LAS VEGAS-The Industrial Telecommunications Association, or a subsidiary thereof, “needs to do everything it can to participate” in the upcoming auction of the guard-band spectrum, said ITA President Mark E. Crosby.
The Federal Communications Commission will auction off 104 licenses in the 700 MHz band to guard-band managers on June 14.
The FCC is creating two guard bands to protect public safety from interference. The licenses are being sold to guard-band managers. After winning a license at auction, the guard-band manager would then be free to “subdivide its spectrum in any manner it chooses and make it available to system operators or directly to end users for fixed or mobile communications, consistent with the frequency coordination and interference rules,” said the FCC.
The guard-band managers would not be permitted, however, to lease spectrum to those using a cellular-like architecture.
The licenses will be for 52 major economic areas. One license will be four megahertz (a pair of two megahertz blocks) located at 762-764/792-794 MHz. The FCC has proposed minimum bids for this license ranging from $3,200 to $3.74 million. The second license will be two megahertz (a pair of one megahertz blocks) at 746-747/776-777 MHz. The FCC has proposed minimum bids ranging from $2,500 to $1.87 million.
The spectrum, being made available with the transition to digital TV, is known as 60-69 because of its place on the TV dial. There is a total of 60 megahertz. Congress split the spectrum so that 24 megahertz is to be used for public-safety operations and 36 megahertz for “commercial” uses.
Since the 60-69 spectrum is considered “prime real estate” by the wireless industry, every sector tried to convince the FCC to give it a piece of the pie.
Proposals for use of the spectrum included everything from using all of it for third-generation wireless to setting aside some spectrum for private wireless uses. The FCC said its decision to auction 30 megahertz will allow for commercial uses including 3G and fixed wireless while still protecting public safety.
Bidders in the June 7 auction for the 30 megahertz will be bidding for two licenses in six economic area licenses in the commercial band. One license will be a block of 20 megahertz of spectrum (a pair of 10 megahertz blocks), and one block of 10 megahertz (a pair of five megahertz blocks). The FCC will allow bidders in the auction to win both licenses in each area.
In addition to protecting public-safety operations, there are 100 broadcasters still in this band that the FCC says will need to be protected from interference until the transition to DTV is complete.
ITA was a strong advocate of the guard-band manager concept as a way for private wireless or non-consumer wireless systems to get access to spectrum for land-mobile operations. The rules that were adopted on March 8 “were absolutely perfect … It is everything we wanted,” Crosby told reporters covering the International Wireless Communications Expo here last week.
Like others, Crosby is concerned the FCC proposed minimum bid prices for the guard bands at unrealistic levels but unlike others who have specifically called for the bid prices to be reduced, ITA is only asking the FCC to reevaluate the bid amounts. “How have they ever determined minimum bids? They have only one model and that is population,” he said.
The price of the bids and the fact that incumbent broadcasters must be protected-and at least 50 percent of the guard-band spectrum is encumbered-may limit the number of participants in the auction. Crosby believes this would be bad for the guard-band manager concept that he championed.
“Non-appearance would hurt the plan. ITA needs to do everything it can to participate. I don’t like to fail. If I fail, I want to fail at the auction,” Crosby said.
It is unlikely that ITA as an organization would participate in the auction, Crosby said, rather it would be an organization with some type of relationship to ITA. He did not elaborate except to say that it would be difficult for a non-profit organization to participate due to tax rules and the FCC’s rules which seem to point toward a for-profit taxable entity to act as a guard-band manager.
At no point either in the informal press conference or in a Meet the Press panel also at IWCE, did Crosby say for sure that ITA or a subsidiary would participate but he sounded very bullish after his initial response that “ITA is in the process of doing all of the due diligence” necessary to participate.
The guard-band auction was a central topic of the Meet the Press panel in which not only Crosby but also other industry association leaders took questions from the press.
A real issue for any winners of the guard-band spectrum-and the public-safety spectrum and the 30-megahertz of commercial spectrum-is when broadcasters will leave the spectrum.
“Broadcasters get to stay there awhile … This is going to be a long and arduous haul … they are not going to go gently into the night,” Crosby told the audience and reporters.
In fact, the broadcasters have a statutory ability to stay in the spectrum until 2006 or until 80 percent of the homes in their coverage area have DTV receivers whichever is later. FCC Chairman William Kennard floated an idea at the recent CTIA Wireless 2000 show in New Orleans where the winners of the 60-69 spectrum would pay the broadcasters to leave early either through voluntary agreements or through a secondary auction. Thomas Sugrue, chief of the FCC’s Wireless Telecommunications Bureau, said at the same convention that these payments could possibly help broadcasters with the expensive transition costs to digital.
