Many Critical Infrastructure Firms in Limbo During AMTS Spectrum Dispute
August 01, 2012
Photo courtesy Enbridge Energy
Several critical infrastructure industries (CII) entities are caught in the middle of an FCC hearing designation order seeking to revoke the spectrum licenses of Maritime Communications/Land Mobile (MCLM). A total of seven electric utilities, four oil and gas companies, and a railroad were in the process of purchasing 217/219 MHz spectrum from MCLM for their mission-critical communications radio networks when the FCC froze their assignment applications pending resolution of the hearing proceeding.
The dispute revolved around Auction No. 61 held in 2005, and whether MCLM received bidding credits under designated entity status that it shouldn’t have and whether its licenses should be revoked. Companies managed by Warren Havens filed the original petition to deny MCLM’s long-form applications for the auction and numerous subsequent petitions.
The spectrum in question is automated maritime telecommunications system (AMTS) area licenses at 217 and 219 MHz. AMTS initially was a specialized system of coast stations providing integrated and interconnected marine voice and data communications for vessels on waterways, according to the FCC. MCLM purchased four of the 10 licenses auctioned. The FCC later permitted uses of the AMTS frequencies to cover land-based CII applications.
Under the commission’s secondary markets rules, which authorize the partitioning and disaggregation of spectrum licenses, several CII companies independently negotiated spectrum purchases from MCLM. Contracts were finalized and applications to transfer small portions of MCLM’s AMTS licenses to CII companies were filed with the commission from 2009 to 2011. Many of the CII companies are leasing the spectrum while their assignment applications await resolution.
In April 2011, the FCC released a hearing designation order to investigate whether MCLM misrepresented information to the FCC and consequently received bidding credits in the auction that it wasn’t entitled to receive. The hearing hasn’t begun but preconference hearings are under way.
Keller and Heckman represents four energy companies — Atlas Pipeline Mid-Continent, DCP Midstream, Enbridge Energy and EnCana Oil & Gas — and one electric utility —Jackson County Rural Electric Membership — that sought to buy spectrum from MCLM. In May 2011, the law firm filed a petition for reconsideration to have its clients removed from the hearing designation order. Keller and Heckman later filed two requests for expedited action on the petition, but the FCC still hasn’t responded.
“Nothing has gotten done; it’s still pending,” said Jack Richards, partner at Keller and Heckman. “There are endless discussions at the pre-hearing conferences, but nothing’s moving. It’s ridiculous. None of these companies is at fault, but they can’t get the frequencies.”
MCLM also filed for bankruptcy after the hearing designation order was released, further complicating the situation, Richards said.
Richards said the hearing designation order is keeping numerous CII firms in limbo, which doesn’t benefit mission-critical communications. If a CII firm wanted to buy spectrum from MCLM, the company would file an assignment application with the FCC. “Typically, while the FCC is reviewing the application, the CII buyer would enter into a lease with MCLM so it can operate on those frequencies,” Richards said. “The situation is problematic because the company wants to buy equipment and needs to know that these frequencies will be available on a long-term basis.”
Rappahannock Electric Cooperative (REC) in Virginia is one electric utility affected by the situation. After looking for 153 MHz spectrum for its new trunked system in 2007, it subleased AMTS spectrum from the National Rural Telecommunications Council (NRTC) and directly leased AMTS spectrum from MCLM. The utility built a six-site system and added a seventh site when it acquired additional territory from Allegheny Energy in 2010.
“The original sublease for the six sites is with NRTC,” said Dennis Buchanan, telecommunications technician with REC. “When we had to have an additional site, we dealt directly with MCLM. We lease 23 frequencies and have re-use on four sites.”
Other than the spectrum unknowns, the utility is pleased with its trunked network, Buchanan said. “We just finished a major outage last week with more than 60,500 members out of service caused by that derecho storm that hit June 29,” he said. “In five days, the system handled 40, 987 radio calls during restoration efforts. That would not have been possible with the old system. In contrast, our normal traffic runs anywhere from 500 to 1,200 calls a day. After the derecho, my system was still intact. There were many cell sites that were not.”
Although Buchanan couldn’t comment on the license specifics for legal reasons, he said the utility is looking at other spectrum options. “Depending on what the outcome of the FCC case is, the opportunity may exist to have access to the spectrum,” he said. “We may have to still lease, or maybe the prospect will be to purchase. Because of where we are, there is not much spectrum available. Options are being explored.”
He said the FCC has made it difficult for utilities to do their job of keeping the electrical grid up and intact because there is no dedicated spectrum for utilities. “Without spectrum, how are we to do that?” Buchanan asked.