FCC Auctions Spectrum in Spring

Posted 03/2000

FCC Auctions Spectrum in Spring
By Kim Sunderland

The FCC has adopted rules governing an upcoming airwave auction of new spectrum that's been freed by the advent of digital television. The federal agency wants to further the reach of wireless telephone service and high-speed Internet access, a move that could create new possibilities for competitors.

The FCC's (www.fcc.gov) new licensing and service rules govern operation of 30 MHz of commercial spectrum located in the 700 MHz band. This spectrum previously was used exclusively for TV broadcasting on channels 60-69. Three years ago, Congress directed the FCC to reallocate this spectrum to commercial and public safety services that can be used for a variety of wireless services, including fixed and mobile Internet access.

"I am excited about the prospect of wireless alternatives to the local loop and/or Internet connections to mobile devices," Commissioner Susan Ness said following the FCC's January order. "Our decision best balances the needs of these competing demands for the same spectrum." FCC Chairman William E. Kennard says the rules will allow auction winners to take advantage of technological advancements in providing a wide variety of new wireless services, including "new fixed broadband services that could become the third Internet pipe into homes across America."

In fact, many analysts believe by 2001 data services may represent more than half of the total estimated CLEC marketplace. Elizabeth Henderson, a telecom analyst with Duff & Phelps Credit Rating Co. (www.dcrco.com), says there are a few CLECs utilizing a wireless approach to bypass the ILECs' last mile or local loop. These include Winstar Communications Inc. (www.winstar.com), Teligent Inc. (www.teligent.com), Advanced Radio Telecom Corp. (www.artelecom.com) and NEXTLINK Communications Inc. (www.nextlink.com). Such wireless CLECs use microwave technology to send voice and data signals to the receiving end that's equipped with a set of antennas. "As compared to fiber, a wireless strategy is cheaper to deploy and will generate a faster return on investment," Henderson says in a recent CLEC report. "Wireless providers are able to serve customers located in buildings that are too small or far away from fiber rings to justify the cost of fiber deployment, or in cities that have placed a fiber build moratorium."

In relation to the total number of commercial buildings in the United States, Henderson says very few buildings are connected with fiber. "Therefore," she says, "the wireless CLECs have an excellent opportunity to exploit."

The airwave auctions are slated for this spring. While a date for the auctions hadn't been set at press time, the FCC has been ordered by Congress to deposit auction proceeds in the U.S. Treasury by Sept. 30.

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