Before the

DEPARTMENT OF COMMERCE

NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION

Washington, D.C.  20230

 

 

Notice, Request for Comments on                    )          

Deployment of Broadband Networks                )           Docket No. 011109273-1273-01

and Advanced Telecommunications                   )                                                                                  

                                                                       

 

 

 

 

 

 

 

 

 

COMMENTS OF AT&T WIRELESS SERVICES, INC.

 

 

 

 

 

 

 

 

 

 

Howard J. Symons                                           Douglas I. Brandon

Sara F. Leibman                                               Vice President-External Affairs

Michael L. Pryor                                              David P. Wye

Catherine Carroll                                              Director, Spectrum Policy

Mintz, Levin, Cohn, Ferris, Glovsky                  1150 Connecticut Avenue, N.W

  and Popeo, P.C.                                             Washington, D.C.  20036

701 Pennsylvania Avenue, N.W.                       (202) 223-9222

Suite 900                                                         

Washington, D.C.  20004                                

(202) 434-7300

 

Of Counsel

 

Dated:  December 19, 2001

 


TABLE OF CONTENTS

INTRODUCTION AND SUMMARY.. 1

i.... REGULATION OF ADVANCED WIRELESS SERVICES SHOULD BE FASHIONED AFTER THE MARKET-BASED POLICIES APPLIED SO SUCCESSFULLY IN THE CMRS CONTEXT         2

A.  Wireless Service Is an Essential Element of a Healthy Telecommunications Infrastructure. 3

B.   Wireless Carriers Are Deploying Advanced Data Services and Rolling Out 3G Offerings. 5

C.  Regulators Should Ensure that Artificial and Unnecessary Tower Siting Restrictions Do Not Impede the Growth of the Wireless and Broadband Markets.......................................................................... 6

                  1.      Siting Facilities on Federal Lands Remains Burdensome........................................... 7

                  2.      State and Local Authorities Raise Numerous Barriers to Tower Siting...................... 9

 

II... Sound Spectrum Policy Will Do More than Any Other Government Initiative To Foster Wireless Broadband

..... Services. 11

A.  Allocation of Additional, Globally Harmonized Spectrum Is Necessary for 3G Deployment.. 11

B.   The Federal Government Should Rely on Competitive Bidding To Ensure that MSS Spectrum Allocated for Terrestrial Use is Put to Its Highest and Best Use. 14

C.  Regulatory Uncertainty Unduly Limits the Ability of Secondary Spectrum Markets To Aid in the Efficient Utilization of Spectrum.. 18

III. Access to High Quality ILEC Transport At Cost-Based Rates Is Crucial to Fulfilling the Promise of Intermodal, Facilities-Based Competition. 19

A.  Wireless Networks Are Dependent Upon ILEC Transport 19

B.   Enforcement of Existing Rules and Adoption of New Policies Will Be Required To Foster the Development of Inter-Modal Competition. 22

CONCLUSION.. 24


Before the

DEPARTMENT OF COMMERCE

NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION

Washington, D.C.  20230

 

 

Notice, Request for Comments on                    )          

Deployment of Broadband Networks                )           Docket No. 011109273-1273-01

and Advanced Telecommunications                   )

 

 

COMMENTS OF AT&T WIRELESS SERVICES, INC.

 

Pursuant to the National Telecommunications and Information Administration’s November 19, 2001 Notice requesting comments on the deployment of broadband networks and advanced telecommunications, AT&T Wireless Services, Inc. (“AWS”) hereby submits its comments in the above-captioned proceeding.[1]/

INTRODUCTION AND SUMMARY

The deregulatory policies implemented over the past decade by the Federal Communications Commission (“Commission” or “FCC”) and the National Telecommunications and Information Administration (“NTIA”) have created a vibrant market for conventional wireless services, generated a wide array of new offerings (such as broadband and third generation (“3G”) services), and introduced new competition into the local and long-distance markets.  As regulators consider what role to take in the maturing wireless market and evolving new markets, they should ensure that the market-based approach that has proved so successful not only guides any new regulatory policy but is even more forcefully applied.   

Regulatory restraint should be the rule except when regulation is necessary to ensure that competitive forces are allowed to operate freely, scarce spectrum is properly and efficiently allocated and licensed, and that market failures, such as abuses of incumbent market power, are addressed.  Most importantly, the Commission and NTIA should identify spectrum that is being underutilized (such as mobile satellite service (“MSS”) spectrum), reallocate it for 3G use, and license any newly available spectrum via a system of competitive bidding, which will ensure that spectrum will be put to its highest use.  In addition, regulators should immediately remove unnecessary impediments (such as uncertainty regarding secondary spectrum markets) to the free movement of spectrum that already has been allocated to meet the evolving and changing needs of licensees.  Finally, the Commission and NTIA, through vigorous enforcement of existing rules and the adoption of several new policies addressing incumbent abuses, should ensure that incumbent local exchange carriers (“ILECs”) are not allowed to use their market power to stunt the growth of their wireless competitors. 

I.      REGULATION OF ADVANCED WIRELESS SERVICES SHOULD BE FASHIONED AFTER THE MARKET-BASED POLICIES APPLIED SO SUCCESSFULLY IN THE CMRS CONTEXT

AWS, which along with other wireless companies will play a major role in meeting the public’s demands for advanced and high-speed services, strongly supports NTIA’s inquiry into broadband deployment and urges adoption of a comprehensive, market-based broadband policy.  As in the commercial mobile radio services (“CMRS”) market, regulators should rely primarily upon market forces to regulate the allocation of scarce resources and guide the development of dynamic and emerging services.  Regulation should take a leading role only in the case of market failure or when otherwise necessary to the public interest, and should be designed, adopted, and implemented in such a fashion as to minimize uncertainty and costs to participants.  Such policies -- even in a less than optimally robust form -- have had phenomenal success in the CMRS context, resulting in an extremely competitive market, vibrant growth in the demand for wireless service, and the rapid and effective deployment of multiple competing networks in almost every major market.[2]/ 

