FCC 3.5 GHz CBRS Draft to Auction PALs by Counties; O'Rielly Cites 'Reasonable' Compromise

“To maximize incentives for investment and innovation, promote robust network deployments, and maintain U.S. leadership in wireless, we aim to update the licensing and technical rules for this band,” said a fact sheet attached to the draft CBRS item. “The Report and Order would make targeted changes to the rules governing the 3.5 GHz band to better achieve these goals.” The revisions are “consistent with the rules that helped foster the development of 4G and LTE services in the United States, and we anticipate that adopting similar rules in this band will help promote additional investment in the next generation of wireless services.”

The size of the licenses has been contentious, with wireless ISPs, public interest groups, companies like General Electric and others pressing to keep the small PALs approved in the 2015 order. O’Rielly questioned whether census tracts are a reasonable size for the licenses and whether the FCC can even auction half a million PALs with its software (see 1807250055). Commissioners agreed a year ago to seek comment on revising the rules (see 1710240050), addressing concerns raised by O’Rielly about how to ensure interest in the PALs.

The draft is a "reasonable and just" compromise, O'Rielly told reporters Tuesday (see 1810020025) . Citing large national wireless players, he said he was able to "talk them down" from larger geographic licenses, but he recognized that smaller wireless providers remained concerned. He said software was only part of the problem with auctioning census tracts, citing increased interference complexities in urban areas and the need to promote investment in a 5G global market that highly values mid-band spectrum.

“Many accusations have been perpetrated about my motives” said O'Rielly about reaction to his CBRS proposal, in Tuesday remarks to the America's Spectrum Management Conference (see 1810020052). Allegations that the proceeding is intended to favor large wireless providers are “nonsense,” he said. It's “unfortunate” that “some may have been given the impression that CBRS was to be 'their' spectrum, that it would be available to them on the cheap,” he said. Any investment in the band was done with no assurances of winning a PAL at auction, he said. The census-tract auction favored by opponents would be too time consuming and run differently than the FCC's previous successful spectrum auctions, he said. “Unfortunately, a few came to the table with a census tract or bust attitude,” he said. “All of this may seem like a very defensive response to criticism, but after a year of debate, it feels liberating to discuss what I believe to be a fair and balanced compromise.”

Carrier Request

CTIA and the Competitive Carriers Association initially asked the FCC to sell the PALs as partial economic areas. There are 416 PEAs nationwide, compared with 74,000 census tracts and some 3,200 counties. Cable companies, licensed on a county-by-county basis, have been among the biggest supporters of county-sized licenses.

“While the decision to use census tracts may well support the deployment of targeted use cases -- particularly fixed uses … the record shows that census tracts could disadvantage flexible mobile use, including 5G, and other wide-area network deployments, which in turn would decrease investment in the band,” the draft says. “Given the increasing importance of mid-band spectrum for 5G -- and the importance of maximizing auction participation to ensure this band is put to its highest and best use -- we believe it is important for the size of PAL license areas not to preclude a mobile 5G use case.”

CCA members told us Tuesday census tracts likely would have reduced the prices for the PALs for wireless ISPs and other smaller potential licensees.

“Counties are sufficiently small to support the small cell deployments and localized types of service we anticipate will be an important part of this band,” the draft says. “They are also small enough to allow licensees to target their deployments where they need capacity.”

The O'Rielly draft was praised as promoting 5G by CTIA, Charter Communications and Verizon. While Frontier Communications "believes that smaller license sizes, such as census tracts, could better promote rural broadband deployment, counties represent a reasonable compromise,” said Ken Mason, senior vice president-government affairs. The Wireless ISP Association voiced concern county-sized licenses would slow wireless broadband deployment in rural America. O'Rielly told reporters census tracts in large rural states are often the size of counties, blurring the impact there.

10-Year Terms

Other proposed changes weren't as controversial.

