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TechnologyDaily Mobile
Educational Spectrum Plan
by Drew Clark
The FCC on Thursday announced a June 10 vote on a proposal affecting a huge portion of spectrum that many in the technology industry see as the key to creating wireless broadband service.
But last-minute tweaks have cast doubt on elements of the plan to reshuffle 190 megahertz of spectrum, and ignited a mini-maelstrom of lobbying from interests as diverse as cellular pioneer Craig McCaw and the Roman Catholic Church.
The battle over this vast, contiguous chunk of the airwaves bears some of the hallmarks of other spectrum wars, like the still-brewing controversy over Nextel's proposal to reband cellular spectrum that interferes with police radios. Traditionally reserved for educational and non-profit institutions, and for commercial video services known as "wireless cable," the band is roughly equal in size to the entire cellular industry.
Many observers believe that the spectrum, which runs from 2.5 to 2.69 gigahertz, has been vastly underutilized, and they have rallied to FCC Chairman Michael Powell's call for greater flexibility in the way licensees can utilize airspace for radio-based communication. Boosters of this plan include the Wireless Communications Association (WCA), which includes companies that want to offer broadband that competes with cable modems and distributed subscriber line (DSL) service offered by Bell companies.
But the flip side of that flexibility is the fear that spectrum incumbents - the biggest of whom are Sprint, Nextel and McCaw Cellular Communications - would reap an unjustified windfall, in the view of the plan's critics at the New America Foundation and the Media Access Project. They say half of the band should be set aside for unlicensed wireless services akin to Wi-Fi, the wireless fidelity standard for sharing a high-speed connection over a local area network.
There are at least two other pending disputes at issue in the proposal: whether spectrum once reserved for educational institutions will remain so forever, and whether 12 megahertz of spectrum should be cobbled together out of the existing video spectrum and auctioned to raise revenue for the federal government.
Heavy Regulation of a 'Burned Over' Band?
The controversy was the buzz at A WCA conference in Washington last week. Powell said in a keynote speech Thursday that "the wireless alternative will transform the marketplace by driving down the price of broadband services and expand access to underserved areas." Calling the spectrum "underutilized" for television purposes, he said, "Magical things happen in competitive markets when there are at least three viable, facilities-based competitors."
Recurring business failures have led some to call the band a "burned over" district. This portion of microwave spectrum was originally marked for Instructional Television Fixed Service (ITFS) by educators. They were parceled out in 6-megahertz channels just like traditional broadcast television channels. But lower-frequency broadcast channels are more desirable because they can pass through walls and do not need the special equipment and antennae that schools needed for students to watch ITFS channels.
"Signals would be transmitted from some central point in a school district, or community college, to community centers, hospitals, or adult learning or teacher certification centers," explained Todd Gray, an attorney for the National ITFS Association (NIA).
In addition to creating television channels for educators in the 1960s, the FCC created Multichannel Multipoint Distribution Service (MMDS or simply MDS), which are video channels intermixed with the ITFS allocations. The theory behind MDS is to spur competition with cable companies through "wireless cable," and some such companies still exist, including Watch TV, which services 13,000 subscribers in Lima, Ohio.
"The rules adopted for MDS and ITFS in the early 1980s were strikingly similar to those imposed on television broadcasters," according an October 2002 white paper by the Wireless Communications Association (WCA), the NIA, and the Catholic Television Network, which uses its spectrum for parochial schools and televising Mass. Because those rules "required prior commission approval on a site-by-site basis before virtually any new or modifies facilities could be deployed," they hampered the development of a viable cable competitor until direct broadcast satellite services arrived using an entirely different section of the airwaves, the groups said.
From Broadcast to Broadband Flexibility
The high-water mark for the technology was December 1996, when wireless cable served 1.18 million subscribers, fewer than 2 percent of U.S. households. Members of WCA - which had been the Wireless Cable Association - latched onto a new business model in the 1990s. Instead of video, they would do wireless broadband.
"There was a glitch," said Tom Hazlett, a senior fellow of the Manhattan Institute, "MMDS licenses were one-way, but network communications are two-way. That MMDS operators could provide two-way traffic within the allocated frequencies space did not matter: two-way violated license specifications." They petitioned the FCC for a change in the rules, and received the ability to use the spectrum for broadband in 1998.
But the broadband providers said the new rules proved inadequate because they "were even more protective of incumbent operations than the prior rules," WCA, NIA and the Catholic Television Network said in their 2002 white paper. As a result, they write, "it has proven virtually impossible for system operators to provide ubiquitous coverage within their territories." Hazlett said, "the misallocation of MMDS frequencies cost society a fortune."
That "consensus" white paper, representing almost all those hold licenses within the MDS/ITFS band, prompted the FCC in March 2003 to propose the new liberalization that it may enact on Thursday. Powell said in his Thursday speech that the agency had built upon the consensus plan to allow greater flexibility. "Now it is time for new rules that will allow MDS and ITFS licensees to enjoy the complete flexibility available to licensees of other wireless services," he said.
Windfall, Flexibility or Both?
As with a different "consensus plan" crafted by Nextel and public safety communications specialists in the 800 megahertz band, the WCA/NIA/Catholic Television Network proposal re-aggregates intermixed channels by creating a two portions for broadband, and one section in the center for the still-existing ITFS channels.
In October 2002, ITFS and MDS licensees agreed to shave off 1/2 megahertz from each 6-megahertz channel to create "guard bands" between the Internet and television zones. Moreover, the educators also benefit from widespread use of broadband because rules put in place in 1983 gave them the freedom to lease up to 95 percent of their channel capacity to commercial companies. "A lot of educators are realizing that they really don't want to be in the one-way video business anyway," said Gray.
Critics charge that the consensus agreement disproportionately benefits incumbents like Sprint, Nextel and McCaw, which own MDS licenses purchased on the secondary market and lease excess bandwidth from educators. "It culminates the largest giveaway of the public airwaves in the history of the FCC," said Jim Snider, senior research fellow at the New America Foundation. "And it culminates the FCC's strategy of enhancing spectrum flexibility for incumbents without public compensation."
But wireless operators say consumers will reap the benefits of greater flexibility for them. As with the vibrant market in cellular communications, a favorable FCC action would "create much more flexibility for operators to actually go out and build businesses without having an overly regulated environment" that has hindered the band in the past, said WCA attorney Paul Sinderbrand.
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