Howard Buskirk

The 2.5 GHz auction is limping along and seems unlikely to hit the $3.4 billion New Street had projected, and could struggle to hit $1 billion. The auction was at almost $160 million after 13 rounds Monday, with numbers growing at a glacial pace. The auction is expected to be the last of mid-band spectrum for 5G for several years.

With many commenters opposing receiver rules from the FCC, and supporting voluntary, industry-led standards (see 2207280050), the agency hasn’t necessarily reached a dead end on the issue, industry experts said. One potential next step would be a policy statement saying the FCC has the authority and intends to specify expectations about receiver vulnerability on a proceeding-by-proceeding basis. Commissioner Brendan Carr said Friday all options remain on the table.

The FCC “reopened” for in-person meetings in June, but the agency hasn’t seen a wholesale return to them, and most meetings between staff and industry remain virtual, as they have been since the start of the COVID-19 pandemic in March 2020, based on a review of ex parte filings and interviews with lawyers and FCC officials. Some expect more in-person meetings starting after Labor Day, depending on what happens on COVID infection rates during August.

CTA sided with Microsoft in its dispute with NAB over how often narrowband devices should have to check a database to operate in the TV white spaces (TVWS). The Open Technology Institute at New America and Public Knowledge also backed Microsoft arguments. In January, commissioners approved 4-0 an order requiring other white space devices (WSDs) to check the database at least once hourly. After NAB and Microsoft clashed as the order was before commissioners, the FCC decided to further explore the rules for narrowband IoT devices in a Further NPRM (see 2201270034). Replies were due Monday in docket 14-165. “With demand for IoT applications and services expected to skyrocket in the coming years, using white spaces more efficiently and effectively in rural areas to address opportunities in sectors such as agriculture can help to achieve this goal,” CTA said: “CTA therefore supports the Commission maintaining its current rule for narrowband WSDs which will facilitate the deployment of narrowband IoT devices in rural areas, while providing existing licensees the same level of protection from harmful interference.” NAB’s objections “stem not from any genuine technical concern but solely from the desire to ‘get Big Tech’ and undermine the use of unlicensed spectrum,” OTI and PK said. Against a dearth of evidence of harmful interference “the Commission must balance the public interest benefits of allowing narrowband WSDs to lower costs and improve productivity in less densely-populated areas for farming, ranching, remote sensing, environmental monitoring and a variety of other innovative uses,” the groups said. NAB filed a one-paragraph comment, noting only 211 devices currently use the white spaces nationwide. “The risk that narrowband WSDs will cause harmful interference to licensed wireless microphones is very low,” Microsoft said, responding to concerns raised in the initial comment round (see 2207050059). “The Commission’s conservative narrowband WSD technical rules combined with the paucity of spectrum in urban and suburban areas, will effectively limit commercial narrowband WSD use cases to those that can be successful in exurban and rural areas such as precision agriculture and remote sensing,” the company said.

Major U.S. tower companies, buoyed by the ongoing 5G buildout, had positive Q2s, in contrast with major wireless carriers, with AT&T and Verizon both navigating rough waters during the quarter (see 2207270054). SBA Communications, the last of the big three tower companies to report, released results Monday.

The FCC’s 2.5 GHz auction started slower than other recent 5G auctions and had little upward movement Monday, after three rounds. The auction hit $115.3 million Monday, after opening Friday at $103.5 million (see 2207290045). “Demand at the start of this auction is very tepid, with excess demand as a percentage of aggregate demand starting at roughly 37%, which puts this auction at the low end of prior auction starts,” blogged Sasha Javid, BitPath chief operating officer, about the start of the auction. “Perhaps this slow start is not surprising,” he said. “This 2.5 GHz auction is far from a typical spectrum auction.” The FCC is selling overlay licenses, which means many winners will have to negotiate with educational broadband service incumbents “if they want to use their entire license,” Javid said: “By my estimate over 80% of the MHz-POPs in these overlay licenses are encumbered (including both incumbents and all pending tribal licenses). This could explain why both Los Angeles and Cook County (Chicago), the two most populated counties in the country have demand below supply at the county level.” Another factor, some 27.5% of the U.S. doesn’t have any licenses available for sale, he said. “This is because the FCC decided against selling overlay licenses in any county where every category of license was fully-encumbered when measured by area,” he said. T-Mobile holds long-term leases with most incumbents EBS licensees and “has an information asymmetry advantage over other auction participants. … Because these leases are confidential, other bidders will not know how long they may be precluded from accessing or re-leasing parts of their licenses currently encumbered by these T-Mobile leases.” New Street’s Jonathan Chaplin predicted in a weekend note to investors the auction will likely hit $3.4 billion, less if Congresses approves a 15% book alternative minimum tax on spectrum licenses (see 2204050083). He predicted the auction will likely end in September. “We have a long way to go,” Chaplin said: “The spectrum is useless to Verizon, AT&T and Dish [Network]; their only interest in the auction is pushing up the cost for T-Mobile. Smaller carriers and [wireless ISPs] may actually have a use for some of the licenses, but these companies won’t have the resources to outbid T-Mobile for any licenses that T-Mobile views as important." But Digital Progress Institute President Joel Thayer noted widespread interest in bidding. “It's a credit to the FCC's ability in shepherding this proceeding along and I'm glad to see that we are going to unleash 2.5 GHz,” Thayer emailed: “This auction is particularly going to be helpful for T-Mobile to be an even stronger alternative to the ‘big two,’ which is great for consumers.” Thayer sees Verizon and AT&T as potentially more interested in 12 GHz, a band being looked at for 5G. Two more rounds are on tap Tuesday.

The FCC’s final scheduled 5G auction, of 2.5 GHz spectrum, opened Friday at $103.5 million after one round of bidding. Two more rounds are scheduled for Monday. Industry analysts tell us T-Mobile looks likely to dominate, filling in gaps in its 2.5 GHz holdings, with some smaller carriers likely to jump in if they see the opportunity for a bargain. Verizon, AT&T and Dish Network qualified to bid but appear unlikely to make much of a play, analysts said. T-Mobile already has 159 MHz of 2.5 GHz spectrum nationwide.

Qualcomm, the Alliance for Innovation, the main automaker trade group, ITS America and most commenters urged the FCC to approve a December waiver request by proponents of cellular-vehicle-to-everything use of the 5.9 GHz band asking to be able to deploy as fast as possible (see 2112140070). NCTA sounded a note of caution, as did the Motor & Equipment Manufacturers Association (MEMA).

CTA told the FCC the “record is clear” that voluntary, industry-led standards are the best approach to improving receiver performance, in reply comments posted Thursday in docket 22-137. The FCC logged more than 20 replies in the proceeding, on a notice of inquiry on receiver performance and potentially standards adopted by commissioners 4-0 in April (see 2204210049). Other comments largely echoed CTA’s arguments. Initial comments were posted a month ago (see 2206270045).

The FCC got its first formal read on what steps industry thinks should come next on regulations and policy for offshore spectrum, with initial comments due Wednesday on a notice of inquiry commissioners approved 4-0 in June (see 2206080055). The consensus appeared to be that the FCC should move forward on the next steps, but carriers urged the agency to do so with caution. Most comments were posted Thursday in docket 22-204. Industry had to little say on the record when the NOI was before commissioners.