Sennheiser Asks FCC To Compensate Wireless-Mic Owners Facing Second Spectrum Reallocation

Wireless-microphone–systems manufacturer Sennheiser has petitioned the FCC to compel compensation for wireless users whose 600 MHz systems will be rendered obsolete by the agency’s pending auction of that spectrum, slated for sometime during the second half of 2014.

In comments filed on Nov. 4, Sennheiser asserts that the auction “will force many… broadcast, film, and live-production professionals to attempt to stage their shows using little more than half of the currently available UHF spectrum.”

The company argues that the winning buyers of the spectrum auction should compensate owners of wireless-microphone equipment that will be rendered obsolete as a direct result of the planned spectrum repacking. It notes that “wireless users will have to make significant investments in new equipment for the second time within a few years,” a reference to the 2010 reallocation of the 700 MHz band to 4G mobile-services providers, which pushed professional and commercial wireless users into lower UHF frequencies, including the 600 MHz band, around which new series of wireless systems were developed and sold.

According to Joe Ciaudelli, spectrum affairs correspondent at Sennheiser, those users are “now they are being told that they must vacate this UHF space and with no contingency or recourse to recover their equipment investments. This is grossly unfair, especially considering that this will be the second time this has occurred within a few years. This time, mics and monitors won’t be able to simply be relocated into lower portions of the UHF because it is already packed with other mics for ones rendered obsolete by the 700 MHz reallocation. TV stations currently operating in 600 MHz will also be relocated to lower channels, exacerbating the congestion.”

As a precedent, he cited the relocation of fixed-service microwave-link–service providers from the 2.1 GHz and 1.7 GHz bands in 2006, whose costs were borne by some of the Advanced Wireless Services (AWS) mobile and wireless vendors that were moved into that part of the spectrum. This was handled through the CTIA Spectrum Clearinghouse, established by CTIA-The Wireless Association, a wireless providers trade organization, to act as a non-profit, cost-sharing administrator to facilitate the cost-sharing process pertaining to the relocation of incumbent facilities in the AWS spectrum band.

Compensation Formula
Sennheiser has suggested a formula for such compensation. It would take the number of months between the June 2010 loss of the 700 MHz band and the upcoming auction of the 600 MHz spectrum and divide that by the 120 months (10 years) of projected useful life of a typical professional wireless system. Subtracting that quotient from 1 would establish a factor value that could be used to establish the pro rata value of wireless systems for the 600 MHz band already purchased. For instance, if the 600 MHZ auction takes place in September 2014, the calculation would look like this:
51 months [June 2010 to September 2014] / 120 [months] = 0.425
1 – 0.425 = 0.575 [which converts to 57.5 %]

Under this calculation, a typical wireless microphone system costing $3,000 would have a remaining value of $1,725, an amount that would be applied to the cost of another wireless system that is compliant with whatever spectrum becomes available for wireless-microphone applications, such as the current 500 MHz range or, for broadcasters, 944-952 MHz.

The question remains who would be liable to pay that compensation. CTIA has already made its opposition to the topic clear.

Sennheiser’s premise has the backing of several competitors in the wireless space, including Audio-Technica, Lectrosonics, and Shure. In a statement filed with the FCC on Nov. 7, Audio-Technica states, “A-T agrees with Sennheiser that the Commission has the authority to require spectrum-auction–winning bidders to reimburse wireless-microphone users who will be displaced from the band as result of the auction and that basic fairness requires such reimbursement.”

However, not all agree on the form any reimbursement should take. Karl Winkler, director of business development at Lectrosonics, tells SVG, “We are not yet convinced of the exact mechanism for reimbursement, but, at the very least, this issue should be made public for a proper debate.”

Asked whether the gambit had a realistic chance of succeeding, Ciaudelli replies, “I do think that, if fairness and objectivity were applied to the subject, then, yes, we’d see some compensation.” But, he adds, “that doesn’t always prevail in Washington.”

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