From theJune 5, 2000 issue of Wireless Week
C Block Hits Carving Block
By Caron Carlson
WASHINGTON?To sustain the spirit of its designated entity rule, yet recognize market forces, the FCC is considering a
plan to carve up each 30-megahertz C-Block license into three 10-megahertz blocks. The commission wants to make two of
the three blocks in large markets?2.5 million people or more? and one of the three blocks in smaller markets available to
carriers of all sizes, reserving 10 megahertz in large markets and 20 megahertz in small markets to small businesses. All
15-megahertz C-Block licenses would be open to bids from any size carrier.
The spectrum cap would remain in place under the commission?s proposal, effectively precluding many large carriers but not
Nextel Communications Inc.?from bidding. Commissioner Michael Powell says he is dismayed that the notice proposes to
reject modification of the cap, and he encourages licensees to make a case for waivers.
Small wireless carriers were relieved and dismayed by the FCC?s news release detailing its tentative plan to make available to
large carriers a portion of the PCS spectrum originally set aside for their exclusive use.
The news brought dismay because the small businesses would rather not see any of the spectrum turned over to big business,
and some relief because they have very limited resources for fighting prolonged regulatory wars.
The FCC?s botched installment payment scheme for C-Block PCS licenses auctioned in 1996 and its protracted battle to
reclaim NextWave Telecom Inc.?s licenses have cast a pall over other small PCS carriers, who say they are paying a price for
the agency?s problems. Several companies operating networks and serving customers say their resources are being unfairly
strained and their business plans compromised because of the way in which the FCC is trying to redress its C-Block policies.
Large carriers are ?trying all kinds of unique tactics to neutralize the DEs,? says Dan Pegg, senior vice president for public
affairs at Leap Wireless International, about efforts to rewrite the DE rules. ?If it weren?t for the scent of blood the
mega-carriers got since the NextWave case came to the surface, they would have nothing to gain.?
Leap has an immediate ax to grind in this area: Its proposed acquisition of designated entity licenses held by Beta
Communications LLC was challenged last week by Nextel, on the grounds that Leap no longer qualifies as a DE. In a petition
to deny the license transfer, Nextel said Leap recently disclosed it has assets of more than $1 billion, considerably more than
the $500 million asset cap for DEs. But Leap contends that Nextel is using the license transfer proceeding to discredit the
C-Block in general.
?To us, it appears to be very transparent posturing to gain an advantage in the discussion of DE licenses in the upcoming DE
rulemaking,? Pegg says. According to Pegg, FCC rules require license transfer applicants to disclose their most recent audited
financial statement, which in this case would be Leap?s statement for the fourth quarter of fiscal year 1999, which shows assets
below the DE cap.
?Nextel?s attack is targeted at undermining the DE program in order that they might gain an advantage. They know full well that
this is an erroneous use of numbers,? he says, adding that even if Leap?s assets did exceed $500 million, FCC rules allow DEs
to grow.
With a host of key congressional leaders having written their support for continuing the ?designated entity? spectrum set-aside
as is, small carriers say the FCC has no good reason to change the DE rules now. It is only by association with the agency?s
handling of a few bankrupt C-Block licensees that small businesses are now forced to defend their spectrum against attacks by
large carriers, they say.
Perhaps regulators? sometimes contentious game of compromise is one King Solomon could appreciate. |
