Spectrum Information Memorandum (SIM)

 EDUCATIONAL BROADBAND SERVICE SPECTRUM INFORMATION MEMORANDUM: MIAMI AND FT LAUDERDALE JUNE 23,2014 Robert Finch 820 Great Cumberland Road McLean, VA 22102 Copyright © 2014 Select Spectrum LLC
Broward County Schools Spectrum Information Memorandum Page 2 of 6 INTRODUCTION Select Spectrum, on behalf of the School Board of Broward County “SBBC”, has prepared this Spectrum Information Memorandum “SIM”. Broward County Schools holds two FCC Educational Broadband Service “EBS” spectrum licenses that are available for lease. This document provides a brief description of the opportunity along with relevant information. More information can be found on our website1, the FCC’s Universal Licensing System2 and Title 47 of the Code of Federal Regulations (CFR)3. Any interested party may also contact Select Spectrum and request more detailed information about Broward County Schools spectrum licenses, uses or the planned leasing process. CONTACT FOR QUESTIONS OR ADDITIONAL INFORMATION Robert Finch Select Spectrum LLC rfinch@selectspectrum.com 820 Great Cumberland Rd McLean, VA 22102 703 635 2686 http://selectspectrum.com PROCESS TIMING Non-­‐binding Expressions of Interest (EOI) will be due by June 25th, 2014 at 2.00 PM EDT. Interested parties should submit their EOI via email to rfinch@selectspectrum.com SPECTRUM LICENSES AVAILABLE FOR LEASE Broward County Schools offering of its call signs, KLC80 and KTZ22, for lease4 presents a unique opportunity for the following reasons: • The Broward County Schools frequencies provide up to 45 MHz overall capacity and are compatible with Mobile “4G” technologies including WiMAX5 and LTE6 as well as with fixed wireless point-­‐to-­‐multipoint, point-­‐to-­‐point and video transmission systems. • The opportunity to acquire rights to up to 45 MHz of mobile broadband spectrum in a major U.S. metropolitan area like Miami – Ft. Lauderdale is rare. In most major cities, 1
http://selectspectrum.com/
http://wireless.fcc.gov/uls/index.htm?job=home
3
http://www.ecfr.gov/cgi-bin/textidx?sid=64f63e21c14d853c79afa96fd333ff3e&c=ecfr&tpl=/ecfrbrowse/Title47/47cfrv1_02.tpl
4
The proposed lease must meet all FCC requirements including a maximum term not to exceed 30 years
and the requirement that five percent of the capacity of the license must be reserved for educational use.
5
WiMAX is the common name for Worldwide Interoperability for Microwave Access as governed by the
WiMAX forum http://wimaxforum.org .
6
LTE stands for Long Term Evolution and is a 4th generation standard developed by 3GPP for the mobile
wireless industry including companies such as AT&T, Verizon, T-Mobile and Sprint.
2
Broward County Schools •
Spectrum Information Memorandum Page 3 of 6 such opportunities are only available when the FCC conducts its occasional auctions and competition for spectrum licenses is extreme. All regulatory and substantial service requirements have been met. An entity may lease the spectrum now for current or future use without any immediate requirement to build a network. KTZ2 has been renewed through 2018, while KTZ22 has been renewed through 2023 Channel, Population, Market Name and MHz POP information for the Licenses is in the table below7. Call MHz Sign Market (City / State) Avail. KTZ22 Miami and Ft. Laud, FL 22.5 22.5 KLC80* Ft. Lauderdale, FL 45.0 Total POPs 4,343,257 2,036,499 6,282,996* Est. MHz POPs Channels 97,723,283 G1, G2, G3, G4 45,821,234 B1, B2, B3, B4 143,544,517 B1-­‐4, G1-­‐4 *KLC80 overlaps KTZ22, so that all pops covered are also covered by KTZ22. Thus these two licenses cover a total of 4.3 million people, of whom 2.0 million are covered on both the B and G blocks, with the rest only covered on the G block. 7
Select Spectrum has prepared this document and believes the information presented to be reliable, but
each interested party bears its own responsibility for verifying and evaluating all relevant information about
the spectrum licenses. Neither Select Spectrum nor the School Board of Broward County makes any
warranty about the information presented herein.
