The FCC released rules for next year's auction of the 600 MHz spectrum that TV broadcasters are expected to relinquish. Importantly, the rules carve out up to 30 MHz of spectrum for smaller wireless carriers, those that don't already own large amounts of low-band spectrum.
The rules had been subject to serious lobbying in the weeks and months leading up to the FCC's vote, and now that the agency has approved the rules--along a party-line, 3-2 vote--the wireless industry is reacting. As expected, small carriers largely cheered the rules, while larger carriers were more reserved.
Check out the industry's reaction to the FCC's 600 MHz auction rules--the first major U.S. auction since the 700 MHz auction in 2008.
AT&T has long argued that the FCC should adopt a spectrum aggregation and incentive auction framework that will encourage all carriers to participate vigorously in the upcoming auctions. We specifically supported broad participation in the incentive auction, as contributions from the entire industry will be necessary to make the auction a success. And we believed that the right framework would allow the Commission to send a clear message to broadcasters that they should bring as much spectrum as possible to the auction as there will be sufficient revenue to pay for their contributed licenses.
Today, the Commission adopted rules and an auction framework that puts the auction on the path toward success. While many important issues remain to be resolved, we believe that the spectrum aggregation and auction rules adopted today represent a significant step forward and will demonstrate to broadcasters that the incentive auction can and will attract significant carrier interest and demand. And while we have long opposed auction restrictions and set asides, the compromise framework will give AT&T a fair shot to participate at auction for a meaningful 600 MHz footprint. For these reasons, we support the auction framework.
The steps taken by the FCC today are substantial.
First, the spectrum aggregation screen was updated and rationalized, and now counts the full array of spectrum actually in use by wireless carriers today. This will hopefully put to rest the long-standing spectrum aggregation battles that emerged in almost every transaction.
Second, the FCC set rules in place for a successful AWS3 auction. While much work remains to bring that spectrum to market, AT&T anticipates that it will participate meaningfully in that auction to supplement its spectrum portfolio.
Third, on the 600 MHz auction, the FCC adopted eligibility rules that will foster a more competitive bidding process while ensuring a multiplicity of licensees in the new 600 MHz band.
Under the FCC's proposed framework, the bidding must reach a threshold of success before the auction can close. In addition, no eligibility restrictions would apply until this threshold is met.
As we noted in a recent filing, we think a reasonable threshold would be $1.50 MHz/POP, which means the auction of a nationwide 10×2 MHz license would be expected to yield at least $9 billion in revenue. At that threshold, 600 MHz spectrum would be an attractive opportunity for AT&T.
AT&T believes that the framework adopted today will give AT&T a fair opportunity to expand its LTE footprint to benefit consumers in all markets, and AT&T remains committed to auction success and anticipates that it will participate broadly. Although we expect bidding at auction to be competitive, we anticipate that, depending on auction dynamics and pricing, AT&T will bid to obtain between 20 and 40 MHz of spectrum nationwide.
Finally, we believe that a threshold price of $1.50 MHz/POP will attract significant broadcaster interest, as it should, so that an initial clearing target of 70 MHz or more is very likely. Although the Commission's draft order contemplates rules for a 40 or 50 MHz auction, given industry demands and capacity challenges, AT&T considers those scenarios unlikely to occur.
In short, the 600 MHz auction represents an enormous opportunity for the wireless industry to obtain new and valuable spectrum licenses to satisfy consumer demand for new and innovative mobile services. The order adopted today represents a significant milestone for FCC progress. And AT&T intends to participate actively and meaningfully in the auction to ensure that it is a success for all participants." --Jim Cicconi, AT&T Senior Executive Vice President of External and Legislative Affairs
|We look forward to additional spectrum coming to market to meet consumers' ever expanding demand. The FCC's recent actions to adopt even-handed rules for the upcoming AWS-3 auction together with today's progress on the incentive auction are important steps forward in meeting wireless customers' needs." --Craig Silliman, Verizon senior vice president, public policy|
We appreciate the Commission's diligence in creating an auction structure that fosters competition and recognizes the special competitive utility of low-band spectrum. By establishing market-based reserves, the 600 MHz Incentive Auction rules enhance the ability of small carriers to bid on critical low-band spectrum.
We are disappointed, however, that in revising its spectrum screen the Commission did not recognize the varying impact of commercial spectrum bands on broadband competition. As a result, the revised spectrum screen will not help the Commission identify transactions that warrant a more detailed competitive analysis.We will fully review the decisions announced today to determine Sprint's next steps." --Lawrence R. Krevor, Vice President - Spectrum, Legal and Government Affairs
|T-Mobile appreciates the FCC's vote today moving ahead with the incentive auction and spectrum aggregation proceedings. While we would have preferred the FCC to reserve more spectrum for competitive carriers, we are hopeful the auction rules will enhance competition and benefit consumers. We also thank the staff of the FCC for their many months of hard work and look forward to working with the FCC and industry stakeholders toward a successful auction." --Kathleen Ham, Vice President, Federal Regulatory Affairs, T-Mobile US|
CTIA commends FCC Chairman Tom Wheeler, the Commissioners and the Incentive Auction Taskforce for their leadership in shepherding this Order that represents a significant step toward implementing a 'win-win' for consumers and the U.S. economy. This historic effort has the potential to unleash vital spectrum to meet ever-increasing consumer demand for mobile broadband services, spur investment and innovation and maintain our global leadership in mobile broadband. As a result of the Commission's and Congress' hard work, American consumers and businesses will benefit from a new generation of wireless services and offerings built on the foundation of new mobile broadband spectrum. We look forward to working closely with the FCC Commissioners and staff to resolve outstanding issues well in advance of the incentive auction so that this first of its kind auction occurs by mid-2015.
