Small Carriers Likely Won Fight for More 5 x 5 MHz Licenses in AWS-3 Auction

"A lot of it is still being worked out,” said an FCC official. “It seems really fluid.” FCC Chairman Tom Wheeler circulated the original order March 10 for a vote at next week’s meeting (CD March 11 p7). A revised order, making some of the changes sought by other commissioners, is expected shortly, officials said.

Commissioner Mignon Clyburn has been especially engaged as an advocate of selling more of the AWS-3 spectrum in smaller license sizes, officials said. The FCC’s two Republicans, Ajit Pai and Mike O'Rielly, have expressed concern there is too much sharing and not enough spectrum clearing in the item, said an agency official.

One likely change is a reconfiguration of spectrum sold on a paired basis in the 1755-1780 and 2155-2180 MHz bands, officials said. The initial proposal was to offer the spectrum in three paired blocks: A 5 x 5 MHz paired block at 1755-1760 and 2155-2160, sold as smaller Cellular Market Area licenses, with the remainder offered in two 10 x 10 Economic Area-sized paired blocks. One of the two 10 x 10 blocks is now expected to be converted to 5 x 5 blocks, officials said. CMAs are much smaller than EAs, and AT&T and Verizon have advocated for the larger license sizes to simplify their spectrum acquisitions.

The order circulated Monday contains language on bidirectional sharing, but it’s expected that will be stripped out of the revised draft, officials said. NTIA recently weighed in, asking the FCC to defer action on bidirectional sharing, in which the federal government, the Department of Defense in particular, would have access to commercial spectrum in areas of the country where carriers aren’t deploying in a particular band (CD March 25 p6). Removal of the language would be a loss for Oceus Networks, which has built a case for bidirectional sharing.

Dish was not successful in getting a provision in the rule that would require interoperability between AWS-3 and AWS-4 spectrum, which the company already owns, officials said.

Spectrum Sharing Looms Large

The AWS-3 auction and other spectrum issues figured prominently at an FCBA seminar Tuesday at Hogan Lovells. Bidirectional sharing issues loom large for industry, said Steve Sharkey, T-Mobile chief-engineering and technology policy. The seminar preceded a reception to “celebrate” the Dale Hatfield Professorship at the University of Colorado Law School. Hatfield is the former chief of the FCC Office of Engineering Technology and acting administrator of the NTIA.

Making spectrum sharing work is “one of the biggest challenges” for industry, but “we're really only at the beginning of this process,” Sharkey said. As carriers push to share more federal spectrum, the government is “pushing back as well,” he said. “As we look to share their spectrum, they're [putting] their focus on our spectrum too and looking at the amount of spectrum that the industry has available. … ‘Can we use your spectrum where we, the federal users, have requirements.'”

Device interoperability also looms large, Sharkey said. Industry reached an agreement on device interoperability in the lower 700 MHz band last year, after years of fighting (CD Sept 11 p1). “As we move forward that issue is coming up in a variety of other bands or other proceedings,” he said. “In the incentive auction proceeding at 600 MHz it’s an issue. It’s come up in the AWS-3” proceeding.

The TV incentive auction poses unique challenges for carriers and the FCC, especially since the amount of spectrum that’s sold will be determined by the number of broadcasters who choose to sell their licenses, Sharkey said. “You've got an unknown supply and demand here,” he said. “You've got to figure out where the price points match up. So the broadcasters say they'll sell their spectrum for X number of dollars and then you look at whether the wireless carriers are willing to pay that.” But Sharkey said based on T-Mobile’s analysis “we're pretty confident that we come out with a pretty good amount of spectrum out of this auction” and the auction should make 84 MHz of spectrum available for wireless broadband.

Bryan Tramont, managing partner at Wilkinson Barker, said enforcement looms as one of the biggest technical issues. “The commission is just institutionally not particularly well suited to some of the complexity that’s coming down,” said Tramont, former FCC chief of staff. Sharing “creates very unique potential enforcement issues,” he said. “There are a lot of examples where there have been real enforcement challenges and it’s both the operational rules … but there’s also an institutional resources issue and making sure that when we make allocation and service rule decisions that we are giving the resources that allow for those regimes to function correctly."

The incentive auction also poses tough technical issues for broadcasters, Tramont said. “There is the repack for the broadcasters, which is not without substantial technical complexity,” he said. “There’s the economics of getting them moving and there’s the ‘what does it mean to not substantially change their footprint, their service contour?'” issue.

One of “the big unknowns” in the incentive auction is broadcaster participation, Sharkey said. “Do they have enough information, enough confidence in the process to actually come to the table?"

The IP transition also presents some thorny issues, Hatfield said. “It is a fundamental sort of change in architecture,” he said. “An issue that I worry about is the unintended consequences and I think that’s a reason that the experiments are so important, is that we catch those unintended consequences before they kind of spread to the … whole network.” Hatfield said he is particularly concerned that the transition not prove harmful to the deaf and other people with disabilities.