FCC Proposes Significant Spectrum Compromise To Enable 5G In The 3.5 GHz Band

This article originally appeared on Forbes by Fred Campbell.

After wrestling with the issue for several months, Federal Communications Commissioner Michael O’Rielly has proposed a significant compromise to resolve licensing issues in the 3.5 GHz band: to issue spectrum licenses in the band on a county-by-county basis rather than the smaller “Census Tract” areas sought by wireless internet service providers (“WISPs”) or the larger “Partial Economic Areas” sought by the mobile industry. Though it’s unlikely to fully satisfy anyone, the compromise proposal appears to be a workable, good-faith effort to balance competing demands for use of this valuable spectrum resource.

The controversy stems from the 3.5 GHz band’s utility for different use cases. The band has been internationally harmonized for the deployment of fifth-generation mobile technologies (“5G”), and the U.S. mobile industry wants to deploy 5G networks using 3.5 GHz spectrum. At the same time, WISPs in the U.S. want to use this spectrum to provide fixed wireless broadband connectivity to homes and businesses in rural and suburban areas.

The previous FCC decided to license the spectrum using “Census Tracts,” which often consist of a couple city blocks, based on its views regarding the the development of the market at that time. Licensing by Census Tracts is a novel approach that supports the business case for many WISPs but is incompatible with mobile network deployments in urban areas (which also happens to be where mobile providers lack adequate spectrum for new 5G services). When the race for 5G leadership started heating up, the current FCC asked whether it should change its licensing scheme from Census Tracts to “Partial Economic Areas,” which typically include several U.S. counties each. The FCC has a proven track record of success with offering multi-county spectrum licenses to mobile providers, but lacks any experience with licensing spectrum on the basis of Census Tracts.

If the FCC wants to maximize the use of 3.5 GHz spectrum for 5G, licensing the spectrum using Partial Economic Areas is the safest and surest option. Based on my experience in formulating spectrum policies that helped the U.S. lead the transition to 4G technologies in the late 2000s, that’s the option I preferred for the 3.5 GHz band (see my contributions to Forbes here and here).

Though I favored the use of larger license areas, I cannot say the FCC’s decision to license the 3.5 GHz band on a county-by-county basis is unreasonable. There is merit to the FCC’s concern that the use of Partial Economic Areas could disproportionately favor mobile use cases as compared to the fixed use cases of smaller WISPs.

The FCC chose to license the band using county areas because counties are neither too small to enable efficient mobile deployments nor too large to preclude efficient WISP deployments. Just as mobile providers were rightfully concerned that the previous FCC’s choice of Census Tracts was biased toward the use cases favored by WISPs, the current FCC is concerned that choosing Partial Economic Areas could tip the scales improperly toward mobile use cases. Commissioner O’Rielly’s decision to choose county licensing areas represents a reasonable middle ground that is intended to enable a neutral market mechanism—an open and transparent auction of the spectrum licenses—to decide which use case will best serve the public interest on a county-by-county basis.

There is no spectrum license area that fits all potential uses cases perfectly. The FCC’s job is to choose a license area size that will reasonably accommodate the most likely use cases based on the current market and foreseeable future. The agency’s decision to compromise on county licensing areas meets that job description in the circumstances of the 3.5 GHz band. Parties on both sides of the issue would do well to embrace it.

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