The FCC should offer TV white spaces spectrum, but only in an auction for fixed use, especially wireless backhaul, the Rural Telecommunications Group and FiberTower said. Their white paper contradicts proposals by Microsoft, Dell and other high-tech companies, which call for the spectrum to be made available unlicensed for mobile devices. Other groups and companies, including Sprint Nextel, also are starting to tell the FCC that the best use for the spectrum is wireless backhaul. They call that use critical to support buildout of cell towers needed as advanced wireless service and 700 MHz spectrum goes on line.
After years of lobbying, backers of a trust for funding education and training using advanced technologies and public broadcast have gotten Congress to weigh a bill embracing all but one of their aims. HR-3631, by Reps. John Yarmuth, D- Ky., and Ralph Regula, R-Ohio, doesn’t tie funding to proceeds of spectrum auctions, as Digital Promise and allies sought.
Opening FCC designated entity rules to wholesalers will be Frontline’s “No. 1 priority” on a petition for reconsideration filing due Sept. 24, Frontline attorney Jonathan Blake said in an interview. The filing follows an Aug. 22 meeting between Blake and FCC General Counsel Sam Feder on an FCC rule restricting wholesale businesses from designated entity status. Unless dropped, that rule would “handicap” Frontline and other wholesalers’ ability to take part in the 700 MHz auction, Blake said, suggesting that harm would come to open access if that is the case.
A public safety communications trust fund would be set up under a bill introduced Wednesday by Reps. Bart Stupak, D- Mich., Eliot Engel, D-N.Y., and Vito Fossella, R-N.Y. The bill calls for a nationwide interoperable communications system for first responders, to be created with revenue from auction of 60 MHz of spectrum within the 700 MHz block. The bill would dedicate auction proceeds exceeding $11 billion to the trust fund, which would get up to $500 million a year from FY 2008 to 2010 to implement the program. After that, the fund would receive 50 percent of net revenue from future spectrum auctions conducted by the FCC. Stupak in a press statement predicted the bill would enjoy wide bipartisan support. NTIA would manage the trust fund, according to the bill.
Spectrum allocations are not economic activities subject to value-added tax (VAT), the European Court of Justice (ECJ) said Tues. The case arose from the 2000 issuance of licenses for 3G mobile phone services by the U.K. and Austrian telecommunications regulators. Several providers then won licenses in an auction, paying 22.5 billion pounds (38 billion euros) in the U.K., and 831.6 million euros in Austria. In actions in their respective national courts, the companies argued that the allocations of rights by the states were transactions subject to VAT and that their payments had included the tax, which they were entitled to deduct. The ECJ said only economic activity is subject to VAT. Allocating spectrum rights to economic operators is a necessary precondition for access of those companies to the mobile telecommunications markets and does not amount to participation in the market by regulators, it said. Only providers holding frequency rights granted can exploit them, the court said, and the fact that issuing the rights gives rise to a payment does not affect an activity’s legal status. Spectrum auctions by national regulators do not amount to economic activity within the meaning of the Sixth VAT Directive, the ECJ said.
Proposed FCC build-out requirements for the 700 MHz band, which Chmn. Martin calls “the most stringent,” will hurt new entrants in the band, EchoStar CEO Charles Ergen told analysts in a Thurs. Q1 earnings call. That won’t necessarily stop EchoStar from participating in the auction, he said: “We are used to doing impossible things and those rules would not be a reason to not participate.” The Commission wants to require operators to serve 25% of their license areas in 3 years, 50% in 5 years and 75% in 8 years or risk losing authority to serve unserved areas.
Rural phone providers with ties to cable and satellite TV operators should alert customers to the DTV transition, House Commerce Oversight Subcommittee Chmn. Stupak (D-Mich.) said Tues. Each time conflict arises over retransmitting Detroit Lions football games, his phone “lights up,” he said: “Just as there’s a First Amendment right to free speech, and a 2nd Amendment right to bear arms, there is a ‘1-1/2’ amendment that says ‘Don’t take away my TV.'” DTV transition education hasn’t gone well, he said: “We have not done a good job of telling Americans that they will lose their TV.” Broadcasters must vacate spectrum used for analog TV by Feb. 2009. On a related track, at its April 25 meeting the FCC is expected to consider how to use that spectrum, of which 24 MHz has been allocated to public safety. The rest will go up for auction, but rules for that auction and use of that commercial spectrum are in flux. “If the spectrum auctions are handled properly, you will really benefit,” said Stupak, urging some spectrum be sold in chunks. “It is not fair to let the smaller communications companies compete with AT&T and Verizon,” he said, speaking for his rural constituents: “We need our own niche.”
NTIA should be ready to ask Congress or the White House to supply more money for the DTV converter box program if it becomes apparent that the $1.5 million mandated isn’t enough, Democrats and Republicans agreed Thurs. at an House Telecom Subcommittee oversight hearing. NTIA Dir. John Kneuer said he expects the money to be sufficient, but the program NTIA has set up provides for compilation of “real-time” data that he will share with Congress so “we can collectively make a decision.”
A trust fund to finance educational and public broadcasting from spectrum auction proceeds could start as a pilot program due to budget limitations, said Anne Murphy, exec. dir. of Digital Promise, now lobbying Congress for the trust. Digital Promise was started by former FCC Chmn. Newton Minow and former PBS Pres. Lawrence Grossman to get Congress to create the Digital Opportunity Investment Trust (DOIT) for schools, libraries, museums and public broadcasters.
That the partisan divide is as wide as ever over whether there’s enough money to supply DTV coupons to all who want them was evident at this week’s House Telecom Subcommittee hearing on the DTV transition (CD March 29 p1). But for now, Democrats who say NTIA’s coupon program is vastly underfunded seem content to maintain close oversight over the process as they monitor coupon requests, converter box availability and consumer outreach.