A.        Wireless Service Is an Essential Element of a Healthy Telecommunications Infrastructure

In their industry’s short history, wireless service providers have established themselves as a critical component in the telecommunications infrastructure.  In just a little over a decade, domestic cellular phone subscription has jumped from approximately five million to approximately 125 million -- a number that is expected to continue to grow dramatically in the near future.[3]/   Multiple national and local competitors exist in almost every major market, providing consumers with a variety of services, pricing plans, and other options.[4]/  As a result of the government’s deregulatory policies and spectrum allocation decisions, “[m]obile phones are now an essential part of how a majority of people live and work.”[5]/  

Rather than being perceived merely as providers of a supplementary service to conventional wireline service, wireless competitors are increasingly being seen as viable competitors to ILECs and long distance providers.  Indeed, FCC Chairman Michael Powell has indicated that the “real competitive choices” that have been introduced through alternative platforms such as wireless “may be the best hope for residential [telephony] consumers,” an observation that is clearly supported by market evidence.[6]/  In a recent review of the status of wireless/wireline competition, the Commission noted the following:

 

 

 

 

 

Continuation of the Commission’s deregulatory policies and wise spectrum allocation and interconnection choices should generate similar results in the wireless broadband context.  Assuming that wireless providers have access to sufficient spectrum and are granted adequate flexibility in the development of their services, Chairman Powell’s prediction that “[a] great deal of competition . . . particularly for residential consumers, will come from other platforms such as  . . . wireless” will almost certainly be realized.[12]/

B.        Wireless Carriers Are Deploying Advanced Data Services and Rolling Out 3G Offerings

There appears to be little need for regulatory incentives to spur deployment of new wireless services in light of the fact that AWS and other wireless carriers already are offering a variety of advanced services.  AWS, for instance, has introduced PocketNet, which provides three different wireless Internet access plans and, depending upon the plan picked, allows access to certain designated websites, full e-mail and Internet access, or full e-mail and Internet capabilities with the ability to create a personal website and utilize a synchronized personal organizer.[13]/

In addition, wireless providers are currently rolling out even more advanced data services and are gearing up for full 3G deployment.  AWS has begun providing regional 2.5G service and intends to provide such service in markets representing approximately 40 percent of the population that it serves this year and markets covering 100 percent of that population by the end of 2002.[14]/  Moreover, AWS plans to start providing true 3G by 2003. 

As with the evolution of wireless service, the various developmental paths that new services such as broadband take should be left to the market whenever possible rather than to regulatory engineering.  It is, for instance, far from clear that regulators should impose a rigid definitional structure on a market as rapidly evolving as the broadband market.  The provision of such advanced services and capabilities has yet to evolve into any particular form, and premature categorization of such services before they are fully shaped could calcify innovation and stunt deployment of broadband services.  The designation of any minimum speed of data transmission for a service to qualify as broadband made by regulators today likely would be obsolete tomorrow as new capabilities continually emerge.  Similarly, some fixed applications may not fall into the broadband category for long as they are eclipsed by the speeds allowed by 3G capabilities, once implemented.  Definition of the term broadband and other attempts to impose regulatory structure on the evolving, highly competitive wireless broadband market would be both unnecessary and unwise. 

C.        Regulators Should Ensure that Artificial and Unnecessary Tower Siting Restrictions Do Not Impede the Growth of the Wireless and Broadband Markets

One of the greatest barriers to the deployment of advanced wireless services is the inability of wireless carriers to site the towers and other facilities they need to provide such services without unreasonable delay or expense.  Federal agencies, while compelled under federal law to make federal property available “to the greatest extent possible” for the siting of wireless telecommunications,[15]/ nevertheless often delay approval of applications for unreasonable periods of time or attempt to collect excessive fees for the use of federal lands.  Localities likewise have attempted to prevent the construction of wireless towers, despite federal limitations on local zoning authority intended to ensure that it is not used to “prohibit or have the effect of prohibiting the provision of personal wireless services.”[16]/  Cities and other localities also are slowing the deployment of advanced wireless services by requiring wireless carriers to comply with burdensome local telecommunications ordinances and pay unfair and unreasonable fees before they can access public rights-of-way, despite federal law prohibiting such behavior.[17]/ 

There are two ways in which NTIA can alleviate these barriers.  First, NTIA should work with other federal departments and agencies to ensure that they make federal property available for the siting of wireless towers on a fair, reasonable, and non-discriminatory basis.  Second, NTIA should work with other federal agencies, including the Commission, to provide guidance to states and localities on the national importance of siting wireless telecommunications facilities, and the limited role that states and localities should play in that process. 

1.         Siting Facilities on Federal Lands Remains Burdensome

In an attempt to spur the deployment of wireless telecommunications services, Congress added section 704(c) to the Telecommunications Act of 1996, which required the President or his designee to adopt procedures to ensure that federal property is made available “to the greatest extent possible” for the siting of wireless telecommunications.[18]/  In response, on March 29, 1996, the General Services Administration published a notice in the Federal Register outlining the guiding principles and actions necessary for federal agencies to implement the antenna siting program promulgated by the presidential memorandum and the Telecommunications Act of 1996.[19]/ 

Despite these congressional and presidential directives, wireless carriers still experience resistance when they attempt to site towers on federal property.  For example, when Verizon Wireless sought permission from the National Park Service to install two antennas in Washington, D.C.’s Rock Creek Park -- antennas that were necessary because 44 percent of Verizon’s customers’ calls were being disrupted in the area -- it took more than two years and the intercession of several congressmen and senators to get approval for the towers.[20]/  NTIA should take a leadership role in making sure that other federal departments and agencies are aware of and comply with their obligation to make federal property available for the siting of wireless towers on a timely basis. 

