WASHINGTON-The Federal Communications Commission needs to clarify its rules on how unused spectrum could be subleased if it hopes to facilitate a secondary market for spectrum, panel members said at a public forum last week.
A secondary market for spectrum could develop if one licensee were allowed to transfer control of some of its unused spectrum to another licensee. At a time when spectrum is in great demand by some wireless carriers and when the wireless broadband market is beginning to take off, the idea of companies leasing extra spectrum to other carriers is gaining appeal.
However, in order for this secondary market to develop, the FCC needs to change the criteria it uses to allow companies to transfer control of licenses to other companies, said Michele Farquhar, former chief of the FCC’s Wireless Telecommunications Bureau and now an attorney in private practice.
Today, the FCC uses guidelines developed in the early 1960s and reaffirmed in 1987, regarding the transfer of control of licenses in a case involving a company called Intermountain Microwave.
The FCC should “look hard at the Intermountain criteria. Staff is giving guidance to some licensees that not all licensees are getting,” Farquhar said.
Caressa Bennet, counsel to the Rural Telecommunications Group, said guidance on what Intermountain criteria is still in effect would help with management agreements being contemplated today.
Many in industry believe that some of the Intermountain criteria are not relevant today. Some FCC staff agree.
The lack of clear guidance on Intermountain was a surprise to Robert Pepper, chief of the FCC’s Office of Plans and Policy. “I had not understood the limitations of Intermountain,” Pepper said.
The following are the current criteria used to approve transfer of control of licenses:
Does the licensee have unfettered use of all facilities and equipment?
Who controls daily operations?
Who determines and carries out policy decisions, including preparing and filing applications with the FCC?
Who is in charge of employment, supervision and dismissal of personnel?
Who is in charge of the payment of financing obligations, including expenses arising out of operations?
Who receives money and profits derived from operating the facilities?
In addition to Intermountain, the FCC heard presentations from a cross-section of industry and academics about what the FCC can and should do to facilitate a secondary market for spectrum.
Some of the ideas-such as giving licensees property rights to spectrum-would require major rule changes, while others require further advancements in technologies, such as software-defined radios.
