The specific changes proposed by the rules include:
- Lengthened the length of a license from 1 year to 10 years.
- Eliminate the rules that the exclusivity of a license expires at the end of the first license term. Exclusivity can now extend into a license renewal.
- Increase the size of the geographic footprint of a license. The license area before was a census tract, which is generally an area encompassing 2,500 to 8,000 people. The Census views a tract as the equivalent of a ‘neighborhood’. The new licenses areas are proposed to be something larger like entire counties or else Partial Economic Areas (PEAs). PEAs were defined in the recent incentive auctions and subdivide the country into 416 PEA regions.
- Allows license holders to partition and disaggregate licenses between adjacent geographic areas.
- Eliminated the rules that limited the number of licenses that can be held by one entity in an area. This also would allow license holders to bid on the use of individual channels.
What does all of this mean? This is largely a shift to allow big wireless carriers to obtain and use the spectrum for cellular service. Before the spectrum rules were aimed at benefiting small rural broadband providers. They would have been able to get a license for a small geographic area and they then got a 1-year head-start to deploy the spectrum before anybody else. The first licensee then had an advantage because future deployments had to be synchronized to not interfere with them.
The old rules made it difficult, but not impossible, for the bigger companies to use the spectrum. A cellular provider was not likely to invest in small license footprints and only be protected for a year from competition and interference. But the new rules allow for a much bigger footprint, similar to that used for other cellular spectrum. And the ten-year license provides a long-term opportunity for no competition, as well as a chance to renew the original license.
Basically this is a spectrum grab by the cellular providers to use for LTE or 5G cellular. Two of the big proponents of these changes include Comcast and Charter which want their own spectrum to support their new cellular businesses.
This change will make it much harder for rural deployments by WISPs and other ISPs willing to serve customers with wireless connections. The original rules also envisioned that this spectrum would enable smaller carriers to deploy various small-cell technologies and not just point-to-multipoint radios.
This is another proposed ruling that shows that current FCC is now clearly pro-big business. Almost every ruling they’ve made so far benefits big companies – the big ISPs, the big TV station owners, and the big wireless carriers. This particular ruling is a big give-away to the cellular companies and to Comcast and Charter. Under the rules the spectrum can be licensed inexpensively compared to spectrum that is auctioned. The new rules allowing large coverage areas will greatly disadvantage small carriers that only want to license a small service area – which was the entire purpose of the original rules for the spectrum.
The FCC voted 4-1 to consider the new rules, which is a likely indication that the new rules will be adopted after the required deliberation time required by FCC rules.