Comr. Adelstein said Tues. he is “troubled” by several decisions the FCC made as it established rules for Aug.’s advanced wireless services auction (AWS), which could potentially “undercut” the auction. Adelstein called special attention to a decision requiring blind bidding, under which bidder identity likely won’t be known as the auction progresses, unless the auction meets a test for competitiveness.
Wireless Spectrum Auctions
The FCC manages and licenses the electromagnetic spectrum used by wireless, broadcast, satellite and other telecommunications services for government and commercial users. This activity includes organizing specific telecommunications modes to only use specific frequencies and maintaining the licensing systems for each frequency such that communications services and devices using different bands receive as little interference as possible.
What are spectrum auctions?
The FCC will periodically hold auctions of unused or newly available spectrum frequencies, in which potential licensees can bid to acquire the rights to use a specific frequency for a specific purpose. As an example, over the last few years the U.S. government has conducted periodic auctions of different GHz bands to support the growth of 5G services.
The WiMAX industry will benefit from having the Intel camp and the Qualcomm camp “fight it out” in the standards organizations, a panelist said in a session called “WiMAX on the Way” at the C3 Expo Tues. in N.Y. When you look, Intel doesn’t really own many of the patents, said Rupert Baines, PicoChip marketing vp. Qualcomm on its own and Flarion, which it acquired, have many patents affecting WiMAX, as do Samsung and Nortel and Nokia, which TI is backing, he said.
Nextel cofounder Morgan O'Brien, chmn. of recently formed Cyren Call, accused the CTIA of “baloney” Tues. in a debate on Cyren Call’s push to dedicate 30 MHz of 700 MHz spectrum to a nationwide wireless network for public safety rather than sell the spectrum at auction. Carriers need the 700 MHz spectrum and have shown they are the nation’s most efficient users of spectrum, CTIA Asst. Vp Paul Garnett retorted.
Except for XM and Sirius, comments overwhelmingly support a request by Wireless Communications Service (WCS) license holders to delay buildout deadlines for companies that want to offer broadband wireless at 2.3 GHz, the WCS Coalition told the FCC. Unless the FCC agrees with the coalition, the WCS licensees face a July 2007 deadline for substantially building out networks using the spectrum, sold by the FCC in 1997 auction (CD June 13 p5).
Senate Commerce Committee negotiations on a hefty manager’s amendment to pending telecom reform legislation were expected to continue “well into the night and tomorrow,” a committee spokesman told us Wed. The committee is scheduled to markup Chmn. Stevens’ (R-Alaska) 3rd draft of the bill today (Thurs.). Some Hill watchers said the marathon meeting could spill into next week. The broad draft contains hot topics like net neutrality and preemption of state wireless regulation (CD June 21 p1), as well as issues like video franchising and Universal Service Fund (USF) reform.
The 3rd U.S. Court of Appeals, Philadelphia, should not stay revised designated entity (DE) rules heading into Aug.’s advanced wireless services auction, the FCC said. With that pleading, the FCC is taking on Council Tree, Bethel Native Corp. and the Minority Media & Telecom Council. Council Tree wrongly claims the DE order violates Communications Act provisions meant to encourage DE participation in spectrum auctions, the FCC said: “But in fact, the rules… strike a balance among the competing policy goals set out in the statute, and Council Tree has not come close to showing that they are unreasonable.” Neither has Council Tree shown it would face irreparable harm from the rules, the agency said: “Conversely, the grant of a stay would cause harm both to other parties and to the public interest. The auction is the product of years of significant coordination between the FCC and other federal agencies to relocate existing government users of the pertinent spectrum so that it could be available for licensing at auction. A stay would harm the public interest by delaying the significant public benefits of the auction and frustrating the substantial public and private efforts invested in bringing it to fruition.” Council Tree’s business plan may have to change to fit tough revised rules for “unjust enrichment,” but other DEs still can get financing to buy licenses, the FCC said: “In any event, the purpose of the DE rules has never been to have DEs participate in auctions solely for the sake of participating in auctions. Rather, the rules are designed to encourage DEs to become facilities-based providers of service. Even if the 10-year unjust enrichment period impedes bidding by some DEs, that rule change makes it more likely that those DEs that do win licenses will become genuine facilities-based providers.”
Delaying the advanced wireless services (AWS) auction after Council Tree sought a stay of designated entity rules for it would be a nearly unprecedented legal step, CTIA and T-Mobile told a federal court. Pleadings were due Thurs. in the 3rd U.S. Appeals Court, Philadelphia, which Council Tree asked to issue a stay. “Petitioners ask the court to do what courts have been asked to do but have done only once in the history of FCC spectrum auctions because some potential bidders are unhappy with the auction rules,” CTIA said: “Nothing in the petition justifies that extraordinary result.”
EchoStar and DirecTV’s 5-year agreement to sell WildBlue’s satellite-based Internet access service in rural markets provides a jump start for a technology that has struggled for years to attract an audience. While research firms have put the potential market for satellite broadband services in rural areas at 10-15 million households, HughesNet (formerly Direcway), StarBand and WildBlue have gained less than 500,000 combined, industry officials said.
U.S. Cellular and 81% owner TDS are using consolidation strategies like those of the Bells, mixed with rural expansion, to grow out of small service territories despite limited resources, said executives speaking Tues. at the Deutsche Bank Media & Telecom Conference in Santa Clara, Cal. Acknowledging that the regulatory system limits even big independents’ reach, the companies said they've substantially increased profitability by gradually adding adjacent territories and keeping users on their networks more of the time.
The FCC should grant a request by Wireless Communications Service (WCS) license holders asking for a delay in build out deadlines for companies that want to offer broadband wireless at 2.3 GHz, until several areas of uncertainty are resolved by the agency, Motorola and Intel said in a filing. But Sirius urged the FCC to take the spectrum back and reopen the band for other uses. WCS spectrum was sold by the FCC in a 1997 auction for what was considered a disappointingly low $13.6 million.