CCA proposes middle-ground approach to size of licenses for 600 MHz auction

The Competitive Carriers Association, along with several other groups representing rural carriers, put forward what they have termed as a middle-of-the-road approach to the area spectrum licenses should cover in the 2015 incentive auction of 600 MHz broadcast TV spectrum.

The debate over the license area size, while somewhat arcane, is crucial because it could determine how much carriers bid for the spectrum, which in turn will determine how much money broadcasters get paid, and how successful the auction ultimately is.

The CCA was joined by NTCA–The Rural Broadband Association, the Rural Wireless Association, and the law firm of Blooston, Mordkofsky, Dickens, Duffy & Prendergast, LLP, which is representing several rural wireless carriers. They jointly submitted a proposal for the use of Partial Economic Areas (PEAs) in the upcoming incentive auctions.

CCA has been urging the FCC to auction 600 MHz licenses in Cellular Market Areas (CMAs), which are the smallest way of dividing markets and therefore favors smaller and rural operators. CCA still thinks the FCC should choose CMAs, but anticipating that it might not, has put forward the PEA proposal. PEAs are the next largest market subdivision up from CMAS, but are smaller than Economic Areas (EAs).

In a statement, the groups noted that the joint PEA proposal divides the U.S. and its territories into 416 license areas, "and these units will help ensure that some licenses consists of large population centers while others consist of less populous areas, with the goal of attracting a variety of bidders."

In a filing with the FCC, CCA noted that this new proposal represents "a compromise solution offered on behalf of our broad and diverse constituencies, who together represent the vast majority of the wireless industry."

Verizon Wireless (NYSE:VZ) has argued that the FCC should auction 600 MHz licenses in the larger EA blocks. Verizon also is urging the FCC to allow for package bidding, which essentially allows carriers to patch together multiple bids. The result, Verizon said, would be faster and more uniform network deployments.

CCA said it is strongly against packaged bidding for the incentive auction and the AWS-3 auction, and wrote that "there is near unanimity in the record against package bidding, with only the two largest carriers supporting its use."

In late January the FCC said it plans to issue a report and order on the planned structure of the incentive auctions sometime this spring, and then start accepting bids from TV stations for the reverse part of the auction in early 2015. The agency's auction report will provide a spectrum band plan and will address issues such as bidding rules, auction structure and the geographic size of license areas.

Probably the largest issue in the 600 MHz auction that needs to be decided, for wireless carriers at least, is if or how any restrictions might be placed on Verizon and AT&T Mobility (NYSE:T), as smaller carrier and public interest groups have urged. Wheeler stressed that the report issued in the spring would be open for comment and further changes.

For more:
- see this release
- see this FCC filing

Related Articles:
FCC to issue report on 600 MHz incentive auction structure in the spring
Verizon, CCA wrangle over size of licenses for 600 MHz auction
Sprint switches gears, backs FDD rather than TDD plan for 600 MHz auction
Stephenson: AT&T would accept limits to spectrum purchases during incentive auctions
FCC pushing 600 MHz broadcast incentive auction to mid-2015
FCC's Wheeler signals intent to let smaller carriers get more spectrum

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