FCC and GAO Back Current Licensing for Fixed Microwave

Posted on November 25, 2012 by Mitchell Lazarus

In separate reports to Congress, both agencies found high spectrum efficiency.

With all the work Congress has to do in averting fiscal cliffs, raising debt ceilings, and naming post offices, we were surprised they found time to look into whether fixed microwave spectrum is being used efficiently. Apparently no concern of national interest, no matter how obscure, escapes the attention of our lawmakers.

In passing the Middle Class Tax Relief and Job Creation Act of 2012, back in February, Congress tacked on questions to the FCC and the Government Accountability Office (GAO) about use of the 11, 18, and 23 GHz fixed microwave bands. Congress asked the FCC for the “rejection rate” in these bands – “rejection rate” being defined as the number and percentage of common carrier applications that are rejected due to spectrum congestion. Congress asked GAO whether current rules provide adequate incentive for efficient use of the spectrum, and whether the Government could maximize revenue by auctioning the bands.

We reported earlier on the statute, and subsequently, on the FCC’s public notice seeking advice on what to tell Congress.

Both agencies have now issued their reports.

The FCC very politely told Congress it had asked the wrong questions. Users in these bands are licensed on a link-by-link basis. A would-be applicant must successfully complete frequency coordination, establishing that the proposed link will neither cause nor receive interference, before it submits an application to the FCC. So by the time an application for this spectrum arrives at the FCC, it will already have passed the no-interference test at the coordination stage, said the FCC.  This means the FCC's “rejection rate” for applications is necessarily zero. But even rejections by frequency coordinators are extremely rare, if they happen at all; the FCC estimated their occurrence at “well under one percent.” The FCC does not know how many of those are common carrier applications, it said, because frequency coordinators typically don’t know if a given application is for common carrier or private use.

The FCC noted that its current procedures allow for heavy re-use of frequencies in areas where demand is high, resulting in highly efficient use of the spectrum.

Much of the GAO report deals with basics of radio-frequency communications, licensing, and frequency coordination. Of course these matters are second nature to the FCC, although perhaps new to GAO (and possibly new to Congress as well).   GAO went on to concur with the FCC that rejections due to frequency congestion are rare. Doing its best with Congress’s query on auctions, GAO struggled at length over the difficulties of auctioning spectrum that already has many thousands of users in place. It considered whether imposing “spectrum fees” instead might provide suitable incentives. But in the end, GAO found the FCC’s current approach in fact has encouraged spectrum efficiency. GAO concluded there is no clear need for either auctions or spectrum fees.

We think both agencies reached the right result. The FCC’s licensing and coordination procedures for fixed microwave services have evolved over many decades in response to the technical and economic realities of an industry that forms an essential part of the U.S. telecommunications infrastructure. The procedures are working well. We hope Congress gets the message and leaves them alone.

(Disclosure: FH&H represents the Fixed Wireless Communications Coalition, which provided substantial input to both the FCC and GAO in the preparation of their respective reports.)
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Congress Wants to Hear from the FCC, Which Wants to Hear from You

Posted on June 21, 2012 by Mitchell Lazarus

FCC to report on frequency congestion in the 11, 18, and 23 GHz microwave bands.

Chances are you have forgotten about the Middle Class Tax Relief and Job Creation Act of 2012, passed back in February, ostensibly to extend a cut in payroll taxes. But the FCC hasn’t forgotten. Because the 250+ pages of the Act unrelated to extending tax cuts include a provision telling the FCC to report to Congress next October on a topic that, frankly, we didn’t know Congress cared about: common carrier point-to-point microwave applications in the 11, 18, and 23 GHz bands that fail to make it through frequency coordination. Read the details here.

The FCC has now released a public notice inviting input on that subject. And it may indeed need help.

The FCC’s first problem: Congress has ordered it to report on the application “rejection rate”, which Congress defines as

the number and percent of applications (whether made to the Commission or to a third-party coordinator) for common carrier use of spectrum that were not granted because of lack of availability of such spectrum or interference concerns of existing licensees.

But applications go only to the FCC, not to frequency coordinators. And by FCC rule, they reach the FCC only after successful coordination. So the rejection rate, as defined by Congress, is necessarily zero.

Rather than just tell that to Congress and get back to its real work, the FCC obligingly broadened the question to one that perhaps Congress meant to ask: the numbers of requests to frequency coordinators that could not be accommodated, and the reasons why.

But even that generous re-phrasing still poses problems.  The answer to the re-phrased question probably is also zero, or close to it. That’s because, in our experience, frequency coordinators usually find a way to meet their customers’ needs. Plus, if in fact coordinators have received requests they could not fulfill, they may not be able to tell the FCC much about them, since nothing requires coordinators to keep records of those (or any) customer requests. And if the coordinators do have records of rejected applications, they are unlikely to know which ones were intended to become common carrier applications. And even if they had all those data (which we doubt), the frequency coordinators may not want to disclose them via a public docket, in a competitive environment.

