The FirstNet board’s Finance Committee approved fiscal year 2014 guidelines for expenditures for the rest of the year. Under the guidelines, FirstNet management is allowed to spend up to $33 million on network development, $16.1 million on outreach and state consultation, $16.1 million “to further develop FirstNet’s operating infrastructure, including facilities and support and contract staff,” and $6.9 million on business strategy development, said a news release Friday. “Today we are funding the essential steps for the rest of this fiscal year to move forward on our program roadmap and business planning for building a nationwide, interoperable, public safety communications network,” said FirstNet Chairman Sam Ginn.

The American Petroleum Institute said it supports a recommendation by the National Public Safety Telecommunications Council that business/industrial coordinators should be authorized to coordinate 4.9 GHz band channels applied for by business/industrial users. API also said the FCC should not permit “by regular licensing” the operation of vehicular repeater units on the 173.2375, 173.2625, 173.2875, 173.3125, 173.3375 and 173.3625 MHz telemetry channels. “Mobile voice operation is incompatible with the telemetry equipment currently deployed in the band,” said an FCC filing (http://bit.ly/1ntV1F0) by API, which represents oil and natural gas companies.

The FCC Wireless Bureau sought comment on a petition by the Land Mobile Communications Council (LMCC) asking the agency to modify rules for the 800 MHz expansion bands (EB) and guard bands (GB). The group asked that 800 MHz incumbent licensees in a market be given a six-month period to apply for EB/GB frequencies before they are made available to applicants for new 800 MHz systems. “LMCC states that spectrum for incumbent 800 MHz systems in urban areas to expand is urgently needed but sparsely available,” the bureau said (http://bit.ly/1mLEw7f). “It argues that a limited opportunity for expansion of incumbent systems would serve the public interest because those licensees had to undergo the disruptive rebanding process without deriving any economic benefit, and use of EB/GB frequencies to expand existing systems’ capacity would promote spectral efficiency.” Comments are due May 27, replies June 11.

The need for a TV incentive auction shows a breakdown in FCC power to regulate the airwaves, Tom Hazlett, a former commission chief economist, suggests in a white paper released Friday (See related story). The FCC has under the Communications Act “full authority to allocate spectrum according to ‘public interest, convenience or necessity,'” he said. “It does not exercise such powers in fact. The agency vested with issuing and renewing (on a seven-year cycle for TV stations) all wireless licenses has revealed that it must -- to carry out its legal mandate to promote the public interest -- buy back FCC licenses from the private parties it has assigned them to (and would use its discretion to otherwise renew).” But Hazlett said in part the FCC is recognizing reality. “Compelling evidence supports the FCC in its judgment that TV Band spectrum is efficiently substituted from TV to mobile services, and the Commission’s belief that it would be hamstrung -- by litigation, congressional backlash, or both -- if it were to uproot existing broadcasting stations (i.e., deny license renewals) under its ‘public interest’ authority,” he said (http://bit.ly/1kdcLRI). “The crucial insight is that regulation, as judged by the regulators, is too unwieldy a tool as to remedy the errors made in previous regulatory choices, such that using market mechanisms -- reverse auctions, in this instance -- will lower the cost and speed the delivery of efficient substitutions.” Hazlett is a professor at Clemson University, on leave from George Mason University.

While sharing is the wave of the future, it might help if some government agency were responsible for all government spectrum, similar to how the General Services Administration manages real estate, said Blair Levin, manager of the FCC’s National Broadband Plan. “Based on what I experienced in government, I think GSA, or OMB [the Office of Management and Budget] for that matter, does a better job forcing a certain kind of efficiency within an agency, than the agency can do for itself,” Levin said Friday. “If the knowledge and incentives lie only in the silo, the prime imperative will be to protect the silo. If authority resides in a broader group, the incentives, and the use of the knowledge changes; I hope Congress explores that.” Levin also took on what he sees as a too-common mantra in Washington, that the government shouldn’t pick winners and losers. “This is also ironic as the city’s major industry, lobbying, is premised on the need to affect the picking of winners and losers,” he said at a Washington conference sponsored by Clemson and George Mason University. But Levin said policy does affect investment. “I subscribe to a different point of view, one offered me by a great investor,” he said. “He told me, ‘D.C. flatters itself to think it can pick; there are too many factors to guarantee one result or the other. But policy is like gravity; it does affect where capital flows.’ So my question is where does D.C. want money to flow in telecommunications where it is not flowing now? Do we think the market is underinvesting in wireless networks? Wired networks? Devices?” Levin, currently at the Aspen Institute, is also a former analyst and FCC chief of staff.

