Wireless Spectrum Auctions

Carriers cautioned against proposals for additional performance requirements, in replies in docket 10-112 on an FCC Further NPRM asking about ways to modernize the licensing process for geographic wireless licenses. Commissioners approved the FNPRM, 3-0, as an addition to an order creating a unified regulatory framework for wireless radio services rules (see 1708030026). “Additional performance requirements under consideration in the FNPRM will undermine, rather than promote, the Commission’s goal to increase wireless service deployment, especially in rural America,” T-Mobile said. “Carriers that wish to serve areas at current performance requirement levels may make the determination that they are unable -- for economic, competitive, siting or other reasons -- to meet enhanced buildout requirements, leading those carriers to simply abandon plans.” AT&T said “targeted incentives,” including increased license terms for rural build-out and special funding mechanisms like the Mobility Fund, are the best way to spur deployment. “The record demonstrates that adding new performance benchmarks on wireless licensees at renewal would force carriers into uneconomic and inefficient builds and siphon limited financial resources from projects that increase network capacity,” AT&T said. “While it supports the FCC’s goal to minimize the digital divide, CCA agrees with the record that offering incentives for rural buildout is a more appropriate way to meet the Commission’s objectives,” the Competitive Carriers Association commented. But the FCC should reject proposals to impose new regulatory or buildout requirements on existing licenses or renewal applications, the group said. “Increased burdens and economic hardship would hinder, rather than promote, buildout in rural America.” The proposed buildout requirements “would be harmful -- they would likely compel uneconomic buildout, distort investment decisions, and depress the valuation of both existing and to-be-auctioned spectrum,” CTIA said.

The FCC released details Friday on its proposed spectrum frontiers order, which makes another 1,700 MHz of high-frequency spectrum available for 5G in the 24 GHz and 47 GHz bands. The draft order in docket 14-177 says the FCC is making spectrum available for 5G, the IoT and other advanced spectrum-based services. But it also says the FCC is looking for a balanced spectrum policy. “In doing so, we help ensure continued American leadership in wireless broadband, which represents a critical component of economic growth, job creation, public safety, and global competitiveness,” the draft says.

The FCC approved an NPRM Tuesday proposing to rewrite parts of rules for the shared 3.5 GHz band, over a dissent by Commissioner Jessica Rosenworcel. Commissioner Mignon Clyburn concurred rather than approve, saying she would have preferred the FCC left the rules as is. The votes were as predicted, with all three Republicans voting yes (see 1710180043). Both Democrats voted against the FCC allowing stations to host studios outside their communities of license (see 1710240062).

The House Communications Subcommittee's Wednesday FCC oversight hearing is still widely expected to feature ample discussion on President Donald Trump's recent comments threatening the licenses of NBC and implications for commission's independence. But the issue is unlikely to overwhelmingly dominate the proceedings, lawmakers and lobbyists told us.

AT&T and Verizon supported the thrust of an FCC plan for auctioning USF subsidies for fixed broadband services in areas traditionally served by large carriers. They, CTIA and a few others commented for the first time on proposed procedures for the Connect America Fund Phase II auction of up to $1.98 billion in support over 10 years. Replies were posted Wednesday and Thursday in docket 17-182. The commission largely "got it right," commented AT&T, saying the auction "must be simple enough to enable providers of all sizes, using different technologies, to participate." The design must "enable bidders to maximize efficiencies by allowing them to assemble contiguous networks across census block groups," it said. It disputed concerns package bidding would crowd out smaller bidders (see 1709190002) and urged the FCC to keep anti-collusion rules, while suggesting "modest modifications." Verizon backed the framework and endorsed "targeted changes," including USTelecom proposals to modify package bidding, bid-switching rules and a financial qualifications screen. CTIA objected to "proposals to require additional showings from applicants proposing to use spectrum to provide the supported services (wireless applicants)," including "calls for wireless applicants to include propagation maps in their short-form applications." The Wireless ISP Association also opposed the propagation-map proposal of a rural coalition. Microsoft again sought inclusion of unlicensed "white space" spectrum and backed a WISPA proposal for even broader spectrum use. The Institute for Local Self-Reliance, joined this time by Public Knowledge and other consumer-oriented groups, said "the FCC should only consider bids that cannot cover all premises in the event that there is no bidder that can connect all premises" in an area. Bidders providing "high-quality fixed service" should be preferred over "high-latency satellite options," they said. SpaceX opposed measures "that exclude any technology that meets" baseline criteria. Hughes Network Systems said the FCC should grant its reconsideration petition to change bid weights and should eliminate package bidding and increase bid-switching flexibility from round to round. Repeating its concern about complexity, a rural electric and telco coalition urged the FCC to simplify the auction by "eliminating or substantially modifying its proposal to allow package bidding; prohibiting bidders from switching tiers between rounds; and allowing proxy bidding." It said anti-collusion rules should be altered to let small providers share auction consultants. The American Cable Association supplemented its arguments against package bidding, a proposed "five-point" financial screen, and anti-collusion rules preventing consultant sharing. Also filing again were GeoLinks, Illinois Electric Cooperative and the Rural Wireless Association.

