WASHINGTON-Efforts must be made to ensure the 700 MHz spectrum from the transition to digital TV is not all won by established operators, a consumer advocate told Congress Thursday afternoon.
“You have to make sure Verizon Wireless and Cingular Wireless L.L.C. don’t gobble up all of the spectrum,” said Gene Kimmelman, senior director of public policy of Consumers Union.
Kimmelman had some support on the House telecommunications subcommittee, including Rep. Anna Eshoo (D-Calif.), who said Congress “will have lost a once-in-a-lifetime opportunity” if it does not set aside some spectrum for new entrants and services.
“The 700 MHz band offers an historic opportunity to provide the equivalent of a third wire into the home-an alternative to cable and telephone broadband access. Without thoughtful consideration to competition policy, what I call this new beachfront spectrum property could become the new wing of the megahotels that already dominate this beachfront,” said Eshoo. “I think it is critical for this committee to establish a spectrum policy for these auctions that favors new entrants and competitive services.”
The House telecommunications subcommittee held a hearing on the staff discussion draft of the DTV Transition Act of 2005. There is nothing in the current draft that would dictate to the Federal Communications Commission how the 108 megahertz available with the DTV transition should be licensed.
In 1997, Congress dictated that 24 megahertz be given to public safety and 36 megahertz to auctioned to commercial services. The FCC has already auctioned six megahertz of the 36 megahertz for guard-band spectrum. One of the major winners of the spectrum, Nextel Communications Inc., recently agreed to return the guard-band spectrum to the commission as part of the FCC’s plan to solve public-safety interference in the 800 MHz band. It also has auctioned some of the 30 megahertz to rural providers and another lower 700 MHz band rural license auction is scheduled for this summer. There is no official decision yet as to what to do with the remaining 48 megahertz of spectrum.
With all of the talk of not letting the established wireless players get all of the 700 MHz spectrum, it seems reasonable to ask whether they even want it.
Interestingly, both Verizon Wireless and Cingular Wireless L.L.C. declined to comment on Kimmelman’s statement, but CTIA stressed its long-standing policy against set asides.
“We oppose blanket set asides. There are more effective and efficient ways-such as bidding credits, smaller licensed service areas and smaller spectrum blocks-to allocate spectrum to smaller providers. It is never a good idea for Congress or the FCC to exclude certain parties from the free and open marketplace,” said Joseph Farren, CTIA director of public affairs.
One analyst said the timing of the 700 MHz auction in relation to the scheduled 2006 auction of 2 GHz band spectrum for third-generation wireless will dictate which carriers are interested and how much they are willing to pay.
“It really depends on when the hard date is, which will determine the value of 700 MHz spectrum in relation to the earlier scheduled auction for 2 GHz 3G next year,” Jessica Zufolo, analyst with Medley Equity Global Advisers, told RCR Wireless News.
The draft bill calls for the 700 MHz auction to begin April 1, 2008, with the transition completed on Jan. 1, 2009.
Zufolo warned that if the DTV bill passes, broadcasters could sue, thus delaying the transition and auction even further.
T-Mobile USA Inc., which is facing spectrum constraints, said it wants access to the 700 MHz spectrum. “The 700 MHz band is ideal for mobile and fixed wireless broadband services because of its favorable propagation characteristics,” said Kathleen O’Brien Ham, T-Mobile managing director of federal regulatory affairs.
Whether or not there is a set aside, one Republican, Rep. Barbara Cubin (R-Wyo.), wants smaller geographic licenses so rural areas are not left behind.
“If a license covers Wyoming, Colorado and Utah, where will the investment go? It will go to Denver and Salt Lake and how far behind will Wyoming be?” asked Cubin.
Rural carriers represented by groups such as the Rural Telecommunications Group have often called for either smaller licenses or more stringent buildout requirements. Last week, CTIA again told the FCC that carriers, not the government, should decide when and where buildout of licenses should occur.
“The FCC should avoid intrusive regulation such as `keep what you use’ that will undermine prudent investment and run the risk of chilling new competitive entry in these markets,” said Diane Cornell, CTIA vice president of regulatory policy. “Keep what you use undermines economically sound licensing policies and may result in uneconomic buildout. To avoid being penalized under a keep-what-you-use regime, licensees may be compelled to make unsound investment or engage in premature construction to `save’ a licensed area that currently is not economically viable but may be in the future. A keep-what-you-use regime may, for example, require a licensee to deploy infrastructure based on existing less-efficient narrowband technologies when new more efficient wideband would be available soon. Further, a keep-what-you-use policy would send the financial community the ill-advised message that wireless licensees may not be able to protect the integrity of their licensed areas unless they pursue uneconomic construction of facilities in sparsely populated areas.”
