WASHINGTON-Cellular carriers have mounted an all-out assault on the Federal Communications Commission to get more spectrum.
“Spectrum is the `life blood’ of wireless services. But not all radio-frequency spectrum is equally useful or suitable. Spectrum-management policies determine the `rule of the game;’ that is, who can play, how much spectrum they will get and where it will be located … Antiquated and ad-hoc spectrum decisions can hinder development and delay or even deny services to the public by predetermining winners and losers or handicapping some providers unfairly,” said Rudolfo L. Baca, global strategist and vice president of the Precursor Group.
Cellular companies are looking at two possible auction avenues to gain more spectrum: the upcoming auction of 30 megahertz of spectrum in the TV band at 700 MHz and the re-auction of the personal communications services licenses mostly reclaimed from bankrupt NextWave Telecom Inc.
Even if incumbent cellular operators are able to convince the FCC they should be allowed to bid for C- and F-block licenses previously reserved for small businesses, they run headlong into the commercial mobile radio services spectrum cap.
The cap limits the amount of spectrum a carrier can control in a geographic market to 45 megahertz in urban areas and 55 megahertz in rural areas.
“Spectrum caps stifle the marketplace … The state of competition has long rendered such a [cap] moot,” said Craig Smith, vice president of strategic planning for SBC Wireless.
The FCC has said the cap will not apply to spectrum won at the 700 MHz auction. However, larger cellular carriers believe the cap prevents them from gaining access to much-needed spectrum they might be able to gain through acquisitions.
Taking it to the Hill
The question of the spectrum cap is no longer just a regulatory issue.
The Cellular Telecommunications Industry Association has been lobbying on Capitol Hill to have Congress tell the FCC the spectrum cap is no longer valid.
Apparently, the lobbying has paid off. There are bills in both houses of Congress to repeal the cap. The House telecommunications subcommittee also held a hearing earlier this month on spectrum-management issues, focusing specifically on issues surrounding the spectrum cap.
Rep. Cliff Stearns (R-Fla.), a sponsor of one of the bills to repeal the spectrum cap, said a reason the United States is losing its competitive advantage in the mobile-phone arena is because there are higher limits or no spectrum limits in foreign countries.
Thomas Sugrue, chief of the FCC’s Wireless Telecommunications Bureau, disagreed. Sugrue noted that while other countries may allow companies to control larger amounts of spectrum, these same countries are instituting cap-like restrictions by limiting the number of licenses a carrier can have in an area.
“They have a functional equivalent of a spectrum cap. They just apply it differently by only allowing one license per customer,” Sugrue said. The United Kingdom has four second-generation providers and made the decision it wanted five third-generation providers, but a carrier was still only allowed to have one 3G license, he noted.
The Personal Communications Industry Association, represented by Leap Wireless International Inc. at the hearing, said the caps help competition. Leap Chief Technology Officer Mark Kelley said caps are not too stringent if you use spectrum efficiently.
“We believe the technology today and tomorrow allows you to do a ton with 45 megahertz,” said Kelley.
Spectrum efficiencies
Using spectrum efficiently was a secondary theme of the hearing.
Cellular carriers are required by FCC rules to set aside spectrum for analog users. Indeed, most of the customers for both Verizon Wireless (51 percent) and SBC Wireless (59 percent) use analog technology.
But that issue is not the point, contended Dennis Strigl, president and chief executive officer of Verizon Wireless. Analog customers don’t talk on their phones as much as digital customers, Strigl said. Digital customers average 380 minutes of use, while analog users only talk for about 70 minutes per month.
Whether cellular carriers will be able to convert entirely to digital technology is a question the FCC plans to examine this fall as part of its biennial review, Sugrue said.
“I think it is time to discuss whether or not it is time to eliminate an analog requirement. There are so many factors involved, such as 911 and access to text telephones (TTYs). It is ripe for discussion. The appropriate course is to let the market decide,” said Brian Fontes, CTIA vice president for policy and administration.
As part of the FCC’s biennial review, the agency also is expected to review the technical rules established in the 1980s when CMRS was delivered by the cellular duopoly.
Also on the FCC’s plate in the near future is the recent remand from the U.S. Court of Appeals for the D.C. Circuit on whether carriers must average their rates across the nation, and the implementation of legislation making 911 the nationwide emergency number for wireless calls.
