FCC Spectrum Auctions Update

IN THIS ADVISORY:

700 MHz Auction

• Cable Operator Consortium Joins Call for Smaller License Blocks in 700 MHz Auction
• Nationwide 700 MHz Public Safety Spectrum Plans Proceed on Two Fronts

Auction 71 (PCS Auction)

Upcoming FCC Auctions and Scheduled Dates 

 700 MHz Auction

Cable Operator Consortium Joins Call for Smaller License Blocks in 700 MHz Auction

SpectrumCo, LLC, the consortium between Comcast, Time Warner, Cox, Advance-Newhouse, and Sprint Nextel, recently filed an ex parte letter and white paper in the FCC’s 700 MHz auction rules proceeding advocating the importance of a mix of license sizes (both in terms of service area and in spectrum amount) for the upcoming 700 MHz auction. While the FCC originally allocated a variety of spectrum block sizes to be licensed over large geographic service areas, in August 2006 the FCC requested comment on whether it should reconsider the spectrum allocation and market size plan originally adopted for the 700 MHz spectrum.

Expanding on comments filed by T-Mobile and a number of mid-sized wireless service providers, SpectrumCo argues that larger spectrum block and service area license plans are inefficient and may encourage spectrum warehousing, while smaller geographic and spectrum allocations facilitate increased auction participation and competition, enhanced rural coverage and ultimately create higher auction revenues. The letter also cites the recent AWS auction as evidence of the importance of a band plan with allocations suited for bidders of all sizes, and argues against comments filed by certain large wireless carriers, DirecTV, and EchoStar calling for the FCC to issue larger regional, or even nationwide licenses.

SpectrumCo’s 700 MHz band plan proposal calls for a diversified mix of 12, 10 and 6 MHz spectrum blocks assigned by a variety of service areas, including Regional Economic Area Groupings (REAG), Economic Areas (EAs) and Cellular Market Areas (CMAs). CMAs divide the United States and its possessions into 734 regional blocks, EAs break the nation down into 175 separate service areas, and there are a total of 12 REAGs. Using either of the CMAs or EAs would result in smaller and presumably lower cost licenses than the FCC’s existing band plan. Under SpectrumCo’s proposal, a total of 1,450 licenses would be awarded in the 700 MHz auction, and it thereby supports carriers seeking to fill in and augment existing regional operations. The FCC’s existing band plan would auction the majority of licenses by far larger Economic Area Groupings (EAGs), with a total of 24 licenses being auctioned.

The 700 MHz auction is required to start no later than January 28, 2008 but FCC Chairman Kevin Martin recently suggested the auction could begin as early as August 2007, a date that would make it more difficult for many smaller and regional carriers to complete the necessary planning to participate in what is expected to be a competitive auction for prime spectrum.

Contact us if you have any questions, or would like to discuss the 700 MHz auction.

Nationwide 700 MHz Public Safety Spectrum Plans Proceed on Two Fronts

In November 2006, the FCC denied Cyren Call’s proposal to create a single, national license to achieve an interoperable public safety broadband network in the 700 MHz band that would also permit some commercial uses. Because the proposal involved use of 700 MHz spectrum not allocated to public safety by Congress, the FCC determined that it did not have the authority to approve the proposal. Nevertheless, Cyren Call continues to lobby Congress for legislation that would authorize its plan.

Last month, the FCC released a Notice of Proposed Rulemaking to redesignate 12 MHz of the 24 MHz currently allocated to public safety in the 700 MHz band to create a national broadband network consistent with the Cyren Call proposal (although limited to existing public safety spectrum). The new public safety network spectrum would be licensed to a single, national public safety licensee to provide interoperable, broadband public safety services, while retaining the ability to serve commercial users on a secondary basis. The FCC is seeking comments on this proposal and a number of related issues including (i) what the selection criteria should be for the single, national licensee, (ii) whether the licensee should be permitted to charge usage fees for its services from public safety and commercial users, (iii) whether the FCC should establish the system architecture for the network, (iv) how the nationwide interoperability requirement should be implemented, (v) what the timing and scope of build out requirements should be for the network, and (vi) what requirements, if any, should be imposed to ensure the robustness of the network.

Comments on the FCC’s 700 MHz public safety proposal are due on February 27, with reply comments due March 12. Contact us if you have any questions or would like to participate in this proceeding.

Auction 71 (PCS Auction)

By public notice released last week, the FCC announced a short form filing deadline of March 16, 2007 for entities wishing to participate in Auction 71. As set forth in our December 2006 News Update “PCS Auction Update” this auction will make available certain remaining Personal Communications Service (PCS) licenses that were either unsold at previous auctions or were cancelled by the FCC and recovered from earlier licensees. The auction is scheduled to begin on May 16, 2007.

In total, 38 wireless licenses will be offered in Auction 71 for spectrum in the 1.8 and 1.9 GHz bands in different parts of the country. For a chart listing Auction 71 licenses, click here. Specifically, certain 10 and 15 MHz spectrum blocks (paired 5 and 7.5 MHz channels) will be auctioned in as Basic Trading Area (BTA) or Major Trading Area (MTA) licenses. BTAs divide the United States into approximately 500 regional market areas and MTAs break the nation down into 51 market areas, providing for much larger geographic service areas than BTA licenses. The chart lists all of the licenses that will be auctioned, along with information concerning BTA /MTA status, population, amount of spectrum, and the exact frequencies associated with each license. The attachment also includes certain auction-specific information, such as the amount of the upfront payment required to bid on each license and the minimum opening bid for each.

Most of the licenses in this auction will be available to any applicant regardless of financial size, but certain licenses will be available only to applicants that qualify for “entrepreneur” status under the Commission’s rules (generally, applicants with less than $125 million in average gross revenues and less than $500 million in total assets). Those licenses that are limited to entrepreneurs are classified as “closed” under the column in the attachment labeled “Open/Closed.”

If you have any questions or wish to discuss available spectrum in Auction 71, please contact us.

Upcoming FCC Auctions and Scheduled Dates

Including the PCS Auction and 700 MHz Auctions, the following wireless telecommunications spectrum auctions have been scheduled or are currently planned:

Auction 69 – 1.4 GHz Bands
Short-form deadline to participate: December 11, 2006
Auction start: February 7, 2007

Auction 71 – Broadband PCS
Short-form deadline to participate: March 16, 2007
Auction start: May 16, 2007

Auction 72 – 220 MHz
Short-form deadline to participate: TBD
Auction start: June 20, 2007

Auction 31 – Upper 700 MHz Band
Short-form deadline to participate: TBD
Auction start: TBD

Auction for 218-219 MHz Band Auction

Short-form deadline to participate: TBD
Auction start: TBD

Auction for Lower 700 MHz Band Blocks, A, B and E
Short-form deadline to participate: TBD
Auction start: TBD

Auction for 1390-1392, 1392-1395 and 1432-1435 MHz Bands
Short-form deadline to participate: TBD
Auction start: TBD