THE FEDERAL COMMUNICATIONS COMMISSION LAST WEEK approved 700 MHz rules to foster the creation of a nationwide public-safety/commercial broadband network and introduce new devices and applications in a wireless space tightly controlled by four national operators.
The FCC designated for auction a nationwide 10-megahertz spectrum block adjacent to a 12-megahertz block of public-safety spectrum that will be available for consumer and first-responder wireless communications, with the latter having priority access during emergencies. The winning bidder of the 10-megahertz block and the public-safety licensee first will have to negotiate a network-sharing agreement. Plans call for the FCC to arbitrate a solution if the two sides fail to reach an accord within six months. The commission managed to work mobile satellite service into the mix by requiring at least one network handset to be MSS compatible.
A separate 22-megahertz spectrum block reserved on a regional basis will be subject to limited open-access requirements, meaning the winning bidder cannot block third-party devices and applications onto the network so long as they cause no disruption to other communications. The regional blocks can be aggregated through combinatorial bidding to produce a nationwide footprint. If a reserve price of $4.6 billion is not reached, however, the spectrum will be re-auctioned and the open-access condition eliminated. Other spectrum blocks will have reserve prices as well and will be subject to stricter-than-normal buildout and coverage requirements.
The FCC rejected a wholesale mandate for the 22-megahertz block, triggering criticism by Democratic FCC Commissioners Michael Copps and Jonathan Adelstein. Silicon Valley-backed Frontline Wireless L.L.C., Google Inc., Skype Ltd., consumer and public-interest groups, some lawmakers and others argued forcefully for making wholesale a component of open access.
While Frontline Wireless said it still planned to compete in the auction, which could generate $10 billion to $15 billion for the U.S. Treasury, Google said it remains undecided whether it will participate in bidding.
The FCC adopted an anonymous bidding approach to prevent gaming in the auction, which FCC Chairman Kevin Martin predicted will begin in late December or early January. The blind-bidding technique means the identity of parties bidding and winning bids themselves will not be revealed until after the auction closes.
Martin’s gamble
For Martin, the 700 MHz represented an uncharacteristically bold-albeit risky-move to take advantage of the perhaps the last big auction to advance public-safety and broadband objectives that the Bush administration has struggled to achieve. Most of the country lacks public-safety communication interoperability and broadband capability, weak links tragically exposed during emergency response efforts following the Sept. 11, 2001, terrorist attacks and Hurricane Katrina four years later. Cities and states lack the financial resources to dramatically improve public-safety communications in the way envisioned by the FCC. On the commercial side, the White House is regularly criticized by Democrats-which are in the minority at the FCC, but control Congress-for ranking behind more than a dozen countries in broadband penetration. The 700 MHz spectrum-being returned by digitally bound TV broadcasters by February 2009-offers a chance to create a fat wireless pipe to compete against the cable TV-Bell telephone broadband duopoly.
While Martin’s 700 MHz plan will not help President Bush meet his goal of bringing affordable, universal broadband service to all Americans in 2007, the FCC chief has been catapulted to hero status for attempting unprecedented regulatory changes to modernize U.S. public-safety communications.
“We have worked long and hard in recent months to help the FCC forge this order in a manner that will benefit public safety to the maximum degree possible. While we need to review the text of the FCC’s order, it appears that the commission has addressed most of our concerns,” said Wanda McCarley, president of the Association of Public Safety Communications Officials International.
Cyren Call Communications Corp., a persistent force for public-safety reform, said the FCC ruling advances the cause of first responders.
“Today, one chapter closes and a new one begins regarding the creation of a nationwide wireless broadband network for our nation’s first responders,” stated Cyren Call. “Cyren Call entered the national conversation on this matter more than a year ago and today’s action represents the most significant step forward in providing the critical communications tools desperately needed by public safety. We applaud the FCC’s leadership on this issue and look forward to reviewing additional details in the report and order on this rulemaking.”
Cyren Call is a leading candidate to become the public-safety broadband licensee’s agent in negotiations with the 10-megahertz commercial broadband licensee on network design and operational requirements.
Industry response mixed
The FCC decision represented a setback for the mobile-phone industry, which largely opposed any conditions on the 62 megahertz of spectrum to be auctioned. AT&T Inc. reversed course and ultimately backed limited open access. The shift weakened the cellular industry’s lobbying campaign to have the mix of small, medium and large wireless licenses auctioned free and clear of any requirements.
The industry put the best face possible on the FCC ruling.
“The FCC’s considerable deliberation over the 700 MHz auction rules has left us pleased in a number of respects and still concerned in others,” said Steve Largent, CTIA president. “Specifically, we believe the commission has taken the appropriate approach by recognizing the importance of not restricting the number of auction entrants, nor requiring them to fulfill wholesale licensing requirements or requiring geographic buildout on all the licenses. In these regards the FCC has replicated past auctions that have led to tremendous benefits for consumers and the U.S. Treasury.
“At the same time,” added Largent, “we are disappointed that a significant portion of this valuable spectrum will be encumbered with mandates that could significantly reduce the number of interested bidders. We remain committed to the principle that wireless consumers and American taxpayers are best served when such a valuable commodity is auctioned in a fair and competitive manner with no strings attached, and we commend Commissioner Robert McDowell for his belief in flexible auction rules and the free-market system.”
