What D Block legislation means for business, industrial licensees

Do you hear the drum roll? I’m not sure how long it will last, but when it ends, the FCC will issue for the public’s consumption a series of critical notices and proposed rule-makings that will implement the Middle Class Tax Relief and Job Creation Act of 2012. We all know what the legislation provided. The public-safety industry — after a substantial united effort — was rewarded with 10 MHz of once-commercial 700 MHz spectrum (the infamous D Block) to marry with its existing 10 MHz of 700 MHz spectrum to create a 20 MHz block of spectrum for a national broadband interoperable network to be managed by NTIA. Fittingly, it will be called the First Responder Network Authority, or simply FirstNet. I must admit, that has a nice ring to it.

Of course, even public safety cannot live on spectrum alone, so funding to the tune of $7 billion also was provided. When the government decided to dole out that kind of money, you just knew that responsibility for FirstNet would remain under the auspices of the federal government. Some say that it’s nowhere near enough money to plan, develop, build, operate and maintain such a colossal undertaking, but there’s no benefit to rain on anyone’s parade at the moment — and why would you? It’s still early, and if more money is necessary in a couple of years, I’m sure that there will be ways to identify additional funding, even another $20 billion or so, to realize the full objective.

And the legislation provided the FCC with a very powerful new spectrum management tool — incentive auctions. I wouldn’t underestimate what this means to the future of national spectrum management.

The spectrum world was turned upside down in 1993 when the FCC first was granted permission to conduct auctions as a means of assigning (and allocating) spectrum. After 20 years, if the FCC knows how to do anything right, it’s how to conduct an auction. But auctions up to this point have been totally voluntary. One is not obligated to play. With incentive auctions, however, the FCC may now target specific spectrum real estate where incumbents would be hard-pressed not to participate.

The initial target is the TV broadcast bands in order to repurpose the best spectrum available for broadband purposes. TV bands today, who knows where tomorrow. And if you think they will be taking their time, think again. Chairman Julius Genachowski already has appointed an Incentive Auction Task Force to define the necessary rules and regulations for incentive auction processes and has appointed the very capable Ruth Milkman at its helm. You may remember that Milkman had a crucial role in the FCC task force that was chartered to prepare the National Broadband Plan. This new task force also will have at its disposal a cadre of leading economic- and auction-theory experts to help in the design and implementation of incentive auctions.

The legislation also repurposed public safety’s use of the 470-512 MHz band (known as T-Band since 1972), which ultimately will be auctioned for commercial purposes to help balance the financial consequences of donating 10 MHz of 700 MHz spectrum for FirstNet. Nothing worthwhile is free of charge. Other than knowing that the legislative provisions speak only of public safety being obligated to vacate its use of T-Band within nine years — with perhaps a two-year cushion to auction what is being vacated to help pay for the transition — we know little else. There have been a number of articles written already. Some are good (see Alan Tilles’ column in the March issue of Urgent Communications); others seem to be guessing a bit both about what T-Band is today and what impact the legislation will have tomorrow. For the record, there are 11 affected cities, not 13; not all T-Band equipment can be reprogrammed to operate in the 450-470 MHz band (let’s just say that it’s not a slam dunk, as it depends on the equipment model and manufacturer); and business/industrial entities are all primary users of this spectrum.

I have heard industry experts report that the legislative authors knew all about the substantial presence of business/industrial licensees when they crafted the provisions, but didn’t quite know how to address them when extracting a public-safety pound of flesh in exchange for the D Block. I also have heard that the authors were shocked to learn that there were licensees occupying T-Band other than public-safety entities. I tend to believe the former. One thing that’s for sure is that the FCC had no advance warning about this part of the legislation; it was a last-minute compromise between public safety and Congress that the FCC now will need to sort out.

For business/industrial and public-safety licensees, all we can really do is wait to see how the FCC plans to transition the public-safety incumbents and what its plans are for the business/industrial users who, perhaps inconveniently to some, occupy a substantial portion of the 470-512 MHz band. Readers should know that the EWA will be an active participant in any and all proceedings that may have consequences — good and not-so-good — for the business/industrial licensees that make up at least 16 ounces of the T-Band flesh Congress decided to extract.

Mark Crosby is the President/CEO of the Enterprise Wireless Alliance (EWA).