FCC Chairman Tom Wheeler circulated service rules for the incentive TV auction Thursday, a senior FCC official confirmed Friday, for a vote at the agency’s May 15 open meeting. Meanwhile, Wheeler made clear in a blog post that he considers low-band spectrum, like the 600 MHz spectrum to be offered in the auction, to be special. Parts of the proposed auction rules could see further revisions as other commissioners make their case for revisions, industry and agency officials said.

The FCC must stand firm on spectrum aggregation rules for the TV incentive auction, Carri Bennet, general counsel to the Rural Wireless Association, said in an email. On Wednesday, AT&T hinted it might not bid in the auction if the FCC imposes rules as proposed by agency staff (CD April 17 p1). “The FCC has a big task in front of it to ensure that the auction is a success,” Bennet said. “RWA believes that everyone will be unhappy about some aspects of the order. The important thing is to ensure that as many companies as possible are able to participate so that there is the potential for more competition in this spectrum band. By stamping its feet and threatening not to participate because it isn’t getting its way, [it] highlights AT&T as the 800-pound gorilla bent on perpetuating a mobile wireless duopoly. RWA trusts that the FCC will stand its ground.” NTCA made a similar comment. “It is unfortunate to see AT&T resort to a thinly veiled threat of not participating in the upcoming 600 MHz incentive auction to seek out policies favorable to its business plan,” NTCA said in a news release. “It’s important, however, that the Commission balance various competing concerns for the licensing of a limited public resource -- especially one that has as much value as this low-band spectrum that AT&T and many others clearly desire."

AT&T may take a pass on next year’s TV incentive auction if the FCC adopts the spectrum aggregation rules expected to be proposed by Chairman Tom Wheeler, the carrier said in an ex parte filing made Wednesday at the commission. The FCC started briefing industry on the rules Friday (CD April 14 p1). AT&T raised the possibility in an ex parte letter on a meeting Monday between Vice President Joan Marsh and Renee Gregory, wireless adviser to Wheeler.

FCC Chairman Tom Wheeler is proposing a two-stage process for the forward part of the TV incentive auction, industry officials said Friday. The first phase is an unrestricted “put up or shut up” phase, officials said. If bids reach a still-to-be-defined threshold, then Verizon and AT&T could effectively be limited to bidding for a limited amount of “unreserved” spectrum, in what one official said would be a “cage match” contest between the two wireless heavyweights. The proposal doesn’t mention AT&T or Verizon but specifies carriers that own more than a third of the sub-1 GHz spectrum in a market, so that the restrictions could apply to other carriers as well, officials said.

Briefings are getting started at the FCC this week on the second part of TV incentive auction rules set for a vote at the commission’s May 15 meeting, spectrum aggregation rules to be approved concurrent with auction service rules (CD March 10 p1), said agency and industry officials. Commissioners Ajit Pai and Mike O'Rielly are likely to raise objections with Chairman Tom Wheeler if he proposes rules that could limit bidding by Verizon and AT&T in what is expected to be a 2015 auction.

Spectrum aggregation limits in Canada’s recent 700 MHz auction meant a more competitive auction, with higher prices and competitive carriers winning some of the spectrum, University of Maryland economist Peter Cramton said in comments filed at the FCC on behalf of T-Mobile. “The main lesson from the Canadian 700 MHz auction is that well-crafted spectrum-aggregation limits can succeed in encouraging valuable competition in the mobile industry without sacrificing auction revenues,” Cramton said (http://bit.ly/1gVIerq). “Were the Canadian auction conducted without limits, it seems likely that the regional operators would have been pushed aside by the much stronger Big 3.” Rogers “as a result of a network sharing arrangement between Bell and Telus had the most to lose if it failed to get” the A and B blocks, he said. “Rogers competed aggressively for AB and won in all the major markets paying CD$4.32 per MHz/POP, about twice the overall average auction price of CD$2.32. The C block also commanded a high price.” Like the Canadian market, the U.S. market is highly concentrated, Cramton said. “In the U.S., the Big 2 [carriers] have 67 percent market share and hold roughly 80 percent of the low-band spectrum, which is best-suited to providing coverage within buildings and in more difficult terrain. Were the Big 2 to dominate the 600 MHz auction, competition in the mobile broadband market would be harmed.” Also on spectrum aggregation, Verizon disputed arguments in a T-Mobile white paper, the T-Mobile USF Mobile Model Report (http://bit.ly/1efEsUX). “T-Mobile recently submitted a cost study analyzing deployment costs in rural markets for different types of spectrum,” Verizon said (http://bit.ly/1i85oqI). “That study provides no support for T-Mobile’s claim that it or any other firm is in danger of being ‘foreclosed’ from competing effectively in any market. The economic evidence shows there is no valid basis for the Commission to abandon its longstanding and successful policy of assigning spectrum to those firms that value it most and that will put it to use promptly to serve their customers."

FCC staff has started to brief industry groups on proposed service rules for the TV incentive auction, more than a month before the commission’s May 15 meeting, at which Chairman Tom Wheeler is expected to seek a vote on the rules (CD March 10 p1). The briefings have been with myriad public interest groups, as well as with broadcasters, carriers and companies concerned about unlicensed spectrum and wireless microphones, industry officials said. The FCC commissioners have also been briefed, as have been key Capitol Hill staff.

The TV incentive auction will have to bring in huge proceeds to be a success, and limiting bidding by AT&T and Verizon will work against big numbers, AT&T Vice President Joan Marsh said Wednesday on the company’s policy blog (http://bit.ly/OdH66y). The FCC is nearing completion of service rules for the auction, expected to get a vote at the May meeting along with spectrum aggregation rules (CD March 10 p1). Marsh said broadcaster reimbursement alone could have a $20 billion price tag. Add in $1.7 billion in relocation costs and revenue to pay for FirstNet and next-generation 911, and expectations for the auction rise, she said.

Service rules for the AWS-3 auction were in flux Wednesday, with an FCC vote on the rules slated for the agency’s meeting Monday. Small carriers appear to be winning in their fight to get more AWS-3 spectrum sold in smaller license sizes, rather than the paired 10 x 10 MHz licenses favored by AT&T and Verizon. Dish Network and advocates of bidirectional sharing also are likely losers in the revised order, FCC officials said.

The FCC wants as many carriers as possible to take part in the upcoming major auctions, FCC acting Wireless Bureau Chief Roger Sherman said Wednesday at the Competitive Carriers Association (CCA) spring conference in San Antonio. Sherman made clear that the FCC is giving strong consideration to spectrum aggregation limits for the TV incentive auction, which have been opposed by Verizon and AT&T.