The approval applies only to the United B757-200 aircraft used to test the technology. “Our wireless broadband system will require only the addition of an avionics box, a wireless access point and a directional antenna, making it the faster and more affordable choice for United and its passengers,” said Verizon Airfone Pres. Bill Pallone.

The FCC will decide at its June 9 agenda meeting whether to grant a CE industry petition to eliminate the July 1, 2005, DTV tuner mandate deadline on 50% of 25"-36” sets, officials said. The CE industry also wants to advance by 4 months, to March 1, 2006, a deadline by which all such sets must have ATSC tuning. Broadcasters oppose scrapping the 50% deadline, urging the FCC to advance CE’s March 2006 deadline to Nov. or Dec. 2005 to take advantage of TV sales during the holiday and Super Bowl selling season. July 1, 2007, is the deadline by which all TV sets and CE devices with TV tuners must include DTV functionality. Draft legislation would accelerate that deadline by a year. With much talk about moving forward with the DTV transition, it’s unclear whether the FCC would grant the CE industry petition, a Commission source said. The 2nd media item on FCC’s agenda is a notice of proposed ruling making on how to streamline obtaining radio licenses. The FCC also will act on 2 wireless items: (1) Petitions seeking reconsideration of the Hearing Aid Compatibility (HAC) order (CD May 23 p3), the Commission said. Petitions were filed by CTIA, Verizon Wireless, Research in Motion, Rural Telecom Group (RTG) and several TDMA carriers. (2) A declaratory ruling and an NPRM to carry out provisions of the Commercial Spectrum Enhancement Act and to update competitive bidding rules and procedures. The Act, signed by President Bush in Dec. as part of a wider HR-5419 legislation, created the spectrum relocation trust fund, which guarantees that advanced wireless services auction revenue can be used to move govt. users off the 1710-1755 MHz part of the band.

The proposed Verizon band plan for advanced wireless services (AWS) in the 1710-1755 MHz/2110-2155 MHz band would leave “carriers with less flexibility,” because “more spectrum would be licensed on REAG [regional economic area group] basis,” T-Mobile told FCC officials at an ex parte meeting. Verizon had urged the FCC to revise the band plan, adopted by the Commission in Oct. 2003, by increasing the number of blocks to 6 from 5, shifting the MSA/RSA license location and eliminating a 30 MHz license (CD June 1 p5). T-Mobile defended the plan it submitted jointly with the Rural Telecom Group (RTG) earlier this year (CD March 15 p8), saying its plan better “enables bidders to acquire spectrum tailored to meet their business needs.” T-Mobile/RTG would divide the 30 MHz E Block into 3 constituent parts to create a 6th AWS license block, leaving the A, B and C blocks unchanged. That proposal was supported by Alcatel, Ericsson, NTCA, SunCom Wireless and U.S. Cellular. Cingular supported the parts of the proposal converting the D Block into a 20 MHz license by taking 10 MHz of spectrum from the E Block and retaining the RSA/MSA designation, as T-Mobile and RTG proposed. But it objected to using the rest of the original E Block to create two 10 MHz (2x5 MHz) licenses, E and F, also described in the proposal. Meanwhile, OPASTCO joined the T-Mobile/RTG plan’s supporters Thurs. “Creating an opportunity for 6 separate bidders to obtain a license rather than 5 and allowing one of those licenses to cover 20 MHz of spectrum devoted to the smaller RSA/MSA geographic areas would make licenses more affordable, would more closely approximate the areas that small carriers are interested in serving, and would ultimately lead to more rural carrier participation in auctions,” it said in an ex parte. The T-Mobile/RTG proposal would also promote efficiency because “smaller license territories would ensure that licensees are not forced to acquire more spectrum than they actually need,” it said.