FCC Indecisive on 700MHz

Think, boys. Think!
— The Music Man

 

The FCC voted unanimously this week to sell slices of 700 MHz spectrum in a mix of geographic sizes, including multistate parcels sought by carriers such as AT&T and Verizon Wireless. The FCC waited to decide how to divide up the spectrum while it seeks comment.

Haggling over how the auction would proceed and 11th hour proposals delayed the agency’s monthly meeting by hours. The meeting was scheduled for 9:30 a.m. but didn’t start until after 7 p.m. Washington time.

The commission hopes to issue final rules by June and start the auction in December or early January, FCC Chairman Kevin Martin told reporters yesterday after the meeting. That would give potential bidders at least six months to prepare for the sale.

The nonpartisan Congressional Budget Office estimates the auction will raise $10 billion to $15 billion. The FCC raised $13.9 billion for the treasury last year in the AWS auction.

According to the FCC statement (pdf):

The FCC adopted a mix of geographic area sizes for licensing the spectrum – including Cellular Market Areas (CMAs), Economic Areas (EAs) and Regional Economic Area Groupings (REAGs) – and established rules related to power limits and other technical issues, as well as initial license terms.

According to the FCC Chairman Kevin Martin’s statement (pdf):

The leading technology companies —Google, Intel, Skype, Yahoo, along with
DirecTV, and EchoStar are the only parties that have promised to try to provide a
national, wireless broadband alternative. They have explained that, for a national
wireless broadband service to emerge, the auction must do three things: (1) make
available at least one 11 MHz paired block; (2) offer at least some large geographic areas;
and (3) enable package bidding so that rights to a national service could be acquired.
These technology companies have formed a coalition urging the Commission to follow
these key principles that they believe are essential to the deployment of an additional
broadband competitor.

I put forth a proposal that would meet these three requirements. I am surprised
that some of my colleagues do not support this approach. Indeed, some of them have
been the most critical of the current state of broadband deployment and competition and
the most vocal about us needing a national strategy. It is puzzling that they would not
endorse taking the minimum steps necessary to enable a wireless broadband alternative to
develop for all Americans.

The FCC’s Ninth Notice of Proposed Rulemaking (pdf) (NPRM) would designate 12 MHz in the current 700 MHz public safety band for broadband use, assign the spectrum to a single national public safety licensee, and leverage advancements in commercial technologies.

Under the Frontline plan, 10 MHz of the 60 MHz available in the 700MHz band, would be allocated for shared use. The 10 MHz could be auctioned to anyone agreeing to operate a wholesale wireless broadband network and the operator also would be able to utilize 12 MHz of first responder spectrum to build a shared, public/private network.

In Senate testimony, Frontline says their plan would provide the following benefits: (1) free build-out of the public safety broadband network; (2) increased spectrum during emergencies; (3) national interoperability; (4) local control; and (5) maximum equipment choice.

The FCC will put parts of Frontline’s proposal out for public comment, which means that the agency has not ruled it out. But it also means that the final auction rules are not yet set in stone.

The Frontline plan drew skepticism from Commissioner Michael Copps, one of two Democrats on the five-member panel. The proposal is “a tantalizing prospect, but only if it works as promised, and there’s the challenge,” he said.

Competitors like Cyren Call wanted another 30 MHz for “shared use”. Cyren claimed Frontline couldn’t make a business case with so little spectrum and that 10MHz x 3 sectors would be necessary. But it was Cyren Call that got short shrift from the FCC earlier — their request for an extra 30 MHz for a first responder/commercial service network was deemed excessive.

Large carriers and the cellular telecommunications industry group CTIA oppose Frontline’s plan. Such an arrangement would violate communications laws and “significantly devalue the spectrum,” CTIA President Steve Largent told Martin in an April 5 letter.

But Verizon and Qualcomm have a special relationship of their own, developing walled garden services. That marriage requires tribute to CDMA or Flarion, not exactly an epitome of spectrum efficiency or openness. Motorola’s CEO Ed Zander (right), prefers to look ahead with more open technology, including Mobile WiMAX and LTE.

“The AWS auction shows that large incumbent carriers were able to control the outcome of the auction,” said Jeannine Kenney, senior policy analyst at Consumers Union. Financial services firm, Stifel, Nicolaus & Company, has a helpful overview (pdf) of the 700 MHz players.

The Coalition for 4G in America (pdf, below), from EchoStar, DIRECTV, Intel, Yahoo! Google, Skype and Access Spectrum, says the 15 MHz paired commercial allocation in the upper 700 band should be re-configured into a 16.5 MHz paired allocation.

“The use of 5.5 MHz ‘building blocks’ gives an immediate 10 percent increase in bandwidth (which) allows more capable next generation broadband network performance,” the group said. “Locating the paired 5.5 MHz commercial block directly adjacent to public safety’s paired 5.5 MHz broadband block would better enable public-private partnerships and lead to potential cost savings for public safety.”

It looks like some of the players (like Google and Frontline) are promoting a concept based on the evolving Long Term Evolution (LTE) standard. It can utilize 3 sectors of 5 MHz each, with separate frequencies for upstream and downstream channels. They could be stretching the envelope (with LTE) while cellular operators may be digging in with old time (EVDO) religion. Mobile WiMAX is still mostly a single 10MHz channel (OFDMA) architecture.