Congress Makes Sweeping Changes to Spectrum Policy; Authorizes TV Band Incentive Auctions
On Friday, overwhelming majorities of both the House and the Senate passed a payroll extension bill that includes important changes to spectrum policy. The legislation is expected to raise $15 billion for the Federal Treasury and to create hundreds of thousands of jobs. The details of the legislation are now delegated to the NTIA, the FCC and other agencies to develop reports and to adopt rules to implement Congress' objectives.
Below is our take on some of the main provisions of the legislation as it applies to spectrum policy and wireless broadband services.
Incentive Auctions and Band Clearing
Aside from public safety, the main driver of spectrum legislation was the need to address the spectrum crunch (real or imagined) for mobile wireless interests. To do this, Congress decided to offer TV broadcasters compensation to voluntarily relinquish their spectrum for repurposing by the FCC for broadband uses. Congress granted specific authority for a two-phase voluntary "incentive auction" that would clear a portion of the TV band (Channels 2-51) for mobile interests and, as part of that process, change the TV "white space" landscape. Because Channel 51 is adjacent to the Lower 700 MHz A Block (formerly Channel 52), the FCC is expected to attempt to "re-pack" the TV stations into the lower portion of the UHF band (beginning with Channel 14). The auction process is expected to take several years.
Under the legislation's language, "relinquishment" of a TV station means (1) relinquishing all usage rights to a channel, (2) relinquishing a UHF channel for a VHF channel, or (3) sharing a channel with another TV station. In lieu of relocation reimbursement, TV stations can obtain, as appropriate, a waiver of FCC rules to make flexible use of their spectrum so long as the TV broadcaster provides at least one programming stream at no charge. Depending on how the FCC ultimately interprets this provision, TV broadcasters could obtain a limited right to offer broadband on their spectrum alongside video service, but only if they forego relocation reimbursement.
Significantly, the FCC is required to reallocate and auction the T-Band (470-512 MHz, i.e., Channels 14-20) used by public safety in 11 major markets, with the spectrum sale used to cover relocation costs. Although not stated in the legislation, the FCC can also clear other users -- land mobile, for instance -- out of the TV bands. The FCC also can relocate radioastronomy users on Channel 37 at a cost of up to $300 million. The ability to relocate Channel 37 users could be a significant band-clearing opportunity because that channel operates as a nationwide encumbrance in the heart of the TV band.
TV White Spaces
Early House Majority versions of the bill would have required the FCC to auction all unlicensed spectrum (though it was unclear whether this included white space spectrum that had previously been allocated). The version of the legislation that passed essentially creates two flavors of white space.
- First, the existing TV white space and the TV white space remaining after the re-packing -- remember, that's several years away -- will be available for fixed and mobile wireless use. There will no doubt be a loss of TV white space in many markets as a result of the incentive auction, but Congress and FCC staff expect that there will vacant TV channels will remain in many rural areas after the re-packing. The re-allocation of Channels 14-20 will create additional spectrum in major markets for TV stations to relocate, and the possible relocation of Channel 37 radioastronomy users will also clear spectrum.
- Second, the FCC has the discretion to use relinquished spectrum or other spectrum to implement guard bands that would, in practice, create a nationwide unlicensed allocation as recommended in the National Broadband Plan. The FCC may "permit" the use of guard band for unlicensed use, but is not required to, and the guard bands must "be no larger than is technically reasonable to prevent harmful interference between licensed services outside the guard bands." (Reports were that earlier versions of the bill used the phrase "technically necessary.") Based on our discussions with the FCC, they see a guard band acting as a "duplex gap" band between LTE-Advanced uplink/downlink spectrum allocations, though this thinking is only preliminary and the ultimate band plan, channel sizes and technical rules will be determined through an FCC rulemaking proceeding. The limits of the FCC's discretion on guard bands appear to be subject to interpretation.
Earlier versions of both the Senate and House bills would have required the FCC to auction the 3550-3650 MHz band (with certain exceptions). The band is not allocated for commercial use; rather, the Department of Defense uses it at present. The final version removed the auction mandate, but requires NTIA to give priority to options involving exclusive non-Federal use and to choose sharing only if NTIA and OMB determine that relocation of a Federal user is not feasible because of technical or cost constraints. Thus, the 3550-3650 MHz band could be subject to auction ("exclusive use") unless it is not feasible to relocate Federal users. If that's the case, commercial and Federal users could share the band under technical rules the FCC would adopt. The radar uses in the 3550-3650 MHz band may be difficult to relocate, which would make the case for shared unlicensed use easier.
Other Unlicensed Bands
The spectrum legislation identifies two additional bands for possible unlicensed use. First, NTIA, the Department of Defense and other agencies will study spectrum-sharing and risks to incumbent Federal users if unlicensed U-NII devices were allowed to operate in the 5350-5470 MHz and 5850-5925 MHz bands – a total of 195 MHz of spectrum. The agencies will issue reports on their findings. The report for the 5350-5470 MHz band is due in eight months, and the report on the 5850-5925 MHz band is due in 18 months.
Wireless Facilities Deployment
An under-appreciated section of the bill provides significant benefits to wireless companies, fixed and mobile, that want access to towers owned by state and local governments. Under the legislation, a local government must approve an "eligible facilities request" to modify an existing wireless tower or base station that does not "substantially change" the physical dimensions of the tower or base station. An "eligible facilities request" is a request to collocate new transmission equipment, remove transmission equipment or replace transmission equipment. The FCC will decide how to interpret "substantial change" pursuant to a rulemaking proceeding. In addition, GSA is required to develop master contracts for wireless antenna structures on property owned by the Federal government.
The new spectrum legislation is a beginning, not an end. Many details have yet to be determined, but many interests – including broadband providers, whether fixed or mobile, broadcasters, public safety users and others -- can find something to like in the new legislation.