Once carriers obtain authorization to use federal property to site wireless facilities, they are often subjected to unreasonable fees for such use.  While section 704(c) of the 1996 Act authorizes federal agencies and departments to charge “reasonable fees” for use of federal property, the GSA notice implementing this provision provided federal agencies and departments with great discretion to charge “market-based” fees for wireless antennas.[21]/  While section 704(c) does not define the term “reasonable,” this term has been interpreted by the United States Supreme Court to prohibit fees that are not based upon some reasonable measure of the costs incurred by the governmental entity in maintaining its infrastructure or the benefits conferred upon telecommunications carriers specifically in utilizing that infrastructure.[22]/  NTIA should therefore work with other federal agencies and departments, including the GSA, to ensure that fees charged for use of federal lands are cost-based.  Moreover, because wireless carriers are using the federal property in question in a virtually identical manner -- to site a tower -- the fee imposed should not vary from provider to provider.

2.         State and Local Authorities Raise Numerous Barriers to Tower Siting

State and local attempts to restrict the siting of wireless towers act as a barrier to the deployment of advanced wireless services.  The opposition of localities to wireless towers is notorious.[23]/  Such opposition is only likely to increase in the future, as wireless carriers are required to use larger antennas in order to comply with their regulatory obligation to provide location-based E-911 services.[24]/  States and localities also are slowing the deployment of advanced wireless services by requiring wireless carriers to comply with burdensome local telecommunications ordinances and pay unfair and unreasonable fees before they can access public rights-of-way, despite federal law prohibiting such behavior.

While section 332(c)(7) of the Communications Act preserves state and local authority over the placement, construction, and modification of personal wireless facilities,[25]/ it also establishes federal limitations on the exercise of that authority by state and local governments.  In particular, section 332(c)(7)(B)(i)(II) provides that the regulation of the placement, construction, and modification of wireless facilities “shall not prohibit or have the effect of prohibiting the provision of personal wireless services.”  In addition, section 332(c)(7)(B)(iv) explicitly preempts state and local regulation of radiofrequency (“RF”) emissions by wireless facilities if they comply with the Commission’s RF emissions rules.  The 1996 Act provided the federal government with an additional basis for preempting barriers to the entry of wireless telecommunications services by adding section 253(a), which states that “[n]o State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service.”[26]/

NTIA should provide guidance to cities and other local governments on the importance of wireless telecommunications services and the appropriately limited role of local authorities in the regulation of such services.  If these issues are not addressed, the actions of local governments will undermine the efforts of wireless providers to develop a comprehensive, national wireless infrastructure for the provision of advanced wireless services.

II.    Sound Spectrum Policy Will Do More than Any Other Government Initiative To Foster Wireless Broadband Services.

The primary constraint upon the development of a comprehensive and fully competitive wireless broadband market is the lack of adequate spectrum.  The government’s primary role in the development of broadband -- one which only it can fulfill -- is to ensure that spectrum that meets the technical and practical needs of 3G deployment is available.  The Commission and NTIA should identify adequate spectrum (both in terms of amount and location) to satisfy current and expected broadband needs, and should distribute licenses for such spectrum in the most economically efficient manner available -- auction.  Failure to adopt a comprehensive spectrum strategy incorporating these elements or adoption of a spectrum policy that lays too heavy a regulatory hand on other aspects of the broadband market will stunt broadband development and prevent consumers from receiving the services they demand.

A.        Allocation of Additional, Globally Harmonized Spectrum Is Necessary for 3G Deployment.

AWS strongly urges NTIA to identify for 3G use at least 160 MHz of paired spectrum in bands consistent, to the extent possible, with spectrum identified internationally for 3G use.  Reallocating underutilized spectrum to more efficient purposes is absolutely essential if wireless services are to become a competitive force in the broadband market.

Competing commercial uses for spectrum has greatly intensified demand for spectrum, thereby exponentially increasing the difficulty of obtaining spectrum appropriate for 3G use and threatening the ability of providers to deploy 3G offerings capable of meeting existing and future consumer needs.[27]/  The government must take full advantage of the opportunities that it now has to develop a well-considered, comprehensive spectrum policy providing long-term solutions rather than merely stopgap remedies.   To ensure that the spectrum drought does not unacceptably retard the future growth and potential of 3G while still in its nascent stages, new spectrum must be allocated for these services.

That process, however, is moving slowly and unevenly.  Several potential sources of 3G spectrum have been removed from consideration for that use, thus rendering the process of identifying new spectrum even more difficult.  For example, the Commission has declined to make available the 2500-2690 MHz band for use by existing mobile operators wishing to provide 3G services.[28]/  Furthermore, as recent Commission and NTIA reports indicate, it may be exceedingly difficult for 3G systems to share with incumbent users, and it is also unclear if and when additional spectrum used by the Department of Defense and other federal agencies could be freed up for commercial uses such as 3G.[29]/   

Nor will the small pieces of spectrum identified by the Commission as candidate bands for advanced services solve the industry’s broadband spectrum needs.[30]/  One problem is that the aggregate amount of spectrum being considered for allocation falls far below the 160 MHz identified by the ITU as necessary to the deployment of broadband in the United States.[31]/  Moreover, because of the minimum size of the channels required, the need to pair spectrum, and the economics of manufacturing radio devices, large contiguous blocks of spectrum are a necessary element of any 3G solution; small (5-10 MHz) blocks of noncontiguous blocks of spectrum will not meet 3G requirements.  Similarly, the guard bands that would be required to provide adequate protection from harmful out-of-band emissions would also render small blocks of spectrum (under 10 MHz) unusable for robust 3G systems.  In addition, any spectrum allocated for 3G use should be, to the extent possible, consistent with international allocations in order to ensure effective global capabilities.  Therefore, identification of frequency bands for 3G purposes and reallocation of that spectrum must be done as the result of a unified and coordinated effort that addresses the unique requirements of 3G service. 

