800 MHz: Rebanding Tips The 800 MHz land mobile band soon

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1 TELECOM ADVISORY May 2005, Issue No. 41 Keller and Heckman LLP Serving Business through Law and Science 800 MHz: Rebanding Tips The 800 MHz land mobile band soon will be undergoing extensive reconfiguration in an effort to resolve interference problems that have been plaguing public safety systems in the band. As a result, many existing licensees will be required to retune their systems to alternative channel assignments in the 800 MHz band. In some regions of the country, the rebanding process will begin next month, and rebanding is to be completed in all regions by June All retuning expenses are to be paid by Nextel Communications, Inc. (Nextel). Such expenses may include internal labor costs, as well as reasonable legal, engineering, and consulting fees. During the course of established voluntary and mandatory negotiation periods, licensees will be expected to negotiate retuning agreements with Nextel that specify the terms governing the retuning of their systems. The Federal Communications Commission has appointed the BearingPoint Team as the independent third-party Transition Administrator (TA) responsible for overseeing the administrative and financial aspects of band reconfiguration and resolving any disputes that may arise. The TA recently issued a Reconfiguration Handbook that provides useful information for 800 MHz licensees that are subject to retuning. The following are a few important points for incumbent licensees to bear in mind: activities as the documenting of equipment and infrastructure, evaluating potential replacement frequencies, seeking legal advice for negotiations, and preparing a retuning Cost Estimate. The TA will be notifying licensees of their proposed replacement frequencies, including information regarding any co-channel licensees within a 70-mile radius. Licensees have a right to review these frequencies for comparability with their existing frequencies and to request alternative frequencies if necessary to ensure comparability. It is recommended that licensees obtain approval from Nextel and the TA before incurring any retuningrelated costs for which they intend to seek reimbursement. Licensees also should seek advance approval of any costs that exceed what has been authorized in a prior Cost In this Issue... Estimate. In their Cost Estimates, licensees will be required to certify that the estimate constitutes the least possible cost for retuning (i.e., no upgrades or other unnecessary expenditures are included). Licensees of large and complex systems may conclude the retuning process with a formal acceptance test to validate operations on the new frequencies. Provisions to allow such acceptance testing should be included in the retuning agreement with Nextel. Keller and Heckman LLP has been involved in the FCC s 800 MHz proceeding since its onset and is available to assist licensees in negotiating retuning agreements with Nextel and with other aspects of the rebanding process. For additional information, please contact Wayne Black at (202) or black@khlaw.com or Nicole Donath at (202) or donath@khlaw.com. 800 MHz: Rebanding Tips...1 Auction Proposed For 900 MHz White Space...2 New 3.6 GHz Band Allocation: A Hybrid Regulatory Approach...3 Supreme Court to Decide Brand X Case...3 Spectrum Opportunities For WiMAX Technology...4 Beginning 75 days before the start of the voluntary negotiation period, licensees may submit a Request for Planning Funding to Nextel to cover such planning FCC Amends Rules to Promote Smart Radios...5 Has the FCC Cooled on Interference Temperature?...5

2 KELLER AND HECKMAN LLP 2 For more than 40 years, Keller and Heckman LLP has represented electric utilities, oil and gas companies, commercial wireless radio operators, common carriers, satellite service providers, equipment manufacturers and a host of other clients before the Federal Communications Commission. On behalf of our telecommunications clients, we file applications for radio station authorizations, participate in rulemaking proceedings, request rule waivers, provide engineering support, structure business and transactional arrangements (including telecommunications system acquisitions and divestitures), prepare communications asset valuations and otherwise offer a broad range of assistance related to FCC requirements. For further information regarding our telecommunications capabilities, please visit our website at or contact one of our partners listed below. Wayne V. Black black@khlaw.com Martin W. Bercovici bercovici@khlaw.com Michael F. Morrone morrone@khlaw.com Jack Richards richards@khlaw.com C. Douglas Jarrett jarrett@khlaw.com David Reader reader@khlaw.com Auction Proposed For 900 MHz White Space In a Notice of Proposed Rulemaking (NPRM) released in February 2005, the Federal Communications Commission proposed a shift in the licensing paradigm for the 900 MHz band. The new rules would provide additional flexibility for the use of the 199 channels allocated to the Business and Industrial Land Transportation (B/ILT) Pools in the / MHz band. The agency has proposed to auction the remaining white space in that band via geographic area. Licensees of the auctioned 900 MHz white space would be permitted broad flexibility for use of this spectrum. The FCC does not anticipate placing any eligibility restrictions on the auctioned channel blocks, which would consist of 19 blocks of 10 contiguous channels and one block of 9 contiguous channels. The Commission also proposed to conduct a two-sided auction in which incumbent site-by-site licensees would have the option of: (1) continuing their current site-by-site operations and receiving protection from auction winners; (2) bidding at auction for the geographic area overlay surrounding their existing systems; or (3) returning their site-by-site licenses in exchange for means to obtain comparable spectrum access (i.e., selling their existing licenses). Because auction winners would be afforded substantial flexibility to provide a broad range of services in the 900 MHz overlay spectrum, ensuring the protection of incumbent systems must be carefully considered. The Commission has proposed that incumbent B/ILT licensees would be provided the same interference protection as that currently afforded to incumbents by 900 MHz Specialized Mobile Radio Service (SMR) providers. The existing service area of an incumbent B/ILT system will be based on the originally-licensed 40 dbµv/m field strength contour. Geographic area licensees would be subject to emission and field strength limits as a protection against adjacent channels licensees. Licensees of the auctioned 900 MHz white space would be permitted broad flexibility for use of this spectrum. In its proceeding to reconfigure the 800 MHz band, the Commission consolidated the B/ILT Pools in that band. The FCC also decided in that proceeding to consolidate the B/ILT channels in the 900 MHz land mobile band and to permit those licensees to initiate Commercial Mobile Radio Service (CMRS) operations on currently-authorized channels or assign their licenses to other parties for CMRS use. Comments in response to the Commission s proposals for the 900 MHz band must be filed by May 18, 2005 and reply comments are due by June 2, The FCC also has affirmed its filing freeze on applications for new 900 MHz authority, which will remain in effect until further notice. Incumbent licensees may modify existing systems. The agency will continue to process those applications for new 900 MHz authority that were filed prior to the implementation of the freeze in September 2004.

3 KELLER AND HECKMAN LLP 3 New 3.6 GHz Band Allocation: A Hybrid Regulatory Approach In an Order released in March 2005, the Federal Communications Commission adopted a hybrid regulatory approach for the MHz (3.6 GHz) spectrum band that incorporates elements of both licensed and unlicensed models. Under this approach, the spectrum will be made available for licensing for terrestrial fixed and mobile operations on a non-exclusive, non-auctioned basis. One potential use for this spectrum is to meet the needs of wireless internet service providers (WISPs) for additional spectrum to bring broadband services to consumers. The 3.6 GHz band was transferred in recent years from primarily government use to primarily non-government use. Existing (grandfathered) operations in the band include a number of Fixed Satellite Service (FSS) licensees and three Federal Government radiolocation sites. The initial filing date for new 3.6 GHz band licenses, as well as filing instructions, will be announced in a future FCC Public Notice. There will be no limit on the number of licenses that can be granted, and each licensee will be authorized to operate on a shared basis with other licensees on all 50 megahertz of spectrum. Licensees will be permitted to designate their regulatory status as either common carrier or Supreme Court to Decide Brand X Case The much-discussed Brand X case, recently heard by the Supreme Court, has the potential to shape the future of the Internet and determine whether cable modem providers and others, including perhaps Broadband over Power Line (BPL) providers, must open their systems to competing ISPs. For pole attachment purposes, the ruling will determine whether utility pole non-common carrier and may provide all allowable services consistent with their regulatory status. Initial licenses will be granted for a 10-year license term, and no performance or build-out requirements will be imposed. Licensees will be expected to cooperate in avoiding harmful interference to one another and eliminating any interference that does occur. An important feature of the new rules is that, in order to facilitate interference avoidance and resolution, licensees will be required to register their operating location and other information regarding their fixed and base stations in a common database. Parties seeking to register a new station will be expected to examine the database and make every effort to ensure that their station operates in a manner that would minimize the potential for interference to and from other stations. However, there will owners may charge cable operators higher pole attachment rates for attachments that are used for both cable television and cable modem services. In 2003, the U.S. Court of Appeals for the Ninth Circuit held that the transmission component of cable broadband service is a telecommunications service. That ruling contradicted the be no priority for first in users with regard to interference protection, and licensees will be expected to cooperate in avoiding harmful interference to one another and eliminating any interference that does occur. The Commission s new rules impose various technical restrictions on 3.6 GHz band licensees. For instance, new fixed stations will be subject to a peak power limit of 25 Watts per 25 megahertz bandwidth, and mobile stations will be subject to a peak power limit of 1 Watt per 25 megahertz bandwidth. Further, all fixed, base and mobile equipment designed for use in the 3.6 GHz band must incorporate some type of contention-based protocol to address what happens when two or more transmitters seek access to the same channel and to establish rules for allowing other transmitters to operate. Certain rules also have been adopted in order to protect the grandfathered FSS earth stations and government radiolocation sites, as well as Canadian and Mexican stations that are located near the U.S. borders. It remains to be seen whether the novel approach adopted by the Commission will prove effective in terms of interference management and spectrum utility. Federal Communications Commission s earlier determination that cable modem service is merely an information service. Information services are lightly regulated under Title I of the Communications Act, but telecommunications service providers must comply with numerous regulations under Title II, including a requirement to provide (continued on page 4)

