THE BATTLE OVER LICENSE-FREE USE OF THE RADIO SPECTRUM... A Backgrounder on the Part 15 Debate _______________________ THE ISSUE An imminent decision by the Federal Communications Commission could dramatically affect the daily lives of millions of American consumers, as well as hundreds of businesses and public entities. Proposed rules under consideration could threaten a wide range of low-cost, state-of-the art consumer and business electronic devices -- including digital cordless phones, utility meter readers, wireless stereo speakers, remote controls, and home security systems. The FCC is considering whether to expand the wideband Automatic Vehicle Monitoring (AVM) service that operates in the 902-928 Mhz band into a new Location and Monitoring Service (LMS). If the FCC decides to expand the current environment by including LMS, it will open the door to wide-spread interference from existing devices and services. Because the rules would allow wideband AVM/LMS operators to demand that license-free wireless users cease to operate if there is any interference, this would be a severe setback in the use and development of license-free wireless devices -- the development of which has been encouraged by the FCC and embraced by the marketplace. Should the FCC overrule the clear choice of the marketplace by giving an anti-competitive advantage to AVM/LMS companies, the U.S. would lose tens of thousands of new jobs, forfeit more than a billion dollars in potential economic growth, and waste the efforts of many of our greatest technological innovators and entrepreneurs. ________________________ BACKGROUND The Federal Communications Commission (FCC) is expected to decide within days whether to adopt new rules regarding the use of the 902-928 MHz band. This 902-928 MHz band is currently used by many types of low-power services and is often employed by small businessmen, innovators, and entrepreneurs whose technology does not require a license from the FCC. These technological leaders share access to the band under Part 15 of the FCC's rules. The AVM/LMS corporations are essentially seeking exclusive licensed use of a portion of this spectrum band for expanded automatic vehicle monitoring (AVM) services. Because of the fragile nature of the AVM system, other current users of the band could cause interference to it. If they caused interference, they could force those other users to cease operating their systems, services, or devices. Currently, all users share the spectrum within rules established by the FCC. Under these rules, the Part 15 products and services cannot cause interference to other non-Part 15 devices and services. ______________________ THE PLAYERS The Wireless Opportunities Coalition is made up of individuals, organizations, and companies that want to ensure the continued growth of the unlicensed wireless industry. Consumer and business electronics devices using the 902-928 MHz band under Part 15 of the FCC's rules include: automated utility meter readers, automobile and railroad traffic signal control devices, wide-area data networking, cordless telephones, wireless headphones and speakers, retail security scanners, home security systems, lifesaving medical devices and many others communication devices. The AVM corporations seeking expanded access to this band are five telecommunications companies. They are Airtouch Teletrac (formerly PacTel), MobileVision, Uniplex, Pinpoint Communications, and Southwestern Bell. ________________________ THE EFFECT ON CONSUMERS Giving AVM companies expanded access to the band would affect the daily lives of millions of Americans. More than three million Part 15 devices are now in use by U.S. businesses and consumers, and the market is about to explode. Under the proposed rule making, users of Part 15 devices that cause interference could be ordered to cease their operation. Cordless phones, home security systems, medical devices, and others could be rendered ineffective or useless. ________________________ ENCOURAGEMENT FOR THE TECHNOLOGY The technologies employed by the Part 15 coalition companies have been developed with the encouragement of the FCC. The FCC Office of Engineering and Technology noted that "our attempts to encourage this development have been successful and today millions of Part 15 spread spectrum devices provide a wide variety of communications services..." Congress also has investigated Part 15 technologies. In the House Energy and Commerce Committee Report to accompany the October 1994 FCC Reauthorization bill, it stated: "A major consideration in the Committee's deliberations must be the current deployment of these [Part 15] devices throughout the country. An allocation decision that has the effect of rendering useless millions of these devices - many of which cost $200 or more - would cause a significant number of American households a real hardship." The technology used by the AVM companies who want exclusive use of the spectrum is fragile and old, having been developed for use in a foreign country more than 20 years ago. Part 15 companies use innovative and ultra-efficient technologies to share the band, permitting coexistance of a wide range of consumer devices. ________________________ ECONOMIC IMPACT OF AN ADVERSE FCC DECISION An adverse decision by the FCC will have a clearly negative economic impact on the nation. Immediately, it will mean the loss of jobs and sales for a technology the marketplace has openly supported. In the longer term, it will mean lost economic opportunities. A negative decision would deny consumers of low-cost, high-quality products (as well as lower, more timely, and more accurate utility bills), and have obvious negative ramification for utilities, public institutions (such as schools), businesses and other private enterprises (such as health-care providers) that could use wireless data networks. The U.S. Department of Commerce has estimated that annual sales of consumer electronics devices operating in this spectrum are currently close to $1 billion. By 1996, sales are expected to top $1.5 billion. Part 15 companies estimate that they have invested more than $2 billion in research and development on emerging technologies that use the band.