Motorola praised introduction of legislation last week by House Telecom Subcommittee Chmn. Upton (R-Mich.) and Rep. Green (D-Tex.) that would shorten depreciation recovery period of spectrum license fees to 7 years from 15. Spectrum licenses typically run for 10 years. Provision was part of package that also would decrease to 2 years from 5 depreciation period for computer and high-tech office equipment. “The U.S. system for licensing spectrum -- the foundation of wireless services -- needs to be reexamined and improved,” Motorola Chmn.-CEO Christopher Galvin said. “Now, more than ever, there is an opportunity to innovate and create new technologies. However, rules and regulations need to be modified in order to accelerate the benefits of these powerful services to the public.” Galvin said wireless industry bid nearly $18 billion in recent C-block re-auction “and estimates for the cost of future auctions put our high- tech sector at a competitive disadvantage with our global counterparts.” He said: “With an economic recession looming, a lot of that investment would better serve the public interest accelerating innovation, capital spending and job creation in the public sector.”

In unveiling “new plan” for 3G, Bush Administration took off table -- for time being -- bulk of 1755-1850 MHz band occupied by Defense Dept. systems that had been under consideration for advanced wireless services. NTIA, FCC, DoD and other executive branch agencies outlined revised assessment of 3G spectrum that now focuses on potential use of 1710-1770 MHz and 2110-2170 MHz. Move had been expected, particularly in light of Sept. 11 terrorist attacks that increased political leverage of DoD for fending off efforts to relocate its spectrum (CD Oct 2 p1). NTIA said late Fri. that 1770-1850 MHz band was “not part of this assessment.” Overall plan falls short of overall amount of spectrum and band that wireless industry had been targeting, although CTIA lauded extent to which development provides 3G spectrum “sooner rather than later.”

Govt. analysis of how to obtain additional spectrum for 3rd generation wireless services appears to be veering -- for now -- away from entire 1755-1850 MHz band occupied by Defense Dept. systems, several sources said. Part of what is driving renewed interest in searching more intensely for 3G spectrum elsewhere is Sept. 11 terrorist attacks that have made it easier for DoD to fend off efforts to relocate its systems, sources said. But industry observers indicated that even before attacks, momentum was building for looking at other bands, with recent FCC order removing MMDS systems from relocation consideration for 3G providing increased impetus. One govt. official said interagency talks had yielded no final decision and situation still was fluid. Agency and industry officials involved in talks have been eyeing out-of-band pairing option that would involve 1710 to around 1770 or 1780 MHz and 2110 up to 2180 MHz. Announcement by Bush Administration on revamped 3G plan is expected as early as this week, although details still are being worked out and await final approvals at top govt. levels.

Paxson Communications Chmn. Bud Paxson urged FCC to set June 15 date for 700 MHz auction. That time frame would give parties about 7 months to begin band-clearing efforts at 700 MHz “and finalize band-clearing agreements,” he said, calling date “workable.” It also would give Commission time to begin processing band-clearing requests, petitions and applications, which “will be critical to the band-clearing efforts,” he said. Paxson lauded FCC order released last month that added flexibility to earlier policy designed to ease voluntary clearing of incumbent analog broadcasters in upper 700 MHz band. Order granted petition of Paxson-led Spectrum Clearing Alliance that had asked that incumbent analog broadcaster that gave up one of its channels to accommodate band clearing should have flexibility to continue operating in analog mode and convert to DTV up to Dec. 31, 2005. In July, FCC Wireless Bureau had postponed Sept. 12 auction of Ch. 60-69 spectrum for 5th time, without setting new date.

Group of thwarted PCS license winners in FCC’s Jan. re- auction of NextWave licenses is floating settlement proposal that would give bankrupt C-block winner $5-$7 billion for spectrum. Several news reports Fri. said U.S. Treasury would receive $10 billion as part of settlement, which isn’t final. NextWave originally bid $4.7 billion for 90 licenses in 1996. Re-auction of licenses, which FCC had cancelled for missed payment, brought $16.9 billion in Jan., of which $15.8 billion was for spectrum once belonging to NextWave. In July, 5 of largest re-auction winners, Alaska Native Wireless, Dobson Communications, Salmon PCS, Verizon Wireless and VoiceStream asked govt. to approve “immediate” settlement of NextWave licenses, with starting point for talks set at $4-$5 billion. That plan would have taken part of money due from winning re-auction bidders and paid it directly to NextWave in return for its dismissing its claims to licenses. Rest of money would go to federal govt. Wall St. Journal said NextWave could receive up to $11 billion from draft settlement, although actual number in play appeared to be lower than that. “Consistent with its corporate responsibilities, it has always been NextWave’s policy to explore ideas that might lead to a consensual resolution of existing issues and allow the company to complete pending bankruptcy proceedings, and we will continue to fulfill that responsibility,” NextWave Senior Vp Michael Wack said Fri. One source said Fri. that reports of settlement talks had surfaced within days of FCC’s asking for additional time beyond Sept. 19 deadline to seek review of U.S. Appeals Court, D.C., decision that had overturned Commission’s license cancellation decision in NextWave case. Chief Justice William Rehnquist has given govt. until Oct. 19 to file petition for certiorari (CD Sept 19 p2).

