Wireless Spectrum Auctions

Congress’ clash on spectrum legislation is expected to escalate just before lawmakers leave for the long August recess with a continued lack of bicameral consensus. House Commerce Committee leaders are eyeing potential floor consideration the week of July 25 of the Spectrum Innovation Act legislative package (HR-7624) the panel advanced Wednesday (see 2207130066). Senate Commerce Committee leaders haven’t signed on in support of HR-7624’s approach and are likely to hold a hearing the week of Aug. 1 on renewing the FCC’s spectrum auction authority and other matters the measure addresses. HR-7624 authorizes an FCC auction of up to 200 MHz on the 3.1-3.45 GHz band.

Broadcasters, MVPDs, ISPs and other entities argued over the state of competition in the broadband and video marketplaces and how to address it, in comments posted by Friday’s deadline in docket 22-203 for the agency’s biannual State of Competition in the Communications Marketplace report to Congress, due in Q4. Regulations premised on lack of competition “should be repealed,” said NCTA. The FCC “must consider the real-world consequences of imposing, in a highly competitive marketplace, a burdensome and outdated regulatory regime,” said NAB.

Senate Commerce Committee Chair Maria Cantwell, D-Wash., is continuing to oppose advancing Extending America’s Spectrum Auction Leadership Act (HR-7783) over the measure’s proposed 18-month extension of the FCC’s sales authority, complicating efforts to pass a spectrum legislative package this year. Senate Commerce ranking member Roger Wicker, R-Miss., meanwhile, is backing language in the Senate Armed Services Committee’s FY 2023 National Defense Authorization Act version that proposes “an assessment of the implications of” provisions in the NTIA Organization Act “on DOD's access to the electromagnetic spectrum and resources" (see 2206160077).

Industry experts said some questions remain after last week’s announcement that “key stakeholders in the aviation and wireless industries” agreed to a revised rollout of C-band spectrum around some airports by Verizon and AT&T (see 2206170070). Airlines for America (A4A), which represents major airlines, already questioned the pact in a letter to the FAA.

The FCC gave Dish Network and designated entities SNR Wireless and Northstar Wireless an opportunity to cure control issues in the AWS-3 auction and fair notice of the legal standards it would apply in looking at their claims to be very small companies, said a U.S. Court of Appeals for the D.C. Circuit panel Tuesday, again rejecting challenges by the petitioners of the auction outcome. Oral argument was in January (see 2201140032). The D.C. Circuit in 2017 upheld the FCC's withholding of auction bidding credits to the DEs based on too-close ties to Dish (see 1708290012).

The FAA said Friday “key stakeholders in the aviation and wireless industries” have identified steps that will protect commercial air travel while allowing Verizon and AT&T to turn up the power on 5G C-band radios around protected airports on a case-by-case basis. The carriers agreed to keep mitigation measures in place around some airports for another year or longer. Airlines for America (A4A), which represents major airlines, raised concerns in a Friday letter to the FAA.

NTIA received letters of intent from 39 out of 56 states and territories indicating their interest in participating in the agency’s $42.5 billion broadband, equity, access, and deployment program, said Administrator Alan Davidson Thursday during a Media Institute event. “It’s going really well,” Davidson said: “We’ve been talking about the digital divide in this country for over 20 years … and finally, thanks to the bipartisan infrastructure law and other funding out there, we’ve been given this historic opportunity to really do something about it.”

The 4.9 GHz band appears to be one of the wireless items likely to get further FCC action relatively soon, industry and FCC officials told us. Comments have been in since January on rewriting the rules, and 4.9 has long been a focus of Chairwoman Jessica Rosenworcel. There's also general agreement that the band has been underutilized for a long time.

Inflation is running “at a faster clip” than AT&T expected, and is the biggest concern for the immediate future, AT&T Chief Financial Officer Pascal Desroches warned at a Credit Suisse financial conference Tuesday. Desroches said AT&T may have to consider raising prices for its service plans for a second time this year (see 2205030066). “We built in a fairly healthy level of inflationary expectations into our budget,” Desroches said: “With that said, it's running harder than we thought, and you saw one of the things that we did recently was to raise prices in response. … We're seeing inflation in labor, supplies, energy, transport.” The AT&T executive expressed optimism about the C-band, with the next phase of deployment looming. “Our network is reliable, consistent, and it's better than it's ever been and getting better every day,” he said. He noted the nearly $40 billion of mid-band spectrum the company bought in the 3.45 GHz and C-band auctions: “We expect to deploy that over the next 18 to 24 months and as we deploy, the network will only get better.” Churn was low during the COVID-19 pandemic, as many consumers benefited from stimulus payments, Desroches said. Churn could rise due to inflation, he said. “As I look at the inflationary expectation over the next several quarters, it's hard for me to envision that that's not going to impact the consumers negatively and that we and others will see some pressure,” he said. Wireless competition isn’t increasing, Desroches said. The market has “been competitive for some time” and “remains competitive,” he said. AT&T has been targeting segments of the population that are underserved, he said, citing FirstNet and outreach to Hispanics. “We are being very surgical,” he said. “We have stepped up our investment [in wireless] to match the competitors and that has helped enormously,” he said. Other markets are also growing, Desroches said: “You're seeing kids getting phones at an earlier age. You have older people getting phones that never had them. You're seeing all of a sudden a separation of your work life from your home life, so people [are] getting multiple devices.” New business formation has also been “really strong” since the start of the COVID-19 pandemic, he said. AT&T recently eliminated HBO Max from its premium unlimited wireless plan as a free perk for new customers. Desroches said the carrier is trying out other included features, such as hot spot data, to bring in more customers. “It’s really not anything against HBO Max,” he said: “It’s us trying to drive deeper penetration to different portions of our customer base.”

Top members of the House and Senate Commerce committees are having varying levels of success in moving forward in the coming weeks on spectrum legislation. The House Communications Subcommittee plans to mark up a revised version of the Extending America’s Spectrum Auction Leadership Act (HR-7783) Wednesday along with other legislation, subpanel Chairman Mike Doyle, D-Pa., said in an interview. Senate Commerce leaders, meanwhile, told us they're still grappling with how to move forward on the Improving Spectrum Coordination Act (S-1472) after an amendment fight prompted them to remove it from a markup last month (see 2205250063).