CCA urges FCC to drop specific price target for triggering 'reserved' spectrum in 600 MHz auction

The Competitive Carriers Association is pressuring the FCC to reconsider its rules for triggering when bidding in the incentive auction of 600 MHz broadcast TV spectrum will split into "unreserved" airwaves and "reserved" spectrum set aside for smaller carriers.

For more than two months the CCA has been urging the FCC to abandon a specific price-per-MHz-POP trigger for making the "reserved" spectrum available. CCA fully supports the reserved spectrum concept but thinks the pricing trigger is unnecessary and could hurt smaller carriers, and the trade group has petitioned the FCC to change the rule.

In a statement, CCA President Steve Berry said that "the price-per-MHz-POP trigger serves no legitimate purpose. In fact, the price-per-MHz-POP trigger obliterates the benefits of the spectrum reserve, and will hinder the FCC's goals of accelerating deployment of broadband services to all Americans, especially those in rural and hard to reach areas."

Berry argued that conducting the auction without the price-per-MHz-POP requirement "would enable greater competition in the wireless marketplace and benefit consumers and the economy." The FCC will vote Dec. 11 on a detailed set of proposed rules for how the incentive auction will be conducted, and will allow public comment on the proposed rules.  

The part of the proposed rules that the CCA is most concerned is related to the so-called "final stage rule" for determining when the auction is over. The FCC must raise enough money to pay and relocate broadcasters as well as fulfill other finance obligations. The rules will include specific—and as yet undefined—price-per-MHz-POP for the broadcast spectrum that should be reached as well as a clearing target.

Essentially, the CCA is arguing that the per MHz-POP reserve price is unnecessary and will actually increase the risk that the auction will fail and that smaller carriers will get shut out of bidding for spectrum by Verizon Wireless (NYSE: VZ) and AT&T (NYSE: T). Under current rules, the FCC has agreed to set aside up to 30 MHz of reserved spectrum for smaller carriers to bid on in the "forward" part of the auction, depending on how much spectrum broadcasters relinquish in a market in the "reverse" portion of the auction.

By setting both an aggregate reserve price and a specific price per MHz-POP that must be met to trigger bidding on the reserved spectrum, CCA argues that the FCC could be shutting smaller carriers out from bidding in some cases. The FCC's public notice, the item that will be voted on in December, fleshes out how the commission would determine the type and amount of reserved spectrum.

Last month the FCC decided to delay the start of the auction from mid-2015 to early 2016. The FCC is expected vote on final rules for the auction next year in time for the commission to start taking applications from broadcasters in September 2015 to participate in the auction.

For more:
- see this release

Related Articles:
FCC to vote on proposed incentive auction rules in December
Starting in January, FCC officials to hit the road to woo broadcasters to incentive auction
FCC delays start of 600 MHz incentive auction to early 2016
FCC pitches broadcasters to participate in incentive auction, offering billions as a reward
CCA wants FCC to revise rules for triggering 'reserved' spectrum in 600 MHz auction

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