We have produced an opinion for one of our clients which they have allowed me to share here.
An Opinion on the future of Part 22
Commercial Wireless Spectrum in the
470-512 MHz Band
(Commonly referred to as T-Band)
Introduction
Significant confusion exists
relative to the future of all spectrum in the 470-512 MHz Band (commonly
referred to as T-Band Spectrum) because of recent actions by Congress. In the recently passed Middle Class Tax
Relief and Job Creation Act of 2012 (the Act), Congress granted 10 MHz of
spectrum at 700 MHz (referred to as the D-Block) to Public Safety Agencies
nationwide to be used for a broadband network to provide a fully interoperable
data and voice nationwide network using LTE technology for all public safety
agencies. The D-Block spectrum has a
potential value of $20 billion + had it been auctioned to Commercial Wireless
Carriers based on the bids received for the C-Block spectrum in the latest
broadband auctions by the Commission in 2008. In addition to the $20 billion
dollars worth of spectrum allocated to federal, state and local public safety
agencies, Congress also allocated $7 billion in funds to be used for the
construction of this new nationwide network.
As part of the requirement for the Congressional allocation of the
spectrum and $7 billion in funds, Congress required that all Public Safety
agencies currently operating in the 470-512 MHz band must “give back” all
spectrum in use in this band. The
Congress has given Public Safety 11 years to clear this band. The act apparently does not mention any
Commercial Wireless Carriers (Part 22 of the rules).
The implementation of the
legislation is left to federal agencies with little or no direction from
Congress. On April 26, 2012 the Federal
Communications Commission’s (the Commission) issued a Public Notice “announcing limited suspension of the
acceptance and processing of certain applications for Part 22 and 90 services
operating in the 470-512 MHz spectrum band (“T-Band”) in order to maintain a
stable spectral landscape while the Commission determines how to implement
recent spectrum legislation contained in the Middle Class Tax Relief and Job
Creation Act of 2012 (“the Act”). As described
below, the suspension implemented by this Public Notice applies only to applications for new or expanded
use of T-Band frequencies.”
Current Upheaval and Unknowns
The Act is clearly aimed at
Public Safety licensees in the 470-512 MHz band operating under Part 90 of the
rules. While there are a limited number
of Public Safety Agencies operating on 470-512 MHz frequencies under Part 22 of
the FCC rules, these Agencies due so under rule waivers granted by the
Commission. Trade associations such as
EWA, LMCC, UTC and others are filing petitions to obtain clarification as to
the specific intent of the proposed rules and L&W believes this will
eventually be sorted out but this is an election year and things always move at glacial speed through the halls of Washington and the Federal
Bureaucracies. It is L&W’s opinion
that there will be no formal resolution emanating from the Commission until
2013.
However, as issued, the
Commission’s “suspension” in the Notice of Proposed Rule Making (NPRM) clearly
extends the freeze to non-public safety users utilizing Part 90 and commercial
wireless carriers operating in Part 22.
What are the current realities for Part 22 T-Band licensees?
While
Part 22 T-Band licensees are mentioned in the NPRM, this ruling has little or
no affect on those licensees between now and 2023 or whenever the 700 MHz Public Safety LTE system is operational, whichever is longer. L&W does not
envision this network being operational before 2028 if ever!
The reason this ruling has
little or no effect on licensees operating under Part 22 is because the licenses
are economic area-based with defined coverage contours. Part
22 economic area licensees do not:
1. require frequency coordination prior to making system changes;
2. need to seek FCC permission to move sites or deploy frequencies.
Additionally, Part 22
economic area licensees have never been able to expand their coverage outside
their economic area without a wavier.
What is the likelihood that Part 22 & Part 90 T-Band users
will be compensated for their relocation to “other spectrum” and when might
this happen?
Significant
precedent that exists at the Commission provides insight into how the
Commission deals with involuntary relocation of existing licensees. Typically the Commission will make spectrum available
for existing licensees and will typically provide re-location financial assistance
to the incumbents. These precedents were
set in the late 1990’s when the 2 GHz microwave band was re-allocated to allow
the 1.8 GHz spectrum to be auctioned for Personal Communication Services (PCS). Congress followed this precedent in providing
700 MHz spectrum and funding to Public Safety users who are being “relocated”
out of the 470-512 MHz band. It is L&W’s opinion that for Part 22 licensees
this precedent will be followed.
Go Forward Opinions for Users in Urban Markets needing 450 – 512
MHz Spectrum
If you are an existing Part
90 user operating in the T-Band, L&W’s first recommendation is not to panic. The rules are clearly evolving; if you are
currently licensed and do not need to make changes to your current system, you
have at least 9 + years (and probably longer) before you have to be re-located.
However, if you are a new
user requiring UHF (450 MHz to 512 MHz) spectrum for a new or expanded system
then you have a major challenge if you are operating in an urban environment,
particularly in any one of America’s top 10 cities, in the next five years.
In theory, additional
spectrum will be freed up in 2013 as a result of narrow banding, but in practice,
this will likely not be the case. First, all indications are that many licensees
are going to miss the January 1, 2013 deadline, adding significant confusion to
the frequency approval and coordination process going forward. Secondly, the FCC has already granted a
number of waivers for users extending the narrow banding process well into
2013. Finally, even when every user
completes the narrow banding process, there are going to be significant
challenges facing the coordinators and the Commission in dealing with some
users who achieved narrow banding by implementing digital equivalent bandwidths
by retaining their existing 25 KHz channels or who have chosen to go directly
to 6.25 KHz equivalence through the implementation of Digital Mobile Radio (DMR)
on a 12.5KHz channel. L&W has yet to see a “narrow band”
spectrum plan released by the Commission to provide coordinators and system
planners, let alone regulators, with reasonable guidelines as to how to
effectively manage a new spectrum landscape that is not yet stable. L&W believes clients can expect an NPRM
from the Commission in late 2012 or on January 3, 2013 announcing a freeze on
new applications for channels until the landscape of spectrum below 512 MHz is
sorted out after narrow banding. Also,
expect the Commission to grant additional narrow banding wavers as the January
1, 2013 narrowband deadline draws near.
The changing landscape of
spectrum regulation and the spectrum shortage that exists in all major
metropolitan areas leaves users with few if any options. However this creates a unique opportunity for
current Part 22 licensees in major urban areas who have spectrum capacity and
are willing to sell or lease to industrial users. L&W believes the risk associated with the
Part 22 T-Band spectrum is minimal in the short-term and manageable in the long-term
based on prior precedent established by the Commission to provide users who are
required to re-locate with new “equivalent” spectrum.
Consequently, L&W recommends
to its clients seeking UHF spectrum in urban markets to seek out the local Part
22 licensee and work with them to solve their short-term and long-term spectrum
needs.
