FCC Seeking Extended Auction Authority for Mystery $6 Billion Auction
The FCC’s FY 2018 budget request includes plans for an additional $6 billion spectrum auction, to take place between 2025 and 2027, but offers no more details. Industry lawyers, including former FCC and Capitol Hill officials, said at this stage, the FCC goal may be mostly aspirational and government doesn’t appear to be focused on a particular band. The budget document proposes to extend FCC auction authority to 2027, from a current expiration of 2025. “The Budget proposes to require the auction of additional spectrum by 2027 and further extend the FCC’s auction authority solely to allow this auction to proceed,” it said.
Congress always has given the FCC authority to conduct auctions on a time-limited basis, said a lawyer who represents carriers and other companies. The 2012 Middle Class Tax Relief Act extended FCC auction authority for 10 years, but Congress hasn’t extended the authority since, the lawyer said: If FCC has a band or bands in mind, “they’re not showing their cards.” The agency declined to comment.
"It appears that the proposed FCC budget is designed to help push for congressional action on filling up the spectrum pipeline, which has run bone dry,” said industry Robert McDowell at Cooley and Mobile Future. “Historically, spectrum auctions have had strong bipartisan support, but they take years to craft and execute. The conversation has to start somewhere, however, and budget committee offices are the usual parlors for these kinds of initial talks. Some are hoping that the next round of auctions will focus on federal spectrum, the largest reservoir of prime frequencies."
Relying on auction revenue to help close the funding gap isn’t wise since at some point, technology will mean the need for more spectrum will plateau, said Richard Bennett, network architect and free-market blogger. “The rise of 5G wireless networks will require new spectrum licenses, hence more auctions,” he said. “The FCC is under a great deal of scrutiny, but there’s broad agreement that it’s good at administering spectrum auctions. Ultimately, the demand for spectrum is insensitive to budget priorities so there’s some wishful thinking in the president’s budget.” The mystery band, or bands, could be high-frequency spectrum for 5G, said Roger Entner, analyst at Recon Analytics. “It is pretty safe to assume this auction will come before 2027 and will probably raise more than $6 billion.”
"We are pleased that the Administration recognizes the importance of spectrum auctions,” emailed Scott Bergmann, CTIA vice president-regulatory affairs: “It is critical that we move forward in the short term in the bands already identified by the FCC, while tying future FCC auction authority to specific low, mid, and high band spectrum. The United States remains in a global race to deploy 5G."
The paperwork explains how some auction revenue will be used by the FCC, including for the replacement of “10-year-old old backend database and software components that support the auction application set-up and management.” It said modernization “is critical to conform to current best practices, allow for modular builds, communicate with auction bidding systems and other Commission databases, and enable greater flexibility for future auction development.” The system upgrade will support all future auctions, the FCC said.
The commission also plans to upgrade its auction systems to make them more resilient to attack, the document said. “As recent news headlines have emphasized, the threat of cyber-attacks and security vulnerabilities are very real, and the Commission takes these threats and vulnerabilities very seriously. The FCC will proactively engage security engineers and architects to ensure the modernization of systems in the cloud are secure and adhere to Federal mandates and regulations to include two factor authentication.”
The budget discusses the TV incentive auction transition and pending auctions of 3.5 GHz and high-frequency spectrum. It says the FCC is working on a “persistent data warehouse where it will host the vast amounts of data generated from each auction.”