October 2, 2018 at 5:00 am ET
By almost all accounts, the United States is involved in a global race for supremacy over the next generation wireless technology, better known as 5G. First-mover nations will gain enormous increases in gross domestic product, productivity, employment and innovation, as well as be able to drive future wireless developments. One factor keeping the United States from firmly establishing its pre-eminent position is the need to have the right mix of wireless bands available to the private sector so they can compete in the global marketplace. Overall success is going to require a wide portfolio of bands to address different capacity and propagation needs.
Thankfully, new rules are coming this month to reform and finalize the 3.5 GHz band, also known as the Citizens Band Radio Service , which is critical mid-band spectrum that complements similar allocations made by the international community.
Dubbed the “innovation” band, CBRS represents a fairly unique attempt to successfully share spectrum between U.S. national security interests, licensed operators and unlicensed offerings. Using dynamic sensor and database technologies that should be ready for full approval in the very near future, the differing systems will exist and operate simultaneously without causing harmful interference to each other. If everything goes according to plan, a good portion of the band will be functionally available in the early part of next year and an auction for the licensed portion can happen by its end — if not sooner.
To ensure that all parties can take advantage of the CBRS band, the commission needs to correct a number of mistakes made in the past. In particular, this means fixing the Priority Access Licenses, or PALs, so they are not artificially slanted to attract interest only from particular users while dissuading others. To address this, I am proposing modifications to the Federal Communications Commission’s CBRS rules to lengthen license terms, modestly increase the geographic license sizes, permit licenses to be renewed, and resolve concerns about certain power emission levels and what information will be publicly available from the approved databases.
Debate over the geographic license size of the PALs has been the most contentious change contemplated to the past rules. While larger providers initially sought extremely large licenses (with some even wanting to redo the entire channel allocation to eliminate unlicensed use), some smaller entities wanted to preserve very small license sizes, allocated by census tracts. In the end, I am proposing to modify our rules to permit county-size licenses with the possibility for combinatorial bidding in the largest markets, which I believe is a well-balanced approach addressing all legitimate concerns. No one is likely to be entirely pleased with this outcome, but it achieves a sound and just result.
Despite my support for the amazing work of small wireless broadband providers (i.e., wireless ISPs), census tract licenses in the CBRS band were ultimately not feasible. First, the FCC has never auctioned that many licenses in its history and actually doesn’t have the capability to do so today. Instead, any auction done by census tracts would be by a one-time, sealed bid mechanism. But simultaneous, multi-round spectrum license auctions have been the hallmark of the FCC’s widely admired auction structure over the last thirty years. Reversing course now would be a monumental error as it would erase price discovery and allow licenses to go on the cheap.
Second, the push for census tracts was not rooted in the desire to serve rural communities, as some would like the public to believe. Instead, it was mostly based in a desire to only serve small slices of large cities, such as industrial parks or ports, or suburban markets. Worse yet, some small providers just wanted to obtain licenses with the hopes of forcing bigger providers to purchase them on the secondary market at inflated prices. Creating government-sanctioned middlemen is not appropriate.
Third, although there is no unanimity among smaller providers, many are supportive of a county-size approach. Consider that many in the cable industry, which has little to no wireless deployments outside of Wi-Fi, believe that counties make the most sense. Additionally, many small WISPs have indicated privately that county license sizes can work for them. And, small and rural mobile providers are also supportive of a county-based approach. For those truly seeking to serve rural America, they will have the opportunity to obtain county-size licenses in desired markets, thereby allowing room to grow their businesses. Additionally, the rules will include both small business and rural bidding credits, giving smaller providers an added boost to stretch their capital further.
Lastly and most importantly, the CBRS spectrum band is going to be the quickest and most appropriate band to initiate mid-band 5G services in the United States. Given its importance to ensure U.S. mobile providers maintain their global superiority and leadership, it is imperative that our auction design not purposefully keep them from participating and winning licenses, as the commission’s current rules would do.
After extensive review spanning over 18 months, I truly believe that the commission’s CBRS rules should be modified as outlined above, allowing all interested parties to focus on winning licenses at the auction while turning policy attention to freeing more spectrum bands for future commercial wireless services. I have recommended this proposal to my colleagues at the Commission, and hope that all will vote to support these reforms to PAL licenses later this month.
Michael O’Rielly is a commissioner of the U.S. Federal Communications Commission.
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