The Federal Communications Commission continues to make progress on setting rules for its highly anticipated 600 MHz incentive auction, with FCC Chairman Tom Wheeler noting in a blog post late last week that he has sent a draft “report and order” on the process to his fellow commissioners. That post also hinted at possible auction rules that could limit the bidding opportunities of carriers already engorged with sub-1 GHz spectrum holdings.
In the post, Wheeler again touted the game-changing possibilities embedded in the scheduled auction for both the broadcast industry, which will be giving up spectrum for cash, and for the wireless telecommunications space. Those wireless telecom benefits included rural markets where the propagation characteristics of the 600 MHz spectrum band could ease wireless broadband deployments, as well as urban markets where the spectrum is more efficient in penetrating buildings.
Wheeler also touched on the agency’s current thinking in terms of how it may craft spectrum auction rules in order to benefit carriers that do not currently own significant chunks of sub-1 GHz spectrum licenses.
“A legacy of earlier spectrum assignments … is that two national carriers control the vast majority of low-band spectrum. As a result, rural consumers are denied the competition and choice that would be available if more wireless competitors also had access to low-band spectrum,” Wheeler wrote. “While many factors go into determining the quality of wireless service, access to a sufficient amount of low-band spectrum is a threshold requirement for extending and improving service in both rural and urban areas.”
AT&T, which along with Verizon Communications are the dominate sub-1 GHz spectrum licenses holders, last week threatened to possibly sit out the FCC’s planned 600 MHz incentive auction, which could lead to lower overall auction revenues, if there were limits put on its bidding capabilities. In a filing with the FCC, AT&T said that rumors of proposed spectrum auction rules limiting the participation of carriers currently controlling more than one-third of spectrum below 1 GHz in markets would prevent the carrier from bidding on licenses covering more than 70% of the U.S. population. Joan Marsh, VP of federal regulatory at AT&T, said such a scenario could see the carrier instead focus its financial means on other spectrum opportunities.
“Such restrictions would put AT&T in an untenable position, forcing AT&T to reevaluate its potential participation in the auction,” Marsh noted in a filing.
Citing people “familiar with the matter,” The Wall Street Journal last week reported that FCC will set aside up to 30 megahertz of spectrum in the 600 MHz band incentive auction process for bidders controlling less than one-third of spectrum below 1 GHz in those markets. That consideration would be triggered once bidding in each market had hit a to-be-determined financial threshold. Other carriers that could be impacted by such a move include regional operators U.S. Cellular and C Spire.
A number of smaller carriers and their representative trade associations have been lobbying for the FCC to limit bidding opportunities for larger carriers in an attempt to level the spectrum playing field for wireless carriers. T-Mobile US has been one of the most active in this argument, putting forth its “dynamic market rules” proposal that would place a spectrum aggregation limit on the amount of spectrum that can be won by a single operator. As the carrier explained:
“Under the dynamic market rule, the auction would first proceed with a spectrum-aggregation limit. If the commission’s revenue target is met while the limit is in place, then the auction would be able to close once there is no longer any active bidding. If the revenue target is not met, however, the limit would be gradually relaxed. Should the bidding fail to clear the revenue target once the limit is completely removed, the commission would resume the process by starting at the next lower spectrum target with the aggregation limit in place.”
In a “policy blog” post earlier this month, Kathleen Ham, VP of federal regulatory affairs at T-Mobile US, noted:
“AT&T has demonstrated admirable consistency in its public comments on the incentive auction – that somehow sacrificing competition for duopoly is good public policy,” Ham said. “Only an auction with robust competition from multiple bidders of all size will meet revenue objectives and result in a competitive, innovative mobile broadband landscape for the future that benefits consumers.”
Unlicensed benefits
Wheeler also highlighted the FCC’s efforts in freeing up more unlicensed spectrum in connection with the incentive auction process. The exact amount of unlicensed spectrum will not be known until the FCC conducts the reverse auction process, which will have broadcasters turning in their spectrum holdings in exchange for financial compensation.
“As part of the Incentive Auction process, we will also make available on a nationwide basis spectrum for unlicensed use (think Wi-Fi),” Wheeler explained. “With the increased use of Wi-Fi, this spectrum has also become congested. Opening up more spectrum for unlicensed use provides economic value to businesses and consumers alike.”
The FCC earlier this year adopted a report and order that modified rules for unlicensed spectrum use that it said will streamline the use of spectrum in the 5 GHz band and could provide an additional 100 megahertz of spectrum for unlicensed use. Unlicensed spectrum uses are currently tied to 555 megahertz in the 5 GHz band, though there are limitations for indoor use only. The Wi-Fi usage in that band is typically signified by the 802.11a standard.
The FCC said the modified rules will remove the indoor-only restriction and provide more access in the 5.15-5.25 GHz band and allow the Wi-Fi industry greater leeway in implementing the 802.11ac standard, which accesses both the 2.4 GHz and 5 GHz bands.
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