Wireless Spectrum Auctions

Senate Appropriations Committee ranking Republican Stevens (Alaska) is pressing other members to support legislation he intends to introduce that “would compel the FCC” to hold long-delayed spectrum auction, spokeswoman said. CTIA Senior Vp Steve Berry said that without date certain for broadcasters to surrender 700 MHz spectrum as part of digital DTV transition, forced FCC auction would enable limited number of wireless carriers to buy and then warehouse spectrum that they could sell later at higher price. Berry said he understood that Stevens was looking out for interests of Alaskan business constituents, but said forced auction would be poorly timed in light of current Bush Administration efforts to develop long-term spectrum plan: “Stevens has been a strong defender of a competitive wireless industry, but in this instance we happen to disagree.” Stevens’ development of auction plan follows introduction of bill by House Commerce Committee leaders that would delay June 19 auction of upper and lower bands of 700 MHz indefinitely (CD April 25 p1). FCC Chmn. Powell recently said further delay would violate congressional order and could lead to lawsuits against agency. (CD April 18 p1).

Spectrum Exchange, which is developing private market mechanism to ease 700 MHz band-clearing through secondary auction, told FCC it opposed CTIA request that Commission review Wireless Bureau’s decision to stick to June 19 auction date. FCC set May 3 as deadline for receiving oppositions to CTIA application for review of bureau decision earlier this month. “The major commercial wireless operators, like the incumbents in most industries, at times have an incentive to restrict new capacity to limit competition,” Spectrum Exchange said. “At other times, they do better with restrictions lifted to expand their own capacity. In making spectrum decisions, the Commission should ignore the first voice and listen to the second.” Company countered recent concerns raised by CTIA that activities of Spectrum Clearing Alliance, which includes broadcasters such as Paxson Communications, could raise antitrust concerns. CTIA said “concerted action by a combination of licensees who clearly exercise market power over the disposition of the upper 700 MHz band spectrum” raised antitrust issues and created more uncertainty. Spectrum Exchange said CTIA’s “prolonged effort to keep the 700 MHz band off the market” could be viewed as similar concerted action in cellphone market that raised antitrust concerns. It said CTIA application for review cited Bush Administration budget proposal that would delay statutory auction date requirements for upper and lower bands of 700 MHz and said delay also was proposed in White House budget blueprint of year ago, “yet no new legislation has been enacted.” Spectrum Exchange stressed “compelling public interest” in not delaying June 19 auction date for both upper and lower bands. “We have an opportunity for voluntary clearing to work,” filing said. “But the opportunity is fragile and delay could cause it to quickly slip away.” It warned that if broadcasters concluded that Ch. 60-69 auction would be subject to continued delay, “likelihood of their clearing before the end of the digital transition becomes remote.” Separately, Spectrum Exchange and Intel met with FCC Comr. Martin last week to urge that auction to move forward June 19. In ex parte filing they said voluntary clearing at 700 MHz was “close to becoming a reality. The alternative to a June auction date and to spectrum-clearing arrangements for channels 59-69 is the gross underutilization of this prime spectrum for the foreseeable future.” Intel Communications Policy Dir. Peter Pitsch said Intel had such meetings with all 4 commissioners’ offices and said company’s weighing in on 700 MHz issues shouldn’t imply “anything about our participation in the auction.” Intel has been subject of industry speculation in recent weeks that it may be among companies interested in participating in auction. Short-form filings for upper and lower band are due May 8. Pitsch told us: “We thought it was in the public interest for the auctions to go forward and that the auctions would reduce spectrum scarcity, particularly for wireless Internet applications.” Intel position is that proponents of delaying auction don’t have alternative plans for clearing 700 MHz spectrum and delay would result in those bands’ being “underutilized for years,” Pitsch said.

