Carriers Disagree on 2.5 GHz Auction

T-Mobile, viewed as the most likely bidder among major carriers (see 2009180029), seeks a 2021 airwaves sale. About 8,300 geographic overlay licenses will be on the block. “Oddities related to the existing licensing structure still need to be resolved before the Commission can hold a successful 2.5 GHz auction,” Verizon said: “The exact spectrum that will be made immediately available will vary from license to license. The Commission is overlaying licenses on top of approximately 2,000 existing licenses, almost all of which are subject to active spectrum leases -- the terms of which are not public.” Even still, the swath remains of interest to national carriers looking for 5G spectrum, the company said. “Meaningful licensing” here “has been suspended for nearly 30 years” with much of the frequencies “particularly in rural areas, lying fallow,” T-Mobile said. Then-Chairman Ajit Pai had proposed a single-round, sealed-bid auction design rather than the more traditional simultaneous multiple round (SMR) format. Commissioners OK’d 5-0 an NPRM in January seeking comment. “Employ familiar and time-tested auction procedures” T-Mobile urged: “Not only is an SMR auction well understood by the Commission and bidders alike, but it would also allow bidders to engage in price discovery, which is the hallmark of what makes an auction economically rational and the touchstone for sincere bidders.” T-Mobile wants SMR because it would gain an advantage, AT&T said. “T-Mobile has already leased large portions of the spectrum at issue from the underlying [educational broadband service] licensees, and thus all other potential bidders know that T-Mobile has a compelling interest in obtaining these overlay licenses to fill out its existing position,” AT&T said: SMR “would be fundamentally uncompetitive, and would essentially hand most of the spectrum to T-Mobile at rock-bottom prices.” It would take months to play out, meaning a prolonged quiet period, AT&T said. Verizon supports SMR, saying a single-round auction is “antithetical to the Commission’s longstanding goals of allocating spectrum based on fully transparent market principles." A single-round approach would “deter auction participation, including by the smaller bidders the Commission believes may benefit,” UScellular warned. SMR auction promotes “price discovery” as over rounds, the carrier said: “While bidders can garner some publicly-available valuation information prior to an auction, this limited information cannot serve as a reasonable substitute.” The Competitive Carriers Association urged a prompt auction and SMR design.