It’s “too early to tell” how Verizon will split its budget for the upcoming AWS-3 and broadcast incentive auctions, but its top priority is the AWS-3 auction, said Chief Financial Officer Fran Shammo Thursday during a conference call with investors. The AWS-3 auction is to occur at the end of 2014, with license attainment during Q1 2015. Once the AWS-3 auction is complete, “then we'll deal with the broadcast licenses after that within 2015,” Shammo said. Verizon is currently using its existing AWS spectrum to increase capacity for its 4G LTE network. Those AWS deployments have mainly been concentrated in major urban markets like New York, San Francisco and Chicago, but it plans to deploy AWS spectrum in smaller cities and rural markets throughout the rest of the year, Shammo said. “The network performance is delivering what we expect it to,” he said. Verizon ended the quarter with a net $3.95 billion profit on $30.8 billion in revenue, driven in part by its successful $130 billion buyout of Vodafone’s 45 percent of Verizon Wireless in February (CD Feb 24 p22). Verizon added a net 539,000 postpaid wireless customers during Q1, having added a net 634,000 subscribers on tablets, but lost a net 138,000 postpaid subscribers using cellphones. AT&T said Tuesday it added a net 625,000 postpaid mobile subscribers during the quarter. Verizon’s net loss of cellphone subscribers -- the first quarter that’s happened since 2010 -- “is a shocking turnaround,” said MoffettNathanson analyst Craig Moffett in a blog post. “Verizon has topped AT&T for post-paid net additions every quarter since they got the iPhone. Not this time.” Verizon began offering the iPhone in 2011. AT&T’s response to competition from T-Mobile and its improved network performance has put Verizon “in a tough spot,” said New Street Research analyst Jonathan Chaplin in a note to investors. “Verizon is faced with either losing share or cutting price, at least until AWS deployment drives improved network performance for a large portion of the sub base."

Slower-than-expected LTE launch in China hit Qualcomm’s fiscal Q2 earnings, with many customers there opting for less expensive TD-SCDMA handsets over more advanced models, analysts said. Qualcomm Technology Licensing (QTL) unit sales were the most affected by the “delayed ramp” in China for LTE handsets, with licensing revenue of $2 billion falling short of analyst estimates for $2.2 billion, FBR & Co. analyst Christopher Rolland said in a research note. QTL-related device sales were $66.5 billion, below Rolland’s estimate for $69 billion due largely to Chinese customers buying TD-SCDMA phones on which Qualcomm doesn’t get a royalty. Qualcomm CDMA Technologies (QCT) business had mobile data modem (MDM) shipments of 188 million units, up from 173 million a year ago, but short of analyst forecasts for 192 million. Despite the sales shortfall, Qualcomm remains confident of strong LTE sales this year “albeit somewhat more backend loaded than our previous expectations,” Qualcomm CEO Steve Mollenkopf said. Qualcomm has more than 100 4G licensees, including 60 in China, he said. About 270 cellular operators have deployed LTE, with another 210 planning them, Mollenkopf said. In the second half, more than half of Qualcomm’s MDM shipments will be LTE-enabled, he said. China Mobile is forecasting having 500,000 LTE base stations in place by year-end, Mollenkopf said. Meanwhile, Mollenkopf, in an interview Thursday on CNBC, said Qualcomm is “pretty confident we haven’t done anything wrong” despite allegations of bribery in China. Qualcomm received a Wells notice from the SEC in March that recommended enforcement action related to the bribery allegations, Qualcomm said in an SEC filing. Qualcomm, which responded to the notice on April 4, is mid-way through the process, Mollenkopf said. The company first became aware of the investigation in 2012 and started its own inquiry, Qualcomm said. Qualcomm found that it provided employment, gifts and other benefits to “individuals” from Chinese-state owned companies and agencies, the company said. The total gift was less than $250,000, Qualcomm said. Qualcomm is cooperating with the SEC and U.S. Department of Justice, the company said. Meanwhile, the carrying value of Qualcomm’s Qualcomm MEMS Technology (QMT) division’s goodwill and property tied to a manufacturing facility in Taiwan was $133 million March 30, while the factory and equipment was $240 million, the company said. About $44 million in property, plant and equipment was being held for sale, Qualcomm said. Qualcomm took a $444 million impairment charge is fiscal Q1 related to the manufacturing complex, the company said. The factory was to produce iMOD bistable displays that used pixel elements composed of 10-100 micron micro electromechanical systems (MEMS). Qualcomm at one point projected spending $1 billion on the factory, which was scheduled to start production in fall 2012. Qualcomm shifted the focus of its MEMS display business to licensing in 2012. Qualcomm’s fiscal Q2 net income improved to $1.95 billion from $1.86 billion as revenue rose to $6.36 billion from $6.12 billion. The company’s QCT sales earnings before taxes (EBT) grew to $740 million from $681 million a year ago as revenue rose to $4.24 billion from $3.91 billion. QTL EBT grew to $1.83 billion from $1.8 billion as revenue improved to $2.07 billion from $2.05 billion.

