Cut it loose

While the mobile wireless industry cries out on Capitol Hill for more spectrum to buy, the mobile satellite services (MSS) industry continues to struggle to find a viable business plan within the 2 GHz spectrum it received for free, the Cellular Telecommunications & Internet Association said in a recent filing with the FCC.

CTIA is asking the FCC to stop granting the MSS industry spectrum and re-allocate existing MSS spectrum “to more efficient users of spectrum.”

“It means that we're looking at spectrum that may not be fully utilized below 3 GHz and could be used for terrestrial, fixed and relocating incumbents from some of the other bands,” said Diane Cornell, CTIA's newly appointed vice president for regulatory policy. “It's a long-term spectrum-management filing.”

Nine companies have filed proposals to operate MSS systems, which fall in the 1990 MHz to 2025 MHz and 2165 MHz to 2200 MHz bands. CTIA says the MSS industry already is failing financially, and new MSS entrants are unlikely to make effective use of the spectrum (see figure).

The mobile wireless industry is particularly concerned with a filing from New ICO — the satellite company revived by cellular mogul Craig McCaw — asking the FCC to let it incorporate an ancillary terrestrial component. This would let New ICO extend MSS to many indoor and urban areas. Without it, MSS cannot survive, according to New ICO.

The mobile industry believes New ICO, if granted the request, will be able to compete against mobile operators. If that's the case, mobile industry leaders believe those bands should be auctioned to all commercial providers.

The industry may be facing the biggest policy fight on Capitol Hill this year. Spectrum for bandwidth-intensive, third-generation services is scarce, and the swath the mobile industry wants most — the 1755 MHz to 1850 MHz band — is controlled by the Defense Department, which has voiced strong opposition to moving. Other spectrum identified by the International Telecommunication Union is used by broadcasters and multichannel multipoint distribution service (MMDS) operators.

The mobile satellite industry's string of failures

Iridium	After spending more than $5 billion on its system, Iridium was able to attract only 55,000 subscribers, and the company filed for bankruptcy. A private company has since purchased the assets with plans to scale back the service drastically.
Globalstar	Posted a first-quarter loss and is reviewing various restructuring proposals after defaulting on debt payments.
ICO	ICO filed for voluntary bankruptcy in 1999 and emerged as New ICO in May 2000 with Craig McCaw assuming control. New ICO now says it cannot survive unless the FCC allows it to incorporate an ancillary terrestrial component that will allow it to compete with wireless operators.
Sources: New ICO's FCC filing, company reports

The Defense Department argues that total relocation of its systems is impossible unless comparable spectrum is made available. The agency claims it's highly unlikely that comparable spectrum exists. The 2 GHz MSS band may provide adequate spectrum to relocate incumbents.

“The way I look at it, we're now dealing with a future where we'll be moving incumbent users,” said Cornell, former chief of staff for the FCC's Wireless Telecommunications Bureau, during a recent trade show. “Looking at significant spectrum blocks will be hard.”

The mobile industry faces numerous challenges in securing the 3G spectrum it says it so desperately needs.

“The question is, will we have the concrete on which the new information superhighway rides?” CTIA President and CEO Thomas Wheeler said during last week's Wireless Agenda show. “I'm sad to say that it is an issue very much in doubt. There is no single issue more important than whether or not there is sufficient spectrum for wireless data. It's halftime, and we're down a bunch.”

With help from the Commerce Department, the FCC is supposed to issue a report and order this summer allocating 3G spectrum, according to a mandate issued last November by former President Bill Clinton. But the executive branch doesn't have enough appointees to address the issue, and many aren't on the wireless industry's side.

Earlier this month, CTIA sent a letter to President George W. Bush, urging him to delay 3G spectrum allocations until the Commerce Department has a chance to study the proposed 3G bands.

The mobile industry is taking solace in the fact that Commerce Secretary Donald Evans is willing to pursue a compromise between the mobile industry and the Defense Department. And Wheeler says the big message the industry is trying to convey to Capitol Hill is the fact that wireless carriers are willing to pay for relocation, giving the Defense Department the extra funds it has been seeking from the Bush administration.