WASHINGTON-The Federal Communications Commission last week largely kept in place rules that restrict how much spectrum a carrier can control in any geographic area to no more than 45 megahertz. The FCC relaxed the cap to 55 megahertz in rural service areas.
Additionally, at its open meeting, the FCC issued rules on a range of other topics, including local exchange competition, enhanced 911 and direct access to satellite services for long-distance companies. It also approved an application granting an investment by Lockheed Martin Corp. in Comsat Corp.
Spectrum caps
The spectrum cap was an intensely debated issue that pitted the Cellular Telecommunications Industry Association-which largely represents incumbent operators-against the Personal Communications Industry Association representing start-up mobile phone carriers.
Although CTIA President Thomas Wheeler said the issue was not cellular carriers vs. personal communications services carriers, he clearly was not pleased with the outcome.
“We represent more PCS carriers and more PCS subscribers than anyone else … [While] it was not a unanimous vote [of the CTIA board], it was an overwhelming vote … In an industry as wildly competitive as wireless, this is unnecessary regulatory micro-management,” Wheeler said.
PCIA, on the other hand, was jubilant.
“We are extremely pleased that the FCC has decided to keep the 45 megahertz spectrum cap in place in all major markets … All Americans deserve a real choice of mobile providers. The [FCC] should continue to promote the rollout of mobile networks that bring new technologies, new service offerings and lower prices to U.S. consumers,” said PCIA President Jay Kitchen.
CTIA asked the FCC to forebear from the spectrum cap on Sept. 30, 1998. Congress established procedures in the Telecommunications Act of 1996 that allow entities to ask the FCC to “forbear” from enforcing rules that have become moot due to competition. PCIA says the time may come for removing the spectrum cap but that time is not now.
The FCC was persuaded by data PCIA presented showing cellular carriers hold more than 80 percent of the wireless market nationwide.
In fact, both FCC Commissioners Susan Ness and Michael Powell indicated the data convinced them the cap was still necessary.
“I, too, will be supporting the item, but it took a hard sell,” said Powell.
FCC Commissioner Harold Furchtgott-Roth was not as convinced, believing there was no statutory obligation to have the cap.
“I have great trust in the antitrust agencies of the federal government to address market abuse … We are not required to have the spectrum cap … I don’t know why we have them,” said Furchtgott-Roth.
The decision will not allow incumbent operators in urban areas to get access to the spectrum they need to offer third-generation wireless services, Wheeler said.
“Unfortunately, the FCC decision will mean American consumers will have to wait longer for next-generation wireless services than their European and Asian counterparts,” Wheeler said.
Carriers that believe they cannot offer innovative new services, such as 3G, because of spectrum restrictions and believe lifting the cap in their market will not harm competition can ask the FCC for a waiver.
These carriers had better not be analog carriers or PCIA will rigorously oppose them, said Mary McDermott, PCIA senior vice president and chief of staff for government relations.
“We hereby put them on notice. We are going to very carefully look at a cellular carrier that is still using analog,” McDermott said.
To address the 3G question, the FCC plans to initiate a proceeding in the near future to allocate more spectrum. This proceeding will not solve the problem, Wheeler said, because it will take too long.
“It will solve the problem if the problem is not time to market,” Wheeler said.
The spectrum cap issue will not go away any time soon.
The FCC said it will reevaluate the spectrum cap during both its biennial review-a review of regulations that happens during even number years-and as part of its 3G proceeding.
The FCC indicated that when it makes its 3G allocation, it could relax the spectrum cap, not make it applicable or keep it in place based on the market at that time.
An U.S. working group on 3G allocations indicated 160 megahertz of spectrum needs to be made available by 2010.
This process is also being debated at the international level and is expected to be a key topic at the World Radio Conference in Istanbul, Turkey, next year.
Notwithstanding the on-going FCC review, Wheeler would not rule out a possible lawsuit by CTIA over the spectrum cap issue.
E911
The FCC also gave carriers the option of using handset-based solutions to implement E911 Phase II. Carriers must declare whether they will use either handset or network-based solutions by Oct. 1, 2000.
The FCC also changed some of the deadlines and accuracy standards.
UNEs
The FCC indicated which unbundled network elements incumbent local exchange carriers must offer to their competitors.
When the Supreme Court ruled mostly in favor of the FCC’s 1996 local competition rules in January, it also told the FCC that it must defend the reasons each and every element is considered necessary.
The decision is expected to have a huge impact on local exchange competition since most competitors-including some fixed wireless carriers-need access to parts of the incumbent local exchange carrier network in order to provide service.
The details of the decision, which have yet to be released, could also impact the deployment of calling party pays.
There is a dispute whether billing and collection is considered a necessary element to offer service or a separate service. Wireless operators that have sister-LEC companies would not have to worry about access to billing and collection, but other wireless carriers may find it difficult to offer CPP if they cannot get access to billing and collection.
Some billing functions were included as part of operations support systems-considered by the FCC to be necessary-but the details were not given.
The same lack of detail is true for the inside wiring rules. The FCC’s press release said the “network interface device” was included as a UNE. This is defined as “a device used to connect loop facilities to inside wiring.”
Fixed wireless carriers are interested to see whether inside wiring is considered a necessary element. Such a ruling could make it easier for these competitive local exchange carriers to get access to ILEC facilities located in office and apartment buildings.
Satellite actions
Finally, the FCC approved Lockheed Martin’s bid to invest 49 percent in Comsat.
This approval combined with approval from the Department of Justice, granted on Thursday, allows the first phase of the proposed merger to go forward, Comsat said.
The second phase of the proposed merger requires congressional action. Such legislation has passed the Senate but has not passed the House.
There is some concern on Wall Street that the FCC’s other satellite-related action, allowing for direct access to the International Telecommunications Satellite Organization, known as Intelsat, will lessen Lockheed Martin’s desire to buy Comsat. Before the FCC’s action, telephone companies wishing to gain access to Intelsat had to go through Comsat to gain access. Now companies can pay a surcharge to Comsat of 5.58 percent to go directly to Intelsat. It had been expected the surcharge amount would be approximately 15 percent.
