Before the

**[National Telecommunications and Information
Administration]{.smallcaps}**

**[United States Department of Commerce]{.smallcaps}**

**[Washington, D.C.]{.smallcaps}**

In re )

)

United States Spectrum Management ) Docket No. 040127027-4027-01

Policy for the 21st Century )

)

Comments in Response to )

Notice of Inquiry )

To: Assistant Secretary for Communications and Information, U.S.
Department of Commerce

> Administrator, National Telecommunications and Information
> Administration

**[Comments of Cingular Wireless LLC]{.smallcaps}**

Cingular Wireless LLC ("Cingular")[^1] hereby offers its comments in
response to the *Notice of Inquiry* issued by the National
Telecommunications and Information Administration of the U.S. Department
of Commerce ("NTIA") in the above-captioned proceeding.[^2]

**I. Introduction**

In his *Presidential Memorandum on Spectrum Policy in the 21st
Century*,[^3] President Bush established a "Spectrum Policy Initiative"
and committed his Administration to "promoting the development and
implementation of a U.S. spectrum policy for the 21^st^ century that
will: (a) foster economic growth; (b) ensure our national and homeland
security; (c) maintain U.S. global leadership in communications
technology development and services; and (d) satisfy other vital U.S.
needs in areas such as public safety, scientific research, Federal
transportation infrastructure, and law enforcement."[^4] In accordance
with the directives contained in the *Presidential Memorandum*, NTIA
issued the *Notice*, which solicits comments as part of a comprehensive
review of the current state of U.S. spectrum management policy. The
purpose of the *Notice* is to develop legislative and other
recommendations for advancing the following policy objectives:

-   modernization and improvement of U.S. spectrum management;

-   creation of incentives for achieving more efficient and beneficial
    use of the spectrum, and provision of a higher degree of
    predictability and certainty in the spectrum management process as
    it applies to incumbent users;

-   development of policy tools to streamline the deployment of new and
    expanded services and technologies, while preserving national and
    homeland security and public safety, and encouraging scientific
    research; and

-   development of means to address the critical spectrum needs of
    national security and homeland security, public safety, Federal
    transportation infrastructure, and science.

In the *Notice*, NTIA asks a variety of questions involving the
organizational, procedural and policy aspects of our nation's spectrum
management policies, with a view toward enhancing Federal government,
State, local and private sector spectrum use. Cingular supports the
goals of the *Presidential Memorandum* and welcomes this opportunity to
offer its views to NTIA on several of the issues raised in the *Notice*.
As a major participant in the most competitive sector of the
telecommunications industry -- the commercial mobile radio service
("CMRS") sector -- Cingular is well-positioned to offer comments on the
best ways to achieve the stated goals.

**II. Key Principles of Spectrum Policy**

The task assigned by the *Presidential Memorandum* is not simple. As
NTIA begins its review of spectrum management in the United States, it
is important for NTIA to remain mindful of certain basic principles.
Cingular believes that the following "key principles of spectrum policy"
should guide this proceeding:

-   Spectrum policy should seek to maximize the efficient use of the
    electromagnetic spectrum.

-   Spectrum policy should create a reliable and predictable regulatory
    environment in which incumbent users -- whether they are government,
    private or commercial -- are protected from interference.

-   Spectrum policy should promote and facilitate the development and
    deployment of new services and applications, and the expansion of
    existing ones.

The *Notice* seeks comment on the structure of the government's system
for spectrum management. Cingular does not perceive a great need to
alter the existing structure at this time -- wherein spectrum management
responsibilities are split among NTIA, the Federal Communications
Commission ("FCC") and the U.S. Department of State. Whatever spectrum
management structure is put in place, however, Cingular wishes to
emphasize that the above-mentioned key principles must be followed.