4 KELLER AND HECKMAN LLP 4 Supreme Court to Decide Brand X Case (continued from page 3) nondiscriminatory open access. With respect to pole attachments, cable operators offering cable modem services are currently eligible for the cable-only attachment rate, but would have to pay the much higher telecom rate if cable modem service were deemed to be telecommunications. In reaching its decision, the Ninth Circuit disregarded the earlier FCC ruling, and instead relied on its own precedent which predated the FCC ruling. The cable industry and the FCC argued that disregarding the FCC ruling violates the Chevron doctrine, which requires courts to give deference to the opinions of an expert agency if a statute is not clear on its face. Tom Magee of Keller and Heckman LLP attended the oral argument before the Supreme Court. Much of the argument focused on whether the Communications Act was clear on its face. The Court seemed considerably skeptical about the FCC s ruling that bundling data service with telecommunications somehow eliminated the telecom feature of the service. Justice Scalia grilled the Commission about whether its decision to regulate cable modem and DSL services as information services was driven by policy rather than an objective interpretation of the statute. The attorney for Brand X, on the other hand, argued without interruption that the Communications Act is clear on its face that cable modem service includes a telecommunications component. A decision from the Court is expected this summer. The Court may decide the matter on its merits or it may remand the case to the Ninth Circuit with instructions to defer to the FCC. If the Court acts to uphold the Ninth Circuit s decision, we expect the FCC to exercise its forbearance authority and decline to impose full Title II regulation. Even if the Commission should forbear, however, nothing would appear capable of stopping utility pole owners from charging higher telecom attachment rates to cable operators providing cable modem service. Whatever the result, we expect that those parties unsatisfied with the Brand X decision will promptly seek a legislative fix on Capitol Hill. Spectrum Opportunities For WiMAX Technology As WiMAX technology continues its march towards standardization and commercial deployment, spectrum availability is a critical issue facing organizations that are considering using the technology. Because of its broad operating range, licensed and unlicensed spectrum options for WiMAX technology are extensive. As organizations consider any WiMAX deployment, they will need to analyze the availability and suitability of spectrum resources. For entities providing wireless communications services, two sources of spectrum are available: (1) licensed spectrum; and (2) unlicensed spectrum. Licensed spectrum requires an authorization from the FCC, which offers that individual user or Licensee the exclusive rights to operate on a specific frequency (or frequencies) at a particular In 2003, the U.S. Court of Appeals for the Ninth Circuit held that the transmission component of cable broadband service is a telecommunications service. location or within a defined geographic area. In contrast, unlicensed spectrum permits any user to access specific frequencies within any geographic area inside the United States without prior Commission authorization. But users of unlicensed spectrum must not cause interference to licensed users and must accept any interference they receive. In addition, equipment utilized on unlicensed spectrum must be approved in advance by the FCC. The WiMAX Forum the main advocacy group for WiMAX technology is focusing its efforts on three spectrum bands for domestic deployment: 5 GHz; 3.5 GHz; and 2.5 GHz. Each of these bands is briefly discussed below. Unlicensed 5 GHz: This frequency range includes bands between 5.25 and 5.85 GHz. In the upper 5 GHz band ( GHz), many countries allow higher power output which makes this band more attractive to WiMAX applications globally. Because much of this spectrum is unlicensed in the United States, it is readily available for WiMAX deployment without individual FCC licensing. Licensed 3.5 GHz: Bands between 3.4 and 3.6 GHz have been allocated for Broadband Wireless Access (BWA) in the majority of countries, with the exception of the United States. In the United States, this spectrum is designated for use by the Federal Government. The FCC also recently adopted a hybrid regulatory approach for the (continued on page 5)

5 5 KELLER AND HECKMAN LLP Spectrum Opportunities For WiMAX Technology (continued from page 4) MHz (3.6 GHz) spectrum band that incorporates elements of both licensed and unlicensed models. This band also presents WiMAX deployment opportunities (See New 3.6 GHz Band Allocation: A Hybrid Regulatory Approach in this edition of the K&H Telecom Advisory ). Earlier this year, the Federal Communications Commission modified and clarified some of its rules in order to facilitate the development of cognitive and software defined radios. It is hoped that the growth in deployment of such radios will foster spectrum efficiency by making possible the improved use of vacant spectrum channels. Radios using smart or cognitive technologies have adaptive awareness capabilities, which enable them to adapt their use of spectrum in response to information external to the radio; they are able to perform such functions as, for example: making location-based modifications; sensing spectrum use by nearby users; engaging in dynamic