[1st-mile-nm] FCC 700 MHz Auction: Open Wireless Spectrum Opportunity

[Richard Lowenberg]

>From MuniWireless
www.muniwireless.com/article/articleview/5956/1/2

Key word: Open

Posted by Harold Feld at 11:48 AM on May 2, 2007

The 700 MHz Auction, Open Access and Municipal Wireless Networks
It seems counterintuitive that the FCCs consideration of rules for the
upcoming 700 MHz auction will have much impact on the future of municipal
wireless. But two proposals under consideration could make significant new
spectrum available for both licensed and unlicensed wireless system
operators. These proposals would require winners of certain licenses to
offer their 700 MHz spectrum on an affordable wholesale basis. If the FCC
approves these proposals, municipal systems could lease beachfront
spectrum to expand the reach and power of their own wireless networks.

For those interested, I have previously published on my blog a lengthy
background piece on the 700 MHz auction. To summarize, Congress in 2005
mandated that television broadcasters switch from analog broadcasting to
digital by February 2009. This transition will free a large block of
spectrum occupied by channels 51-69 (located in various portions of the
700 MHz band). The physical characteristics of this band make it uniquely
valuable for wireless broadband and fourth generation (or 4G) advanced
wireless mobile services. Signals in this band travel significantly
further at lower power. They penetrate foliage and other solid material.
Where they do not penetrate, they shape themselves more easily around
terrain. As a consequence, availability of the 700 MHz spectrum will make
it possible to deploy more powerful wireless systems, able to serve hard
to reach end users cheaper than wireless systems using any of the
currently available unlicensed bands.

Congress directed the FCC to auction 60 MHz of this returned analog
broadcast spectrum and allocate 24 MHz to public safety. Of the 24 MHz
allocated to public safety, the FCC has allocated 12 MHz to new public
safety voice systems, and 12 MHz to new public safety data systems.
Recently, the FCC has proposed to make the 12 MHz public safety data
allocation a single national license operating a wireless broadband
systems for the benefit of all public safety entities and licensed to a
public safety trust (PST) representative of the public safety community.

Because Congress ordered the FCC to auction the licenses, few municipal
operators have thought much about what this proceeding could mean to
municipal wireless systems beyond the possible public safety applications
or the possibility that new WiMax vendors may become available. But two
proposals, one by a Silicon Valley start up called Frontline and another
by a coalition of public interest groups, would make this spectrum
available directly to municipal wireless operators for lease at affordable
prices.

Frontline Wireless, a Silicon Valley-backed start up organized for this
one purpose, has proposed that the FCC create a 10 MHz E Block license on
spectrum compatible with shared use by the proposed Public Safety Trust
licensee. The winner of the E Block would agree to build the proposed
national broadband network for the PST. In addition, the PST would have
access to the E Block spectrum on an as needed basis  taking priority over
any commercial traffic using the E Block spectrum. In exchange, Frontline
(assuming it won the E Block at auction) would have the right to negotiate
with the Public Safety Trust licensee for access to the PST spectrum when
not in use by public safety entities. This would give public safety access
to 22 MHz of spectrum when needed, while allowing Frontline to use idle
public safety spectrum when available.

What makes Frontline potentially valuable to municipal operators (beyond
the public safety applications), is that Frontline has urged the FCC to
prohibit the E Block licensee from selling retail wireless services.
Instead, Frontline would lease access to the E Block (and available PST)
spectrum on a non-discriminatory wholesale basis, a condition known as
open access. While the FCC already allows most licensees to lease spectrum
on a voluntary basis under its secondary market rules, few holders of
valuable licenses have elected to make spectrum available in this way
particularly not to rival operators. Under Frontlines proposed open access
rule, the E Block winner would have no choice. As a result, up to 22 MHz
of extremely valuable spectrum  already interoperable with public safety
systems  would become available for lease for wireless operators
everywhere.

