CONCURRING STATEMENT OF
COMMISSIONER HAROLD FURCHTGOTT-ROTH
| Re: | In the Matter of Amendments to Parts 1, 2, 87, and 101 of the Commission's Rules to License Fixed Services at 24 GHz, WT Docket No. 99-327 (rel. July 31, 2000). |
I support today's decision to promptly make available spectrum in the 24 GHz band. The fixed wireless industry has experienced exponential growth in recent years and today's decision will provide still more spectrum for this rapidly developing industry segment. In this context the precise contours of the fixed wireless industry continue to evolve. Unlike PCS, where the majority of service providers have developed national footprints, it is not clear today how fixed wireless service fits into the marketplace. Will it become a largely urban and local service, or will a regional approach prevail? Alternatively, will fixed wireless at 24 GHz become a nationwide service offering? From the Commission's standpoint there is no "right" answer. Instead, the FCC must attempt to develop a flexible spectrum policy that is "business plan neutral."
Accordingly, I am intrigued by the prospect of utilizing smaller service areas for some of these licenses. (1) The size of the initial license areas should not matter. Our disaggregation and partitioning rules should facilitate a secondary market that permits licensees to slice and dice spectrum for the highest-valued use. (2) However, our partitioning and disaggregation rules have a mixed record and appear to create substantial transaction costs. These apparent difficulties create increased pressure on the Commission to craft initial license allocations that respond to market demand. Here, numerous parties requested smaller service areas. In response I would have considered subdividing one or two of the five licenses into smaller licensing units in order to meet this apparent demand. (3) Smaller license areas may also facilitate the deployment of competitive services to underserved areas and permit the development of business plans based on a more localized strategy. Going forward, rather than assuming all services are going to be "national," I believe it is important that we closely examine our initial license allocation strategy in each service to permit a whole range of business plans to audition in the marketplace.
1 One reason for some reluctance to adopt smaller service areas in this band is that we failed to pursue this approach in the recent 39 GHz band auctions. In light of the highly competitive relationship between the national players in this band and 39 GHz, it may not be fair to subject only the 24 GHz band to these smaller license segments. However, other services that compete with these bands are subject to smaller license areas.
2 See 47 C.F.R. § 101.1323; Policy Statement: In the Matter of Principles for Reallocation of Spectrum To Encourage the Development of Telecommunications Technologies for the New Millennium, 14 FCC Rcd 19868, FCC 99-354, ¶¶ 12-13 (rel. Nov. 22, 1999); Federal Communications Commission Public Forum on Facilitating the Development of Secondary Markets for Radio Spectrum, Partitioning and Disaggregation (May 31, 2000), available at <http://www.fcc.gov/Bureaus/Engineering_Technology /Public_Notices/2000/da001139.html>.
3 For businesses with more regional or national strategies, smaller service areas should only slightly increase the transaction costs of acquiring these licenses at auction. (In this regard, the use of combinatorial bidding will enable the FCC more freely to utilize smaller license areas by reducing the transaction costs of aggregation and maximizing the cumulative value of the licenses.) In evaluating our overall spectrum management goals, the small increases in transaction costs inherent in smaller license areas must be balanced against the apparently substantial reduction in transaction costs created by eliminating the need for smaller players to acquire their spectrum from the secondary market.