The FCC’s auction for 70 MHz of priority access licenses (PALs) in the shared CBRS band is winding down and when it’s over some might decide to take advantage of the CBRS secondary market.
There were 57 rounds completed in Auction 105 at midday Wednesday with $4.5 billion in gross proceeds.
With 271 qualified bidders in the PAL auction and 80 MHz of CBRS spectrum already available for unlicensed General Authorized Access (GAA), winners can put licenses to use in a variety of ways.
Mark Gibson, director of business development at CommScope, told FierceWireless that he thinks Auction 105 is likely to wrap up by the end of this week.
CommScope has been heavily involved in CBRS, and Gibson is on the board of the CBRS Alliance and the WInnForum. The company offers CBRS products but also serves as a Spectrum Access System (SAS) administrator, one of five authorized by the FCC.
The SAS dynamically manages CBRS spectrum sharing on an as needed basis across the band’s three tiers of access – federal incumbent operations, PALs, and GAA users.
Leasing spectrum by blocks or geographic areas
Who will win what at Auction 105 remains to be seen. Major operators are among qualified bidders, as are cable companies, smaller service providers and some enterprise entities.
Analysts at MoffettNathanson wrote Wednesday that cable operators Charter and Comcast are likely among the most active bidders, looking to offload MVNO traffic from deals with Verizon to lower costs. Verizon itself is expected to be a major bidder for the mid-band spectrum.
Outside of putting CBRS PAL licenses to their own use, the secondary market could offer options for winners as well.
That’s where licensees can lease out their PAL spectrum rights in their designated market areas.
“We expect to it be robust,” Gibson said of the CBRS secondary market. “Based upon more than anything, the ability for [leasing] to be very lightweight.”
That speaks to the less regulated or light-touch leasing approach that the FCC is looking at. CBRS is already unique in in terms of the licensing scheme. The GAA portion is unlicensed with 80 MHz available and PALs are not exclusive-use licenses, so others can use the spectrum if the licensee is not utilizing it at that time.
The commission is looking at light-touch leasing for CBRS probably even more so than other spectrum, Gibson said, because the SAS is there to help manage it in real time. And CommScope gets the sense that parties will be able to take advantage of the secondary market soon.
There, the SAS will help manage both partitioning and disaggregation. The former relates to leasing portions of a winner’s market areas, while the latter is leasing portions of their CBRS spectrum blocks.
For example, if a winner buys 40 MHz, but only wants to use 20 MHz, they might decide to lease the remaining out. Ultimately parties could disaggregate one block, but that’s not possible yet, Gibson noted. CommScope is currently looking at the ability to subdivide and manage some of those coexistence issues.
For partitioning, a licensee could decide to put its own applications in the middle of a city within its PAL county, but then lease out other cities that are of interest within that county area.
Through its SAS, CommScope would manage which users are able to operate in the different geographic areas or spectrum blocks.
Options in the CBRS secondary market
When it comes to the secondary market, Gibson discussed a few examples of how that might happen.
One reason a winner might opt to lease out its PAL license rights is that they’re not ready to use the CBRS spectrum for their own purposes yet but want to monetize it in the meantime.
“You could take advantage of leasing right away, get some revenue going in your market and then as soon as you’re ready to go, take the spectrum back and [use] it,” Gibson said.
Another thing the SAS can enable is more granular leasing timeframes, something Gibson said CommScope believes people will be interested in taking advantage of. The SAS could potentially be used to manage spectrum access at places like venues, he noted.
“What they could do is lease the spectrum around stadiums in those markets to other interests, who could use [the spectrum] to manage operations in the stadium,” Gibson said. The leasing period could be set to go into effect the week of the game, with license rights returned to the carrier 24 hours after the event ends.
That’s not something that can be done right now with other spectrum leases, as the SAS (which is unique to the shared CBRS band) can manage more time-adjusted leasing.
Another example of how the CBRS secondary market could be used is by bidders that weren’t successful at winning contentious markets but want to deliver services on a more extended timeline. One of the highlights during ongoing auction was sustained excess demand, even in smaller counties with comparatively low population counts.
According to auction tracking by Sasha Javid’s BitPath, out of the 20 counties that had the largest excess demand after round 55 on Tuesday, ten had populations under 100,000 and seven had under 50,000. Meade, Kansas, with a population of just 4,575, still had two blocks of excess demand over the supply of seven.
Gibson pointed to the example of Loving County in Texas – with a population of merely 82 – which had nine contentions at one point.
“Somebody is not going to get spectrum,” he said. So if a winner buys one channel or four but isn’t ready to put it to use, “they could turn around to one of the people who didn’t win and say you bid on this, we know you did, we’ll let you lease our spectrum in our market and you can get started right away until you have other assets in place.”
There is one minor limitation in the SAS, Gibson acknowledged, regarding required coordination with the FCC. CommScope is meeting with the commission early next month to finalize some coordination aspects, related to data that has to flow back and forth between the SAS to manage coexistence in the band.
If leasing is desired right away, it can happen but some of it would be managed outside the SAS.
That said, he doesn’t see the timeline as a major issue. If the auction were to end Friday, Gibson said there would still be at least two to three weeks before spectrum is usable as things like regulatory payments and forms are completed.
“We’re looking at mid- to late September anyhow, and we should have the leasing ready to go, we’re hopeful, by then,” Gibson said.
As for progress in the shared band, deployments of devices known as CBSDs are already “in the low tens of thousands” spread across the country. Though the overwhelming majority are devices required to transition from Part 90 to the CBRS Part 96.
Still, there’s been a steady increase, not just of CBSDs, but of more and more users, Gibson said. He didn’t give the exact number of CBRS customers CommScope is servicing but said it's “in the high scores” with other SAS administrators supporting many as well.
“We think once the auctions are over and the interest has been demonstrated and the efficacy of the SAS has been demonstrated, then more people will begin to jump on the CBRS bandwagon and take advantage of it,” Gibson added.