Gated community or RV park?

Oct 1, 2001 12:00 PM, Don Bishop Editorial Director dbishop@primediabusiness.com www.mrtmag.com

Private and commercial radio system operators won't have to wait nearly as long as their counterparts in public safety to put 700MHz spectrum to use.

While public safety representatives continue their work on standards intended to foster interoperability in their 24MHz allocation in the 700MHz band, private and commercial system operators don't have exactly the same concerns. As a result, future 700MHz system operators may find a choice of technologies coming available next year as manufacturers move through the product development and FCC certification process.

Meanwhile, owners of the 700MHz private and commercial radio spectrum are readying their plans for leasing channels in various bandwidths and for various geographic areas for voice and data use. If equipment were available now, some of the spectrum already might be leased and placed in use.

Mark Crosby, president of Access Spectrum, indicated that equipment for point-to-multipoint data communications might be available in as little as five months, with the first two-way radio infrastructure, portable and mobile equipment coming on the market as early as next summer. Crosby outlined Access Spectrum's plans to an audience at the Small Business in Telecommunications “Fall Classic” conference in Nashville, TN, on Sept. 6.

Access Spectrum spent $78 million to purchase 700MHz private and commercial radio spectrum in an FCC auction last year. Two other bidders also made large purchases. Nextel Communications, a nationwide wireless telephone system operator, spent $345 million; and Pegasus, a broadcast and cable TV company, spent $95 million. Only Access Spectrum has made its plans public, so far.

“We're building a gated community,” Crosby said, referring to Access Spectrum's ability to control channel assignments among its spectrum lessees. “You design the lot (bandwidth and geographic coverage) and the building (the chosen technology), and we're going to make sure, because it's in our best interest, that there's no foolishness going on in this band.”

In comparison, Crosby described the VHF and UHF bands as an RV park where system operators may receive interference from other users with overlapping coverage areas and incompatible operating patterns. (See our cover story on page 26 for a more complete 700MHz update, which includes an interview with Crosby.)

Meanwhile, spectrum lease fees have yet to be publicized. One system operator who heard Crosby speak at SBT made a quick calculation based on his understanding of Access Spectrum's operating and interest expenses and figured channels might be leased for $1,000 per month. Crosby said he thought portables would cost no more than $400 to $500.

The system operator said he thought it might be necessary to charge users as much as $50 per month to offset the spectrum lease expense. This compares to the $20 to $35 that operators charge for airtime on VHF and UHF systems in the “RV park.” It begins to approach the average $72 that Nextel now charges for 800MHz service.

Private users and commercial system operators should consider the possibilities for early deployment at 700MHz, especially in areas with pent-up demand.