11.29.2012 04:31 PM
FCC Spectrum Screen Should Consider Frequency Characteristics, PK Says
Carnegie professor notes demand is related to infrastructure cost
WASHINGTON--Not all spectrum is creatively equal, Prof. Jon M. Peha of Carnegie Mellon University notes in comments on the Federal Communications Commission’s proposal to overhaul its spectrum screen.

“Radio transmissions at different frequencies have different physical properties, and no man-made law or regulation can change this,” Peha said.

Peha urged the commission to factor frequency characteristics into its spectrum license approval process, which now consists of a two-part spectrum screen. The first is an analysis of post-transaction market concentration using the Herfindahl-Hirschman Index—the sum of squares of all providers’ subscriber market shares. The second is an examination of the amount of spectrum available for wireless services in the affected market. The commission has reviewed wireless spectrum transactions on a case-by-base basis using the screen since 2003.

The procedure has since come under fire. Verizon Wireless criticized the commission for excluding spectrum bands suitable for wireless, but not yet deployed.  AT&T said the screen was applied unpredictably. Sprint Nextel argues that it values all spectrum equally, “regardless of whether it lies within more valuable ‘beachfront’ bands or in higher-frequency bands of limited commercial use.”

Peha argues likewise.

“It has become common place in discussions of spectrum-related issues to confuse the amount of spectrum a carrier has with the amount of data that carrier’s network can carry or the number of people that a carrier can serve,” he said. “More capacity and more spectrum are not the same thing.”

He goes on to observe that “the alleged equivalence of bandwidth and capacity makes even less sense for cellular systems… One cellular system with 20 MHz of spectrum can easily have a much greater data-carrying capacity than another competitor that also has 20 MHz, or even one that has 40 MHz. It is literally the defining principle of a cellular system that the system is made up of cells, and capacity can be increased with no additional bandwidth simply by deploying more cells. The issue is cost; adding a cell may mean spending a half million dollars on a new cell tower.”

Wireless carriers therefore want more spectrum, “not because bandwidth equals capacity, but because a carrier can generally meet its customers’ needs at lower infrastructure cost if the carrier gets more bandwidth,” Peha said. “It is this relationship to cost that should be the basis of a spectrum screen.”

Peha, is a professor at Carnegie Mellon’s Departments of Electrical & Computer Engineering and of Engineering & Public Policy. He is a former chief technologist of the FCC. His comments were filed on behalf of Public Knowledge, a public-interest lobby in Washington, D.C. Public Knowledge has argued that the “assumptions underlying the method used to calculate the spectrum screen have proven unreliable,” according to the FCC’s Notice of Proposed Rulemaking.
 
“It is difficult to conduct spectrum policy at the FCC without first knowing how useful different bands of spectrum actually are,” John Bergmayer, senior staff attorney at Public Knowledge, said. “It is easier to use certain frequencies of spectrum to provide service than others.
 
“In general, a carrier can compensate for less-valuable spectrum by building more infrastructure. Thus, Public Knowledge argues for an approach that looks at the relationship between the physical properties of spectrum and infrastructure costs in rural, suburban, and urban markets, which each have their own characteristics.”

The spectrum screen NPRM Docket No. is 12-269. Comments are due Dec. 24, 2012. Replies are due Jan. 23, 2012.
 
~ Deborah D. McAdams

 



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