The FCC Fri. delivered a big loss to Council Tree, the Minority Media & Telecom Council (MMTC) and Bethel Native Corp., refusing to make changes they demanded in designated entity (DE) rules released April 17. The order clarifies the FCC’s intent in referring to “spectrum capacity,” and stating that the rules don’t apply retroactively to licenses bought in earlier auctions. And it counters complaints a DE decision on unjust enrichment rules didn’t follow proper procedure.
Wireless Spectrum Auctions
The FCC manages and licenses the electromagnetic spectrum used by wireless, broadcast, satellite and other telecommunications services for government and commercial users. This activity includes organizing specific telecommunications modes to only use specific frequencies and maintaining the licensing systems for each frequency such that communications services and devices using different bands receive as little interference as possible.
What are spectrum auctions?
The FCC will periodically hold auctions of unused or newly available spectrum frequencies, in which potential licensees can bid to acquire the rights to use a specific frequency for a specific purpose. As an example, over the last few years the U.S. government has conducted periodic auctions of different GHz bands to support the growth of 5G services.
Latest spectrum auction news
NextWave Broadband plans to acquire WCS Wireless licenses XM Satellite Radio was to buy before both sides killed that deal (CD May 23 p10). NextWave quietly filed an application at the FCC for approval of transfer of 16 licenses WCS owns in cities across the U.S. “NextWave and its affiliates… have the technical and operational expertise to hold and control FCC licenses and are financially qualified to acquire the licenses,” the firm said. NextWave Broadband is a successor to NextWave, which went bankrupt in June 1998, having bid $4.67 billion in 1996 for 63 PCS licenses in that year’s C- block auctions. In Jan., the company said its spectrum holdings cover more than 93 million POPs in the U.S. NextWave Broadband hasn’t issued a press release on the WCS buy.
The value of unlicensed spectrum below 2 GHz came into dispute as key players answered an FCC notice of proposed rulemaking (NPRM) on policy for the jam-packed 904-909.75 MHz and 919.75-928 MHz spectrum, known as location & monitoring service (LMS) bands. With licensee Progeny LMS seeking re- examination of the rules, advocates of the status quo claimed the arrangement was defined clearly in the 1999 LMS auction, simply dooming licensed spectrum in those bands.
Designated entities (DEs), venture capitalists and rural groups are pressing the FCC for substantial changes to coming designated entity rules. Unless the FCC acts the next few days Council Tree, the Minority Media & Telecom Council (MMTC) and Bethel Native Corp. are expected to ask an appeals court to stay the order, set to take effect Sat. If the rules do kick in, they would apply to an advanced wireless services auction that starts Aug. 9. Sources disagree whether Chmn. Martin will yield to the pressure.
The Rural Telecom Group voiced its strong opposition to the FCC’s new designated entity and unjust enrichment rules. As the FCC considers a petition for reconsideration of the rules ahead of the Aug. advanced wireless services auction, the filing could prove significant, especially since the rule change was designed to help small players. Comrs. “Adelstein and Copps in particular, but the others too, are very sensitive to any concerns by the rural community,” a regulatory lawyer said: “There’s growing pressure on Chairman Martin to change the rules and this adds to that pressure.” RTG said the FCC should instead focus on enforcing rules already on the books, examining “any suspect ’sham’ DEs in the AWS auction and future auctions.” At the least, the unjust enrichment rule change mustn’t apply to spectrum licenses purchased in previous auctions, RTG said: “The Commission’s retroactive adoption of a 10-year time frame for unjust enrichment payments instead of the 5-year time frame in the existing rules is legally unsupportable and highly inequitable to existing licensees that acquired their spectrum under the well-established 5-year schedule.”
The FCC air-to-ground auction appears to be essentially over, with AirCell the all but guaranteed winner of the key 3 MHz license to offer wireless broadband service on commercial airliners. The firm’s high bid was $31.3 million. AirCell, which already offers Internet services to the general aviation market, is expected to have little to say for several weeks after the auction ends on its plans for building out a network because of anticollusion rules.
The FCC must rely on documentation -- not rhetoric -- in considering telco arguments to remove municipalities from video franchise oversight, Comr. Copps said. He told a news briefing he'll rely on “the record” in the review and wants a further study of media ownership, which he linked to network neutrality. The FCC should provide Congress “options papers,” Copps said: “I want this Commission to be as active as it can be… teeing up options, especially for our friends in Congress.”
The FCC’s decision to delay the start of the advanced wireless services (AWS) auction from June 29 until Aug. 9 (CD May 22 p1) is considered bad news for T-Mobile - the national carrier with the most at stake in the auction. The net effect for other potential bidders of the action late Fri. is less clear. The FCC still must address a petition for reconsideration on designated entity rules for the auction, but is generally expected not to make substantial changes to the revised rules approved in April, officials said.
The FCC Fri. suspended until today (Mon.) its air-to-ground auction of spectrum licensees to be used for wireless broadband on commercial flights. The move was mysterious. “People have been calling the Bureau,” said a source who’s following the auction: “They've been saying there’s been some delays. It’s on track. They expect to be back on Mon.” Verizon Airfone -- which had been considered front runner to buy the spectrum -- hasn’t played a important part. After 8 rounds of bidding, Unison Spectrum has the highest bid at $4.5 million for a 3 MHz license. Space Data has the leading bid for the other 1 MHz license at $244,000. Unison’s identity is also mysterious. Todd Lawyer, listed as the contact on Unison’s short form application, said in an e-mail Fri. he isn’t commenting until after the auction.
Bringing broadband access to underserved areas is the most “economically productive and socially beneficial” use of spectrum freed up by the switch from analog to digital TV, the U.K. Communications Management Assn. and Open Spectrum U.K. told the Office of Communications (Ofcom) Fri. The transition in 2012 is expected to release a large amount of prime spectrum, and Ofcom is examining ways to use the “digital dividend.” The groups told the regulator that wireless broadband is the best Internet access solution for rural regions, and that networks built for UHF cost less than network for higher bands. Allowing wireless access networks to use UHF will broaden the territory broadband is economically feasible, they said. But they added that experience has shown rural areas aren’t likely to win spectrum license auctions when they compete with higher- density areas -- so Ofcom should reserve spectrum for use in underserved and rural locations without requiring license auctions. Ofcom’s final draft proposal for the digital dividend is due in the fall.