Broward County Schools Spectrum Information Memorandum Page 4 of 6 The School Board also maintains an extensive inventory of wireless transmission towers located at schools and other sites in Broward County and is willing to discuss potential tower leasing arrangements as part of a separate, but potentially coordinated, process. BASIC INFORMATION ABOUT 2.5 GHz EBS SPECTRUM
The Educational Broadband Service is the successor to an older service created in the 1960s that was designed for instructional television broadcasts. In practice, however, the School Board of Broward County was one of the minority of educational licensees that ever operated broadcast transmitters because of the costs involved. The FCC modified the band rules on several occasions, and in 2005, the FCC modernized the band by changing the channel structure and updating the rules. Broadcast television is still allowed, but most licensees have taken advantage of the new rules that allow for fixed and mobile wireless Internet operations. Since most schools and colleges don’t have the funds, expertise or need to operate a wireless broadband network, they have entered into excess capacity leases allowed by FCC regulations. These leases provide schools with cash payments and educational Internet service in exchange for spectrum rights while fostering economic development through greater Internet access in the community. The School Board of Broward County is an exception and currently broadcasts educational television programs over its B4 and G4 mid-­‐band channels. Assuming the School Board accepts an offer to lease its spectrum, it is willing to consider ceasing operations on one or both of its mid-­‐band channels after the lessee has constructed a network designed to use the mid-­‐band channels and immediately prior to the date when the lessee is ready to begin operations on the leased mid-­‐band channel(s). Currently, most operators on the EBS band are using 4G8 protocols, including WiMAX and LTE, which are supported by a wide variety of equipment manufacturers. However, the spectrum can also be used to support more specialized networks including utility smart grid applications, government organizations and public safety9, etc. FCC rules require that a limited portion of the spectrum must also be used for educational purposes, and spectrum leases generally require commercial lessees to provide support for specified educational use of the license. Cisco Systems forecasts global mobile wireless data usage will grow by nearly 11 fold (61 percent compounded annually) between 2013 and 2018.10 The primary driver of this trend is the increased demand for video, combined with the rapid cost reductions of data transfer. Wireless operators are investing significant funds to acquire spectrum rights to allow for 8
“Fourth Generation” technology developed for the broadband mobile wireless industry
NYCWIN is a post 9/11 public safety network in New York that utilizes leased 2.5 GHz spectrum
licenses to provide mobile wireless broadband access for a variety of municipal organizations. See
http://www.nyc.gov/html/doitt/html/citywide/nycwin.shtml
10
http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-indexvni/white_paper_c11-520862.html
9
Broward County Schools Spectrum Information Memorandum Page 5 of 6 capacity expansion on existing networks or the construction of new wireless networks and this trend is expected to continue. BASIC INFORMATION ABOUT THE MIAMI-­‐FT LAUDERDALE METROPOLITAN AREA The Miami-­‐Ft. Lauderdale Metropolitan area is the eighth most populous in the country and the most populous in the Southeast US.11 As a major metropolitan area, the economy is highly diversified and service oriented, including many corporate headquarters, Port Everglades and the Port of Miami. An early 2000s building boom contributed to a larger than normal crash during the housing crisis associated with the 2008 recession, but the situation has recovered since. Between 2010 and 2012, the population in the covered area increased by 3.5%. In 2013, the median sales price for single-­‐family homes in Miami-­‐Dade County was increased 19.7% compared to 2012. The median sales price for condos rose 19.9% compared to 2012. Price increases in 2013 marked two years of consecutive double-­‐digit appreciation for both single-­‐
family homes and condominiums in Miami-­‐Dade12. INFORMATION TO BE INCLUDED IN EOIs All parties interested in leasing the spectrum should include the following information in their EOIs. 1. Name of organization and contact information of the individual coordinating the offer. 2. The proposed offer terms: a. upfront fee, b. monthly royalties, and c. escalation percentage or amount and timing of royalty escalations. 3. Proposed initial term (duration in years) and identification of number and length of any proposed renewal terms. 4. Proposal for providing devices, free accounts and/or service credits to assist Broward County Schools in meeting its FCC Substantial Service requirements for the EBS licenses. 5. Any other important lease terms or terms inconsistent with industry norms. 6. The proposed timeline for completing the lease (a timely and efficient plan is preferred). 7. Identification of any contingencies or areas of concern associated with the EOI. 8. A list of any due diligence items required. 9. Background information about the organization including summary financial information and identification of senior managers. Interested parties may submit more than one response including different alternatives for completing the transaction, but all responses should be submitted by the deadline. If a party is 11
Source: U.S. Census Bureau. At 5.8 million population, Miami Ft-Lauderdale is slightly larger than
Atlanta at 5.7 million
12
http://www.housingwire.com/articles/29031-why-is-the-miami-real-estate-market-burning-so-hot
Broward County Schools Spectrum Information Memorandum Page 6 of 6 submitting more than one alternative as part of its EOI, each proposal should be described clearly.