AWS-3 Auction Shows Continuing Importance of Licensed Spectrum, O'Rielly Says

The recently completed AWS-3 auction demonstrated that licensed spectrum remains valuable, FCC Commissioner Mike O’Rielly said in a blog post Friday. “Although some argue that the future lies only with unlicensed or shared spectrum, this view ignores the fact that our nation’s commercial wireless carriers still seek exclusive spectrum in order to be able to maintain quality of service and network control,” he said. The auction showed the paired spectrum blocks are much more valuable to industry than unpaired spectrum, he said. The auction also showed that location matters. "As expected, the licenses covering the top 30 metropolitan areas, which account for approximately 10 percent of the licenses offered, brought in 79 percent of the overall gross revenues. This is nothing against medium- or small-sized markets, but this fact is important as the Commission looks toward the incentive auction and issues raised by potential market impairments.” The auction also showed that mid-band spectrum remains valuable and highlighted the need for the FCC to address its designated entity rules. Dish Network was able to indirectly buy the second most AWS-3 spectrum of any player in the auction at a discounted price through DEs Northstar and SNR Wireless (see 1501300051). He didn't directly cite Dish. This major company was “able to use this structure to outbid not only small businesses and rural telephone companies, but also some of the country's largest wireless providers,” he said. “If these bidding credits are granted, which I take no position on at the current time, the rules would allow these licenses to be ‘flipped’ to another company after five years without repaying a penny of the subsidy.”