Will Two New Spectrum Bills Identify More Spectrum for Americans?

Last week, the House Communications Subcommittee approved two bills that are critical steps in uncovering more of one of our most precious natural resources: radio spectrum. (A companion bill sponsored by Senate Commerce Communications Subcommittee Chairman John Kerry, D-Mass., is pending.) These bills are more than just good news for the wireless industry; they’re good news for all American consumers, and the country as a whole.

Many Americans may be blithely unaware that the nation is on the verge of a looming spectrum scarcity crisis, perhaps because unlike petroleum, natural gas—or even solar or wind—our radio air waves are a natural resource that you can’t see, smell or feel. As consumers, our first hand personal experience of the spectrum shortage may be limited to when we experience dropped mobile calls, or can’t get an Internet connection. We might blame our carrier for poor service but don’t understand that our airwaves are a finite resource that is experiencing explosive demand. Many don’t realize how much our nation depends on wireless for our critical infrastructure – for utilities delivering smart grid and other power solutions and public safety services providing urgent communications – as well as our national defense. We might not pause to reflect on how wireless technologies help keep America competitive in a global economy. Some of us don’t even realize we are consumers of spectrum; we love our Blackberry’s, iPhones and laptops – and now our netbooks, iPads and whatever is “next”. We’re happy consumers of technology that entertains us and helps us communicate in new and amazing ways.

The good news is that the FCC has been steadily working toward evolving and improving how our spectrum is managed and allocated in recent years, from approving a secondary market for spectrum, to creating a national broadband plan, to freeing up TV white spaces, the broadcast waves left dormant by the Digital TV transition. Last week’s spectrum legislation will help us dig deeper into how efficiently spectrum is being used and where pockets of idle spectrum exist.

More good news for consumers: While companies have been developing all of the cool new gadgets you want next, Spectrum Bridge has been quietly but swiftly developing new technologies for increasing spectrum availability and efficiency. The new gadgets consumers will enjoy in the future will be made possible through spectrum allocation software born in our labs. In fact, many of the wireless gadgets and services you use now are already supported by a host of Spectrum Bridge tools and technologies.

In 2008 we launched the world’s first online spectrum exchange, SpecEx.com. SpecEx.com is helping thousands of organizations access spectrum on the secondary market for their wireless operations right now. We’re finding new life for old spectrum – by repurposing certain types of spectrum for new applications.

We’re helping companies find more spectrum through geo partitioning, disaggregation and other on-demand leasing strategies, and helping them maximize their spectrum assets and find new opportunities with SmartWaves, our innovative spectrum intelligence software, all right now.

We’ve been at the forefront in developing mixed spectrum solutions and in developing a groundbreaking TV white spaces database that is helping people all over the US locate available TV white spaces channels in their areas, right now. In October of 2009, under an experimental license, Spectrum Bridge launched the world’s first TV white spaces network, bringing high speed broadband Internet access to the citizens of Claudville, Virginia. Claudville is online right now. (We’ll be updating everyone with a bigger status report on the network and the tremendous impact it has had on the Claudville community in this blog next week.)

We applaud the House for approving these bills for a thorough inventory of the nation's communications spectrum. As FCC Commissioner Meredith Atwell Baker recently said, we need to “leverage the spectrum that exists more efficiently” and “encourage new technologies and innovation.” These two bills will now move to the full House Energy and Commerce panel for consideration, where we hope they will receive equally quick action. American consumers, businesses, our critical infrastructures, and the future of our national best interests deserve nothing less.

Meanwhile, the team at Spectrum Bridge continues to support wireless spectrum needs now and for what’s next. With the spectrum bills in place and many of Spectrum Bridge's innovative spectrum efficiency tools and technologies already in progress, our ultimate vision for making more spectrum available for wireless applications, Universal Spectrum Access, will usher in a more prosperous wireless nation.

We’re working on it, right now.

Leasing Lessons Learned, part 2 of 2

By: Stephen E. Coran, Attorney, Rini Coran, PC
Part 2 of 2

With AWS-1 and 700 MHz auctions concluded in the past year and auctions for the AWS-3 band expected in 2009, there is an increasing supply of spectrum available for lease. If past is prologue, these are some of the lessons learned that can be applied to future transactions:

Determine Your Priorities – Each party needs to determine its priorities. For the licensee, the need for a lump sum payment may be the most important factor, or maybe the licensee would prefer periodic payments or an upside benefit if the lessee meets certain performance benchmarks. The lessee may insist on having a significant degree of control of the spectrum, or the right to extend the lease. Regardless of the priorities, it is important that these be assessed up front and communicated to the other party to help structure the deal and to determine early in the process if there will be any fundamental differences in the way the parties want to proceed.

Put It All on the Table – Once priorities have been identified and the outline of a transaction is in place, all those priorities and other critical deal points should be communicated to the other party. Raising deal points in piecemeal fashion prolongs the negotiations and limits the ability of parties to compromise on points that already have been decided. More importantly, the party that identifies new issues far into the process risks his credibility and may force the other party to employ the same tactics, delaying the time for an agreement to be reached.

Don’t Skimp on the Due Diligence – Be sure the FCC licenses are in order and there are no problems such as build-out issues, renewal challenges or rule making proceedings that could have a substantial impact on the value of the spectrum. If the license has been partitioned, make sure you understand exactly what you are getting (there are often partitions of undefined areas hidden in the FCC’s database, especially with respect to rural broadband PCS and WCS licenses). The licensee should also seek to mitigate risks regarding the lessee’s financial ability to perform the agreement, especially when payments are scheduled to be paid out over time.

Understand Your Regulatory Obligations – The FCC specifies two kinds of leases. Spectrum manager leases leave ultimate control with the licensee and require only notification to the FCC. De facto transfer leases place most of the regulatory burdens on the lessee and require prior FCC approval, a process that takes about 30 days. Sometimes, the lessee will want to lease the facilities as soon as possible and will not want to wait. In other cases, the lessee will want to exercise more control. In either case, understanding how the FCC process affects the transaction and the lease term are important considerations. In addition, the FCC requires lease agreements to contain specific language concerning the rights of the parties if interference is alleged, and the allocation of responsibilities in dealing with the FCC. Be sure these provisions are in the agreements.

By applying these lessons, lease transactions can be finalized more quickly with a high degree of trust and satisfaction.

Spectrum Bridge has incorporated these and other “lessons learned” in to the entire SpecEx marketplace system to insure that leases (and sales) can be completed as transparently, cost-effectively and quickly as possible. We are here to assist you and make the entire transaction go as smoothly as possible. By leveraging our online databases, standardized agreements, in-house experts and our growing ecosystem of industry partnerships, you can buy, sell and lease spectrum with greater ease and higher confidence than ever before. (Editor’s Note: Rini Coran developed the standardized leasing agreements used in the SpecEx marketplace)

Stephen E. Coran is an attorney at Rini Coran, PC, a Washington, DC law firm that provides strategic, transactional, regulatory and governmental relations counsel to help clients succeed in a dynamic telecommunications, media and technology marketplace. For more information, contact Mr. Coran at (202) 463-4310 or scoran@rinicoran.com or visit http://www.rinicoran.com/.