CTIA SAYS FCC WRONG TO NOT CHANGE AUCTION RULES
CTIA Mon. sharply criticized the FCC for failing to change its auction rules when Auction 58, taking in most of NextWave’s former spectrum and other licenses in the 1.9 GHz band, takes place next year. The FCC late Fri. issued a public notice saying the auction will largely follow rules established for Auction 35 in 2000-2001 and will take place starting Jan. 12, 2005, as expected (CD June 18 p3).
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The announcement was a loss for major carriers who had pushed the FCC to at least investigate changing the rules to eliminate designated entities (DE) restrictions, opening some tracts to bids only by smaller carriers. The FCC said it will sell 234 10-MHz licenses in 117 markets. More than half, or 119, can be purchased only by Des, while 115 will be made available to all bidders.
CTIA released a statement saying the FCC should have changed its rules. “CTIA is disappointed that the Commission has chosen to apply the old Auction 35 eligibility restrictions to this new spectrum auction, without considering whether they still make sense today,” CTIA said: “A significant portion of the same spectrum, originally won by NextWave at auction, will be auctioned or sold privately by NextWave without similar restrictions. We had hoped the Commission would review whether the designated entity restrictions make sense in the current spectrum and capital environment.”
CTIA said its concerns were particularly strong in that NextWave will be permitted to sell off some of the licenses it holds without similar strictures. NextWave announced April 20 it would return 60 of its PCS licenses, with plans to sell or possibly build out the rest of its holdings.
“The over $900 million reserve price that NextWave set in its private auction for 10 MHz of spectrum in the New York market shows the value of this prime spectrum in the heart of the PCS band,” CTIA said: “We believe the FCC should consider whether an open auction would be the best overall spectrum policy to help CMRS carriers build out their footprints and improve service for millions of consumers.”