AWS-3 Auction Surpasses Minimum Price Target

The AWS-3 auction on Monday surpassed the FCC’s minimum target of $10.5 billion. The auction has raised $16.4 billion so far through 15 rounds.


UPDATE: Already, the AWS-3 auction is the FCC’s most successful auction ever, reports FierceWireless. After just six days of bidding it has raised more than $24 billion in provisionally winning bids, surpassing the $13.7 billion raised during the AWS-1 auction in 2006, and the $18.9 billion raised during the 700 MHz auction in 2008. Now some predict the AWS-3 auction could raise more than $30 billion (which it did easily the next day).

AT&T, Verizon and T-Mobile US are expected to grab the lion’s share of spectrum, but Dish Networks and non-U.S. companies including Mexico-based America Movil and Japan’s DoCoMo are among the potential bidders.

Dish Network has cobbled together nearly 55 megahertz of spectrum and has been looking for a wireless partner. The valuation of Dish’s 40 MHz in the nearby AWS-4 spectrum has already sent Dish Network stock rising. Their stock gained nearly 4% on Tuesday to a record high, and Dish was up more than 2%, above 69, in early trading in the stock market today. Dish also bought H-Block airwaves (adjacent to their AWS-4 spectrum), in March, raising $1.56 billion for the Treasury.

The FCC granted Dish flexibility to use 20 MHz of its AWS-4 spectrum at 2000-2020 MHz for uplink OR downlink operations. Dish owns uplink spectrum on the low end of AWS-4, but interference with the adjacent downlink H-block has been a concern.

If Dish is successful in attaining 15 MHz of uplink-only spectrum, then they could then pair it with AWS-4, converting uplink to downlink spectrum. In addition, Dish owns 6 MHz of 700 Mhz for downlink, potentially outflanking AT&T and Verizon in downlink spectrum. Their AWS Block H block could give them device interoperability/roaming with other carriers.

The FCC chose to require that AWS-3 spectrum be interoperable with AWS-1 spectrum, which many carriers currently use for LTE services. AWS-1 runs from 1710-1755 MHz and 2110-2155 MHz, notes Fierce Wireless, but the FCC left it up to carriers to voluntarily have AWS-3 be interoperable with AWS-4 (MSS) spectrum, which Dish Network controls.

Analysts have valued Dish’s airwaves in a wide range, from $7 billion to $17 billion. Whatever wireless firms pay for AWS-3 spectrum in specific markets could help set a value for Dish’s airwaves, analysts say. DISH is also part of three separate bidding consortia: American AWS-3 Wireless I LLC, Northstar Wireless, LLC and SNR Wireless LicenseCo, LLC.

The auction of 50 MHz of paired spectrum has increased evaluations of spectrum, according to New Street research analyst Jonathan Chaplin.

Cash-short but spectrum-rich Sprint will sit out the auction.

The AWS-3 auction is not as straightforward as previous auctions because two chunks of spectrum are currently used by federal agencies, including the Department of Defense. In most cases, federal spectrum users will have to exit the 1695-1710 MHz and 1755-1780 MHz bands or geographically share them with commercial users.

The Report and Order sets flexible-use regulatory, licensing, and technical rules for 65 megahertz of spectrum in the AWS-3 band, which includes the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz bands.

The FCC adopted rules to allocate and license the 1695-1710 MHz band for uplink/mobile operations on an unpaired shared basis with incumbent Federal meteorological-satellite (MetSat) data users.

The other 50 MHz block is more traditional. They will assign AWS-3 licenses by competitive bidding, offering 5 megahertz and 10 megahertz blocks that can be aggregated using Economic Areas (EAs). The FCC’s decision to license only one paired 5×5 MHz block in smaller Cellular Market Areas (CMAs) was disappointing for most competitive carriers.

The Order will make 50 megahertz (of the total 65 megahertz) of the AWS-3 spectrum available for commercial use. The 15 MHz chunk will be available on a shared basis with federal incumbents.

