For more than 30 years, microwave communications systems have been used by utilities, oil and gas pipeline companies, railroads and municipalities to provide basic services to the American public including energy and transportation services, heating, air conditioning, power and fuel. Even public-safety agencies rely on microwave communications to provide police, fire, ambulance and other public-safety services.
In a very real sense, the continued safety and reliability of our country’s infrastructure depends on microwave systems licensed by the Federal Communications Commission. Many of them operate in the 2 GHz Band. Any displacement of these systems from the 2 GHz band will be extremely disruptive, and it will be costly. Nevertheless, the FCC has decided that this band must be “cleared.”
The relocation decision
Following three years of notices, comments, reply comments, reports, orders, ex parte visits, congressional input and the like, the commission determined to relocate microwave systems from the 2 GHz band to accommodate a new, emerging technology: personal communication services. In other words, PCS licensees would be permitted to move into this band (i.e., deploy PCS at 2 GHz); and microwave licensees would be required to move out (i.e., vacate the 2 GHz band). Because the displaced microwave systems support the basic infrastructure of our country, however, the commission cushioned the blow by creating a graduated, phased-in relocation process.
To avoid an abrupt disruption to the operations of microwave systems, a two-part relocation framework-one based on “voluntary” negotiations and the other on “involuntary” negotiations-was established by the commission. During the initial two-year voluntary phase (three years for public-safety licensees), there are no limits on the scope of the negotiations. PCS and microwave licensees are free to agree on whatever relocation terms and conditions are mutually satisfactory to both parties.
Although microwave licensees may decline to disrupt their normal, day-to-day operations (the provision of electric services, oil and gas services) for negotiations with PCS licensees during the voluntary negotiation phase, a virtually unlimited range of options is available for PCS licensees to induce microwave licensees to negotiate and relocate “early.” For instance, alternative facilities could be provided. Analog systems could be upgraded. Fiber could be laid. Additional links could be replaced. Even the provision of PCS services to microwave licensees could be “on the table” during negotiations. PCS units and service might be provided at reduced costs, equity interests in the PCS system might be considered, perhaps in return for access to the microwave licensees’ tower sites, conduit, poles, rights-of-way or backhaul facilities for PCS. Or, to simplify matters, the parties could agree on a straightforward monetary settlement (i.e. cash).
Should the parties fail to reach agreement during the voluntary negotiation period, the commission established a follow-up, one-year involuntary negotiation period (two years for public safety). During this period, microwave licensees must negotiate with PCS licensees, and the PCS licensees may force the microwave licensees to relocate by providing “comparable facilities.”
To avoid becoming bogged-down in hundreds or even thousands of engineering debates, the commission created a simple, workable definition of “comparable facilities: ” they must be equal to or better than the previous facilities. If the new facilities turn out not to be comparable, displaced licensees have a right to move back to 2 GHz within one year of the relocation.
In essence, the commission’s rules allow the affected parties to work out the relocation themselves, which is always preferable to a government fiat. If “push comes to shove,” however, the rules allow a PCS licensee to force a relocation by paying for it.
These rules, according to the commission, were adopted as “the least disruptive means for accommodating new emerging technologies in this spectrum.” They provide a fair, workable relocation scheme to introduce a new, promising technology into an already congested band. They also reduce to an absolute minimum the number of disputes that ultimately will have to be settled by the FCC.
PCS industry complaints
In recent letters to the commission, the Personal Communications Industry Association and the Cellular Telecommunications Industry Association argue that the relocation process is not “working.” PCIA complains about “greenmail” and “extortion” during the voluntary negotiation process, because some microwave licensees are negotiating prices for moving early that are apparently too high for PCIA’s tastes. Instead of showing some flexibility, upping the ante or walking away from the table until the involuntary negotiation period, PCIA has opted to seek commission intervention.
Likewise, CTIA claims that the voluntary negotiation rules are deficient, because microwave incumbents have no “incentive” to vacate the band until the involuntary period. CTIA even goes so far as to suggest that microwave licensees be fined or lose their licenses if the microwave licensees’ negotiations offend the sensitivities of the PCS industry. Rather than taking advantage of the flexibility inherent in the voluntary negotiation rules, CTIA proposes that the commission eliminate voluntary negotiations altogether, so that all negotiations would become mandatory. Microwave licensees not agreeing to relocate “voluntarily” would be required to relocate at their own expense.
In short, CTIA would tilt the balance entirely in favor of the PCS industry, ignoring the impact on the nation’s infrastructure industries. Indeed, by “flash-cutting” the 2 GHz band to PCS, CTIA’s proposal likely would disrupt critical microwave operations throughout the country. It would force hasty and unsafe relocations, not voluntary settlements.
The rules are working
The beauty of the FCC’s relocation framework is its flexibility. It allows the parties to work out a voluntary solution based on their unique requirements. Using a full array of market-based incentives, PCS licensees anxious to deploy systems in particular areas are free to induce microwave licensees to participate in the process earlier than otherwise required.
Failing a voluntary resolution, however, the new technology proponent may force its way into the incumbents’ band on a reasonable timetable. Either party can move forward; neither party is hurt.
In fact, the system is working. Voluntary negotiations between PCS licensees and microwave incumbents have only just begun, yet some relocations already have occurred. It would be patently unfair to PCS licensees and microwave incumbents alike, who have conducted their negotiations to date in good faith reliance upon the existing regulatory standards, for the FCC to change the rules in mid-stream.
Nor is there any reason, at this late date, for the FCC to change the rules in favor of the PCS industry, thereby increasing the value of the already-auctioned spectrum and giving the A and B Block licensees an unjustified windfall at the expense of the U.S. Treasury. They knew the relocation rules at the time they placed their bids.
The commission has done a commendable job of establishing a solid plan for the introduction of PCS into congested microwave bands. It recognizes the rights of both microwave licensees and PCS providers, and it provides an excellent regulatory model for the introduction of other new technologies into other congested bands in the future. It should not be discarded simply because the PCS industry would prefer a completely PCS-friendly system.
The commission’s relocation rules were the product of countless pleadings and extensive, time-consuming rulemaking proceedings. Rather than complaining about them at this late date, the PCS industry should give them a chance to work.
Jack Richards is a partner with the Washington, D.C., law fir
m of Keller and Heckman. He represents numerous licensees authorized by the Federal Communications Commission to operate point-to-point microwave systems in the private operational fixed microwave service on frequency assignments in the 1850-1900 MHz band.
