Learning to share

Government agencies release preliminary report on 3G spectrum Prospects of third generation wireless operators in the U.S. sharing spectrum with the Department of Defense appear more promising than expected, but any segmenting or sharing of the bands will be challenging, according to a Department of Commerce report.

The Commerce Department and the FCC last week released interim studies on the availability of spectrum for 3G systems, studying the possibility of using spectrum within the 1710 to 1885 MHz band and the 2500 to 2690 MHz band. These bands were among those identified at World Radiocommunications Conference 2000 in May as additional bands for high-speed broadband 3G systems.

The studies were conducted pursuant to President Clinton's executive memorandum calling for executive branch departments and agencies and the FCC to swiftly cooperate with the wireless industry to identify spectrum for these new wireless systems.

While parts of the 1710 to 1885 MHz band are free for 3G services, spectrum in the 1755 to 1850 MHz band is heavily encumbered by the Defense Department, which uses this band to operate federal space systems, microwave communications systems and other military functions. The 1710 to 1885 MHz band is the spectrum of choice for the wireless industry because most countries in the Western Hemisphere already have chosen 3G spectrum in this band.

"This interim report indicates that segmentation and sharing are possibilities in the 1755 to 1850 MHz band," said Gregory L. Rohde, assistant secretary of commerce for communications and information and National Telecommunications and Information Administration administrator, when releasing the study at a press conference last week.

NTIA, the entity in charge of evaluating the Defense Department bands, said the Defense Department's own electromagnetic compatibility tests found that uncoordinated sharing of the band with IMT-2000 systems is not feasible. But other sharing approaches - segmenting the band into three segments or allowing 3G mobiles to share and transmit in the 1710 to 1790 MHz range - may be possible under certain conditions, according to NTIA's report.

"The results were more promising than we expected," an FCC official said of the NTIA report. "We all assumed the initial rounds there would be challenging."

The FCC's report evaluating the 2500 to 2690 MHz band was not as promising. Fixed wireless operators such as Sprint and WorldCom, as well as religious and educational broadcasters, heavily use this spec - another attractive band that would align the wireless industry with the European 3G market.

Incumbent use of the band varies from one geographic area to another, which presents serious challenges to band sharing or segmentation options that could be implemented across the country without severely disrupting incumbent services, said the FCC.

Neither report evaluated the possibility of moving the incumbents to a different band. This issue will be addressed in final reports due March 1.

The studies are subject to industry comment, and the FCC will proceed with a notice of proposed rule making on Dec. 31 on all 3G spectrum allocation options. The NTIA and the FCC are scheduled to identify suitable spectrum by July, with auctions commencing by Sept. 30, 2002.

Troubled competitive local exchange carrier ICG Communications has filed for Chapter 11, seeking shelter from its creditors. The company remains in operation, and no date has been set for a hearing at the U.S. Bankruptcy Court in Wilmington, Del.

There are a lot of creditors from which to seek protection. ICG reports $2.81 billion in total debt against $2.79 billion in assets.

Analysts say it is too early to tell how much ICG might be worth to a potential acquirer or how much shareholders might get for their investment.

"The only recent example, GST, shows you can get between 80› and 90› on the dollar," said Ken Hoexter, managing director at Merrill Lynch. "But [at GST], you had extensive fiber facilities in the ground that someone wanted to make use of. ICG has fiber in the ground in certain markets. In other markets, they were making large fiber deals with utility companies. They even stated at the time that only a small percentage of that fiber was actually useful."

Mike Lauricella, telecom analyst for The Yankee Group, believes ICG's cloud, dark as it is, has a silver lining.

"ICG is facing its problems head-on," Lauricella said. "They're not trying to hide it. They're not trying to spin it. They're saying, `We've got some problems, we've filed Chapter 11, and now we're going to try to make a go of it.'"