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.
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 hope to get paid off (by taxpayers) to move off the public airwaves in the 600 MHz band. A sweet deal for billionaire group owners.
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