##  

**III. Fostering Competitive Markets Will Most Effectively Promote
Efficient Use of Spectrum.**

In the market for CMRS services, making efficient use of one's spectrum
is an indispensable ingredient for survival. Likewise, in any
well-functioning, competitive market (*i.e.*, one in which behavior is
driven by market incentives), service providers have every reason to
maximize spectrum efficiency. The marketplace dynamic for spectrum
efficiency -- in which increased efficiency will lead to higher profits
-- operates as a more powerful force than any regulatory requirements.
Indeed, in competitive markets like CMRS, imposition of any new
regulatory mechanism to ensure efficient use of spectrum will only
interfere with the smooth functioning of the market.

As a general matter, spectrum should be allocated to its most efficient
use unless significant public policy goals, such as public safety, would
be jeopardized.[^5] In addition, when spectrum is being allocated, the
public interest is served best by maximizing the flexibility of users to
employ licensed spectrum in the most efficient manner, consistent with
interference protection requirements. It is unwise, however, to attempt
to solve an inefficient existing use of licensed spectrum by simply
layering on new permitted uses under the guise of a "flexible use"
policy.[^6] If spectrum is to be subject to flexible use, the degree of
flexibility should be made clear at the time the allocation is made. In
this way, all potential bidders in an auction of licenses to use that
spectrum will have complete information as to the spectrum's potential,
and the auction winner will more likely be the party with the best and
most efficient use for the spectrum.

The *Notice* asks how the term "spectrum efficiency" should be defined,
and what metrics should be used to apply the definition. Defining this
term, however, may not be productive. Spectrum efficiency often means
entirely different things depending on the service or use being
discussed. For example, a definition that relies upon the number of
subscribers that a carrier served per licensed MHz over a particular
geography would be meaningless in analyzing the efficiency of a
non-commercial spectrum use or of one that uses a point-to-point
architecture. Spectrum efficiency is best encouraged not by defining it
through regulatory means, but instead by encouraging competitive
markets, where market forces will naturally drive market participants to
more efficient uses of their spectrum assets.

NTIA also asks how receiver performance standards can be employed to
increase spectrum efficiency and minimize harmful interference.
Commercial wireless receivers already are engineered to rigorous
standards. In order to maintain their market positions, carriers like
Cingular must be able to offer their customers interference-free service
to the maximum extent possible. Competitive pressures drive CMRS
carriers to demand that equipment manufacturers incorporate robust noise
filters in commercial wireless receivers. Adopting new receiver
performance standards would therefore not be useful with respect to
equipment used in competitive services. They may, however, be of some
use in bands in which competition does not exist to naturally drive the
equipment market to produce interference-resistant receivers (*e.g.*, in
bands allocated to public safety radio communications).

##  

**IV. Spectrum Management Policies Must Protect Incumbent Spectrum Users
From Interference.**

NTIA's desire (as stated in the second objective articulated in the
*Notice*) to "provide a higher degree of predictability and certainty in
the spectrum management process as it applies to incumbent users" is
well placed. A predictable and reliable regulatory environment is
critical to the public interest because, to the extent that
uncertainties exist, investors and carriers are less willing to commit
capital, thereby limiting services offered to the public.

As the FCC's Spectrum Policy Task Force stated in its November 2002
report, spectrum management policy "must be based on clear definitions
of the rights and responsibilities of both licensed and unlicensed
spectrum users, particularly with respect to interference and
interference protection."[^7] Cingular is concerned about the initiation
of recent FCC proceedings that could result in the adoption of new rules
and policies that would impose substantial additional uncertainties
regarding interference in CMRS spectrum bands that were designed for
exclusive use licensees (*i.e.*, operation by a single entity in a
defined geographic area). Specifically, the FCC is considering rules
that would enable unlicensed "underlays" or "easements" that could
introduce new interference to services provided by exclusive use
licenses.[^8] For the reasons detailed below, any recommendations on
spectrum management policy that arise from this proceeding should
clearly state that exclusive use licensees should be free from
additional interference threats.

