Wireless Spectrum Auctions

FCC hopes to issue public notice on comprehensive nationwide agreement to streamline tower siting decisions next month, Wireless Bureau Commercial Wireless Div. Chief William Kunze said Fri. Related tower siting policies will be among division’s priorities for this year, including issues on migratory birds, Fish & Wildlife Service requirements and overall processes in that area, he said. Kunze spoke at FCBA Wireless Practice Committee lunch at which chief of Auctions & Industry Analysis Div., Public Safety and Private Wireless & Policy also discussed their 2003 agendas.

FCC’s Wireless Bureau announced creation of Lower 700 MHz Band service website at http://wireless.fcc.gov/services/lower700/. Website provides access to consolidated data resources, licensing process details, spectrum auction recaps and updates and related releases.

CTIA again urged FCC not to grant ancillary terrestrial component (ATC) authority to mobile satellite service (MSS) licensees, but it urged Commission to release “gating criteria” for comment if it moved ahead on ATC. New ICO, which opposes requirement for dual-mode phones as condition of ATC, has pitched to FCC version different from CTIA’s on proposed gating criteria. Different proposals are based on what conditions MSS operators would have to meet to provide ancillary terrestrial services on MSS spectrum (CD Dec 19 p1). In filing that stemmed from Dec. 23 meeting with Comr. Adelstein, CTIA said FCC should seek comment on gating criteria before it made final decision. “This issue need not be decided by the Commission immediately, as the 2nd MSS milestone is still more than 7 months away,” CTIA said. “Hasty” decision on ATC would lead to “a morass of legal proceedings” and guarantee that spectrum would be underutilized or unused “for years to come,” group said. “Consumers would be far better served if the Commission were to reallocate and auction the 2 GHz spectrum that is licensed to MSS companies that have missed milestones or are not viable, than to grant those licensees additional terrestrial capabilities that the MSS licensees themselves have conceded will do nothing to help their profitability outlook,” CTIA Pres. Tom Wheeler said in letter to Adelstein. Group contended grant of terrestrial capability to MSS licensees must involve auction “open to all interested bidders.” FCC interpretation of ORBIT Act recognizes holds that terrestrial operations using spectrum shared with international satellite services don’t fall within competitive bidding exemption. That means Sec. 309(j) of Communications Act requires that any grant of terrestrial service be auctioned, it said. Meanwhile, Wireless Communications Assn. (WCA) told FCC that if it granted ATC in Big LEO band, agency must ensure it didn’t cause interference to terrestrial Multipoint Distribution Service (MDS) and Instructional TV Fixed Service (ITFS) operations in adjacent 2500-2690 MHz band. WCA responded to Iridium request that FCC postpone decision on whether to allow MSS licensees to offer ancillary terrestrial service in Big LEO bands of 1610-1626.5 and 2483-2500 MHz. Iridium wanted agency first to adjust Big LEO band plan to rectify what it called “spectrum inequity” between Big LEO operators that stemmed from failure of several original licensees. FCC notice of rulemaking on MSS flexible use said technical rules for protecting adjacent channel and intraband operations could be modeled on broadband PCS rules. WCA said that while those technical requirements could be starting point to limit interference from ATC, “they are not a complete solution absent the establishment of appropriate guardbands to protect MDS and ITFS usage.” WCA backed alternative band plan in recent Iridium filing that would limit ATC to 2483.5-2490 MHz, reducing potential for interference from ATC if 2490-2500 MHz were set aside as guardband protecting MDS, ITFS and ATC from interference, group said. While WCA couldn’t say with certainty whether 10 MHz guardband would protect against interference, it told FCC that it was worth “further study.”

Verizon Wireless confirmed it reached agreement with Cablevision-backed Northcoast Communications to buy 50 PCS licenses for $750 million in cash. Licenses cover Boston, Columbus, O., Minneapolis, N.Y.C., Providence, Rochester, N.Y. Northcoast plans to use $60 million to pay down FCC- related debt with remaining $635 million share that goes to Cablevision to be used to pay down bank debt. Northcoast’s partners include Northcoast PCS and subsidiary of Cablevision. Cablevision owns 49.9% of Northcoast Communications. Deal, which is expected to close in 2nd quarter of 2003, appears to be one of first to include licenses that take advantage of FCC sunsetting wireless spectrum cap Jan. 1. Commission this year agreed to phase out 45 MHz spectrum cap, immediately lifting it for all areas to 55 MHz. In 4 small markets -- Binghamton, N.Y., Lewiston, Me., and Meadville and Stroudsburg, Pa. -- carrier’s holdings will go to 50 MHz from 40, Verizon Wireless spokesman said. Carrier said it planned to finance purchase by drawing on existing intercompany loan with Verizon Communications, and network investment for increased capacity related to those licenses “has been factored into the company’s near-term capital program.” Total population covered by licenses is 47.4 million and includes 10 MHz in each of 50 markets in D-, E- and F- blocks at 1900 MHz. Deal also includes more than 300 cell site locations from which company could continue to build out its network, Verizon Wireless said. Purchase of N.Y.C. licenses came within weeks of FCC’s allowing NextWave re-auction winners such as Verizon to opt out of their Jan. 2001 bid obligations pending continued litigation over fate of NextWave spectrum. Of more than $8 billion that Verizon bid in that auction, $4.1 billion had been for two 10 MHz licenses in N.Y. “These highly attractive licenses, overlapping some of our most densely populated service areas, will enable us to efficiently deploy capital to provide more network capacity,” Verizon Wireless CEO Dennis Strigle said.

