LAS VEGAS – One of the biggest issues facing rural carriers is having continued access to new spectrum resources, which has been a central rallying point for the Competitive Carriers Association. Boosting that call, CCA hosted a panel consisting of regulatory personal from a handful of wireless operators, public interest groups and representatives from the broadcast industry.
The focus of the panel was on the upcoming 600 MHz spectrum auction, also known as the incentive auction, which looks to fill a number of roles. Those include providing new spectrum for wireless operators; a financial “carrot” for broadcasters to turn in some of their current spectrum holdings; and the funding of the FirstNet nationwide public safety network. Complicated and heady goals indeed.
One of the biggest issues named by the carrier representatives was that the Federal Communications Commission lay out ground rules prior to the auction that solidify the playing field heading into the bidding, while at the same time catering towards their own view of what is fair. That included the view of how much spectrum should be allowed to be bid on by the nation’s two largest wireless operators Verizon Wireless and AT&T Mobility, which combined currently control more than 80% of the sub-1 GHz spectrum currently available to the wireless industry.
“They would not be fighting so hard if they thought they were comparable,” noted Tom Sugure, VP of government affairs at T-Mobile US, adding that there was a good deal of high-band spectrum coming to market through the auction process in 2014, and if all spectrum was indeed equal, those carriers could bid aggressively for those licenses.
T-Mobile US has put forth an extensive proposition under its “dynamic market rules” recommendation that it says will allow the government to fulfill its financial obligations while still catering towards increased competition in the wireless space. Sugrue reiterated that the proposal will lead to greater revenues for the government.
That sentiment was echoed by Grant Spellmeyer, VP of federal affairs and public policy at U.S. Cellular, who noted that the T-Mobile US proposal was a “very creative approach,” though U.S. Cellular did not have an “official position” on the idea.
One item many on the panel did agree on was that the link between the 600 MHz spectrum auction and funding for FirstNet may not be completely intertwined. Sugrue proposed that between the recently scheduled H-Block auction and expected auction of the AWS-3 band in late 2014, the proposed $7 billion in funding to be set aside for FirstNet could be nearly complete even before the incentive auction has begun.
Another lingering challenge is how to break up the 600 MHz spectrum into chunks that will generate enough interest from bidders. Make the chunks larger, which is favored by carriers looking to build a nationwide footprint, and you basically block out smaller carriers that have no interest in increasing their scope. Make them too small, and bidding for carriers looking for a nationwide reach will involve a considerable amount of effort to piece together such a move. The current consensus seems to indicate that the FCC is looking at either an “economic areas” model consisting of 176 licensed markets or the “cellular market areas” model that would split the country into 734 markets.
At the end of the day, while the FCC has said it plans to conduct the incentive auction by the end of 2014, most on the panel figure a more realistic date could be early 2015. Many pointed out that with the H-Block and AWS-3 both on the clock for 2014, squeezing in something as complex as the incentive auction could be asking a bit much.
In a separate “press briefing” conducted with regularly personal included in the initial panel as well as from other carriers, there was some thought that the auction process could still hit its 2014 deadline if incoming FCC Chairman Tom Wheeler makes it a priority. With Wheeler’s appointment not expected to garner Senate approval until at least October, Wheeler would have to hit the ground running in order to get such a complicated process in motion within 15 months.
Bored? Why not follow me on Twitter?
