Access Spectrum Targets CII Firms with 700 MHz A Block Spectrum
Tuesday, May 19, 2015 | Comments

John Vislosky is working to put his company out of business and himself out of a job.

Access Spectrum owns 28 licenses in the upper 700 MHz A block, the spectrum between Verizon Wireless’ C block and the First Responder Network Authority (FirstNet) D block. The company is looking to sell the paired 1-megahertz by 1-megahertz licenses to critical infrastructure industries (CII) entities, which have few new spectrum options.

Vislosky, senior vice president of Access Spectrum, said the 28 licenses cover about two-thirds of the center of the United States. Beach Point Capital Management owns 21 licenses in the A block along both coasts, while Columbia One owns a license for Washington, D.C.

Access Spectrum originally wanted all three companies that owned the 700 MHz A block spectrum to come together and sell it nationwide. However, now Access Spectrum and the other licensees are partitioning the spectrum and selling individual licenses to utilities and other CII entities. NorthWestern Energy purchased two of the licenses earlier this month. Salt River Project (SRP) signed a purchase agreement April 6 for the state of Arizona and in a specific Phoenix-Mesa economic area.

“Partitioning the spectrum works better than a nationwide license for utility budgets and service areas,” Vislosky said.

Access Spectrum is majority owned by Quadrangle Group, with minority ownerships by Motorola Solutions, Goldman Sachs and others. The spectrum initially was guard band spectrum. In 2007, the company rebanded to its current position in the A block.

SRP, an Arizona utility, requested a proof-of-concept pilot to verify absence of interference, spectrum efficiency and equipment capabilities. The pilot was conducted in Arizona on SRP’s urban territory between Sept. 3 and Dec. 23, 2014.

The goal of the pilot was to assess fixed and mobile data capabilities and to determine if there was interference by the tenants in adjacent spectrum. The tests also showed low-power 2 Megabits per second (Mbps) throughput. The tests demonstrated 700 MHz spectrum had capable throughputs of up to 2.4 Mbps throughput in unencumbered spectrum.

Access Spectrum helped SRP define the pilot requirements and identify equipment manufacturers. ConVergence Technologies, assisted by Walker and Associates and Memorylink, supplied equipment.

One interference issue with Verizon was found, and the nationwide mobile carrier is addressing it. Verizon had filter issues with its Long Term Evolution (LTE) equipment, and the carrier recognized it as a systemic problem. FirstNet established a 500-kilohertz guard band, which should eliminate interference concerns with the D block, Vislosky said.

The spectrum is priced at 75 cents per megahertz-POP (MHz-POP). The cost is calculated by taking the population covered and multiplying by two because there are 2 megahertz of spectrum and then multiplying by 0.75. The most recent Advanced Wireless Service (AWS) spectrum auction fetched prices of more than $2 per MHz-POP.

“Our spectrum is priced lower to reflect the more narrow bandwidth than the AWS spectrum, which means that our spectrum on its own would not be of interest to cellphone companies,” he said. “Utilities prefer the portioning methodologies because it aligns with counties and goes back to their base rate.”

The biggest challenge is a lack of equipment for the spectrum, although several suppliers are working to roll out appropriate products.

“The momentum has tipped for equipment,” he said. “Full Spectrum and GE MDS and many others are now making equipment.”

At least 10 – 12 additional vendors have committed to making equipment for the 700 MHz A block. The companies include Carlson Wireless, ConVergence Technologies/Memorylink, T3 Wireless, Walker and Associates, and XetaWave.

The 700 MHz A block is an interesting option for CII,” said Gregory Kunkle, partner with Keller and Heckman, a law firm that represents CII firms. “It probably has taken a little longer than expected to catch on, in part due to an equipment ecosystem that is still developing. But it is one of the few bands available nationwide, and that should encourage vendors and, in turn, potential purchasers as the user base builds towards a critical mass.”

Applications for the spectrum include voice, data, mobile data, unmanned aerial vehicle (UAV), automation distribution and on/off switching. There are no restrictions from the Federal Aviation Administration (FAA) on UAVs in the spectrum.

Licensees must follow the FCC’s Part 27 substantial use rules. CII buyers would renew the 10-year licenses in June 2019 for another 10 years as long as they maintain substantial service.

“Our service and technical rules are the same as Verizon’s C block, which is adjacent to our spectrum, which permits a wide variety of applications and technology,” Vislosky said.

Vislosky said the process involves CII entities discussing with Access Spectrum the geographies in which they are interested. The company can parcel the licenses for sale down to a county-sized geography. The entities agree to terms and then file together for the license transfer at the FCC.

Vislosky said Access Spectrum will do the heavy lifting with the FCC. “We’ve streamlined this as much as possible,” he said. “That’s why the FCC has been so supportive.”

Once all 28 licenses are sold, Vislosky’s job will be done. “Once we’re done, we’re done as a company, and the entities purchasing the 700 A block licenses will finally have use of much needed spectrum to enhance operations,” he said.

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