Sen. McCain (R-Ariz.) appeared to weigh in Fri. on side of mobile wireless carriers in debate over ancillary terrestrial component (ATC) use of mobile satellite service (MSS) spectrum. He asked FCC Chmn. Powell in letter how granting New ICO petition for ATC would be in line with Communications Act. “As you know, Congress has mandated that FCC spectrum licensing in almost all cases be performed through auctions,” McCain told Powell. Competitive bidding system is designed to ensure spectrum is given to parties that value it most highly and to compensate public for its use, he said. “The Commission has previously implemented this requirement by concluding that, where multiple parties seek to use satellite spectrum to provide terrestrial services, the terrestrial use rights must be auctioned.” McCain said his letter reflected “my own concerns on this important question of public policy.” He told Powell he didn’t write on behalf of any party participating in proceeding at FCC. CTIA has petition pending before Commission that seeks reallocation of MSS spectrum based on arguments that service wasn’t available and terrestrial carriers had need for spectrum to be available at auction. New ICO has argued that proposed terrestrial service would be “ancillary” to its mobile satellite offering and wouldn’t change fundamental underpinnings of its use of satellite spectrum. While CTIA still opposes grant of ATC authority to MSS licensees, it proposed “gating” criteria to FCC last week if agency approved New ICO request. McCain noted in letter that MSS operators had asked FCC to grant ATC request so they could roll out services to rural areas. He said he supported deployment of new wireless services in those areas. “As you have stated in a similar context, however, ‘[I] cannot support an equitable concern trumping the auction regime Congress created in the statute, or the value of allowing other competitors to vie for a chance to offer service to the public,'” McCain wrote.

Wireless technology developers urged FCC to move forward with allocation plan for 71-76 GHz, 81-86 GHz and 92-95 GHz that would allow commercial users and govt. and scientific operations to co-exist. Allocation and licensing proposals for W-band frequencies were part of comments due this week in rulemaking that would pave way for commercial operations in those bands for first time. Developers have eyed that millimeter wave spectrum for rollout of gigabit-per-sec. broadband capacity, particularly in areas where fiber couldn’t reach easily.

Australia will be first country to debut i-BURST, new wireless broadband technology, Dept. of Communications, Information Technology & Arts (DCITA) said. Mobile broadband network will be launched in Sydney, it said, and prerollout involving some 500 customers is under way. Federal govt.’s spectrum auction policies were instrumental in allowing wireless broadband provider CKW Wireless to buy unpaired spectrum needed for network, DCITA said. I-BURST is to deliver mobility and high-speed Internet access at up to 1 Mbps at competitive prices, DCITA said.

Two wireless carriers petitioned FCC for treatment similar to that received by NextWave re-auction winners when Commission allowed those operators to opt out of their bids. FCC this month granted requests by NextWave re-auction winners for dismissal of their license applications and release from payment obligations. Summit Wireless acquired 13 of licenses in Auction No. 35, but that spectrum didn’t involve licenses tied up by NextWave litigation. However, Summit argued that it should have same opportunity for relief as that provided to winners of spectrum that since had been handed back to NextWave. “This would assure that all auction winners are treated similarly and have the opportunity to void their Auction No. 35 obligations,” company said. Summit had contended that since Jan. 2001 NextWave re-auction, value of licenses it won in that bidding also had dropped significantly. “That dramatic change in wireless valuation is the most significant change that has occurred since the start of the auction and is the most unforeseeable event,” Summit said. “The fact that long-pending litigation has permitted only some of the licenses ‘won’ in the auction to have been granted, while others have remained pending, pales in comparison.” In case of licensees who acquired licenses tied up in NextWave litigation, uncertainty involved contingent liabilities of those licenses, Summit said. Those whose licenses were granted because they weren’t part of NextWave spectrum still faced financial obligations involving “existing debt or eroded equity,” Summit said. “For all winners, the value now is far less than that at the conclusion of the auction and the licenses are far ‘under water’ vis-a-vis the obligations that remain in effect regarding them.” Summit argued FCC had failed to address issues it raised in proceeding when it granted relief to NextWave re-auction winners. Mountain Solutions, high bidder for 2 licenses in 1996 re-auction of C-block licenses, filed separate petition for reconsideration. It told FCC its applications for 2 C-block licenses had been pending before Commission for more than 6 years but NextWave relief order covered only Auction No. 35 winners. Mountain Solutions said that order unfairly “pigeonholes” it with earlier auction winners who received PCS licenses and then used dismissal options laid out by C-block restructuring order, designed to address dire financial conditions of some original C-block bidders who couldn’t make payments. Instead, Mountain Solutions compared itself to NextWave re-auction winners and said FCC had retained its down payment on licenses for more than 3 times as long. Mountain Solutions said it neither defaulted on its payment obligations nor received licenses.

New ICO and CTIA are pitching divergent blueprints at FCC for “gating” criteria agency could use to ensure ancillary terrestrial component (ATC) for mobile satellite service (MSS) wouldn’t comprise stand-alone system. One key area of disagreement is that CTIA is urging FCC, if it allows ATC, to require dual-band phones and bar MSS licensees from offering terrestrial-only subscriptions.

If FCC were to adopt “interference temperature” standard for measuring spectrum interference at device level, newly emerging technologies could be accommodated quickly without threatening incumbents, FCC official said Tues. Bryan Tramont, FCC Chmn. Powell’s senior legal adviser, in a Communications Daily audio conference Tues. said Nov. report from FCC’s Spectrum Policy Task Force, while staff-written, “largely reflects the chairman’s views.”