Subject: [NEXTEL-1] Spectrum Leasing in a Shared Environment - A New Paradigm in Access to Spectrum

From: [email-masked]
Date: Tue, 25 Nov 2003 17:34:23 -0500

Spectrum Leasing in a Shared Environment - A New Paradigm in Access to Spectrum

Jeremy Denton
 Director, Government Affairs
Industrial Telecommunications Association

November 2003

In early October, the Commission released its much-awaited Report and Order
(R&O) outlining new regulations for the development of secondary markets in
wireless radio services and spectrum. Under the new rules, certain licensees
with exclusive service areas are now explicitly permitted to enter into leasing
agreements with third parties “for any amount of spectrum, in any geographic
area, and for any period of time within the scope and term of the license.”

To say that private wireless licensees have a substantial stake in this
proceeding is an understatement. Not only are many
specifically listed as eligible to enter into leasing agreements in the R&O (for
example, SMR and Business/Industrial Land
Transportation licensees at 800 and 900 MHz), the Commission is also seeking
comments about leasing opportunities on shared channels in a Further Notice of
Proposed Rulemaking. Thus, industrial/business licensees below 470 MHz, while
not
eligible under the new R&O, could become eligible in the near future.

At this point, it is unclear why a secondary market for spectrum distribution on
shared channels will be needed when the
primary market, the FCC, remains open for business. On the other hand, the
flexibility promised by the new leasing provisions may simplify the regulatory
environment for certain shared system operations such as community repeaters.

Nevertheless, the Commission has offered the wireless world a new paradigm of
spectrum access that will force incumbent licensees, spectrum seekers, radio
dealers, equipment manufacturers and their respective trade associations to
blend views
of traditional spectrum management principles with contract and real estate law.

So what does this mean in the future for private land mobile spectrum? To assess
the impact, let us first turn to the permissible leasing options established by
the Commission. The “spectrum manager” option requires that a licensee maintain
active control, both legal (de jure) and working control (de facto) over the
license. “De facto transfer” leasing is the second
option, which can be broken down into short-term (less than 360 days) and
long-term options. Under this model, the licensee must retain legal control over
the spectrum and the terms of the lease, but the lessee may assume working
control of the station.
The “spectrum manager” model mitigates the potential for rogue operation by
directly holding the licensee itself accountable
for all aspects of the radio system, including lessee compliance and necessary
interactions with the Commission, such as filing
the required notifications. In addition, the “spectrum manager” option requires
that the lessee be eligible for operations in the
authorized spectrum. “De facto transfer” leasing, on the other hand, does not
offer these limited comforts. In fact, the “de facto transfer” model could lead
to a muddled picture of accountability in shared spectrum since either the
lessee or the lessor,
depending on the agreement, could be responsible for ensuring compliant
operations and for submitting applicable filings to the Commission.

This is not to say that spectrum leasing in secondary markets is less than
beneficial. Indeed, there are benefits to spectrum leasing in the private land
mobile bands, increasing efficiency of spectrum use, gaining additional spectrum
access and opening up new business opportunities.

The drawbacks, however, are uncertainty in bands providing critical
communications; a rise in spectrum speculation; a greater potential for rogue
operation; and a long paper trail to find the final, accountable party. These
are issues, among others, that the Commission must weigh in its upcoming comment
cycle on its Further Notice.

Many issues remain if spectrum leasing in secondary markets is to be seriously
considered on shared channels. One primary issue for private land mobile groups
may be to adopt adequate reporting and coordination conditions (to assess the
local operating environment) that are not so onerous as to create disincentives
to legitimate shared use. In addition, an appropriate balance must be struck
between leasing requirements, use limitations and enforcement capabilities.

While private wireless users could benefit from leasing arrangements, systems
may fall dramatically short of their imperative
reliability levels if the spectrum environment is degraded by congestion or
rogue use. Therefore, sufficient information on the
actual use of the spectrum environment must be provided to the shared land
mobile community, either through the FCC or through industry. Private wireless
operations are simply too important – for the safety of employees and the
public, not to
mention the continued output of our nation’s economic agenda – for our industry
to remain silent on this issue.

Source: http://www.ita-relay.com/magazine/november2003/regUp.pdf

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