Subject: [NEXTEL-1] New Spectrum Opportunities Mean- New Business Opportunities

From: [email-masked]
Date: Sat, 16 Aug 2003 23:42:30 -0400

JULY 2003

New Spectrum Opportunities Mean- New Business Opportunities

On May 15th, the FCC adopted a Report and Order and Further Notice of Proposed Rulemaking (R&O or NPRM) that would permit "most wireless radio licensees with 'exclusive' rights to their assigned spectrum to enter into spectrum leasing arrangements." This piece has become known as the Secondary Markets item at the Commission.  A licensee that has "exclusive" rights to their assigned spectrum has already entered into a primary market transaction for spectrum usage. This action by the Commission would authorize a secondary market transaction for usage of the same spectrum under the licensee's existing parameters.
The Commission has, thus far, outlined three different types of leasing arrangements and listed the features of each. The "Spectrum Manager" leasing option would require a licensee to maintain legal and working control of the leased spectrum while in operation.  The other two options are "Long-Term" (more than 360 days) and "Short-Term" (less than 360 days) de facto transfer leasing. The de facto transfer leasing model requires a licensee to retain legal control of the leased spectrum, while working control is passed on to the lessee.
So what does this mean for private wireless licensees with "exclusive" rights to their assigned spectrum? New business opportunities based on leasing agreements. New business models will be driven by internal efficiencies depending on how much leasing and how much usage a licensee should allocate in a given area. In some cases, all of a licensee's spectrum could be used internally. In others, a licensee may find a mix of leasing and use for efficient, profitable operations. Secondary market transactions will afford a licensee the ability to lower its own power, split its service area, seek more spectrally efficient technologies, and lease excess downtime to others needing spectrum-based services under the same conditions of the existing authorization.

What does this mean for private wireless licensees without "exclusive" rights to their assigned spectrum? One benefit of secondary market transactions could be additional spectrum opportunities in congested markets. If a licensee needs additional spectrum, but has little or no spectrum available in the area, it can seek leasing arrangements with existing licensees.
For a leasing arrangement to work, however, a licensee must maintain legal control of the license. A licensee can relinquish working control of a license, but it will still be held accountable for the legality of the system. Thus, a licensee must make sure its lessees are operating in compliance with the Commission's authorization.

Many benefits can be seen through the new leasing opportunities. Much-needed spectrum could be placed in the hands of those who value its use. Moreover, spectrum prices will be driven by pure market values, which creates an entrepreneurial incentive for efficient spectrum usage. With this new tool a reality, the private land mobile community can seek even more spectrally efficient operations to promote new business models under existing authorizations based on spectrum leasing.
Jeremy Denton Director, Government Affairs

http://www.ita-relay.com/magazine/July_2003/WebRegUP.pdf

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