The NTCA's Kelly Bond speaks up for rural carriers in the 700 MHz auction.

Urging the FCC and members of Congress not to lose sight of the opportunity that 700 MHz spectrum can bring to rural America, Kelly Bond, president of Public Service Communications and chairman of the National Telecommunications Cooperative Association's wireless committee, testified on Oct. 10 before the U.S. House of Representatives Committee on Small Business.

The plea came one day after AT&T threw $2.5 billion at Aloha Partners for their 700 MHz spectrum. In light of that and Google's standing offer to bid $4.6 billion for spectrum under the right circumstances, it gets harder to believe that anything other than getting top dollar will be driving the bidding process when the auction rolls around on Jan. 24, 2008.

However, Bond made the case for small businesses having the incentive and expertise to provide broadband in rural America, noting that the upcoming 700 MHz auction represents a tremendous opportunity for the FCC to help them deliver that broadband.

Bond knows he is fighting a strong tide and that the likely winners of this spectrum will be the large, nationwide telecom carriers that “will once again overlook rural towns and their outlying areas, instead concentrating on the most profitable, highly populated pockets of their vast license areas,” he said.

Bond stated in his testimony that rural service providers would not sit on their spectrum like others have but would want to provide service and start making a return on their investment as soon as possible. However, some small telcos are still sitting on the spectrum they acquired in the last auction.

Regardless, Bond rightly said, “Unless small rural businesses are able to acquire 700 MHz spectrum, this incredible opportunity to encourage the deployment of broadband service to rural areas will be lost.”

Current rules for auctioning and licensing the 700 MHz bands lean in favor of large providers. And the week Bond made his presentation, FCC Chairman Kevin Martin was quoted by Reuters as saying he has no intention of revising the open-platform rules.

Nonetheless, the FCC has budged on the date and may yet budge on the rules. Bond suggested several changes: licensing the spectrum based on smaller license areas rather than huge regional areas, changing the construction requirements for the C Block from population-based to geographic-based benchmarks, and working with Congress to ensure that customers of small carriers are able to roam on the networks to be built by the nationwide carriers.

Bond said the robust propagation characteristics of 700 MHz spectrum make it ideal for rural settings where long distances, extreme terrain and a disbursed population are an everyday consideration. Bond's Public Service Communications is in Reynolds, Ga. It is part of Public Service Telephone Co., established in 1954.

He also reminded the committee that under section 309(j) of the Communications Act of 1934, as amended, the FCC has the statutory responsibility to ensure that small carriers have a realistic chance of acquiring spectrum, rather than having their local spectrum warehoused by nationwide carriers or speculators.

So far, the FCC has fallen short of its responsibility. “The FCC's response to 309(j) was to limit small carriers' access to the AWS-1 spectrum by segmenting 78% of the spectrum into blocks that could not be reasonably bid on by small business,” Bond said. “In the 700 MHz band as a whole, 66% of the spectrum will be similarly segmented. And in the upcoming auction, 81% will be beyond the reach of small businesses.”