As the government’s spectrum coordinator, NTIA can serve the vital role of identifying appropriate spectrum for 3G use and relocating government users from those bands.  In furtherance of these objectives, NTIA should complete as promptly as possible its review of partial relocation of the 1.7 GHz band for commercial use.[32]/  In addition, NTIA should support the reallocation, pairing, and clearing of spectrum of the 1710-1770/2110-2170 MHz bands for 3G services.  The availability of such spectrum would expedite the development and deployment of 3G and provide limited commonality with advanced services bands worldwide.  In addition, as discussed more fully below, NTIA should support the reallocation of underutilized MSS spectrum for 3G use.  Finally, by establishing reasonable reimbursement policies for relocating government incumbents, NTIA could help free up spectrum by encouraging more rapid relinquishment by current users.

B.        The Federal Government Should Rely on Competitive Bidding To Ensure that MSS Spectrum Allocated for Terrestrial Use is Put to Its Highest and Best Use

At a time when government agencies and industry are investing substantial time and money in an attempt to find new spectrum to satisfy existing and emerging consumer needs, the government should consider the reallocation of underutilized spectrum (in particular, the bands allocated to MSS) for more highly valued uses such as 3G and employ the method for distributing the licenses most likely to maximize the most efficient use of such spectrum  -- a system of competitive bidding open to all interested bidders.

NTIA has long supported auctions as the preferred method for the distribution of scarce spectrum rights.  In 1991, it strongly recommended that a market-based system of spectrum licensing be adopted because “a market for spectrum licenses or rights, if properly structured, can maximize both ‘allocative efficiency’ (i.e,. prices bid for spectrum reflect the costs to society of spectrum use) and ‘distributive efficiency’ (i.e,. those who value spectrum most will use it)” and “promote ‘technical efficiency’ (i.e., total costs are minimized for a given level of production or output.”[33]/  In addition, NTIA noted that “a spectrum market would be equitable in the most basic sense” because “users would pay for using a valuable resource,” which not only would compensate the public for use of the public airwaves but would force users themselves to determine and bear the opportunity costs of their exclusive use of a limited asset.[34]/  Accordingly, NTIA concluded that the public interest would be best served “if spectrum management in the United States made greater use of the ‘management’ approach relied on so successfully throughout our economy to allocate resources and produce those goods and services most valued by consumers -- the market system.”[35]/  In fact, NTIA’s support for competitive bidding was instrumental to Congress’s and the Commission’s adoption of auctions as the preferred mechanism for licensing spectrum.[36]/ 

Since then, NTIA has repeatedly reaffirmed its belief that the government should leave the task of picking winners and losers to the market, thereby allowing competition to ensure that spectrum flows to its most valued and efficient use.[37]/  Indeed, Assistant Secretary for Communications and Information for the Department of Commerce, Nancy J. Victory, who is the Director of NTIA, recently voiced support for NTIA’s long-standing reliance on market forces rather than government regulation as the primary mechanism for governing the allocation of scarce resources and the development of new markets, noting that government’s role in any overarching broadband policy should be, when possible, merely to “facilitate deployment of new technologies by eliminating any roadblocks,” leaving further regulation “up to the market” itself.[38]/

The Commission and NTIA should make no exception to their general presumption that competitive bidding is the licensing mechanism most likely to further the public interest in granting rights for terrestrial use of spectrum allocated to satellite services.  As indicated above, the many benefits of auction are obvious, while the only argument purportedly supporting the rejection of competitive bidding is that such a subsidy is necessary to ensure the viability of MSS.  Although the MSS providers contend that such rights would allow them to offer hybrid terrestrial/MSS services that would increase their ability to serve urban areas and boost their subscribership sufficiently to render their MSS systems profitable, as numerous commenters (including both CMRS providers and MSS licensees) have demonstrated to the Commission, granting such authority would far more likely result in the quick demise of MSS than in its revival.[39]/

Contrary to MSS operators’ assertions, the terrestrial component of the systems under consideration would not be ancillary or supplemental to the MSS system.  Because the terrestrial component could be operated independently of the MSS component and would serve the vast majority of the system’s subscribers, MSS operators would almost certainly succumb to the intense economic incentives to transition from serving the extremely cost-intensive, unprofitable MSS market to the far more lucrative terrestrial market.  Not only would such a shift in service priorities be directly contrary to the proposed goal of the proposed subsidy -- fostering robust MSS -- it would provide MSS operators with a huge competitive advantage over the terrestrial wireless providers with whom they would be directly competing and who were required to pay billions of dollars for their spectrum.

By sharp contrast, reallocating MSS spectrum for terrestrial wireless use and licensing that spectrum via auction would strongly benefit the public interest.  The reallocation of these large, contiguous blocks of underutilized MSS spectrum would ease dramatically the spectrum drought by allowing such spectrum to be used for services for which there is intense existing and future consumer demand.  Moreover, permitting the market rather than regulatory intervention to determine the use of this spectrum would encourage the deployment of new and innovative services (such as 3G) as well as permit CMRS operators to serve better their existing customers (including the provision of more reliable emergency services).  In the absence of any public interest rationale for implementing a licensing mechanism other than auction, Section 309(j) of the Communications Act -- which mandates CMRS spectrum be distributed via auction except for in very narrow circumstances not relevant here -- requires that rights to terrestrial use of MSS spectrum be assigned via a system of competitive bidding open to all qualified bidders.[40]/

C.        Regulatory Uncertainty Unduly Limits the Ability of Secondary Spectrum Markets To Aid in the Efficient Utilization of Spectrum

The Commission’s adoption of a Policy Statement on November 9, 2000, setting forth the goal of encouraging secondary markets in an attempt to encourage more efficient spectrum utilization was a welcome indication of the Commission’s commitment to relying on market forces rather than regulation to govern spectrum distribution whenever possible.[41]/  Although no substitute for the adoption of a comprehensive spectrum policy including the re-allocation of underutilized spectrum (such as that allocated for MSS) for more pressing needs, robust secondary markets would allow carriers substantially more control over their economic fates and to take some action -- even if of only limited scope -- to resolve problems stemming from spectrum scarcity in particular areas.  Carriers have, to date, been unable to take full advantage of potential opportunities to trade or sell spectrum on such secondary markets because the Commission has not yet clearly defined the regulatory scheme -- particularly licensees’ rights and obligations -- that would govern participation in such markets.  Secondary spectrum markets will not become a truly useful tool until the Commission adopts clear rules that will allow licensees, investors, and others to make informed, rational economic decisions without overcoming superfluous regulatory barriers.   

