3G Spectrum? Stay Tuned

Like a soap-opera plot, the 3G-spectrum saga continues with unexpected twists and turns following Sept. 11.

Initially, speculation was rife that Department of Defense (DoD) spectrum was out of consideration for 3G wireless services.

However, Badri Younes, director of spectrum management, told Wireless Review on Sept. 26 that DoD's spectrum policy did not change as a result of the terrorist attack, and it's still possible that the DoD may be able to accommodate the industry by vacating the spectrum in question.

“What Sept. 11 hopefully did was make everyone realize that this accommodation must take place on DoD's timeline and that adequate funding will need to be programmed or reimbursed in the interim,” Younes said.

The fixed-wireless industry was pretty sure that its MMDS/ITFS licenses at 2.5GHz were going to be pulled off the 3G table, but the events of Sept. 11 had others wondering whether the FCC might want to take a second look at these bands. Instead, on Sept. 25, the FCC announced that the bands were definitely off the table, but it added a “mobile allocation” that left the door open for spectrum owners perhaps to use these bands for “advanced services” at a later date.

Reaction was mixed and predictable. CTIA was dismayed, WCA was euphoric, and the license owners realized they might have gotten more than they bargained for. The two largest are Sprint and WorldCom. WorldCom had no comment on the mobile allocation. Sprint released a cautious statement saying that it agrees with the FCC decision to let market forces “determine the feasibility of using this spectrum for additional services.”

Nucentrix, the third largest MMDS spectrum holder, was more direct.

“MMDS/ITFS spectrum must be considered part of the solution set for 3G and other advanced wireless services,” said Russ Wiseman, senior vice president of Internet services.

Leo Cyr, Clearwire Technologies president & COO, has a lease deal with the ITFS Alliance for licenses in as many as 80 markets. He sees the mobile option adding value to the spectrum holdings.

The FCC made it clear that any mobile use of this spectrum is for incumbents exclusively, and any 3G uses will require further rulemaking. There's a certain irony in this as far as Sprint is concerned. Although carriers such as Verizon Wireless have been aggressively seeking 3G spectrum, Sprint PCS has maintained all along that it has no need for additional spectrum for 3G.

Meanwhile, Back at the FCC …

The spectrum search continues. Ideally, CTIA would like to see an additional 200MHz of spectrum by 2010, spectrum that will be harmonized around the globe, which will mean lower equipment costs due to economies of scale. The 1710MHz to 1850MHz band — DoD's spectrum — has been the band of most interest because this is the band of choice among the United States' major trading partners. But timing clearly is an issue.

Younes said that some seem to think the DoD can part with 1710MHz to 1755MHz by 2004, “though we have not yet received notice of where we might reallocate some of our precision guided munitions.” As far as vacating 1755MHz to 1850MHz is concerned, he reiterated 2017 as the year when upgraded or new ground and satellite communications systems would support such a move. DoD's investment in the band totals more than $100 billion in more than 100 systems, Younes said.

“That's not the sort of investment we can replace in a single Future Years Defense Plan,” he said.

CTIA currently is pleased with the latest NTIA proposal to examine the potential use of the 1710MHz to 1770MHz and 2110MHz to 2170MHz bands. The 1770MHz to 1850MHz band is not part of this assessment. The assessment will address possible sharing between incumbents and new 3G users and attempt to identify alternate, replacement spectrum bands for displaced federal and private-sector systems.

If additional spectrum is needed to relocate incumbents from the 1710MHz to 1770MHz band, the assessment also will include identifying relocation spectrum in accordance with the National Defense Authorization Act of 2000, along with the time frame for moving the displaced incumbents into those bands. In addition, the federal government incumbents in the 1710MHz to 1770MHz band will be assessing their future spectrum needs in light of new national security demands. The auction deadline would be Sept. 30, 2004.

Plan B & Beyond

Other bands being considered for advanced services have certain drawbacks related to spectrum harmonization or other issues.

Yet even if bands are allocated that don't harmonize globally, there's sure to be interest in them. Michael Doherty, Ovum senior wireless analyst, predicted carriers will grab whatever is on the table.

“The game is to get as much spectrum as possible,” he said.

Travis Larson, CTIA spokesperson, agreed, saying, “The growth in wireless voice alone in 2000 would suggest that all spectrum has some value.”

The NextWave licenses will provide relief for some larger carriers. That spectrum will go to Verizon and entities representing AT&T Wireless, Cingular and VoiceStream if an Oct. 16 agreement gets expected FCC approval.

The FCC also took steps in September to create incentives for incumbent broadcasters on channels 60 to 69 to clear the 746MHz to 806MHz band for wireless services. Broadcasters may continue to operate on these frequencies until at least Dec. 31, 2006, yet Congress has directed the FCC to auction commercial spectrum in the band before that time. The auction date now is set for June 2002.

The next best bet for relief is the elimination of the spectrum cap, something CTIA is urging.

“This is truly our only interim solution to the spectrum shortage,” Larson said.

The FCC has an open proceeding to examine the spectrum cap and plans to do so before the end of this year, said Julius Knapp, FCC deputy chief of the Office of Engineering & Technology.

“There's no leaning one way or another,” Knapp said.

Ovum's Doherty said he hasn't seen any opposition to lifting the cap, calling it the least controversial of all the spectrum-relief measures out there and the most likely to pass.

If it does, more industry consolidation could result.

“We probably are looking at another round of consolidation, maybe losing one or two of the big players,” he said.

Although regional carriers such as Alltel and U.S. Cellular survived the last round, “are they strong enough to sustain themselves, or will they join a larger partner?” he asked.