H-Block Auction Expected Later This Year or Early 2014
The FCC approved by a 3-0 vote Thursday a report and order moving the FCC toward an auction of H-block spectrum, 10 MHz of already cleared paired spectrum at 1915-1920 MHz and 1995-2000 MHz. The H-block auction is expected to be the first in which the federal government will collect money to pay the $7 billion costs of launching FirstNet, the national wireless network for public safety. The money must come from auction proceeds, though not necessarily the incentive auction of broadcast TV spectrum.
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Wireless Bureau Chief Ruth Milkman said after the meeting the two 5 MHz blocks will likely be paired with other PCS spectrum for deployment following an auction. “One of the reasons that there’s interest in this particular block is it can be aggregated with other blocks in the PCS spectrum, whether or not they are immediately adjacent,” Milkman said. “All four of the national carriers, as well as many other smaller carriers, have PCS spectrum already."
Milkman said it will probably take the FCC about six months to prepare for an H-block auction, likely to occur late this year or early next year. Milkman declined to discuss in more detail interference protection rules imposed by the FCC and the order wasn’t released by our deadline. “You'll be able to see the technical rules in all their glory,” she said. Carriers have questioned whether wireless operations in the H block could interfere with PCS handsets operating at 1850-1915 MHz (CD Feb 8 p5).
The H block is unique among the 65 MHz of spectrum identified by last year’s spectrum law for possible auction, said Commissioner Jessica Rosenworcel. “It is the only specifically identified spectrum in the law that is paired and not already in use by federal agencies,” she said. “That distinction is critical. It means that revenue from the H-block will not be burdened by having to pay upfront for the relocation of federal users. That means that the H-block is our best chance to provide significant funding for our first responders before we get started on another kind of auction -- incentive auctions."
"I am pleased that we do not saddle this spectrum with burdensome and unnecessary conditions,” said Commissioner Ajit Pai. “Instead, we outline straightforward and flexible rules for H block licensees. I am confident that this common-sense approach will make for a successful auction of this paired spectrum in the coming months. And I believe that this approach should serve as a model for future auctions."
An FCC official noted that the auction is the first since the 700 MHz auction in 2008 of new, unencumbered spectrum. “I think it signifies the reopening of [the] spectrum pipeline,” the official said.
"The commission must continue to ensure that the nation’s wireless networks have the capacity, speed, ubiquity to keep pace with consumers’ expectations and their ever rising demand for more mobile services,” said acting Chairwoman Mignon Clyburn.
"T-Mobile applauds the FCC for moving to make more spectrum available for mobile broadband,” said T-Mobile Senior Vice President Tom Sugrue. “Moreover, proceeds from the sale of the H Block will provide an excellent down payment for the creation of a nationwide public safety network.”
Adopting the H-block rules is likely a welcome development for Sprint Nextel and Dish, “who are probably the most natural buyers of H block,” said Paul Gallant, a Guggenheim Partners analyst. The action reflects the push for getting spectrum into the wireless market, said Jeff Silva, a Medley Global Advisors analyst. “Given the limited spectrum supply, I think it’s a big step forward for the FCC and for the carriers … Even though it doesn’t have the stature of the broadcast incentive auction, moving forward on the H block is still a big step forward and very important across the board.”
Sprint said it’s pleased with the adoption of the licensing, technical and service rules. Sprint “appreciates the commission adopting balanced rules to protect neighboring licensees from interference while assuring H Block licensees the flexibility necessary to provide wireless broadband services,” said Vice President Larry Krevor.