Small Carriers Disagree on Whether AWS-3 Auction Proposal is a Win
Small carriers largely welcomed the FCC’s proposal to dedicate at least some of the spectrum offered in the upcoming AWS-3 auction in the form of Cellular Market Area licenses, rather than much larger Economic Area (EA) licenses. Meanwhile, the major groups representing small carriers have worked out an agreement on Partial Economic Area (PEA) licensing, submitting a revised proposal to the FCC dividing the U.S. and its territories into 416 PEAs for the incentive TV auction.
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The FCC is expected to propose offering the 1755-1780 and 2155-2180 bands in three paired blocks in the AWS-3 auction, an FCC official said Monday (CD March 11 p7). One of these would be a 5 x 5 MHz paired block at 1755-1760 and 2155-2160 MHz, sold in CMA-sized chunks, with the remainder offered in two 10 x 10 EA-sized paired blocks.
In the filing at the FCC, the Competitive Carriers Association, the Rural Wireless Association, the Blooston law firm and NTCA agreed on a plan to offer PEA-sized licenses, but just in the incentive auction (http://bit.ly/1cRHtzS). CCA made the original PEA proposal, at the urging of the FCC, but had run into pushback from RWA and NTCA. “Without prejudice to their continued support for CMAs, CCA, NTCA, RWA and the Blooston Rural Carriers jointly submit the enclosed map and associated county list as a compromise PEA proposal for use in the incentive auction,” they said.
One small carrier executive said it would be a “mistake” to offer two 10 MHz, EA-sized blocks, rather than more 5 MHz blocks and CMA-sized licenses. “Even AT&T has said 5 x 5 is a good building block; start with that, keep it 5 x 5s,” the executive said. Small carriers “have the same needs as the larger carriers.”
RWA agreed to PEAs as a “one time thing” for the incentive auction, said Carri Bennet, general counsel at the RWA. “They [at the FCC] need the number of lots that they can auction to be a manageable number.” Bennet said her group had hoped more of the AWS-3 spectrum would be sold as CMAs. “The problem is we see it’s very easy to consolidate smaller into larger, but it doesn’t go the other way,” she said. “EAs are too big for our guys."
Small carriers would prefer more of the licenses to be sold as CMAs, said John Prendergast, Blooston managing partner. “You never know in a given area, there may be multiple and overlapping interests,” he said. “But that being said, it would be very encouraging to see at least one CMA-sized opportunity” in the auction, he said. A number of small carriers did buy licenses in the AWS-1 auction in 2006, he noted.
In the AWS-1 auction, the FCC sold 90 MHz of spectrum. Only one block, Block A, was sold as paired 10 x 10 CMA-sized licenses. The FCC also offered two blocks of EA licenses with three blocks, 40 MHz of spectrum, sold as gigantic Regional Economic Area Grouping licenses. The PEA filing came after weeks of negotiations among the rural groups.
"Although licensing spectrum based on the areas contained in this joint proposal will not promote opportunities for smaller carriers to the same extent as CMAs, these PEAs will ensure that some licenses consist of large population centers while others consist of less populous areas,” the joint filing said. “The goal of this proposal is to attract a variety of bidders, including carriers that would be foreclosed from bidding on entire EAs.”
"CMAs continue to be the best option to ensure carriers of all sizes, especially smaller rural and regional carriers, have the opportunity to participate in the upcoming 600 MHz incentive auction,” said CCA President Steve Berry in a news release. “Based on our understanding that the Commission would not use CMAs for the incentive auction, CCA crafted its Partial Economic Area proposal last November as the next-best option. Today’s joint filing is the result of multiple weeks of negotiations with other industry stakeholders, and is a clear indication that CCA has listened to our members and will work together to ensure all carriers have an opportunity to participate at the upcoming auction.” (hbuskirk@warren-news.com)