FCC Finalizes Rules on 700MHz: Limited Open Access, No Wholesale Requirement

Posted by Sam Churchill on

The Federal Communications Commission approved (pdf) a set of 700 MHz ground-rules today for the spectrum auction this January. Here’s the Band Plan Chart (pdf), Martin Statement (pdf), Copps Statement (pdf), Adelstein Statement (pdf), Tate Statement (pdf), and McDowell Statement (pdf).

The FCC split the 24 MHz reserved for 700 MHz Public Safety Spectrum (12 MHz x 2 blocks) into 12 Mhz of narrowband and 12 Mhz of broadband. Frontline proposed sharing the broadband PS spectrum with commercial users. In exchange, public safety users wouldn’t have to front the cost of building towers and providing service. Elements of Frontline’s approach were incorporated into the FCC’s band plan (along with 2 MHz Guard Bands).

UPDATE: Here’s the FCC’s 2nd Report and Order released Aug 10th (pdf). The FCC set benchmarks for D Block build-out of the public safety network. Signal coverage and service must be available to 75 percent of the population within four years, with 95 percent to be covered within seven years and 99.3 percent to be covered within 10 years.

The Commission approved limited open access, with no wholesale requirement for the much discussed shared 22 megahertz block of the 60MHz available. The FCC steered a moderate course between the more “open” proposal of Google and the “walled garden” approach favored by cellular carriers.

The agency suggested a $4.6 billion minimum price for the new block of commercial airwaves. If that price was not reached, then the airwaves would be auctioned again without the access requirement, reports Reuters.

The C block covers two 11MHz chunks, making 22MHz available for national commercial use. This is prime real estate — it is the spectrum that Google and Verizon most want. FCC rules for open devices and open applications apply and a minimum bid of $4.6 billion is required. It will be re-auctioned if the minimum isn’t met.

The D block offers two 5MHz sections for a total of 10MHz with similar provisions. But this chunk also gets to use 12 MHz on the Public Safety band. The catch — bidders must build out a nationwide wireless network that meets public safety specifications for coverage and redundancy. Commercial traffic can share the spectrum with public safety users. Wireless Priority Service (or something like it), will allow public service users to get priority access in an emergency, overriding general public access. The minimum bid on the “D” spectrum block is $1.3 billion. The rules are vague about what happens if the reserve price isn’t met.

The auction of 60 MHz in the UHF television band could raise some $10-$15 billion for the U.S. Treasury, but could go higher since the spectrum requires only one third the number of towers to cover the same area as cellular or AWS frequencies (near 2 GHz). The downside is that the capacity of 700MHz is less and the frequencies can’t be used until analog television broadcasters move out, sometime after the February, 2009 DTV conversion deadline.

Commercial providers will be able to bid on large regional licenses and smaller individual market licenses. The auction will offer a total of 1,099 licenses. That includes 176 in the A Block, 734 in the B Block, 12 in the C Block, 1 in the D Block, and 176 in the E Block.

The 700 MHz Band Plan (pdf) includes these provisions:

  • 62 megahertz of spectrum will be divided into five spectrum blocks, and auctioned for commercial uses.
  • The commercial spectrum will be made available at auction in a mix of geographic area sizes, including Cellular Market Areas (CMAs), Economic Areas (EAs), and Regional Economic Area Groupings (REAGs).
  • The 10-megahertz Upper D Block will be licensed on a nationwide basis and will become part of a 700 MHz Public Safety/Private Partnership.
  • Within the 24 megahertz of public safety spectrum, the public safety wideband spectrum is being redesignated for broadband use to allow for nationwide interoperable broadband communications by public safety users.
  • The public safety broadband spectrum is placed in a 10-megahertz block at the bottom of this band and the existing public safety narrowband spectrum is consolidated in a 12-megahertz block at the top of the band. Internal guard bands are placed in between the broadband and narrowband segments.
  • There will be a single, nationwide license for the public safety broadband spectrum, assigned to a Public Safety Broadband Licensee, which will work with the adjacent commercial D Block licensee as part of the 700 MHz Public Safety/Private Partnership.
  • The Public Safety Band is shifted by downward by one megahertz from 764-776/794-806 MHz to 763-775/793-805 MHz in order to protect public safety narrowband operations in the Canadian border areas.
  • To accommodate the shift in the Public Safety Band, the Guard Band A Block is being relocated to a new location between the Upper C and D Blocks, and, to further protect the public safety narrowband operations from potential interference, the Guard Band B Block is being placed above the narrowband block at the top of the 700 MHz Band.
    Public Safety/Private Partnership
  • The Upper D Block commercial licensee and the Public Safety Broadband Licensee will form a Public Safety/Private Partnership to develop a shared, nationwide interoperable network for both commercial and public safety users

The vote was not unanimous, reports the Washington Post. Republican Commissioner Robert McDowell dissented on the open access provision, his first “no” vote since joining the commission. Republican Deborah Taylor Tate also expressed concerns about the provision, but did not oppose it.

The two Democrats, Michael Copps and Jonathan Adelstein, would have preferred that the rules had included the wholesale concept sought by Google and consumer groups. Still, they ended up supporting the final rules.

The text of the rules was not released at Tuesday’s meeting. The language in the document ultimately will determine which investors will commit billions of dollars to develop new wireless networks and which may not bid at all.

