Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : ICO Global Communications, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Rono who wrote (65)	1/24/2002 1:22:13 PM
From: Rono	Read Replies (1) \| Respond to of 70

MSS Spectrum Flexibility Needs Balanced Approach By Ari Q. Fitzgerald and Angela E. Giancarlo The FCC is considering whether to allow mobile satellite service (MSS) providers such as New ICO Global Communications (Holdings) Ltd. and Motient Services, Inc., to provide terrestrial wireless services over their satellite spectrum. The issue is controversial, partly because it puts two elements of the Commission’s spectrum-management policy on a collision course: flexible spectrum use and auctions. Under a 2000 law that codified the FCC’s practice of not auctioning licenses for global satellite services, ICO and Motient obtained their spectrum at no cost. Now they want to use it to offer terrestrial wireless services in competition with companies that had to pay for their spectrum at auction. Recent history suggests that the Commission may be inclined to allow MSS providers some flexibility. The question is at what cost. Background In the MSS flexibility proceeding, which began in August 2001, the FCC is considering whether to allow authorized MSS operators to reuse their satellite frequencies to operate terrestrial base stations on an ancillary basis. ICO, a 2 gigahertz band MSS operator, and Motient, an L-band MSS operator, say they need such flexibility to extend their services to indoor and urban areas where a satellite-based network can’t reach. They say the flexibility can be provided without interfering with other MSS or adjacent-band operators. ICO wants the Commission to allow terrestrial use only after an MSS provider has begun operating a satellite constellation. ICC reasons that this policy would ensure that terrestrial use would be merely ancillary. The company also argues that the terrestrial component of its service would not compete directly with existing terrestrial wireless providers in urban areas because it focuses on delivering global and rural services. Issues for Comment Acknowledging the value of MSS in serving rural and geographically isolated areas, the Commission set forth a detailed set of related issues for comment. First, it sought general comment on two proposals that would allow terrestrial use of the 2 GHz and L-bands. One proposal, based on the ICO and Motient requests, would allow terrestrial use only by licensed MSS operators, and only after MSS operators demonstrated that satellite coverage had been provided over the entire U.S. An alternative proposal would permit the provision of terrestrial services in certain segments of the 2 GHz and L-bands by anyone, including terrestrial wireless providers with no connection to MSS, and would assign the rights to provide such services by auction. Second, the Commission asked for comments on issues raised by the proposal to allow only licensed MSS operators to provide terrestrial services, including (1) Possible conditions on the use of terrestrial components, (2) Additional licensing requirements, (3) Intraband and adjacent-band interference and the frequencies that should be used for ancillary terrestrial services, and (4) The potential effect of the proposal on existing relocation and reimbursement rules. Third, the FCC ask for comments on whether it should give “Big LEO” (low Earth-orbit) MSS licensees such as Iridium Satellite LLC and Globalstar L.P. the opportunity to incorporate terrestrial operations into their MSS networks. A decision in the proceeding is expected during the second or third quarter. Summary of Filings Predictably, the comments submitted were largely divided along industry lines. The Cellular Telecommunications & Internet Association led the charge on behalf of the terrestrial wireless carriers, suggesting that it would be unfair for the FCC to allow MSS operators to offer terrestrial services without paying for their spectrum. CTIA urged the FCC to reallocate the 2 GHz MSS spectrum for “3G” (third-generation) wireless services and auction it to interested bidders. ICO and most of its fellow MSS operators defended their piece of the spectrum on universal service policy grounds. The Progress & Freedom Foundation (PFF) urged the Commission to do the following: (1) Grant the flexibility requested by MSS providers, (2) Require MSS providers to pay fees for using spectrum for this purpose, (3) Adopt a liberal policy with respect to consolidations involving MSS providers, (4) Immediately reallocate and auction 10–14 megahertz of spectrum from MSS to alternative wireless use, (5) Adopt a “zero-tolerance” policy for failure by MSS operators to meet milestone requirements, and (6) Reallocate abandoned MSS spectrum for advanced wireless services expeditiously. Conclusion The FCC will not be writing on a blank slate when it issues a decision. In recent years the Commission has modified the rules pertaining to several existing services, including cellular, multipoint distribution service (MDS), and personal communications service, in order to allow licensees the flexibility to respond better to the needs of the marketplace. Only a few months ago it allowed fixed MDS licensees to offer mobile services on their spectrum. In addition, most of the FCC’s recent decisions involving new commercial spectrum have allowed for flexible use. Yet, with the notable exception of cellular service providers, most of the commercial licensees that have benefited from these policies acquired their spectrum through an auction in which the highest and best uses could be determined in the marketplace. It thus seems appropriate for them to have maximum flexibility. They will be more likely than those who receive their licenses at no cost to put the spectrum to its most efficient use in an effort to recoup their license investment. Of course, anytime the bundle of rights and obligations associated with a spectrum license changes, the change requires a reassessment of the licensee in the marketplace based on information that was not available when the licensee was originally shopping its business plan. The inefficiencies in this process are exacerbated, however, when the original license- assignment mechanism was not market-based. Although flexibility is extremely appealing, the FCC must be careful not to establish a precedent that encourages regulatory arbitraging that could undermine its auction program and provide a windfall to companies that might be incapable of putting spectrum to its highest and best uses. If it’s augmented by statutory lease fee authority, the PFF’s proposal is a good starting point toward a decision that embraces flexibility while protecting the FCC’s market-based approach to assigning spectrum. (Ari Q. Fitzgerald is a partner in the Washington law firm of Hogan & Hartson LLP. He previously was a legal adviser to former FCC Chairman William E. Kennard and deputy chief of the FCC’s International Bureau. Angela E. Giancarlo is an associate attorney at the firm and was previously a director-federal regulatory affairs at the Personal Communications Industry Association.) Telecommunications Reports Wireless, January 25, 2002