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Thomas Sugrue Chief, 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.
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Thomas Sugrue • Chief, 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
Point A 1 Second 10 Cycles / 1 Second = 10 Hertz Frequency • Frequency is the number of times that a wave's peak passes a fixed point in a specific period of time
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)
Electromagnetic Spectrum • 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
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.
Spectrum Licensing Policy in the U.S. • Regulatory Reform • Competition • Flexibility • Licensing Reform - Auctions • Economic Deregulation
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 Mobile Telephone Competition BTAs with > 2 Operators BTAs with <= 2 Operators Markets with More Than Two Mobile Telephone Providers: September 1995
Markets with More Than Two Mobile Telephone Providers: September 2000
Mobile Telephone Competition:September 2000 Source: FCC
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.
Historical and Projected Average Price Per Minute for Mobile Telephone Service Source: The Strategis Group, 2000
Entry Level Pricing for DOR-Type Plans (1998 vs 2000) 600 minutes 450 minutes 300 minutes 150 minutes 180 minutes 20 minutes Source: Company Web sites.
Mobile Telephone Operator Coverage in Minnesota Estimated by County
Mobile Competition in Minnesota Number of Competitors in a Market
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.
International Comparisons:Total Subscribers: 2000-1Q Source: RCR Top 20 International Markets, RCR Wireless, June 19, 2000, at18.
International Comparisons: Average Minutes of Use Per Month - 2000E Source: Michael I. Rollins, The Wireless EDGE, Salomon Smith Barney, May 23, 2000, at 5.
International Comparisons: Average Annual Price for Basket of Digital Mobile Service for Personal Use Source: OECD, Cellular Mobile Pricing Structure and Trends, May 2000, at 79.
M-Commerce: Market Potential and Regulatory Issues
U.S. Mobile Internet Subscriber Growth Source: Perry Walter and Jason Bell, The Mobile Internet, Robinson-Humphrey, September 8, 2000, at 15.
Worldwide Growth of M-Commerce Source: Perry Walter and Jason Bell, The Mobile Internet, Robinson-Humphrey, September 8, 2000, at 16.
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 Wireless Location -- U.S. Policy Issues • 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.
Technologies in Development to Provide Location Information 2) 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)
Potential Commercial Applications for Location Information 2) Location Information • Provide location-specific information • Merchants • Banks • Restaurants • Notify users of sales and promotions • Provide driving directions and traffic information
3) Privacy and 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.
4) Open Access Major Modes of Accessing Internet • Telephone: open access applies • Cable: open access? - a major issue currently being debated • Mobile wireless: open access - will it become a big issue?
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