Cell-Phone Technology Threatens to Devour Distance-Education Bandwidth

Colleges' instructional-television services and potentially valuable spectrum licenses are at risk

By GOLDIE BLUMENSTYK

Will educational television be sacrificed on the altar of the next-generation cell phone?

Educators fear that a proposal to help accommodate spiffy new Web-surfing cell phones and other hand-held devices could end up displacing instructional-television operations at more than a thousand colleges, schools, and other educational institutions.

One of the ranges of frequencies the U.S. government may allocate to the new technology is the band used by many colleges and universities to deliver educational programming.

What's more, the proposal could undermine the partnerships that colleges and other educational broadcasters have begun negotiating with companies like Sprint and WorldCom to create new Internet services that are as speedy as cable modems and digital subscriber lines.

The new, wireless Internet services offered by these partnerships -- hailed in some quarters because they could be made available in rural and urban regions where cable and telephone companies aren't offering their high-speed Internet services -- would provide access to the Internet using the excess capacity in the educational-broadcasting spectrum.

Because colleges and schools control the licenses for use of the spectrum that would carry these broadband services, many of these institutions are now in a position, after more than a decade of effort, to more fully exploit the frequencies for educational and financial gain.

But the proposals for the so-called third-generation devices -- cell phones and other gadgets, capable of surfing the Web as fully as computers do today -- could derail all that.

The frequencies that most colleges and schools use for their educational programming make up one of two bands of the radio spectrum that the Clinton administration recently identified as airwaves that could be set aside for third-generation services, also known as 3G. The other band is now used by the Department of Defense and other government agencies.

According to a notice released this month, the Federal Communications Commission is to select a preferred band of spectrum for 3G services by July, and to auction licenses for that band by the end of September 2002.

As they learn about the potential threat, colleges and others with licenses in the education spectrum -- it's called Instructional Television Fixed Service, or I.T.F.S. -- are sounding the alarm.

The cell-phone companies are "anxious to get more real estate in the sky," asserts Patrick J. Gossman, director of University Television at Wayne State University and chairman of the National I.T.F.S. Association. "Excuse us. We happen to be in this spectrum."

Since the early 1960's, when the frequencies were first set aside for instructional television, colleges, schools, and Roman Catholic dioceses have held most of the licenses.

The I.T.F.S. association began organizing a campaign to protect the spectrum at its annual meeting last week, in Orlando, Fla. Along with planning discussions with the Federal Communications Commission, Congress, and the incoming Bush administration, the association is forming a larger consortium called Wireless Education Broadband NOW, or WEB NOW.

Mr. Gossman hopes to enlist support from a number of education associations, including the American Council on Education, the National Association of State Universities and Land-Grant Colleges, and the National Education Association, because better Internet access "is so important for education as a whole," he says.

Other wireless-Internet companies are proposing services that could operate in other parts of the spectrum, but because those bands are not as economical to develop, the companies are creating the services for high-end business customers, not the residential market that the I.T.F.S. license holders are planning to sell to. Policymakers are urging the public and private sectors to improve Internet access for all, says Mr. Gossman. "Don't kill the one technology that is going to bridge the digital divide."

Even if those arguments carry weight, the educators' battle will have to be waged on many fronts. Colleges and other education broadcasters are at the vortex of some powerful political forces: cellular-telephone manufacturers and service providers, like Motorola and Verizon, eager for frequencies that will help them develop globally compatible 3G services; wireless-communications companies, anxious to deploy their new Internet services after investing more than $2-billion to buy out companies that had previously leased bandwidth in the spectrum from educational broadcasters; and the federal government, which would welcome the chance to pocket the billions of dollars that could potentially be raised though a 3G-spectrum auction.

Then there is the Defense Department. Education broadcasters are hardly enthusiastic about a scenario that could pit education interests against those of the military.

Todd Gray, a lawyer in Washington who represents schools and colleges with hundreds of I.T.F.S. licenses, says the cell-phone industry appears to be more interested in the military's spectrum -- but "if they can't pry some frequencies loose from them, guess where their eyes turn next."

To some extent, college officials are heartened by history: The F.C.C. has tended to support education broadcasters. For example, the agency has rarely, if ever, scrutinized license holders over the kinds of programs they offer to satisfy requirements that they deliver a fixed amount of educational programming each week.

Susan Hansen, a Defense Department spokeswoman, said the agency is now evaluating the band of spectrum targeted by the Clinton administration to determine if, and under what circumstances, it could be shared with 3G services. The department is expected to report those findings by March to the National Telecommunications and Information Administration, which coordinates government uses of spectrum.

The Cellular Telephone Industry Association, for its part, is hopeful that all parties can somehow be accommodated, says its spokesman, Travis Larson. Sprint, which intends to deploy its own 3G services within the bandwidth that it is already using for other purposes, says disrupting the instructional-television spectrum is unnecessary, according to Jay Keithley, vice president for federal and regulatory affairs.

The I.T.F.S. license holders expected 2001 to be a year in which they would face complex issues. A threat to their spectrum was not what they had anticipated. Rather, this was when many of them expected to begin to realize the potential value of their licenses, following hard-fought changes to the F.C.C. rules that govern how they use the spectrum.