The 1695-1710 MHz band will be unpaired spectrum used for low-power uplink operations. The 1755-1780 MHz band will be licensed for low-power uplink operations and will be paired with the 2155-2180 MHz band, which is unencumbered by federal users, for downlink operations.

The Advanced Wireless Service (3) auction started on Thursday and could last weeks. It’s the first major sale of airwaves since 2008 when the 700 MHz auction raised some $19 Billion for the treasury. That spectrum is now utilized by AT&T, Verizon and others for nationwide LTE service. The current AWS auction will put some 65 MHz of spectrum on the auction block.

Some proceeds of the AWS-3 auction will go toward FirstNet, the stand alone LTE public safety network, on the 700 MHz band.

Related Dailywireless articles include; 70 Companies Qualified for AWS-3 Auction, Dish Wins Everything in H-Block PCS Auction, FCC Sets AWS-3 Auction Rules, AWS-3 Auction Rules: Who Benefits?, Verizon Activates AWS Band , DOJ Sets Conditions for Verizon AWS, Verizon Getting AWS Spectrum Says WSJ, T-Mobile Okayed to Test Spectrum Sharing, Verizon’s Spectrum Deal: Tough Nut, AT&T Buys 2.3 GHz from NextWave, AT&T Wants 2.3 GHz for LTE, FCC to Okay Verizon/Cable Spectrum Buy

Obama Urges Strong Net Neutrality Rules

President Obama today urged the Federal Communications Commission (FCC) to take up the strongest possible rules to protect net neutrality. It represented a rare step by the White House into the policy-setting of an independent agency, reported Reuters.

“An open Internet is essential to the American economy, and increasingly to our very way of life,” said President Obama at the White House today, strongly supporting the concept of “net neutrality“.

Obama is calling for the FCC to enact four rules:

  • A “no blocking” rule where ISPs can’t block lawful Internet traffic.
  • A “no throttling” rule banning the intentional slow down some content.
  • Increased transparency around how ISPs connect to consumers that would potentially address interconnection deals like the ones between Netflix, Verizon, AT&T and Comcast.
  • A “no paid prioritization” rule, where no service would be stuck in a ‘slow lane’ because it does not pay a fee.

“By lowering the cost of launching a new idea, igniting new political movements, and bringing communities closer together, it has been one of the most significant democratizing influences the world has ever known.That is why today, I am asking the Federal Communications Commission (FCC) to answer the call of almost 4 million public comments, and implement the strongest possible rules to protect net neutrality,” said President Obama.

Net neutrality” has been built into the fabric of the Internet since its creation — but it is also a principle that we cannot take for granted. We cannot allow Internet service providers (ISPs) to restrict the best access or to pick winners and losers in the online marketplace for services and ideas.

The FCC on May 15 launched a rulemaking seeking public comment on how best to protect and promote an open Internet. The Notice of Proposed Rulemaking is designed to ensure robust, fast and equal Internet access to providers and users.

At the crux of the debate over Net neutrality is Title II of the Telecommunications Act, explains C/Net. The section, which is more than 100 pages long, regulates how common carriers must conduct business across all forms of communication in order to act “in the public interest.” Net neutrality supporters say that the language is vague and could be used to sidestep a free and open Internet.

In a press release, Chairman Wheeler today said the President’s statement is an important and welcome addition to the record of the Open Internet proceeding.

“Like the President, I believe that the Internet must remain an open platform for free expression, innovation, and economic growth. We both oppose Internet fast lanes. The Internet must not advantage some to the detriment of others. We cannot allow broadband networks to cut special deals to prioritize Internet traffic and harm consumers, competition and innovation.”

“…Keeping the Internet open includes both the Section 706 option and the Title II reclassification. Recently, the Commission staff began exploring “hybrid” approaches, proposed by some members of Congress and leading advocates of net neutrality, which would combine the use of both Title II and Section 706. The more deeply we examined the issues around the various legal options, the more it has become plain that there is more work to do.”

