The Federal Communications Commission is asking for comments on procedures for its planned 600 MHZ incentive auction, following up on a Notice of Proposed Rulemaking released by the FCC in May.
The auction is set to include spectrum in the 600 MHz band returned by broadcasters for compensation as part of
the reverse-auction process, which will then be auctioned off for mobile communication use in the forward-auction process similar to the ongoing Auction 97 proceedings. That auction has so far surpassed $43 billion in total potential winning bids, a record haul for an FCC conducted spectrum auction.
The FCC is looking for input on a number of topics related to the auction process, including the methodology for establishing opening bids for both the forward and reverse auction; components on the “final stage” rule; how to implement its mobile spectrum holdings policies and spectrum reserve; and considerations in making “provisional and final channel assignments and the priority in which they should be considered.”
“In many respects, (this) notice simply fleshes out decisions that the commission made in May, such as a ‘near-nationwide’ clearing target to take account of the possibility that we may need to assign some broadcasters to the portion of the 600 MHz band that will be allocated for mobile broadband; the use of a clock auction format to make it easy for broadcasters to participate; and a market-based spectrum reserve to promote competition,” explained FCC Chairman Tom Wheeler. “It is my hope that parties will focus on the proposals we put forward today to implement these decisions, rather than seeking to re-litigate these basic determinations.”
Comments are due by Jan. 30, with reply comments due by Feb. 27.
The FCC in late October pushed the incentive auction proceedings from its previous mid-2015 start to at least early 2016. The move was made in order to provide more time to deal with the complex nature of the forward- and reverse-auction proceedings as well as a recent court challenge brought about by the National Broadcasters Association. That challenge claimed the FCC in its 600 MHz incentive auction rulemaking changed the “methodology used to predict local television coverage areas and population served, which could result in significant loss of viewership of broadcast TV stations after the FCC ‘repacks’ TV stations into a shrunken TV band.”
The FCC’s NPRM included plans for parsing out spectrum licenses in 5×5 megahertz chunks (10 megahertz total per license) covering partial economic area license sizes. Larger operators had wanted license sizes to include at least some 10×10 megahertz options, which were touted as being most beneficial to current LTE deployment plans.
The PEA-sized licenses will provide for the country to be divided up into 428 markets in which licenses will be available. Larger carriers had initially lobbied for larger license chunks of either regional economic areas (12 markets) or economic areas (176 markets), while smaller operators had petitioned for cellular market areas (734 markets). The FCC noted that “PEAs permit entry by providers that contemplate offering wireless broadband service on a localized basis, yet may be easily aggregated by carriers that plan to provide service on a larger geographic scale.”
Looking to avoid interoperability and band plan issues that shrouded the deployment of 700 MHz spectrum licenses, the FCC also noted that there would be interoperability between all spectrum licenses in the 600 MHz band.
The FCC also placed limits on certain potential spectrum license participants, noting that no more than 30 megahertz of spectrum will be set aside in all markets in a reserved manner for those participants holding less than one-third of spectrum in those markets below the 1 GHz level. That rule was most pointedly targeted at the likes of Verizon Wireless and AT&T Mobility, both of which control a lion’s share of the nation’ sub-1 GHz spectrum, and follows guidelines proposed by T-Mobile US last year as part of its “dynamic market rules” filing.
Auction 97 impact
The record-breaking haul of the ongoing Auction 97 process has seemingly altered the industry’s view on the 600 MHz incentive auction proceedings. Many had overlooked Auction 97 as a mere stepping stone toward the incentive auction, noting that Auction 97 spectrum (65 megahertz in the 1.7/2.1 GHz band, also known as AWS-3) was not as attractive as the potential 70 megahertz of spectrum in the 600 MHz band expected to be included in the incentive auction. However, now that Auction 97 has more than doubled the previous record-haul in an auction process – as well as the most wildly optimistic forecasts – many are now having to refigure expectations for the incentive auction.
“The still-ongoing AWS-3 auction has only reinforced the view that carriers need spectrum to serve the voracious appetite of a data-consuming public,” Wheeler noted. “This bodes well for the incentive auction.”
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