December 2013, Vol. 240 No. 12
Features
The Spectrum Disconnect At The FCC
Which of the following statements best reflects the Federal Communications Commission (FCC) view of spectrum requirements in the energy industry?
a. Oil and gas companies, and electric utilities are unable to find suitable frequencies for core applications in some parts of the country.
b. Sometimes oil and gas companies and electric utilities cannot gain access to licensed spectrum and must put core applications on unlicensed, unprotected spectrum.
c. While some FCC license-holders are willing to sell or lease spectrum, spectrum deals can be problematic. Years ago, 11 major oil and gas companies, and electric utilities tried to buy spectrum from an existing FCC licensee, but their assignment applications have been tied-up at the commission while the licensee is laboriously investigated for various alleged rules violations. Other FCC licensees remain reluctant to sell or lease spectrum for fear of creating “swiss cheese” holes in their licenses.
d. There is a wide range of bands and services that can meet the utility industry’s needs, whether on a licensed or leased basis.
The correct answer, according to the FCC, is “d.”
The FCC believes the energy industry has ample alternatives available to satisfy its spectrum requirements. In fact, answer “d” is based on an FCC order released earlier this year denying a 5-year-old petition by the Utilities Telecom Council and Winchester Cator, LLC (UTC-Winchester), asking the commission to start a proceeding to share the 14.0-14.5 GHz band on a secondary basis. To repeat: This was not a request by UTC-Winchester for an immediate, exclusive allocation of spectrum to utilities, it was simply a request to start a proceeding looking to share spectrum on a secondary basis.
The FCC summarily denied UTC-Winchester’s petition and made clear it was not interested in exploring the issue further in a rule-making proceeding. Yet in the same order, the commission recognized there are no “utility-specific” bands available for use by oil and gas companies, electric utilities, and others in the critical infrastructure industries (CII). Adding salt to the wound, the commission said such an exclusive allocation is “unlikely in the future.”
Regulatory, Technology Committee
The mission of the Energy Telecommunications and Electrical Association (ENTELEC?) is to advance knowledge and ideas concerning telecommunications, automation and related issues in the energy industry.
Several years ago, ENTELEC formed a Regulatory and Technology Committee to address regulatory developments of interest to ENTELEC’s membership. Of particular concern to the committee is the sufficiency of available radio spectrum resources to support the critical communications requirements of energy companies, including supervisory control and data acquisition (SCADA) related to production fields, advanced pipeline controls, leak detection smart grid and other critical functions in the electric utility industry.
All members of ENTELEC – end-users and vendors alike – are invited to join the committee, which speaks with a broad voice by leveraging its combination of energy companies, manufacturers and service providers in a common forum.
FCC Meetings
In September, on behalf of the ENTELEC Regulatory and Technology Committee, I attended two separate meetings at the FCC to discuss spectrum requirements in the energy industry: one with the Homeland Security/Public Safety Bureau (HSPSB), the other a joint meeting with both the Wireless Telecommunications Bureau (WTB) and the Office of Engineering and Technology (OET).
During the meetings, we distributed a short paper, “The Pressing Need for Spectrum in the Energy Industry,” prepared jointly by ENTELEC’s Regulatory and Technology Committee and the American Petroleum Institute’s Telecommunications Subcommittee (API). It briefly describes how a shortage of radio spectrum constrains the energy industry’s ability to continue developing resources safely and efficiently. We discussed how energy companies rely on a variety of communications systems authorized by the FCC to meet private internal communications requirements, and how these types of systems serve a multitude of vital communications functions. Without an influx of additional spectrum, we argued the energy industry’s ability to continue meeting these critical requirements, as well as to migrate legacy systems to advanced broadband digital technology, will be limited.
We questioned the commission’s earlier conclusion that utilities have ample spectrum alternatives, since many of ENTELEC’s members encounter difficulty obtaining access to sufficient spectrum for core applications (production fields, pipeline control, refineries, smart grids, storm restoration, security, etc.) in some areas.
We pointed out energy companies already make extensive use of commercial cellular networks and rely on cellular providers to satisfy important communications requirements throughout the country. Unlicensed spectrum also provides an opportunity to satisfy energy communications requirements some of the time, and spectrum leasing, too, is a viable option in some cases – especially in geographic areas served by licensees dedicated to serving the needs of the energy industry. But none of these alternatives answers all of the energy industry’s spectrum requirements all of the time, since, as the commission noted, there are no “utility-specific” bands available today.
Growth In Demand For Spectrum
Energy companies implementing advanced communications systems are increasingly dependent on automation to provide these services safely, reliably and efficiently. Private radio spectrum is a key component in the development of these systems, enabling the energy industry to use wireless communications technologies that potentially are more cost-effective, scalable, reliable and secure than commercially available services or other alternative communications technologies.