III.   Access to High Quality ILEC Transport At Cost-Based Rates Is Crucial to Fulfilling the Promise of Intermodal, Facilities-Based Competition

As noted above, FCC Chairman Powell recently emphasized the importance of facilities-based competition from alternative platforms such as wireless networks.[42]/  Ironically, however, the promise of facilities-based competition from wireless platforms hinges in large part on the ability of wireless carriers to obtain wireline transport facilities.  Such facilities are a critical component of wireless networks.  This is the case regardless of whether the service is voice, data or broadband.  It is crucial, therefore, that NTIA and the Commission promote policies that provide incentives for incumbent local exchange carriers to provide such facilities in a timely manner, with a high qualify of performance, and at cost-based prices.  Examples of such policies include the adoption of national performance standards for the provision of unbundled network elements, interconnection facilities and special access services underpinned with an effective enforcement regime, and confirmation that wireless carriers may obtain necessary transport facilities as unbundled network elements.  In addition, the Commission should vigorously enforce existing rules targeting incumbent misconduct.

A.        Wireless Networks Are Dependent Upon ILEC Transport

The provision of wireless services requires the acquisition and deployment of a variety of infrastructure components.  These include acquisition of spectrum and handsets, the deployment of base station antennas and related equipment at each cell site, and the establishment of centralized base station controllers and mobile switching centers to route traffic and switch calls among cell sites.  These components represent the wireless platform that wireless carriers “bring to the table” to provide facilities-based competition.   

The purchase of these facilities represents a significant capital investment.  AWS, for example, has invested billions of dollars to develop and deploy its network.  In the third quarter of this year alone, AWS’s capital expenditures for network infrastructure exceeded one billion dollars.[43]/  For the year, AWS’s plans call for spending approximately $5 billion for network build-out and improvements.[44]/  Capital expenditures for the wireless industry as a whole likely will increase in the years ahead as the industry deploys 2.5G and 3G technologies to provide broadband wireless services.[45]/

In addition to the capital expenditures for spectrum, cell site development and establishment of mobile switching centers (MSCs), wireless carriers expend significant sums to lease transport facilities from incumbent LEC special access tariffs.[46]/  This transport is used to backhaul traffic from cell sites to MSCs or to centralized base station control equipment that may be located away from the MSC.[47]/  Wireless carriers also purchase special access transport to carry traffic to other carriers.  Major national carriers such as AT&T Wireless have established tens of thousands of cell sites throughout their territory, and that number is expected to increase substantially in the next few years as carriers expand capacity to meet increasing demand and implement 2.5G and 3G technologies.  Each of these cell sites must be linked to an MSC or to base station controller (if not collocated at the MSC). 

To a surprisingly large extent, wireless networks must rely on wireline transport facilities.  These facilities are necessary both to tie the wireless network together, and to transport traffic to the networks of other carriers, such as local exchange carriers, interexchange carriers, or other CMRS providers.  In the vast majority of cases, wireless carriers have no choice but to purchase these facilities from the ILECs.  Indeed, the sale of special access services to wireless carriers is big business for the incumbent carriers.[48]/  Although other providers have deployed transport facilities, such as SONET rings, in some areas -- primarily urban centers -- only the ILECs have deployed the ubiquitous transport facilities that wireless carriers need.  Wireless carriers are located in suburban and rural parts of the country as well as large cities and, as noted above, they have established thousands upon thousands of cell sites.  Only the ubiquitous incumbent networks have existing facilities to these sites.

Wireless carriers also cannot, as a practical matter, duplicate the incumbents’ facilities and construct their own transport networks.  Attempting to build such comprehensive transport facilities would be ruinously expensive and would divert precious capital from the efforts to increase the number of cell sites to accommodate increased demand and upgrade the existing networks to advanced technology.  In addition to the costs, expansion and improvements would be significantly delayed while wireless carriers obtain rights-of-way, building access agreements and navigate the myriad other obstacles that confront carriers attempting to construct networks.

Wireless carriers are therefore captive customers for transport facilities to the ILECs.  Recognizing their monopoly power, the ILECs require wireless carriers to purchase these facilities from special access tariffs and consistently refuse to provide such facilities as unbundled network elements (UNEs), as required by the 1996 Act and the Commission’s implementing regulation.[49]/  This forces wireless carriers to pay the inflated, subsidy-ridden prices contained in the tariffs and, at the same time,  denies them access to the performance standards and penalties certain of the states have developed for unbundled network elements.  Unless and until the federal government requires ILECs to put wireless providers on equal footing with other carriers, it is unlikely that wireless service will be able to develop into a meaningful competitor for wireline telephony and advanced services.

B.        Enforcement of Existing Rules and Adoption of New Policies Will Be Required To Foster the Development of Inter-Modal Competition

To fulfill the promise of inter-modal competition, not only must wireless carriers have access to unbundled network elements, ILECs must be subject to uniform performance standards, backed by effective, efficient enforcement mechanisms, for special access services.  The Commission recently launched its “triennial” review of unbundled network elements, the outcome of which will be critical to the development of competition, especially inter-modal competition.[50]/  Through the policies it develops on UNE access, the Commission can either foster the development of wireless/wireline competition or prevent wireless carriers from realizing their potential as meaningful participants in the marketplace.   

The Commission also has initiated a rulemaking proceeding to identify a core set of performance measurements and standards for the provisioning of interstate special access services, and to adopt enforcement mechanisms to ensure compliance.  The adoption of performance measurements and standards -- with uniform rules specifying what is to be measured and how -- would significantly facilitate inter-modal competition.  ILECs retain market power in the provision of these facilities and a national performance plan would help ensure that special access services are provisioned on a nondiscriminatory, pro-competitive basis.  Equally important is the adoption of an enforcement mechanism that contains self-effectuating liquidated damages and compensates the injured party for the incumbent’s failure to perform as well as establishes penalties sufficiently severe to ensure that fines for poor performance are not merely a cost of doing business.  As Assistant Secretary Victory recently noted, regulations “must have teeth and penalties must deter non-compliance.”[51]/ 


CONCLUSION

For the foregoing reasons, NTIA should adopt – or urge the adoption of – comprehensive spectrum and regulatory policies that will promote the development of a robust advanced wireless services market.

