Rural operator Nex-Tech Wireless is pushing the FCC to extend buildout deadlines for small 700 MHz licensees and mandate 700 MHz device interoperability, contending a lack of equipment is blocking Nex-Tech from launching its planned LTE networks in western Kansas and eastern Colorado.
Nex-Tech alleges that currently available handsets lack chipsets necessary to operate on the 700 MHz B Block licenses that the company owns. 700 MHz B Block handsets "are non-existent," said Nex-Tech in an ex parte presentation to FCC officials. Further, according to the company, a timeline to gain access to that equipment remains unknown, and there is no industry solution in sight.
The issue threatens to leave Nex-Tech with insufficient time to meet FCC buildout requirements, which were mandated in Auction 73 for 700 MHz spectrum. Nex-Tech's interoperability problems were discussed on Oct. 10 with members of the FCC's Wireless Telecommunications Bureau by company President and CEO Johnie Johnson and others representing Nex-Tech. The FCC's is conducting a 700 MHz interoperability rulemaking.
Nex-Tech explained to the FCC that it only acquired its 700 MHz spectrum from Verizon Wireless (NYSE:VZ) this May, making it "extremely difficult to meet first geographic construction requirements given the rural nature of the markets." The company said it generally takes 24 months for a network buildout, assuming compatible equipment is available, which it currently is not.
Under current buildout requirements for the Lower 700 MHz A, B and E Blocks, an operator must cover 35 percent of its licensed area within four years and 70 percent within 10 years. The Upper 700 MHz C Block, however, has population-based buildout requirements that require coverage of 40 percent of POPs within four years and 75 percent within 10 years.
The four-year deadline will arrive on June 13, 2013, while the 10-year deadline will be June 13, 2019.
Nex-Tech enumerated three recommendations to the FCC that it said would ease the company's plight. Topping the list, the operator requested a buildout extension of at least 24 months. The company also said the FCC should require device interoperability in the lower 700MHz band and modify the current geographic buildout requirement to be a population-based requirement.
Without such changes, Nex-Tech is in danger of losing its 700 MHz licenses under the FCC's "use it or lose it" rule. The company argued that it has tried to get the equipment it needs via the Associated Carrier Group, which it helped form with 36 other rural carriers in 2006 "to strengthen buying power and offer greater volume to handset vendors." ACG has held numerous meetings with handset vendors, all of which indicated little interest in building devices for the 700 MHz band classes to which rural vendors have rights because the volumes needed do not justify vendor investments, said Nex-Tech.
There are two different 3GPP operating bands in the Lower 700 MHz band: Band Class 12, which covers operations in the Lower A, B and C Blocks that are owned by smaller mobile operators; and Band Class 17, which covers operations in the Lower B and C Blocks where AT&T (NYSE:T) holds spectrum. AT&T, which was one of the leaders in the effort to create Band Class 17 during 3GPP proceedings, asserts it was necessary to create a separate band class for the Lower 700 MHz B and C Blocks in order to avoid interference issues from digital television channel 51 and high-power operations in the Lower E Block.
Nex-Tech also lamented to the FCC the fact that a roaming or wholesale agreement with a large national operator is currently not available to it.
Nex-Tech is a member of the Competitive Carriers Association, which has voiced many of the same arguments in its push for 700 MHz device interoperability, which has largely focused on licensees with spectrum in the Lower 700 MHz A Block. It is also a subsidiary of Rural Telephone, Golden Belt Telephone and Mutual Telephone. Nex-Tech offers CDMA EV-DO service at 1900 MHz in 40 counties of central and western Kansas as well as local coverage to four counties in Colorado.
- see this Nex-Tech filing
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