Public internet groups have vigorously opposed Wheeler’s proposal, which prohibited Internet service providers from blocking any content, but allowed deals where content providers would pay ISPs to ensure smooth delivery of traffic, reports Reuters.

Reaction was mixed, with netneutrality supporters largely supporting Obama’s stance and carriers opposed.

  • The Electronic Freedom Foundation said the White House Gets It Right On Net Neutrality.
  • The Internet Association — whose members include Facebook, Netflix, Amazon and others — had previously remained largely mum, said it was in full support of the president’s plan.
  • AT&T’s statement today said, “Today’s announcement by the White House, if acted upon by the FCC, would be a mistake that will do tremendous harm to the Internet and to U.S. national interests.
  • Verizon’s statement said, “Reclassification under Title II, which for the first time would apply 1930s-era utility regulation to the Internet, would be a radical reversal of course that would in and of itself threaten great harm to an open Internet, competition and innovation.”
  • The CTIA and its members said, “…applying last century’s public utility regulation to the dynamic mobile broadband ecosystem puts at risk the investment and innovation which characterizes America’s world-leading $196 billion wireless industry.
  • Comcast’s statement by VP David Cohen said, “To attempt to impose a full-blown Title II regime now, when the classification of cable broadband has always been as an information service, would reverse nearly a decade of precedent, including findings by the Supreme Court that this classification was proper. This would be a radical reversal that would harm investment and innovation, as today’s immediate stock market reaction demonstrates.”

We’re going to get sued,” says a senior FCC official to the Washington Post. “But we want to be on firm legal footing. The litigators in the agency want to be sure to do everything to minimize the legal risk.”

The Verge has gathered additional reactions and TechMeme has more links.

70 Companies Qualified for AWS-3 Auction

The FCC has qualified 70 companies (pdf) to bid on AWS-3 spectrum (pdf). The auction starts Nov. 13 and will be the country’s largest spectrum auction since the $19 billion 700 MHz auction in 2008. That auction was before Apple’s iPhone became a huge hit and the extraordinary growth of data-hungry smartphones. The FCC has set a total reserve price of $10.587 billion for the AWS-3 auction.

The AWS-3 auction is not as straightforward as previous auctions because two chunks of spectrum are currently used by federal agencies, including the Department of Defense. In most cases, federal spectrum users will have to exit the 1695-1710 MHz and 1755-1780 MHz bands or geographically share them with commercial users.

The Report and Order sets flexible-use regulatory, licensing, and technical rules for 65 megahertz of spectrum in the AWS-3 band, which includes the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz bands.

The FCC adopted rules to allocate and license the 1695-1710 MHz band for uplink/mobile operations on an unpaired shared basis with incumbent Federal meteorological-satellite (MetSat) data users.

The other 40 MHz block is more traditional. They will assign AWS-3 licenses by competitive bidding, offering 5 megahertz and 10 megahertz blocks that can be aggregated using Economic Areas (EAs). The FCC’s decision to license only one paired 5×5 MHz block in smaller Cellular Market Areas (CMAs) was disappointing for most competitive carriers. The FCC also left it up to carriers to voluntarily have AWS-3 be interoperable with AWS-4 (MSS) spectrum, which Dish Network controls.

The Order will make 40 megahertz (of the total 65 megahertz) of the AWS-3 spectrum available for commercial use. The 15 MHz chunk will be available on a shared basis with federal incumbents. The 1695-1710 MHz band will be unpaired spectrum used for low-power uplink operations. The 1755-1780 MHz band will be licensed for low-power uplink operations and will be paired with the 2155-2180 MHz band, which is unencumbered by federal users, for downlink operations.

