Subject: [NEXTEL-1] THE “CONSENSUS PLAN” SPECTRUM GRANT PROPOSAL VIOLATES WELL-ESTABLISHED LICENSING POLICY AND QUALIFIES NEITHER AS A “CHANNEL SWAP” NOR AS A “LICENSE MODIFICATION”

From: [email-masked]
Date: Fri, 05 Dec 2003 14:32:03 -0500

THE “CONSENSUS PLAN” SPECTRUM GRANT PROPOSAL VIOLATES
WELL-ESTABLISHED LICENSING POLICY AND QUALIFIES NEITHER AS A
“CHANNEL SWAP” NOR AS A “LICENSE MODIFICATION”

A crucial element of the so-called “Consensus Plan” is its proposal that the
Commission bypass its normal competitive bidding procedures and grant to Nextel
Communications Inc. an exclusive nationwide license covering 10 MHz of spectrum
in the 1.9 GHz band (1910-1915/1990-1995 MHz). Although the Commission’s
proceeding is aimed at eliminating the problem of interference to public safety
radio systems in the 800 MHz band, proponents of the “Consensus Plan” claim that
this exclusive assignment of 1.9 GHz spectrum to Nextel is needed to allow
Nextel to “be made whole” for relinquishing spectrum in the 700, 800 and 900 MHz
bands.1 They also argue that this spectrum grant can be justified legally either
as a “channel swap” or as a “license modification.”2 As shown below, however,
this aspect of the “Consensus Plan” would significantly depart from Commission
precedent and is unsupported in law or policy. In particular, it would:

• violate the well-established policies underlying Section 309(j) of the
Communications Act and would circumvent the Commission’s standard license
assignment process;
• not qualify under the applicable law as either a channel swap or a license
modification; and
• require the Commission either to improperly ignore its statutory obligations
or to illegally use its Section 316 authority to “trump” its Section 309(j)
obligations.

The “Consensus Plan” proposal would sidestep the normal competitive bidding
rules and procedures in order to substantially improve Nextel’s spectrum
holdings without Nextel having to face competition for the licenses. The
Commission should not allow its public safety interference proceeding to be used
in this way.

I. Giving Away 10 MHz of Spectrum in the 1.9 GHz Band Would Violate the Policies
Underlying the Auction Statute and Deviate from Standard Commission Practice.

Congress amended the Communications Act in 1993 to authorize that the Commission
use competitive bidding to award licenses for commercial services.3 In 1997, the
Act was strengthened to require auctions whenever mutually exclusive
applications for the same spectrum are filed.4 Only very limited exceptions to
this policy exist for public safety and satellite services, and certain
broadcast licenses,5 and this is for good reason.

1 See Reply Comments of the Consensus Parties, WT Docket No. 02-55, August 7,
2002, at p. 18.
2 See Reply Comments of Nextel Communications Inc., WT Docket No. 02-55, August
7, 2002, at pp. 61-68. It is particularly galling that, as a vehicle to enhance
its spectrum holdings, Nextel is using the Commission’s effort to solve the
problem of interference to public safety radio systems – a problem caused
primarily by Nextel’s own operations.

3 See Omnibus Budget Reconciliation Act of 1993, Pub. L. 103-66, 107 Stat. 312
(1993) (adding Section 309(j) to the Communications Act).
4 See Balanced Budget Act of 1997, Pub. L. 105-33, 111 Stat. 251 (1997).
5 See 47 U.S.C. § 309(j)(2); see also 47 U.S.C. § 765.

Since the enactment of Section 309(j) in 1993, the Commission has codified
general auction rules in Subpart Q of Part 1 of its rules, and has successfully
used competitive bidding to award spectrum licenses for terrestrial commercial
uses, adhering faithfully to the bedrock principle of auction policy – that
awarding licenses to those who value them most highly will encourage growth and
competition, result in the rapid deployment of new technologies and services,
and promote efficient spectrum use.6 Time and again, the Commission has
allocated spectrum for new wireless services, adopted service and licensing
rules that include specification of the size of the geographic areas to be
licensed and the rules to govern competitive bidding, and then proceeded to
auction.

The standard licensing assignment process is already underway with respect to
the 10 MHz of spectrum coveted by Nextel. Recognizing that the demand for
spectrum for advanced wireless services exceeds the currently available supply,
the Commission has reallocated some spectrum to fixed and mobile uses from other
uses and has proposed other similar reallocations. The 1990-1995 MHz band
already has been reallocated for advanced wireless services, and the Commission
has initiated a rule making proceeding to determine whether the 5 MHz block at
1910-1915 MHz (now designated for unlicensed PCS) should be re-designated for
new advanced wireless services.

The “Consensus Plan” proposes that the Commission deviate from its standard
license assignment process and give Nextel – without any competitive process
whatsoever – an exclusive nationwide license to operate on 10 MHz of prime
commercial wireless spectrum immediately adjacent to the C Block PCS band. There
is, however, no reason for the Commission to make this exception to its standard
procedures. The record makes clear that, instead of making Nextel “whole,” the
requested assignment would constitute a multibillion dollar benefit for Nextel.8

Equally important, the proposed spectrum grant to Nextel would be inconsistent
with policies that have served our nation well. As Chairman Michael Powell
recently pointed out to Congress in opposing another company’s attempt to secure
legislation that would enable it to avoid the Commission’s usual competitive
bidding processes:

[I]ssuing a license for free deprives the taxpayers of the revenue they would
receive if auctioned instead. Congress’s determination that an auction is the
best licensing method not only to ensure that the public receives maximum value
of the spectrum, but also to decide which party would put the spectrum to its
best use, has proven correct

* * * * * * * * * *

Full Document:

http://gullfoss2.fcc.gov/prod/ecfs/retrieve.cgi?native_or_pdf=pdf&id_document=6515292106

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