Spectrum

Federal agencies, especially the Department of Defense (DoD), don’t face normal marketplace pressures to economize their use of spectrum. While the potential societal gains of reallocating federal spectrum for commercial use are likely in the hundreds of billions of dollars, attempts at addressing this problem have met many roadblocks. Today, I’m offering another idea for consideration: the option of allowing agencies to free up some of their spectrum holdings in exchange for budgetary relief. While I still believe the imposition of Agency Spectrum Fees is the best course of action, this new proposal represents a compromise between differing carrot and stick approaches. And it is particularly timely today, as many of these federal agencies face increasing budgetary pressure. I suggest that federal agencies be permitted to use their spectrum holdings to offset the annual budgetary caps and sub caps. This would mean that, in achieving its respective budget limits, a federal agency could substitute the market value – as determined by an average of Congressional Budget Office and Office of Management and Budget estimates – of their surrendered spectrum to offset other cuts or even expand its spending options. It amounts to a spectrum-for-cash swap.

Public policy has probably never been more important for the US wireless industry as it will be over the next several years. And the schedule for Mobile World Congress Americas underscores that. Legislative and regulatory issues will play a major role at the trade show, starting with the first keynote Sept 12 featuring Federal Communications Commission Chairman Ajit Pai and CTIA CEO Margaret Attwell Baker. Other discussions include a panel analyzing the FCC’s incentive auction of 600 MHz spectrum, a look at unmanned aerial services hosted by CTIA Vice President of Regulatory Affairs Jackie McCarthy and a round table examining how the coming transition to 5G is spurring new efforts to streamline siting processes. And that’s just day one.

On August 4, 2017, the Commission released the Connect America Fund Phase II (CAF II) Auction Comment Public Notice, seeking comment on detailed proposals for conducting the Phase II reverse auction designated as Auction 903. While many of the pre-auction and bidding procedures and processes proposed for this auction are similar to those used in other Commission auctions, the proposals include some new procedures and processes. To facilitate public input on the proposals, the Rural Broadband Auctions Task Force announces that the Wireless Telecommunications and Wireline Competition Bureaus will host a webinar about the proposed auction process on September 11, 2017, from 1:00 p.m. to 3:00 p.m. ET.

The House Commerce Committee has switched gears and will hold a Sept. 7 hearing on the post-incentive auction repack in its Communications Subcommittee. The committee had planned to hold a high-profile hearing on network neutrality on that date, but sources say that has been indefinitely postponed. Now, the Communications subcommittee will hold a hearing at 10 a.m. titled “The Broadcast Incentive Auction: Update on Repacking Opportunities and Challenges.” No witnesses had been set at press time. The repack will be getting in gear this fall, with almost a thousand TV stations having to move to make room for wireless operators in the swaths of broadcast spectrum purchased in the spectrum auction.

The US Court of Appeals for the DC Circuit remanded the SNR Wireless v. Federal Communications Commission case to the FCC. Senior Vice President at Public Knowledge Harold Feld said, “We’re extremely pleased that the D.C. Circuit agreed with our analysis that although the FCC had the authority to deny the small business credit, the agency should have given DISH Network, SNR Wireless and Northstar a chance to remedy the problem. As we noted in our amicus brief, the small business credit put licenses in the hands of new competitors and constituted the single largest win of FCC licenses by minority-owned businesses like SNR Wireless and Northstar."

A federal court has upheld the Federal Communications Commission's determination that Dish had de facto control over AWS-3 winning bidders SNR and Northstar.

The FCC denied designated entity (DE) bidding credits to the companies—some $3.3 billion worth—which would have lowered the bid to $10 billion, after which the companies said it could not pay for all of the licenses, paying full price for some and turning back others, which the FCC allowed them to do. "Under the totality of the circumstances, we believe that the FCC acted reasonably and consistently with its Wireless Bureau’s decisions when it held that Dish had de facto control over SNR and Northstar," wrote Judge Cornelia Pillard in the decision, which was rendered by a three-judge panel of Judges Pillard and Janice Rogers Brown and senior Circuit Judge Stephen F. Williams.

