FCC OKs Auction Plan Despite Some Concerns

Commissioners approved 4-0 an item that moves the agency closer to a 3.45-3.55 GHz 5G auction starting in early October. A notice proposes a standard FCC auction, similar to the C-band auction, rather than one based on sharing and rules similar to those in the citizens broadband radio service band. The draft public notice got several tweaks, as expected, including offering 10 MHz rather than 20 MHz blocks, but keeps larger partial economic area-sized licenses (see 2103150052). Commissioners Brendan Carr and Nathan Simington concurred on parts of the order because of lingering concerns.

Acting Chairwoman Jessica Rosenworcel said she's already working with other federal agencies on 5G in the 3.1-3.45 GHz band. “While the law compelled certain outcomes in our decision today, it is my hope that our future efforts to find more spectrum for 5G will enjoy the flexibility to explore every option available to us, including the opportunity to pursue more innovative spectrum sharing policies like we have in the CBRS band,” she said.

“We made a meaningful change” by approving 10 MHz blocks, Rosenworcel told reporters. “We did that at the request of smaller carriers who believed that they would have greater ability to participate in this auction with the change in the block size.” Officials said the agency had to stick with PEAs largely because of the agreement on the closing price of the auction, which was negotiated with NTIA during the last administration.

Commissioner Geoffrey Starks, who pressed for 10 MHz blocks, said the FCC had to adopt a standard auction because of Congress’ requirements that the auction start this year and bring in at least 110% of the cost of moving incumbents. It adds "language highlighting the benefits of opportunistic use," he said. “As we have seen in the CBRS band, opportunistic use facilitates more intensive spectrum use by allowing smaller entities to benefit from unused spectrum in a quick and cost-effective manner, particularly in rural areas." The order takes additional steps to protect operations in the adjacent CBRS band, Starks said, citing out-of-band emissions limits and a “good-faith negotiation requirement for [time division duplex] synchronization." The FCC also seeks to protect DOD contractors who use the spectrum, he said.

Carr said the FCC should have dropped rules limiting any bidder to buying 40 MHz of the 100 MHz for sale. “Studies of bidding restrictions imposed by regulators around the world show that these efforts routinely fail to achieve those governments’ goals of determining winners and losers of spectrum auctions,” he said: “They often impose severe costs.” Carr slammed the two-step emissions mask, which was controversial. “We didn’t impose this type of … limit in the C band or the adjacent 3.55 GHz band, and the approach taken here will undoubtedly increase the costs of obtaining equipment and building out,” he said. The U.S. could find itself “on an island, since other countries have not taken this approach.”

Simington also had reservations about the two-step emissions mask, noting it could mean lower bidding. He has concerns about “harmonization" of technical requirements across the midband, he said.

The proposed rules include “the most aggressive build-out obligations of any spectrum auctioned for 5G,” Rosenworcel said: “We insist on getting infrastructure built twice as fast as what the agency has required in other recent 5G bands.” The FCC approaches 3.45 GHz “in a coordinated way, so we don’t end up increasing interference and decreasing the utility of the limited mid-band resources we have available to us,” she said.

The approach was a win for national carriers and a loss for smaller providers. “Licensed mid-band spectrum plays a vital role in enabling our world-leading mobile networks, and we look forward to a successful auction later this year,” said CTIA President Meredith Baker. It's a “great decision on 3.45 GHz that will make much needed full power licensed spectrum available to advance competitive 5G for all Americans,” said Kathleen Ham, T-Mobile senior vice president-government affairs.

“Large PEA-sized license areas, which include densely populated urban areas along with sparsely populated rural areas, will make it nearly impossible for RWA’s members to be successful in acquiring this mid-band spectrum,” said Rural Wireless Association General Counsel Carri Bennet. The approach “begs the question on how to solve the rural digital divide,” Bennet told us: “I wish I could take the FCC to rural America and let them see firsthand what it is like to build a rural wireless network, or even a fiber one.”

“We expect a repeat of the recent C-band auction, in which AT&T and Verizon won 90% of the licenses,” said Michael Calabrese, director of the Wireless Future Program at New America.

