National Spectrum Managers Association Spectrum Management 2004

1
National Spectrum Managers Association Spectrum
Management 2004

• Diane Cornell
• Vice President, Regulatory Policy
• CTIA-The Wireless Association
• May 19, 2004

2
CTIA- The Wireless Association

• CTIA is the international organization of the
  wireless communications industry for both
  wireless carriers and manufacturers. Membership
  in the association covers all Commercial Mobile
  Radio Service (CMRS) providers and
  manufacturers, including cellular, broadband PCS,
  ESMR, as well as providers and manufacturers of
  wireless data services and products.
• CTIA is the voice of the wireless industry -
  representing its members in a constant dialogue
  with policy makers in the Executive Branch, the
  Federal Communications Commission, and in
  Congress. CTIAs industry committees provide
  leadership in the area of taxation, roaming,
  safety, regulations, fraud, and technology.

3
Commercial Mobile Radio Service- Over 164
Million Subscribers Today.
Wireless Subscribers
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CMRS Delivers Digital Service

• Over 140 million digital subs at year-end
  2003

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Over 1 Trillion Minutes-of-Use by YE 2004
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CMRS Track Record for Customer Service and
Innovation Hard to Match

• 1993
• 2 providers per market
  
• A regulated duopoly
  
  
  
• Avg. monthly bill - 61.49
  
• 16 million consumers
  
• 5 penetration
• Service on local/regional analog networks
• Data Rates of 9.6 kbps
• Limited internet access
• Limited number of mobile data capable devices

• 2003
• 5 providers per market for 83 of consumers
• Avg. monthly bill 38.73 (in 1993 s).
• 159 million consumers
• 54 penetration
• 92 digital nationwide networks
• Data Rates up to 500 kbps
• Full Internet Access
• Over 140 million mobile data capable devices

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Spectrum ManagementProcedural and Structural
Reform

• Some ideas for procedural and structural reforms
  to improve efficiency of spectrum allocation
  process
• Develop a rolling long-term spectrum planning
  process.
• Create an independent review mechanism similar
  to the Base Realignment and Closure Commission
  (BRAC).
• Designate an entity to contribute an independent
  voice on difficult sharing/ interference and
  technical decisions.
• Improve U.S. participation in the international
  spectrum process.
• Create a relocation fund from auction proceeds.

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Spectrum Management Reform

• NTIA should encourage more efficient use of
  spectrum by those commercial and Government users
  that are currently not subject to market forces
  or discipline.
• The FCC and NTIA should avoid creation of
  unlicensed spectrum underlays, which could
  create serious interference problems for licensed
  users.
• Any spectrum or network reliability planning
  relating to Homeland Security or public readiness
  needs to be performed at the Federal level to
  ensure an uniform, national response during
  terrorist attacks or natural disasters.

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Issues with Upcoming Blocks of New Spectrum

• Advanced Wireless Service
• Allocation of 90 MHz of spectrum in 1710-1755 MHz
  and 2110-2155 MHz band for advanced wireless
  services.
• Need Spectrum Relocation Bill to be signed into
  law.
• The FCC and NTIA proceeding will need to be
  completed.
• Auction timing?
• MDS/ITFS rebanding
• Decision expected this summer.
• Will create opportunity for secondary market
  purchases.
• Nextwave spectrum
• What service rules apply?
• When will auction be held?
• Reallocated MSS spectrum
• Will it be allocated for CMRS?
• What blocks will be made available and what
  service rules will apply?
• G block controversy- 1910-1915 MHz /1990-1995
  MHz.

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Flexibility Two Perspectives

• PROPERTY RIGHTS MODEL
• Licensees who buy their spectrum at auction
  should be given property-like rights to do
  whatever they like within their assigned
  spectrum, provided they do not interfere with
  other licensees.
• COMMONS MODEL
• License would be subject to efforts by the FCC to
  improve the efficiency of utilization of the
  spectrum by allowing additional flexible uses
  in assigned spectrum.
• Possibly results in additional services allowed
  to be provided in the licensees spectrum.

