WASHINGTON-The Federal Communications Commission asked for Capitol Hill’s blessing to delay until September the 700 MHz auctions after large wireless carriers said the spectrum was too heavily encumbered to be of any value.
“I have serious concerns about the compressed timing for these auctions … this delay should allow all interested parties to achieve greater certainty in developing their business plans and finalizing their bidding strategies for this auction,” said FCC Chairman William Kennard in a letter to congressional appropriators.
“We could still conduct the auction and meet the specified deadline,” Kennard said. “However, as a matter of spectrum management policy, I believe such a course would be unwise and would jeopardize the efficient assignment of this valuable resource.”
The FCC is expected to release shortly a public notice announcing the new date and schedule for the delayed auctions.
BellSouth Corp. began raising questions in March after it determined that what it thought was valuable spectrum-especially for a mobile high-speed Internet service it wants to develop-was full of TV broadcasters that do not have to vacate the spectrum until 2007, and maybe even later.
In a series of meetings with FCC staff and industry representatives, BellSouth hoped someone would find fault with its analysis that broadcasters operating TV channels 56-59 need to be cleared from the spectrum before it can be used, as well as broadcasters in TV channels 60-69, the spectrum being auctioned. No one disagreed.
After meeting with BellSouth and receiving a delay request from Verizon Wireless, FCC staff began talking to key congressional staff about such a delay.
Congress last year directed the FCC to auction 36 megahertz of spectrum-known as 60-69 because of its place on the TV dial-and deposit the money in the U.S. treasury by Sept. 30.
The commission plans to hold two auctions for the spectrum: one for commercial use and one for guard bands. The commercial-use auction first was slated to start May 10, but delayed to June 7 after preliminary concerns were raised. The guard-band auction, where spectrum was allocated to protect 24 megahertz of public-safety channels also in the band, was set to start June 14.
While some involved in the guard-band auction applauded the decision to delay, the major industry proponent of guard bands, Mark E. Crosby, was not pleased.
“The timing of this is not good. There are substantial issues with the commercial spectrum, but the guard-band spectrum is entirely different,” said Crosby, president of the Industrial Telecommunications Association.
The largest question before the FCC is how to clear broadcasters using the 700 MHz spectrum. BellSouth last week asked the FCC to come up with a band-clearing proposal that would completely clear the spectrum within two years of the close of the auction.
The National Association of Broadcasters has been resisting any moves to require or encourage broadcasters to move before 2007. “NAB believes that the [FCC’s] decision to consider regulatory requests needed to implement arrangements facilitating the operation of new wireless services in the 700 MHz band contravenes Congress’ clear intent to ensure that viewers do not lose their existing analog television service on these bands during the DTV transition,” said the NAB on Feb. 22.
Spectrum Exchange Group L.L.C. is advocating a plan that calls for it to hold a reverse auction. Under that concept, broadcasters would bid the price they believe it would cost to relocate, and the lowest amount would be the actual relocation cost for that area.
Spectrum Exchange late last month petitioned the FCC to adopt rules to prevent broadcasters from attempting to be the lone holdout, which could lead to delayed and expensive relocation costs, and negate the need for a reverse auction.
PCS re-auction
The delay of the 700 MHz auctions also could impact the July 26 scheduled re-auction of spectrum reclaimed from NextWave Telecom Inc.
The FCC said it would decide who can participate in the personal communications services C- and F-block re-auction before short forms are due for the 700 MHz auction. However, if the delay is approved, the C- and F-block re-auction could be finished before the 700 MHz auction started.
The commission is under the impression bidders may want to play in both auctions. But BellSouth said rules for the C-and F-block auction would make little difference on how it uses spectrum at 700 MHz.
“Not all of the services are available in the PCS spectrum. We can offer a more broad [suite] of services at 700 MHz,” said Howard J. Haug, assistant vice president for strategic management for BellSouth.
On a related note, it appears a proposal endorsed by Kennard to allow large players to bid in the re-auction is having a hard time gaining momentum.
The delay in the 700 MHz auction, combined with litigation regarding the PCS spectrum, could postpone the July PCS re-auction as well.