Open access -- which had previously been the rule in the wireline world
before the FCC deregulated in 2005 -- would require the licensee to make
spectrum available on an affordable and non-discriminatory basis.
Frontline or any other E-Block winner could not cut exclusive deals with
large incumbents. Its business model depends on leasing supplementary
spectrum to as many customers as possible, such as municipal operators.
While not enough spectrum to construct a system, Frontline hopes that
operators will use the unique characteristics of the band to fill in holes
created by geography or urban topography, and facilitate mobile and
nomadic uses on point-to-point networks.

For municipal operators, this potentially creates huge opportunities to
cover large rural areas or difficult to reach inner city neighborhoods. It
potentially also allows operators to offer a new area of complimentary
mobile services such as high-bandwidth video  particularly for public
safety users who would also have access to the 12 MHz of PST spectrum.
This supplementary spectrum would be available to system operators that
have already contracted with third parties to build and operate their
networks, since it would not displace the existing system operator.

The Public Interest Spectrum Coalition (which includes my employer, Media
Access Project), supports the Frontline proposal as a means of bringing
spectrum to possible broadband competitors, such as municipal operators
and commercial WISPs. Because the Frontline proposal does not provide
enough spectrum for a possible competitor to offer a genuine third pipe to
the home that can compete with cable or DSL speeds, the PISC has asked the
FCC to go further. PISC proposed that the FCC make 30 MHz of the
commercial spectrum available on an open access basis, and auction the
remaining 30 MHz of spectrum under terms that allow licensees to exclude
others. Making 30 MHz of returned broadcast spectrum available in every
market in the United States would make it possible for new entrants, such
as municipal operators, to construct high quality wireless networks that
equal cable or DSL in terms of speed and performance for residential
subscribers.

In the face of fierce resistance from incumbent wireless operators, the
FCC has solicited comment on both the Frontline E Block proposal and the
PISC 30 MHz open access proposal as part of its pending rulemaking on the
700 MHz auction. You can find a copy of the full Order and Further Notice
of Proposed Rulemaking the FCC adopted at its April 25 meeting here (170
page PDF file). You can find the FCCs much shorter official press release
here. Because the statute requires the auction to begin by January 2008,
and because the FCC must give potential bidders sufficient time before the
auction begins to determine their level of interest and find financing,
the FCC has set a very narrow window for taking comments.

For those who wish to participate, the FCC will take comments until May
23, and reply comments until May 30. Although the FCC will take late
comments, the FCC must decide on the final rules soon after May 30 to meet
the timeline imposed by the statute. Those who plan to file should
therefore do so sooner rather than later. You can filed a comment with the
FCC through the FCCs electronic comment filing system. The docket number
for this proceeding is 06-150.

In addition to the open access proposals, the FCC solicits comment on PISC
proposals to prevent incumbents from again winning the vast majority of
licenses. Those interested in multiple potential providers of licensed
services may wish to comment on these issues as well. These proposals
include barring incumbents from the auction or providing bidding credits
for new entrants. PISC has also proposed changes in the auction rules,
notably a switch from the current open system to anonymous bidding, to
prevent incumbents from targeting and blocking new entrants.

The 700 MHz auction has tremendous potential to reshape our wireless
future. If the FCC adopts these proposals, it will foster a new era of
vibrant wireless competition by making prime spectrum widely available. If
it rejects these proposals and maintains the status quo, as urged by the
incumbents, we can expect our wireless future to look a pretty much the
same as it does today.

- - - - About the author - - - -

Harold Feld is Senior Vice President of the Media Access Project, a
non-profit public law firm representing the Public Interest Spectrum
Coalition at the FCC. Harold Feld also blogs about telecom issues
including the 700 MHz auction  on his own blog Tales of the Sausage
Factory.


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Richard Lowenberg
P.O.Box 8001, Santa Fe, NM 87504
505-989-9110,  505-603-5200 cell

New Mexico Broadband Initiative
www.1st-mile.com/newmexico
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