The FCC today announced an initial spectrum clearing target of 126 MHz for the 600 MHz incentive auction, a figure that represents the maximum amount of spectrum the commission had hoped to offer.
The FCC last year established a spectrum clearing range from 42 MHz to 126 MHz. Carriers had hoped the FCC would be able to clear at least 80 MHz.
CTIA CEO Meredith Attwell Baker was one of the first to cheer the FCC's announcement it had hit the high end of its spectrum clearing range: "CTIA is encouraged to see so much interest in the FCC's incentive auction, which will play a critical role in making spectrum available for 4G LTE and 5G technologies. We look forward to a successful conclusion of the auction this summer, a smooth repacking transition and securing access to licensed spectrum as quickly as possible to meet consumers' mobile broadband demands," Attwell Baker said in statement.
Under the band plan associated with this spectrum clearing target, 100 MHz, or 10 paired blocks, of licensed spectrum will be offered in the forward auction on a near-nationwide basis.
The generic license blocks offered in the initial stage during the forward auction under this band plan will consist of a total of 4030 "Category 1" blocks (zero to 15 percent impairment) and a total of 18 "Category 2" blocks (greater than 15 percent and up to 50 percent impairment). The FCC said approximately 97 percent of the blocks offered for the forward auction will be "Category 1" blocks, and 99 percent of the "Category 1" blocks will be zero percent impaired. These figures likely will cheer wireless carriers and other auction bidders since unimpaired spectrum can be used more quickly.
According to a senior FCC official, the low impairment levels are an indication of robust participation on the part of broadcasters and because the FCC doesn't have to assign TV channels to wireless bands.
FCC Chairman Tom Wheeler echoed those sentiments in a statement: "Robust broadcaster participation is key to the success of the incentive auction. Today's announcement reflects the voluntary decision by many broadcasters that this auction truly is a once-in-a-lifetime opportunity," Wheeler said. "The 126 MHz initial clearing target ensures that wireless carriers and other forward auction bidders have their chance to compete for the maximum amount of low-band 'beachfront' spectrum. The wireless industry has said it needs additional spectrum to meet growing customer demand and usher in the age of 5G. The broadcasters have stepped up and done their part to fulfill that demand."
AT&T (NYSE: T), T-Mobile (NYSE:TMUS) and Verizon (NYSE: VZ) have all committed to bidding in the auction. Analysts at Wells Fargo estimated that AT&T could spend up to $10 billion on a 2x10 MHz chunk of nationwide spectrum, and T-Mobile will bid as much as $8 billion and Verizon could bid as much as $5 billion.
Sprint (NYSE: S) won't be participating in the auction, but other potential bidders include Comcast (NASDAQ: CMCSA) and Dish Network (NASDAQ: DISH).
The reverse auction for broadcasters, which will adhere to a clock phase format, will begin May 31. That will be preceded by mock auctions on May 25 and May 26. The reverse auction could take up to one month.
The initial bidding round on May 31 will run 10 a.m. – 4 p.m. EST and the next round on June 1 will run 10 a.m. – 2 p.m. EST. Starting June 2, the daily bidding rounds will be scheduled as 10 a.m.-12 p.m. EST and 3 p.m.-5 p.m. EST.
- see this press release
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