Vulcan Wireless, a 700 MHz licensee that is owned by Microsoft (NASDAQ:MSFT) co-founder Paul Allen, is advocating for interoperability among the various 700 MHz spectrum band classes.
Vulcan, which owns 700 MHz spectrum licenses in the lower A Block in Oregon and Washington, is trying to use AT&T's (NYSE:T) proposed $1.93 billion acquisition of Qualcomm's (NASDAQ:QCOM) MediaFLO spectrum, which sits in the lower D and E Blocks of the 700 MHz band, as a vehicle to push for the changes to interoperability rules. "One way forward would be to impose a narrowly tailored and transaction-specific condition in the AT&T/Qualcomm transaction," said Michele Farquhar, a lawyer at Hogan Lovells, which represents Vulcan at the FCC.
In a March 28 filing with the FCC, Vulcan argues that to ensure interoperability and prevent interference with the lower A-Block licensees, the FCC should prevent AT&T from pairing its 700 MHz B and C Block licenses with any newly acquired D and E Block licenses. As a condition of the deal, Vulcan is pushing to have the FCC require interoperability across the entire 700 MHz band by June 2013, when AT&T and Verizon Wireless (NYSE:VZ) are expected to be nearing the completion of their LTE deployments.
Vulcan thinks that its strategy is more practical than that of another group, which is also advocating for 700 MHz interoperability. The 700 MHz Block A Good Faith Purchasers Alliance, a joint venture among Cellular South, Cavalier Wireless, Continuum 700 and U.S. Cellular, wants interoperability rules in place before any more 700 MHz equipment can be authorized by the FCC.
The Alliance first petitioned the FCC in September 2009 to require that mobile devices for the 700 MHz bands be capable of operating on all paired frequency blocks in the 700 MHz bands, and that equipment authorization for 700 MHz devices be suspended until such rules are in place. The Alliance argues that AT&T and Verizon are using their size and weight to encourage network equipment makers to build equipment that only supports the 700 MHz band classes that they own, effectively shutting out lower A Block licensees. As recently as late May, Cellular South was still filing comments on the topic.
Vulcan, meanwhile, is not arguing that deployments be stopped. "We have never gone so far as to suggest that there be a delay in broadband rollouts and freezes on equipment until this gets resolved," Vulcan spokesman Scott Wills said. "We are asking the FCC to require interoperability to eventually come to the 700 MHz band without stopping anything."
Upper & Lower 700 MHz
"What Vulcan is doing is trying to take a practical approach to the marketplace," Wills said. "Where we have some disagreement is how you achieve that objective."
Ultimately, Wills conceded, the lack of 700 MHz interoperability is holding back the commercial deployment of Vulcan's 700 MHz spectrum. "We are not currently operating commercial services," he said. "We have looked at a number of different opportunities for that spectrum. I think we are significantly hampered and disadvantaged by some of the issues that we face."
Wills noted the disparity facing 700 MHz lower A Block licensees compared to say, Verizon, which holds spectrum in the upper C Block. The 700 MHz auction closed in March of 2008 and Verizon deployed commercial LTE service in December 2010. It was not until that month that the 3GPP set standards for Band Class 12, where the lower A block licenses sit. "Now we have to try to get chips and get devices," he said. "We already have some of the other 700 MHz holders with a completely deployed network."
An FCC spokesman said the proceeding remains open and that the commission is looking at the issue. The FCC held a workshop in April on 700 MHz interoperability in which representatives from Verizon, AT&T and other large companies argued that mandating interoperability across different band classes of the 700 MHz band will be costly and difficult to achieve. On the other side, smaller carriers and consumer advocates argued that, without interoperability, subscribers of smaller carriers will suffer from more expensive devices and a lack of roaming.
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