Reading the 700-MHz CommentsMonday, June 30, 2008
After the 700-MHz public/private partnership failed to attract a bidder, the FCC issued a request for comments. The document (WT-06-150/PS-06-229/WT-96-86) laid out some questions and asked for comments on how to re-auction this spectrum and whether the public/private partnership could, indeed, work.
As of June 25, 1,023 documents were listed in the comment database at the FCC. Of those, a number are Ex Parte notices that certain groups and individuals had meetings with various FCC Commissioners and Officials (these notices are required by law). The rest of the documents were comment filings running the gamut from one or two pages to hundreds of pages.
Comments were filed by large companies such as Verizon Wireless, AT&T Wireless, Google, Qualcomm, Northrop Grumman, Motorola, Ericsson and Sprint Nextel, smaller companies including some equipment vendors, smaller cellular network operators and other interested parties and by individuals such as myself. I have not read all of the filings, but I have read a number of them and my observations follow.
It appears that every filer wants to see that the Public Safety (first responder) community is assisted in achieving the goal of a fully interoperable network using commercial equipment. However, everyone has a different idea as to how to go about accomplishing this and many question whether a single license is the right answer.
Some want the nation divided into regions with a license for each region, and a few said the auction process is basically flawed and the FCC should issue a request for proposal instead. Several others pointed out that the FCC, in Appendix A, called out the use of WiMAX or LTE for the system, ignoring the 3G technologies already in place. By using 3G technologies with the availability and quantities of equipment in use today, the network and customer equipment would cost less. The suggestion is that UMTS/HSPA and CDMA2000 1xEV-DO are available today and fast enough for most of the required applications and they will be getting faster all the time. The point, well taken as far as I am concerned, is that the FCC should not rule out existing 3G technologies in favor of what it considers "next-generation" technologies. (Further, I do not believe WiMAX qualifies as a next-generation technology). The ITU has found that UMTS/HSPA, CDMA2000 1xEV-DO and WiMAX all meet the definition of 3G technologies and as far as I am concerned, it makes more sense to build the network based on technologies that are commercial today rather than waiting for the next generation.
Both UMTS/HSPA and CDMA2000 1xEV-DO are mature technologies that are deployed in much of the world with the availability of hundreds of different devices. My personal choice would be EV-DO, but not because it is a Qualcomm technology-Qualcomm also has a stake in UMTS/HSPA and LTE. My choice is based on the fact that EV-DO uses a 1.25-MHz carrier. This means multiple carriers can be established in 5 MHz of bandwidth whereas UMTS/HSPA requires 5 MHz of spectrum for a single carrier. My logic is that building this network with the capability of having more than one carrier per cell site would provide for additional ways to assign priority. Moreover, single-carrier systems can be built in outlying areas until there is heavier demand, at which time they can be upgraded to two or three or more carriers. Since LTE is designed to use carriers that are 1.25 MHz up to 20 MHz in size, upgrades to the EV-DO system could be made using LTE as one carrier and keeping EV-DO as the others until the system was ready to be fully upgraded (which I believe won't be for a number of years). There will not be enough LTE installations in the next five years to result in the volume of devices that will drive prices down, nor will there be the volume to reduce the cost of the infrastructure. I, for one, hope the FCC listens and includes both of these technologies as possibilities in the next bid or RFP.
Here is an interesting comment: What if the FCC auctioned the white space (the space between TV stations in a given city) and used that income to fund the public safety network? I like this idea as well because it solves two problems. First, it helps pay for the system and second, it resolves the issues I have with white space being used for unlicensed activities where it would be difficult to track down anyone causing interference to TVs in a given area. The license holder could wholesale the spectrum or run a system itself. And the funding would go a long way toward making the Public Safety system happen. Many comments had to do with the viability, or rather lack of viability, of a single license holder building out what will be the most expensive network ever built in the United States, with no guarantees that there will ever be a return on investment. You certainly cannot pay for the network based on three million first responders, even if every one of them decided to use the system and not even if you expand the definition of first responder to include the three million additional responders who support them.
Many of the network operators pointed out that the economics of a system like this just do not work for a commercial network operator. Further, AT&T and Verizon, the two largest network operators, are pretty well set for 700-MHz spectrum moving forward so their motivation to become involved would not be based on revenue but perhaps on giving something back to the community and the nation-but at what cost? I think both would be willing to help with the network, but they certainly have no reason to step up and bid on a single license and then be responsible for building out the network.