Government agencies have been willing to be more forthcoming than before on spectrum questions, House Commerce Committee Majority Chief Counsel David Redl said Thursday during a Mobile Future forum (see related story). Redl said he and other committee staffers were tasked by their bosses to meet regularly with NTIA, the FCC and Department of Defense on the AWS-3 band, which is to be cleared of users to be sold to wireless carriers in an auction later this year. “I think we have made significant progress,” he said. “All the agencies have been very responsive to the concerns of Capitol Hill.” Shawn Chang, senior Democratic communications counsel to the House Commerce Committee, also said he’s pleased with the progress made. “We are entering this extremely crucial period,” he said. “We really need the agencies to work together with the industry in providing enough information so that interested bidders can evaluate this spectrum."

AT&T and Verizon aren’t the only carriers complaining about proposed FCC spectrum aggregation rules for the TV incentive auction. U.S. Cellular said the restrictions could end up restricting its rights to bid in some markets, in a meeting with FCC Chairman Tom Wheeler, Chief of Staff Ruth Milkman and others at the agency. “Such a proposal would place U.S. Cellular at a significant disadvantage to at least three of the four national carriers in acquiring the spectrum likely necessary for the deployment of 5G technology in the next decade in its operating markets,” the carrier said (http://bit.ly/1gTXf9v). It said the rules as written would let carriers with less than 44 MHz of low-band spectrum in a market buy unlimited amounts of 600 MHz spectrum, while those with 45 MHz couldn’t buy any.

The Find Me 911 Coalition released a survey it says highlights problems with tracking wireless 911 location accuracy. It submitted to the FCC the results of the survey, which collected responses from 1,014 911 call center managers and dispatchers throughout 50 states and gathered upwards of 200 anecdotes of such struggles, on Thursday (http://bit.ly/1rpSLxX). The coalition said 82 percent of the staffers don’t trust the location data from carriers. They also pointed to the struggle of calls routed to the wrong 911 call center. Nearly all respondents back the FCC going forward with wireless location accuracy standards within two years, the coalition said. The stories the coalition collected focused on the wireless location problems. “We had a caller call in [and] all we could hear was what sounded like a struggle to breath and loud music in the background,” one 911 call center staffer from California said. “He called from his cell phone, however there was no Phase II [location information], only Phase I where it shows only a triangle of area that he could be calling from. ... The subject was eventually found and he had been murdered by having his throat cut.” The FCC and lawmakers have emphasized efforts to improve such accuracy.