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Wireless Systems Design

FCC Update: May 2006

Recent important announcements from the Federal Communications Commission.

For details see

1. FCC adopts relocation procedures and cost sharing rules to facilitate access of spectrum for new advanced wireless services (AWS). AWS licensees may relocate incumbent Broadband Radio Service (BRS) and Fixed Microwave Service (FS) operations in spectrum that has been allocated for AWS. These procedures will promote the rapid deployment of broadband, voice, and data services to the public by the AWS licensees, and will also minimize the disruption to incumbent BRS and FS licensees during the relocation processes. The relocation rules affect existing BRS operations in the 2150- to 2160/62-MHz band and the FS operations in the 2110- to 2150-MHz and the 2160- to 2200-MHz bands. (4/14/06)

2. The Federal Communications Commission (FCC) adopted a Public Notice that establishes procedures, minimum opening bids, and a reserve price for the FCC’s upcoming first auction of spectrum licenses for Advanced Wireless Services (AWS-1). This auction, Auction No. 66, is scheduled to begin June 29, 2006, and will include 1,122 AWS-1 licenses in the 1710- to175-MHz and 2110- to 2155-MHz bands.

In this Public Notice, the FCC established procedures designed to promote competition and efficiency in the AWS-1 auction. The FCC has decided that, unless a certain threshold level of likely competition among bidders exists before the bidding begins, as indicated by the level of upfront payments made by prospective bidders, it will not make the following information available until after the close of the auction: (1) bidders’ license selections on their short form applications (Form 175); and (2) the identities of bidders that placed bids in each round, as well as other information on bidder activity and eligibility.

Under this approach, the FCC will disclose the identities of the bidders after the filing of the short form applications and the level of upfront payments of individual bidders after those payments are made. During the auction, with regard to individual bids, the FCC will disclose at the end of each round of bidding the gross amount of every bid placed in each round, but not the identity of the bidder that placed any particular bid in that round.

If the auction appears likely to be competitive in advance of the start of the bidding, that is, if there is a modified threshold eligibility ratio of three or greater, the anticompetitive bidding behavior that the proposal was designed to prevent is less likely to be successful. Under those circumstances, the FCC would make available all information that has customarily been made available during an auction.

In the years since the FCC’s auctions were first developed, economists and analysts have observed that bidders can use the information revealed over the multiple rounds in an FCC auction to signal each other to coordinate bids, retaliate against bidders that do not cooperate, or engage in other undesirable strategic behavior. Such behavior distorts prices and may lead to an inefficient assignment of spectrum licenses. Therefore, the competitiveness and economic efficiency of the auction may be enhanced if certain information about the auction is withheld and competing bidders are prevented from coordinating their bids with one another.

In past auctions, the FCC has established other procedures to limit coordination among competing bidders, such as requiring that bidders place bids in set amounts and limiting disclosure about the exact time at which bidders submitted their bids. Those procedures will continue to be used in Auction No. 66.

In addition, all of the AWS-1 licenses will be auctioned in a single auction using the simultaneous multiple-round auction format. Package bidding will not be used in this auction.

Finally, the FCC established a reserve price for all of the licenses in the auction in order to comply with a statutory requirement aimed at funding the relocation of federal government entities that currently operate in the 1710- to 1755-MHz band. The total winning bids for the complete licenses, net of any bidding credits applicable at the close of bidding, must exceed approximately $2.059 billion. The FCC will cancel the auction if the net winning bids at the close of the auction do not equal at least that amount.

This Public Notice also announced the other routine procedures that will be used to conduct Auction No. 66, such as the amounts of minimum opening bids and the method of determining minimum acceptable bids. (4/12/06)

3. The Federal Communications Commission (FCC) adopted an Order that continues the FCC’s efforts to transform its rules and policies governing the 2496- to 2690-MHz Broadband Radio Service (BRS) and Educational Broadband Service (EBS) band. The actions taken in this Order will facilitate the deployment of educational and commercial wireless broadband services using this spectrum.

In the order, the FCC adopted several modifications and enhancements to its July 2004 BRS/EBS Report and Order which restructured the 2496- to 2690-MHz band. Specifically, the FCC modified the process for transitioning to the new BRS/EBS band plan by changing the transition planning area from Major Economic Areas to Basic Trading Areas. The FCC also allowed BRS and EBS licensees the option to self transition to the new band plan in markets where a proponent has not come forward or a proponent withdraws an initiation plan. With respect to leases entered into under the FCC’s secondary market rules, the Commission held that EBS licensees are permitted to enter into excess capacity leases for a maximum of 30 years, but leases with terms of 15 years or longer must include a right to review the educational use requirements of the leases every five years starting at year 15. In addition, the FCC established a mechanism for eliminating overlaps between grandfathered EBS E and F channel licensees and co-channel BRS licenses by geographically splitting the overlap area. The FCC also affirmed that BRS and MSS operators can share a segment of this band at 2496-2500 MHz.

The actions mentioned above will provide both existing licensees and potential new entrants in the 2496- to 2690-MHz band with greater flexibility, thereby encouraging the efficient use of the spectrum. The Order will facilitate the growth and rapid deployment of innovative communications technologies in this band, including wireless broadband systems that have the potential to compete with landline broadband services, reach areas not served by existing broadband networks, and provide consumers with portability or mobility. In addition, these actions will allow EBS licensees to use this band more effectively, thereby improving the ability of educational institutions to serve America’s students using wireless technology. (4/12/06)

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