Incentive Auction and Mobile Spectrum Holdings Report and Orders - Responses from Industry and the Public
As discussed in our post earlier today, the Federal Communications Commission yesterday adopted long-awaited rules governing the 600 MHz incentive auction and spectrum-aggregation proceedings. Interested parties throughout the wireless industry, including wireless carriers, industry associations, and public interest groups, issued statements regarding their thoughts about the new rules. We’ve assembled many of those statements here so you wouldn’t have to.
The following may be attributed to Jim Cicconi, AT&T Senior Executive Vice President of External and Legislative Affairs:
“AT&T has long argued that the FCC should adopt a spectrum aggregation and incentive auction framework that will encourage all carriers to participate vigorously in the upcoming auctions. We specifically supported broad participation in the incentive auction, as contributions from the entire industry will be necessary to make the auction a success. And we believed that the right framework would allow the Commission to send a clear message to broadcasters that they should bring as much spectrum as possible to the auction as there will be sufficient revenue to pay for their contributed licenses.
“Today, the Commission adopted rules and an auction framework that puts the auction on the path toward success. While many important issues remain to be resolved, we believe that the spectrum aggregation and auction rules adopted today represent a significant step forward and will demonstrate to broadcasters that the incentive auction can and will attract significant carrier interest and demand. And while we have long opposed auction restrictions and set asides, the compromise framework will give AT&T a fair shot to participate at auction for a meaningful 600 MHz footprint. For these reasons, we support the auction framework.
“The steps taken by the FCC today are substantial.
“First, the spectrum aggregation screen was updated and rationalized, and now counts the full array of spectrum actually in use by wireless carriers today. This will hopefully put to rest the long-standing spectrum aggregation battles that emerged in almost every transaction.
“Second, the FCC set rules in place for a successful AWS3 auction. While much work remains to bring that spectrum to market, AT&T anticipates that it will participate meaningfully in that auction to supplement its spectrum portfolio.
“Third, on the 600 MHz auction, the FCC adopted eligibility rules that will foster a more competitive bidding process while ensuring a multiplicity of licensees in the new 600 MHz band.
“Under the FCC’s proposed framework, the bidding must reach a threshold of success before the auction can close. In addition, no eligibility restrictions would apply until this threshold is met.
“As we noted in a recent filing, we think a reasonable threshold would be $1.50 MHz/POP, which means the auction of a nationwide 10×2 MHz license would be expected to yield at least $9 billion in revenue. At that threshold, 600 MHz spectrum would be an attractive opportunity for AT&T.
“AT&T believes that the framework adopted today will give AT&T a fair opportunity to expand its LTE footprint to benefit consumers in all markets, and AT&T remains committed to auction success and anticipates that it will participate broadly. Although we expect bidding at auction to be competitive, we anticipate that, depending on auction dynamics and pricing, AT&T will bid to obtain between 20 and 40 MHz of spectrum nationwide.
“Finally, we believe that a threshold price of $1.50 MHz/POP will attract significant broadcaster interest, as it should, so that an initial clearing target of 70 MHz or more is very likely. Although the Commission’s draft order contemplates rules for a 40 or 50 MHz auction, given industry demands and capacity challenges, AT&T considers those scenarios unlikely to occur.
“In short, the 600 MHz auction represents an enormous opportunity for the wireless industry to obtain new and valuable spectrum licenses to satisfy consumer demand for new and innovative mobile services. The order adopted today represents a significant milestone for FCC progress. And AT&T intends to participate actively and meaningfully in the auction to ensure that it is a success for all participants.”
C Spire Senior Vice President Eric Graham responded to the FCC’s adoption of processes governing the Broadcast Television Spectrum Incentive Auction:
“C Spire is pleased the Commission has adopted the processes governing the 600 MHz spectrum auction. The Reports and Orders summarized at today’s Open Meeting can be a significant step towards restoring competition in the wireless industry.