Verizon Wireless and AT&T will likely be major bidders of AWS-3 spectrum, but the two dominate carriers did not get their wish to have two chunks of 10Mhz X 2. Instead, the auction will include three 5×5 megahertz options, and just a single 10×10 megahertz license covering the country, notes RCR Wireless. Verizon, AT&T and T-Mobile US as well as Dish Network are qualified to bid, along with dozens of smaller carriers, investment firms and private entities. Sprint said in September that it will sit out the AWS-3 auction.

Steve Berry, president of the Competitive Carriers Association was not impressed. “The use of the larger Economic Areas (EAs) will likely curtail participation among smaller carriers, who have neither the resources nor the scale to bid on license areas of that size.”

Congress has mandated the AWS-3 spectrum be auctioned by February 2015.

The FCC also chose to require that AWS-3 spectrum be interoperable with AWS-1 spectrum, which many carriers already use for LTE services. AWS-1 runs from 1710-1755 MHz and 2110-2155 MHz, notes Fierce Wireless, but left it up to carriers to voluntarily have AWS-3 be interoperable with AWS-4 (MSS) spectrum, which Dish Network controls. That will likely mean phone sold by the big carriers will shut out Dish.

Dish controls more than 50 MHz of spectrum, including 40 MHz in the AWS-4 band and 10 MHz of the 1900 MHz PCS H Block, part of which is adjacent to AWS-4. It also owns a large block of unpaired 700MHz “E-Block”, which was originally planned for MediaFLO broadcast-type service. That 700 MHz spectrum (adjacent to the “A block” downlink), would now likely be used for LTE – potentially causing less interference to “A block” licensees.

The FCC also recently announced they will delay the start of the 600 MHz broadcast TV auction from mid-2015 to early 2016, due to broadcasters’ court action. The 600 MHz auction will be the big one, with lots of valuable spectrum likely to be available between TV channels 52-69. Unlike cellular carriers, broadcasters do not pay the government for use of spectrum. That’s because they’re still considered a “public service” by the federal government even though only 5-10% of the population still depend on over the air broadcast television. Broadcasters would get paid off to move off (our) public airwaves in the 600 MHz band.

If fully realized, the 600 MHz auction could bring in $45 billion. From that sum, the FCC will deduct $7 billion: $250 million to run the auction; $1.75 billion to reimburse broadcasters for expenses during the repacking of spectrum assignments; $5 billion to establish the “FirstNet” high-speed public safety network for first responders.

The FCC established an outlay of up to $38 billion to broadcasters, based on the recovery of 126 MHz of spectrum and AT&T’s pledge to spend $9 billion in the auction if its acquisition of DirecTV is approved. If, as some observers expect, only two- thirds of that goal (about 84 MHz of airwaves) is relinquished, the pay-out would be about $26 billion at top valuations. A portion of the reclaimed airwaves will not be sold to wireless carriers; about 26 MHz will be retained for use as guard bands and buffers between broadcast and wireless services sharing the bands. Those may be used for unlicensed White Space data transmission.

The AWS 3 auction could reveal disruption in the comfortable 4 carrier status quo in the United States. Dish Network is “cautiously optimistic” that its fixed-mobile broadband trials, currently running with Sprint and nTelos, will turn into a “real business.” For example, Google and Dish could acquire AWS-3 (for roaming compatibility) and launch a 5th nationwide wireless service. Perhaps Google Wireless could deliver cable-like services with enough spectrum.

Related Dailywireless articles include; FCC Sets AWS-3 Auction Rules, AWS-3 Auction Rules: Who Benefits?, Dish Wins Everything in H-Block PCS Auction, Verizon Activates AWS Band , DOJ Sets Conditions for Verizon AWS, Verizon Getting AWS Spectrum Says WSJ, T-Mobile Okayed to Test Spectrum Sharing, Verizon’s Spectrum Deal: Tough Nut, AT&T Buys 2.3 GHz from NextWave, AT&T Wants 2.3 GHz for LTE, FCC to Okay Verizon/Cable Spectrum Buy, 700MHz: Money Talks

Google Fiber Going Wireless?