Coalition of commercial wireless operators, manufacturers and private wireless licensees floated plan to FCC late Fri. that would provide alternative to Nextel proposal for alleviating public safety interference at 800 MHz. Coalition for Constructive Public Safety Interference Solutions said that for Commission and Congress to give adequate consideration to plan, delay was needed in 700 MHz auction now set for June 19. Backers of alternative spectrum reconfiguration plan include AT&T Wireless, Cingular Wireless, Southern LINC, Alltel, Nokia. New proposal would relocate public safety from 800 MHz to 700 MHz and reallocate some 700 MHz spectrum now specified for commercial use to public safety. That would exclude guard bands at 700 MHz that already have been auctioned, coalition said. “The coalition acknowledges that any relocation of public safety to the 700 MHz band designated for commercial use will require legislative action,” it said. “While it is premature to assume that the necessary statutory changes will be enacted into law, it is equally premature to eliminate the coalition’s proposal from consideration by going forward with the auctions on the scheduled date.” Specifically, proposal would: (1) Give all of Ch. 60-69 to public safety, including spectrum already allocated for public safety operations, for total of 54 MHz. (2) Allow some spectrum to be used for homeland security, wireless priority access service, critical infrastructure. (3) Move existing 800 MHz public safety users to 700 MHz. (4) Auction vacated 800 MHz public safety spectrum and use proceeds to help relocate public safety to 700 MHz. (5) Require broadcasters to exit upper 700 MHz band by Dec. 31, 2006, “or sooner.” Filing said that compared to Nextel proposal, which would increase public safety spectrum to 44 MHZ from current 33.5 MHz, new plan would increase spectrum for those users to 54 MHz. Nextel plan would swap 4 MHz of guardband spectrum in 700 MHz band, 8 MHz of specialized mobile radio (SMR) spectrum in lower noncontiguous channels of 800 MHz and 4 MHz of SMR spectrum at 900 MHz. Nextel would receive another 16 MHz at 800 MHz and from reserve MSS spectrum, without auction’s being held. Nextel plan would reimburse public safety users for relocation costs, but private wireless operators that were dislocated wouldn’t be similarly covered. Coalition touted its proposal as not requiring such relocations for private wireless operators and giving them opportunity to acquire additional spectrum at auction. Legislation would be required under plan to: (1) Delay auction of 700 MHz from June 19 date. (2) Allocate upper 700 MHz band to public safety. (3) Reallocate 800 MHz band vacated by public safety. (4) Target revenue from auction so it could be used for public safety users who must relocate. (5) Set timeline for analog broadcasters to vacate upper band of 700 MHz. Late Fri., the FCC established pleading schedule for application for review filed by CTIA over Wireless Bureau decision to keep June 19 auction date intact for 700 MHz. Under expedited schedule, oppositions to petition are due May 3 and there will be no reply period.

House Telecom Subcommittee ranking Democrat Markey (Mass.) is circulating draft bill that would create trust fund for digital technology grants out of future wireless auction proceeds. Draft bill also would allocate spectrum for advanced wireless services while keeping intact Bush Administration proposal for separate trust fund for govt. relocation proceeds for incumbent users that may be relocated from spectrum. Markey’s proposal, which panel of industry and academic experts at New America conference said Fri. has bipartisan backing, would reserve first $5 billion derived from applicable spectrum auctions to reimburse Dept. of Defense and other govt. agencies for vacating various spectrum bands. Rest of auction proceeds would be deposited into separate trust fund to provide grants for educational broadband technology and deployment projects, making those funds available to entities currently eligible for universal service funding. Up to $300 million from such grants would be made available annually to public TV stations to upgrade analog stations to digital. Markey is expected to introduce bill this week and Sen. Dodd (D-Conn.) is said to be drafting somewhat broader companion bill that also has bipartisan backing.

