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Global Media and Communications Watch The International Legal Blog for the Tech, Media and Telecoms Industry
Posted in Policy & Regulation, Spectrum, Telecoms & Broadband

FCC’s WCS Order Raises Cheers … and Questions

Written by Trey Hanbury and Phillip Berenbroick

In a move that has the potential to unleash new broadband deployment across the United States, the Federal Communications Commission recently loosened technical constraints on the long-dormant 2.3 GHz band.  The rules that the FCC adopted October 17, 2012 essentially ratify a joint proposal that the two largest licensees in the band, the wireless operator AT&T and the satellite radio company Sirius XM, first advanced in June 2012.

The FCC praised its decision as part of its ongoing effort to “address the continued ‘spectrum crunch.’”  And the decision offers much to like.

Despite its name, the Wireless Communications Service band has not proven useful for wireless communications services.  Since the FCC first auctioned the 2.3 GHz frequencies in 1997, WCS licensees have had little success in deploying wireless network infrastructure.   Many different factors – from limited equipment availability to spectacular bankruptcies – conspired against successful WCS deployment.  But one of the largest impediments to success was the potential for interference between WCS operations and adjacent-channel Satellite Digital Radio Service operations.

2305-2360 MHz Band Plan

As shown above, satellite radio separates the two WCS band segments.  The FCC licensed the satellite radio operators first, and when it later licensed WCS, the FCC imposed stringent rules and especially onerous out-of-band emissions limits on WCS to protect satellite radio receivers from harmful interference emanating from the mobile bands.  The stringent OOBE limits made WCS deployment all but impossible without the use of exceptionally expensive equipment that could meet the highly protective limits.

The FCC’s new rules break the logjam by imposing sharp limits on the WCS C and D Blocks (shown in pink) for the benefit of satellite radio, while giving a green light for full-power mobile broadband deployment within the remaining twenty-megahertz of the WCS band (shown in dark pink).  Creating radically different intensities of use within the WCS spectrum was not previously feasible because spectrum ownership was too diffuse.  The presence of a large number of licensees, each with its own business plan and settled expectations, meant any revision to the WCS technical rules had to satisfy each discrete group of WCS licensees – from those C and D block WCS licensees located immediately adjacent to the satellite radio operations, which had the most to lose from stringent emissions limits, to the A and B block WCS licensees located farthest away from the satellite radio bands, which faced the least threat from stringent protections.

Within the last year, however, AT&T consolidated spectrum in the WCS band on a massive scale.  AT&T had long been the largest holder of WCS spectrum licensed for mobile broadband use, but AT&T made deals to acquire an additional 2.3 GHz spectrum from NextWave Wireless, Comcast, Horizon Wi-Com, and others.  (All are awaiting FCC approval).  Following the acquisitions, the only major segment of WCS spectrum that AT&T will not control is held by Sprint.

Stripped of all pretense, the new rules allow AT&T, as more or less the only remaining licensee in the WCS band, to sacrifice five megahertz of spectrum on either side of satellite radio to gain access to twenty megahertz of mobile broadband spectrum.   Given its desire for additional capacity, AT&T seems to have made a rational economic choice for its shareholders.  But, as a public policy matter, does idling one-third of a valuable spectrum band make any sense in a time of constrained spectrum resources?  Or would the public interest have been better served by requiring the satellite radio operator to improve the performance of its receivers and deploy better performing terrestrial repeaters?

We’ll never truly know.  But the long, sad tale of WCS spectrum raises the question of whether incumbent operators such as satellite radio should always receive as substantial protection against new entrants.   After all, AT&T only really “solved” the problem of WCS interference by sacrificing ten megahertz of valuable broadband spectrum to enable use of the remaining twenty megahertz that it controlled.  Few other spectrum licensees have that luxury.

While controversial among incumbent users, alternatives exist.  Receiver standards, protection limits, dynamic efficiency rules, and other innovations long advanced by leading academics better reward efficient spectrum uses than the current anything-goes environment.  Creating stronger incentives for better interference-mitigation techniques not only would make better use of public spectrum resources, but also would create opportunities for innovative new entrants to begin operations in otherwise idle spectrum.

The deal between the two largest incumbents in the 2.3 GHz band offers tangible benefits to the two incumbents, their shareholders and subscribers.  But the pursuit of alternatives that deliver more broadband spectrum without chewing up valuable spectrum resources in the process would offer something that everyone could applaud.