WASHINGTON-The Federal Communications Commission, besieged by educators who oppose any auction of their spectrum, is expected this week to approve a new 2.5 GHz plan designed to foster wireless broadband deployment and accommodate licensees forced off the lower end of the band to free frequencies for third-generation mobile-phone service.
“I think we’re going to get it right,” said John Muleta, chief of the FCC’s Wireless Telecommunications Bureau at an industry conference last week.
Muleta and Bryan Tramont, chief of staff to FCC Chairman Michael Powell, largely sidestepped the auction issue. What the two officials did say about the issue tended to reflect their desires to make auctions available-in addition to secondary-market leasing and sales-as another market incentive to attract capital investment to the 2.5 GHz band. Muleta several times mentioned wanting to make the highest and best use of the spectrum, a phrase usually associated with auctions.
In addition to favoring market-based tools in spectrum management, the FCC has a statutory obligation to use auctions whenever possible in wireless licensing.
At the same time, the two FCC officials stressed they wanted to protect educational institutions currently in the band.
“This has nothing to do with changing uses of ITFS (Instructional Television Fixed Service) spectrum,” said Muleta.
Much of the 2.5 GHz band-shared by ITFS and Multipoint Distribution Service technologies-is leased for commercial wireless applications.
Colleges, school districts and a major religious-based group-the Catholic Television Network-have ratcheted up FCC lobbying the past two weeks in hopes of persuading Powell to take the auction option off the table and forbear from lifting eligibility restrictions in the 2.5 GHz band.
But as Tramont noted, “It is against the trend.” For sure, flexibility has been a hallmark of spectrum reform efforts at the FCC since the mid-1990s.
Powell is a big fan of disruptive technology and markets.
“These new rules will unleash the power of wireless broadband over fixed and mobile platforms in this band and provide tremendous benefits for Americans in the form of personalized and ubiquitous services, economic growth and greater security,” the FCC chairman said in prepared remarks for delivery to the Wireless Communications Association International conference last Thursday.
WCA, which represents educational and commercial licensees at 2.5 GHz, warned the FCC that inclusion of auctions in 2.5 GHz licensing could lead to costly and time-consuming lawsuits. Moreover, such litigation could create enough uncertainty to chill investment in the band, undermining a primary objective of government and industry.
The technical aspects of overhauling the 2.5 GHz band are complex enough. Making the job all the more complicated and controversial is that industry and educational groups are not unified on combustible eligibility and auction issues.
Last week, Gerald Faulhaber, a University of Pennsylvania professor and a former FCC chief economist during the Bush administration, chimed in with a stinging indictment of establishment forces that seek to maintain the status quo.
“There are potential losers from open licensing [in the 2.5 GHz band],” said Faulhaber in an FCC filing. “They are those persons within the incumbents’ organizations who manage and lease their ITFS spectrum and the attorneys who help defend their interests by, among other things, filing comments before the FCC. Should their organizations sell their spectrum, the jobs of these managers, bureaucrats and lawyers would be much reduced, perhaps eliminated.”
Faulhaber added: “Incumbent licensees appear to be opposing a very useful policy initiative at the FCC that is actually in their interest, based on a faulty understanding of the economics.”
What could prove most persuasive, however, are the views of the one person whose growing presence in wireless broadband generally and in the 2.5 GHz band specifically could shape the future direction of portable Internet service.
Craig McCaw said 2.5 GHz spectrum should not be bottled up, but he does not support taking frequencies away from schools to create an auction opportunity for the FCC.
“We think the mechanism of shaving channel widths is probably not the right answer. So we actually don’t favor the plan that’s constituted,” said McCaw in a WCA speech last week. “We think it’s probably not the right answer, given the job we have to do and the issues before us. I know the plan has been described to us, and we’re trying to see if there’s a better way to do this.”
McCaw did not appear to rule out auctions completely, however, limiting his opposition to the current FCC plan.
Whether the FCC will drop auctions from the new 2.5 GHz regulatory regime is unclear.
“I don’t know where we’ll end up,” said Tramont.
