As part of its strategy to make additional mid-band spectrum available for Fifth Generation (“5G”) wireless services, the Federal Communications Commission (“FCC”) recently adopted a Report and Order that revises its rules for the 2.5 GHz band – the largest contiguous band of spectrum below 3 gigahertz – in a manner that will pave the way for the Commission to auction the spectrum for commercial use next year.  Specifically, the Report and Order: 

• removes several restrictions on the part of the band currently designated for Educational Broadband Service (“EBS”) use, in favor of allowing flexible use, in order to attract commercial investment;

• creates a priority filing window for Tribal entities interested in obtaining unassigned EBS spectrum;

• adopts procedures to conduct an overlay auction for the remaining EBS spectrum; and

• adopts county-based licensing and performance requirements for the new overlay licenses. 

The FCC’s actions here represent an opportunity for wireless services providers, including those serving Tribal lands, to obtain the mid-band spectrum they need to help the nation win the race to 5G, particularly as several other countries have already allocated mid-band spectrum for advanced wireless services.

Background.  Spectrum in the 2.5 GHz band is currently designated for the EBS and Broadband Radio Service.  Prior to the adoption of the Report and Order, this meant that only educational or educational-related institutions and organizations were eligible to hold EBS licenses.  The Commission’s rules also prohibited EBS licensees from leasing their facilities for a period longer than 30 years.  These provisions were intended to ensure that EBS spectrum is used primarily for educational purposes.  However, over 95 percent of current EBS license holders in the 2.5 GHz band lease the spectrum to non-educational entities for non-educational purposes.  Moreover, the restrictions on leasing terms have deterred others from entering into agreements to use the spectrum, causing the 2.5 GHz band to be underutilized, particularly in rural areas. 

Elimination of Restrictions.  In order to improve the utility of the 2.5 GHz band and provide EBS licensees more flexibility, in this Report and Order, the Commission eliminates the EBS license eligibility restrictions, the band’s educational use requirement, and the restrictions on leasing.  The Commission envisions that these changes will not only incentivize rural buildout, but will also attract additional investment in this spectrum.

Tribal Opportunity.  Where EBS licensees do not hold spectrum, and to provide Tribal entities with an opportunity to quickly obtain unassigned EBS spectrum for the provision of high-speed broadband and advanced wireless services to their communities, the FCC will open a Tribal priority filing window before offering the spectrum to commercial entities.  In order to be included in the Tribal priority window, Tribal applicants must be recognized by the U.S. government; the area sought to be licensed must be based on the Tribe’s reservation or qualified off-reservation lands; the area must be rural; and the applicant must have a local presence in the area.  Entities that provide communications services to and are controlled by a federally-recognized Tribe are also eligible to participate in the priority window.  If a Tribal entity acquires 2.5 GHz spectrum during the priority window, it will not be prohibited from leasing that spectrum to a third party.  However, a Tribal licensee will not be permitted to lease the spectrum until after it has met certain buildout requirements.

Commercial Use.  Once the Tribal priority window closes, the FCC will auction any remaining vacant and available white space EBS spectrum for commercial use.  To maximize commercial licensees’ use of the spectrum, while also protecting the rights of incumbent licensees in the band, the FCC will auction the spectrum using geographic overlay licenses.  The new overlay licensee would be permitted to operate in any area within its licensed geographic area, so long as the incumbent’s licensed area is protected. 

Buildout Requirements and License Term.  New licensees in the 2.5 GHz band will be required to meet performance requirements based on the particular service the licensee offers.  For example, licensees that offer mobile or point-to-multipoint service will be required to provide coverage to 50 percent of the population in their license areas as an interim buildout requirement and to provide coverage to 80 percent of the population in their license areas as a final buildout requirement.  The new licenses will have a ten-year license term, and the Commission will apply the Wireless Radio Services renewal framework to both new and existing licensees.