FCC Chairman Envisions Long-Term, Multifaceted Approach to 'Spectrum Crunch’

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By Paul Barbagallo  

NEW ORLEANS--A combination of adding new spectrum and using efficiency-enhancing technologies will be needed to meet the rising consumer demand for bandwidth-hungry smartphones and tablet computers, said Julius Genachowski, chairman of the Federal Communications Commission.

The chairman, delivering a keynote speech to the International CTIA Wireless 2012 conference and expo May 8, tried to sound a positive note about what he has termed the “looming spectrum crunch,” saying that forthcoming auctions of broadcast TV spectrum will be merely one part of a long-term, multifaceted approach.

“We know that it is becoming increasingly harder to find free and clear blocks of spectrum,” Genachowski said. “Where we can, of course, we must and we will. But it would be counterproductive to limit ourselves to two choices--complete reallocation or nothing.”

Genachowski said the FCC and the Commerce Department's National Telecommunications and Information Administration, which oversees the spectrum licenses for all government agencies, will soon begin testing whether both government and commercial mobile broadband providers can share spectrum in the coveted 1755-1780 MHz band.

The 1755-1780 MHz spectrum band is immediately adjacent to a 25 MHz tranche of frequencies already allocated for mobile broadband uses and ready for auction--what is known as AWS-3, or Advanced Wireless Services-3, spectrum at 2155-2180 MHz.

Several days before the conference officially kicked off, T-Mobile USA and CTIA filed an application with the commission to put sharing to the test.

Challenges in Sharing Spectrum.

Most federal agencies use their spectrum only sporadically, which creates an opportunity for mobile network operators to make use of it during idle periods. Wireless carriers have been resistant to the concept, preferring to be the sole licensee of their airwaves so as to provide certainty to their investors and their customers.

“We may find that in some bands, sharing allows us to auction spectrum that otherwise would never get to the commercial market,” Genachowski said. “If we can share spectrum meaningfully, it will have a dramatically positive effect.”

Genachowski sees another opportunity in “small cells.”

Carriers have been using small cells to handle traffic, using Wi-Fi to complement their spectrum.

“It's the next step in a progression toward getting networks closer to users to increase capacity, user speeds, and power efficiency,” he said. “But as we've seen with Wi-Fi, when you go from hundreds of thousands of cell sites to millions or even tens of millions of small cells, the impact could be huge. The small cell revolution will drive enormous change in wireless in coming years.”

NTIA has made available spectrum in the 3.5 GHz band for sharing between commercial and federal users.

To the FCC, this spectrum is ideally suited for small cells.

Genachowski said that later this year the FCC will open a new rulemaking proceeding aimed at permitting the use of small cells in the 3.5 GHz band.

With the use of new technologies, any spectrum that is auctioned off will only become that more valuable.

Auction Rules Forthcoming.

Also later this year, the FCC will propose rules for the first “voluntary incentive auction,” in which broadcasters, who license their spectrum through the commission, could voluntarily release some--or all--of it back to the government in exchange for a share of auction proceeds.

The FCC, in its National Broadband Plan in March 2010, set a goal of reclaiming as much as 120 MHz of broadcast TV spectrum, which would then be auctioned off to mobile internet providers led by Verizon Wireless and AT&T Inc. Although the Temporary Payroll Tax Cut Continuation Act of 2012 (H.R. 3630) stipulates that about $15 billion of the $30 billion extension in unemployment benefits will be paid for with the proceeds of incentive auctions, nothing in the measure will force TV broadcasters to relinquish their airwaves.

In addition to incentive auctions, the FCC plans on conducting auctions for 65 MHz of spectrum in the next 3 years--25 MHZ of Wireless Communications Service spectrum, and 40 MHz in the 2 GHz band--the blocks at 2000-2020 MHz and 2180-2200 MHz, now licensed to DISH Networks.

“Of course it's become more difficult to find spectrum to auction, but, to borrow a phrase, reports of the spectrum auction's demise have been greatly exaggerated,” Genachowski said.

The FCC chairman made a tacit reference to AT&T Inc.’s criticism of the agency for blocking its proposed $39 billion acquisition of T-Mobile USA.


“Reports of the spectrum auction's demise have been greatly exaggerated.”  



FCC Chairman Julius Genachowski

AT&T had argued the merger would give the company a way to meet the exploding demands for mobile data, and that the FCC's decision might mean a delay of the next generation of mobile devices capable of browsing the internet at high speeds.

“Some have recently argued that the government's review of transactions in the wireless space--or, let's be frank, review of one specific transaction-- is somehow causing a shortage of spectrum and leading that company to raise prices for consumers,” Genachowski said. “But the overall amount of spectrum available has not changed, except for steps we're taking to add new spectrum on the market. At its core, the argument--that competition is bad for consumers--is at odds with basic free-market principles.”

“As a society, we've staked our economy on the proposition that competition doesn't lead to higher prices for the same product, but to lower prices and more valuable services,” he added.