“Based on our understanding of the Reports and Orders, we believe the policies established today will improve competition in the wireless industry and boost all consumers’ access to innovative mobile broadband services, as well as increase the likelihood that C Spire will participate in the 600 MHz auction.”
Lawrence R. Krevor, Vice President – Spectrum, Legal and Government Affairs, said:
“We appreciate the Commission’s diligence in creating an auction structure that fosters competition and recognizes the special competitive utility of low-band spectrum. By establishing market-based reserves, the 600 MHz Incentive Auction rules enhance the ability of small carriers to bid on critical low-band spectrum.
“We are disappointed, however, that in revising its spectrum screen the Commission did not recognize the varying impact of commercial spectrum bands on broadband competition. As a result, the revised spectrum screen will not help the Commission identify transactions that warrant a more detailed competitive analysis.
“We will fully review the decisions announced today to determine Sprint’s next steps.”
Kathleen Ham, Vice President, Federal Regulatory Affairs said:
“T-Mobile appreciates the FCC’s vote today moving ahead with the incentive auction and spectrum aggregation proceedings. While we would have preferred the FCC to reserve more spectrum for competitive carriers, we are hopeful the auction rules will enhance competition and benefit consumers. We also thank the staff of the FCC for their many months of hard work and look forward to working with the FCC and industry stakeholders toward a successful auction.”
The Federal Communications Commission today approved rules governing its spectrum screen and the upcoming incentive auction. As part of this two-sided auction, broadcasters will have an opportunity to relinquish spectrum, which will then be put out for bid. The following statement should be attributed to Craig Silliman, Verizon senior vice president, public policy:
“We are pleased that today’s order aligns the FCC’s spectrum screen with current marketplace realities. For far too long, the screen has been woefully under-inclusive. By counting all providers’ broadband spectrum equally, the FCC’s decision will help ensure that all carriers have the opportunity to acquire the spectrum necessary to serve their customers.
“We look forward to additional spectrum coming to market to meet consumers’ ever expanding demand. The FCC’s recent actions to adopt even-handed rules for the upcoming AWS-3 auction together with today’s progress on the incentive auction are important steps forward in meeting wireless customers' needs.”
Today’s FCC passage of the Incentive Auction Report and Order will lay the groundwork for the app industry to continue its remarkable growth.
ACT | The App Association is pleased that the FCC is advancing the auction process to provide much needed spectrum for the wireless industry. Spectrum is the lifeblood of the mobile app ecosystem. More spectrum is critically needed to provide consumers a robust wireless infrastructure capable of handling the surging demand for mobile content. Although the framework agreed upon today may not be perfect, we are pleased that this process will be able to move forward to the benefit of both consumers and mobile app makers.
The following statement can be attributed to Gary Shapiro, president and CEO, Consumer Electronics Association (CEA), regarding today’s Federal Communications Commission’s (FCC) vote on rules for the broadcast television spectrum incentive auction:
“Today’s vote is a milestone for American consumers, industry and innovation. By approving the rules for the world’s first TV broadcast voluntary spectrum incentive auction, the FCC has taken a crucial step toward unleashing valuable spectrum to help fuel our growing demand for ‘anywhere/anytime’ connectivity.
“Now, it’s up to broadcasters to work with the FCC and industry stakeholders to ensure that the auction is a success. We’re facing a nationwide spectrum shortfall and the number of American homes that watch over-the-air programming remains at all-time lows. The spectrum auction presents a tremendous opportunity to free up this much-needed resource.
“We applaud Chairman Wheeler, the commissioners and dedicated FCC staff for their commitment to U.S. innovation and the wireless economy. And we look forward to working with the commission to expand access to both licensed and unlicensed spectrum.”
Today, in its Open Meeting, the Federal Communications Commission (FCC or Commission) adopted rules for the 600 MHz incentive auction. CCA commends the Commission for implementing a competitive framework for the auction, including adopting geographic license sizes in Partial Economic Areas (PEAs), creating a spectrum reserve and allowing all carriers a meaningful opportunity to participate in the auction.
