Wireless Utilities 2003Chicago
Special Regulatory Perspective
Presented by:
Christine M. Gill
Telecommunications Practice GroupMcDermott, Will & Emery
Washington, DC202-756-8283/[email protected]
August 20, 2003
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INTRODUCTION
WIRELESS/RF SPECTRUM
• Subject to FEDERAL Regulation by the Federal Communications Commission
• Viewed as Scarce Public Resource - Tightly Controlled by the Federal Government for Various Uses Based On “Public Interest” Standard
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OVERVIEW OF UTILITY USE OF WIRELESS SYSTEMS
Primarily Internal - Support of Operations
• Land mobile [voice and data]: – 25, 48, 150, 450, 470, and 800/900 MHz
• MAS/SCADA/Remote Meter Reading: – 150, 220, 900 MHz, 2 GHz
• Microwave - [point-to-point]: – 1, 2, 5, 6, 11, 18, 21 and 24 GHz
• Satellite - WANs/LANs/SCADA
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OVERVIEW OF UTILITY USE OF WIRELESS SYSTEMS
Common Carrier Services in Utility Operations
• Typically Used Only as an Adjunct to Internal Wireless Systems (For Example, Cellular)
• For-Profit Model at Odds with Utility Requirements– Coverage Often Insufficient – Reliability Not Up to Utility Standards– “Priority Access” Deemed Not Adequate
• Utilities Receive a Low Level of Priority Access [by law] on Commercial Systems
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OVERVIEW OF UTILITY USE OF WIRELESS SYSTEMS
Hybrid Wireless Utility Systems
• Shared Access to Land Mobile by Private Entities [Currently Non-Profit Only]
• Shared Access to Microwave Capacity by Private Entities/Carrier [For-Profit or Non-Profit]
• Leased Access to All Systems [coming soon?]
Commercial Utility Wireless Ventures
• Automated Meter Reading – Metricom
• Wireless Services – Southern LINC
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THE REGULATORY ENVIRONMENT
The Federal Communications Commission
• Under the Communications Act of 1934, Has Jurisdiction Over Virtually All Non-Government RadioFrequency Operations, Equipment and Structures
• There Is Virtually No State or Local Jurisdiction over Wireless Operations
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THE REGULATORY ENVIRONMENT
The Federal Communications Commission
• Historically Has Employed a Command and Control Approach to Wireless - Dedicated Allocations of Spectrum for Specific Uses
• Issues Licenses and Prescribes Technical Parameters, Geographic Restrictions, Permissible Communications
• Access to Spectrum Determined by the Priority Given to a Particular Group under Government Policy
Commercial/Common Carrier Private/Internal Use Unlicensed
Cellular Utilities Spread Spectrum
Microwave Oil Companies Ultra-Wideband
Transportation U-NII
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REGULATORY ENVIRONMENT
1996 Telecom Act
• Only Major Reform in the Nearly 70-Year History of the Communications Act
• Objective Was Deregulation of Telecommunications - Move to a Market-Driven Model Where Possible
– Increased Use of Auctions to Allocate Spectrum for New Uses
– Moving Away from Allocating Spectrum Based on “Public Interest” to Model Based on “Highest Bidder”
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REGULATORY ENVIRONMENT
1996 Telecom Act
Introduced “Exempt Telecommunications Company” [ETC]
Short-Cut for Public Utilities to Enter Telecommunications Service and Related Markets
Utilities Regulated Under “PUHCA” Can Create or Acquire ETCs Subject to Streamlined FCC Approval Process [no SEC Review]
Restriction: ETC Must Be Exclusively Engaged, Directly or Indirectly, in the Provision of:
• Telecommunications or Information Services
• Products, Services Within the FCC Jurisdiction; or
• Products, Services Related or Incidental to the Referenced Services
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REGULATORY ENVIRONMENT
Balanced Budget Act of 1997
• Expanded the FCC’s Spectrum Auction Authority
– Previously: FCC Could Auction Spectrum Where it Would Be Used to Provide a Commercial Service
– After BBA 1997: FCC Must Auction All Spectrum, Except for Public Safety Radio Service Licenses
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REGULATORY ENVIRONMENT
Balanced Budget Act of 1997 [continued]
• Impact of New Auction Authority
– Auctions Are Widely Used, With Approximately 40 Held to Date, Including:
• 800 MHz and 900 MHz Specialized Mobile Radio
• 2 GHz Personal Communications Service
• Lower 700 MHz [UHF TV Channels – Broadcasters to Exit]
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REGULATORY ENVIRONMENT
Balanced Budget Act of 1997 [continued]
– Under the FCC's Interpretation of 1997 BBA, Current Spectrum Used by Utilities Could Be Auctioned
– Access to Spectrum for New Uses Became Intensely Competitive/Prices Escalated
– Market Prices for Spectrum Have Recently Dropped, But Remain Volatile
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REGULATORY ENVIRONMENT
FCC Auctions
• The FCC Conducts Auctions Electronically, Allowing Bidders to Place Bids and Monitor Auction Results Round by Round via the Internet.
