The FCC has issued a complex rulemaking proposal on how best to auction and use the prime spectral real estate at 2155-2175 MHz. Yet even the band’s availability for auction is a matter of dispute.
Frequencies at 2155-2175 MHz are home to important microwave services. An earlier proceeding to clear surrounding spectrum for Advanced Wireless Services (AWS) took in this band as well. As a result, rules now in place specify how incoming AWS licensees must move out the incumbents. But when the FCC auctioned off nearby AWS frequencies, it left 2155-2175 MHz untouched.
Enter M2Z Networks. In one of those interesting Washington coincidences, M2Z’s founder and CEO turns out to be the most recent ex-chief of the FCC’s Wireless Telecommunications Bureau, which administers all of the spectrum at issue here.
M2Z put forward a novel proposal. Don’t bother with an auction, it said — just give us the spectrum. We will provide free Internet broadband service nationwide. (With ads, of course.) We will also offer an optional higher-speed service for a charge. And we will remit 5 percent of our take to the government.
Response came swiftly. Other companies, it seemed, shared M2Z’s interest in free spectrum. Six filed their own applications for the same band. Yet free spectrum is not to everyone’s liking. The wireless phone carriers, among the big winners at recent auctions, urged the FCC to dismiss all seven applications and — no surprise — conduct an auction instead.
The FCC put an end to vigorous lobbying on both sides by turning down M2Z’s request. The Communications Act, it said, calls for an auction to choose among competing applications — a requirement that applies here. Anticipating the objection, M2Z had mustered a long list of legal arguments as to why the FCC should bypass the auction and simply award the spectrum to M2Z. But none of them impressed the FCC.
The following week, M2Z appealed the FCC’s dismissal to the U.S. Court of Appeals.
A week after that, seemingly unworried about the court’s eventual decision, the FCC issued a Notice of Proposed Rulemaking seeking comment on what to do with the band.
The 2155-2175 MHz band has excellent propagation, similar to popular cell phone frequencies. And, like the cell band, it is compatible with conveniently small handset antennas. But it comes with two disadvantages. One is the presence of incumbents, who will require relocation to other frequencies. The other is the absence of a matching paired band. Two-way communication can work in a single band, but the FCC finds it hard to shake the 1940s-era habit of licensing frequencies in pairs, one for each direction. This works best when the respective members of the pair are spaced well apart, which is not possible in the single band here.
Much of the FCC’s notice addresses the two-way problem. It proposes three main alternatives:
- use techniques in which the transmitter and receiver take turns using the same or nearby frequencies;
- use different parts of the band for communications in different directions, despite the difficulties; or
- use this band only for base-to-handset transmissions, and put communications the other way elsewhere in the spectrum.
Each of these possibilities raises subsidiary issues: the amount of spectrum per license, whether to allow bidding on competing band plans, the geographic areas to be auctioned, and the prevention of interference among licensees.
The notice also raises more generic questions: applicable service rules, common carrier considerations, spectrum aggregation limits, eligibility restrictions, technical rules, and bidding procedures.
Surprisingly, the FCC asks whether it should impose any of the conditions offered by M2Z and its six competitors, such as free nationwide broadband service. Those offers, of course, were part of a bid for free spectrum, proposed in lieu of auction payments. An auction participant might well resist providing free service on top of writing a check. In practice, of course, such a requirement would tend to diminish revenues from the spectrum, and hence pull down the bidding. Still, the FCC’s mandate goes beyond raising cash for the U.S. Treasury. It could, if it wanted to, impose non-monetary public interest obligations on licensees. The notice even asks what should become of those obligations if a licensee transfers some or all of its spectrum — and what should become of a licensee that fails to meet its obligations.
Comment and reply dates will probably fall in November and December, respectively. We will let you know.
The FCC’s notice can be found here.