But the court also found that the FCC did not give those companies sufficient notice that, if their relationship cost them the credits, the FCC would not give them a change to cure that de facto control.

In the 2007 700 MHz Second Report and Order, the Commission adopted rules for relicensing of 700 MHz Lower A, B, and E Block, and Upper C Block spectrum that is returned to the Commission’s inventory as a result of licensees’ failure to meet applicable construction requirements. The Commission set forth the overall rules and policies for the relicensing process and delegated authority to the Wireless Telecommunications Bureau (Bureau) to implement those rules and policies. To the extent the 700 MHz Second Report and Order and other Commission rules set forth elements of the relicensing process, we cite to those rules, and, by this Public Notice, otherwise seek comment on the Bureau’s proposed approach to the remaining elements of the process, including the respective costs and benefits of the various proposals.

The TV white spaces (TVWS) debate is cranking back up again thanks to a proposal that recommends that the Federal Communications Commision set aside three 6 MHz-wide TVWS channels for unlicensed use in every market across the country. The economic argument for broadband connectivity is undisputed and obvious: Without broadband connectivity, businesses can’t compete, and it’s more difficult for consumers to access critical educational, healthcare and governmental services. Today, approximately 34 million Americans currently lack basic broadband access, according to the FCC—and the majority of them, about 24 million, live in rural areas that simply do not have infrastructure in place to enable it.

To address the gap, strategies for making inexpensive unlicensed spectrum available to ISPs have been a cornerstone of the FCC’s plan to bridge the digital divide. The FCC previously ruled that the 600 MHz duplex gap between 652-663 MHz and Channel 37 would be not be sold to wireless carriers and would be available on an unlicensed basis, once the recent TV spectrum incentive auction was over—given that that broadcasters would be vacating that real estate. The FCC also has an unfinalized notice of proposed rulemaking that would reserve an additional 6 MHz channel in each broadcast market for unlicensed use, at 54-608 MHz. It’s the future of this last band that’s at stake. A bipartisan coalition of 43 Congressional representatives asked the FCC earlier this summer to reserve at least three TV white space channels in the 600 MHz band to support rural broadband deployments—a plan first proposed by Microsoft.

It may take much longer for wireless carriers to deploy services on their new 600 MHz spectrum than previously thought. Bidders committed more than $19.63 billion for TV broadcasters’ airwaves during the Federal Communications Commission’s incentive auction, which ended last spring, with T-Mobile leading the way by spending $8 billion on 600 MHz licenses.

Operators have repeatedly urged the agency to stick to the 39-month repacking plan it has allotted to reshuffle TV broadcasters’ airwaves for wireless use to avoid interference problems as the spectrum is redeployed. But clearing those airwaves for wireless use may actually take twice that long, Robert Gutman of Guggenheim Equity Research wrote this week, citing a recent report from Inside Towers. “As part of the 600 MHz auction, broadcasters have 39 months to move the antennas needed for the television channel repack. However, Vertical Technology Services (a Maryland provider of tower services) estimates that only 14 crews are qualified for the work,” Gutman said in a note to investors. “As such, Kevin Barber, CEO of Tower King II, believes the repack could take five to seven years. If this estimate is correct, it means the towers may not benefit from the rollout of 600 MHz in the immediate future.”

The National Association of Broadcasters is firing back at a letter from tech executives who wrote the Federal Communications Commission in support of reserving broadcast band channels, so called "white spaces," for unlicensed device use. A group of tech company execs banding together as Voices for Innovation Aug 22 raised their voices in support of a proposal by Microsoft that the FCC reserve channels in the white spaces of the broadcast TV band for unlicensed devices as a way to promote rural broadband deployment. NAB is no fan of the plan, and made that clear in its response to the tech exec letter on TV white spaces. That letter talked up the use of the unlicensed spectrum to get broadband to 34 million more homes. Broadband deployment is a signature issue for the FCC under new chairman Ajit Pai.