Oct 13, 2019The Federal Communications Commission (FCC) recently issued a Public Notice seeking comment on procedures for the auction of Public Access Licenses (PALs) in the 3550 to 3650 MHz (3.5 GHz) band. Commercial use of the 3.5 GHz band is a critical part of the expansion of 5G, including the Internet of Things (IoT), of which RFID is a vital component. The auction is scheduled for June 25, 2020. Comments are due by Oct. 28, 2019, and reply comments by Nov. 12.
While the Public Notice indeed solicits comments on some bidding procedures, a major licensing issue is included therein. The FCC, at this late date, seeks to give bidders for PALs the "flexibility" to bid on large Cellular Market Area (CMAs), instead of bidding separately for the counties within the CMAs.
As those who have followed the history of the 3.5 GHz proceeding well know, in 2015 the FCC issued rules that set census tracts as PAL service areas. Census tracts, which generally align with the borders of political boundaries such as towns, cities and small counties, would have offered small wireless service providers the opportunity to bid on affordable licenses, many of which cover rural areas. That scenario was a win-win for the smaller players and rural America, which would have had access to affordable wireless broadband.
When Ajit Pai became chairman in 2017, he called for a review of the 3.5 GHz rules. Chief among the new rules proposed was the enlarging of PAL service areas from census tracts to much larger Partial Economic Areas (PEAs). PEAs are approximately 178 times larger than census tracts. Based in part on comments it received, the FCC decided to compromise on the PAL service areas, and settled on counties, instead of PEAs.
Now the FCC is attempting yet again to enlarge many of the PAL geographic areas, proposing that bidders can elect CMA-level bidding for the 172 CMAs that are classified as Metropolitan Statistical Areas (MSAs)—those that incorporate more than one county. As shown in Attachment A to the Public Notice, these MSAs typically encompass many counties, and bidding on them requires large upfront payments and unaffordable minimum opening bids.
The FCC's proposal to increase many PAL service areas will make it that much more difficult for smaller entities to successfully bid for PALs. Cable companies and large mobile network operators (MNOs) will be able to outbid smaller providers for the more profitable CMA-sized PALs. This plan would effectively limit participation in the CMRS band to the largest carriers that are focused on deploying 5G in profitable urban areas. The inevitable result is that rural areas will likely remain underserved.
Future RFID systems can operate on the unlicensed (GAA) portion of the 3.5 GHz spectrum. PAL spectrum has priority over GAA spectrum—that is, PAL licensees have interference protection, whereas GAA users have none. Hence, if the spectrum band in a PAL area becomes crowded, the GAA users may get bumped, which could result in dropped communications, mangled RFID read rates and so forth. With larger entities such as T-Mobile angling for the multi-county CMA licensing areas, they will necessarily be bringing a lot more traffic with them that will crowd the network and possibly interfere with GAA users, such as RFID operators. Conversely, the smaller the PAL area, the more likely that local providers will be using the spectrum, and hence less traffic and less interference potential for GAA operators. Current RFID operations on UHF and other bands will not be affected.
Consequently, it is critical that all interested stakeholders make their voices heard in this proceeding. There is strength in numbers. Tell the FCC that all PAL service areas must remain at the county level. There is no excuse for moving the goalposts on smaller carriers at this late stage in the game.
For more information, please contact Ronald E. Quirk, head of Marashlian & Donahue's Internet of Things Practice Group, at req@commlawgroup.com or 703-714-1305.