[Interference Protection Promotes Economic Growth]{.underline}. One of
the primary reasons why Congress created the FCC and its predecessor,
the Federal Radio Commission, was to end the rampant and unpredictable
interference that resulted from an unregulated, uncoordinated
environment in which anyone could use spectrum of their own
choosing.[^9] The establishment of a predictable regulatory environment
made possible the development of new technologies that have driven
innovation and economic growth in the communications sector for decades.
In turn, new communications technologies have brought incalculable
benefits to society, both by creating new ways for people to obtain
information and to communicate with one another, and by spurring new
products and services that allowed us all to be more productive. This
phenomenon would not have happened if the users of licensed spectrum
were not protected from interference.

In the CMRS industry, incumbent carriers have invested more than \$134
billion in their networks, employed more than 187,000 people and brought
valuable telecommunications services to the over 156 million
subscribers.[^10] As a result of these investments, CMRS networks have
continued to expand as carriers have offered an ever-increasing array of
innovative wireless products and services, bringing prices down and
delivering "a high level of competition for mobile telephone
consumers."[^11] The CMRS industry has evolved into the most competitive
sector in the telecommunications industry, but if CMRS carriers did not
enjoy interference protection through operation of the FCC's rules,
these benefits would not have been realized.

[Consumers Will Suffer If Licensees Are Not Protected From
Interference]{.underline}. Protection from interference is essential to
ensure that incumbent spectrum users continue to have access to the
capital necessary for additional investment in their physical networks
and in the development of innovative new products and services.
Furthermore, the customers of incumbent spectrum users would suffer if
regulations allow unlicensed services to be deployed as underlay uses in
a licensed band. Permitting underlay uses would inevitably increase the
noise floor over which licensed services must operate, adversely
affecting the quality of service provided to consumers of those licensed
services.

[Simple Fairness Requires That Incumbents Be Protected From
Interference]{.underline}. When the FCC granted the CMRS licenses in use
today, it granted those licensees the "exclusive use" of certain
frequencies over a certain geography. Billions of dollars have been
invested in wireless networks in reliance on the notion that the
exclusivity granted would remain just that -- exclusive. It would
violate the most basic notions of equity and fairness for lawmakers
and/or regulators to enact new rules that would allow underlay services
or "easements" to encroach on licensed services in exclusive use bands.

**V. Spectrum Management Policies Can Facilitate New Spectrum Uses
Without Compromising Existing Services**

Over the past decade, pursuant to changes in the Communications Act
enacted through Section 6002(b) of the Omnibus Budget Reconciliation Act
of 1993,[^12] the method through which spectrum is assigned has shifted
from hearings and lotteries to auctions. As was intended, assigning
spectrum licenses through competitive bidding has produced huge benefits
for taxpayers, consumers and the wireless industry alike: taxpayers
benefit from the U.S Treasury's recovery of a portion of the value of
the spectrum resource; consumers see new technologies, products and
services sooner because auctions place spectrum in the hands of parties
with the highest valued use for it and therefore the greatest incentive
to put it to use quickly; and the wireless industry is afforded a
reliable, market-based mechanism for gaining access to spectrum more
quickly.

The process by which commercial spectrum is assigned is not in need of
major reform. It is working as intended, and working well. As detailed
below, however, some spectrum allocation policies are in need of reform
and attention must be paid to ensure that spectrum assignment policies
are applied in a consistent manner. NTIA should carefully consider these
concerns and make the following recommendations.

A.  **Allocation Policy Regarding Commercial Spectrum For Unlicensed
    Services Is In Need of Reform.**

No one would dispute that government decisions regarding spectrum
allocations should be based principally on sound policy considerations
and not on politics or popular trends. In its recent actions promoting
unlicensed services, however, it seems that the FCC has forgotten this
basic premise. Certainly, unlicensed applications such as WiFi are
growing rapidly, and unlicensed services have a valuable place in the
wireless landscape. But the FCC seems lately to have committed itself to
promoting unlicensed services even if doing so reduces the ability of
licensed service providers to innovate and improve service quality to
their customers.