Verizon fixed 5G trials “are going very well” and 5G is exceeding expectations, Chief Financial Officer Matt Ellis said Thursday during a quarterly earnings call. The company said it took a 1-cent-a-share earnings hit due to the hurricanes that struck Florida and Texas. The carrier is finding that with 5G, it can deliver service without line of sight to a cell tower, Ellis said. Service to multiple dwelling units worked better than expected, with 5G working above 20 floors, higher than expected, he said. “A number of good things” are coming out of trials, Ellis said. The company still plans to launch a fixed 5G offering next year, he said. It has commercial 5G trials ongoing in 11 cities (see 1709280047). A positive point is that Verizon had a rush of customers as soon as its stores reopened in Houston post-storm, he said. Ellis declined to comment on rumors of a merger between Sprint and T-Mobile. “There’s a lot of various rumors and so on around the industry all the time,” he said. “We have the right set of assets to compete irrespective of the industry structure.” Verizon has “a great spectrum portfolio” and only about half the spectrum it controls is now serving its network, Ellis said. Among its plans for 2018 are “refarming” its 850 MHz and personal communications service spectrum and deploying service on licenses it bought in the AWS-3 auction, he said. “We’re comfortable with our spectrum position,” he said. Ellis said Verizon's plans to launch an over-the-top video service are under development, and the company envisions becoming a bigger video player. “We feel there is an opportunity for us to play,” he said. “But we don’t want to launch another ‘me too’ service.” Earnings were flat from the same quarter last year and revenue increased 2.5 percent to $31.7 billion. The company added a net 274,000 postpaid phone subscribers, compared with forecasts of about 195,000. Analysts were mostly positive. Verizon “delivered a second consecutive quarter of strong results, particularly in its wireless segment," wrote Wells Fargo's Jennifer Fritzsche.

Companies like Nsight, a small wireless and wireline carrier in northern Wisconsin and Michigan, aren’t afraid to take on big carriers, but rules have to be different, Associate Legal Counsel Larry Lueck told an FCBA session on closing the digital divide Thursday. “When we talk about the digital divide, we live and breathe it every day,” he said. “We need to be treated differently because we don’t serve the big cities.” An FCC Wireless Bureau official said the agency is working hard to wrap up all the rules for a Mobility Fund II auction.

Wireless ISPs, backed up by Google and other advocates of unlicensed spectrum, are mounting an all-out challenge to get the FCC to make changes to its 3.5 GHz NPRM to be voted at the Oct. 24 commissioners’ meeting. Wireless ISP Association officials met Tuesday with Commissioner Mike O’Rielly, who helped develop the NPRM, on their concerns over the size of priority access licenses (PALs) that would be part of the rules. WISPA officials told us Wednesday they view the band as critical to their future, since many WISPs need more mid-band spectrum to continue to compete.

NBC didn’t contact the FCC after President Donald Trump’s tweeted questioning whether the network's “license” could be pulled, said NBC Broadcasting and Sports Chairman Mark Lazarus during panels (see 1710180023) at the NAB Show New York Wednesday. Lazarus declined to comment on Chairman Ajit Pai’s remarks that the FCC wouldn’t unilaterally take a station’s license. Asked about the president’s tweets, he said NBC News valued editorial independence and he's confident in NBC’s reporting: “We have great confidence that the FCC will stand by our First Amendment rights and support us and we have every confidence our licenses will be renewed.” FCC Chairman Ajit Pai faces heat for not addressing more squarely the tweets. Some Democrats won't get a Senate Commerce Committee FCC oversight hearing on the matter.

Partial economic area (PEA) or other larger license sizes would mean carriers are the only ones likely to buy priority access licenses (PALs) in the 3.5 GHz, Citizens Broadband Radio Service band, said Michael Calabrese, director of the Wireless Future Program at New America, in a meeting with an aide to Commissioner Mignon Clyburn. Commissioners are to consider an NPRM proposing larger license sizes and other changes to the citizens broadband radio service rules at their Oct. 24 meeting, with Democrats skeptical of changes (see 1710120009). The Los Angeles PEA covers the entire metropolitan area, includes Riverside County and extends to the Nevada border, Calabrese said in a filing in docket 17-258. “It would be far easier for carriers to assemble larger contiguous areas by acquiring census tracts than it would be for hundreds or thousands of other potential users noted above to either win a PEA or county license at auction,” Calabrese said. “Subleasing small areas of spectrum from a big mobile carrier, through a secondary market transaction, is unrealistic both because of high transaction costs and because carriers have a disincentive to allow competitors with or substitutes for their services to access spectrum at a reasonable price.” The Wireless ISP Association, meanwhile, said the FCC should keep the current rules in place. A plan backed by Commissioner Mike O’Rielly “and the mobile industry would overturn pro-innovation rules adopted unanimously by the FCC -- twice -- in 2014 and 2015,” WISPA said in a Monday statement. “Dozens of companies are already making significant investments in the CBRS band, counting on the current rules.” WISPA also urged the FCC to approve the Broadband Access Coalition’s proposal for the 3.7-4.2 GHz band (see 1706210044). “Under mobile industry pressure, the FCC is prioritizing a much broader and more time-consuming review of multiple spectrum bands, which would lead to years of regulatory delay and no near-term progress for rural America,” WISPA said.