Respectfully submitted,

AT&T WIRELESS SERVICES, INC.

 

 

  /s/ Douglas I. Brandon                                   ____

Howard J. Symons

Sara F. Leibman

Michael L. Pryor

Catherine Carroll

Mintz, Levin, Cohn, Ferris, Glovsky

     and Popeo, P.C.

701 Pennsylvania Avenue, N.W.

Suite 900

Washington, D.C.  20004

(202) 434-7300

 

Of Counsel

 

Dated: December 19, 2001

 

Douglas I. Brandon

Vice President-External Affairs

David P. Wye

Director, Spectrum Policy

1150 Connecticut Avenue, N.W.

Washington, D.C.  20036

(202) 223-9222

 

 

 

 


CERTIFICATE OF SERVICE

 

I, Catherine Carroll hereby certify that on this 19th day of December, 2001, a copy of the foregoing Comments of AT&T Wireless Services, Inc. were delivered via first class U.S. Mail to the following:

 

Josephine Scarlett

Office of the Chief Counsel

National Telecommunications and

      Information Administration

Room 4713 HCHB

1401 Constitution Avenue, NW

Washington, DC  20230

Nancy J. Victory

Assistant Secretary for Communications

       and Information

National Telecommunications and

       Information Administration

Room 4898

U.S. Department of Commerce

1401 Constitution Avenue, N.W.

Washington, DC  20230

Michael D. Gallagher

Deputy Assistant Secretary

National Telecommunications and Information

  Administration

Room 4898

U.S. Department of Commerce

1401 Constitution Avenue, N.W.

Washington, D.C.  20230

 

William J. Bailey III

Senior Advisor

Office of the Assistant Secretary

      for Communications & Information

National Telecommunications and Information

  Administration

Room 4898

U.S. Department of Commerce

1401 Constitution Avenue, N.W.

Washington, D.C.  20230

William T. Hatch

Associate Administrator

Office of Spectrum Management

National Telecommunications and Information

     Administration

Room 4009

U.S. Department of Commerce

1401 Constitution Avenue, N.W.

Washington, DC 20230

 

Milton Brown

Office of the General Counsel

National Telecommunications and Information

  Administration

Room 4713

U.S. Department of Commerce

1401 Constitution Avenue, N.W.

Washington, D.C.  20230

 


 

Frederick Wentland

Director, Spectrum Plans and Policies

Office of Spectrum Management

National Telecommunications and

      Information Administration

Room 4099

U.S. Department of Commerce

1401 Constitution Avenue, N.W.

Washington, DC  20230

Russell W. Slye

Office of Spectrum Management

National Telecommunications and Information

       Administration

Room 4009

U.S. Department of Commerce

1401 Constitution Avenue, N.W.

Washington, DC 20230

 

Rodney Small

Office of Engineering and Technology

Federal Communications Commission

445 12th Street, S.W.

Washington, DC 20554

 

Bruce Franca

Acting Chief

Office of Engineering and Technology

Federal Communications Commission

445 12th Street, S.W., Room TW

Washington, DC 20554

 

Kathleen Ham

Deputy Chief

Wireless Telecommunications Bureau

Federal Communications Commission

445 12th Street, S.W., Room 3-C252

Washington, DC 20554

 

James D. Schlichting

Deputy Chief

Wireless Telecommunications Bureau

Federal Communications Commission

445 12th Street, S.W., Room 3-C252

Washington, DC 20554

 

 

/s/ Catherine Carroll                                         

Catherine Carroll

Text Box: WDC 304952v1



[1]/    Request for Comments on Deployment of Broadband Networks and Advanced Telecommunications, Dep’t of Commerce, National Telecommunications and Information Administration, Notice, Docket No. 011109273-1273-01 (Nov 19, 2001) (“NTIA Notice”).

[2]/    See Letter from Nancy J. Victory, Assistant Secretary for Communications and Information, Dep’t of Commerce, NTIA, to Michael K. Powell, FCC Chairman 1-2 (Oct. 25, 2001) (filed in 2000 Regulatory Review, Spectrum Aggregation Limits for Commercial Mobile Radio Services, WT Docket No. 01-14) (“Victory Letter”).

[3]/    See Brad Spurgeon, Timeline of Wireless Communications, International Herald Tribune, Special Report (Graphic), Sept. 26, 2001 (stating that U.S. subscribership passed 5 million in 1990 and is expected to reach more than 1 billion by the end of this year); Jennifer Davies, Cell-Phone Industry Not Hurt By Sell-Off This Week, San Diego Union-Tribune, Sept. 20, 2001 (placing current subscribership at about 120 million and indicating that future subscribership could reach approximately 70% domestic penetration); Victory Letter at 1 (placing current subscribership at 125 million) .

[4]/    See Victory Letter at 1-2 (asserting that “[t]here is broad agreement that the CMRS marketplace is highly competitive and has grown remarkably since its inception,” recognizing that cellular, PCS, and Nextel services compete head-to-head resulting in most metropolitan areas having more than four vigorous competitors while many have more than six, and noting that “the CMRS market as whole is characterized by many large national players, along with many robust local players”).

[5]/    Ernest Rejman, 3G Is Poised To Take Over the Cellular World, Microwave Journal, Sept. 1, 2000.

[6]/    See Digital Broadband Migration – Part II, FCC Chairman Michael K. Powell, Speech at FCC Press Conference (Oct. 23, 2001).

[7]/    Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993, Annual Report and Analysis of Competitive Market Conditions With Respect to Commercial Mobile Service, 16 FCC Rcd 13,350, 13,381, Sixth Report, FCC 01-192 (rel. July 17, 2001) (“Sixth Report”) (citing Yankee Group study).

