When the Federal Communications Commission (FCC (News - Alert)) convened its meeting yesterday to unveil its newest plans for the soon to be vacated 698-806 MHz spectrum — also known as the 700 MHz band plan — it did so in the face of tremendous expectations from private, commercial, and government constituencies alike.

 

Indeed, as FCC Commissioner Jonathan Adelstein noted, “Our decision today is one of the most significant and groundbreaking we have conducted in the time I have served. These 700 MHz licenses are the finest crown jewels the FCC has to put up for auction.”

 

The 700 MHz band, which is currently used by television broadcasters, will soon be vacated thanks to the transition to all-digital television by February 17, 2009. As a result, the freed spectrum must be reallocated, presenting far-reaching opportunities for both the wireless industry and a proposed national public safety network, which has garnered considerable attention following numerous communications failures in the aftermath of both natural and man-made disasters.

 

Indeed, as Commissioner Michael Copps explained, the decisions of the FCC were focused on resolving three key issues:

 

 

First, the FCC’s Order establishes the groundwork for developing a nationwide public safety network designed to enable first responders to communicate more effectively and put them in a position to react more quickly to any situation, explained Derek Poach, Chief, Public Security & Homeland Security Bureau at the FCC.

 

In order to establish this new national network, Poach described a public/private partnership, whereby a single, nationwide license will be granted to a non-commercial entity, which will have oversight of the public safety network and will report to the public safety community, while working in tandem with a commercial entity that will be assigned an adjacent spectrum block.

 

FCC Chairman Kevin Martin said that, while a single, exclusive public safety network would have been acceptable, it would have been nearly impossible to achieve.

 

“The simple reality is that there currently is no way to fund such an enterprise,” he explained. “The use of a public safety-private partnership, however, creates an opportunity to provide state-of-the-art technologies to our Nation’s first responders in a timely and affordable manner.”

 

The commercial licensee in this partnership will be tasked with building out a national, interoperable broadband network that can also be used for public safety operations to facilitate efficient communications between various response groups (e.g., fire, police, medical, federal agencies, etc.). Through this partnership, the public safety licensee will be given priority access to the commercial spectrum in case of emergency, while the commercial licensee will be afforded secondary access to the public safety broadband spectrum.

 

In addition, the Order includes network build-out requirements for the licensee, but also allows various public safety entities to build out their own network ahead of that schedule, or in areas not earmarked for coverage — both clauses are designed to maximize coverage area and efficiency of the public safety network.

 

Poach explained that a number of national and local organizations have expressed interest in such an approach. “Providing for shared infrastructure will help achieve significant cost efficiencies while maximizing public safety’s access to interoperable broadband spectrum,” he said.

 

In addition to providing spectrum for a new public safety mechanism, the order also focused on the need for greater openness in access to broadband services for consumers. As Chief of the Wireless Telecommunications Bureau of the FCC Fred Campbell explained, the second part of the Order is “designed to promote the provision of new wireless broadband services to consumers across the country,” noting specifically the importance of providing consumers access to consumers using their choice of devices and applications.

 

Support for the open access decree was almost instantaneous, as was to be expected. In fact, in February, Skype (News - Alert) had filed a petition with the FCC regarding the right of consumers to connect to wireless networks with their choice of devices — essentially asking for the extension of the 1968 Carterfone decision to wireless networks. The petition has since gained the support of consumer advocacy groups, industry associations, as well as more than 4,000 individual consumers. Hundreds of thousands of other consumers and businesses have also expressed their desire for greater openness in wireless communications.

 

Meg Whitman, president and CEO of Skype’s parent company eBay (News - Alert), Inc., and Christopher Libertelli, Skype’s senior director of Government and Regulatory Affairs both were quick to announce their support of the FCC’s mandate, saying that it is a key step in offering greater choice to consumers in the wireless communications space.

 

“We believe that ensuring greater choice for wireless devices and applications is a very positive development and we are very pleased that ‘Carterfone’ principles are now part of the Commission’s spectrum policy,” said Whitman. “We will continue to work with the Commission to make openness a guiding principle throughout the broadband Internet access marketplace.”

 

Libertelli added that this represents “an excellent first step and an endorsement of our position for ‘open’ wireless devices and applications… which places the burden on the carriers to demonstrate they comply with Carterfone.”

 

Under the FCC Order, 62 MHz of spectrum will be designated for commercial use, to be licensed based in a diverse mix of geographic and block size allocations, with the goal of facilitating greater broadband deployment, as well as accommodating the widest possible range of bidders. Campbell noted that the plan was specifically designed to accommodate the needs to small, rural providers. Importantly, the Order also mandates certain build-out requirements, including the possibility of rescinding licenses if schedules are not met.

 

As for promoting open access, winning bidders of the 22 MHz-wide “C Block” will be required to provide open access to devices and applications, creating opportunities for developers, manufacturers, and end users until now unavailable. Allowing open access will promote broadband competition, including the development of new and increasingly innovative services and applications that can truly make use of the latest technologies available today, since they will not be constrained by a single operator’s requirements.

 

Chairman Martin elaborated on the need for openness: “Currently, American consumers are too often asked to throw away their old phones and buy new ones if they want to switch cell phone carriers.  And when they buy that new phone, it is the wireless provider, not the consumer, who chooses what applications the consumer will be allowed to use on that new handset.”

 

Importantly, the auction will be using under anonymous bidding, but should include options for package bidding, which will promote bids from network operators seeking to create a nationwide footprint — thus another wireless nationwide alternative.

 

Reacting to the FCC’s decision, Cisco’s vice president of Global Public and Government Affairs said, “The rules set by the FCC will open the door to an exciting new era of mobile broadband communications in which users will have more choice and greater access.  Emergency communications will also be more reliable through a new, nationwide spectrum allocation for public safety broadband applications.”

 

With both parts of the decision, the FCC has sought to enable all participants in the wireless space to benefit from constantly evolving technology and to ensure that consumers are not handcuffed by a few, large network operators.

 

“Whether we’re talking about media ownership, the future of the Internet, video distribution, or ownership of wireless and wireline assets, I believe that reducing the power of gatekeepers and increasing the intensity of competition is the right policy call,” said Copps. “It’s the right call because it returns power to consumers and entrepreneurs and limits incumbents’ power to extract monopoly or oligopoly rents.”

 

While the FCC is excited about the prospects its decision brings, it also realizes this is only the beginning, and there is considerable work to be done. It also understands meeting these demands will not be easy, but that they are necessary to protect the country the public.