The FCC today voted to move forward with an auction of spectrum in the 3.45-3.55 GHz band – one designed to attract more diverse participation than the C-band auction. According to some, however, it doesn’t go far enough to encourage smaller players.
The auction is expected to begin in early October. The FCC is setting a reserve price of $14.8 billion, in part to help cover relocation costs for incumbents in the band.
The C-band auction was dominated by two bidders: Verizon, which spent over $45 billion pre-clearing costs, and AT&T, which pledged over $23 billion. But as FCC Acting Chairwoman Jessica Rosenworcel pointed out in prepared remarks, the way the 3.45 GHz auction is being set up should enable wider participation from smaller entities.
Auction 110 will offer up to 100 megahertz of spectrum, divided into ten 10-megahertz blocks licensed by Partial Economic Areas (PEAs), for a total of 4,060 flexible-use licenses across the contiguous U.S. The FCC is limiting the amount any single bidder can get in a PEA to 40 MHz.
Congress mandated that the FCC commence an auction for licenses in the 3.45-3.55 GHz band this year, and the order today marks progress in meeting that obligation. The commission also voted to adopt a Public Notice seeking comment on procedures for Auction 110.
Commissioner Geoffrey Starks said he’s hopeful the 3.45 GHz auction will raise both substantial funds and generate a significantly diverse group of winners.
“I appreciate that my colleagues agreed with my request to reduce the size of the spectrum blocks in the band to 10 megahertz. This change – coupled with the 40 megahertz spectrum aggregation limit – should increase competition, encourage more efficient bidding, and create opportunities for smaller bidders, particularly the rural and regional carriers that are critical to bringing advanced services to our hardest-to-reach communities,” Starks said in a statement.
While acknowledging this auction will include smaller blocks for more players to win licenses, Rosenworcel pointed out that most of the country has yet to experience the benefits of a true 5G network.
The “out there” innovations that 5G can deliver are still a ways off, because so many of them are not about connectivity delivered via phones. In addition, it’s confusing for consumers, with so many carriers providing different versions of 5G, which “can sometimes feel a lot like the 4G they already have,” she said. That’s in part because carriers don’t always have the airwaves they need to provide consistent and widespread coverage at this time.
“Today, we take action to change that. We take action that will move us closer to 5G service that is fast, secure, reliable and most importantly, available everywhere in this country,” she said.
The buildout obligations for this band are the most aggressive of any spectrum auctioned for 5G to date, she noted. The FCC is requiring infrastructure get built twice as fast as what the agency required in other recent 5G bands.
CTIA, which represents the biggest wireless carriers, applauded the FCC’s action. 5G Americas also welcomed the addition of more mid-band spectrum.
“Spectrum in all ranges will be needed to fulfill the promise of 5G and mid-band provides both coverage and capacity. Making 3.45 – 3.55 GHz available through licenses for large geographic areas, at full commercial power, will ensure 5G leadership by the U.S.,” said 5G Americas President Chris Pearson in a statement. “A growing 5G ecosystem will be critical to the post-pandemic economic recovery. 5G Americas looks forward to continuing to work with the FCC on mid-band spectrum.”
However, the Wireless Internet Service Providers Association (WISPA) said the agency missed an opportunity to open up the spectrum to a greater diversity of wireless broadband solutions for bridging the digital divide.
“Experience shows that applying the CBRS General Authorized Access rules and county sizes for an auction of the 3.45 GHz band could have attracted more winning bidders than any spectrum auction using much larger Partial Economic Areas (PEAs), which only the largest mobile companies can afford,” said Louis Peraertz, VP of Policy for WISPA, in a statement.
He added that the CBRS model accomplished two important things: “It brought 228 diverse, small, rural and urban providers to the table, over 70 of which were WISPs – something the PEA model cannot do. And, it provided 80 megahertz of licensed-by-rule, opportunistic use spectrum, which all can employ at far less cost than acquiring expensive licenses.”
“We appreciate that the Commission’s efforts and sincere inquiry – especially those of Acting Chairwoman Jessica Rosenworcel and Commissioner Geoffrey Starks – to see if the CBRS model could have been applied to the 3.45 GHz band. It did not bear fruit here,” Peraertz said.
"This was due in large part to a statutory requirement that the Commission start an auction for a portion of this spectrum coupled with an NTIA relocation cost estimate that meant the aggregate reserve price for this auction had to exceed $14.77 billion," he added. "But we hope that the Commission will carry the CBRS model forward into other spectrum bands, such as the 3.1 to 3.45 GHz band, and we stand ready to help the FCC achieve this goal for what lies ahead.”
WISPA is not the only group calling it a missed opportunity.
“The FCC’s vote today was a missed opportunity to take a step back and open up a much larger amount of 3 GHz military spectrum using a sharing framework that enables a wider variety of users and use cases. Unfortunately, in a Commission divided 2-2, the combination of a statutory auction deadline and the need to raise over $14 billion to clear military radar has resulted in a framework that makes the licenses affordable only to the biggest mobile carriers,” said Michael Calabrese, director of the Wireless Future Project at New America’s Open Technology Institute, in a statement. “We expect a repeat of the recent C-band auction, in which AT&T and Verizon won 90 percent of the licenses.”
Article updated with comment from the Wireless Future Project.