WASHINGTON-The Federal Communications Commission adopted rules that allow wireless carriers to lease spectrum they are not using to other companies, a move heralded by the wireless community.
“The spectrum-leasing policies adopted are a landmark step in the [FCC’s] evolution toward greater reliance on the marketplace to expand the scope of available wireless services and devices. These policies will lead to more efficient and dynamic use of the important spectrum resources to the ultimate benefit of consumers throughout the country,” said the commission.
FCC Commissioner Michael Copps voted against the rules because he does not believe the Communications Act allows them.
“I keep running into the same problem, and I can’t make it go away. I do not see how the law allows us to effectuate these policies,” said Copps. “Today we allow licensees to transfer a significant right-the right to control the spectrum on a day-to-day basis-without applying to the commission and without the requirement of any commission public-interest finding.”
Copps expressed specific concern about a staff suggestion-pulled from the final draft late Wednesday-that the FCC propose spectrum leasing for the broadcast TV bands. Copps has been leading the charge against the FCC’s expected relaxation on June 2 of media-ownership rules.
The spectrum leasing-or secondary markets-rules are expected to let the market rather than regulation decide whether a spectrum deal gets done.
“Our decision unlocks value trapped for too many years in a regulatory box. That box was most clearly epitomized by the anachronistic 40-year-old Intermountain Microwave standard, which required commission prior approval for a license transfer any time a licensee ceded any of a panoply of responsibilities associated with equipment, salaries, personnel and sundry other activities. We are pleased to announce the passing of Intermountain, as we explicitly abandon that standard for spectrum leases,” said FCC Chairman Michael Powell and FCC Commissioner Kevin Martin in a joint statement. “We adopt a new standard more narrowly tailored to the statutory requirements and more suited to today’s marketplace.”
The 1963 Intermountain Microwave rules were much maligned, and Powell celebrated their end by noting they were the same age. “I was born the year Intermountain Microwave was established, and it has grown gray with me,” said Powell.
The hope is that rural America will now see more mobile-phone (and other wireless) competition because licensees that may not have wanted to sell swaths of spectrum under the disaggregation model will be willing to lease those swaths to entrepreneurs who may want to build out networks.
The FCC may have one taker in its concept. AT&T Wireless Services Inc., which in the past has sold some of its spectrum under disaggregation, may be willing to lease spectrum now, said Douglas Brandon, AT&T Wireless vice president of federal affairs.
“We are very interested in rural areas,” said Brandon, noting his company is looking to lease to users that would build out GSM networks that would allow that technology to reach new customers and allow AT&T Wireless customers to roam.
The Rural Telecommunications Group said it was ecstatic with the decision, but expressed some concern that leases need to be protected if the licensee goes bankrupt.
“Bankruptcy issues will need to be examined in the leasing environment. Specifically, the [FCC] should explore how lessees will be treated in the event a licensee files for bankruptcy protection. RTG is concerned that this aspect could put a damper on transactions,” said RTG.
Spectrum also could be used for innovative services not normally associated with the carrier whose spectrum they are leasing.
