Battling Over 600 MHz Rules

Posted by Sam Churchill on

The battle to shape the rules for the FCC’s 600 MHz auction continued last week as T-Mobile US described how it believed the government should conduct the bidding process.

FCC Wireless Bureau chief Ruth Milkman says that market variation remains a key goal for the FCC’s band plan, and may be the key to holding a successful incentive auction. Milkman says there are a dozen variants on the band plan proposed and that while some may look like a consensus position from 30,000 feet, it is “misleading” to characterize them as a consensus.

In the FCC’s “Down from 51 Reversed” band plan, the FCC would clear broadcast TV channels starting at channel 51 and expand downward; the downlink would begin after a guard band at channel 51, followed by a duplex gap and then the uplink band.

Parties representing a diverse cross-section of the wireless and broadcasting industries have weighed in on this and other technical and policy issues

T-Mobile, as the 4th largest carrier in the US, wants to prevent the nation’s two largest operators – Verizon Wireless and AT&T – from using their financial clout to dominate the spectrum.

T-Mobile US explained its 35×35 MHz Down from 51 band plan in its FCC filing (pdf). T-Mobile USA says their plan represents the “best balance” between maximizing the amount of spectrum available for auction and minimizing the potential for harmful interference.

“Rather than indiscriminately introducing a guard band under all clearing scenarios, T-Mobile’s plan avoids adding a guard band until it is absolutely needed,” the company explained in its June 14 filing. T-Mobile would also largely eliminate unlicensed “white spaces”.

“Under the dynamic market rule, the auction would first proceed with a spectrum-aggregation limit. If the commission’s revenue target is met while the limit is in place, then the auction would be able to close. If the revenue target is not met, the limit would be gradually relaxed. Should the bidding fail to clear the revenue target once the limit is completely removed, the commission would resume the process by starting at the next lower spectrum target with the aggregation limit in place.”

AT&T noted in a blog post earlier this month that the FCC should move forward with a minimum of regulations with a level playing field.

“This approach offers the best prospect for a successful auction that meets all of Congress‘s stated goals, including freeing up the maximum amount of spectrum for mobile broadband use, reducing the deficit, and funding a nationwide public safety network,” explained Bob Quinn, SVP-federal regulatory and chief privacy officer at AT&T, in the post.

Verizon Wireless has also expressed interest in participating in the auction, and the FCC should not pick “winners”.

Consultant Anna-Maria Kovacs, talking up the rights of big carriers, says small bidders did well in the 2008, 700 MHz auction. That auction raised $19 billion for the Treasury. About half of that ($9.36 billion) came from Verizon.

What Kovacs doesn’t mention is that AT&T had already purchased 700 MHz spectrum before the auction. As a consequence, AT&T bought only about half the spectrum of Verizon (paying another $6.64B).

The small bidders paid a total of $2.6 billion, primarily in the A, B and E blocks for about 10% of the spectrum. AT&T and Verizon promptly cleaved them from the herd, locked them out of roaming and watched them die in the wilderness.

Verizon and AT&T are the two “duopoly” owners of 800 MHz spectrum (for 3G) and the duopoly owners of 700 MHz spectrum for LTE. The low frequences travel about 3 times further the PCS spectrum, at 1.9 GHz, where the majority of cellular carriers, including Sprint and T-Mobile USA, own spectrum.

T-Mobile and Sprint, as well as the US Justice Department, have expressed the opinion that AT&T and Verizon should have constraints on owning additional 600MHz spectrum, in order to prevent domination by the two largest carriers. Verizon paid nearly $10B for 20 MHz of 700 MHz five years ago.

Perhaps Sprint would be motivated to buy 20 MHz ($12B), T-Mobile 20 MHz ($12B), and Dish/Google 20 MHz ($12B). That totals $36 billion. If Verizon and AT&T were allowed 10 MHz each (generating a total of $12B), that might add up to $48 billion for 80 MHz. Perhaps then, another 20 MHz could be freed up for rural broadband. Everyone might benefit from ubiquitous broadband — not just a handful of big city police departments.

And by the way, what’s the big idea behind carving up this valuable spectrum into paired frequencies for voice carriers? Isn’t it hugely wasteful in the age of data?

Perhaps the FCC should explain itself to avoid skepticism. Maybe the auction is “rigged” for big carriers who comply with government wiretaps. The DOJ could be caught between a rock and a hard place.

Related DailyWireless stories include; DOJ: Justice at 600 MHz?, T-Mobile Files 600 MHz Proposal – Eliminating “Free” Spectrum, 600-mhz Auction Speculation, FCC: TV Auction in 2014, Facebook Wi-Fi?, Cellcos to FCC: Give Us 2 GHz TV Microwave, Municipal Broadband: On Again?, FirstNet: Get Utilities to Pay for It, It’s Official: Austin Gets Google Fiber, FCC Approves Dish Spectrum for Mobile Broadband , Mobile: The New Television, FCC Moves on TV Frequency Auction, FCC Makes TV Spectrum Sharing Official, FCC Gets White Space Autonomy, Municipal Broadband: On Again?, FirstNet: Get Utilities to Pay for It, It’s Official: Austin Gets Google Fiber, Public Service Gives Up 470-512 Mhz, D-Block Gets a Hearing, National Wireless Initiative, White House: D-Block to Police/Fire, First Responders Get Bills for D-Block , Free Spectrum for Cities: Fergetaboutit, Verizon: Spectrum Scarcity is Good, The National Broadband Plan, Battle of the Bands, Cellcos: One Thing – Bandwidth,

Posted by Sam Churchill on Monday, June 24th, 2013 at 11:01 am .

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