FCC refuses to bump fixed wireless operators from spectrum

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By Bob Brewin

(IDG) -- The Federal Communications Commission has ruled that companies such as WorldCom Inc. and Sprint Corp., as well as educational institutions nationwide, do not have to give up their frequency spectrum to accommodate new, high-speed mobile services.

The FCC decision, made Sept. 6, could hamstring the cellular telecommunications industry's search for spectrum in the near future. That's because Department of Defense frequencies, also under consideration for commercial 3G (third generation) wireless use, are now considered inviolable given the nation's war footing, according to former Defense officials and industry analysts.

The cellular industry had a sharp reaction to the FCC spectrum decision, with Tom Wheeler, president of the Cellular Telecommunications & Internet Association (CTIA), saying in a statement it "does not help to address the continuing need for additional spectrum for the most spectrum-contained carriers."

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The FCC, in its ruling, said it won't force companies such as Sprint and WorldCom, which paid billions of dollars for licenses in the 2,500-MHz- to 2,690-MHz-band, to move. The decision removes "regulatory uncertainty" which had stalled deployment of broadband wireless services designed to bypass local telephone companies, according to Andrew Kreig, president of Wireless Communications Association International.

Julie Moore, a spokeswoman for WorldCom, said the company sees the FCC ruling as a victory that will allow for aggressive rollout of the fixed wireless services.

The commission did say that it would allow mobile services to share the 2,600-MHz to 2,690-MHz fixed wireless bands, but it "will rely on market forces rather than making regulatory judgments" about the best use of the band.

Craig Mathias, an analyst at Farpoint Group in Ashland, Mass., said that he interpreted this to mean the fixed wireless carriers could sell their frequencies to mobile operators. But, he said, that wouldn't make economic sense unless a mobile operator could acquire enough of that spectrum "to serve a fairly wide geographic area."

Mathias added that a number of mobile carriers would have to decide to use the 2,500-MHz to 2,960-MHz band to reach the economies of scale needed to develop wireless base stations and handsets capable of using that band.

Last year, the federal government also targeted for potential 3G uses the 1,710-MHz to 1,850MHz bands used extensively by the Defense Department, and the CTIA has led a fierce lobbying battle for those frequencies. Any chance of the cellular industry gaining access, however, has largely evaporated since the terrorist attacks on Sept. 11, said analysts and former Defense officials.

John Hamre, deputy defense secretary in the Clinton administration and now president and CEO of the Center for Strategic and International Studies in Washington, said that "no one is going to argue about DoD needing that spectrum today, and I don't think anyone wants to take away that spectrum now."

Even so, Hamre said, "It is only a matter of time" before the issue resurfaces.

Mathias said the ruling walling off the 2,500-MHz to 2,690-Mhz band, combined with the political realities that will prevent any poaching on the Defense Department 1,700-MHz to 1,850-MHz bands, means the cellular industry "is up the creek" in its search for new spectrum to support 3G services.