Sept. 11, Hurricane Katrina, Superstorm Sandy and other disasters have demonstrated all too clearly the energy industry’s need for reliable and secure wireless communications over private, hardened networks during times of emergency. Rapid response activities in the energy industry are necessary to protect public safety and restore essential services, and they must be supported by sufficient spectrum resources.
The unprecedented growth in energy exploration and the need to transport product safely through populated and other sensitive areas also demands particular attention by the commission. Oil and gas companies rely on sophisticated wireless leak detection devices and remote valve controls to comply with applicable federal and state regulatory requirements. These types of advanced pipeline- and well-monitoring systems require higher data speeds and, consequently, consume greater bandwidth.
Other core applications used on a daily basis require similar support as the energy industry implements new, advanced communications technologies to modernize existing plant and promote safety and efficiency. Many are spectrum-intensive.
Chronic Loss Of Spectrum
For decades, the energy industry has satisfied its spectrum requirements within the confines of the commission’s existing spectrum allocations. Unfortunately, over time, the FCC reallocated large amounts of bandwidth away from the critical infrastructure industry toward consumer-based services, including personal communications services (PCS), advanced wireless services (AWS) and mobile satellite services (MSS) at 2 GHz.
Many former 2 GHz-users tried to relocate to higher frequencies but were blocked by satellite earth stations at 4 GHz and 6 GHz bands, the next best options. CII companies also were moved from portions of the 800 and 900 MHz bands to resolve interference concerns between commercial carriers and public safety.
As a consequence of these and other commission actions, there is a shortage of spectrum – particularly broadband spectrum – available to satisfy the energy industry’s growing demand for higher data throughput necessary for advanced pipeline controls, smart grids, digital oil fields and other sophisticated communications technologies.
While shared frequencies, unlicensed spectrum, leased spectrum and narrowband channels offer relief in some areas, the energy industry could be stymied in implementing new, advanced systems without at least a small allocation of exclusive broadband spectrum for core applications (e.g., 1-2 MHz in 100-200 kHz channels).
At the moment, there is no utility broadband solution at the FCC. There is no reliable home for even the most basic IP-based SCADA systems. FCC spectrum auctions offer only theoretical relief, as the license areas subject to auctions rarely, if ever, match the reality of energy industry service requirements.
If auctioned licenses comported better with the energy industry’s actual service territories, companies likely would buy them. Energy companies also may be willing to pay an equivalent amount as a regulatory fee for geographic area licenses more closely aligned with service territories, but that option currently does not exist at the FCC.
Prognosis
Officials from both the FCC’s Wireless Telecommunications Bureau and Office of Engineering and Technology explained during our meeting that a specific allocation of spectrum to a particular industry sector – even one as deserving as the energy industry – is the commission’s “least attractive” option for allocating spectrum.
The commission prefers more flexible and shared uses of spectrum to accommodate a wider range of important applications. They expressed particular concern in attempting to differentiate between the relative worth of important, competing uses of spectrum – for instance, “wireless medical devices vs. CII applications.”
They were disinclined to initiate an inquiry into spectrum requirements in the energy sector and suggested the industry might consider submitting a formal study or survey of its own, describing different uses of frequencies and providing detailed examples of specific problems (for instance, why the industry is not able to buy spectrum from auction winners, why carrier offerings sometimes are not adequate, why leasing may be inadequate in some circumstances, why unlicensed spectrum is sometimes inappropriate, and which geographic areas show high spectrum congestion).
For the foreseeable future, it seems likely the FCC will stand by its conclusion that there are sufficient spectrum alternatives available to satisfy energy industry requirements. If so, the industry will be required to optimize whatever bits and pieces of spectrum it can find, as it struggles to implement new, sophisticated and spectrum-consuming technologies, while modernizing plant, improving efficiencies, promoting safety and protecting the environment.
If, on the other hand, electric utilities and oil and gas companies are looking for additional spectrum to satisfy these types of requirements, a significant push lies ahead to persuade the commission that even a modest allocation of broadband spectrum is appropriate for core energy applications.
Author:
Jack Richards serves as general counsel of ENTELEC and is a partner in the Washington, D.C., law firm of Keller and Heckman LLP. Among other clients, he represents oil and gas companies, electric utilities and railroads before the FCC. His views do not necessarily reflect those of Keller and Heckman LLP, its other clients or the individual members of ENTELEC’s Regulatory and Technology Committee. Richards can be contacted at richards@khlaw.com or 202-434-4210.
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