Google has applied to the FCC for permission to begin wireless spectrum tests in the San Francisco area. According to Reuters, the company’s looking into a rarely-used millimeter wave frequency that is capable of transmitting large amounts of data, but only if the receiving equipment is in the line-of-sight.

Google reportedly may offer a fast wireless service in markets where it offers Google Fiber Internet and TV service. By beaming Internet services directly into homes, Google would open a new path now dominated by Comcast, Verizon and AT&T.

The Google wireless test, beginning Nov. 13, will apparently include three sites in the San Francisco Bay Area, including one in San Mateo county and two locations a half-mile apart which appear to be on Google’s Mountain View, California campus. It will use the 5.8 GHz frequency, the 24.2 GHz frequency and the millimeter wave bands of 71-76 GHz and 81-86 GHz, according to the application.

The FCC’s meeting on Friday discussed the use of wireless spectrum above 24 GHz for mobile services, including ways the agency can facilitate the development and deployment of technology. Their Notice on Inquiry looks at utilizing frequencies above 24 GHz for mobile use and “5G” applications. The FCC also adopted a Report and Order to facilite and clarify the use of public infrastructure for wireless transmitters.

Google bought Alpental Technologies in June, a stealthy Seattle startup led by ex-Clearwire researchers. Apparently Alpental will utilize 60 GHz 802.11ad and mesh networking.

The FCC loosened some rules governing the 60GHz band last year, saying that it could be used to provide wireless connections of up to a mile at speeds up to seven gigabits per second.

A wireless broadband network is cheaper than fiber. Rather than digging up roads and laying cables to each individual home, transmitters on nearby buildings could enable Google to bring Gigabit internet to more places in less time. Craig Barratt, the former Atheros Communications CEO, is now head of the Google Access and Energy division. He signed off as the authorized person submitting Google’s FCC application.

FCC Prepares for AWS-3 and 600 MHz Spectrum Auctions

The FCC claims there are no limitations on bidding eligibility for the upcoming AWS-3 auction, scheduled to start on Nov. 13th. The AWS auction will be the most significant airwaves auction since the 700 MHz auction in 2008. Verizon, AT&T and T-Mobile, as well as Dish Network are on the list of bidders released by the FCC. A total of 80 entities submitted initial applications.

There is currently 50 megahertz of spectrum set to be auctioned off for commercial services in those proceedings, which have garnered interest from most commercial operators. The spectrum license will include three 5×5 megahertz options, leaving just a single 10×10 megahertz license covering the country.

The FCC adopted rules to allocate another 15 MHz and license the 1695-1710 MHz band for uplink/mobile operations on an unpaired shared basis with incumbent Federal meteorological-satellite (MetSat) data users.

RCR Wireless News spoke with CCA President and CEO Steve Berry at the Competitive Carrier event in Las Vegas to get his view on how the FCC was handling the auction proceedings.

In July, the FCC and the NTIA issued a 43-page public notice outlining coordination procedures for the AWS-3 bands.

Meanwhile, FCC continues to make progress on crafting rules for the planned 600 MHz incentive auction (pdf), this week rolling out an information package (pdf) targeted at television broadcasters, RCR Wireless News.

The auction is scheduled for mid-year 2015, but several parties, including the National Association of Broadcasters, have challenged the auction in court, which could potentially push back that timetable.

FCC Chairman Tom Wheeler has said the greatest challenge for the planned 600 MHz incentive auction process will be in convincing broadcasters to participate in the “reverse” auction process, noting at a recent speech that the opportunity was a once-in-a-lifetime chance to garner financial compensation for underutilized airwaves.

NAB’s members say they will lose coverage area during the auction’s repacking and reassignment process, or be forced to participate in the auction (and relinquish broadcast spectrum rights),” the NAB lawsuit stated.

