News

FCC: Just Saying No to Spectrum Deals?

3/12/2012 12:01 AM Eastern

Washington — It would seem that freeing
up unused mobile broadband spectrum
is an ideal goal for the Federal Communications
Commission these days, given its
effort to auction off the bandwidth used by
broadcast TV stations. But apparently not all
spectrum is equal.

The nation’s telecom regulator has not
been so quick to free up spectrum for
wireless mobile services, and it remains
to be seen whether it is as eager to free up
cable spectrum for wireless.

The commission last year also denied
AT&T’s purchase of rival wireless carrier
T-Mobile — the justification for which was
to add spectrum to make room for advanced
4G services — saying that AT&T
could deliver the new technology without
added spectrum, and that concentrating
more bandwidth in the hands of one of the
two largest cellular players was not creating
wireless broadband competition.

Just last month, the FCC moved to rescind
a waiver it granted to LightSquared,
a startup that would have used mobile
satellite spectrum to deliver terrestrial mobile
broadband services to all the laptops
and smart phones it says need to be served
with broadcasters’ spectrum.

Then, two weeks ago, it denied directbroadcast
satellite provider Dish Network a
waiver that would have allowed it to do the
same thing with satellite spectrum the firm
purchased in bankruptcy court.

LightSquared’s proposal ran aground because
its technology was found to interfere
with global positioning system (GPS) technology
— which became something of a
nuclear issue, politically — but Dish’s plan
prompted no such concerns.

GPS GRIPES

The FCC wanted to OK the LightSquared
spectrum proposal as a way to promote wireless
broadband price and service competition, but
just could not get past the GPS interference issue.
The agency caught flak for what some legislators
— notably Sen. Charles Grassley (R-Iowa)
— suggested was a rush to approve the Light-
Squared waiver in the interests of promoting
competition against incumbents, particularly
Verizon Wireless, the No. 1 cellular provider,
and No. 2 AT&T.

Dish’s plan raised no interference worries, a
company spokesperson said. But its shortterm
loss might turn out to be a long-term
gain for allowing terrestrial use of satellite
licenses. The FCC said it would consider
the waiver in the context of a broader rulemaking,
meaning the FCC might change its
rules to a presumption that it is generally in
the public interest to allow terrestrial use,
though not until after a full rulemaking proceeding,
per its pledge of transparency.

The latest spectrum play is Verizon’s
attempt to buy out cable operators’ wireless
spectrum, which has essentially been laying
fallow. That, too, could run into competitive
concerns that trump the vaunted goal of
alleviating the spectrum crunch.

Public-interest advocacy groups and others
are pushing back. They’re claiming that joint
service-marketing agreements between Verizon
Wireless and cable operators Comcast,
Time Warner Cable, Bright House Networks
and Cox Communications have essentially created
a cartel. (The agreements were part of
deals in which the MSOs sold their Advanced
Wireless Spectrum allocations to Verizon;
see “Operators Cash in Wireless Chips,” Dec.
5, 2011.)

FIOS RIVAL

The spectrum deal has essentially thrown
Verizon’s own FiOS triple-play service under
the bus, critics claim. The national crossmarketing
agreements will include areas
where FiOS services are available, though a
Verizon spokesman said the intial test markets
would not be in the FiOS footprint.

The MSOs and Verizon have argued
that the marketing deals — with
Verizon Wireless selling cable
service through its stores and
cable operators putting its
mobile products into their
service bundles — are not
separate agreements being
vetted by the Department
of Justice, and thus
are not germane to any
FCC decision about the
spectrum licenses.

How (or if) the FCC bundles
those deals into its review
could decide whether or not
it concludes that Verizon’s making use of
unused wireless spectrum for advanced
broadband is in the public interest.

Last week Sprint, T-Mobile and some
public-advocacy groups asked the FCC to
stop the clock on its consideration of the
deal until unredacted versions of those
agreements are produced. Verizon has
given the FCC redacted versions.

There is some cause for hope that
Comcast and the other operators may
get to sell that spectrum. The FCC back
in December approved AT&T’s acquisition
of spectrum from Qualcomm — spectrum
that, like the cable spectrum, was not
being used.

SpectrumCo and Verizon made that point
in their reply comments to the FCC last week,
quoting the commission’s own Qualcomm order
that “to compete effectively and innovate, a
wireless provider must have access to adequate
spectrum.”

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