WASHINGTON-Top mobile-phone carriers, having bid the lion’s share of the $13.9 billion for advanced wireless services licenses auctioned by the Federal Communications Commission, now face the potentially time-consuming and costly process of negotiating to relocate commercial and government users off of the 2110-2155 MHz and 1710-1755 MHz bands.
While industry has relocation experience dating back to the mid-1990s when the FCC auctioned PCS licenses to create competition for the then-duopoly cellular industry, compensating the Department of Defense and other federal agencies for moving off the 1710-1755 MHz band to other radio channels introduces a whole new dynamic.
Unlike most things in life, money is not the big problem. There is more than enough gathered from winning bids to cover the roughly $1 billion cost to reimburse agencies to relocate 2,240 government radio links.
The biggest challenge is time-especially for T-Mobile USA Inc. The No. 4 carrier was the high roller in AWS auction, spending $4.2 billion to strengthen its weak spectrum position relative to competitors Cingular Wireless L.L.C., Verizon Wireless and Sprint Nextel Corp. It all comes down to which carrier can best capitalize on emerging content and data applications on fatter, faster wireless pipes driven by third-generation wireless technology.
“The biggest difference is having federal government agencies involved,” said Thomas Lusk, vice of spectrum management at LCC International Inc. “They have rather long time lines.”
Indeed, the National Telecommunications and Information Administration, which manages federal government spectrum, estimates it will take more than four years for all government radio systems to migrate to new spectrum bands. However, much of the clearing of the 1710-1755 MHz band is expected to occur voluntarily during the next two-to-three years.
“As far as the timing and how long it will take, we are establishing processes in place to ensure timely, if not early, relocation, working closely with auction winners,” said Badri Younes, DoD director of spectrum management. “I do not see unforeseen issues yet, but I am sure they will be handled efficiently as we are setting up a dedicated team to handle all technical aspects of the relocation.”
“The biggest challenge is the 1.7 GHz issue,” said H. Mark Gibson, senior director of business development for Comsearch, a unit of Andrew Corp. “Government is moving on its own time frame. The time frame might not be fast enough for them [mobile phone carriers]…Can it be done faster? Probably it can. We’re trying to find out what that means.”
Gibson said nothing will happen until the U.S. Treasury collects money for government wireless relocation. Final payments from winning AWS bidders were due Oct. 19.
“Some of the things we’re helping on is to facilitate coordination between the licensees and agencies, if necessary; maintain status information on our Web site and monitor the transition on the band,” said Todd Sedmak, an NTIA spokesman. Sedmak noted NTIA will have monthly meetings to check on the status of government relocation and will be available to consult with agencies and the FCC.
In contrast, the mobile-phone industry has a decade of experience under its belt in relocating commercial licensees. Despite snags here and there, PCS relocation in the 1.9 GHz spectrum band was largely successful.
Thomas Stroup, former president of now-wireless infrastructure association PCIA and ex-chief executive officer of Columbia Spectrum Management, was right in the thick of it. Stroup, currently CEO of public-safety application firm SquareLoop, said there are both similarities and differences between relocation then and now.
Stroup said the feared nightmare scenario of microwave incumbents holding new PCS licensees hostage for more money did not significantly materialize.
“It was really the nuts-and-bolts issues that were most frustrating,” said Stroup. Seemingly minor details like finding the right contact person for PCS-microwave relocation negotiations became major headaches for new wireless entrants, he said.
Stroup said the AWS relocation-like the PCS relocation-will be inherently difficult and lengthy because of the large numbers of incumbents that must be moved to new airwaves. About 10,000 wireless links in the AWS 2110-2155 MHz band must be relocated.
Time was even more critical during PCS relocation, Stroup noted, because new licensees needed to roll out service as soon as possible to begin chipping away at two-to-a-market cellular carriers, many operating since the early-to-mid-1980s.
“Unless you’ve been through it, you don’t appreciate the challenges,” said Stroup.
In addition to grappling with the unknown in the federal government relocation process, winning AWS bidders face uncertainty in relocating users occupying the 2110-2155 MHz band. Licensees in that band, including some with ambitious wireless broadband plans, are dissatisfied with having to move to the upper 2.4 GHz band, which they must share with mobile satellite operator Globalstar Inc. and TV broadcasters that use those frequencies for live news feeds. The FCC has yet to act on the relocation challenge of the Wireless Communications Association International, which represents major wireless broadband hopefuls.
“There still is the lingering question: Where will BRS [broadband radio service] go?” said Lusk.
Technically there are no AWS licensees yet, and it might not be until early next year that permits are actually issued by the FCC. Last Friday, the FCC put the applications of the 1,087 winning AWS bidders out for public comment. As such, parties can file petitions to deny AWS applications. That process will play out next month.
“After four years I think it’s all worked out,” said Lusk.
