The international telecom market will grow at 10.1% this year to $1.4 trillion, reversing declines in 2001-2002, the TIA’s “2003 Telecom Market Review & Forecast” said. It predicted the market would grow at a 10.3% compound average growth rate through 2006, encouraged by increases in wireless and support services. TIA said the underlying demand for telecom remained strong, as Internet traffic and the need at the enterprise level for high-speed data transmission continued to grow rapidly, and the demand for mobile connectivity for both voice and data was expanding. The report said spending on landline transport services was beginning to be cannibalized by wireless services. International spending on communications transport services is expected to reach $788 billion in 2003 (up 10.5% over 2002) accompanied by a 2.7% uptick in international spending on telecom equipment to $247 billion in 2003, TIA said. It said the Asia-Pacific market was the largest regional area outside N. America, with total telecom revenue expected to reach $421.6 billion this year from $380 billion in 2002. TIA predicted that market would increase at a 9.1% clip through 2006. The report said the Japanese market continued its modest gains and China and India were growing rapidly with mobile phones subscribership growth in both countries exceeding 80% in recent years. It said revenue in Western Europe, the 2nd largest regional telecom market outside N. America, was expected to reach $362 billion in 2003, up 5.8%. Despite the difficulties faced by many carriers resulting from the 3G spectrum auctions, European operators are beginning to plan their strategies for rolling out advanced wireless networks encouraged by the decision to allow wireless carriers to share infrastructure, TIA said. It also said broadband rollout was beginning to accelerate in Europe and was expected to reach 10% penetration in 2003. Unlike in N. America, the report said, DSL is the most popular broadband access technology there, surpassing cable modems and accounting for 60% of broadband connections. TIA Pres. Matthew Flanigan said broadband and wireless were “the big drivers for the international market for” this year. He said broadband deployment was approaching critical mass in 2003 in many countries, “putting the market on an accelerated growth curve.” He said 3G and unlicensed wireless networks also were taking off this year and had “the potential to be a driver for the entire global market.”
As expected, House Telecom Subcommittee Chmn. Upton (R- Mich.) introduced legislation to create a spectrum reallocation trust fund. His proposed Commercial Spectrum Enhancement Act (HR-1320) would create a fund for agencies that relocated spectrum options to a different band or switch to non-spectrum-dependent facilities to transmit telecommunications. The trust fund would be created from spectrum auctions that must total at least 110% of the total estimated relocation expenses, Upton said: “There is a tremendous need for this bill. We must relocate federal government incumbents to comparable spectrum in order to make way for the commercial wireless industry, but the road to relocating government entities to comparable spectrum is unpaved and filled with potholes.” He said. “This legislation would pave that road, establishing procedures to ensure a timely, certain, and privately -- yet fully -- funded relocation of federal incumbent to comparable spectrum.” The Bush Administration included the trust fund in its FY 2004 budget and Upton introduced similar legislation late last year. Co-sponsors include Commerce Committee Chmn. Tauzin (R-La.), Reps. Towns (D-N.Y.), Boucher (D-Va.), Terry (R-Neb.), Green (D-Tex.). Senate Commerce Committee Chmn. McCain (R-Ariz.) has said he will introduce comparable legislation in the Senate.
Senate Commerce Committee Chmn. McCain (R-Ariz.) said he would introduce spectrum reallocation trust fund legislation “in the near future.” He made the announcement during a hearing Thurs. on the future of spectrum policy. His proposal will be designed to pay relocation costs of federal spectrum users that are forced to move to different spectrum.
Improvement in spectrum allocation process was key point in moderate Republican report on Dept. of Homeland Security (DHS) released Tues. Republican Main St. Partnership report, which makes recommendations for first 100 days of DHS, said Dept. should be given “place at the table” during spectrum negotiations.
Incoming Senate Communications Subcommittee Chmn. Burns (R-Mont.) is considering “hybrid” approach to spectrum auctions that which would require participants to prove effectiveness of their business models before they could enter process, aide said Tues. in audioconference sponsored by Communications Daily’s parent Warren Communications News. Mike Rawson, Burns’ senior policy adviser, likened senator’s tentative approach to way that public lands were allocated in 1800s.
Protection of universal service will be top priority for NTCA in next session of Congress, but bankruptcy and spectrum management also will be on its agenda. In news conference Wed., NTCA officials said Assn. would lobby for “fair and stable contribution methodology” for universal service fund (USF) and modifications of portability and identical support rules to prevent competitive carriers from claiming funds to detriment of local rural incumbents.
