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Thomas SugrueChief, Wireless Telecommunications Bureau
Federal Communications Commission
Developments in FCC Wireless Policy
December 11, 2000
1) Spectrum Management Principles
2) Status Report: Mobile Services in the U.S.
3) M-Commerce: Market Potential and Regulatory Issues
Spectrum Management Principles
Some Basic Concepts
Frequency
• Frequency is the number of times that a wave's peak passes a fixed point in a specific period of time
Point A
10 Cycles / 1 Second = 10 Hertz
1 Second
Frequency (cont.)
• Frequency is measured in cycles per second, or Hertz (Hz)
• For example:– Cellular phones produce radio waves with
frequencies around 800 million Hz (800 MHz)
– PCS phones produce radio waves with frequencies around 1,900 million Hz (1900 MHz)
1,000 Hz = 1 KiloHertz (kHz)1,000,000 Hz = 1 MegaHertz (MHz)
1,000,000,000 Hz = 1 GigaHertz (GHz)
•The set of all possible frequencies (an infinite number) is called the "electromagnetic spectrum"
•The subset of frequencies from 3,000 cycles per second to 300 billion cycles per second (3 KHz to 300 GHz) is known as the "radio spectrum"
Electromagnetic Spectrum
Electromagnetic Spectrum
FCC Responsibilities
• Allocations - What Services in What Bands?
• Assignments - Who Gets the Licenses?
• Service Rules - How Can Licensee Operate?
Importance of Spectrum Management
• Demand for wireless services exploding.
• Wireless data and internet services will put even greater demands on spectrum.
• Available spectrum below 3 GHz very scarce.
• Regulatory Reform
– Competition
– Flexibility
– Licensing Reform - Auctions
– Economic Deregulation
Spectrum Licensing Policy in the U.S.
Spectrum Licensing Policy in the U.S.
• As a result of these developments– New providers have entered and flourished.– Prices have decreased dramatically– Subscribership has increased substantially– Multiple new digital technologies have
proliferated.
Status Report:
Mobile Services in the U.S.
BTAs with MobileTelephone Competition
BTAs with > 2 OperatorsBTAs with < 2 Operators
MTAs and BTAs are based on Material Copyright (c) 1992 Rand McNally & Company.Rights granted pursuant to a license from Rand McNally & Company through anarrangement with the Personal Communications Industry Association. There are 51MTAs and 493 BTAs.
Source: Federal Communications Commission estimatesbased on publicly available information.
Estimated Nextel Communications Inc. Digital SMR Network Coverage Using iDEN Technology
Markets with More Than Two Mobile Telephone Providers: September 1995
BTAs with > 2 OperatorsBTAs with <= 2 Operators
BTAs with MobileTelephone Competition
Markets with More Than Two Mobile Telephone Providers: September 2000
Mobile Telephone Operatorswith Coverage in a BTA
7 Operators6 Operators5 Operators4 Oeprators3 Operators2 Operators
Estimated Mobile Telephone Service Deployment: Number of Operatorsin Each BTA with Some Level of Coverage
Mobile Telephone Competition:September 2000
Source: FCC
88.2%80.4%
69.4%
35.8%
6.7%
0%
20%
40%
60%
80%
100%
3 or more 4 or more 5 or more 6 or more 7
Number of Competitors in a Market
Per
cent
of U
.S. P
opul
atio
n
Spectrum Cap
• Applies to current allocation of 180 MHz of spectrum for mobile telephony service.
• Prohibits any entity from holding more than 45 MHz of such spectrum in a geographic area.
• Effect is that there must be at least four licensees in each geographic area.
• FCC will initiate new rulemaking to examine spectrum cap policies by end of this year.
National Carrier Subscribers
3.10
6.16
8.61
12.60
19.15
26.28
- 5.00 10.00 15.00 20.00 25.00 30.00
VoiceStream
Nextel
Sprint PCS
AT&T
Cingular
Verizon Wireless
Million
Historical and Projected Average Price Per Minute for Mobile Telephone Service
$0.53$0.58 $0.57 $0.56
$0.54
$0.43
$0.35
$0.28
$0.24$0.22
$0.20 $0.19 $0.18 $0.17
$0.45
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
Ave
rage
Pri
ce P
er M
inut
e
Source: The Strategis Group, 2000
Entry Level Pricing for DOR-Type Plans (1998 vs 2000)
$89.99
$39.99
$59.99
$29.99
$35
$19.99
0 20 40 60 80 100
Sprint - 2000
Sprint - 2000
Verizon - 2000
Voicetream - 2000
AT&T - 2000
AT&T - 1998
Price Per Month
20 minutes
180 minutes
150 minutes
300 minutes
450 minutes
600 minutes
Source: Company Web sites.
Mobile Telephone Operator Coverage in Minnesota Estimated by County
Mobile Competition in Minnesota
Number of Competitors in a Market
82.1%
61.6% 59.8%
73.8%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
3 or more 4 or more 5 or more 6 or more
Perc
ent o
f Min
n. P
opul
atio
n
Wireless Carriers in the Minneapolis/St. Paul Area
• Cellular Carriers
– AT&T Wireless and Verizon Wireless
• PCS Carriers– Qwest, Sprint PCS, and VoiceStream
• SMR Carriers– Nextel
International Comparisons:Wireless Penetration: 2000-1Q
Source: RCR’s Top 20 International Markets, RCR Wireless, June 19, 2000, at 18.