Software Defined Radio (SDR) rulemaking at FCC is “step forward” in regulatory effort needed to “jump-start” nascent technology, Vanu Bose told Technology Advisory Council (TAC) at FCC Fri. Bose is pres. of Vanu Inc., start-up company developing SDR commercial applications. SDR involves radios that provide software control of modulation techniques, wideband or narrowband operation, communications security functions (such as hopping), waveform requirements. For example, SDR user devices and network equipment can be programmed dynamically in software to reconfigure characteristics for better performance, richer feature sets or advanced services. SDR technology is applicable across wireless industry in both military and commercial sectors, Bose said. With its ability to adapt spectrum dynamically, “I'd like to see spectrum become a commodity that is traded” rather than auctioned as property, he said: “Spectrum licensing needs to be less static.” FCC should consider making it possible to “sublicense” spectrum. “In this way spectrum is used as a function of demand, not regulation.” Bose envisioned commodity spectrum market with authorized traders to whom wireless providers would make real-time bids on small geographic blocks “to acquire spectrum for region and time required, for next 3 years or next 2 weeks,” he said. Edward Thomas, chief of FCC Office of Engineering & Technology (OET), said Commission should give technology closer look: “The time is ideal to start a public dialog on the implementation of software radio as it bears on spectrum management, and what is needed to get the technology rolling.” Bose defined 3 classes of SDR: (1) Modal SDR, where equipment has more than radio mode built in. An example is handset that can receive both CDMA and AMPS wireless calls. (2) Reconfigurable SDR equipment, where all signal processing is reconfigurable in software. Military has developed technology in Speakeasy II project in which equipment is reprogrammable to accommodate 10 military radio systems. Reconfigurable SDR equipment usually is reprogrammed by manufacturer, rather than user, Bose said. (3) Software radio uses only software for signal processing and can be changed dynamically by user or service provider. “Software radio takes advantage of Moore’s Law,” he said, referring to rapid development of computer processors. SDR already is practical for fixed wireless infrastructure, he said. Bose said his company had developed systems that used “commodity off-shelf processors” to lower costs. Today’s general purpose computer technology allows “signal processing of 50 analog [wireless] channels on a single processor,” he said. Discussion moved to cellular handsets, application that he said was 3-5 years away. Problems are higher costs compared with single-purpose ASIC processor used in conventional handsets and higher energy consumption and heat from powerful processor. Admitting SDR never can be as efficient as single purpose ASIC, Bose said its advantage became apparent when more than one radio mode was needed in handset. Today SDR can be more cost effective if handset is designed to handle 3 radio modes: “I expect the crossover point to be 2 modes.” Power consumption and poor battery life will be solved “in future” only with more efficient processors and improved battery technology, he said. Formed by OET under Federal Advisory Committee Act to advise Commission on technical issues, TAC periodically gathers diverse group of academics, scientists and chief technology officers of technology firms representing telecom, data networking, software, consumer electronics and amateur radio interests. Next scheduled meeting is June 12.

Panelists at discussion Thurs. sponsored by Congressional Internet Caucus generally agreed that U.S. was poised to catch up with its European and Asian counterparts in development of wireless Internet in next few years. But industry and investor panel, at lunch held by Advisory Committee to Congressional Internet Caucus, also raised concerns about impact of pending spectrum policy challenges in U.S. Rep. Honda (D-Cal.), whose district includes Silicon Valley, said extent to which U.S. wireless sector appeared to lag behind its counterparts when it came to data services “should at least serve as a wake-up call.” He told lunch audience in U.S. Capitol that he just recently started receiving DSL service at home. “I live in Silicon Valley. If it’s not available readily in a neighborhood like mine, how much worse it is needed in other communities,” he said. Precursor Group analyst Rudy Baca raised particularly strong concerns about lack of available spectrum in U.S., citing auction “debacles” such as NextWave. On 700 MHz auction, which wireless industry is seeking to have postponed from June 19, Baca said investment community also would prefer delay. Citing current encumbrance of analog broadcasters that don’t have to move until DTV transition is completed, he said investors thought “how in the world do we value this spectrum?” Valuations are hard to make based on spectrum that may not become available until 2008, Baca said. “My clients say, ’sorry, guys, I can get 3% [interest] if I just go park my money in the bank.'” He encouraged Washington policymakers to provide “predictability” to spectrum policy, particularly because telecom sector now had gone from being engine of dot-com economy to “anchor.” In other policy areas, David Jeppsen of NTT DoCoMo said some of same policy considerations that had beset the wireline Internet would face wireless data applications as they were deployed more ubiquitously. He cited handsets that contained MP3 players and provided digital downloads of music. Jeppsen said that potentially provided different platform for same set of copyright issues as were at stake for the wireline Internet with Napster. But panelists generally were bullish on extent to which U.S. appeared to be closing the gap with its counterparts elsewhere in world on wireless Internet deployment, citing developments such as recent interoperability agreements among U.S. carriers for short- message service (SMS) messages. Vodafone’s Daniel Meredith said that, particularly in last year, U.S. had made strides to catch up with Europe. “We've come a long way,” he said of U.S. wireless industry. In response to question from moderator Gerry Waldron, attorney with Covington & Burling, he said that “in 2 years we will be almost on par -- if not on par -- with what the rest of the world is doing.”