In a statement, CCA President & CEO Steven K. Berry said, “I commend Chairman Wheeler and the Commission for adopting rules for the upcoming incentive auction that will promote competition and benefit public safety, the economy and consumers. Today’s decision is historic and very positive for competitive carriers, especially smaller and rural carriers, and I applaud the Commission for their steadfast work on behalf of competition. Creating a spectrum reserve will allow every carrier, large and small, the opportunity to bid in the auction, which is critically important given the superior propagation characteristics of low-band spectrum. As Commissioner Clyburn notes, the auction’s ‘competitive structure helps to ensure that [the FCC’s] policies are best able to promote more competition in rural markets.’”
“Additionally, utilizing geographic license sizes in PEAs will allow carriers to bid on spectrum licenses that make good business sense for their company and allow companies to focus on rural areas. This is a good day for consumers, competitive carriers, public safety, taxpayers and the economy. Chairman Wheeler and the Commission should be commended for their work, and I look forward to our continued work on this important competitive issue.”
In a crucial vote that impacts all mobile phone users and those who access the Internet through a wireless connection, the FCC adopted rules for its upcoming 600 MHz spectrum incentive auction that include partial reserve blocks, for which the two dominant carriers may not be eligible in all markets.
While today’s decision includes larger unreserved blocks than originally recommended by staff, this plan opens the door for some winning bids by smaller national, rural and regional carriers. The low-band spectrum up for auction is especially valuable because it is less expensive to deploy and reaches more locations with higher quality services at lower cost. Coupled with a fair compromise on the sizing of geographic market areas, and an updated screen in the spectrum holdings docket, this is on balance a good day for mobile wireless competition.
The Commission's concurrent designation today of modest uniform blocks of spectrum on a nationwide basis for unlicensed use is good news for fixed wireless innovation and competition.
The Computer & Communications Industry Association has been an advocate for competition in the telecom industry since the 1980s. The following can be attributed to CCIA President & CEO Ed Black:
“This incentive auction is a once in a generation opportunity for the FCC to ensure the wireless broadband market is competitive, which keeps prices lower for consumers, motivates better service and encourages innovation.
“We are pleased the FCC took a stance for consumers in the face of political pressure to just turn over more spectrum to the two dominant carriers. The adoption today of pro-competitive limits on low-band spectrum aggregation allows the largest carriers to participate in the auction on a nationwide basis while preventing them from sweeping up all of the frequencies available, which would only support a duopoly.
“Having new spectrum for wireless broadband is increasingly critical for the future of mobile communications. It impacts everything from how well people can access mobile Internet connections to what they pay for them.
The following can be attributed to CCIA Vice President Cathy Sloan:
“A competitive bidding process that encourages the broadest participation will generate the largest auction revenues. Low-band spectrum reserve blocks will promote participation from carriers of all sizes, benefitting consumer choice and coverage in both urban and rural areas.”
“Crafting rules for the incentive auction presented the FCC and its impressive multidisciplinary task force with an unprecedented challenge and we applaud the outcome that is supportive of the public interest and the vitality of non-dominant carriers.”
After the FCC's May Open Meeting, please attribute the following statement to CTIA-The Wireless Association® President and CEO Steve Largent:
"CTIA commends FCC Chairman Tom Wheeler, the Commissioners and the Incentive Auction Taskforce for their leadership in shepherding this Order that represents a significant step toward implementing a 'win-win' for consumers and the U.S. economy. This historic effort has the potential to unleash vital spectrum to meet ever-increasing consumer demand for mobile broadband services, spur investment and innovation and maintain our global leadership in mobile broadband. As a result of the Commission's and Congress' hard work, American consumers and businesses will benefit from a new generation of wireless services and offerings built on the foundation of new mobile broadband spectrum. We look forward to working closely with the FCC Commissioners and staff to resolve outstanding issues well in advance of the incentive auction so that this first of its kind auction occurs by mid-2015.
