The FCC’s decision to delay the start of the advanced wireless services (AWS) auction from June 29 until Aug. 9 (CD May 22 p1) is considered bad news for T-Mobile - the national carrier with the most at stake in the auction. The net effect for other potential bidders of the action late Fri. is less clear. The FCC still must address a petition for reconsideration on designated entity rules for the auction, but is generally expected not to make substantial changes to the revised rules approved in April, officials said.
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 FCC Fri. suspended until today (Mon.) its air-to-ground auction of spectrum licensees to be used for wireless broadband on commercial flights. The move was mysterious. “People have been calling the Bureau,” said a source who’s following the auction: “They've been saying there’s been some delays. It’s on track. They expect to be back on Mon.” Verizon Airfone -- which had been considered front runner to buy the spectrum -- hasn’t played a important part. After 8 rounds of bidding, Unison Spectrum has the highest bid at $4.5 million for a 3 MHz license. Space Data has the leading bid for the other 1 MHz license at $244,000. Unison’s identity is also mysterious. Todd Lawyer, listed as the contact on Unison’s short form application, said in an e-mail Fri. he isn’t commenting until after the auction.
Bringing broadband access to underserved areas is the most “economically productive and socially beneficial” use of spectrum freed up by the switch from analog to digital TV, the U.K. Communications Management Assn. and Open Spectrum U.K. told the Office of Communications (Ofcom) Fri. The transition in 2012 is expected to release a large amount of prime spectrum, and Ofcom is examining ways to use the “digital dividend.” The groups told the regulator that wireless broadband is the best Internet access solution for rural regions, and that networks built for UHF cost less than network for higher bands. Allowing wireless access networks to use UHF will broaden the territory broadband is economically feasible, they said. But they added that experience has shown rural areas aren’t likely to win spectrum license auctions when they compete with higher- density areas -- so Ofcom should reserve spectrum for use in underserved and rural locations without requiring license auctions. Ofcom’s final draft proposal for the digital dividend is due in the fall.
L-band and S-band satellite spectrum could offer an alternate spectrum source for failed AWS auction bidders, or non-bidders for that matter, analysts and satellite executives said Thurs. in a Kagan Research wireless briefing. All eyes are on AWS, panelists agreed. But some said auction participants realize mobile satellite services (MSS) operators hoping to partner on terrestrial wireless ventures still will need partners when the AWS auction is over. Mobile Satellite Ventures and Inmarsat has spectrum holdings in the L-band. ICO and TerreStar have spectrum in the S- band. All have voiced interest in partnering with a non- satellite firm to develop next-generation terrestrial wireless networks using their satellite spectrum, but no deals have been announced.
Watchdog group TeleTruth accused major wireless carriers of “fraud” for their use of designated entities to buy spectrum in FCC auctions. The group is filing a report at DoJ and the FCC, and is seeking a law firm to file a lawsuit. TeleTruth said the FCC needs to do more than just tweak DE rules. “The FCC has it wrong,” the group said in a report. “It shouldn’t be questioning whether the rules are adequate, it should have been investigating this as a straightforward fraud case. These companies knew they were playing with the rules.”
The FCC’s air-to-ground auction opened Wed. and at the close of the 4th round at our deadline Va.-based Unison Spectrum was the high bidder for the coveted nationwide license with a high bid of $3.8 million. A 5th round was getting underway. Unison isn’t considered among the prime contenders for the spectrum, which will be used to offer broadband on commercial airliners. Verizon Airfone is considered by many to be the leading contender, followed on many lists by AirCell (CD April 4 p10). In another auction development, the FCC granted a motion by AirCell to withdraw from the auction, but that wasn’t a surprise since the company has indicated it will bid as part of AC BidCo. In a big day for auctions, short form applications for the June advanced wireless services (AWS) auction were also due Wed. The number of contenders will be of more interest than usual since the FCC will keep bidder identity secret as the auction develops unless a sufficient number file short forms so that the FCC considers the auction likely to be competitive. Based on past auctions, the FCC is likely to release lists of potential bidders within the next 2 weeks.
Time Warner Cable may bid on wireless spectrum in an upcoming FCC auction with 4 other joint venture partners including Sprint Nextel and Comcast (CD Nov 2 p7) as it takes steps to remain competitive with online content providers. “We're evaluating whether it would be a good idea to more directly own spectrum… along with the other cable partners that are in the venture,” said Time Warner Cable Pres. Glenn Britt. The firm planned to file a so-called short form registration late Wed., Britt told an investor meeting. Time Warner has received “almost all of the local franchise approvals that we need” to buy Adelphia systems, he said: “We're still awaiting FCC action, which we expect will be forthcoming shortly.” Time Warner Cable will double the amount of VoD content available as it experiments with making more video available online, said another executive. The firm has found that “consumers more often [are] looking to the Web for entertainment, including short form video clips” rather than longer shows, Peter Stern, exec. vp-product management, said: “They don’t want to engage with the Web the way they engage with TV.” The firm’s Road Runner broadband service is “selectively” increasing transmission speeds in markets including Rochester, N.Y., he said. - JM
The FCC should dump an April 25 order setting designated entity (DE) bidding rules for an advanced wireless services (AWS) auction starting June 29, urged Council Tree Communications, the Minority Media & Telecom Council (MMTC) and Bethel Native Corp. in a Fri. petition. The DEs asked the FCC to hold the auction, but using previous auction rules.
The U.K. Office of Communications awarded 12 wireless licenses for 1781.7-1785 MHz, paired with 1876.7-1880 MHz, it said Wed. The licenses, sold by auction April 20, are for a total of 6.6 MHz spectrum for such low-power purposes as private GSM mobile phone networks in office buildings or universities. Winners included BT, Cable & Wireless U.K. (England), COLT Mobile Telecom, and O2. The auction raised about Pounds 3.8 million ($7 million).
Alltel likely will sit out the June FCC advanced wireless services auction, CEO Scott Ford said Wed. in a conference call with analysts on Alltel quarterly results. Ford said he questions how useful the 90 MHz of spectrum being sold would be to Alltel as it builds out its network. One byproduct of the auction is that acquisition activity in the wireless world has ground to a halt, with FCC rules limiting contact between wireless carriers going into the AWS auction.