As noted above, by awarding exclusive use licenses to CMRS providers,
the FCC provided licensees with incentives to invest capital in
infrastructure and to spend on development of innovative new products
and services. Armed with the knowledge that their licenses protect them
from interference from other users on the same frequencies, CMRS
licensees have been able to access capital far more easily than would
have been the case in the absence of that protection. Future spectrum
policy decisions should not weaken this protection.

The FCC has recently sought to promote unlicensed services through new
allocations, the creation of underlays and/or easements, and the
establishment of new "interference temperature" rules.[^13] To the
extent these efforts hinder the continuing significant growth and
innovation taking place in CMRS services, they would come at a
tremendous cost. In making decisions in these areas, the FCC should
conduct meaningful cost-benefit analyses taking into account the
potential destructive effects that these changes will have on licensed
services.

The FCC's previous CMRS spectrum allocation decisions have created a
fiercely competitive market and brought countless benefits to consumers.
No matter how fashionable it may be to promote unlicensed services,
policymakers should not undercut these previous decisions by damaging a
competitive industry that it worked so hard to nurture.

**B. A Mix of Licensed and Unlicensed Spectrum Should Be Allocated.**

The available spectrum allocable for non-governmental use can and should
be allocated to a combination of licensed and unlicensed uses. It is
vitally important, however, that these two uses not be intermingled. It
has yet to be demonstrated that unlicensed uses can exist in licensed
frequency bands without causing harmful interference to licensed
services. As it moves ahead with this effort to reform spectrum
management policy, NTIA and other policymakers should guard against
actions that would risk significant degradation of the spectrum
environment in which licensed services are provided.

A key element of spectrum allocation policy going forward should be a
continuation of the policy of licensing most of the spectrum below 5 GHz
on an exclusive use basis. The CMRS experience proves that such an
approach provides licensees with the incentive to invest in
infrastructure and to innovate, and gives the capital markets comfort in
knowing that licensees will be free from interference from within their
bands as they roll out their business plans. The resulting economic
gains have been enormous, and it would be foolhardy to jettison this
approach in favor of unproven unlicensed technologies that claim they
can co-exist with licensed services as underlay operations in licensed
bands.

Unlicensed underlays would threaten not only the business plans of
licensed service providers, but also limit the flexibility that
licensees have in deploying technology to meet consumers needs. The
potential for interference that these operations bring represents a
danger to the productivity and enjoyment that the wide variety of
licensed services (not just CMRS services) has brought to all Americans.
Therefore, separate spectrum should be set aside for unlicensed
operations, primarily in spectrum above 5 GHz.

**C. Spectrum Assignment Policy Must Be Applied Consistently.**

In contrast to spectrum allocation policy, the policies governing the
assignment of spectrum licenses for commercial services do not require
major reform. It is the application of these policies that needs to be
addressed. Spectrum assignment policies are not always consistently
applied by the FCC. For example, the FCC concluded correctly that
Section 309(j) of the Communications Act requires it to accept multiple
applications for Multichannel Video Distribution and Data Service
licenses and to put those licenses up for bid in an auction if mutually
exclusive applications are filed,[^14] yet it wrongly decided to allow
Mobile Satellite Service licensees to provide a new terrestrial service
without subjecting them to the Section 309(j) auction process.[^15]
Consistent application of spectrum policies should be a guiding
principle that is included in any recommendations that emanate from the
Spectrum Policy Initiative.

**VI. Congress Should Enact Legislation To Use Auction Revenues To Fund
The Relocation of Government Spectrum Operations.**

In OBRA-93, Congress ordered NTIA to identify for reallocation to
non-governmental use bands of spectrum that were allocated for use by
the U.S. military and other Federal government users. Pursuant to this
mandate, NTIA in 1995 identified the 1710-1755 MHz band for transfer
from exclusive use by the Federal government to mixed use.[^16]
Subsequently, the FCC allocated 90 MHz of spectrum -- pairing this band
with the 2110-2150 and 2150-2155 MHz bands -- for advanced (or third
generation ("3G")) wireless services.[^17] The FCC recently adopted
service rules for this spectrum,[^18] and appears poised to hold an
auction for licenses to use these frequencies in the not-too-distant
future.

