The FCC closed the first stage of the C-band auction Friday at $80.9 billion, not including about $13 billion in additional accelerated clearing payments (see 2101070048). All 5,684 spectrum blocks were sold. The FCC will next release the list of winning bidders. “The winning bidders, at least, perceive … tremendous value in acquiring the C-band spectrum and monetizing it over the course of the coming years, through the deployment of 5G services within an accelerated time frame,” Chairman Ajit Pai said at an American Enterprise Institute event Friday. Asked whether the costs will cause difficulties for carriers in building out their networks, Pai said that’s “a very good question” and deferred “to economists and those in finance” who monitor carrier balance sheets. Pai said offering the band through a standard spectrum auction was the right course. “After months of back-and-forth with stakeholders, we had serious concerns about the plans that were submitted for the private sale and whether it would be run competently,” he said: “In contrast, the FCC had a quarter-century track record of performing successful and transparent spectrum auctions.” S&P Global Ratings said the auction “will have a significant effect on balance sheets for U.S. wireless operators.” The nationwide average price per MHz/POP across all categories was 94.2 cents, BitPath Chief Operating Officer Sasha Javid blogged Friday. That's about 4.3 times the 21.7 cent price per MHz/POP for the spectrum sold in the citizens broadband service auction, he said. The most expensive license was for Red Oak, Iowa, which closed at $2.835 MHz/POP, and the most expensive top 20 market was San Diego, at $1.773, he said. The auction offered 280 MHz, rather than the 65 MHz in the AWS-3 auction. “This is why total gross proceeds in this C-band auction skyrocketed past the $44 billion raised in the AWS-3 auction to become the highest gross auction of all time,” Javid said. “We have heard the term ‘beachfront’ used to describe various bands over the last several years," wrote Wiley’s Ari Meltzer. "The market has spoken, and it has confirmed that mid-band has the view and the amenities.” The auction “showcased the critical need of the mobile wireless industry to have access to an important portfolio of spectrum to support connectivity for citizens, the economy, and U.S. technology leadership,” said Chris Pearson, president of 5G Americas. “This record-breaking spectrum auction demonstrates the wireless industry’s commitment to leading the emerging 5G economy and underscores the importance of developing a robust pipeline of spectrum auctions,” said CTIA President Meredith Baker.
Wireless Spectrum Auctions
The FCC manages and licenses the electromagnetic spectrum used by wireless, broadcast, satellite and other telecommunications services for government and commercial users. This activity includes organizing specific telecommunications modes to only use specific frequencies and maintaining the licensing systems for each frequency such that communications services and devices using different bands receive as little interference as possible.
What are spectrum auctions?
The FCC will periodically hold auctions of unused or newly available spectrum frequencies, in which potential licensees can bid to acquire the rights to use a specific frequency for a specific purpose. As an example, over the last few years the U.S. government has conducted periodic auctions of different GHz bands to support the growth of 5G services.
The Ajit Pai FCC had success in opening spectrum bands for 5G because it was willing to take on other agencies, Commissioner Brendan Carr told an American Enterprise Institute webinar Thursday, less than a week before Pai leaves and a new administration begins. There was a lot of noise about fights with DOD over Ligado and with other agencies, he said. “These disputes have always been there, but prior [FCCs] kept it below the headline level because they didn’t want to take on the fight,” he said.
Regulators cleared three items circulated by Chairman Ajit Pai last week -- opening the 12 GHz band to 5G, proposing bidding procedures for a 2.5 GHz auction and unveiling the first round of selections for the agency's Connected Care pilot program (see 2101060061). Pai, who leaves next week, effectively forced a vote.
Chairman Ajit Pai may force votes on two spectrum items circulated last month (see 2012290032): a “neutral” 12 GHz NPRM and proposed 2.5 GHz auction rules, said industry and FCC officials. Pai is considering putting them on the agenda Wednesday for the following week’s meeting if he needs to assure a vote, officials said.
