“Spectrum Availability and Acquisition” Acquisition Seminar.pdf · Spectrum Issues OIncreasing...
31
Keller and Heckman LLP Serving Business through Law and Science ® ® “Spectrum Availability and Acquisition” ENTELEC Conference & Expo April 10, 2008 George R. Brown Convention Center Houston, Texas
Transcript of “Spectrum Availability and Acquisition” Acquisition Seminar.pdf · Spectrum Issues OIncreasing...
Keller and Heckman LLPServing Business through Law and Science ®
®
“Spectrum Availability and Acquisition”
ENTELEC Conference & ExpoApril 10, 2008
George R. Brown Convention CenterHouston, Texas
2
Introduction
Jack Richards, Partner
Doug Jarrett, Partner
Greg Kunkle, Associate
3
Topics
Spectrum IssuesSpectrum PurchasingSpectrum LeasingAuctionsExample Opportunities
4
Spectrum Issues
Increasing shortages, particularly for private use
Loss of bands
Large new private spectrum allocations unlikely
Prime spectrum already allocatedFCC turning to market based approaches
5
Spectrum Issues
Recent allocationsAuctioned – 700 MHz band“Unlicensed” – 3.65 GHz, TV White Space
Market-based solutions increasingly the answer
Will require investment in spectrum
6
Common Issues
Common issues of all spectrum acquisitions (excl. of auctions)Due diligence on underlying license
Use restrictions (Fixed v. Mobile) Eligibility Restrictions Construction/Buildout Requirements Desired coverage
Due diligence on licensee Dealing with broker or directly with Licensee
7
Partitioning and Disaggregation
Treated as asset purchaseAccounting TreatmentOften preferable for long term requirementsValuation
Acquired at auction or notAvailability of type-accepted equipment Due diligence findings
8
Leases
Spectrum Manager v. “De facto lease”Accounting Treatment Will the communications requirement be satisfied within term of lease? Will the term of the lease extend beyond term of underlying license? Will equipment costs be recovered by lease end? Same Valuation issues as Partitioning and Disaggregation
9
Spectrum Purchasing
Assignments vs. Transfers of ControlFiled on FCC Form 603Must close within 180 days or seek extensionNotification of Consummation due within 30 days of closing
10
Spectrum Purchasing (Cont’d)
FCC Form 602 required for commercial/auctioned licensesForeign Ownership restrictionsUnjust EnrichmentConstruction/Coverage requirements
11
Partitioning/Disaggregation
Geographic area licensed servicesPartitioning
acquisition of a portion of a licensee's geographic service area by another entity
Disaggregationacquisition of a portion of a licensee's allotted spectrum by another entity
12
Partitioning/Disaggregation
PitfallsConstruction/Coverage RequirementsUnjust Enrichment
13
Spectrum Leasing
FCC encouraging leasingAvailable for most exclusive Services
Including 220 MHz, AMTS, auctioned and site-based Multiple Address System, Private-Operational Fixed Point-to-Point Microwave
No central “Clearinghouse”
14
Spectrum Leasing
Types of LeasesSpectrum Manager
Licensee retains responsibility for FCC compliance and communicationsNotification only
De Facto Transfer of ControlLessee responsible for FCC compliance and communicationsFCC approval required
15
Spectrum Leasing
FCC Form 608Waiting period prior to commencing operations
Short Term Lease – 10 daysLong Term Lease – 21 daysImmediate processing available
Lessee use can satisfy construction
16
Special Temporary Authority
Special Temporary AuthorityUse for immediate needGood for up to 180 daysPermits Secondary Operations
17
Auctions
Can be problematic for private usersCertain auctions more suitable for private use
Multiple Address System, 220 MHz
18
Auctions
File FCC Form 175 to registerUpfront deposit required for eligibilityAnti-Collusion rulesIncumbent useConstruction requirements
Generally longer construction term than site-based licensesMore detailed showing required
19
Example Opportunities
20
2.5 GHz - EBS/BRS
BRS – Broadband Radio ServiceEBS – Educational Broadband Service2.5 GHz band6 MHz and 5.5 MHz channelsWiMAX
21
2.5 GHz - EBS/BRS
22
2.5 GHz - EBS/BRS
EBS – Eligibility requirements to hold license
Leasing available Digital Service
EBS licensee must reserve capacity Analog Service
EBS licensee must reserve hours for EBS use or have recapture right
23
Multiple Address Systems
Recent MAS auctions highlight leasing/assignment and auction opportunities
24
Multiple Address Systems
25
Multiple Address Systems
Auction No. 421,355 LicensesLeasing/assignment potential
84 Terminated for failure to meet construction634 Construction Extension Requests Filed
26
Multiple Address Systems
Auction No. 59Auction potential
4,226 Licenses Offered2,223 Licenses Won Many licenses sold for $1,000 or less
27
Part 22 Paging Licenses
152/158 MHz; 454/459 MHz 20 kHz paired channelsAuction No. 40
5,323 Licenses Won
Auction No. 48 2,832 Licenses Won
28
Part 22 Paging Licenses
29
Part 22 Paging Licenses
Commercial paging industry downturnSuitable for two-way voiceWaiver of Part 20 required
Routinely grantedFCC to eliminate requirement
30
Questions?
31
Thank You!!!
Jack Richards 202-434-4210; [email protected]
Doug Jarrett 202-434-4180; [email protected]
Greg Kunkle 202-434-4178; [email protected]