"CTIA's members remain committed to an open Internet and a vibrant wireless ecosystem because that's what consumers want. The U.S. wireless industry leads the world in mobile broadband and in next-generation networks, LTE subscribers and the app economy, and American consumers are experiencing huge benefits. The defining characteristics of wireless broadband are that it is fast-evolving, still-developing, and robustly competitive, and we urge policymakers to not impede the wireless industry's virtuous cycle of investment and innovation.
"As we've said before, wireless remains inherently different from other forms of broadband, whether considering that spectrum needed to fuel wireless broadband is finite, the additional network management required to provide a high quality experience in a mobile environment or the numerous competitive choices available for mobile broadband consumers. In fact, 98 percent of Americans have at least three or more providers to choose from. While we will carefully review the Commission's Notice of Proposed Rulemaking, we are deeply concerned about proposals that would impose anachronistic Title II regulation on any broadband Internet access offerings. Rotary-phone era regulation has no place applying to next-generation, wireless broadband services and would deter investment in network infrastructure, inhibit innovation and undercut U.S. competitiveness, all to the detriment of American consumers."
Today, the Federal Communications Commission adopted rules for the broadcast spectrum incentive auction and addressed issues regarding mobile spectrum holdings.
The following statement should be attributed to Mobile Future Chair Jonathan Spalter:
“With sharply increasing consumer wireless usage and data consumption, it is critical to move forward to repurpose spectrum to meet this demand and advance continued opportunities for mobile innovation and wireless consumers.
“Our nation’s mobile future hinges on the success of the ground-breaking broadcast incentive auction to free airwaves from legacy inefficient uses and repurpose them for mobile broadband consumers. This process has the potential to make significantly more spectrum available to all wireless consumers, while affording a range of business opportunities to broadcasters. To ensure success, this auction must encourage and support broad participation from both broadcasters and wireless network operators.
“The Commission should not be subsidizing well-funded companies who are more than capable of competing without special favors or privileges from the U.S. government or American taxpayers. Open auctions have proven time and again to be the most successful policy approach for the American people.
“We appreciate the Commission’s recognition today that more spectrum that is usable and available for mobile should be counted in the spectrum screen to ensure fair and healthy competition in the wireless sector. This is a significant improvement over the Commission’s existing approach and will allow for the continued growth of a dynamic secondary market in this vital national resource.”
In response to the FCC's 3-2 approval of an order that adopts key policies and rules for the broadcast television spectrum incentive auction, the following statement can be attributed to NAB Executive Vice President of Communications Dennis Wharton:
"While NAB acknowledges the incredibly hard work by FCC staff, we are disappointed that today's vote fails the mandate of Congress to hold harmless those broadcasters who choose not to participate in the spectrum auction.
"Simply put, a deeply-divided Commission chose not to fulfill required obligations under the Spectrum Act. It adopted new coverage and interference software that has not yet worked, potentially jeopardizing hundreds of TV stations and millions of over-the-air television users. It takes for granted that the yet-to-be-released auction and repacking software will work flawlessly. The FCC cavalierly concluded that broadcasters forced into a shrunken TV band won't be guaranteed full compensation for this disruptive move - as was the express intent of Congress.
"The order today threatens diverse programming sources and diminishes a vibrant free and local news, entertainment and information source for millions of Americans who can't afford $200 a month pay TV and broadband bills. NAB will pursue every avenue to get the auction back on track and ensure that broadcasters and our viewers are protected -- as Congress mandated in the Act."
The Telecommunications Industry Association (TIA), the leading association representing the manufacturers and suppliers of high-tech communications networks, today applauded the Federal Communications Commission (FCC) for taking important steps towards a first-of-its-kind voluntary incentive auction.
