Sprint, Clearwire, Prepare for Battle at 2.5 GHz
Sprint Nextel last week took a major step toward the launch of wireless broadband in spectrum once set aside for educational broadcasts, filing at the FCC an application to initiate the “transition” of 2.5 GHz spectrum in 2 major cities -- Baltimore and D.C. Clearwire subsidiary Fixed Wireless Holdings also made a series of filings after the filing window opened -- with Clearwire planning to “transition” 8 relatively small basic trading areas (BTAs).
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Sprint is the #1 holder of the spectrum nationwide, and Clearwire is #2. Under the FCC’s new rules, the companies become the “proponent” in the BTAS where they file, putting them in charge of working with educational licensees and providing equipment so they can operate using the new bandplan. If multiple commercial operators are active in the same BTA they share the transition costs. The proponent is also in charge of monitoring and controlling interference as commercial operators launch operations.
“We want to be first out of the gate and kick off the transition process,” Trey Hanbury, dir. of spectrum proceedings for Sprint, told us Fri.: “The filings that we made for Baltimore and Washington are important because they're major markets and they're the first of many that we'll be making… These filings are a key part of getting us where we are today, to where we need to be.” Hanbury said the filings also help Sprint meet a merger obligation of deploying service in the band to 30 million people by 2011.
Filings for other cities, and other major markets, are expected in coming months from Sprint, which has a near nationwide footprint in the band. Other major holders of the spectrum, including BellSouth, Intelos and NextWave are considering making filings to initiate the transition in other markets.
“Anyone who has visions of operating in the band is going to be filing transition plans,” said Paul Sinderbrand, counsel to the Wireless Communications Assn. “The scuttlebutt within the industry is that a lot of companies are moving forward and starting to work through the process. I think you're clearly going to see virtually all areas transitioned by the deadline.”
In the wake of the FCC’s April EBS/BRS order (CD April 13 p2), which made some modifications to rules for the spectrum which were established in 2004, operators are getting close to launch services in the band, Sinderbrand said. “We started within the industry discussing these rules in 2001 and here it is July 2006 and for the first time you can practically do it,” he said: “We've seen a bit of a wake up call over the past few months -- now we've got to really start focusing on this because it’s time. People are gearing up to do it.”
Stephen Coran, an attorney who represents companies that are leasing the spectrum, said Sprint was looking for a “first mover” advantage in the markets where it filed. “Clearly, this represents a fair amount of planning,” Coran said: “By getting in on the first day they are sending a message to the Commission and to the public that they're serious about transitioning… They want to move forward with the transition as quickly as possible.”
One remaining question is which technology Sprint will use to develop the spectrum, with possibilities including UMTS and flash OFDM wireless broadband technology from Flarion. One source said while an announcement is expected shortly, Sprint hasn’t said much: “There’s a small group of people within Sprint who knows what’s happening and they're not talking.”
Intel turned up the heat on Sprint to use WiMAX, investing $600 million in Craig McCaw’s Clearwire in July. Emmy Johnson of Sky Light Research said in a research note following the investment: “There are 2 questions on everyone’s minds. Is this an Intel strategy to provide an insurance policy for WiMAX because Sprint is favoring another mobile technology? Or is this a clever tactic to influence Sprint’s decision toward WiMAX in the interest of nationwide roaming?”
Hanbury said Sprint wants to be active in an as many markets as possible. “There is an incentive to file your initiation plan first,” he said: “Under the old rules you could have multiple proponents, but the new rules are a first to file rule.” But just making a filing is complicated, he added.
“You have to send out pretransition data requests. You have to receive information from the licensees,” he said. “We try to meet individually in the market areas with the licensees, walk them through the processes… In some sense it’s the beginning of the process, but we've also already done quite a bit of spade work to get to where we are today.”