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A Proposed Framework to Analyze Requests for
Flexibility in the Use of Spectrum

• First, determine whether reallocation of the
  relevant spectrum band is preferable to granting
  the requested flexibility.
• If reallocation is not appropriate, determine
  whether the additional flexible rights can be
  auctioned, subject to appropriate service rules.

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Secondary Markets

• Secondary market mechanisms will help ensure that
  limited spectrum resources are used in the most
  economically efficient manner.
• CTIA supports
• The FCCs proposal to forbear from requiring
  prior approval of certain transfers and
  assignments.
• The FCCs proposal to expand spectrum leasing.

13
Receiver standards

• The FCC should rely primarily on market
  incentives and voluntary industry programs,
  rather than a regulatory regime that would
  subject all receivers to a set of mandatory
  standards.
• The FCC should not impose unnecessary regulation
  where competitive markets and industry
  cooperation have been successful in improving the
  interference immunity of wireless equipment.
• For some spectrum service users whose markets are
  not driven by profit, such as public safety users
  and TV broadcasters, receiver requirements or
  standards might be appropriate.

14
Interference Temperature

• The use of CMRS bands has been highly efficient.
  The systems in CMRS bands are now designed to
  operate down to (and in some cases below) the
  noise floor. Underlay operations in CMRS band
  will cause harmful interference to licensees.
• The introduction of ITemp-based systems in CMRS
  spectrum would adversely affect existing consumer
  services by reducing the coverage available from
  mobile networks, increasing dropped call rates,
  decreasing the voice quality of service, and
  limit data throughputs.
• The record in the ITemp proceeding was
  overwhelmingly opposed to the concept, and most
  commenters emphasized the many unanswered
  questions in the Notice.

15
CMRS and Unlicensed

• CMRS carriers view unlicensed as a compliment to
  but not a substitute for licensed mobile
  offerings.
• Many are building unlicensed into their business
  models.
• Concern with unlicensed underlays (the
  interference temperature model).
• But supportive of unlicensed in separately
  allocated spectrum when demand is demonstrated.

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The Unlicensed Hype is Overdone

• But unlicensed offerings today do not offer
  high-speed access to the Internet, they only
  provide local area hot spot networks.
• They need some other means of connecting to
  internet access.
• Starbucks, for example, needs to buy T-1 access
  lines to offer its hot spots, which affects the
  economics.

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Licensed Services Already Offer Broadband Mobile
Access

• EV-DO already deployed in two cities, many more
  in 2004/2005.
• Speeds comparable to DSL and Cable Modem.
• Rides on existing CMRS infrastructure.
• Other licensed technologies are on the way.

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Licensed Uses Should be a Higher Priority for
Most New Spectrum Allocations than Unlicensed Uses

• Licenses provide certainty of spectrum
  environment needed to stimulate investment and
  innovation.
• Allocations for unlicensed uses are appropriate,
  if demand is demonstrated, and it can be shown
  that there is a greater need for unlicensed than
  licensed uses in the target band.
• Unlicensed underlays, however, raise serious
  technical, economic and practical concerns.

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Economic Concerns with Unlicensed Underlays

• Government-imposed underlay rights perpetuate the
  command-and-control that the FCC has recognized
  as flawed.
• These types of government-imposed rules are not
  technology neutral, and distort innovation and
  investment incentives.
• Regulation generally is not needed to create
  underlay rights and promote efficient use of the
  spectrum.
• From the perspective of consumer welfare and
  economic efficiency, allowing primary users to
  sublicense via secondary markets would be better
  than unlicensed underlays.
• CMRS spectrum is the wrong place to experiment
  with underlay rights.
• Unlicensed underlay devices could cause
  interference to incumbent licensees and would
  prompt uncertainty that would stifle innovation
  and hamper full use of spectrum.

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Spectrum Managers Must Consider Opportunity Costs
of Allocating Spectrum to Unlicensed Instead of
Licensed Operations

• Licensed CMRS offerings have a proven track
  record.
• Unlicensed offerings have an important role, but
  beware the tragedy of the commons potential to
  curb innovation.
• International harmonization enables manufacturers
  to achieve economies of scale, whether for
  licensed or unlicensed, and should guide
  allocations.

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• Questions?
• Diane Cornell
• Vice President, Regulatory Policy
• DCornell_at_CTIA.org
• 202-736-3216