Comments in response to the public notice are due on July 20, 2012. There is no provision for reply comments. In a rare move, the FCC will allow parties to submit information without also posting it in the docket. But be careful: information sent to the FCC remains subject to disclosure under the Freedom of Information Act, unless it qualifies for confidential treatment and the submitter makes a proper and timely request for FOIA non-disclosure.
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Congress Seeks Info on 11, 18, and 23 GHz Fixed Microwave

Posted on February 18, 2012 by Mitchell Lazarus

Bill extending payroll tax cut requires reports on frequency coordination.

Among the little surprises buried in the 250+ page legislation to extend the payroll tax cuts is a provision instructing the General Accounting Office and the FCC to investigate the use of the 11, 18, and 23 GHz fixed microwave bands.

Currently these bands, along with some others, are licensed on a “link by link” basis. An applicant sends the coordinates and elevations of its proposed stations, preferred frequency band, and other technical data to a frequency coordinator, who tries to fit the new user into the band without threatening interference to the incumbents. The process usually works. Few applicants need be turned away, and unexpected interference from one system to another almost never happens. The arrangement also results in highly efficient use of the spectrum. But it does not bring in revenues to the Treasury, as auctions do.

The new bill (the relevant portion of which is reproduced below) requires the FCC to report on the number and percentage of common carrier applications in these three bands that fail to make it through frequency coordination. Separately, GAO must assess whether the current rules provide “adequate incentive” for use of the bands, and whether they “ensure that the Federal Government receives maximum revenue for such spectrum through competitive bidding.” The bill further instructs GAO to consider adjacent spectrum that has been auctioned (which is just the 24 GHz band), and also the present and projected failures of frequency coordination in markets having high demand for common carrier use of these bands.

The object, apparently, is to lay the groundwork for auctioning these bands. But the bill has some odd features.

For one thing, although auctions have succeeded for mobile spectrum, such as the bands used for PCS voice and 3G and 4G data, they have never worked well for fixed point-to-point applications. The bands previously auctioned for that purpose, including 24, 28, 31, and 39 GHz, are all severely underused. They did raise some cash for the Government, but make poor examples of spectrum efficiency. At least according to historical precedent, auctioning off a fixed point-to-point band is almost tantamount to removing it from productive use.

For another, the bill looks primarily to common carrier uses of the three bands. Although we don’t have hard data, we strongly suspect that non-common-carrier applications account for the large majority of licenses.

Finally, the focus on failures of frequency coordination is curious, considering that most coordination efforts ultimately succeed, thanks in large part to the skills of the companies that provide this service.

The current system of regulation, in short, has worked well for decades. We respectfully suggest that Congress should have left it alone.

Both reports are due in nine months. No doubt the FCC will soon have to seek public comment on the issues raised in the bill. We will let you know when that happens. In the meantime, the relevant text from the bill appears below.

SEC. 6412. DEPLOYMENT OF 11 GHZ, 18 GHZ, AND 23 GHZ MICROWAVE BANDS.

 (a) FCC REPORT ON REJECTION RATE.—Not later than 9 months after the date of the enactment of this Act, the Commission shall submit to the Committee on Energy and Commerce of the House of Representatives and the Committee on Commerce, Science, and Transportation of the Senate a report on the rejection rate for the spectrum described in subsection (c).

 (b) GAO STUDY ON DEPLOYMENT.—

 (1) IN GENERAL.—The Comptroller General of the United States shall conduct a study to assess whether the spectrum described in subsection (c) is being deployed in such a manner that, in areas with high demand for common carrier licenses for the use of such spectrum, market forces—

(A) provide adequate incentive for the efficient use of such spectrum; and  

(B) ensure that the Federal Government receives maximum revenue for such spectrum through competitive bidding under section 309(j) of the Communications Act of 1934 (47 U.S.C. 309(j)).

 (2) FACTORS FOR CONSIDERATION.—In conducting the study required by paragraph (1), the Comptroller General shall take into consideration—

 (A) spectrum that is adjacent to the spectrum described in subsection (c) and that was assigned through competitive bidding under section 309(j) of the Communications Act of 1934; and

(B) the rejection rate for the spectrum described in subsection (c), current as of the time of the assessment and as projected for the future, in markets in which there is a high demand for common carrier licenses for the use of such spectrum.

 (3) REPORT.—Not later than 9 months after the date of the enactment of this Act, the Comptroller General shall submit a report on the study required by paragraph (1) to—

 (A) the Commission; and

 (B) the Committee on Energy and Commerce of the House of Representatives and the Committee on Commerce, Science, and Transportation of the Senate.

 (c) SPECTRUM DESCRIBED.—The spectrum described in this subsection is the portions of the electromagnetic spectrum between the frequencies from 10,700 megahertz to 11,700 megahertz, from 17,700 megahertz to 19,700 megahertz, and from 21,200 megahertz to 23,600 megahertz.

 (d) REJECTION RATE DEFINED.—In this section, the term ‘‘rejection rate’’ means the number and percent of applications (whether made to the Commission or to a third-party coordinator) for common carrier use of spectrum that were not granted because of lack of availability of such spectrum or interference concerns of existing licensees.

 (e) NO ADDITIONAL FUNDS AUTHORIZED.—Funds necessary to carry out this section shall be derived from funds otherwise authorized to be appropriated.
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