FCC Chairman Ajit Pai circulated a neutral NPRM on the 12 GHz band late last week, plus a notice on bidding procedures for the 2.5 GHz auction, attempting to close out two more spectrum items before he leaves office Jan. 20. The two items had been rumored candidates for the January commissioners’ meeting (see 2012210051) but didn’t make the agenda. With Democrats poised to take control of the FCC, industry experts said the question is whether they will allow the items to get a vote or ask for a delay until the new administration. The timing of both items would allow Pai to force a vote under must-vote rules, though he still has the option of putting them on the Jan. 13 meeting agenda.
The Enterprise Wireless Alliance asked the FCC to immediately lift the nearly nine-year T-band freeze, after President Donald Trump signed into law (see 2012280052) the FY 2021 appropriations and COVID-19 aid omnibus bill, which includes a repeal of the mandate that the FCC auction the spectrum. EWA said its members -- business/industrial land transportation (B/ILT) licensees -- should have the first shot at the band. But industry officials said the FCC will have to weigh interests because public safety agencies are also interested in expanding there.
Contrary to expectations, FCC Chairman Ajit Pai decided not to seek action on any items at the Jan. 13 commissioners’ meeting (see 2012210051). Pai on Wednesday released a meeting agenda that lists five panels updating commissioners on various parts of the FCC’s work. The meeting will be Pai’s last as chairman. Industry officials said Pai’s strategy means he can highlight the work he has done while avoiding complaints or letters from Congress that he must stop doing anything major.
Both houses of Congress were expected to vote Monday night on the combined FY 2021 appropriations and COVID-19 aid omnibus bill (HR-133), after Hill leaders reached a deal on the measure, which includes $6.82 billion for broadband and a raft of other tech and telecom policy provisions. HR-133 also includes increases in annual funding for the FCC, FTC, NTIA and other agencies compared with FY 2020. The Senate was, meanwhile, set to hold a revote on invoking cloture on FCC inspector general nominee Chase Johnson after failing a first try Saturday.
FCC Chairman Ajit Pai is expected to tee up several items for a busy Jan. 13 open meeting, his last on the commission, industry and FCC officials said. The meeting is expected to be 5G heavy, including a notice on a 2.5 GHz auction and possibly a 3.45-3.55 GHz and 12 GHz item. Also likely, Pai could use the meeting to complete action on the latest Communications Act Section 706 report (see 2012160051) and other items he wants to finalize as chairman. Pai’s blog on the meeting is due Tuesday, with draft items to be posted Wednesday.
The FCC dismissed various petitions seeking reconsideration of its order on the 2.5 GHz band, which was approved last year over partial dissents by Democrats (see 1907100054) and is expected to lead to an auction next year. The National Congress of American Indians sought reconsideration of the decision to focus the tribal priority window on rural tribal land. The Schools, Health & Libraries Broadband (SHLB) Coalition and others asked the agency to reinstate the eligibility restrictions it eliminated and allow additional educational use of the band, and the Hawai’i Broadband Initiative filed a recon petition it asked to withdraw. “We affirm the framework the Commission adopted to make available the 2.5 GHz band quickly by eliminating outdated legacy regulations that inhibited full use of the band and establishing flexible-use rules that will allow commercial providers to use this large swath of prime mid-band spectrum to provide 5G and other advanced services to American consumers,” said Thursday's order. Only Commissioner Geoffrey Starks released a statement: The educational broadband service (EBS) model “has not been perfect” but “should have been improved rather than undercut,” he said. “Given our nation’s need for mid-band spectrum and the importance of this spectrum to future wireless broadband service, particularly in tribal communities and rural America, I concur so we can make this spectrum available as soon as possible.” The tribal priority window closed in September with more than 400 applications (see 2009030012). John Windhausen, SHLB Coalition executive director, called the order disappointing Friday: “For many schools, access to EBS spectrum would have been their golden ticket to quickly deploy networks that reach their students without home internet access.” He said the coalition “provided many examples of successful wireless deployments by schools working with private sector companies, and we provided detailed economic evidence that awarding schools EBS licenses would promote economic growth and help address the homework gap.”