Things Get Messy as FCC Tackles First 5G Spectrum Auction

The upcoming wireless auctions this fall are a first for the FCC as the agency intends to make high-band spectrum available for next-generation wireless use.

While all four Commissioners agreed to get going on the November auctions of Upper Microwave Flexible Use Service licenses in the 28 and 24 GHz auctions, fault lines were exposed as they discussed procedural issues during the Thursday vote. Commissioner Michael O’Rielly was glad, “to be putting the final few pieces of the puzzle in place.” He noted these auctions have unique issues the agency hasn’t handled before because they will be the first auctions for flexible use licenses in the millimeter wave bands.   

Several parties said the upfront payments initially being discussed “were too high for smaller markets, based on recent secondary market transactions and the projected high cost of millimeter wave buildouts in rural areas,” he said. That’s why the agency adopted a tiered approach. Commissioners propose capping bidding credits at $25 million for small businesses and $10 million for rural service providers. Others had concerns the licenses will be sold “too cheaply,” O’Rielly said. “If we find problems,” with the pricing in the first auction “we can fix them” before the next one begins.

Bidding in the 28 GHz auction is slated to begin November 14; the 24GHz bidding begins once the prior auction is over. The 1.55 gigahertz of spectrum available in these auctions would be licensed on a geographic area basis, with 28 GHz licenses offered in two 425-megahertz blocks by county and 24 GHz licenses offered in seven 100-megahertz blocks by Partial Economic Area.

But Commissioner Jessica Rosenworcel, now the lone Democrat on the panel, said the procedures depend too much on past auctions and the FCC needs to be more brave. The majority of comments asked the agency not to schedule concurrent auction filing windows, “and yet today, we do just that,” she said.  

“Mid-band spectrum auctions are already being held abroad. The U.S. risks falling behind.” She added the agency is “haphazardly scheduling” auctions of mid-band spectrum. “We need to be bold and willing to take into consideration new auction rules.”

FCC Chairman Ajit Pai countered that: “We’re not stopping with these two auctions,” noting there will be auctions for 37, 39, and 47 GHz spectrum in the second half of 2019. “We will push almost 5 gigahertz of spectrum into the marketplace over the next 17 months. The agency is also reforming wireless infrastructure rules to ensure that the small-cell and fiber-based networks of the future can be built.” He’s repeatedly reminded his colleagues that: “All the 5G spectrum in the world is pointless” if 5G networks aren’t actually built.

August 6, 2018                       

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