I had the unique opportunity to interview two former FCC heavyweights who now represent two warring factions over the FCC's interest in pursuing an auction of a nationwide license in the 2155-2180 MHz band that would require the winning bidder to open up 25 percent of its network for free broadband access.
Both Kathleen Ham, T-Mobile's vice president of regulatory affairs, and John Muleta, CEO and co-founder of M2Z, worked for the FCC's Wireless Telecommunications Bureau in the past. Muleta was head of the bureau in 2003 and 2005. Now both are butting heads over the FCC's interest in auctioning the AWS-3 band. M2Z , which originally proposed this free broadband wireless deal, is poised to bid on the spectrum, while T-Mobile has been fighting such a move, citing interference concerns.
T-Mobile has been making the rounds this week, meeting with commissioners before their Dec. 18 vote on the auction, trying to convince them to change the proposed rules to one that would avoid potential interference problems and offer better broadband throughput.
T-Mobile wants the 20 MHz AWS-3 band paired with the 10 MHz J block to create a single asymmetric license that it says would support downstream bit rates of about 35 Mbps per sector and upstream bit rates of about 4 Mbps per sector. T-Mobile says this plan will avoid harmful interference. An earlier FCC engineering report concluded that opening up the AWS-3 spectrum in a single national license would not cause interference to T-Mobile AWS-1 spectrum, which the company has vehemently disagreed with.
"We think [the plan] is superior, uses 100 percent of the spectrum, avoids interference, provides broader capability and is supported by the record of substantially by a number of parties," Ham said.
Muleta believes T-Mobile's latest move is another attempt to delay the proceeding, which has already been delayed from August when T-Mobile argued more time should be given to assess the potential interference problems. "We don't understand what the big deal is. There is nothing that would prevent a licensee from doing asymmetric pairing with any other band. Why J block? It should be the licensee's call." M2Z has argued that asymmetric pairing pairing forecloses the use of Time Division Duplexing (TDD) and requires the use of less spectrally efficient Frequency Division Duplexing (FDD).
That is just the latest issue raised in this entire AWS-3 auction debate, which has been raging throughout much of 2008. One thing seems clear: T-Mobile would benefit from the issue being delayed and taken up by a new commission that will come in under President-elect Barack Obama's administration, while M2Z's best interests are having the commission rule on the issue this month as Chairman Kevin Martin is keen on bridging the digital divide with this type of plan.
It has been well-understood Martin wants to tackle some big issues before he leaves the commission. Bringing broadband to the have-nots has been a major priority. Some have accused the Chairman as being in legacy mode with his eagerness to push some unique rulings to usher in broadband. White-space device approval is another example.
Ham has plenty of complaints toward the FCC's Office of Engineering, which flew out to Seattle to replicate tests T-Mobile had done to determine how severely the AWS-3 band interferes with its AWS-1 licenses.
"One thing I would say is that we had a lot of faith when the FCC came to Seattle that there would be an opportunity there for them to balance the various competing interests in a way we would think could result in a good compromise--not 100 percent of what we wanted but better than what has been proposed," Ham said. "What surprised our engineers was the FCC's report was so one-sided and did not appear balanced. It could have just as well been written before testing. I think is what concerns our engineers that there really wasn't any overall balance that we would have liked to have seen."
But Martin however, points out that interference safeguards for the AWS-3 band are stricter than those approved for 700 MHz services. And Muleta argues that the whole debate comes down to T-Mobile's desire to stifle competition. To which Ham said: "The notion is T-Mobile is concerned about competition but competition from AT&T, Verizon and Sprint, and that's why spectrum so important to us, the spectrum we paid $4.2 billion two years ago."
Both Ham and Muleta were coy about what their companies' next moves would be if either interests were defeated on Dec. 18. Ham said T-Mobile has the option to seek a reconsideration with the new commission that comes in under Obama's administration or file a lawsuit. Muleta said M2Z would assess its option at the right time.
"We believe in the rule of law. The commissioners have to do their job at all times ... If the FCC wants to deny American people access to affordable communications because of a German carrier's desire to continue monopoly then so be it," Muleta said.--Lynnette [1]
Links:
[1] mailto:lluna@fiercemarkets.com