[8]/    Id. (citing Consumer Electronics Association survey).

[9]/    Id. at 13,381-13,382

[10]/   Id. at 13,382.

[11]/   Id. (citing IDC Personal Wireless Communications Users Survey, 2000).

[12]/   See Digital Broadband Migration – Part II, FCC Chairman Michael K. Powell, Speech at FCC Press Conference (Oct. 23, 2001).

[13]/   See AWS Website, http://www.attws.com/personal/pocketnet, viewed December 11, 2001.  Sprint Wireless, Verizon Wireless, and other wireless providers similarly offer a variety of advanced data services.  See, e.g., Sprint Website, http://www.sprintpcs.com/wireless/index.html, viewed Dec. 11, 2001; Verizon Wireless Website, http://www.verizonwireless.com/internet_data/index.html, viewed Dec. 11, 2001.

[14]/   See AWS Website, http://www.attws.com/press/releases/2001_07/071701.html, viewed Dec. 11, 2001.  Sprint PCS has also begun rolling out its 2.5G service, and Verizon and Cingular intend to launch their offerings this quarter.  See William Schaff, Insight into Technology Investing: Taking Stock, InformationWeek, Nov. 19, 2001.

[15]/   H.R. Conf. Rep. No. 104-458, at 207 (1996).

[16]/   47 U.S.C. § 332(c)(7)(B)(i)(II).

[17]/   47 U.S.C. § 253(a).

[18]/   Telecommunications Act of 1996, Pub. L. No. 104-104 at § 704(c), 110 Stat. 56, 152 (1996) (“1996 Act”); H.R. Conf. Rep. No. 104-458, at 207-09 (1996).  President Clinton had previously issued a memorandum directing the Administrator of General Services, in consultation with the heads of other federal agencies, to develop procedures necessary to facilitate access to federal property for the siting of “mobile services antennas.”  Executive Memorandum of August 10, 1995, Facilitating Access to Federal Property for the Siting of Mobile Services Antennas, 60 Fed. Reg. 42023 (Aug. 14, 1995).

[19]/   Placement of Commercial Antennas on Federal Property, GSA Bulletin FPMR D-242, 62 Fed. Reg. 32611 (1997) (“GSA Bulletin”).

[20]/   See, e.g., Michael E. Ruane, Cell Phones Sing in Rock Creek, Washington Post, Aug. 14, 2000, at B2; Heather Forsgren Weaver, BAM to Get Rock Creek Permits, Radio Communications Report, Nov. 22, 1999, at 3.

[21]/   GSA Bulletin, 62 Fed. Reg. 32613.  (“In accordance with the President’s memorandum, Executive departments and agencies should charge fees based on market value.  Fee determination can be based on appraisal, use of set rate schedules, or other reasonable means of value determination.”).

[22]/   See Northwest Airlines, Inc. v. County of Kent, 114 S.Ct. 855, 864 (1994) (applying test developed in Evansville-Vanderburgh Airport Authority District v. Delta Airlines, Inc., 405 U.S. 707 (1972) that levy is “reasonable” if it is (1) “based on some fair approximation of use of the [State’s] facilities;” (2) and not “excessive in relation to the benefits conferred.”); American Trucking Ass’n v. Scheiner, 483 U.S. 266, 290 (1987) (invalidating taxes because “they do not even purport to approximate fairly the cost or value of the use of Pennsylvania’s roads”).

[23]/   See e.g., Stephen Bouvet, Tower Siting:  Carriers May Get Help From Congress, Mobile Phone News, Jan. 26, 1998; www.planwireless.com/sayno.htm; www.emrnetwork.org.

[24]/   See, e.g., 47 C.F.R. § 20.18. 

[25]/   47 U.S.C. § 332(c)(7)(a).

[26]/   47 U.S.C. § 253(a).  Section 253(d) grants the Commission the authority to preempt any statute, regulation or legal requirement that it finds violates this prohibition.  47 U.S.C. § 253(d).

[27]/   See Amendment of Part 2 of the Commission’s Rules to Allocate Spectrum Below 3 GHz for Mobile and Fixed Servs. to Support the Introduction of New Advanced Wireless Servs., Including Third Generation Wireless Sys., 16 FCC Rcd 596, ¶ 2, Notice of Proposed Rulemaking and Order, FCC 00-455 (rel. Jan. 5, 2001) (noting that “demand for spectrum has increased dramatically” and Commission policy must focus on increasing the amount of spectrum available for use); Principles for Reallocation of Spectrum to Encourage the Dev. of Telecomms. Technologies for the New Millennium, Policy Statement, 14 FCC Rcd 19868, 19870 (1999) (“Spectrum Policy Statement”) (noting the existence of “very little unencumbered spectrum . . . . for new services”).

[28]/   See generally Amendment of Part 2 of the Commission’s Rules to Allocate Spectrum Below 3 GHz for Mobile and Fixed Services to Support the Introduction of New Advanced Wireless Services, Including Third Generation Wireless Systems; Amendment of the U.S. Table of Frequency Allocations to Designate the 2500-2520/2670-2690 MHz Frequency Bands for the Mobile Satellite Serv., ET Docket No. 00-258, RM 9911, First Report and Order and Memorandum Opinion and Order, FCC 01-256, (Sept. 24, 2001).

[29]/   See generally Office of Engineering and Technology, Mass Media Bureau, Wireless Telecommunications Bureau and International Bureau, Federal Communications Commission, Spectrum Study of the 2500-2690 MHz Band, The Potential for Accommodating Third Generation Mobile Sys., Final Staff Report, Public Notice, DA 01-786, http://www.fcc.gov/3g/ (rel. Mar. 30, 2001) (“FCC Spectrum Report”); see also NTIA, U.S. Dept. of Comm., The Potential for Accommodating Third Generation Mobile Sys. in the 1710-1850 MHz Band: Federal Operations, Relocation Costs, and Operational Benefits, Final Report (rel. Mar. 30, 2001) (“NTIA Spectrum Report”).

