Tweaks Likely to Come for 3.45 GHz Auction Rules

Aides to the other three commissioners have been working with the office of acting Chairwoman Jessica Rosenworcel Monday on possible changes to a public notice proposing rules for an October auction in the 3.45 GHz band, said FCC and industry officials. The order is expected to be approved 4-0. It could get a few tweaks from the draft, officials said. They expected discussions to continue Tuesday.

The most likely change is proposing 10 MHz license sizes, rather than 20 MHz, officials said. The FCC is considered likely to stick with relatively large partial economic area (PEA) licenses, rather than licensing by county. Among the most contentious items are whether to rely on citizens broadband radio service rules rather than hold a more traditional auction, whether the rules should be more closely aligned with those for CBRS, and the right license sizes.

Rosenworcel made the final cuts, but it was on an item where work started before she became acting chair in January, officials said. There has been a significant amount of lobbying, but officials said major changes to the rules could be difficult because the auction has to raise nearly $15 billion to close. Questions were raised whether CBRS rules would bring enough money to pay for the cost of relocating federal incumbents (see 2103120053). Rosenworcel and Commissioner Geoffrey Starks were interested in the use of CBRS-style rules but were boxed in by the statute requiring the auction to start this year, which encapsulated NTIA estimates of band clearance costs, officials said.

If PEAs are used, small rural carriers won't participate, Rural Wireless Association General Counsel Carri Bennet told us. PEAs were supposed to be used only in the 600 MHz auction, but the FCC has continued to utilize them when it decides to award licenses to the top three carriers, she said. “If the FCC wants to use PEAs, it needs more stringent buildout requirements that are geographic-based, not population-based, [because] creating more licenses doesn’t help.” One compromise would be cellular market areas, which are smaller than PEAs but bigger than counties and also break out urban areas from rural areas, she said: “This would allow the larger carriers to buy the urban areas and the rural carriers to buy the rural areas.”

“Unfortunately, by enacting a statutory deadline for an auction limited to this 100 MHz, Congress has boxed a 2-2 FCC into what public interest advocates consider to be bad policy,” said Michael Calabrese, director of New America's Wireless Future Program. “The combination of a statutory deadline and GOP insistence on rules that make the licenses affordable only to the big national carriers means this will be a repeat of the recent C-band auction, in which AT&T and Verizon won roughly 90% of the licenses.”

The FCC is split 2-2, “so there is no choice but to forge consensus,” said Cooley’s Robert McDowell. The item was largely drafted under former Chairman Ajit Pai, with all the current commissioners helping shape it, he said. “The art of compromise is that everyone has to give up something to gain something else, and that’s what is going to happen here.”

“CCA supports full power 5G operations in the band," emailed Competitive Carriers Association President Steve Berry. "We continue to believe that 10 megahertz channels and counties as the license area would promote competition and participation from smaller bidders, which is critically important in meeting the needs of their unique communities, while also addressing the targeted clearing costs for a successful auction.”

"The swift action … to bring the 3.45 GHz band to auction" is "an important step to help close the digital divide and fuel the 5G economy,” emailed Scott Bergmann, CTIA senior vice president-regulatory affairs: “To maximize the potential of this critical mid-band spectrum, we should embrace exclusive-use licenses, cleared spectrum, flexible rights, and harmonized, 5G-friendly rules.”

CBRS general authorized access rules and county-size licenses “would attract a greater diversity of players, such as smaller, rural entrepreneurs, for opportunistic and licensed use,” said Louis Peraertz, Wireless ISP Association vice president-policy: “The result would be more innovation and competition, especially in the hardest to reach areas of our country. And this would help close the digital divide in a taxpayer-friendly manner, correspondingly reducing outlays for federal support in those areas.”

During an American Enterprise Institute webinar Monday, Commissioner Brendan Carr emphasized the importance to 5G of holding the auction this year (see 2103150058). “Hopefully, we’re in good shape to get that done,” he said. The FCC should increase the power levels in the CBRS band to “align the U.S. band plan with international standards and create efficiencies for midband 5G builds in the U.S. that could span the 3.45 GHz to C-band spectrum ranges,” he said. Carr also called for a calendar of future spectrum auctions.