FCC Chmn. Martin was unable to convince a majority of the commissioners to endorse a specific band plan for the upper 700 MHz band. Instead, the FCC adopted a further notice of proposed rulemaking seeking comment on several plans for the spectrum, which is being made available with the transition to DTV. The decision came during a meeting that had originally been scheduled to start at 9:30 a.m., but which didn’t start until an unprecedented 7:14 p.m. because of continuing negotiations over the 700-MHz issue. Attendees were called back to the FCC meeting room at least once in anticipation of the meeting, only to wait for additional hours for the start.
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 Media Access Project claims to have found widespread evidence of gaming and signaling in 2006’s advanced wireless services (AWS) auction. FCC rules required disclosure of bidders’ identities as the auction progressed. The data MAP cites suggest gaming doomed chances for DBS operators to buy spectrum they sought early in the auction, which would have let them offer wireless broadband to complement their video offerings. Neither the FCC nor other bidders immediately commented. MAP released its data as the FCC readies rules for the coming 700 MHz auction. MAP wants all FCC auctions from now on to be closed. Harold Feld, MAP senior Vp, told us Mon.: “There are just too many opportunities in an open environment to identify new entrants like DBS Wireless, to have those interested in throttling new entrants swarm after them.” MAP cited studies by Gregory Rose of Economic Research Services. Rose analyzed the 2006 auction results using the same methodology with which he claimed to have found evidence of tacit collusion in the PCS D, E and F-Block auction in 1996-97. Rose determined that 0.19% of bids in the 2006 AWS-1 auction were placed to “retaliate” against other bidders and to thwart competition. That’s up from 0.16% of all bids in the PCS auction from 10 years ago.
The FCC is analyzing conflicting studies on whether large or small license size is better for the upcoming 700 MHz auction. The FCC is expected Wed. to begin deciding how to auction spectrum becoming available in the 700 MHz band with the switch to DTV.
Key House Commerce Committee Democrats gave high marks to Frontline’s public-private 700 MHz auction plan, saying Congress lacks funds to underwrite an interoperable public safety network. Chmn. Dingell (D-Mich.) said Frontline offers a technologically efficient proposal that maintains an open auction format. He added that accountability measures would be needed to ensure the public benefits.
Chmn. Martin circulated but subsequently withdrew an order that would scuttle M2Z’s proposal to build a free, nationwide wireless broadband network in the 2.1 GHz band, in favor of auctioning the spectrum, sources said. The order denied M2Z’s petition for forbearance and launched a proceeding on service rules and procedures for an auction. Several other companies, including Speedus Corp.-backed NetFree, have also contended for the spectrum.
A fierce debate is being waged on the FCC’s 8th floor on the band plan for the upcoming 700 MHz auction, said sources close to the negotiations. On one side are Chmn. Martin and Comr. Tate, who want to limit the number of small licenses the FCC auctions in the band. On the other side, we're told, are Comrs. Copps and Adelstein, who want a band plan similar to the one used in last summer’s advanced wireless services auction, where half of the licenses were smaller. As the clock ticks down to the April 25 Commission meeting at which the issue will be decided, lobbying is being focused on Comr. McDowell, who we're told is the tiebreaker.
Members of Congress floated ways to widen broadband, some at odds with one other, at a Tues. Computer & Communications Industry Assn. meeting. They discussed Universal Service Fund reform, the 700 MHz auction, Carterfone rules, net neutrality and white spaces, giving different predictions on this year’s legislative trends.
After denying for months that it had a proposal for building a shared but dedicated public-safety data network using 12 of the 24 MHz available in the 700 MHz band for public safety, Verizon Wireless advocated that approach in filings with the Southern Governors Assn. (SGA) last month. Verizon Wireless urged the SGA to adopt a plan using a “dedicated” public safety data network “paid for and operated by the public sector but which leverages existing commercial infrastructure” to reduce costs and provide priority access to commercial networks during emergencies.
The 700 MHz auction will be pushed into Nov. or Dec. as a result of FCC Chmn. Martin circulating an item that narrows the issues but requires additional public input, Stifel Nicolaus said in an investor’s note late Wed. Many observers had expected the auction to begin earlier. For example, Comr. McDowell said he expected it to be before Halloween. Congress has dictated that the auction begin before Jan. 28, 2008. A source close to the FCC indicated there hasn’t been an officially set date.
The FCC should “enthusiastically embrace” participation of small businesses, known as designated entities (DEs), in the proposed auction of an E-block of the 700 MHz spectrum, said Jonathan Blake, Frontline’s outside counsel. In Frontline’s proposal an E-block nationwide license would be created and the E-block licensee would be required to construct, own, and manage the wireless network to be used by both public safety and commercial participants. Management of the network would include leasing to commercial entities, and that has caused some to question whether that would run afoul of the Commission’s DE rules. An item circulating on the 8th floor wouldn’t waive the DE rules (CD April 10 p5) but a waiver isn’t necessary, wrote Blake in a Tues. letter saying nothing in the “existing rules precludes” DEs from bidding on the E-block. “It would be ironic in the extreme were the Commission to interpret its rules so unduly narrowly as to discourage new entrants” from participating in Frontline’s proposed E-block, said Blake.