Wireless Spectrum Auctions

The U.S. Appeals Court, D.C., upheld an FCC decision to auction terrestrial multichannel video distribution and data service (MVDDS) licenses in the primarily satellite 12 GHz band. In Northpoint vs. the FCC, the Court denied challenges to new FCC regulations, which: (1) Allow terrestrial MVDDS to share the 12.2-12.7 GHz bandwidth spectrum with direct broadcast satellite (DBS) TV services. (2) Allow the FCC to auction MVDDS use of that spectrum. DirecTV, Satellite Bcstg. & Communications Assn., EchoStar and SES Americom said use of terrestrial service use of the DBS frequency would cause too much interference. Northpoint, which claimed credit for inventing MVDDS technology, said it should get the frequencies rather than the FCC allocating them by auction.

XM’s purchase of WCS Wireless has wireless operators in the WCS spectrum -- which XM used to neighbor but now owns 10 MHz of -- even more concerned about interference. The WCS Wireless acquisition, which cost XM $200 million, also further complicates the FCC’s task of completing the rules on SDARS terrestrial repeaters in a 4-year-old proceeding, officials said. The rulemaking has been open since the FCC granted nascent Satellite Digital Audio Radio Service (SDARS) the permission to deploy terrestrial repeaters under a grant of special temporary authority on a noninterference basis in 2001.

Inmarsat was out in front opposing allocation of more 2 GHz spectrum to Mobile Satellite Services (MSS) operators ICO and TMI/TerreStar. The MSS competitor -- which said it’s developing plans for broadband and multimedia MSS for handheld devices and vehicles using spectrum in the 2 GHz band -- asked the Commission to consider allocating it the extra 1/3 of the spectrum in question.

The Senate Commerce Committee’s DTV hearing today (Tues.) is a long-awaited public airing of complex issues befogged in political uncertainty. The committee is seen as balancing the immediate need to raise revenue from spectrum auctions against a potential public backlash if the analog TV signal cutoff stumbles. The panel is holding the hearing despite lack of a draft bill, expected to be ready by the July 4 recess but is still in development, according to committee staffers.

Spectrum policy is getting more scrutiny in Congress in light of the 2007 expiration of auction authority, Congressional Research Service analyst Linda Moore said in a report for Congress. Some have questioned the system’s efficacy. Despite the FCC’s conclusion that auctioning spectrum licenses has sped deployment of new wireless technologies, many ask if the FCC shouldn’t augment auction policy “more aggressively” with other market- driven solutions such as licensing fees.

Cingular or Verizon Wireless likely would face the toughest fight if they emerged as the purchasers of T- Mobile, regulatory sources said Tues. Other potential players, including rumored suitor Vodafone, or less conventional wireless players like Comcast or even Microsoft, would likely have an easier time winning approval, they said.

The FCC sketched lines Thurs. in a 2 GHz proceeding with 2 public notices announcing Commission intent to reallocate S-band spectrum previously surrendered by Boeing, Iridium and Celsat. The FCC said it intends to divide the 40 MHz of spectrum in the 2GHz band into thirds: 2/3 earmarked for ICO and TMI/TerreStar, the 2 Mobile Satellite Services (MSS) licensees remaining in the band, with the other 1/3 up for grabs. A heated battle for the spectrum, prime for MSS or wireless services, is likely to ensue.

Now that the high court has ruled in Brand X, “the role of wireless is going to become more important,” Barry Ohlson, advisor Comr. Adelstein, said Wed. at the Wireless Communications Assn. (WCA) conference. “People will look more toward wireless, because they won’t be able to use the same tools that were previously available,” he said.

FCC hopes to circulate a draft order this week revising an Oct. 2003 advanced wireless services (AWS) spectrum band plan, an FCC source said. The new 1710-1755 MHz and 2110-2155 MHz band plan urged by the Wireless Bureau incorporates parts of proposals by T-Mobile and the Rural Telecom Group (RTG), and Verizon Wireless, the source said. The order, expected to be scheduled for the July 14 FCC meeting, also would resolve other issues raised in reconsideration petitions.

Council Tree Communications urged the FCC to “repair, improve and ultimately preserve” designated entity (DE) incentives in advanced wireless services (AWS) spectrum auctions. Council Tree asked the Commission to: (1) Raise from 25% to 35% the maximum DE bidding credit offered in AWS auctions. (2) Provide an additional 10% bidding credit for DEs that serve underserved populations. (3) Not allow large incumbent wireless carriers to have any material investment, financial or operating relationship with a DE if they have licenses with material geographic overlap. (4) Not allow individuals with a net worth exceeding $3 million to have a controlling interest in a DE. “These proposals will ensure that DE benefits are limited and applied only where needed, and will provide meaningful entry points for new competition in the wireless industry,” Council Tree said, adding the proposals can be implemented “on a non-disruptive basis well in advance of the first AWS auction” expected in mid- 2006.