Leasing Rural Cellular Spectrum

I don’t write often about potential legislation since there are numerous bills submitted to Congress every year that never make it out of committees. But there is a recently proposed bill that could create both an opportunity to expand rural broadband and also a threat to those already serving rural areas.

The bill is H.R. 1814 the Rural Spectrum Accessibility Act.  It has been introduced as a bipartisan bill by Congressmen Adam Kinzinger (R-IL) and Dave Loebsack (D-IA). It’s a very short bill, with the full text here. The bill is currently being considered by the House Energy and Commerce Committee.

The bill proposes to encourage owners of cellular wireless spectrum to partition or disaggregate their spectrum for use in rural areas and to lease the spectrum to small carriers. In this case a small carrier is defined as any carrier that has fewer than 1,500 employees (which most of the folks reading this blog would consider as a pretty large carrier!).

The bill would instruct the FCC to extend the license for three years for any wireless license holder that agrees to lease spectrum under this new law. That is a major boon to wireless spectrum holders and one would imagine that many of them would look for opportunities to take advantage of this offer.

The leased spectrum could only be used in rural areas, which is defined in the normal definition used for most other regulatory purposes as towns or with populations less than 20,000 and all areas that we think of as rural.

The Opportunity. The opportunity would be a new way for rural carriers to provide broadband. Numerous rural carriers are now offering wireless point-to-multipoint broadband using unlicensed spectrum. But the range of coverage with this technology is relatively short with the strongest signals only carrying for a few miles. Unlicensed spectrum is subject to interference by foliage or any physical barrier like a hill.

But cellular spectrum carries up to three times further when used for point-to-multipoint data. Depending upon the density and the number of customers to serve, this spectrum could be used to deliver fairly robust broadband. I’ve talked to customers on the new point-to-multipoint service offered by AT&T that receive data bursts as fast as 30 Mbps. But in really rural areas with a handful of customers, speeds could be considerably faster than that. I’d note that AT&T apparently only offers the faster speed in short burst, but a rural carrier could establish that as a permanent speed. In addition to greater distance, the cellular spectrum also travels well through foliage, through walls at homes, and even bounces over hills fairly well.

The opportunity is for rural carriers to be able to bring data services to customers at a greater distance from a tower, but probably most importantly would offer a wireless option for carriers operating in heavily wooded areas like Appalachia or the Pacific Northwest. Unlicensed spectrum is a poor alternative in those places.

The Threat. Of course, there also exists a threat to every existing rural carrier in that some other carrier can now compete with them in rural areas. The bill says that the spectrum would be available to any small ‘carrier’ and that generally means anybody that is certified by states – meaning not only ILECs, but competitive CLECs.

If this becomes law I would envision rural CLECs asking to lease spectrum. I also envision carriers like WISPs becoming carriers in order to use this spectrum.

It certainly is an interesting idea. Wireless license holders have always had the ability to lease spectrum in rural areas. I have three clients who have been able to lease cellular spectrum from Sprint, for example. But for the most part it’s always been difficult to get the attention of rural spectrum owners, and I know several clients have been unable to lease spectrum from any of the existing license holders. For the most part the cellular license holders aren’t interested in dealing with small carriers. This legislation would still not guarantee that spectrum would be made available, but it would add an incentive for license holders to make such leases.