While there are “dramatic” differences between outgoing Senate Commerce Committee Chmn. Hollings (D-S.C.) and his likely successor, current ranking Republican McCain (Ariz.), former FCC Comr. Harold Furchtgott-Roth said it was unlikely Senate would pass sweeping legislation on broadband issues. In meeting with reporters Fri., Furchtgott-Roth said controversial bills such as Breaux-Nickles (S-2430) wouldn’t sail through even though Hollings -- legislation’s chief critic -- no longer can block them with power of his chairmanship. FCC is likely to make some of the changes sought in Breaux-Nickles and Tauzin-Dingell (HR-1542), making push for legislation less pertinent, he said. And McCain still is likely to have powerful critics, said Furchtgott- Roth, now fellow with American Enterprise Institute (AEI). Sen. Lott (R-Miss.), who is expected to become Senate majority leader, “has views on communications policy that don’t coincide with McCain’s views,” Furchtgott-Roth said. And “Hollings will have a much smaller platform to speak from, but he won’t go away,” he said. Hollings spokesman told us that online privacy bill would continue to be one of his top priorities in 108th Congress. While there may not be “tangible change” in committee’s agenda, there almost certainly will be “change in tone,” Furchtgott-Roth said. FCC Chmn. Powell doesn’t seem to be driven by signals from Capitol Hill and those signals are likely to get better, he said, as Powell has better relationship with McCain than he did with Hollings. Furchtgott-Roth said he wasn’t sure what type of spectrum policies McCain-controlled Commerce Committee would pursue. He said it’s not likely it would address Sen. Kerry’s (D-Mass.) Nextwave auction opt-out bill (S-2869) because FCC is likely to handle issue administratively. Furchtgott-Roth said FCC has been “suicidal” in administering spectrum auctions. “It’s difficult to understand their reluctance to admit they were wrong about the Nextwave auction,” he said. Furchtgott-Roth said FCC is moving too slowly on many proceedings, mainly because of fears that rules will be overturned in court.
Sponsors of NextWave bill in Senate and Senate Commerce Committee Chmn. Hollings (D-S.C.) sent letter to FCC Chmn. Powell urging Commission to “immediately complete consideration” of agency’s proposal for opt-out provisions of NextWave auction. Letter urged complete release from auction, return of all deposits and freedom for companies that did opt-out to acquire spectrum in future. Sen. Kerry (D-Mass.), sponsor of S-2869 to allow auction opt-out, signed letter, along with principal co-sponsor Sen. Brownback (R- Kan.). Letter said potential $16 billion liability on companies was damaging wireless industry credit rating and was impeding carriers’ ability to take “interim steps, such as building out their networks further or leasing spectrum from others, that may be urgently needed to improve service for its customers.” It said there was no “sound policy sense” to hold carriers to liability when govt. couldn’t deliver spectrum. U.S. Supreme Court heard NextWave’s objections to FCC’s seizure of licenses after company failed to make payments (CD Oct 9 p1). In comments to FCC on opt- out plan, several carriers recommended that companies that did opt out should be forced to forgo participation in spectrum auctions for period of time (CD Oct 16 p1). Nextel recommended 3 years. Hollings isn’t listed as co-sponsor of legislation, but he has floated alternative language to bill that included longer time for companies to decide whether they want to opt out. Alaska Native Wireless urged FCC to provide 180-day period to allow opt out. Sen. Stevens (R- Alaska) said he had concerns about bill and Senate aides have told us he was seen as obstacle to passage. Senate aide told us bill wasn’t likely to pass with limited time left in Senate session. It has collected 59 co-sponsors. Senate returns Nov. 12, but length of lame-duck session hasn’t been announced. Senate aide also told us Sen. Biden (D-Del.) had placed hold on bill for reasons unrelated to issue. Biden also is listed as co-sponsor.
Bill introduced late Thurs. by House Commerce Committee leaders would establish new mechanism for reimbursing incumbent federal spectrum users for their relocation costs. House Telecom Subcommittee Chmn. Upton (R-Mich.) introduced legislation (Commercial Spectrum Enhancement Act) with Commerce Committee Chmn. Tauzin (R-La.) that would place funds from spectrum auctions into new Spectrum Relocation Fund to cover relocation costs incurred by federal entities, Commerce Committee said. Auction proceeds currently are placed in General Fund. Bill also would guarantee federal incumbents received adequate compensation for expenditures related to relocating to other spectrum bands. Auction proceeds would have to equal 110% of total estimated relocation expenses, Committee said. If agency is required to relocate its spectrum operations, it must be able to achieve comparable telecom capability in new band, Committee said. Office of Management & Budget (OMB) and Congress are assigned oversight authority to ensure that incumbents make accurate estimates of their relocation costs and timelines, CTIA said. “The road to relocating federal government incumbents to comparable spectrum is unpaved and filled with potholes,” Upton said. Bill would “pave that road,” he said, by providing for timely and privately funded relocation plan. Tauzin said: “Earlier this year, we significantly changed spectrum auction policy by eliminating artificial deadlines that dictated when auctions had to occur. Now, with this bill, we are entering the second chapter in our spectrum management efforts.” He said bill would create system that’s more efficient and less expensive. “It is a win-win for the federal government and the wireless industry,” he said. CTIA Pres. Tom Wheeler said: “This proposal delivers exactly what America’s spectrum policy needs: Certainty. It brings certainty to the wireless industry, answering critical questions: What does it cost bidders? How long will it take to access the spectrum? And, most importantly, it provides certainty to American taxpayers -- the certainty that they won’t get stuck with relocation bills.”
Europe’s 3G sector needs policy support, not restrictions, to recover from current financial crisis, some Europe telecom industry representatives said at one-day workshop organized by European Commission (EC) Tues. in Brussels to examine results of study by McKinsey Consulting Group on 3G licensing regimes. “Where is the policy support for a financially strapped industry to exploit 3G technology? We don’t see this support forthcoming. Instead we see regulation of this emerging market in the making,” said European Telecom Network Operators’ Assn. (ETNO) Dir. Michael Bartholomew.