The FCC noted, when it adopted service rules for advanced wireless
services in this band, that its action

> bring\[s\] us closer to our goals of achieving the universal
> availability of broadband access and increasing competition in the
> provision of such broadband services both in terms of the types of
> services offered and in the technologies utilized to provide those
> services.  The wide spread deployment of broadband will bring new
> services to consumers, stimulate economic activity, improve national
> productivity, and advance many other objectives -- such as improving
> education, and advancing economic opportunity for more Americans.[^19]

The orderly and timely relocation of Federal government communications
operations from the 1710-1755 MHz band will greatly enhance the
opportunity to achieve these goals sooner rather than later. The
Secretary of Commerce should continue to include in the reports required
under Section 5 of the *Presidential Memorandum* a recommendation that
the President propose the enactment of legislation that would establish
a trust fund from which the costs of relocation of Federal government
spectrum users from the 1710-1755 MHz band would be paid. A portion of
the revenues derived from the FCC's auction of 3G licenses in the 1.7
GHz and 2.1 GHz bands could be used to furnish the necessary monies to
accomplish this task in an orderly and expeditious manner. The trust
fund mechanism would afford a systematic way to ensure that the
relocation of Federal government spectrum users occurs smoothly and
without undue delay. In addition, this approach would be far preferable
to requiring the auction winners to pay relocation costs, because that
would introduce substantial uncertainties into the auction process and
likely would negatively affect the values that bidders in the auction
would place on the 3G licenses.

The establishment of a Federal government spectrum relocation trust fund
is the best way to achieve, at the earliest possible date, the goals of
expanding the availability of broadband access and increasing
competition in the provision of broadband services.

**VII. Conclusion.**

For the foregoing reasons, NTIA and the other participants in the
Spectrum Policy Initiative should:

-   follow the key principles of spectrum management outlined above;

-   recognize that efficient spectrum use will be best promoted by
    fostering competitive markets;

-   ensure a predictable and reliable regulatory environment that
    protects incumbent licensees from interference;

-   adopt policies that foster new spectrum-based services without
    undercutting the competitive markets that currently exist; and

-   recommend that the President propose the enactment of legislation
    that would establish a trust fund from which the costs of relocation
    of Federal government spectrum users from the 1710-1755 MHz band
    would be paid.

Respectfully submitted,

**[Cingular Wireless LLC]{.smallcaps}**

> By: [/s/ M. Robert Sutherland]{.underline}
>
> J. R. Carbonell
>
> Carol L. Tacker
>
> M. Robert Sutherland
>
> 5565 Glenridge Connector
>
> Suite 1700
>
> Atlanta, GA 30342
>
> \(404\) 236-6364
>
> *Its Attorneys*

March 18, 2004

[^1]: Cingular, through various subsidiaries and affiliates, constructs,
    operates and holds interests in numerous wireless telecommunications
    systems throughout the United States. The company holds cellular
    service and personal communications services (PCS) licenses in 43 of
    the 50 states and in 87 of the top 100 metropolitan areas. Cingular
    is jointly controlled by BellSouth Corporation and SBC
    Communications Inc.

[^2]: *United States Spectrum Management for the 21^st^ Century*,
    *Notice of Inquiry*, 69 FR 4923 (February 2, 2004) ("*Notice*").

[^3]: *Presidential Memorandum for the Heads of Executive Departments
    and Agencies on Spectrum Policy for the 21st Century*, 69 FR 1568
    (released by the White House Office of the Press Secretary on June
    5, 2003 and published in the Federal Register on Jan. 9, 2004)
    ("*Presidential Memorandum*").

[^4]: *Id*.

