FCC floats flexible regulatory scheme for multibillion-dollar wireless auction

Computerworld - The Federal Communications Commission yesterday outlined what it called a "flexible regulatory scheme" that it believes will clear the way for a multibillion-dollar auction of airwaves currently occupied by UHF television stations. Buyers will be carriers of a variety of wireless services, including broadband mobile and fixed Internet access.

But a spokesman for the Cellular Telecommunications Industry Association (CTIA) portrayed the decision as unworkable for the wireless carriers the FCC expects to bid on the spectrum.

Starting Sept. 6, the FCC plans to auction off chunks of the spectrum in the 700 MHz frequency band, which is currently occupied by television stations operating in channels 60 to 69. The stations won't have to vacate those channels until Dec 31, 2006. That's too long a delay for many wireless carriers, who say they'd have to pay big bucks for a chunk of invisible real estate that they can't use.

The FCC's indecision to come up with a concrete plan to move the broadcasters off the spectrum is "no help at all" to potential bidders who want an unencumbered title to the spectrum, according to CTIA spokesman Jeff Nelson

To help clear those television stations from the band to new digital frequencies, as planned, the FCC adopted a set of rules it says will lead to "intensive and efficient commercial use." The arrangements will depend on "voluntary" agreements worked out between the broadcasters and the auction winners, the FCC said. These agreements would permit the broadcasters to make a deal with the carriers to move sooner than 2006. The FCC also suggested they could potentially share the spectrum, either on a time or data basis, but offered no road map for such sharing. The Commission invited suggestions from the industry and public on how to share the bands.

Nelson said the FCC's voluntary sharing plan "might sound good if you're a hippie in the '60s, but this is a business."

He added that the FCC's approach to selling spectrum to wireless carriers, but then not taking any concrete steps to move the broadcasters "is like selling a house with the people still in it, with no guarantee that they will ever move out."

Nelson also blamed Congress for mandating the FCC proceed with the auction -- which will generate funds for the Treasury -- before the Commission could come up with an orderly plan to move the broadcasters off the auctioned frequencies.

The Commission said it believed, "voluntary band-clearing arrangements" between the broadcasters and the auction winners "should facilitate both the provisionof advanced wireless services, such as broadband Internet access, and the transition to DTV by incumbent broadcast stations."

The FCC also said it's seeking public comment on the possibility of holding secondary auctions, in which carriers would pay broadcasters to clear the spectrum before the 2006 deadline. William Kennard, FCC chairman, has called for an "aggressive program" to avoid a spectrum drought, including the use of secondary auctions and the development of a spot market in spectrum.

The National Association of Broadcasters, which represents the stations, didn't return calls in time for deadline.