CommLawBlog : Broadcast & Communications Lawyers & Attorneys : Fletcher Heald & Hildreth Law Firm : Telecommunications, FCC Regulation, Communications Act

Pat yourself on the back – but not too hard – if you deduced that the NPRM and anticipated AWS H Block spectrum auction are products of the Spectrum Act. Hence, the law directs the FCC to “unleash” (or grant, if you prefer) new initial licenses in the AWS H Block (among others) within three years of the Spectrum Act’s passage. The goal is to “unleash more spectrum for broadband” because doing so is supposedly “essential” to the achievement of “economic growth, job creation and global competitiveness” and nirvana generally.  (To all the “leashed” spectrum out there yearning for freedom – don’t worry, your time will come.) The NPRM is the FCC’s first step in implementing this particular Spectrum Act directive.

The AWS H Block comprises the spectrum blocks at 1915-1920 MHz (Lower H Block) and 1995-2000 MHz (Upper H Block). For those new to the block, the AWS H Block is actually adjacent to the PCS-block; the “H” is a continuation of the PCS-block letter designations. 

This isn’t the first time the Commission has proposed service rules for the H Block. Comments were solicited back in 2004, and again in a follow-up in 2008. However, due to the passage of time and advances in technology, the Commission figures it’s a good idea to revisit H Block issues again, including the question of whether “harmful interference” to the neighboring PCS-block may occur.

The Spectrum Act expects residents in the AWS H Block to play nice with their PCS neighbors. In fact, the Act prohibits the Commission from granting initial licenses if it should determine that licensing in the H Block would cause harmful interference to commercial mobile service licensees in the PCS Downlink band (1930-1995 MHz). The Commission has tentatively concluded that licensing in the Upper H Block will not cause harmful interference to the PCS Downlink band. The Commission bases this tentative conclusion on the fact that, in previous proceedings, no contrary technical data/analyses were submitted. (Note: AT&T appears to disagree with the FCC’s conclusion.) 

The potential for harmful interference from the Lower H Block, on the other hand, has been hotly debated, and the various PCS licensees have proposed different technical rules on how this result might be avoided. Which of those proposals would work best to avoid harmful interference from the Lower H Block (a matter the PCS licensees haven’t been able to agree on so far) is an issue on which the NPRM seeks comment. The outcome of this debate may ultimately determine the fate of the H Block spectrum.

It should be noted that this NPRM was a companion to the Commission’s simultaneous decision to re-purpose the adjacent 2000-2020 MHz band for terrestrial operations. This band was purchased as a primarily mobile satellite band by DISH Network about a year ago. The FCC has now converted it to satellite and terrestrial use and re-dubbed it the “AWS-4” band. Before doing so, however, the Commission bent over backwards to ensure that terrestrial operations from AWS-4 would not interfere with the yet-to-be created H Block.

If the Commission decides, after evaluating the comments filed in response to the NPRM, that the new kids on the H Block won’t play nice with the kids in the PCS neighborhood, the Spectrum Act’s desired unleashing of spectrum may be stymied. However, rather than adopt an “all-or-nothing” approach, the Commission has offered up an alternative. The NPRM tentatively concludes that the Spectrum Act would still require the Commission to auction and license half of the H Block spectrum even if the other half were found to cause harmful interference to the PCS Downlink band. The remaining question would then be: if one portion of the H Block gets “unleashed,” what should the Commission do with other? (The NPRM doesn’t presume which of the two portions – upper or lower – would necessarily be “unleashed” first in this half-block auction scenario.) Comments are solicited on the appropriate use for such spectrum and/or whether it should be designated for Unlicensed PCS.

Some other proposals open for comment in the NPRM include:

• licensing of the H Block for exclusive geographic areas by Economic Areas;
• an interim (within 4 years) buildout requirement to offer service and signal coverage to at least 40% of the population;
• a final buildout requirement of 70% coverage;
• cost-sharing formulas; and
• licensing and operating rules. 

Take a look at the NPRM for the full list of issues/proposals on which comments are being sought.

Comments are currently due by February 6, 2013 and reply comments are due by March 6, 2013.

One of the fundamental presumptions of radio licenseeship is that a licensee must either use its licensed spectrum or lose it. The operative rule codifying this principle provides that if you permanently discontinue service, your license will automatically be cancelled.  In virtually every other radio service that we can think of – with one notable exception – the FCC specifies strict time frames regarding discontinuance, or abandonment, or permanent cessation, of service. A licensee who fails to meet the minimum operational period specified for its particular service will be deemed to have permanently discontinued operation. When that occurs, the licensee must either turn in its license or have it cancelled by operation of law. 

But Northstar’s were PCS licenses. By some odd quirk, the PCS rules do not define  a period of non-operation that leads to a presumption that a PCS operation has been “permanently discontinued”. Because of the rules’ silence on this point, PCS licensees have historically taken the perfectly reasonable position that a licensee has not permanently discontinued operations until it has in fact ceased operations with the intent of never resuming them. In the absence of a legal presumption established by a rule, the actual intent of the licensee to resume operations at a later point would seem to easily and satisfactorily rebut any contention that it had permanently discontinued operations. The situation might be likened to that treadmill down in your basement which has acquired a thick coating of dust since it was last used in 1989.   But if asked, you could and would truthfully insist that you have every intention of getting on that treadmill and getting back into shape. In fact, you seriously think about firing it up every couple of weeks, but some other annoying factor always prevents you from doing so. No way have you “permanently discontinued” use of that treadmill!

But the FCC would take your treadmill away.  The Bureau rather breezily noted that in its other services it deems permanent discontinuance to have occurred if a licensee ceases operations anywhere “from 90 days to up to one year or more.”  Since Northstar had acknowledged in its application that it had not been operating the system for at least two years, the Northstar licenses were deemed to have cancelled automatically. 

This completely unsupported and unprecedented declaration is flabbergasting on several levels.

First and foremost – when did the automatic cancellation occur? There is absolutely no way that any licensee would have known that a secret alarm clock with a silent alarm was ticking.   And if there was such an alarm clock, did it silently go off at 90 days, 180 days, one year, or “more” – all of which would be potential yardsticks to measure PCS against. The Bureau does not say.  All we know is that at some point by the two-year mark, the alarm clock had definitely gone off unbeknownst to anyone, and the license had been cancelled without the FCC, the licensee or anyone else doing or saying anything.  

This is scary, since the law generally demands that people be given notice before the guillotine blade is allowed to fall.

Second, PCS licensees who are planning to sell their silent stations now face a quandary. If the station has been silent for any length of time (we assume you’re safe if you were silent for less than 90 days, but who knows?), neither the buyer nor the seller has assurance that the license has not been automatically cancelled by operation of a law that is unstated.  Communications lawyers called upon to opine to the “good standing” of PCS licenses will be hard put to issue such opinions.   A dark cloud of uncertainty has been cast over a whole service.

Unfortunately, the applicants involved in the Northstar case are unlikely to seek review; the Commission waived the “permanent discontinuance” rule for them in order to facilitate the effectuation of the license sales, so they’d be foolish to challenge the ruling. Under ordinary principles, no other party has standing to seek review of the Bureau’s decision. As a result, even though the decision seems (to this observer, at least) grossly, unequivocally and manifestly erroneous, it will sit there for a while until it can be revisited. (One avenue might be the periodic review of non-controversial rules that the FCC undertakes every few years. Such a proceeding is now open, and the Commission could remedy the effect of this decision by simply adopting a firm standard for measuring permanent discontinuance of service, prospectively applied.) In the meantime, forget about your treadmill and get that PCS system running.