[^5]: The FCC recognized that ensuring spectrum efficiency sometimes
    requires spectrum reallocation when it recently reallocated 30 MHz
    of spectrum in the 2 GHz band from mobile satellite services to
    terrestrially-based advanced wireless services. *See 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, *Third Report and Order, Third
    Notice of Proposed Rulemaking and Second Memorandum Opinion and
    Order*, 18 FCC Rcd 2223 (2003)

[^6]: As Cingular has argued before the FCC, it was unwise and
    impermissible to grant mobile satellite service licensees the right
    to make terrestrial use of their satellite authorizations. *See*
    Cingular Wireless LLC, Petition for Reconsideration in IB Docket No.
    01-185, at 1 (filed July 7, 2003).

[^7]: Spectrum Policy Task Force, ET Docket No. 02-135, Report (rel.
    Nov. 15, 2002) at 3.

[^8]: *See, e.g., Establishment of an Interference Temperature Metric to
    Quantify and Manage Interference and*

    *to Expand Available Unlicensed Operation in Certain Fixed, Mobile
    and Satellite Frequency Bands*, ET Docket No. 03-237, *Notice of
    Inquiry and Notice of Proposed Rule Making*, FCC 03-289 (rel.
    November 28, 2003).

[^9]: *See generally* Glen O. Robinson, *The Federal Communications Act:
    An Essay on Origins and Regulatory Purpose,* [A Legislative History
    of the Communications Act of 1934)]{.smallcaps} 3, 8-11(Max D.
    Paglin, ed., 1989); J. Roger Wollenberg, *The FCC as Arbiter of "The
    Public Interest, Convenience, and Necessity,"* in [Legislative
    History]{.smallcaps} at 61, 61-70; *National Broadcasting Co. v.
    United States,* 319 U.S. 190, 212 (1943) ("With everybody on the
    air, nobody could be heard.").

[^10]: *See Semi-Annual Wireless Industry Survey*, prepared by the
    Cellular Telecommunications & Internet Association, and available at
    <http://www.wow-com.com/pdf/MidYear_2003_survey.pdf>.

[^11]: *Annual Report and Analysis of Competitive Market Conditions With
    Respect to Commercial Mobile Services*, WT Docket No. 02-379,
    *Eighth Report*, FCC 03-150 (July 14, 2003), at ¶ 57.

[^12]: Omnibus Budget Reconciliation Act of 1993, Pub. L. 103-66, §
    6002(b), 107 Stat. 312, 392 (1993).

[^13]: The term "interference temperature" is a newly coined term and
    has never been defined in sufficient engineering terms.

[^14]: *See Amendment of the Commission's Rules to Authorize Subsidiary
    Terrestrial Use of the 12.2-12.7 GHz Band by Direct Broadcast
    Satellite Licensees and Their Affiliates*, ET Docket 98-206,
    *Memorandum Opinion and Order and Second Report and Order*, 17 FCC
    Rcd 9614 (2002) at ¶¶ 237-248.

[^15]: *See Flexibility for Delivery of Communications by Mobile
    Satellite Service Providers in the 2 GHz Band, the L-Band, and the
    1.6/2.4 GHz Bands*, IB Docket No. 01-185, *Report and Order and
    Notice of Proposed Rulemaking*, 18 FCC Rcd 1962 (2003), *appeal
    pending, AT&T Wireless Services, Inc. and Cellco Partnership d/b/a
    Verizon Wireless v. FCC, No. 03-1191 (D.C. Cir. filed July 8,
    2003).*

[^16]: *See Spectrum Reallocation Final Report, Response to Title VI --
    Omnibus Budget Reconciliation Act of 1993, NTIA Special Publication
    95-32 (February 1995).*

[^17]: *See 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, *Second Report
    and Order*, 17 FCC Rcd 23193 (2002).

[^18]: *See Service Rules for Advanced Wireless Services in the 1.7 GHZ
    and 2.1 GHz Bands*, WT Docket No. 02-353, *Report and Order*, FCC
    03-251, 31 CR 96 (rel. November 25, 2003).

[^19]: *Id*. at ¶ 2.