Innovation NOI Provides Surprisingly Granular Focus on Spectrum

“What jumped out at me was there were some areas in particular that were much more granular,” said a wireless attorney Friday. “The spectrum access, spectrum management section had a lot of new, creative and very specific suggestions for what may be done by the FCC at the regulatory level to enhance spectrum access. The rest of it tended to offer a more big picture, ask lots of questions, look under lots of rocks” approach.

Another wireless source said some carriers will be enthusiastic about the possibility of putting more licensed spectrum in play. “There’s a budget issue. They could make a lot of money for the Treasury by auctioning spectrum,” the person said. “A problem the administration is going to have with a lot of unlicensed spectrum is nobody pays for it and nobody pays to clear it.”

The wireless innovation NOI mentions spectrum 222 times. The mobile wireless competition NOI, also released late Thursday, mentions spectrum 55 times. The innovation inquiry has an entire section on spectrum use and availability, with chapters on current spectrum management practices, making spectrum available for new uses, spectrum access, interference protection and band sharing and efficient use. The NOI explores everything from receiver standards to a cap and trade system for tradeable interference protection rights.

The innovation NOI observes that putting new spectrum in play is difficult because most bands have already been allocated to federal and non-federal users. “One of the most complex challenges for promoting innovation in the wireless sector is making sufficient spectrum available -- both in terms of frequency bands and amount of bandwidth -- to support new services and new applications,” the NOI said. It asks “as a general matter” how much spectrum is needed to “foster innovation” in wireless networks and systems.

The FCC can reallocate spectrum, as done in the AWS-1 band, moving incumbents to other spectrum. The NOI asked which bands are the best candidates for “repurposing.” “Has the Commission’s past repurposing of spectrum spurred or resulted in innovation?” the NOI asked. “Which of the Commission’s methods for repurposing spectrum have proven most beneficial to fostering innovation? What lessons have we learned from such efforts?” Another question: “Are there auction approaches for affording ‘new’ access to previously licensed spectrum that would also address the cost issues? For example, should incumbents be allowed to offer their spectrum rights at an auction in which the Commission also offers new licenses in the same spectrum band?”

The NOI asked a battery of questions about secondary markets for spectrum. Have “innovators been able to launch new deployments and services” in these markets and what “barriers or impediments exist” to the efficient operation of secondary markets, the NOI asked. The NOI also asked about spectrum user fees.

One highly controversial proposal among federal spectrum managers is making federal agencies pay for spectrum as part of their budget, similar to the administered incentive pricing model in place in the U.K. “Has AIP proven effective in encouraging efficient spectrum usage and if so, would similar fees be appropriate in the United States?” the NOI asked. The FCC “seems to ask the question to not just apply it to government users,” one industry source said. “The fees discussion in general seemed pretty nuanced -- like should they only be applied to spectrum not in use by a licensee, etc.? Given that there’s fee language in the FCC’s budget, it makes you wonder how far along they are in thinking about it.”

The NOI also probes the issue of interference. “The viability of spectrum access for new radio services often centers on whether the new service may cause harmful interference to incumbent services,” the NOI said. “This can lead to delays through protracted rule making proceedings that can create uncertainty and discourage investment. Are there ways the Commission can improve upon this process?” One possibility, it suggests, are alternative dispute resolution processes to resolve conflicts quickly.

The NOI asked about other innovative ways to manage interference. “We note that the U.K. Office of Communications recently offered licenses incorporating ‘Spectrum Usage Rights’ in its L-Band auction in May 2008, where SURs specify the maximum amount of interference that a licensee may create,” the NOI said. “Under such a system where licenses are subject to interference limits that describe signal strength as experienced by a receiver rather than technical rules on transmitted power, licensees can update or modify their technologies as long as they stay within their interference limit. Could defining licenses in terms of interference rights in this manner provide flexibility for innovations? Would licensees be prompted to sell their licenses to more productive users -- or switch themselves to more productive uses -- rather than pay a user fee that is high relative to the value generated by the license in its current use?”

The NOI also asked whether the FCC should promote more sharing of spectrum already in play. “Some organizations have argued that a substantial portion of licensed spectrum is underutilized, resulting in swaths of fallow spectrum that otherwise could be used to deploy new services to the public,” the FCC said. “Have licensees established any new and innovative arrangements (i.e., sharing or secondary use) that make more intensive use of spectrum? What additional future or developing services might operate on a secondary basis or benefit from real-time sharing? Should the Commission require or encourage existing licensees to share their spectrum resources with other users, either on a licensed or unlicensed basis?” Comments on both notices are due Sept. 28. Replies are due Oct. 12 for the wireless innovation inquiry and the next day for the wireless competition report.