“This is another important moment for American consumers who are tethered to their smartphones and tablets,” said Grant Seiffert, president of TIA. “The FCC is setting out the rules under which spectrum being voluntarily relinquished by television broadcasters will be made available for mobile broadband use. This spectrum is essential for industry to keep pace with exploding demand and with the rapid pace of innovation in the mobile ICT marketplace.”
Seiffert continued, “The incentive auction represents another critical step towards the national goal of making 500 MHz of new spectrum available to satisfy America’s thirst for mobile broadband. Moreover, maximizing revenue from the auction is also essential for funding FirstNet, the interoperable national public safety broadband network. TIA looks forward to reviewing the rules adopted today and working with the Commission as it strives to hold the auction by mid-2015. Chairman Wheeler and his fellow commissioners, as well as Congress, are to be congratulated for their actions that have led to today’s important steps.”
Public Interest Groups
Today, the Federal Communications Commission (FCC) adopted a plan for the upcoming "Incentive Auction" of television spectrum, under which broadcasters willing to give up some or all of their spectrum rights for auction will receive a portion of the auction proceeds. The incentive auction includes something called a "band plan," that has implications for the unlicensed use of spectrum
The band plan will also protect three other important services that also operate in the existing TV bands on empty TV channels: unlicensed TV white spaces devices (sometimes referred to as "Super WiFi"), wireless microphones, and wireless medical telemetry devices. The plan would ensure that at least 20 MHz will be available in each market for these three services to share, subject to a further rule-making by the FCC to set the rules for sharing without interference.
The following statement may be attributed to Harold Feld, Senior Vice President, Public Knowledge:
"For 5 years, Public Knowledge has supported the concept of the Incentive Auction as a way to provide much needed spectrum for mobile broadband, expand the opportunity for unlicensed use in this powerful frequency band, while still protecting broadcast television and other services that also use band.
"The band plan for the Incentive Auction adopted today gives the American people a win-win-win of more licensed spectrum for mobile services, more open spectrum for 'Super WiFi' devices, while protecting broadcasters and other legacy uses of the TV spectrum. Open spectrum use such as WiFi already contributes more than $200 billion dollars a year to the American economy, and demand for more open spectrum continues to grow exponentially. The Commission's action today provides a way forward to meet this continued demand for better and more powerful WiFi and make possible the kind of innovation in devices and services that have given open spectrum the nickname "the innovation bands."
"We still have a difficult summer ahead of us, developing the rules for sharing the open spectrum with other services such as wireless microphones for mobile news gathering. Had those with exclusive licensees responded to repeated offers from the unlicensed community to work together, we could now be much further down the road. Hopefully, the National Association of Broadcasters and other legacy users of the broadcast band, that continue to enjoy free exclusive use of the public airwaves will recognize that they can, in fact, share the public airwaves with the actual public.
"I want to express my personal thanks to Chairman Wheeler for his courage and leadership. Time and again, resisting pressure to take the easy way out and throw open spectrum under the bus. Wheeler forced all parties and FCC staff to go back to the drawing board to find a way to thread the needle and deliver the "triple win" of more licensed spectrum, more open spectrum, and a vibrant free over the air television service.
The following statement should be attributed to John Windhausen, Executive Director of the SHLB Coalition:
“The SHLB Coalition is pleased that the FCC has recognized the value of unlicensed spectrum for anchor institutions and their communities. Unlicensed spectrum can provide schools, libraries, health care providers, higher education, community-based media, local governments and other anchor institutions an affordable option for their wireless broadband needs. The spectrum below 700 MHz is especially valuable, and we look forward to working with the FCC and with the industry to make the most of this opportunity to promote wireless broadband to anchor institutions and communities all across America.”
