Last Thursday, the FCC voted to adopt a Notice of Proposed Rulemaking and Notice of Inquiry to encourage investment and deployment of terrestrial wireless facilities. This FCC action represents the first step in implementing the National Broadband Plan recommendation to provide Mobile Satellite Service (“MSS”) licensees with increased flexibility aimed at encouraging terrestrial spectrum build-out (as we previously advised).

By way of background, MSS licensees were originally authorized to provide satellite-to-earth communications services. In 2003, the FCC created rules to allow MSS licensees to provide terrestrial wireless services over the same frequencies. This terrestrial wireless service was to be provided in conjunction with the satellite offerings (known as the Ancillary Terrestrial Component or “ATC”) and would allow the MSS licensees to bolster and strengthen the signals sent from space stations, thereby providing a better overall service. The use of the ATC for enhanced services was contingent upon the MSS licensees providing fully functioning satellite services, so as to guarantee that the important public safety, federal government, and rural uses of MSS communications in this spectrum would not be foregone in favor of pure wireless broadband deployments.

In the National Broadband Plan, the FCC identified 90 MHz of MSS spectrum suitable for wireless broadband services in the 1.5 GHz, 1.6 GHz, 2.1 GHz, 2.2 GHz, and 2.4 GHz bands. The NPRM proposed two concrete rule changes, one largely procedural, and the other substantive. First, the FCC proposes to amend its spectrum allocation tables to create co-primary fixed and mobile wireless allocations along side the current satellite allocation for 40 MHz of the broadband-suitable MSS spectrum, in the 2.1 and 2.2 GHz bands.

Noting that MSS and ATC service deployments in these bands have been slow, the FCC stated that the change to the spectrum allocation takes the first formal step to “lay[ing] the groundwork for future flexibility in use of this spectrum…” The Commission followed this proposal by asking about next steps in the NOI, such as whether current MSS licensees in these bands should be allowed to recover money in a voluntary “incentive auction” of the spectrum for terrestrial wireless services only. In the same vein, the FCC asked whether disaggregations or modifications of the MSS licenses should be allowed to facilitate third party wireless deployments in these bands.

The second change proposed in the NPRM would apply the FCC’s spectrum leasing rules, first adopted in 2003 and now applicable to most FCC-licensed wireless services, to all MSS spectrum as well. The spectrum leasing rules allow third parties to contract with FCC spectrum licensees to deploy services and benefit from operations over the spectrum, while the licensee retains varying levels of oversight or legal control and responsibility for use of the spectrum. The Commission observed that it had already approved one MSS spectrum leasing arrangement and had tentatively cleared a second MSS licensee to do so, subject to certain restrictions on spectrum leases to the two largest wireless carriers.

The FCC asked for comment on whether its wireless spectrum leasing rules should be applied in full to MSS licensees or if restrictions should be built in to account for the unique nature of MSS spectrum, or to protect competition in wireless services.