The 700 MHz auction may well be the FCC’s most important wireless-related action for many years, because it could lead to the introduction of new facilities-based providers of broadband services, wielding new business models,” Google attorney Richard Whitt wrote in a letter earlier this month to the FCC.

Google carefully lauds the FCC for its action in a post on the company’s public policy blog, but, says GigOm, both Google and other observers are guessing that the fine print in the rules (likely be published in a couple weeks), will make it extremely hard for any new national provider to surface.

Frontline Wireless today complimented the FCC (pdf) for putting in place (1) The nation’s first public safety-private partnership; (2) Clear implementation of an open access paradigm for wireless broadband.

In light of today’s FCC decision to promote a nationwide interoperable broadband network for first responders, and to provide a more open wireless platform for consumers, Frontline Wireless looks forward to moving ahead with the next steps of its business strategy to participate in the upcoming 700 MHz spectrum auction.

Steve Largent, president of the cellular industry association CTIA, told RCR News:

“The FCC’s considerable deliberation over the 700 MHz auction rules has left us pleased in a number of respects and still concerned in others. Specifically, we believe the commission has taken the appropriate approach by recognizing the importance of not restricting the number of auction entrants, nor requiring them to fulfill wholesale-licensing requirements or requiring geographic build-out on all the licenses”.

Free Press, a Liberal advocate opined:

Had the FCC opted to attach open conditions to these airwaves, the agency would have unleashed the creative forces of the marketplace onto an Internet that is now suffocating under the weight of a few cozy providers. More than a quarter-million citizens filed comments to the FCC urging the agency to inject such broadband competition into the marketplace by creating a so-called “third pipe,” a national wireless Internet network to compete head-to-head with DSL and cable.

AT&T and Verizon are expected to be participants in the 700 MHz auction. The band is important, not because of its capacity, but because of its reach. Only one-third to one-tenth the number of towers are required to provide coverage at 700 MHz. Conversely, the low frequencies penetrate walls much better, improving indoor reception.

Unlike cellular’s PCS & AWS frequencies which have 3-4 times the total bandwidth, but less range, 700MHz wireless broadband could be swamped by tens of thousands of potential users in high-density urban centers. That makes use of the band more appropriate for rural areas. A Senate Commerce, Science and Transportation Committee hearing on public safety and competition heard various opinions about 700 MHz issues.

How will it all shake out? It’s foolish to predict — but that’s never stopped us.*

  • Google seems best positioned to monetize the 22Mhz “C” block
  • Frontline seems positioned to take the shared public service “D” band
  • AT&T and Verizon could be relegated to the lower 700 Mhz bands, on the “A” and “B” blocks
  • I’ll go with AT&T for mobile television on channel 56, the single “E” block. (Qualcomm’s MediaFlo already has channel 55 on “D”).
  • Since Aloha Partners already owns most of the “C” blocks in the lower band, perhaps some kind of deal will be struck.
  • Verizon seems to have most to gain (as an IWN partner), so I’d give them the advantage for the “B” block on the lower 700 Mhz spectrum. Maybe cut a deal with Aloha. (AT&T doesn’t have the IWN advantage).

*Subject to change and total revision.

The Washington Post notes Google spent about $770,000 on their 2006 congressional lobbying effort, compared to the $21 million spent by AT&T and $14.4 million spent by Verizon the same year.

In related news, Verizon Wireless said today it has agreed to buy Rural Cellular Corp. for $2.67 billion in cash and assumed debt.

Verizon Wireless said the proposed acquisition will expand its wireless service coverage in rural areas; Minnesota-based Rural Cellular Corp. has networks located in Massachusetts, Maine, New Hampshire, and Vermont, as well as in Minnesota, North Dakota, Wisconsin, and several other states. Verizon said the acquisition will increase its customer base by more than 700,000 and allow expansion into some areas where it had little or no presence.

The deal comes one month after AT&T Inc. agreed to buy larger rural wireless service provider Dobson Communications for $2.8 billion.

Critics say Verizon and AT&T would like to kill upstart competitors like Google and Frontline, and get an RUS federal subsidy to do it.

Related 700MHz stories on DailyWireless include; FCC Testifies at House Committee, Equal Access Happy Talk, Broadband Wireless — Hello Goodbye, Google To FCC: $4.6B for Open Network, Frontline: Martin Plan Not ‘Open’, Equal Access Happy Talk, Frontline: Rumble in the Jungle, Adelstein: Open Access for 700MHz, Hearings on 700MHz, NXTcomm 2007, Broadcasters: Portable Devices Kill DTV, FCC: Beltway Vs Valley, 700Mz Support for “Open Access” Grows, Apple Developers Conference, 700MHz Battle Begins, AT&T “Open” to 700MHz — Not, General Dynamics Wins IWN Contract, Martin: Sharing is Good, Harold Feld on 700MHz, FCC Indecisive on 700MHz, Consumers to FCC: 700MHz Democracy Now!, FCC to Rural Users: 700MHz is the Ticket, McCain Wants Commercial 700 MHz for Police, State-wide Wireless Broadband Access, FCC’s 8th Report and Order, Joint Commecial/Muni Proposed for 700Mhz and Oregon’s $500 Million Statewide Wireless Network.

Posted by Sam Churchill on Tuesday, July 31st, 2007 at 1:45 pm .

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