The Struggle for Spectrum
By Michael Grebb, Thu Aug 30 00:00:00 GMT 2001

The US government is finding it hard to pave the way for 3G services by freeing up the necessary frequencies.

By now, it's no secret that the world is moving toward an era of broadband wireless services. This explosion of bandwidth is expected to have a number of purposes, including enabling faster data rates and accommodating a fast-growing population of wireless users. And companies have been salivating for at least a couple of years. In Europe and Asia, auctions of spectrum set aside for "third-generation" (3G) broadband services have already netted (at least on paper) over $100 billion for various governments trying to cash in on the craze.

But in the U.S., the race to offer 3G services has been famously fraught with delays, disputes, and general hand wringing. The result has been a confusing mix of Congressional hearings, proceedings at the Federal Communications Commission, and anxiety about which entities will be relocated to make room for new 3G carriers. Asked about 3G, wireless industry lobbyists often shake their heads. "It's going to be a while before that happens," says Thomas Wheeler, president of the Cellular Telecommunications & Internet Association (CTIA), which represents wireless carriers in the U.S. The CTIA says its members need at least 200 MHz of additional spectrum to meet expected demand.

Wheeler and his wireless industry colleagues are on a major campaign to convince the federal government to make available more spectrum for commercial use - whether it comes in the form of new 3G capacity or by allowing companies to buy more of it on their own in the open market. But many have grown increasingly skeptical that the government will act quickly. Just the same, Verizon Wireless CEO Denny Strigl says big markets like Los Angeles and New York City will "exhaust" capacity within 12 to 18 months if the government doesn't provide more spectrum for carriers. "We are falling behind other nations," he told lawmakers at a July 31 hearing of the Senate Commerce Committee. At a 3G hearing held a week earlier by the House Commerce Committee, Wheeler cautioned, "There are other countries trying to use that home field advantage with spectrum."

The wireless industry has used that argument-as well as the implication that lawmakers will be blamed for letting the U.S. fall behind-as it fights to eliminate the government-imposed spectrum cap that limits carriers to 45 MHz in any given market. The CTIA argues that the cap disadvantages U.S. carriers against foreign counterparts, many of which aren't under any spectrum limits at all. And it points out that the caps were instituted years ago before wireless competition flourished.

Furthermore, the CTIA says the caps are now only worsening the current spectrum shortage in the U.S. "There's only one short-term solution," says Wheeler. "The Commission has to eliminate the spectrum cap." In March, the FCC opened a proceeding to consider lifting the cap, but it's unclear when the agency will make a decision.

A complicated problem

The 3G debate received a kick-start in October 2000 when the Clinton Administration directed the FCC to work with the National Telecommunications and Information Administration (NTIA) to identify and allocate 3G spectrum by Sept. 30, 2002. But shortly after Clinton issued that memo, George W. Bush took over the White House and appointed FCC Commissioner Michael Powell (son of Bush's Secretary of State, Colin Powell) to become FCC Chairman.

The FCC also has three new commissioners (Kathleen Abernathy, Michael Copps, and Kevin Martin), all of which places the 3G issue under new scrutiny. President Bush also appointed Nancy Victory, a former Washington telecom attorney, to head the NTIA, which has jurisdiction over spectrum assignments.

Victory and the new FCC have vowed to act as quickly as possible on 3G, but no one expects the process to move as fast as it might have before because all of the new players will need to get up to speed on the complex nuances of the 3G debate.

They have their work cut out for them. The World Radiocommunications Conference (WCT-2000) last year identified several potential bands that could be used for 3G services, including the 698-960 MHz, 1710-1885 MHz, 2500-2690 MHz and 2700-2900 MHz bands. WCT-2000 sought bands that would promote more seamless roaming between countries and encourage cheaper equipment prices. Unfortunately for policymakers in the U.S., all of the bands identified by WCT-2000 (and signed off on by the U.S.) are used by entities that don't want to move.

The most contentious fight is over the 1710-1885 MHz band, most of which (1755-1850 MHz) is used by the U.S. Defense Department for troop communications and munitions guidance systems, among other things. Of the various choices, the wireless industry favors the 1755-1850 band because of its prime location and close proximity to European and Asian allocations. But the military staunchly opposes the wireless industry's efforts to take over the band. At a July 24 hearing of the House Commerce Committee, Dr. Linton Wells, assistant Secretary of Defense for Command, said that prematurely reallocating the band for commercial use would have a "severe and immediate impact" on national security. Wells also pointed out that legacy equipment issues would make migration difficult because parts of the band used for terrestrial and satellite communications would be tied up until 2010 and 2017, respectively. (In the case of satellites, the military says it can't change the satellites' frequencies while they are in orbit. And they won't fall out of orbit until 2017).

The wireless industry-while making sure to acknowledge the need for troop safety-has treated the military's arguments with at least half a grain of salt. "We don't want to threaten one life or one individual in uniform," Wheeler told lawmakers on July 24. But he questioned the military's estimate of how long it would take to vacate the spectrum and advocated a "win-win" solution in which the government could guarantee that auction revenues funnel back to the Defense Department to help pay for relocation expenses. Military leaders, however, have been skeptical that the money would truly make its way back to DoD coffers.

A few good options

That the industry would fixate on the 1755-1850 MHz band despite strong opposition from the military only highlights how unattractive carriers find the other options being considered for 3G services. Take the 2500-2690 MHz band, which is now used for multichannel multipoint distribution service (MMDS) service.

MMDS operators have are trying to convert their systems to two-way, broadband wireless networks, but investors have been largely unwilling to finance the upgrades until it's clear whether the band may go to new 3G carriers. The MMDS industry has asked the FCC to take its spectrum out of the running for 3G, but the agency deferred action on the matter at its Aug. 9 meeting. A decision could come any day.

The 698-960 MHz band, meanwhile, includes the 700-MHz band used for the upper edge of the broadcast television spectrum (channels 60 to 69 of the UHF band, to be exact). The FCC has been trying to devise a feasible way to relocate the small number of TV stations that use the band so that it can re-auction it for mobile wireless uses. But it has delayed the auction several times after potential bidders complained that they couldn't bid under such uncertain conditions. Under FCC rules, TV stations don't have to leave until 2006, at the earliest. Stations can strike deals with wireless carriers to leave sooner, but most have been unable to agree on terms.

And so the 3G question in the U.S. is besieged by competing interests and confused policymakers. And even after the federal government assigns 3G spectrum, it could be months or years before auction winners are able to build out their networks, much less deploy services.

On the bright side for the U.S., several 3G timetables around the world are also behind schedule. But few, it seems, have as much catching up to do as America. "Where do we go from here?" asked Sen. Daniel Inouye (D, Hawaii) at the July hearing.

When it comes to 3G, no one has a good answer.

Michael Grebb has previously written for The Industry Standard, Business 2.0, and eCompany. From Washington DC, he covers the impact of mobile technology on modern society.