60%
52%
43% 43%36% 34%
30%
22%
4%
0%
10%
20%
30%
40%
50%
60%
70%
Swed
en
Ital
y
U.K
.
Japa
n
Fra
nce
U.S
.
Ger
man
y
Can
ada
Chi
na
International Comparisons:Total Subscribers: 2000-1Q
93.6
57.946.5
31.125.5 25 21.1
7 5.3
0
20
40
60
80
100U
.S.
Japa
n
Chi
na
Ital
y
U.K
.
Ger
man
y
Fran
ce
Can
ada
Swed
en
Mill
ion
s
Source: RCR Top 20 International Markets, RCR Wireless, June 19, 2000, at18.
International Comparisons:Average Minutes of Use Per Month - 2000E
221204
186 182
145132 132 123
0
50
100
150
200
250
U.S
.
Sw
eden
U.K
.
Fra
nce
Eur
o A
vg.
Ital
y
Fin
land
Ger
man
y
Ave
rage
MO
U P
er M
onth
Source: Michael I. Rollins, The Wireless EDGE, Salomon Smith Barney, May 23, 2000, at 5.
$447 $480
$658 $684$765
$837 $886 $912
$1,081
$0
$200
$400
$600
$800
$1,000
$1,200
Fin
land
U.S
.
U.K
.
Ave
rage
Fra
nce
Sw
eden
Ger
man
y
Japa
n
Ital
y
Source: OECD, Cellular Mobile Pricing Structure and Trends, May 2000, at 79.
International Comparisons:Average Annual Price for Basket of Digital
Mobile Service for Personal Use
M-Commerce:
Market Potential and Regulatory Issues
M-Commerce: Market Potential
M-Commerce: Market Potential
M-Commerce: Market Potential
M-Commerce: Market Potential
Source: Perry Walter and Jason Bell, The Mobile Internet, Robinson-Humphrey, September 8, 2000, at 15.
U.S. Mobile Internet Subscriber Growth
0.88.0
29.0
52.0
69.5
91.8
0102030405060708090
100
2000
E
2001
E
2002
E
2003
E
2004
E
2005
E
Mil
lion
s
Source: Perry Walter and Jason Bell, The Mobile Internet, Robinson-Humphrey, September 8, 2000, at 16.
Worldwide Growth of M-Commerce
0.2 1.3 5.011.5
24.0
50.0
0.5 3.011.0
27.0
58.0
120.0
0.0
20.0
40.0
60.0
80.0
100.0
120.0
2000
E
2001
E
2002
E
2003
E
2004
E
2005
E
$ B
illio
n
USA World
FCC Policies and Programs Regarding M-Commerce
1) Spectrum Availability
2) Location Information - Rollout of Service
3) Privacy and Location Information
4) Open Access
1) Spectrum Availability
• C & F Block PCS - 1900 MHz– Includes many major markets (e.g. New York,
Los Angeles, Chicago)– Start Date: December 12, 2000
• 700 MHz– Occupied by TV channels 60-69– Start Date: March 6th, 2001
1) Spectrum Availability
• International 3G Spectrum Process:• World Radio Conference (WRC) in Istanbul, May-June, 2000
– United States sought identification of multiple bands for additional IMT 2000 (3G) spectrum
• U.S. Domestic 3G Spectrum Allocation Process:• FCC to study 2500-2690 MHz Band
– currently used for Multipoint Distribution Service (MDS) and Instructional Television Fixed Service (ITFS)
• NTIA to study 1755-1850 MHz Band
– U.S. government users, primarily DOD
2) Location Information
• Public Safety Driven
• Wireless carriers to begin providing location-specific information by October 1, 2001 for E911 purposes.– Will enable 911 operators to locate and provide
assistance to wireless callers more quickly.– Requires upgrades to both carrier and public
safety systems.
Wireless Location -- U.S. Policy Issues
Technologies in Development to Provide Location Information
• Network-based – e.g. Time Difference of Arrival (TDOA)
• Handset-based – e.g. Assisted Global Positioning System
(A-GPS)
• “Hybrid”– e.g. Enhanced Observed Time Differential
(E-OTD)
2) Location Information
Potential Commercial Applications for Location Information
• Provide location-specific information– Merchants– Banks– Restaurants
• Notify users of sales and promotions
• Provide driving directions and traffic information
2) Location Information
• “Wireless Communications and Public Safety Act of 1999”– Limits disclosure of location information
(principally to public safety personnel).– Carriers must obtain their customers’ express
prior consent to use or disclose location information for other purposes.
• FCC rulemaking on location-based privacy rules will begin in First Quarter, 2001.
3) Privacy and Location Information
4) Open Access
• Telephone: open access applies
• Cable: open access? - a major issue currently being debated
• Mobile wireless: open access - will it become a big issue?
Major Modes of Accessing Internet
Mobile Wireless Is Different...
• Competitive Market– Nearly 70% of U.S. population can now choose from
among 5 different mobile telephone providers.
• Mobile Internet access still in its infancy– Carriers just began offering service this year in U.S.
– Only a handful of sites can be accessed through Web-enabled mobile phones
• Technological Factors– small screen, keypad, and memory capacity
– content providers must alter sites and applications
Conclusion
Spectrum Management - An Ongoing Challenge
Mobile Telephony - Going Strong and Getting Stronger
M-Commerce - Big Potential, But Lots of Questions
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