WASHINGTON-The Federal Communications Commission this week will vote to consider lifting the 45 megahertz spectrum cap, revamping relocation rules for 2 GHz mobile satellite operators and auctioning spectrum mandated by Congress-three controversial issues with broad implications for future terrestrial and space-based wireless systems that could split the wireless industry and federal regulators.
At its open meeting Thursday, according to sources, the FCC plans to issue a neutral proposal on the 45 megahertz commercial wireless spectrum cap that seeks public comment on a range of options that include maintaining the status quo; raising the cap; eliminating the cap altogether; or modifying the cap on a case-by-case basis.
There is no consensus on spectrum-cap policy among the FCC members or within the industry, according to sources.
The Cellular Telecommunications Industry Association, which represents most cellular and personal communications services licensees, recently asked the FCC to repeal the spectrum cap. Under the 1996 telecom law, the agency has one year to act on CTIA’s forbearance petition.
The Personal Communications Industry Association, which speaks for paging and start-up PCS operators, has maintained in the past that spectrum caps were appropriate to foster new wireless competition.
But the world has changed significantly since spectrum caps were put on the books several years ago as an antitrust check against a excessive spectrum concentration in any given market.
Today there is more facilities-based wireless competition, though that is somewhat offset by a mega-merger trend. In addition, preparations have begun to move the U.S. mobile phone industry to third-generation technology, a transition that will require additional spectrum regardless of which 3G standards are adopted.
“We’re not rigid or dug in on anything,” said Mark Golden, PCIA senior vice president of industry affairs.
Republican FCC Commissioners Harold Furchtgott-Roth and Michael Powell, based on their strong confidence in free markets, appear more likely to support wholesale removal of the spectrum cap than FCC Chairman Bill Kennard and fellow Democratic Commissioners Susan Ness and Gloria Tristani.
Yet, Powell, owing to his Justice Department antitrust background, could be more prone to a compromise on spectrum caps.
Kennard, for his part, was FCC general counsel under former FCC chairman Reed Hundt when spectrum caps were put in place.
On the 3G spectrum issue, too, differences of opinion exist within industry. The Telecommunications Industry Association, which speaks for wireless vendors, wants the FCC to earmark the 2110-2250 MHz band for 3G-the same spectrum chunk identified for auction in the 1997 budget act. Congress also targeted for auction 15 megahertz in the 1990-2110 MHz band that broadcasters use.
Others fear a huge infusion of 3G spectrum could undercut heavy investments-many billions of dollars-already made in second-generation mobile phone systems.
It is possible the FCC will address to some degree TIA’s petition in the 2 GHz emerging technology rulings Thursday.
On a separate front, ICO Global Communications and other 2 GHz mobile satellite applicants are asking the FCC to consider a “managed relocation” regime to relocate incumbent licensees. Today’s rules dictate that the incoming operator must pay to relocate the outgoing licensee.
The ICO plan calls for the gradual migration of 2 GHz users to other frequencies that follows the pace of commercialization and spectrum requirements of new mobile satellite operators. Under this arrangement, the disruption to outgoing 2 GHz incumbents would be minimized as would relocation cash outlays by satellite carriers.
“We believe an appropriate framework that incents both sides to negotiation can be very fruitful,” said Francis Coleman, a regulatory analyst for ICO.
ICO, which proposed a 2005 sunset date for relocating 2 GHz terrestrial users, has mostly overseas investors but is contracting with U.S. vendors, like Hughes Electronics Co., for the multibillion-dollar global satellite phone system expected to begin commercial operations in 2000.
ICO said relocation has been hampered by resistance from broadcasters and cable TV operators to provide an inventory of 2 GHz users.
On a related note, one source said pressure from the National Association of Broadcasters prompted the Clinton administration to find a different 15 megahertz block than the one Congress wanted to sell.
In the past, the FCC decided against auctioning global satellite spectrum because it could complicate international spectrum acquisition and business planning. ICO and others contend the burden of relocation costs likewise could have a chilling effect on the development of an emerging global satellite market that is extremely capital intensive.
A big worry is that if the FCC imposes relocation requirements on 2 GHz mobile satellite licensees in the United States, other countries will emulate that policy and thereby exacerbate their financial problems.