Broadcasting & Cable calculated $38 billion would wind up in TV broadcasters pockets after the FCC funded the FirstNet emergency responder network and paid the auction costs as well as the TV stations moving expenses as they relocated to new frequencies.

The auction is estimated to generate as much as $45 billion. Some $19.5 billion was raised in the 2008 auction of 700 MHz spectrum. But the 2008 auction was for nearly half the spectrum and before the smartphone’s huge impact on bandwidth.

Wheeler took to the stage at the recent Competitive Carriers Association and CTIA trade shows to encourage mobile operators to participate in the 600 MHz proceedings, which are currently scheduled to begin in mid-2015.

If everything does goes according to the FCC’s plans, about 100 MHz of airwaves would be freed up for commercial mobile broadband services like LTE. The remaining 26 MHz would become guard bands between broadcasters and uplink and downlink transmissions, but that spectrum would also be made available for white space broadband uses.

Mobile Carriers Object to Increased Net Neutrality Rules

This week speec FCC Chairman Tom Wheeler hinted the agency is considering net neutrality guidelines that would apply to wireless carriers. In its original guidelines, the FCC drew a line between wired and wireless networks, getting wireless operators off the hook due to their limited spectrum.

Wheeler highlighted Microsoft’s letter to the FCC, saying the software giant wrote that we are living in a “mobile first” society in which mobile devices are the primary path to the Internet for many people.

Microsoft is advocating for net neutrality rules for the mobile Internet that will follow the guidelines established in the FCC’s 2010 Open Internet Order. That order prevented Internet service providers from blocking or slowing the delivery of packets on their networks.

Executives from the nation’s top wireless carriers were quick to unanimously rejected arguments that wireless networks should fall under the same net neutrality guidelines as wireline networks, reports Fierce Wireless.

Leonard Cali, senior vice president of global public policy for AT&T, said it would “chill innovation.” Cali made his comments here at the 4G World event, held in conjunction with the CTIA Super Mobility Week trade show. Cali argued that applying stricter net neutrality guidelines onto wireless carriers would cause them to either seek FCC approval for virtually every action, or would cause them to pay fines.

“It’s an incredibly complicated system,” argued Bruce Gottlieb for SoftBank. Gottlieb said that, during the past few years, device and platform companies like Apple, Samsung and Google have gained more control over the mobile user’s experience, although why that would apply was less clear.

Luisa Lancetti, chief counsel of law and policy with T-Mobile US, argued, “The core difference between fixed networks and mobile networks has not changed.”

On Wednesday, during Internet Slowdown Day, more than 10,000 sites participated in the action by placing spinning “loading” symbols on their web pages, according to Fight for the Future, a public advocacy organization.

The spinning symbols were meant to imitate a slow-loading site, a protest criticizing the FCC’s proposal to allow ISPs to charge websites for faster access to home Internet subscribers—a decidedly anti-net neutrality rule.

FCC Chairman Tom Wheeler has proposed rules that would allow ISPs to charge content companies to ensure their websites or applications load smoothly and quickly, as long as such deals are deemed “commercially reasonable.”
The FCC is currently considering a proposal for rules for the Open Internet that would establish that behaviour harmful to consumers or competition by limiting the openness of the Internet will not be permitted. The proposed rules would ensure:

  1. Transparency: That all ISPs must transparently disclose to their subscribers and users all relevant information as to the policies that govern their network
  2. No Blocking: That no legal content may be blocked
  3. No Unreasonable Discrimination: That ISPs may not act in a commercially unreasonable manner to harm the Internet, including favoring the traffic from an affiliated entity.

Wheeler has recently appeared to be warming up to increased net neutrality rules.

Thirty-three companies including Cisco, Intel, Alcatel Lucent, Ericsson, and Nokia’s NSN, joined activists, lawmakers and companies debating how the U.S. government should regulate Internet service providers. Critics, including Netflix and numerous advocacy groups, argue the plan would threaten less deep-pocketed content providers by potentially relegating them to “slow lanes” on the web.