Many of the comments suggested a lower reserve price for the bidding and lowering or eliminating the penalty that was included in the first auction if the commercial network operator and the first responder representative could not come to an agreement. There were also comments that if there is an auction, the anti-collusion requirement should not be part of rules and a large number of comments from those who believe a "network-of-networks" is the best approach (regional licenses with common interconnectivity requirements). In my filing, I suggested that the bidder be a systems integrator, and that all of the network operators take part in the build-this is a variation of the same theme.
I was very disappointed that none of the filings I read made the connection that I did about solving our rural broadband problems at the same time this network is built. I still believe this is a great solution and it is certainly better, and less expensive, than building out a nationwide network at 2.1 GHz as the Chairman favors, requiring 95% population coverage and free wireless service. My calculations show that this network on this frequency band would require more than 80,000 cell sites at a cost of $40-45 billion-and it will be supported by advertising revenue?
You can probably guess which filer wants the D block to be used for wireless wholesale and contain open access requirements. I believe that not one bidder would show up at the auction if this were the case. Why would I build the country's most expensive network and then be required to wholesale it, making less money than if I sold directly to the customer. Perhaps if the network were paid for by federal funds this might be a workable solution, or perhaps the company that filed the comment might want to invest $20 billion into building the network and then wholesale it and, on a secondary basis, remember the first responders.
Other filings had to do with the troublesome definition of "emergency," or the times at which first responders would have priority access to the network. The definition put forth by the FCC leaves a lot of question about what qualifies as a real "emergency" situation. Other comments suggested that the commercial network operator not have any access to the 10 MHz of spectrum licensed to the first responder community, which, of course, makes the network even less attractive from a financial aspect.
I think several of the comments were right on the money in saying there should be consensus meetings prior to the final rules, and that the PSST and the commercial community should decide on issues such as network requirements ahead of the auction and not leave it to negotiation after the fact-when it is possible that no consensus could be reached.
Some comments indicate that their filers really do not understand the needs of the first responder community. I was concerned that some of these comments do not take into consideration the need for one-to-many dispatch, simplex (peer-to-multi-peer) communications and other first responder community requirements. Some seemed to believe that this network, if built, could handle an unlimited amount of video and data traffic as well as all dispatch traffic. I don't for a moment believe any first responder organization will give up its existing dispatch and simplex channels and simply move over to this network for day-to-day use any time soon, if ever.
I am left with the feeling that if someone at the FCC actually reads and tries to compile a consensus from all of the comments it will be an impossible task. There are many great suggestions hidden among all the words, a consensus that something has to be done for the first responder community and that one of the biggest obstacles is how to pay for the network. One of the points the FCC might find running through many of these proposals is that there is not a lot of financial incentive for a single network operator or even a group of incumbents or new players. Something other than financial rewards in terms of customer revenue must be considered if this network is to be built.
After reading as many of these comments as I had time for, I see a need to include a funding mechanism for this network because there is no way-even using an advertising-based model-that anyone who looked at the requirements and potential client revenue would even show up at the bidders table. I do believe a network-of-networks is the best approach and while I differ in my idea of how this could best work, I am sure there are a variety of ways in which it might be structured.
I also had another thought but perhaps this one is not possible. What if first responders had first priority and network operators that built out the network were given a second tier of priority for their most important customers? Would this be enough of an incentive to help them decide to build out the network? It is clear to me that any new auction will have the same issue as the old auction: Where is the financial reward for those who step up and are willing to build this network? If there is none, then how do we persuade them to spend time and money on this project?
In the meantime, I have a suggestion I would like to float. Today, there are chipsets that enable operation on both the CDMA and UMTS networks (as well as GSM and CDMA). What if the PSST or some other organization could put together a nationwide agreement with the network operators, for example, a single monthly fee for each first responder, access to all existing networks (data) on a priority basis, and the ability to move across networks seamlessly? This would enable the first responder community to work together on an integrated system, with redundancy in most markets, and provide the ability to operate anywhere there is a commercial network. The operators would not make a lot of money, but their costs would be covered so it would not cost them anything, and we could get the first responder systems up and running quickly while we work on the issues surrounding a nationwide network.
Everyone has his or her own ideas, including me, but the bottom line is that the first responder community needs help quickly. We need to find a way to both help quickly and carry them into the future.
Andrew M. Seybold