FCC Gives Schedule, Detailed Rules for 700 MHz Auction

The bureau sought comment on design issues affecting the auction within the broad framework of the July 31 auction order. The order mandates anonymous and package bidding. Comments are due Aug. 31, replies Sept. 7.

In line with mandatory anonymity, the bureau will not reveal license selections on short-form applications, upfront payments and bidding eligibility or other data of use to those trying to identify bidders or parties taking bidding-related actions, it said. And should some licenses remain unsold in a particular block, the FCC will keep bidder identity for all licensees in the block secret until after a follow-up auction offering the licenses a second time, it said. Such sales are expected to occur soon after their predecessors end, letting the FCC meet statutory deadlines.

“Because bidding on the 700 MHz Band licenses is interrelated, the purpose for which we impose anonymous bidding procedures in the first place -- to make signaling and other anticompetitive bidding behavior less likely to be successful -- will continue to be served by not making such information public until after the close of bidding on all of the licenses,” the bureau said.

The exception: a 10 MHz public-safety D block national license. For that block, the FCC will reveal information that would allow the D Block winner to negotiate a network sharing agreement with the national public safety broadband licensee in the adjacent spectrum block. But the bureau wants comments on these rules and any alternative proposals, it said.

In regard to package, or combinatorial, bidding, the bureau proposed a simultaneous multiple round auction design with hierarchical package bidding for the 12 regional licenses in the 22 MHz C block, the block seen as of most interest to Verizon Wireless and other major carriers. There would be no package bidding for the other 1,087 licenses. In package bidding, a bidder can offer a single bid for all licenses in a package, succeeding only if that bid beats the aggregate sum of all individual bids for those licenses.

Unlike with other auctions, package bidding in this event will involve only predetermined groups of specified licenses. The FCC plans to offer packages that include the 8 regional economic area group licenses (REAGs) taking in the U.S., including Alaska and Hawaii, as well as the two REAGs covering Puerto Rico and the U.S. Virgin Islands and the Gulf of Mexico and the two REAGs covering the U.S. Pacific territories. Under the formula, bidders can make a play for licenses individually and as part of a package at the same time without having to spend additional bidding eligibility.

But here too, the bureau seeks comments, it said. “We propose a package of REAGs covering the 50 states consistent with the Commission’s determination that we should implement a package bidding auction design to facilitate the entry of a new nationwide competitor in the C Block,” the FCC said. “We seek comment on this proposal, including comments suggesting alternative levels or alternative ways of packaging licenses within levels.”

The proposed upfront payment schedule would set upfront payments at $0.05 per MHz per population (MHz-pop) for Metropolitan Statistical Area (MSA) licenses and $0.03/MHz-pop for Rural Service Area (RSA) licenses, for REAGs, cellular market area (CMA) and economic area (EA) licenses. In areas where licenses went unsold in the advanced wireless services auction, the upfront payment would be $0.01 per MHz-pop.

The order also proposed minimum reserve prices for each spectrum block, which bids must exceed in the aggregate before the auction is complete. These sums range from a high of $4.64 billion for block C, the massive REAG licenses, to a low of $904 million for EA licenses in block E. In aggregate, the reserve price for all blocks totals $10.4 billion. The bureau also proposed minimum opening bids for each license based in part on prices brought by similar licenses in the AWS auction.