Just as the Federal Communications Commission appears ready to settle the great white-spaces debate – one predominantly framed to date by a powerful broadcast lobby fearing costly disruption to digital signals from unlicensed devices and by equally muscular high-tech titans anxious to exploit prime unused TV spectrum for further Wi-Fi deployment – a new surge appears to be gaining momentum for a licensing approach to huge amounts of valuable airwaves.
Among those making an 11th-hour push for licensing white spaces are Aloha Partners L.P., Qualcomm Inc., cellular industry association CTIA and the Rural Cellular Association. Sprint Nextel Corp., T-Mobile USA Inc., FiberTower Corp. and others previously advocated white-spaces licensing as a less-costly alternative for wireless backhaul.
More recently, one of the most powerful members of the House – Commerce Committee Chairman John Dingell (D-Mich.) – was prompted to enter the fray.
“As the commission proceeds, it is my hope that it gives all due consideration to all proposals concerning the best use of the white spaces, including those proposals to license some or all of the available spectrum,” said Dingell in a letter to FCC Chairman Kevin Martin. “It is possible that a licensing regime could help mitigate the impact of harmful interference to incumbents in this spectrum. These particular bands of spectrum are extraordinarily valuable and offer the potential for entirely new and innovation services. I urge the commission to carefully and deliberately weigh each proposal prior to reaching any tentative or preliminary conclusions.”
How valuable? The Brattle Group, in a new study underwritten by Qualcomm, estimates the U.S. Treasury could pull down as much as $24 billion – or some $5 billion more than the government’s record take in the 700 MHz auction earlier this year.
Robert Kenny, an FCC spokesman, said the agency is wrapping field testing of white-spaces devices to assess any potential interference to digital TV and is considering what steps to take next.
“There is no evidence for the claim the TV white space would spur innovation in unlicensed applications,” stated the Brattle Group in an FCC filing. “Although unlicensed spectrum can provide a good home for low-power, short-range systems and thus facilitate innovation in such systems, the TV white space is ‘overqualified’ for such applications. Devoting TV spectrum to low-power, short-range systems is like using land in downtown Tokyo to grow rice.”
Earlier this year, AT&T Mobility completed its $2.5 billion purchase of Aloha’s’ 700 MHz spectrum. Aloha appears ready to get back into the 700 MHz space, perhaps to enter a still-unproven mobile TV market in which Qualcomm has invested hundreds of millions of dollars through its MediaFLO USA Inc. subsidiary. Still, Qualcomm likely would rather take its chances on competition by an entity forced to buy pricy spectrum rights at an FCC auction as opposed to a newcomer entering the mobile TV business for free under an unlicensed spectrum regime.
Wealth of spectrum
Aloha’s talking points in recent meetings and letters to FCC officials on white-spaces licensing point to potentially significant auction proceeds; the fact that an average of 75 megahertz of white-spaces spectrum is available in the top five U.S. markets (more than 200 megahertz on average in rural markets), coverage advantages in rural locales and efficient use of spectrum when licensed.
The company also highlighted the wobbly municipal Wi-Fi track record to date.
“There have been a significant number of experiments with unlicensed Wi-Fi in major metropolitan areas, including San Francisco, Philadelphia and Portland,” Aloha President Charles Townsend told Martin in a letter last week. “In every instance, these experiments have been a failure or were shot down before they started. They have not failed due to a lack of funding: EarthLink has spent in excess of $20 million building unlicensed Wi-Fi operations in several of these cities. These experiments have failed due to lack of demand for unlicensed Wi-Fi service. EarthLink had expected to have over 100,000 customers in Philadelphia in the first year. In spite of extensive marketing efforts, EarthLink was able to attract 5,942 subscribers.”
But Aloha, Qualcomm and others favoring white-spaces licensing face an uphill battle, given support for unleashing white spaces by some lawmakers, the New America Foundation, tech heavyweights like Intel Corp., Google Inc., Microsoft Corp., Dell Inc., Hewlett-Packard Co. and others.
Timing of the essence
There are policy and political considerations, too. The FCC’s Martin, regularly pummeled by Democrats and kept on the defensive because U.S. broadband penetration lacks more than a dozen countries, has been anxious to bolster broadband availability and to foster the emergence of a new national wireless competitor to knock heads with the telephone-cable TV broadband duopoly. An attempt to accomplish the latter flopped in the 700 MHz auction, though a re-auction of a 700 MHz public-safety/commercial national license might yet change the landscape. The FCC chief is also trying to attract a national wireless broadband player through the auction of AWS-3 spectrum, but the initiative is steeped in controversy.
From most indications, Martin appears committed to freeing up TV white spaces before he leaves office after a new administration is put in place early next year. The latest campaign for white-spaces licensing further muddles an already complicated and convoluted FCC proceeding. As such, rather than risk a stalemate that delays a decision for the next agency head, Martin could opt for a compromise that divides new white-spaces spectrum between licensed and unlicensed use.
The white-spaces debate has been a tricky one for the mobile-phone industry. National carriers, while stating a preference for a licensing scheme, have not really thrown the full force of their weight – that is, lobbying clout – behind the matter. White-spaces licensing potentially gives rise to the same competitive threat – at least in terms of wireless broadband – posed in the 700 MHz auction and the AWS-3 fracas.
It makes sense why major cellular operators would feel comfortable sitting on the sidelines of the white-spaces conflagration. If an unlicensed regime were to fail and national wireless service providers determined they need more spectrum in the future, they could simply lobby policymakers to change the rules to a licensing universe.