Tuesday, December 2, 2008

Spectrum Aggregation: Adjudication or Rulemaking?

Over the summer, a petition was filed at the FCC asking the Commission to impose an absolute limit of 110 MHz on the amount of spectrum a company could hold in any given county. The petition argues that a spectrum cap is necessary to prevent service providers from impeding competition.

As WCAI noted in its pleading on this issue, “there is no question that the Commission should continue to guard against spectrum aggregations that harm the public interest.” But the Commission already has that power – and exercises it on a case-by-case basis during review of transactions and auctions. The only question is whether the Commission should abandon its current flexibility to analyze spectrum aggregation concerns on a case-by-case basis in favor of the inflexible, hard spectrum cap proposed in the petition.

The primary problem with a hard spectrum cap established by rule is the inability to rapidly adapt it to market and technology changes. As WCAI notes in its pleading:

“In this evolving, nascent mobile wireless broadband environment, the flexibility provided by case-by-case review remains the best way for the Commission to promote competition, minimize barriers to deployment, and encourage additional investment in wireless broadband infrastructure. The Commission must preserve its ability to respond to rapid changes as they occur, rather than attempt to accurately predict them in advance . . . .”

I couldn’t say it better.

So, how rapidly is the mobile wireless broadband environment evolving? Fast. Since just 2006, the Commission has made additional wireless broadband spectrum available in the AWS-1 band, BRS/EBS band, 700 MHz band, 5 GHz band, 3650 MHz band, and the DTV white spaces. T-Mobile began using Wi-Fi VOIP, Apple released the iPhone, and 3G/4G services have been deployed on a wide scale. And a new, nationwide competitor has emerged.

While a spectrum cap may have been appropriate in the pre-broadband era, when mobile wireless services were limited almost exclusively to narrowband voice and the technologies and amount of available spectrum for such services were relatively static, it is poorly suited for the rapidly evolving broadband wireless marketplace that exists today.

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