06.21.10

FCC acts on MSS spectrum – why now?

Posted in Globalstar, ICO/DBSD, Inmarsat, LightSquared, Operators, Regulatory, Spectrum, TerreStar at 2:36 pm by timfarrar

On Friday, the FCC’s Spectrum Task Force announced a “plan to increase value, utilization, and investment in mobile satellite service (MSS) bands”, beginning with a Notice of Proposed Rule Making (NPRM) which they hope to approve at the Commission meeting scheduled for July 15.

Although the announcement itself referred to the whole 90MHz of MSS spectrum identified in the National Broadband Plan (NBP) as suitable for terrestrial broadband, the focus of the discussion at Friday’s press conference appeared to be around the 2GHz (S-band) spectrum. Indeed the FCC highlighted that this spectrum, which is held by DBSD and TerreStar, is “right in the neighborhood of both the AWS spectrum and the PCS spectrum”. In particular, the FCC indicated that it would propose changing the table of allocation for the 2GHz spectrum, to allow primary terrestrial use (without ATC), and then enable secondary leasing for all three MSS spectrum bands. These rules would enable secondary leasing to begin “relatively soon”, if the FCC agreed to the proposal of the Spectrum Task Force.

According to Communications Daily, this proposal might include “charges”, presumably as “consideration for the step-up in the value of the affected spectrum” (as proposed in the NBP), but would avoid some of the delays associated with an incentive auction (which was one of the other options suggested in the NBP). Of course spectrum leasing for purely terrestrial use (as would then be possible in the 2GHz band) would be rather more straightforward than leasing under the current set of ATC restrictions, but the level of any FCC “charges” (and perhaps other conditions on terrestrial buildout or provision of satellite services) would dictate how much value could be realized by the existing spectrum holders.

What is particularly interesting is that this NPRM is being issued so quickly, when the Credit Suisse research conference call three weeks ago indicated that it was not expected until September. In addition, the NBP suggested that an S-band (2GHz) Order would not be expected until 2011 (as opposed to 2010 for the L-band and Big LEO bands), at least partly because decisions might be impacted by the outcome of the adjacent AWS-3 band proceeding.

Perhaps the reason for this change in timing is hinted at by the first line in the FCC’s announcement: the need to “increase…investment in MSS bands”. Certainly both Echostar and TerreStar were well prepared with immediate comments on the announcement (with Echostar also noting that the proposed change would “help spur investment”), and TerreStar desperately needs new investment in the very near future. It looks like the outcome of the FCC meeting in July (which according to Friday’s press conference is “still in flux”) might therefore prove critical to TerreStar’s future.

1 Comment »

  1. PCSTEL said,

    June 21, 2010 at 5:48 pm

    It appears the FCC is proceeding as planned in the NBP. With flexibility granted to WCS spectrum straight away void of any NPRM requisites. The next step in the plan was for the issuance of NPRM’s for all 3 band plans in 2010 with the issuance of the 2Ghz Order delayed until sometime in 2011.

    The NBP appears to have selected “winner and losers” in the MSS marketplace. While indicating their desire to repurpose all 40Mhz of the “S Band” MSS spectrum with a modification to the International Table of Allocations to “Primary Mobile”, along the notation that neither DBSD nor Terrestar had any commercial subscribers on the roles. Whilst, over at thee L Band, and Big LEO Bands. The FCC indicated that only a portion of those bands would be afforded “flexibility”, while promoting the need for “public interest” via operational and subscriber metrics.

    Of course, the Big LEO and much of the L Band MSS Spectrum is ITU sanctioned spectrum, while the 2 Ghz MSS Spectrum is FCC, Industry Canada harmonized spectrum. So the FCC has fewer “treaty” obligations in the 2Ghz bands, versus the Big LEO bandplans. Hence, the FCC’s ability to easily reconfigure the Table of Allocations with the 2Ghz licenses to “Primary-Mobile”.

    The FCC suggests in the NBP that only the 2Ghz MSS licensees would be subject to financial penalties in lieu of the “step up in value”. I viewed this framework as an effort to mitigate potential legal battles with the CTIA in association with the FCC regulated 2Ghz MSS Band, versus potential issues with levying localized financial rewards on ITU sanctioned Big LEO spectrum.

    The NBP, through it’s recommendations appear to make it clear that the FCC considers that 4 MSS providers would present sufficient service and competition. Therefore the FCC appears to have clearly set their sites on the internally regulated 2Ghz MSS Bands as a source for a large percentage of the targeted spectrum to be repurposed.

    So personally, I see no large change in timing as the NBP indicated that the “L Band” and “Big LEO Band” Orders would be issued in 2010. A September NPRM, with the clock ticking once officially published would yield little time for an order to be issued by the end of 2010, once the required comment and replay periods are taken into account. I have always expected the NPRM in July/early August if the FCC were to stick to their timetable. The consensus at the Globalstar ASM was that the NPRM was on track for a July issuance.

    In my opinion, the FCC could provide an incentive auction for the 2Ghz MSS spectrum with few issues, versus a similar auction for Big LEO ITU sanctioned spectrum. Which I believe would raise many more international legal issues than the possible financial rewards for the relief sought. However, I believe the CTIA is going to be overseeing this process with a keen eye.

    PCSTEL

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