WASHINGTON-The Federal Communications Commission next week is expected to approve a band plan for third-generation wireless services, a ruling with major implications for incumbent mobile-phone operators of all sizes, potential new entrants and the U.S. Treasury.
Deciding how to configure the 3G band-the 1710-1755 MHz and 2110-2155 MHz bands-and how to write service rules for advanced wireless services has been made difficult by deep divisions in the mobile-phone industry over the geographic size of licenses and the amount of spectrum in each license.
There are no fewer than three band plans in the mix in addition to the one proposed by the FCC. The 3G-band plan under consideration by the agency includes five licenses, three of which would be reserved for regional licensing.
The latest proposal comes from MetroPCS Inc., an independent carrier with operations in Miami, Atlanta, Sacramento and San Francisco.
MetroPCS, which recently acquired spectrum rights in several other markets and touts itself as a flexible, low-cost alternative to the five national mobile-phone carriers, has proposed a seven license, 3G-band plan. MetroPCS asserts its plan will enable small and mid-sized carriers that bought PCS licenses in the 1990s to expand existing networks.
MetroPCS said 3G-band plans proposed by the FCC, T-Mobile/Rural Telecommunications Group and Verizon Wireless are too heavily weighted toward larger spectrum blocks and large, regional licensing areas.
“The problem presented by overly large spectrum blocks or market areas is exacerbated by the realities of the financing market,” MetroPCS told the FCC. “Carriers such as MetroPCS, which are pursuing more localized business plans, do not have financial resources as those of some of the nationwide wireless carriers. As a consequence, MetroPCS cannot afford to acquire and `warehouse’ spectrum for future use that does not meet the company’s near-term business objectives.”
MetroPCS said a band plan skewed toward large spectrum blocks and markets would result in a less competitive auction. Royal Street Communications L.L.C., which picked up six wireless licenses in Auction 58 earlier this year, backs the MetroPCS 3G band plan. So does CSM Wireless L.L.C, which also successfully bid on a handful of licenses at the same auction.
“More moderately sized markets would increase the likelihood that small and rural carriers, who often have a geographically limited sphere of interest, and who have contributed so much to telecommunications in rural areas, can continue to contribute to the public interest by offering localized service that is tailored to the needs of rural communications,” stated CSM in an FCC filing.
The 3G-band plan presents an early challenge for FCC Chairman Kevin Martin, who grew up in rural North Carolina and championed rural causes as a commissioner before becoming agency head in March.
The FCC plans to hold the 3G auction next summer, but there are several hurdles between now and then. Given differences that already have surfaced in the industry, it is highly likely wireless carriers and other parties will ask the commission to reconsider the Aug. 4 scheduled ruling. Court appeals are possible too.
In addition, the National Telecommunications and Information Administration, a Commerce Department unit that advises the president on telecom policy and manages federal government spectrum, must complete by year’s end a cost estimate for moving military radio systems from 1710-1755 MHz to other frequencies. The Congressional Budget Office estimates the Pentagon relocation will cost $2.5 billion.
The 3G auction itself is projected to raise $15 billion.
Lobbying has intensified in recent weeks at the FCC over the design of the 3G-band plan, designated-entity (small business) eligibility and interference protection for fixed wireless and mobile satellite service operators.
Prior to MetroPCS’ proposal, T-Mobile USA Inc. and the Rural Telecommunications Group (a wireless advocacy group for rural telecom carriers) submitted a band plan to create a sixth license by breaking up the sole 30-megahertz regional license proposed by the FCC. That plan has attracted significant support.
Verizon Wireless also put forth a 3G-band plan with six licenses, but T-Mobile, and now, MetroPCS argue the plan has too many regional licenses.
CTIA, the wireless trade association, said the FCC’s 3G-band plan “provides a balance between broad regional and small market areas that will result in the dissemination of licenses to a diverse range of entrants.” CTIA, however, said it would support one 20-megahertz license block on a metropolitan statistical area/rural service area basis.
CTIA opposes restricting affiliations between national carrier affiliation and designated entities. The trade group also rejected the Wireless Communications Association’s push for stronger interference protection for fixed-wireless licenses in the 2150-2162 MHz band.