frequency selection; adjusting power output; and employing enhanced security features. Software defined radios (SDRs) are devices in which software changes can control such operating parameters as frequency range, modulation type, and output power. Under the leadership of (now former) Chairman Michael Powell, the Federal Communications Commission s Spectrum Policy Task Force considered various measures to improve spectrum management and optimize spectrum use. One such measure entails the use of an Licensed 2.5 GHz: In the United States, this spectrum has been licensed for use in the Educational Broadband Service (EBS) and the Broadband Radio Service (BRS). Recently, this particular spectrum band has received a great deal of attention as a result of the proposed merger between Nextel Communications, Inc. and Sprint Corporation. If the merger is approved by the FCC, much of this The following are some of the rule changes recently adopted by the Commission to promote smart radios and SDRs: To facilitate the equipment certification process, the Commission has eliminated the requirement that SDR manufacturers supply radio software source code to the Commission upon request. Instead, manufacturers will be required to provide a high level operational description of the radio software that controls the radio s operating characteristics. Manufacturers will be permitted to market radios that have the hardware-based capability to transmit outside of authorized United States frequency bands, provided that they have software controls to limit operation to authorized frequency bands when the radios are used in the United States. interference temperature approach in order to avoid or minimize instances of harmful interference among spectrum users. The management of interference, under such an approach, involves the setting of a maximum cap on the cumulative RF energy that may be spectrum would be held by the merged entity. Because much of the 3.5 GHz spectrum within the United States is occupied by the Federal Government, the unlicensed 5 GHz and licensed 2.5 GHz bands appear to be the most viable options for WiMAX deployment in the United States. The recently established 3.6 GHz spectrum band also offers potential deployment opportunities. FCC Amends Rules to Promote Smart Radios The Commission modified its rules to ensure that radios with software that can be or is expected to be modified by a party other than the manufacturer have reasonable security measures to prevent unauthorized modifications. The FCC s decision also described certain types of technical mechanisms that cognitive radios may employ in order to allow secondary use of spectrum by lessees, while enabling the spectrum to revert back to the primary licensee when necessary. The Commission concluded that measures for allowing such interruptible spectrum use are technically feasible, but it decided not to adopt any particular technical model at this time. The new rules regarding cognitive radios and SDRs will go into effect on August 2, Has the FCC Cooled on Interference Temperature? transmitted by all spectrum-based devices located within a particular geographic area. Currently, interference management typically focuses on specifying and limiting the transmit powers of individual radiating devices. (continued on page 6)

6 6 KELLER AND HECKMAN LLP Has the FCC Cooled on Interference Temperature? (continued from page 5) Following up on the efforts of the Spectrum Policy Task Force, the Commission (still led by Chairman Powell) initiated a proceeding in November 2003 to consider issues relating to the interference temperature model. The FCC discussed three possible implementing approaches: (1) the measurement of interference temperatures and the processing of information within individual transmitting devices; (2) the aggregation of interference temperature measurements at a central site; or (3) the use of a grid of monitoring stations to determine interference temperatures. Moreover, to test the basic concept of interference temperature, the FCC proposed to apply it to allow new unlicensed operations in portions of the 6 GHz and 12/13 GHz bands that are currently occupied by Fixed Service and Fixed Satellite Service licensees. Many parties, in their subsequent comments to the Commission, expressed skepticism as to the feasibility of the interference temperature approach and noted concerns about potential interference to licensed services. Nevertheless, Chairman Powell reportedly remained committed to its implementation, and the Commission was expected to take further action in its interference temperature proceeding during the first half of this year. It now appears, however, that in light of Chairman Powell s departure from the Commission in March 2005 and other changes in high level FCC personnel -- there may be reduced support at the Commission for the interference temperature concept. As a result, no imminent FCC action is expected on this matter, and it is quite possible that none will be forthcoming in the foreseeable future. Telecom Advisory is distributed free of charge and published by the law offices of Keller and Heckman LLP, 1001 G Street, N.W., Washington, D.C Copyright All rights reserved. Articles are on topics of general interest and do not constitute legal advice for particularized facts. Individual articles may be copied in their entirety with attribution. For other requests or further information, please contact Traci Mott at or by at mott@khlaw.com. TELECOM ADVISORY KELLER AND HECKMAN LLP Serving Business through Law and Science LAW OFFICES Washington 1001 G Street, N.W. Washington, D.C Brussels 25 Rue Blanche B-1060 Brussels 32(2) San Francisco 50 California Street, Suite 1500 San Francisco, CA Shanghai 300 Huaihai Zhong Road 47th Floor Shanghai China FIRST-CLASS MAIL U.S. POSTAGE PAID Washington, DC PERMIT NO. 1547