Regulators see little chance for 3G sharing

Either wireless providers will tolerate restrictions on service in new 3G spectrum or they will pay to relocate incumbents, a much-anticipated federal report says.

5 min read
WASHINGTON--The message to wireless carriers here Friday is blunt: If you want next-generation spectrum, which promises to deliver high-speed Net access to mobile devices, you'll either have to share while burdened with restrictions or pay to relocate existing customers.

That was the basic conclusion of a five-month investigation by the National Telecommunications and Information Administration (NTIA), which examined the possibility of wireless providers offering 3G services in the 1710-1850MHz band. So-called 3G services promise always-on, high-speed Internet access to mobile phones, handheld computers and laptops.

NTIA acting Director John Sopko said that "certain sharing and segmentation options may be possible," but a review of the report showed that for every option there were several caveats. The Federal Communications Commission released its own report on the 2500-2690MHz band and reached similar conclusions.

National wireless carriers have been reacting differently to the anticipated spectrum crunch. Verizon Wireless, for example, has petitioned the FCC not to issue any more licenses to fixed-wireless providers, the existing users in the spectrum band the agency is inspecting.

Sprint PCS and Cingular Wireless, the latter a venture of BellSouth and SBC Communications, announced recently at the Cellular Telecommunications Industry Association show in Las Vegas that they are moving ahead with 3G services in existing spectrum.

Though these are being called the final reports of the NTIA and FCC, they were chartered under an executive order by former President Bill Clinton.

"The current administration doesn't have anything invested" in this process, said The Precursor Group analyst Rudy Baca. In fact, wireless industry attendees at a meeting Thursday with Secretary of Commerce Don Evans said he assured the industry the administration would work with the spectrum incumbents to find a solution regardless of the content of Friday's reports. The message carried extra weight, as the NTIA is an agency under the Department of Commerce.

Pentagon as immovable object
The bands examined by the NTIA and the FCC were selected in 2000 by the World Radiocommunication Conference (WRC) as best suited for 3G, and many countries in Europe and Asia have already adopted them.

"Promoting worldwide harmonization of spectrum is a desired long-term goal," the NTIA report said.

But use of the 1710-1850MHz band doesn't seem likely based on the NTIA's analysis. That spectrum is occupied mostly by the Department of Defense, which runs military training exercises with the spectrum and also tracks satellites. Thirteen other federal agencies also use the spectrum.

The NTIA report noted that "sharing the spectrum would allow for a more efficient use" than relocating incumbents, but because some Defense Department facilities can't share spectrum, someone "will have to be moved to another frequency band if accommodation is to occur."

The NTIA estimated that relocating incumbents to another part of the spectrum would cost $2.2 billion to $4.6 billion, and wireless carriers would be expected to pay that cost.

"That's a tremendous amount of money," Baca said.

Even with relocation there are concerns. For example, the NTIA said that satellite control facilities cannot be moved during the life of the satellites they control. As a result, the Defense Department cannot begin to relocate satellite facilities until 2017 at the earliest, with others not moving until 2030.

Even terrestrial facilities might not relocate until 2010, far later than the executive order anticipated, which set an auction date for 3G spectrum of Sept. 30, 2002. In addition, the report said it's not entirely clear that all of the federal operations in the band could work properly in other areas of the spectrum.

With all of these concerns and restrictions, the NTIA saw two possible solutions. One would have wireless providers sharing the 1710-1790MHz band with incumbents and moving into the spectrum in stages, with the federal government retaining the 1790-1850MHz band. Even then, wireless providers would have to work around protected areas, which likely would include major population centers such as San Francisco, New York, Boston, Dallas and Washington, D.C.

The other option would have the federal government vacate the 1710-1755MHz band entirely over lengthy stages, with carriers assuming the cost of the move.

FCC cost estimates higher
The cost of relocating fixed wireless providers from the 2500-2690MHz band would be $10.2 billion to $30.4 billion, the FCC estimated in its report. It added that regulators would have to balance the benefit to consumers of speeding the launch of 3G offerings while delaying the broadband services that fixed wireless providers such as Sprint and WorldCom are preparing to offer.

The FCC noted that fixed wireless providers have already spent "several billion dollars" to build broadband facilities in that spectrum. In addition, a study by Cisco Systems suggested that if fixed wireless providers were moved to a higher spectrum band, their broadcast signal distance would drop.

"Clearly the FCC is responding to information we have known and been saying for some time," Sprint spokesman James Fisher said. He said the government's focus really should be on the spectrum the NTIA examined, as that has been described as the best-suited to 3G services, and no country in the Western Hemisphere is considering 2500-2690MHz.

Commissioner Harold Furchtgott-Roth said he was pleased that the report, written by FCC staff, didn't propose relocation. "Forced relocation of fully authorized licensees is one of the most dramatic examples of government diminishing licensees' rights and should be a policy of last resort."

The problem in this band, the FCC said, is that large distances would be needed between fixed wireless providers and 3G providers or they "would cause extensive interference with each other."

Further complicating the matter is that most fixed wireless providers are concentrated in urban and suburban areas, exactly where wireless providers would want to operate. The agency noted there are portions of the country that aren't heavily populated, and sharing arrangements could be done there, but it added that it was doubtful the wireless industry would find this "sufficient to deploy a viable 3G service."

Although the regulators examining the issue haven't offered as much guidance as some in the wireless industry hoped they would, the reports "raise the political profile of the issue," Baca said. He said Evans has seized a strong interest in spectrum and technology in general and will work with Secretary of Defense Donald Rumsfeld to find a solution.

The NTIA's report and an accompanying one from the Defense Department can be found on the agency's home page.

The FCC also posted its report on its Web site.