FCC reconsidering spectrum caps

(Telephony) With wireless service providers laying down the foundation for future spectrum-intensive third generation services, the FCC is now considering modifications to its spectrum cap rules.

Under the current regulations, a carrier can hold no more than 45 MHz of spectrum in any one geographical area. This regulation was put in place to foster wireless competition.

In the proposed rule making, the FCC asks for comments on whether the cap is achieving its purpose, is inhibiting the development of advanced services and whether it should be eliminated, modified or retained.

A spokesman for Verizon Wireless, a current participant in the C and F block spectrum re-auction, expressed support for removal of spectrum caps.

“We have a long-standing position advocating for the elimination of spectrum caps. [Verizon Wireless CEO] Denny Strigl testified last year to the congress to that effect…What Mr. Strigl said was that the spectrum cap is not longer needed, that there’s full competition in the market place. The opportunity for advanced services will rely on additional spectrum.”

David Bishop, director at the Yankee Group, said that spectrum caps were originally put in place to ensure competition among four providers in any given market. With additional spectrum for service providers having been identified since the time spectrum caps were put in place, a cap of 45 megahertz may be outdated.

“In general, I think competition has developed to a fairly robust stage in most markets…With additional spectrum out there, we’re going beyond that. I think it’s definitely time to readdress [spectrum caps]. It’s kind of an object of the past and I think its time may be done.”