The Federal Communications Commission this week took steps towards an auction for overlay licenses in the 2.5 GHz band, releasing data on what’s available and seeking input on auction design.
The commission on Tuesday approved a public notice (PDF) that details and seeks comment on two options for how bidding could be formatted. The options for Auction 108 include a single-round pay-as-bid design versus a simultaneous multiple-round (SMR) auction.
T-Mobile is eager to scoop up more 2.5 GHz spectrum and wants an SMR format, while smaller entities like WISPs have advocated for a single-round design.
The FCC will offer up to three blocks of 2.5 GHz spectrum licensed on a county basis with about 8,300 licenses available.
While there are many licenses, the history of the 2.5 GHz band creates a unique situation where each overlay license will be different – and the amount of white space and population covered isn’t always obvious.
The auction is for so-called “white spaces” or unlicensed spectrum that surrounds areas covered by an incumbent licensee. In 2019 the FCC adopted rule changes for the Educational Broadband Services (EBS) portion, where 114-megahertz originally was intended to be used by educational institutions. Restrictions on use, EBS eligibility along with an unusual licensing scheme meant that much of the 2.5 GHz band had laid fallow, according to the FCC. At the time of the rule change, the commission said more than 95% of EBS license holders leased it out to non-educators.
T-Mobile holds the majority of 2.5 GHz spectrum, with a trove of the mid-band airwaves thanks to its merger with Sprint.
Before rule changes, EBS was licensed in Geographic Service Areas; generally consisting of a 35-mile radius from a specific point, and existing coverage circles sometimes overlapped.
For the 2.5 GHz white space auction, the band is divided into three channels, with two roughly 50-megahertz blocks and a third smaller 16.5-megahertz block. But these don’t always cover the full county because existing licensees could intersect.
“Within a county, each block has a different amount of bandwidth—though not all frequency blocks are available in all counties—and even where a given frequency block is available in a county, white space may not be available throughout the county due to existing incumbent licensee operations,” the FCC public notice states.
Brian Goemmer, president of spectrum ownership and analysis firm AllNet Insights & Analytics, helped break it down with some visuals and analysis of one example.
Below is a map showing Washington County, Kansas. The existing EBS license area (leased by T-Mobile) is represented by the large green circle. Surrounding area in blue is the whitespace 2.5 GHz, with the 2.5 GHz whitespace specific for Washington County in purple.
In comparing the FCC’s Auction 108 inventory information to AllNet Insight’s own database and EBS auction tools, Goemmer noted the FCC lists the population for each channel at 5,799 based on 2010 census data. However, it doesn’t indicate what percentage of that population can be purchased in the auction.
In Goemmer’s evaluation of nine sub channels that make up the first 49.5-megahertz auction channels “the number of people in this whitespace area totals 642 or 11% of the total population.” In contrast, the third “skinny” auction channel that offers 16.5-megahertz covers the entire 5,799 people available in Washington County, as seen below.
“So purchasing the 3rd Auction Channel would allow a carrier to deploy a network covering all of Washington County while the purchaser of the 1st Auction Channel must limit their operation to the whitespace area in North Washington County,” Goemmer wrote, meaning 642 people.
In his view, unless there is 100% of a population for a county available, the auction largely allows T-Mobile to complete their license area at a very cheap price.
In areas where T-Mobile doesn’t hold or lease the existing licenses, Goemmer thinks it’s likely the operator would still make the purchase under the assumption that at some point in the future it will exclusively own all of the 2.5 GHz spectrum, rather than not control a small fragment out to a county border.
That’s not to say T-Mobile can’t provide service either way. T-Mobile still has 600 MHz, PCS, and AWS spectrum, he noted.
“They’re not precluded from servicing this area, they just don’t have that 120-megahertz of 2.5 GHz in [a given] county,” Goemmer said.
Some proponents of the single-round auction style, such as Select Spectrum, indicated in filings that an SMR auction design could hurt smaller entities as they’re outbid by T-Mobile for licenses in areas, particularly rural, where the carrier might not intend to deploy 2.5 GHz near-term.
The FCC is also considering the single-round format, where possibly larger entities don’t always have the opportunity to place a higher bid, as a way to make sure smaller entities with potentially local interests aren’t deterred from bidding.
“A multiple-round auction will always give a bidder an opportunity to outbid its competitors, and given that the majority license-holder in this band is a nationwide service provider and is likely to be better funded than many other entities that are potentially interested in Auction 108, these other, smaller entities may feel as though they have little chance of winning when competing against the larger license-holder,” the notice stated.