• Utilities Often Have Access to Auctioned Spectrum Before and After the Auction Because of:– Permissive Eligibility Standards– Availability of Spectrum in Nationwide, Regional,
and Subregional Blocks– Rules Allowing the Partitioning or Disaggregation of
Spectrum by Winning Bidders
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REGULATORY ENVIRONMENT
FCC Auctions:
• Auction Prices Vary Depending on the Spectrum Band, Timing and Market
– Over $2 Billion for a Single Broadband PCS License in New York City (2001)
– Total of Approximately $3.2 million for 2,832 Paging Licenses Located Across the Nation (2003)
• The Average Bid During Recent Auctions:
– $11,428 for a 220 MHz License
– $1,713 for a Multiple Address System License
– $1,130 for an Upper or Lower Paging Band License
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ONGOING FCC INITIATIVES THAT WILL AFFECT ACCESS TO WIRELESS SPECTRUM
• Currently - The FCC is Seeking to Advance Several Objectives:
– Make More Spectrum Available to More Users
– Address Public Safety/Homeland Security Needs
– Facilitate Technological Developments
– Ensure Efficient Spectrum Use
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ONGOING FCC INITIATIVES
Spectrum Refarming
• Initiated More than 10 Years Ago as a Way to Increase Efficiency in Spectrum Usage
• Refarms Existing Spectrum - Creating a Greater Number of Narrower Channels
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ONGOING FCC INITIATIVES
Spectrum Refarming [continued]
• Originally Equipment Driven [Increasingly Narrow Channel Capacity Required for Equipment Over Time]
• Now - Mandatory Licensee Migration to 12.5 kHz Channelization Below 512 MHz
• Under Consideration - Mandatory 6.25 kHz Migration
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ONGOING FCC INITIATIVES
Unlicensed Devices
• FCC Promotion of Unlicensed Operations Is Consistent with Deregulatory Approach
• June 2003 – White Paper from FCC Staff
– Preliminary Exploration of Unlicensed Operations
– Authors Showed Strong Interest in Granting Access to Currently Licensed Spectrum
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ONGOING FCC INITIATIVES
Spectrum Leasing/Secondary Markets
In an Ongoing Rulemaking, the FCC Is Seeking to Promote the Development of Secondary Markets in Spectrum
• Relaxed Restrictions on Transferring Licensee Control - Allows Spectrum Leasing in a Wide Variety of Radio Services
• Streamlined Approval of Requests to Lease
• Further Measures to Facilitate [NPRM]?
• More Evidence of Market-Based, Deregulatory Policy - Away from Command and Control.
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ONGOING FCC INITIATIVES
Interference Resolution Issues
• Increased Spectrum Demand/Use Has Led to More Interference
• For Example, 2001 Nextel White Paper Detailed Interference to 800 MHz High Power, High-Site Public Safety Systems by Nextel's Low-Power, Low-Site Commercial System
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ONGOING FCC INITIATIVES
Interference Resolution Issues [continued]
• Nextel et al. Have Proposed Band Reconfiguration
– All Public Safety Moved to Lower Part of Band [851-854 MHz] and Nextel Moves to Upper Part [861-864 MHz]
• FCC Has Given No Indication of Views/Anticipated Approach
• Initial Decision Expected Late 2003/Early 2004
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ONGOING FCC INITIATIVES
Enforcement/Compliance
• Historically
– Enforcement Responsibility Divided Up Among Various FCC Bureaus
– Private Radio Licensees, Such as Utilities, Were Not Aggressively Targeted
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ONGOING FCC INITIATIVES
Enforcement/Compliance [continued]
• 1999 - FCC Creates a Distinct Enforcement Bureau
– Bureau’s Full Time, Attention and Resources Are Devoted to Identifying and Addressing Rule Violations/Unused Spectrum
– Across-the-Board Enforcement of Rules Becomes an FCC Priority
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ONGOING FCC INITIATIVES
Enforcement/Compliance [continued]
• Currently
– Areas of Particular Focus Include:
• Antenna Towers/Sites (painting, lighting, signage, RF Radiation Exposure)
• Unauthorized Operations (expirations and otherwise)
• Unauthorized Transfers of Control (mergers, asset sales)