With the FCC apparently set to embrace Partial Economic Area (PEA) licensing in the incentive TV auction (CD Jan 16 p1), the big debate has shifted to whether the FCC should allow package bidding. Small carriers warned of the dangers of package bidding, while AT&T said it is necessary, especially if the FCC embraces license sizes smaller than Economic Area (EA) licenses for the auction. Package bidding allows a carrier to make a single bid for a particular package of licenses, rather than bid for each on an individual basis.

Change is on the way for the FCC Incentive Auction Task Force. The agency is poised to add longtime cable and wireless attorney Howard Symons to the team, as vice chairman to current task force Chairman Gary Epstein, industry and agency officials told us. Meanwhile, the FCC appears poised to give small carriers a win on at least one big issue -- the geographic size of the licenses that will be offered in the auction.

Top U.S. wireless carriers Verizon Wireless and AT&T told the FCC it should move forward with its original proposal to license the 600 MHz band and AWS-3 spectrum based on Economic Areas, rather than adopt the Competitive Carriers Association’s alternate proposal to license the spectrum based on Partial Economic Areas (PEAs). The PEAs, as proposed by CCA, would essentially be a subdivision of EAs and would be based on EA and Cellular Market Areas (CMA). The FCC had sought public input on the CCA proposal, which also has support from other rural carriers, and comments were posted online Thursday and Friday.

The FCC should reject an NTCA/Rural Wireless Association proposal to divide the forward auction of 600 MHz spectrum into two phases (CD Jan 9 p2), said AT&T in comments filed Thursday. Dividing the forward auction into one phase for purchasing large lots of urban spectrum and a second phase for smaller chunks of rural spectrum “adds complexity to what has already been widely acknowledged as one of the most complicated proceedings in Commission history,” AT&T said. The telco also argued that the two-phase auction would still expose buyers to aggregation risks, making it difficult for companies to provide coverage over large uninterrupted areas. Though the NTCA/RWA proposal framed the two-phase auction as still allowing carriers like AT&T to purchase large pieces of spectrum, the pieces aren’t big enough, AT&T said. The proposal would still lead to “operational difficulties inherent with such small license areas,” AT&T said.

The FCC forward auction of 600 MHz wireless spectrum should be split into two sequential phases, one covering high-demand urban areas and a second for smaller rural markets, suggested a NTCA- and Rural Wireless Association-sponsored report by NERA Economic Consulting (http://bit.ly/1afZ6Ws) filed Wednesday. The proposed plan would auction off urban, high-spectrum use markets under the economic areas licensing structure initially proposed by the FCC and favored by large carriers, while selling off rural spectrum in the smaller, geographically-based lots favored by NTCA and local carriers, called partial economic areas (PEAs), said NTCA Director-Legal Affairs Jill Canfield in an interview. The proposal might be a way to bring more participants to the auction by encouraging smaller carriers, and could be attractive to larger carriers by allowing them to avoid spectrum caps, said Telecommunications Industry Association Director-Regulatory & Government Affairs Mark Uncapher.

The Office of Management and Budget signed off on parts of the FCC’s May 24, 2012, order allowing Medical Body Area Networks (MBANs) in the 2360-2400 MHz band, and the rules took full effect Friday, said an FCC notice in the Federal Register (http://1.usa.gov/1cFBQTQ). The notice said OMB signed off on Sections 95.1215(c), 95.1217(a)(3), 95.1223 and 95.1225 of the rules in October. OMB examined reporting requirements, third-party disclosure requirements and recordkeeping requirements of the order under the Paperwork Reduction Act of 1995. OMB decided the total annual burden for compliance was 9,120 hours at an annual cost of $462,600. A wireless industry lawyer told us Friday that industry is waiting for a resolution of various recon petitions and a further notice on MBANs “to be resolved before developing equipment."

Members of the Public Interest Spectrum Coalition made their case for unlicensed use of the TV bands following the incentive auction and channel repacking, in a meeting with Roger Sherman, FCC Wireless Bureau acting chief, and others from the bureau. PISC said the FCC should designate “an unlicensed and contiguous duplex gap (and/or guard band) of at least 20 MHz” and maintain two designated channels for wireless mics, opening “them for shared unlicensed use; shrinking the separation distances that limit wireless microphone use of locally-vacant, out-of-market TV co-channels; and requiring microphones to rely first on out-of-market TV co-channels that are not available to unlicensed devices,” said a filing on the meeting (http://bit.ly/1eCAKdd). It said the FCC should also make Channel 37 available on a limited basis for unlicensed use and maintain “the status quo with respect to unlicensed access to 600 MHz spectrum, post-auction, in each local area until it is actually in use.” Michael Calabrese of the New America Foundation, Harold Feld of Public Knowledge and Matt Wood of Free Press were at the meeting for PISC.

With federal regulators concerned about cutting the number of major national wireless carriers from four to three, a possible Sprint/T-Mobile merger would face an uphill battle at the FCC and Department of Justice, industry observers say. Reports emerged last week that Sprint, the nation’s third largest carrier, and T-Mobile US, its fourth largest, are looking at a deal to merge (CD Dec 16 p15). The Wall Street Journal reported Friday that Sprint is looking at making a bid north of $20 billion for T-Mobile in the first half of next year, while it also studies “regulatory concerns."

Wireless microphone maker Sennheiser said CTIA is wrong to oppose the company’s request that TV incentive auction winners be required to partially reimburse wireless mic users for the cost of replacing equipment made unusable by reallocation of the 600 MHz band. “At the outset, CTIA has mischaracterized the request,” the company said in a filing at the FCC (http://bit.ly/1dbItJR). “Sennheiser does not seek reimbursement to wireless microphone manufacturers, as CTIA states, but rather to wireless microphone users -- not only professional broadcasters, filmmakers, theaters, and concert promoters, but also churches, schools, community organizations, political groups, and countless others -- people who lack meaningful input to the Commission’s spectrum policies, yet stand to suffer financial damage from the reallocation.” Contrary to CTIA’s characterization, owners of wireless mics are not secondary users of the spectrum, Sennheiser said.

The FCC Wireless Bureau sought comment on a proposal to license TV incentive auction spectrum in smaller blocks than Economic Area licenses, which was proposed by the Competitive Carriers Association. CCA proposed use of Partial Economic Area licenses, bigger than Cellular Market Area licenses, but smaller than EAs. “Although a number of commenters support the Commission’s proposal to license the 600 MHz band on an EA basis, some commenters argue that EA licenses are too large for small and rural operators to obtain at auction or deploy,” the bureau said (http://bit.ly/IRKmC0). “Larger carriers express concern that it is more difficult to acquire a national or regional footprint using smaller geographic area licenses.” There are 734 U.S. CMAs, with much smaller geographic areas than the 176 EAs. Comments are due Jan. 9, replies Jan. 23.