From 1983 to 1998, the license holders were allowed to lease excess capacity on their spectrum to pay-television companies that offered "wireless cable" services (The Chronicle, February 21, 1997). Many schools and colleges did so, using the rest of the frequencies for their own distance-education courses and other educational programming.

But the wireless-cable industry never caught on, and very few license holders made much money from the arrangements. Nor were they able to reach as many students with their televised courses as they had hoped, because the wireless-cable systems didn't attract a big customer base. By the late 1990's, most of the companies were floundering or in bankruptcy.

Meanwhile, instructional-television license holders were working with the F.C.C. to change the rules. Instead of keeping it as a one-way broadcasting system, they sought authority to use it as two-way system, in which digital signals of data, audio, and video could be both sent and received. This, they argued, was a more attractive use for their spectrum, as the Internet was emerging as the preferred vehicle for distance education.

The F.C.C. approved the two-way rule in September 1998. A few months later, Sprint and WorldCom began buying up the wireless-cable companies -- along with the I.T.F.S. leases that the companies had negotiated with license holders -- in anticipation of offering high-speed Internet services. The two companies each spent more than $1-billion to acquire the spectrum rights. Sprint has rights in 90 markets, with as many as 30 million homes. WorldCom has rights in 160 markets, with 31 million households. A third major player is Nucentrix, a successor to a wireless-cable company called Heartland.

The two-way-rule change "has unquestionably increased the value of the spectrum," says Edwin N. Lavergne, a lawyer who represents I.T.F.S. license holders. "I've seen the spectrum described as beachfront property."

But questions about how much the spectrum is really worth, and whether the colleges and other license holders can actually realize greater values when negotiating with big players like Sprint and WorldCom, remain largely unanswered. While some institutions have the legal and financial sophistication to recognize and reject a low-ball offer, others might not.

Some of the big wireless-Internet companies are looking to negotiate leases based on the relatively low amounts they were paying to use the spectrum for wireless cable, says Lynn Rejniak, director of research and development in the University of South Florida's office of educational outreach. If that happens here, "we're going to say forget it."

When you hear that Sprint and WorldCom spent billions to buy the rights to the leases, she adds, "you're hoping there is something left in the pot."

South Florida used to receive about $6,000 a month for the excess capacity on its channels. Ms. Rejniak declines to say what the university is seeking from Sprint in current negotiations. But she hopes that any new arrangement would include money to help the university develop high-speed, wireless Internet connections at the 45 sites to which it now broadcasts television courses over the one-way system. "We could be players in the technology," she says.

Five years ago, three-quarters of South Florida's distance-education courses were delivered via television. Today, televised courses make up just 35 percent of its distance-education offerings; the rest of the 285 courses go out over the Internet.

In many markets, colleges are looking for terms that include service discounts for their faculty and staff members and students as part of the deals.

But it's a confusing time for many license holders. "I've read that this is the greatest windfall," and then word spreads that "3G is going to come and these leases are worthless," says Patricia Cuocco, senior director for technology advice and policy for the California State University System. Uncertainty over the business prospects of wireless Internet service is also a factor. "Eight years ago, I thought we'd make a lot of money and wireless cable would be hugely successful," Ms. Cuocco recalls. "Wrong answer. Thanks for playing."

She's hardly alone. "The I.T.F.S. license holders really don't know the value of what they've got," while the companies they are negotiating with do, says Camilla Jensen, a senior analyst with B.I.A. Financial, a consulting company in Chantilly, Va. Factors like how much the company paid for rights in that market (information that B.I.A. and other firms are gathering), the potential market for the services, and the technical limitations and advantages of particular systems could come into play in establishing a lease price, she says.

At Eureka College, for example, B.I.A. advised officials that the college's license for two channels could be worth anywhere from $1,500 to $10,000 a month when deployed for wireless Internet. Eureka, which had been getting $500 a month for the channels under a license with Nucentrix, subsequently renegotiated the terms. Beginning this month, the college will receive $3,000 a month for the licenses. The fee will increase to $4,000 a month in 2004 and $5,000 a month in 2006. Eureka also cut a deal for a percentage of Nucentrix's revenue: 0.4 percent beginning in January; 0.6 percent as of 2004, and 0.8 percent as of 2006.

James Flynn, Eureka's chief financial officer, says his familiarity with the radio airwaves, after years in the Army Reserve Signal Corps, helped him to appreciate the value of the spectrum: "I knew physics and the good Lord weren't creating any more."

Mr. Flynn adds that he is satisfied with the renegotiated terms. "It's more than we had before," and the percentage clauses make it possible for Eureka to share in Nucentrix's potential success, he says. Then again, "it could blow up, like all these dot-coms."

But now that instructional-television license holders see that the technical barriers can be overcome, that the regulatory issues with the F.C.C. have been resolved, and that capital-rich companies are eager to turn the I.T.F.S. spectrum into big business, Wayne State's Mr. Gossman and his colleagues are determined to insure that wireless Internet does not become the college license holders' latest disappointment.

Certainly not now, he says, "with all the work that has gone on to bring us to an absolutely wonderful spot."

Easy-to-print version

E-mail this article