Wireless Spectrum Auctions

The FCC issued a decision on some of the technical issues raised in June in a rulemaking tied to the advanced wireless services (AWS) auction. the auction, expected to take place this summer, could raises in billions of dollars for the Treasury. The FCC sought guidance on issues such as reserve bid prices that guarantee govt. agencies will be fully compensated as they exit the spectrum put up for sale, and on options for preserving tribal land bidding credits. The Commercial Spectrum Enhancement Act creating the trust fund for compensating agencies required the FCC to make changes proposed in the rulemaking. A few industry players, notably Verizon Wireless and T-Mobile, had provided some advice for how the FCC should proceed in an otherwise quiet docket. Sources said there saw no major surprises in the order.

Broadband wireless in the 2.5 GHz band would be held back by the FCC’s limiting to 15 years license terms for Broadband Radio Service and Educational Broadband Service, service providers indicated to a Wireless Communications Assn. conference in San Jose last week. The restriction would be bad news for Sprint Nextel, which plans “a sizable commitment” in the band and would face competitors like Verizon without similar constraints in their bands, said Paul McCarthy, Sprint’s licensee relations dir. Other matters that will affect how quickly the 2.5 GHz band is used effectively are creation of transition rules to remove impediments, auctioning whitespace, and “substantial service” requirements, he said. The pace of advance will be determined especially by how quickly “speculators” among license holders are removed from the spectrum, McCarthy said. But “you can deploy now, and we're going to do that,” he said: “Now is the time to compete with EVDO.” Other regulatory matters cited as affecting how quickly broadband wireless flourishes are whether Commercial Mobile Radio Service is classed as provision of pure information service; conditions of VoIP provision; CALEA, E-911 and universal service fund requirements; terms of access to the public switched phone network; and network neutrality. Clearwire supports net neutrality and believe it applies here, but “there’s a traffic management issue that allows you to guarantee your customers quality of service,” said Gerard Salemme, Clearwire exec. vp-strategy, policy & external affairs. It’s “not as simple as saying we're in favor of letting other people use our network,” he said. A Dec. agreement for Sprint to swap smaller-market 2.5 GHz licenses for large-market licenses from Clearwire foreshadow more such deals, executives of the companies said. “We both have a common interest in maximizing the value of that spectrum and its efficiency,” Salemme said. They also agreed mobility is central to the success of services in the band. Clearwire will start deploying the capability “in the very near term,” Salemme said. “The very, very near term.” -- LT

SAN JOSE -- An FCC aide indicated notice for the Advanced Wireless Services (AWS) spectrum auction could appear by early Feb. Roy Knowles, senior wireless telecom auctions analyst, said Fri. at a Wireless Communications Assn. (WCA) conference if he were a bettor, he'd say “the next couple weeks should bring some kind of announcement.”

Clearwire has won more new broadband customers than cable and telco competitors in all but one of its 25 U.S. markets the past year, a senior executive said Wed. “We are getting more than our share with the new subscribers,” CTO Nicolas Kauser told the Wireless Communications Assn. conference in San Jose. Predicting the trend would continue, Kauser said he foresees a “3-way race… maybe 4-way… with the mobile operators… We think we will have our God-given right to a 35% market share.” Kauser didn’t say which market will be the exception. Other bright signs are markets showing month-over-month sales growth and strong word of mouth, he said: “60% of sales seem to come from referrals.” Clearwire, founded by wireless pioneer Craig McCaw, offers wireless broadband access using 2.5 GHz spectrum. It’s mostly in small cities in Fla. and the western U.S.; among its larger markets are Anchorage, Boise and Jacksonville. The company sees its niche as between those of fixed broadband and of 3G, which will have ubiquitous coverage Clearwire will lack, but not as much bandwidth, said Kauser. He spoke generally of company efforts to evolve past proprietary technology “to make it more open… to join the WiMAX trend.” The firm has been talking with WiMAX proponents about convergence, he said. Rollout will gain speed this year in the U.S. and abroad, where Clearwire has 16 markets in northern Europe, and via a partnership in Mexico, said Kauser, also pres. of Clearwire International. “We're looking forward to an aggressive growth this year, which will be many times as large” as in 2005, the company’s first full year offering service, he said. Clearwire is rolling out VoIP in the U.S. this quarter, he said. And the company soon will pursue allowing roaming throughout the U.S., Canada and Mexico, Kauser said. -- LT