Today, the Federal Communications Commission (FCC) approved an order that sets the stage for an incentive auction that can advance both licensed and unlicensed wireless broadband. The FCC has found a compromise that will allow it to auction large bands for licensed wireless services while still permitting innovations in unlicensed technologies in at least three channels in every community in the nation. By ensuring that American consumers, businesses, schools, libraries, anchor institutions and local governments will have access to these three unlicensed channels across the country, the FCC has laid the foundation for the investment and innovation needed to develop a new class of 600 MHz unlicensed technologies.
WifiForward congratulates the FCC on this substantial achievement. But far more work remains to turn the promise of the 600 MHz band into a reality.
The FCC announced that it would now issue a series of important rulemaking notices to set the critical technical rules for unlicensed technologies. We strongly support the FCC’s efforts so far and look forward to working together to ensure a robust wireless economy supported by the most efficient and effective allocation of spectrum, one of our nation’s most valuable public resources.
"After many months of hard work to balance the conflicting interests of many stakeholders, today's FCC order establishes workable initial rules for the reorganized 600 MHz band plan for the upcoming incentive auction, repacking, and forward auction. The band plan reflects the Commission’s understanding of the critical role unlicensed spectrum plays in our innovation economy and we believe offers the potential for allocating a baseline amount of spectrum necessary to ensure a way forward for TV White Spaces, WiFi and the myriad of unlicensed applications that will meet our nation's growing wireless needs. Bringing this commercial potential into being depends on the subsequent rulemaking regarding unlicensed device operation in the reorganized 600 MHz spectrum band.
America is the world-leader in development of wireless technology from LTE to TV White Spaces and the world is watching. Today’s vote was an important step forward and there remains much work to be done. The Wireless Innovation Alliance looks forward to working with the Commission to ensure additional unlicensed spectrum resources are made available to American consumers and innovators so that the U.S. can continue to lead the world in wireless innovation."
"Today’s spectrum aggregation and incentive auction orders provide some elegant solutions to complex problems. Consumers and competition will benefit from non-dominant carriers having the opportunity to obtain critical low-band spectrum. DISH commends the leadership of Chairman Wheeler, and the work of the Incentive Auction Task Force and Wireless Bureau on these important orders,” said Jeff Blum, DISH’s SVP & Deputy General Counsel.
Today, the Federal Communications Commission took an important step toward powering tomorrow’s wireless broadband. The FCC adopted new rules that will designate some spectrum--resources that, under the FCC’s plan, would not in any event be auctioned for wireless carriers’ broadband services--for unlicensed devices and applications on a shared basis.
Unlicensed uses of spectrum are an important complement to carriers’ mobile broadband services. For example, the Wi-Fi networks in homes, businesses, and coffee shops allow users to take data off the wireless carriers’ licensed networks, which enables faster service and reduces congestion on cellular systems. For smartphones and tablets in particular, Cisco has found that daily data consumption over Wi-Fi is four times that of cellular. Offloading data from cellular networks to Wi-Fi has saved mobile network operators billions of dollars in network deployment costs. Faster and cheaper access to online services drives usage of those services and thus demand for all forms of network access, creating a virtuous cycle of investment. Access to new, lower-frequency TV band spectrum could accelerate this process and create more unlicensed service options, allowing better indoor coverage and service in rural and underserved areas.
The FCC’s plan allows television broadcasters to sell their spectrum rights voluntarily so they can be purchased by mobile operators. This will enable more efficient spectrum use and spur economic growth.
The FCC had a challenge in designing its plan for an auction of TV broadcast spectrum, and we’re pleased that it is supporting both licensed and unlicensed uses. While the plan doesn’t provide as much unlicensed spectrum as we recommended, it should provide just enough unlicensed spectrum to attract investments in equipment and operations in the new band. Google will do its part to ensure that our Spectrum Database supports sharing of the newly allocated spectrum.
We’re grateful that Congressional supporters of unlicensed spectrum use have continued to back the FCC’s progress on this front. While there’s still a lot of work ahead to get the final details of the auction right, we look forward to working with all stakeholders to build the next generation of wireless technologies and see them deployed across America.