[30]/   See generally, Amendment of Part 2 of the Commission’s Rules to Allocate Spectrum Below 3 GHz for Mobile and Fixed Services to Support the Introduction of New Advanced Wireless Services, Including Third Generation Wireless Systems, ET Docket No. 00-258, Memorandum Opinion and Order and Further Notice of Proposed Rulemaking, FCC 01-224 (rel. Aug. 20, 2001) (“3G Further Notice”).

[31]/   See 3G Further Notice at n.7.

[32]/   See NTIA Statement Regarding New Plan to Identify Spectrum For Advanced Wireless Services (3G), National Telecommunications and Information Administration, Dep’t of Commerce, Oct. 5, 2001.

[33]/   U.S. Spectrum Management Policy: Agenda for the Future, Dep’t of Commerce, NTIA, NTIA Spec. Pub. 91-23, Chapter 4, Section II(A)(1) (Feb. 1991).

[34]/   See id.

[35]/   Id.

[36]/   See Management of the Radio Spectrum, Testimony of Larry Irving, Assistant Secretary for Communications and Information, Dep’t of Commerce, NTIA, Before the House Committee on Commerce, Subcommittee on Telecommunications, Trade, and Consumer Protection, at 2-3 (Feb. 12, 1997) (“Irving Testimony”). 

[37]/   See Irving Testimony at 3 (NTIA testimony before Congress in 1997 that “[a]uctions are more likely to award licenses to the parties that value them most and therefore can result in the most economically efficient license distribution,” to allow rapid and less costly distribution of licenses, and to compensate the public for the use of such spectrum both directly through the funds paid via auction and through the jobs and other benefits created by a flourishing PCS industry).  See also New Opportunities for Small Wireless Operators, Speech by Larry Irving, Assistant Secretary of Commerce, NTIA, Dep’t of Commerce (June 15, 1998) (“The Administration and the FCC believe that auctions are an efficient way to assign spectrum to those that value it most”); Jennifer Mayne, Changing of the Guard at NTIA: Greg Rhode Takes the Helm, Rural Telecommunications, Vol. 19, Iss. 2, Mar. 1, 2000 (noting that NTIA has a history of supporting auctions and quoting a recent Director as stating that auction “is a much more efficient and fair way of allocating systems than the previous system.”).

[38]/   NTIA’s Victory Lists Guideposts To Follow for Broadband Policy Development, Telecommunications Reports Daily, Dec. 6, 2001.

[39]/   See, e.g., AWS Comments at 4-8, filed in Reallocation of the 216-220 MHz, 1390-1395 MHz, 1427-1429 MHz, 1429-1432 MHz, 1432-1435 MHz, 1670-1675 MHz, and 2385-2390 MHz Government Transfer Bands, Federal Communications Commission, Notice of Proposed Rulemaking, ET Docket Nos. 00-221, RM-9267, RM-9692, RM-9797, RM-9854 (rel. Nov. 20, 2000).  See also Cingular Wireless and Verizon Wireless Joint Comments at 15-16; Inmarsat Ventures PLC Comments at 26-27; Iridium Satellite LLC Comments at 2, 8.

[40]/   See 47 U.S.C. § 309(j) (requiring auction of CMRS spectrum in most circumstances).

[41]/   See generally Principles for Promoting the Efficient Use of Spectrum By Encouraging the Development of Secondary Markets, Policy Statement, FCC 00-401 (rel. Dec. 1, 2000).

[42]/   See Digital Broadband Migration – Part II, FCC Chairman Michael K. Powell, Speech at FCC Press Conference (Oct. 23, 2001).

[43]/   AWS Earnings Commentary, 3d Quarter, 2001, http://www.attws.com/wirelessir/fin/financials.shtml#gec.

[44]/   Tish Williams, AT&T Wireless Beats Estimates, but with Mixed Metrics, The Street.com, October 23, 2001, http://www.thestreet.com/cnet/tech/telecom/10002875.html.

[45]/   See, e.g., Report:  Wireless Infrastructure Spending to Soar, Wireless NewsFactor, Sept. 27, 2001, http://wirelessnewsfactor.com/perl/story/13806.html (reporting on Yankee Group study estimating that worldwide mobile infrastructure spending will grow from $99.4 billion this year to $120.2 billion in 2004 due largely to deployment of 3G and 2.5G networks).

[46]/   AWS projects that it will spend $200 to $400 million this year for special access circuits nationally.  See, Letter from Douglas I. Brandon, AT&T Wireless to Michelle Carey, Chief Policy and Program Policy Division, CCB, April 6, 2001, at 4, submitted in CC Docket 96-98, on June 26, 2001.

[47]/   MSCs are central computers that connect a wireless phone call to the public network and control the entire system’s operations, including monitoring calls and handing calls off from one cell site to the next.  See the Wireless Glossary, www.wow-com.com/consumer/faq/articles.cfm?ID=98.

[48]/   The incumbent LECs make wireless carrier handbooks available on their websites to explain the services they can provide to wireless carriers, including the provision of special access circuits to haul traffic from cell sites to MSCs.  See, e.g., US WEST, Wireless Carrier Resource Guide, http://www.qwest.com/wholesale/pcat/wirelessGuide.html; Verizon Wireless Handbook, http://www22.verizon.com/wholesale/frames/generic_frame_east/0,2656,cd_wireless_hbk,00.html.

[49]/   See Petition for Declaratory Ruling filed by AT&T Wireless and VoiceStream Wireless Corporation, on November 19, 2001 (requesting declaratory ruling confirming wireless carriers’ right to access unbundled network elements).

[50]/   Federal Communication Commission Initiates Review of Local Phone Network Unbundling Policies, Press Release, Federal Communications Commission (Dec. 12, 2001).

[51]/   Removing Roadblocks to Broadband Deployment, Speech by Nancy J. Victory, Assistant Secretary for Communications and Information, before the Competition Policy Institute’s Conference (Dec. 6, 2001).