Verizon Airfone met with International Bureau and Wireless Bureau staff to discuss progress on cross-border agreements with Canada and Mexico when the U.S. begins to permit broadband on commercial flights following the May air-to-ground auction. Verizon is the ATG incumbent and will continue to offer services using a 1 MHz license. The company also plans to bid aggressively for the spectrum licenses being offered at auction. “As Airfone noted in previous meetings with the staff, timely negotiations of new cross-border agreements with Canada and Mexico is extremely important to the provision of broadband air-ground services,” the company said. “In addition, it is critical to enable Airfone to meet its obligation under the new rules adopted by the Commission, i.e., to reconfigure its current narrowband system -- such that it uses just 1 MHz of spectrum -- within 24 months of the grant of new licenses.”

Ties between major carriers and designated entities (DEs) are coming under the Wireless Bureau microscope against a backdrop of long-pending action on a further notice of proposed rulemaking on DE issues. Late last week, that NPRM began to circulate on the 8th floor. But, due to an Aug. 2005 FCC agreement to launch an NPRM before a summer 2006 advanced wireless services (AWS) auction, FCC staffers already are asking more questions about relationships between carriers and DEs, industry and FCC sources said. The NPRM would go a step further and prohibit some relationships altogether.

To extend broadband, Va. may reach out to untested technologies whose creators see the sense in sharing the risk of rollouts, the state’s new technology secretary said. When private providers aren’t delivering, the state should consider “advanced technologies that might be less mature” but whose owners may “take chances in the marketplace to show their capability” to close gaps between high-speed Internet haves and have-nots, said Aneesh Chopra. Now Advisory Board Co. (ABC) managing dir., Chopra, 33, will join the cabinet of Gov.-elect Tim Kaine (D), who takes office tomorrow (Sat.).

Former FCC Comr. Rachelle Chong was nominated Thurs. to be the newest commissioner on the Cal. PUC. Chong would fill the vacancy left by the departure of former Comr. Susan Kennedy. Chong, a Republican, was on the FCC 1994-97 when the FCC was implementing the 1996 Telecom Act, setting up the first PCS wireless spectrum auctions, finalizing DTV rules and coping with new wireless and satellite services. Most recently, Chong was in private telecom practice as an attorney, mediator, arbitrator and expert witness. The appointment of a former federal telecom regulator to the state commission overseeing the nation’s largest telecom marketplace follows on the heels of a Tenn. state regulator, Deborah Tate, being appointed to fill an FCC vacancy. Gov. Arnold Schwarzenegger (R) said Chong’s telecom background and “exceptional understanding of the regulatory environment” will be major assets to the PUC. Kennedy left the PUC to become Schwarzenegger’s chief of staff. Chong’s appointment must be confirmed by the Cal. Senate.

The FCC’s long-awaited BRS/EBS order has been withdrawn from circulation so new Comr. Tate can get up to speed on its complex issues, industry sources said this week. The order involves leasing spectrum assigned to educational institutions for wireless broadband use. Meanwhile, lobbying continues. Motorola defended itself against the Assn. of Home Appliance Mfrs. (AHAM) charges that its recent data on the interference threat from microwave ovens and other IMS devices were based purely on “discredited” information and an NTIA study that tested old gear. A group representing ITFS license holders urged an end to secrecy on the terms of leases filed at the FCC.

The FCC Wed. scheduled its long-awaited air-to-ground (ATG) 800 MHz auction for May 10. Companies led by Verizon’s Airfone, a prospective bidder, had asked the FCC to schedule an auction as soon as possible. The auction means that passengers on some commercial flights could have access to broadband through the ATG spectrum as early as next year.