CTIA's members remain committed to an open Internet and a vibrant wireless ecosystem because that's what consumers want. The U.S. wireless industry leads the world in mobile broadband and in next-generation networks, LTE subscribers and the app economy, and American consumers are experiencing huge benefits. The defining characteristics of wireless broadband are that it is fast-evolving, still-developing, and robustly competitive, and we urge policymakers to not impede the wireless industry's virtuous cycle of investment and innovation.
I applaud Chairman Wheeler and the Wireless Bureau for moving forward with competitive auction rules for the 600 MHz broadcast spectrum. The Commission's announcement to auction fully interoperable 600 MHz spectrum in 5x5 MHz building blocks and, particularly, in smaller geographic license sizes is a real win for competition and for consumers. Reserving a small amount of spectrum for competitive carriers will help to increase access to capital and participation in the auction. I would also like to thank Competitive Carriers Association for its hard work and advocacy to promote competition in rural America. I look forward to working with the Commission to finalize the details for the auction and, ultimately, bidding in the auction."
Cellular One is a highly successful US regional wireless carrier, serving customers in Louisiana, Texas, and the Gulf of Mexico. Cellular One is committed to providing great value and exceptional service for its customers. The Cellular One team of knowledgeable, experienced professionals is dedicated to serving customers and local communities in ways that far exceed their expectations." --Jonathan Foxman, President & CEO, MTPCS, LLC d/b/a Cellular One and CCA Chairman of the Board
Today, the FCC took a significant step forward for competition and consumers by adopting a competitive framework for the upcoming 600 MHz auction. Bluegrass, along with other competitive carriers, has consistently advocated for smaller geographic license sizes for new wireless spectrum, and while not as good as Cellular Market Areas, the Partial Economic Areas proposed by the vast majority of the wireless industry are a good compromise from the larger Economic Areas originally considered. In addition to right-sizing the spectrum offered in the auction, the Commission's decision to reserve up to 30 MHz of spectrum for non-dominant providers who participate in the auction will further promote competition and rural Americans' access to next generation services. Bluegrass Cellular looks forward to reviewing the rules once released, working with the Commission on further details and expanding access to rural Kentuckians through bidding in the incentive auction."
Bluegrass Cellular was the first cellular carrier to provide analog cellular network service in rural Kentucky. Since the initiation of service, the Bluegrass Cellular wireless network has grown to provide coverage to 40 counties within its license areas. Bluegrass Cellular is committed to serving as a pioneer of wireless service in rural Kentucky." --Ron Smith, Chief Executive Officer of Bluegrass Cellular
C Spire is pleased the Commission has adopted the processes governing the 600 MHz spectrum auction. The Reports and Orders summarized at today's Open Meeting can be a significant step towards restoring competition in the wireless industry.
Based on our understanding of the Reports and Orders, we believe the policies established today will improve competition in the wireless industry and boost all consumers' access to innovative mobile broadband services, as well as increase the likelihood that C Spire will participate in the 600 MHz auction." --C Spire Senior Vice President Eric Graham
|Today's spectrum aggregation and incentive auction orders provide some elegant solutions to complex problems. Consumers and competition will benefit from non-dominant carriers having the opportunity to obtain critical low-band spectrum. DISH commends the leadership of Chairman Wheeler, and the work of the Incentive Auction Task Force and Wireless Bureau on these important orders," --Jeff Blum, DISH's SVP & Deputy General Counsel.|
|NTELOS is pleased with the rules adopted today by the Federal Communications Commission (FCC) for the upcoming 600 MHz incentive auction. We applaud the FCC for adopting smaller geographic license sizes (PEAs), which will enable smaller carriers such as NTELOS to effectively bid for necessary spectrum in its core markets. In addition, because access to under 1 GHz spectrum is critical to the deployment of competitive services to consumers, NTELOS supports the FCC's decision to reserve a certain amount of spectrum for bidding by non-dominant carriers. We believe that the FCC's rules will promote broad participation by all wireless carriers, large and small, which will in turn maximize revenues available for participating broadcasters, FirstNet and the U.S. Treasury. NTELOS looks forward to participating in the 600 MHz auction, and thanks the FCC for adopting rules that will promote wireless competition." --Jim Hyde, President & CEO, NTELOS Wireless|
|We commend the FCC for its action today in the 600 MHz and the Mobile Spectrum Holdings proceedings. We believe that this auction represents a vital opportunity for wireless carriers to obtain crucial spectrum needed for the deployment of 5G service across our entire operating footprint. That's why we fought so hard for the ability to bid on all the spectrum blocks made available for auction. Today's vote is a huge step forward towards what we believe will be a highly successful auction and we fully anticipate playing an important role in that auction. We expect that there will be vigorous bidding for spectrum across the entire country and the FCC's action today is a win for competition, consumers, and companies of all sizes." --Kenneth Meyers, President & CEO of U.S. Cellular|