Satellite Bcstg. & Communications Assn. (SBCA) is “disappointed and concerned” with FCC ruling that will allow multichannel video distribution and data services to share spectrum with satellite companies in 12.2-12.7 GHz band. Group said ruling didn’t “appear to adequately reflect results” of independent tests for interference. “This decision is particularly difficult to understand in light of the fact that there is ample spectrum available outside” DBS band, SBCA said. It said it would wait to see text of order before determining whether future DBS subscribers would be adequately protected.

House Commerce Committee Chmn. Tauzin (R-La.), ranking Democrat Dingell (D-Mich.) and 50 co-sponsors unveiled bill Wed. that would direct FCC to delay upcoming 700 MHz auctions indefinitely, tying future timing to resolution of other thorny spectrum issues. Legislation would delay June 19 auction of upper and lower bands at 700 MHz, requiring FCC within one year to report to Congress on proposed rescheduling. Proposal outlines panoply of other spectrum proceedings that await resolution and would instruct FCC to not hold 700 MHz auction until there was plan to resolve 800 MHz interference issues for public safety. Backed by bipartisan bill, CTIA late Wed. filed application at FCC seeking full Commission review of Wireless Bureau decision earlier this month that kept June 19 date intact. Prospects for companion bill in Senate appeared to be somewhat less clear, although Sen. Brownback (R-Kan.) told reporters Wed. he might support similar bill if administrative actions failed.

Another postponement of scheduled June 19 auction of upper 700 MHz band would require FCC “to ignore clear congressional directives,” Spectrum Clearing Alliance said in letter to FCC Chmn. Powell Mon. Responding to request by private wireless operators (CD April 17 p4), Alliance said further delay also “would undermine years of regulatory effort” to clear band of TV stations for nonbroadcast users and would “directly and substantially harm the interests of public safety agencies and the public generally.” In seeking postponement, Alliance said wireless operators’ request “is based entirely on… speculation” on future uses of 700 MHz, citing only “vague and uncertain possibilities” as justification.

Rural Telecom Group (RTG) told FCC it was ready to take Commission to court, along with others such as Paxson Communications, if 700 MHz auction were delayed beyond current statutory mandate. RTG said “any delay” of June 19 auction planned for Ch. 52-59 “will slow the delivery of spectrum-based services to rural America.” FCC now plans to auction both upper and lower bands of 700 MHz starting June 19. Earlier this month, Wireless Bureau turned down request by CTIA to postpone date. RTG said that for first time many rural phone companies are preparing to participate in auction because FCC has decided to auction portions of 700 MHz spectrum in metropolitan statistical areas as well as rural service areas (RSAs). “The use of RSAs will enable rural telecommunications carriers, who are committed to building out and serving less densely populated regions, to concentrate their attention on rural regions,” RTG wrote to FCC Chmn. Powell on April 22. “RTG members plan to use the 700 MHz spectrum to augment their current cellular systems for 3G capability and/or for wireless broadband applications and are anxious to acquire spectrum.” RTG said in letter that it suspects that calls by larger carriers for delay in auction “stem from financial concerns rather than spectrum clearing concerns.” RTG noted that in many areas of lower band of 700 MHz, particularly rural markets, spectrum is unencumbered by analog broadcasters, meaning spectrum could be used immediately for wireless applications. Group noted that FCC faces statutory mandate to deposit proceeds from auction in U.S. Treasury by Sept. 30 for lower band. “Even a slight delay in the auction to give Congress more time to pass legislation delaying the auction makes no sense when there is no clear consensus in Congress for a delay,” RTG wrote: “Last-minute legislation is speculative.”