Gains, Setbacks Posted In Efforts To Expand Wireless Capacity

By Joseph Palenchar On Aug 6 2001 - 6:00am

Efforts to expand spectrum availability and capacity for current and future 3G wireless-phone services have taken two steps forward and three steps back.

In one positive development, U.S. Rep. Cliff Stearns (R-Fla.) introduced legislation to eliminate the amount of spectrum a carrier can hold in the 800MHz cellular and 1.9GHz PCS bands in a particular market. The caps, adopted in 1994 to promote carrier competition in a geographic market, limit cellular and PCS carriers to 45MHz of spectrum in urban areas and 55MHz in rural areas.

In the second positive development, the FCC has begun to seek comments on ending or phasing out the requirement that 800MHz cellular carriers offer analog Advanced Mobile Phone Service (AMPS). That would free up analog channels for use by capacity-efficient digital technologies.

Rural analog carriers and other business interests are opposed to AMPS elimination. Opponents include General Motors's OnStar telematics group, which uses AMPS for its services. Final comments are due to the FCC in August.

Three other developments, on the other hand, will delay the availability of new spectrum:

  • the postponement of an auction for 700MHz spectrum,

  • a delay in identifying bands for 3G service,

  • and a spectrum fight that pits current network operators against bankrupt carrier NextWave.

Here's what's happening:

700MHz auctions: The FCC indefinitely postponed planned September auctions of spectrum currently used by analog UHF channels 60-69.

Like other TV stations, the UHF stations using the 747-762MHz and 777-792MHz bands are supposed to turn off their analog signals by 2006, or when digital-TV penetration hits 85 percent in their markets.

The FCC initiated the delay to give itself time to work out rules for broadcasters to vacate the spectrum in an orderly manner. Without such rules, wireless carriers fear they will be held hostage by broadcasters demanding exorbitant sums of money to vacate the spectrum.

3G auctions: In another action that will delay the launch of 3G services by some carriers, Commerce Secretary Donald Evans said he agreed with a request by FCC Chairman Michael Powell to postpone a decision, originally due in July, on allocating spectrum for 3G services.

Evans directed the National Telecommunications and Information Administration, which oversees government-used spectrum, to work with the FCC to identify viable 3G spectrum and come up with a new plan for selecting 3G spectrum "to be executed as quickly as possible," an FCC statement said.

The FCC and NTIA tentatively identified the 1710-1855MHz and 2500-2690MHz bands for 3G use but objections were raised by current spectrum users, including the Department of Defense and fixed-wireless providers.

The 1710-1855 band has been identified by the International Telecommunication Union as a worldwide 3G band, which would enable global roaming.

NextWave fight: In a separate development that could delay some carriers' plans to expand their 2G footprints or expand capacity within their existing footprints, existing network operators continued their spectrum food fight with carrier NextWave.

Some carriers are trying to get back 1.9GHz spectrum they won during the December-January auctions and had taken away in June by a U.S. appeals court, which handed the spectrum over to carrier NextWave Telecom. NextWave won the spectrum at auction in 1996, but the FCC took it back because the company had fallen into Chapter 11 and had never begun to build a network.

The FCC is expected to appeal the court decision, but in the meantime, three carriers — Verizon, VoiceStream and AT&T Wireless partner Alaska Native — have asked the FCC to investigate whether NextWave meets FCC eligibility criteria for owning the 1.9GHz licenses. The trio casts doubts on whether NextWave violates FCC foreign-ownership regulations, whether it meets "designated entity" status, and whether it can meet regulatory requirements to build out and operate the network.

Meantime, those carriers and two others — Dobson Communications and Cingular partner Salmon PCS — have asked the U.S. attorney general and Powell to get the government to simply pay NextWave $4-$5 billion to give up all rights to the spectrum. That amount would be more than covered by the more than $15 billion raised by the FCC in reauctioning the NextWave licenses.

NextWave said it has rights to 95 PCS licenses covering geographic areas with a population of more than 168 million people coast to coast. The Hawthorne, N.Y., company said those areas include all top 10 U.S. markets, 28 of the top 30 markets, and 40 of the top 50 markets.

NextWave has adopted a "carriers' carrier" strategy, in which existing carriers and new service providers would resell NextWave 3G airtime under their own names.

The company said it has already initiated a nationwide buildout that is "fully financed with cash on hand" and that "it will soon file a plan of reorganization that provides billions of additional dollars for network construction and operational activities."

"It's clear that certain competitors are attempting to use administrative and legal ploys to delay our wireless network rollout," said Michael Wack, NextWave's deputy general counsel. "The FCC must decide whether it wants to stand up to these tactics and allow the spectrum to be put to use right away, or if it wants consumers to be denied the use of our digital 3G network while litigation continues."

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Based on advertising in more than 100 U.S. newspapers.
Source: Beyen Corp., Niagara Falls, N.Y.©TWICE 2001

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