Progress made on 700 MHz auction plans, challenges remain

The Federal Communications Commission, facing congressionally-mandated deadlines and time pressures to complete 700 MHz rules to give wireless license bidders sufficient time to prepare for the upcoming spectrum auction, suddenly finds itself bogged down trying to balance competition, public safety, broadband and other public policy issues that have become increasingly intertwined.
Indeed, the FCC delayed voting on 700 MHz and related digital TV transition agenda items until last night because of day-long negotiations over band plans old and new. When the agency finally acted Wednesday evening the universe of undecided 700 MHz issues seemed to have expanded rather than narrowed. The agency, however, did agree on making available to bidders a mix of small, medium and large wireless licenses and to enforce strict, geographic-based build-out requirements.
As expected, the FCC officially recognized Frontline Wireless L.L.C.’s 700 MHz public safety-commercial broadband wireless plan by requesting public comment on the proposal.
Commissioner Michael Copps, a Democrat, said continued public safety communications deficiencies-such as lackluster interoperability-in the aftermath of the Sept. 11, 2001, terrorist attacks and Hurricane Katrina represent “a truly monumental national failure.” At the same time, Copps voiced skepticism about whether Frontline could improve matters.
“I will need strong assurances-much stronger than any we have been provided thus far-that the plan will actually worked before I can support it,” Copps stated. “And by work, I mean work for public safety. I’m talking about an interoperable network-built and configured to public safety standards-that police officers, firefighters and EMS technicians and other first responders all across the nation can actually afford to use.”
Commissioner Jonathan Adelstein, the other Democrat on the GOP-led FCC, agreed in less animated fashion.
“I support our inquiry into whether or not we should condition a “Block E” license on the licensee constructing a public safety broadband network and providing wholesale commercial services. I am pleased that we were able to add a number of important questions about the oversight of such a potential licensee,” Adelstein said.
While the FCC action was a step forward for Frontline, the startup company sounded anything but assured about its proposal’s future.
“There is still time for the FCC to do the right thing to meet the needs of public safety users for interoperability and of commercial users for innovation, choice and competition,” said Frontline CEO Haynes Griffin. “But unfortunately it remains unclear whether the FCC will seize this once-in-a-generation opportunity of this auction to meet these critical needs. Failure is not an option.”
The mobile phone industry opposes the 10 megahertz wholesale-open access component and other aspects of Frontline’s proposal, while consumer and other groups endorse the plan because of the potential to extend net neutrality principles to the wireless sector.
“We are very pleased that the commission recognizes the pivotal role this auction will play in helping to create a competitor to cable and the telephone companies,” said Gigi Sohn, president of Public Knowledge, one of five organizations in a coalition seeking to shape 700 MHz rules. “If the commission adopts the rules we suggest, consumers will benefit from having more companies offer more types of services in many different areas.”
Aside from still-unsettled public safety issues related to the 30 megahertz of commercial spectrum set for auction and the 24 megahertz earmarked for first responder communications, the FCC still must settle on a 700 MHz auction band plan and a new 700 MHz guard band configuration.
In an apparent shot at his two Democratic colleagues, FCC Chairman Kevin Martin complained about lack of support for a proposal to create a wireless alternative to the landline telephone/cable TV broadband duopoly.
“The leading technology companies -Google, Intel, Skype, Yahoo, along with DirecTV, and EchoStar are the only parties that have promised to try to provide a national, wireless broadband alternative,” Martin stated. “They have explained that, for a national wireless broadband service to emerge, the auction must do three things: Make available at least one 11-megahertz paired block; offer at least some large geographic areas; and enable package bidding so that rights to a national service could be acquired. These technology companies have formed a coalition urging the Commission to follow these key principles that they believe are essential to the deployment of an additional broadband competitor.
“I put forth a proposal that would meet these three requirements. I am surprised that some of my colleagues do not support this approach. Indeed, some of them have been the most critical of the current state of broadband deployment and competition and the most vocal about us needing a national strategy. It is puzzling that they would not endorse taking the minimum steps necessary to enable a wireless broadband alternative to develop for all Americans.”
The mobile phone industry urged the FCC to resist the urge to fix a system that it said is not broken.
“There is a proven model for success that we can be following and that is the recently concluded AWS [advanced wireless services] auction,” said national cellular association CTIA. “Because the policy was to auction that spectrum in a free and unencumbered process, the results were incredibly positive. The AWS auction not only brought new entrants into the already competitive wireless marketplace, but it also yielded a record amount of money for the United States Treasury. If the 700 MHz spectrum is put-up for auction without unnecessary restrictions and conditions, positive results for everyone involved will follow. . Furthermore, it’s important for the commission to recognize the ever-increasing role wireless is playing in the broadband marketplace. In February, the Commission released a report that showed nearly 60 percent of all new high-speed lines in America were wireless. As Americans seek to become even more productive and efficient while on-the-go, this trend will only increase. We should not lose sight of what the American telecommunications consumer is demanding from the competitive marketplace.”
Commissioner Robert McDowell repeated concerns about fighting the clock.
“Opening up the lower and upper 700 MHz band for auction is America’s best opportunity for spurring more competition in the broadband market. More than likely, we will not have another chance like this for years. That’s why it is so important that we get it right. But we also need to act quickly. That’s not just a good idea, it’s the law,” McDowell stated. “Congress has mandated that we start the auction no later than January 28, 2008, and deposit the auction proceeds by June 30, 2008. So, we appear to have some tension between getting it done right and meeting our statutory deadlines. That said, I am optimistic that we can produce high-quality service and auction rules on time. However, I am not without some anxiety.”