Last week’s terrorist attacks appear to have dimmed prospects, for now, of wireless industry’s obtaining quick decision on relocating military spectrum users for 3G wireless. While insiders continue to stress need for additional spectrum for advanced wireless services, several told us that if nothing else, logistics of defense agencies focusing on response to last week’s attacks meant that Pentagon policymakers attention was focused elsewhere. On other hand, several wireless industry officials said key role played by mobile communications in aftermath of attacks, including final calls from passengers on hijacked planes, underscored very publicly importance of adequate wireless coverage.

FCC added flexibility to policy designed to help clear incumbent analog broadcasters from Ch. 60-69 spectrum on voluntary basis, to allow introduction of wireless services in 700 MHz band and to ease shift of analog TV licensees to DTV. Commission said order approved Sept. 7 and released Mon. added flexibility to earlier policy designed to ease voluntary clearing of incumbent analog broadcasters in upper 700 MHz band. It granted petition of Spectrum Clearing Alliance (SCA), coalition of 21 broadcasters led by Paxson Paxson Communications that had asked that incumbent that gave up one of its channels to accommodate band clearing should have flexibility to continue operating in analog mode and convert to DTV at any time up until Dec. 31, 2005. Order allows such broadcasters to seek additional extension of DTV construction deadline if less than 70% of TV households in their markets are capable of receiving DTV signals.

Northpoint continued to oppose auction for using satellite spectrum for proposed terrestrial service. Competitor MDS and other wireless companies asked FCC to auction spectrum, but Northpoint said that would destroy “incentives for entrepreneurs and inventors to develop innovative technologies to create new bandwidth in already licensed spectrum.” It said it was only company “qualified” for terrestrial license. “In the absence of mutually exclusive applications, there is no rationale for an auction.”

As expected, Commerce Secy. Donald Evans sent congressional leadership draft bill Thurs. to postpone for 2 years deadline for receipt of advanced wireless auction proceeds. He told top brass on Capitol Hill and Vice President Cheney that Office of Management & Budget’s preliminary scoring indicated that proposal would reduce surplus by $1 billion in fiscal 2002 and increase it by that amount in fiscal 2004. Proposed language would shift statutory deadlines for completing auctions of 2 bands under consideration for 3G services to Sept. 30, 2004, from Sept. 30, 2002. “Based on revised assumptions for the current spectrum auction schedule, the midsession review of the budget baseline already reflects the shift in auction receipts from 2002 to 2004,” Evans wrote. He said any law that would reduce receipts was subject to pay-as-you-go (PAYGO) requirements under Balanced Budget and Emergency Deficit Control Act (BEA). “The BEA requires that official PAYGO scoring continue to use the FY 2002 budget baseline and thus score the cost to FY [fiscal year] 2002,” Evans said. “The Administration will work with Congress to ensure that any unintended sequester of spending does not occur under current law or through enactment of any proposals that are part of the President’s program.” Proposal would shift deadlines for depositing proceeds in U.S. Treasury for auctioning 1710-1755 MHz and 2110-2150 MHz and would provide more time to arrive at 3G decisions, Evans said. “Chairman Powell of the Federal Communications Commission and I both believe that it is imperative that the final allocation decision be the best possible one and that additional time and continued hard work are needed to reach that decision,” Evans wrote. While govt. wants to identify spectrum for 3G services as quickly as possible, he said, current statutory deadline “does not provide sufficient time to conclude the identification process and conduct an auction before Sept. 30, 2002.” NTIA Dir. Nancy Victory told reporters Wed. that language would be sent to Hill this week (CD Sept 6 p1). Besides Cheney, Evans sent letters to Senate Majority Leader Daschle (D-S.D.), House Speaker Hastert (R-Ill.), House Majority Leader Armey (R- Tex.), Sen. Lott (R-Miss.). Senate Commerce Committee Chmn. Hollings (D-S.C.), House Commerce Committee Chmn. Tauzin (R-La.), House Minority Leader Gephardt (D-Mo.), Sen. McCain (R-Ariz.), Rep. Dingell (D-Mich.).

NTIA plans to send legislative proposal to Congress today (Thurs.) that would postpone for 2 years deadline for receipt of advanced wireless auction proceeds. Move is designed to give federal policymakers more time to reach decision on obtaining additional spectrum for 3rd generation wireless services. In her first news conference, NTIA Dir. Nancy Victory said auction proposal didn’t mean current 3G viability analysis by broad range of federal agencies would itself take 2 more years: “We are hoping to do it in a much shorter period.” Legislation that would provide additional time for auction proceeds to be deposited in U.S. Treasury “is a recognition of the fact that more time is needed in order to take a look at this issue,” she said, referring to 3G. New date would be Sept. 30, 2004, for proceeds to be deposited from auction of 1710-1755 MHz and 2110-2150 MHz, instead of current statutory deadline of Sept. 30, 2002, she said. Besides 3G, Victory said she saw NTIA focusing on questions of broadband deployment, telecom and broadcast minority ownership, comprehensive spectrum policy review.