The FCC recently wrote a letter to DISH Networks warning the company that it had not complied with the FCC’s build-out requirements for its AWS-4 and its E and H blocks of 700 MHz spectrum. The warning was more sternly worded than what we normally see from the FCC, and perhaps they will take steps to reclaim the spectrum if DISH is unable to meet the required deployment of the spectrum. The company has a long history of sitting on spectrum and delaying its use. They recently told the FCC that they want to use the AWS spectrum to launch a nationwide IoT monitoring network and that they are interested in entering the cellular business with the 700 MHz licenses.
Today’s blog is not about DISH specifically. Instead, I want to talk about the FCC reclaiming spectrum. This is an important issue for rural America because the majority of licensed spectrum sits idle in rural America for a number of reasons. We could go a long way towards fixing the rural broadband problem if the unused spectrum could be reclaimed by the FCC and repositioned for rural use. There are a number of reasons why the spectrum sits idle today.
Coverage Rules. Most FCC licenses come with coverage requirements. For instance, a given spectrum might need to eventually be deployed to cover something like 70% of the households in a license area. That rule allows spectrum holders to deploy spectrum to urban areas and legally ignore the surrounding rural areas.
There is nothing wrong with this from a business perspective. Cellular companies only need to use their full inventory of spectrum in urban areas where most customers live, and the FCC rules should not require deployment of spectrum where nobody will use it. But the coverage rules mean that the spectrum will remain unused in rural areas as long as the primary license holder is serving the urban areas – effectively forever. Since the spectrum is licensed, nobody else can use it. This problem is caused by the way that the FCC licenses spectrum for large geographic areas, while the spectrum buyers are interested in serving only a portion of the license areas.
Ideally unused spectrum should be made available to somebody else who can make a business case for it. There are several ways to fix this issue. First, licensed holders could be compelled by the FCC to sub-license the spectrum to others where it sits idle. Or the FCC could reclaim the spectrum in unused geographic areas and distribute it to those who will use it.
Deployment Delays. Other spectrum goes unused due to deployment delays by license holders. The DISH Network spectrum is a perfect example. The company bought this spectrum for a use that they were unable to execute. Since the spectrum is valuable the license holders deploy delaying tactics to stop the FCC from reclaiming the spectrum. The FCC has largely been derelict in enforcing its own rules and I’m sure that DISH was shocked at the FCC response. DISH probably figured that this would be business as usual and that the FCC would grant them more time as had been done in the past. I have no idea if DISH really intends to deploy an IoT network or go into the cellular business – but those are the kinds of new competitive ventures that the FCC has been publicly asking for, so DISH is telling the FCC exactly what it wants to hear. But it’s likely that DISH just wants another delay until they can find a buyer for their sinking satellite business by somebody who will value the spectrum. Regardless of the reasons, the FCC has ignored its own deployment rules numerous times and granted license holders more time.
Spectrum Speculators. There is a class of investors who buy spectrum with the hopes of selling it or licensing it to somebody else. They will buy spectrum and rig up a bogus use of the spectrum to meet the build-out requirements. I’ve seen wireless links deployed that carry no data but that are intended only to prove to the FCC that the spectrum is being used. The FCC ought to do a better job of identifying the fake deployments that are done only to preserve the license.
There’s no way to know if the letter to DISH signals a change at the FCC and if they intend to enforce the spectrum rules. Better enforcement of the rules alone won’t help rural America if the spectrum gets re-licensed and the same cycle repeats. We need spectrum rules that free up spectrum in rural areas where the spectrum sits idle. Perhaps this could be done by requiring license holders to sub-license the spectrum to others where it sits idle. The FCC has said numerous time that wireless technology can be the salvation for rural broadband, yet they allow the most valuable spectrum to sit idle while WISPs are relegated to delivering broadband using a few tiny swaths of unlicensed spectrum. This is not a hard problem to solve, but it requires the will to solve it, and an FCC that won’t cave-in to the big spectrum license holders.