The FCC would offer PALs for 10-year terms with an expectation they will be renewed. Under 2015 rules, an applicant could apply for up to two consecutive three-year terms. “The service rules for the 3.5 GHz band must create incentives for investment, encourage efficient spectrum use, support a variety of different use cases, and promote network deployments in both urban and rural communities,” the draft asserts. The FCC notes 10-year terms are standard for spectrum licenses. The FCC posted an O’Rielly fact sheet on the proposed changes and he wrote an opinion piece in Morning Consult.

The other major wireless item is an NPRM proposing unlicensed use of the 6 GHz band. “Unlicensed devices that employ Wi-Fi and other unlicensed standards have become indispensable for providing low-cost wireless connectivity in countless products used by American consumers,” the draft says. “The broad spectrum swaths that we propose making available in this frequency band could promote new technology and services that will advance the Commission’s efforts to make broadband connectivity available to all Americans, especially those in rural and underserved areas.”

The draft says there's widespread need for more spectrum for unlicensed use. “America’s appetite for wireless broadband connections can seem insatiable,” the FCC says. “This is placing high demand on commercial networks as well as systems that rely on unlicensed devices to deliver data to consumers.”

Media Items

A draft item on cable rate regulation would seek comment on proposed simplified rules, and eliminate rules that no longer apply, said the draft Further NPRM and order fact sheet. Very few cable carriers are currently subject to rate regulation, the draft said, so it “appears unnecessary for the Commission to administer such a complex regime for such a small number of regulatees.” To simplify the rate system, the FNPRM would consider eliminating all rate regulation forms and directing local franchising authorities to set “reasonable” rates. It would seek comment on an NCTA proposal for a national or regional rate called an “Updated Comparative Benchmark.”

The FNRPM would seek comment on revising and streamlining the existing rules instead of scrapping them. The order included with the item would do away with moot and outdated rules, including those connected with the cable programming service tier rate regulations, which have sunset. The agency is jumping to an order without notice and comment “because the modification in question merely codifies an existing uncodified rule,” the draft said.

A draft order on broadcaster contracts would eliminate requirements that broadcasters send physical copies of certain contracts to the FCC. Under the order, broadcasters would instead update an online list of contract documents in their online public file. Though the American Cable Association and consumer groups pushed for the contracts themselves to be required in the online public file, the order rejects that proposal. Allowing stations to provide the documents upon request won't deprive the public of important ownership information, “contrary to some commenters’ assertions,” the draft said.

BDS Draft

A BDS draft order would allow some rural carriers to opt into incentive regulation.

Rate-of-return telcos receiving model-based or other fixed high-cost USF support would be allowed "to elect to move their lower speed (DS3 and below) TDM-based business data services to incentive regulation," said the summary of a draft item also containing two FNPRMs. The order would "relieve electing carriers’ lower speed TDM-based end user channel terminations of ex ante pricing regulation in areas deemed competitive by a competitive market test," "eliminate ex ante pricing regulation of electing carriers’ higher speed TDM-based business data services (above a DS3) and their packet-based business data services" and "forbear from requiring electing carriers to comply with tariffing, cost assignment and jurisdictional separations requirements."

One FNPRM would seek comment on how to treat electing carriers' TDM-based transport services. Another, responding to an 8th U.S. Circuit Court of Appeals reversal and remand (see 1808280050), would propose to eliminate ex-ante price regulation of price-cap carrier TDM-based transport services.

A draft report and order addresses public land mobile radio use of the 800 MHz band. The order would add 318 new interstitial channels in the 800 MHz mid-band and direct FCC staff to announce when applications for 800 MHz expansion band, guard band, Sprint-vacated and interstitial channels may be filed in the areas where the 800 MHz rebanding is complete. The FCC also would decline to give incumbent 800 MHz licensees “filing priority for 800 MHz Expansion Band and Guard Band over non-incumbents after such an announcement” and terminate a 1995 freeze on intercategory sharing of 800 MHz channels.