The FCC’s much anticipated vote on the new 700 MHz bandplan finally happened on July 31. Though many of the crucial details remain to be seen, the plan as adopted gave a little bit to everyone while denying everyone all of what they wanted. The most hotly contested feature of the plan was the designation of one spectrum block on an "open access" basis as sought by Google. The FCC did allocate a huge 22 MHz block with this condition, also allowing combinatorial bidding on that block, which will facilitate the creation of a nationwide network. (Open access means that any compatible device can hook onto the network without the restrictions normally imposed by the carrier which manages the network.) Google, who it seems should have been pleased, was unhappy that the FCC did not permit operation of the band on a wholesale basis. (Google’s reaction is puzzling since the restriction on wholesaling only applies to Designated Entities – companies with low revenues – a category that Google would not fit into in any event.)
A company called Frontline had advocated allocation of a spectrum block adjacent to the block allocated to public safety. The idea here was that the license holder on this block would partner with public safety to build out the public network in return for pre-emptible access to that block. While adopting this concept, the FCC rejected Frontline’s attempts to impose other conditions on this license or to permit wholesaling of service by Designated Entities who win the license.
The public safety community generally pronounced itself pleased with the results – as well it might – but it remains to be seen whether there are any significant takers for the public/private partnership envisioned by the Commission. The enormous burden of building out the PS network might well be greater than the benefit of pre-emptible use of that spectrum.
The FCC also imposed relatively strict build-out requirements on the spectrum winners in an attempt to ensure that winning bidders provide service to large areas of their territories in short order or lose the unserved areas.
In sum, the band plan is classic case demonstration of how a camel is a horse designed by a committee. With differing conditions encumbering bits and pieces of the various spectrum blocks in different ways, the overall value of the spectrum to bidders is likely to be significantly reduced from what it might have been. This may trigger a move for Congressional intervention, which could only inject further uncertainty into the planning process. But at least the basic terrain of the 700 MHz block is now known. Still to come: setting the reserve prices for the various blocks.
