FCC Proposes Largest Federal Wirless Spectrum Auction Since 2008
The Federal Communications Commission (FCC) has released the 139-page "Report and Order," the result of "years of work across multiple federal agencies," detailing how it might repurpose federal spectrum in the AWS-3 band for commercial use.
The action represents the "largest amount of spectrum suitable for mobile broadband use that the Commission has made available for auction since the 700MHz band was auctioned in 2008," the FCC said in a statement.
The report establishes service rules for the AWS-3 band and moves the FCC "closer to holding an auction for 65 megahertz of spectrum this fall," FCC Chairman Tom Wheeler said in a March 31 statement.
"While there may be disagreements about some of the details around the edges, make no mistake," said Wheeler, "making this spectrum available for auction for commercial use is a home run no matter how you look at it."
The increased use of wireless devices and mobile data—by the end of 2014, Cisco expects the number of mobile connected devices on the planet to exceed the number of people—has the wireless carriers vying for ever more of it, and the FCC, at its pace, working to free up spectrum where it can. The upcoming "incentive auction" planned for mid-2015 focuses on spectrum that television networks have agreed to sell, some with some coaxing. Portioning away federal spectrum will require its own sensitive maneuverings.
"Making these airwaves available for flexible, commercial use is not natural for incumbent spectrum holders," Wheeler continued. "We appreciate their willingness to find solutions to accomplish that goal; however, we are mindful that protection zones and coordination are still issues being debated."
That is to say, "no one," the Department of Defense included, is satisfied with the current solutions, so there is still "more work to be done to ensure the success of this auction," said Wheeler.
Chairperson Mignon Clyburn said in her own statement that every year the number of Americans relying solely on mobile devices increases, while the number of competitive options for consumers goes down.
"For example, in the 2006 AWS-1 auction, 104 bidders won 1,087 licenses. Now, four carriers hold 1,000 of those licenses," said Clyburn. "After carefully considering all the arguments on the band plan, I was more persuaded by the view that smaller block sizes and license areas could enhance competition."
She added that she would have preferred a "different band plan," but that the effort to repurpose federal spectrum requires compromises. Further, the Commercial Spectrum Enhancement Act requires the FCC to design an auction that "returns 110 percent of the total estimated relocation costs of federal users."
Another requirement of the spectrum auctions is that $7 billion of the funding they raise go toward the construction of a nationwide public safety broadband network, the First Responder Network Authority, or "FirstNet." As the rules of the auction are still undecided, that $7 billion has been a bargaining chip for carriers that believe that purchasing caps could ultimately lower the proceeds from the auction (to the detriment of FirstNet).
Chairperson Jessica Rosenworcel said that while the freeing up federal spectrum isn't easy, there's more to it than just the benefits of deploying an additional 40MHz of spectrum.
"If we get this right, we will also substantially fund the first nationwide, interoperable, wireless broadband network for public safety—[FirstNet]—even before we begin our upcoming spectrum incentive auction," she said in a statement.
"This is important," she added, explaining that it would not only give public safety officials the ability to start FirstNet, but that achieving the funds for it early will free the FCC to "develop more robust incentives" for its 2015 auction.
The alternate option, she added, is sitting through the long process of waiting for commercial spectrum to free up and for the various proceedings to take place.
"It takes far too long," Rosenworcel wrote. "That is why it is time for a fresh approach to federal spectrum. We need a policy built on carrots, not sticks."