“The FCC missed an important opportunity to open up the spectrum to a greater diversity of wireless broadband,” said Louis Peraertz, Wireless ISP Association vice president-policy: “Applying the CBRS General Authorized Access rules and county sizes for an auction of the 3.45 GHz band could have attracted more winning bidders than any spectrum auction using much larger [PEAs], which only the largest mobile companies can afford.”

Meeting Notebook

Rosenworcel appeared to indicate to reporters that news conferences with bureau and office career staff wouldn't return until monthly commissioner meetings are held in person again. Asked by us about the lack of such conferences since the agency shifted to virtual meetings in March 2020, she said she's looking forward to the pandemic being over, and current policies were consistent with what the agency has been doing throughout the pandemic. Rosenworcel said transparency at the FCC is important, and the agency will "make every effort" to make bureau staff available for emailed questions. The last bureau news conferences were at the FCC's last in-person meeting, over a year ago. See our report here.

Carr joked at the start of his news conference that he's glad he's mostly been regularly holding such briefings for reporters, so he didn't attract scrutiny from journalists. Rosenworcel and some other past and present members of the commission haven't recently held regular news conferences. After Wednesday's gathering of regulators, Simington and Starks didn't appear to have hosted any.

Carr told reporters he hasn’t made the “full transition to the minority" of the 2-2 FCC, "although I am very cognizant of the direction that things are trending.” Carr noted he has worked at the FCC since 2012, when Democrats were also in charge. “It’s been going really, really well,” he said, responding to our query: “We have been working with the acting chair, plus our other colleagues, closely on a number of items.” He’s not getting everything he wants, but discussions have been handled “in good faith” under Rosenworcel, he said. “We’ve found a way to work together,” he said: “We’re engaging in a lot of discussion on the floor. We’re communicating. We’re compromising."

Commissioners unanimously approved two national security matters. One establishes further proceedings for deciding whether to revoke China Unicom Americas' Communications Act Section 214 authority, which was granted in 2002 (see 2103020062). The second establishes procedures for deciding whether to terminate Pacific Networks' and its ComNet's Section 214 authority. "The threat to our networks from entities aligned with communist China is one that we must address head-on," Carr said. "We know some countries may seek to exploit our openness to advance their own national interests," Rosenworcel said. "When we cannot mitigate that risk, we need to take action to protect the networks that are important to our national security and economic prosperity." China Unicom is "a distinct, separate legal entity that is subject to, and complies fully with, U.S. laws and regulations," emailed an attorney for the company. "CUA expects a thorough, fair and fact-based review of the company’s conduct by the FCC, and anticipates that engagement between CUA and relevant U.S. government agencies can address any outstanding concerns and ensure the interests of its American and international customers are protected." A representative for Pacific Networks declined to comment.

FCC members unanimously approved a $225 million fine against Texas-based telemarketers John Spiller and Jakob Mears of Rising Eagle and JSquared Telecom for illegal spoofed robocalls, the largest such fine. CEO Spiller said Rising Eagle "never owned or operated with anyone that knew how to make spoofed calls." The company "never possessed the technology to spoof numbers so that is false information," he emailed us. Mears couldn't be reached. They and the companies were accused of making more than 1 billion robocalls offering health insurance products and misleadingly using the names of some of the biggest health insurance companies. Cease-and-desist letters were sent to RSCom, Stratics Networks, Yodel Technologies, Icon Global, IDT and Third Rock Telecom. Rosenworcel also announced creation of the Robocall Response Team, whose first task will be a "top-to-bottom review of our policies, laws and practices to identify gaps we need to close." The commission sent letters to the FTC, DOJ and National Association of State Attorneys General asking for their participation.

Rosenworcel said in a news conference she supports Carr’s calls for an auction road map (see 2103150058). “I’d like the agency to do a lot more work on spectrum auctions and make sure that we can broadcast to the public just when those auctions are going to take place,” she said: “That’s going to take coordination across the government.” Carr was happy Rosenworcel discussed the 3.1-3.45 GHz band and said he expects action probably after 2022. “There’s been a lot of legwork” on the band, he said. With the C band, CBRS and the 2.5 GHz bands in play, the U.S. is making progress on midband, he said.