NTIA head argues for no restrictions on AWS-3 licenses

A major schism in the Bush administration has erupted over an anticipated Dec. 18 vote by the Federal Communications Commission on a national wireless broadband plan that T-Mobile USA Inc. and others fear will cause interference to mobile-phone operations in spectrum they paid billions of dollars for at an auction two years ago.
Responding to one of six House Republican members who raised concerns in August about the FCC’s advanced wireless services-3 rulemaking, President Bush’s top telecom policy advisor – Meredith Attwell Baker – expressed a negative view on attaching conditions to licenses sold at auctions. Martin’s AWS-3 initiative would do just that by requiring the winning bidder to use 25% of network capacity for free, family friendly service, the latter obligation necessitating the use of network-based filtering. The AWS-3 licensee operator also would have to allow third-party devices and applications on the network and provide service to at least 95% of the U.S. population by the end of the 10-year license term.
“Auctions without price or product mandates create a level playing field. Restrictions and conditions on spectrum use, however well intentioned, are not the most effective or efficient way to encourage development of services or to assist underserved areas,” stated Baker, acting head of the National Telecommunications and Information Administration, in a Nov. 18 letter to Rep. K. Michael Conaway (R-Texas.). “Subject to appropriate government rules to prevent harmful interference, government should rely on market forces to determine the best use of spectrum.”
Baker, director of congressional affairs at cellular industry association CTIA from 1998 to 2000, is well-regarded in telecom policy circles. She has been on the hot-seat for months insofar as managing the upcoming transition to digital television in mid-February.
An FCC official said Baker is taking far too narrow a view of spectrum auctions, which Congress authorized in 1993 legislation that included public interest considerations for airwaves put up for bid.
“It’s not simply a matter of raising the most money that you can. It’s about bringing added benefits and choices to consumers,” said an FCC official. “In the same way Chairman Martin pushed for buildout and open-access conditions in the 700 MHz auction, he believes requirements for winning bidder in the AWS-3 auction to provide a free, broadband lifeline is a good thing.”
While proposed AWS-3 conditions have created a stir – particularly with regard to allegations that the FCC is crafting rules to accommodate the business plan of Silicon Valley-funded startup M2Z Networks Inc. – the major controversy is over the risk of harmful interference to portions of spectrum in the AWS-1 band, namely 2110-2155 MHz. The spectrum is adjacent to the AWS-3 band (2155-2180 MHz). The question is whether two-way TDD wireless broadband operations in the AWS-3 band will disrupt AWS-1 and wireless microphone operations at 2 GHz.
An FCC engineering analysis concluded sufficient safeguards are built into proposed AWS-3 technical and operational rules to prevent harmful interference to AWS-3 mobile phone communications and wireless microphone operations.
T-Mobile, which spent $4.2 billion on 120 AWS-1 licenses at a 2006 auction that raised nearly $14 billion total, and others in the wireless industry, carriers and vendors alike, insist AWS-3 interference testing does indeed raise red flags. The AWS-1 spectrum purchased by T-Mobile, the smallest of the four national cellular carriers, is critical to being competitive in terms of 3G offerings. T-Mobile is counting on upcoming holiday sales with the rollout of 3G service in more than two dozen markets by year’s end.