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.


Wireless Carriers


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

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.”

Industry Associations

ACT | The App Association

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.

Consumer Electronics Association (CEA)

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.”

Competitive Carriers Association (CCA)(see also roundup of statements by CCA members)

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.”

Computer & Communications Industry Association (CCIA)

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.”

CTIA – The Wireless Association

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."

Mobile Future

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.”

National Association of Broadcasters

 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."

Telecommunications Industry Association (TIA)

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

Public Knowledge

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. 

Schools, Health & Libraries Broadband Coalition (SHLB)

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.

Wireless Innovation Alliance (WIA)

"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."

Other Companies


"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.

FCC Increases Spectrum Concentration Screen

In an otherwise unremarkable order approving AT&T’s acquisition of multiple licenses in the 2.3 GHz band, the FCC yesterday changed its rules on spectrum concentration.  Generally speaking, the FCC reviews an acquiring firm’s spectrum holdings and applies a “spectrum screen” to ensure that no more than one-third of the total pool of available broadband spectrum resources rests with any one company in any given market.  Yesterday’s order, however, increases the screen to incorporate twenty megahertz of Wireless Communications Service (WCS) spectrum into the total amount of spectrum the FCC considers useful and available for broadband use. 

As a result, the new spectrum screen for wireless transactions and auctions is as follows:

  • 102 megahertz or more of cellular, PCS, SMR, 700 MHz, and WCS spectrum, where neither BRS nor AWS-1 spectrum is available;
  • 121 megahertz or more of spectrum, where BRS spectrum is available, but AWS-1 spectrum is not available;
  • 132 megahertz or more of spectrum, where AWS-1 spectrum is available, but BRS spectrum is not available; or
  • 151 megahertz or more of spectrum where both AWS-1 and BRS spectrum are available.

The FCC reasoned that “in light of our recent revisions to the WCS service rules to facilitate the provision of mobile broadband services, we find that 20 megahertz of WCS spectrum – comprised of the paired A and B Blocks – are suitable and available for the provision of mobile telephony/broadband services and should therefore be added to the spectrum screen. Further, AT&T has indicated that it will take substantial steps to deploy LTE in the band (including through the acquisition of the spectrum at issue in these transactions).”

The FCC also declined to include additional 2.5 GHz spectrum of the type held by Clearwire and, by extension, Sprint Nextel:  “We find that [AT&T and the licensees of the WCS spectrum AT&T sought to acquire] have provided no new arguments that persuade us to change” the agency’s prior determination that including additional 2.5 GHz was not warranted, “particularly given that we do not yet have the benefit of a full record in the Mobile Spectrum Holdings Notice of Proposed Rulemaking.”

The FCC also rejected AT&T’s call for changing the screen only through an industry-wide rulemaking as opposed to the case-by-case approach the FCC followed in yesterday’s decision.  While the FCC noted AT&T’s argument for an industry-wide re-evaluation of the agency’s approach, the FCC said it would “continue to apply [its] current case-by-case approach to evaluate mobile spectrum holdings in secondary market transactions and initial spectrum licensing after auctions” while the Mobile Spectrum Holdings NPRM remains pending. 

If the FCC moves quickly to finalizes alternative spectrum concentration rules in the Mobile Spectrum Holdings NPRM, the increased headroom for wireless mergers and acquisitions adopted yesterday could prove fleeting.



The US Telephone Consumer Protection Act and Litigation Risk

 Michele Farquhar and Mark W. Brennan authored an article for the December 2012 issue of E-Commerce Law & Policy.  Titled “The US Telephone Consumer Protection Act and Litigation Risk,” the article highlights a number of recent Telephone Consumer Protection Act legal developments and their impact on mobile financial services and other new wireless services and technologies.  The article is available here.

Setting the Arena - The German Regulator Proposes Possible Scenarios for the Future Allocation of Mobile Broadband Frequencies

 By Dr. Harm-Randolf Döpkens

The German telecoms regulator Bundesnetzagentur (BNetzA) is currently considering different scenarios for the future allocation of frequencies for mobile broadband services.  This initiative relates to the discussion about the 900 and 1,800 MHz frequencies that are currently used by mobile operators for their GSM networks. The current licenses for these frequencies will expire by the end of 2016. Mobile operators are therefore urging BNetzA for an early extension of the existing licenses while other market players make the case for a reallocation of these frequencies in an open auction. At the same time, frequency policy is required to deal with the ever increasing demand for mobile broadband services and thus needs to develop a broader strategy, taking into account the different frequency bands that are allocated and/or suitable for mobile broadband services. Apart from the GSM frequencies this includes the UMTS frequencies in the 2 GHz band (expiring 2020), the BWA frequencies in the 3.5 GHz band (expiring 2021) and the frequencies of the 2010 auction in the 800 and 1,800 MHz and the 2 and 2.6 GHz bands (expiring 2025). In addition, further frequencies in the 700 MHz and other bands may become available for mobile broadband services as a result of the 2015 summit of the World Radio Conference.

Against this backdrop, BNetzA on November 9, 2012 issued a discussion paper (full text and press release published in German on the BNetzA website) setting out four possible scenarios for the future allocation of the 900 and 1,800 MHz and other frequencies:

  • Scenario 1 – Prolongation: This scenario proposes a short-term prolongation of the mobile operators' licenses for the 900 and 1,800 MHz (GSM) frequencies, which would be the fastest and easiest way to provide a stable investment environment for these operators. However, under German telecommunications law the allocation of scarce frequencies must generally be done by way of a tendering process. Exemptions can only be justified if so required by the aims of telecoms regulation.  BNetzA does not seem to be convinced that such exemption can be justified with regard to the GSM frequencies. In particular BNetzA points out that a prolongation of the existing licenses would also extend the current fragmentation of frequencies. And further, a prolongation of existing licenses would clearly not provide equal access to spectrum for newcomers.
  • Scenario 2 – Allocation 900/1,800 MHz: This scenario proposes an early reallocation and flexibilization of the 900 and 1,800 MHz frequencies, giving newcomers an early opportunity to enter the mobile broadband market. However, an isolated auction of these frequencies cannot take into account other frequency bands for mobile broadband, such as the UMTS frequencies in the 2 GHz band that will expire by the end of 2020. In BNetzA's view this scenario is thus likely to increase the regulatory complexity calling for certain measures such as spectrum caps in order to ensure effective competition in the mobile broadband market.
  • Scenario 3 – Allocation 900/1,800 MHz Plus: This scenario proposes a joint auction of the GSM frequencies in the 900 and 1,800 MHz band with other frequencies that will become available for mobile broadband services in the coming years, i.e. the UMTS frequencies in the 2 GHz band, the BWA frequencies in the 3.5 GHz band, and possibly frequencies in the 700 MHz and other bands as a result of the 2015 summit of the World Radio Conference. In terms of timing, BNetzA clearly prefers an early auction before the expiry of the GSM frequencies by the end of 2016, which would provide a clear and stable investment environment for all stakeholders early on.
  • Scenario 4 – Global Allocation 2025: This scenario even goes a step further and aims to also include the frequencies of the 2010 auction (expiring 2025), in a global auction of all frequencies for mobile broadband services. To achieve this, the license terms of the different frequencies ranging from 2016 to 2025 would need to be harmonized, either by prolonging existing licenses until 2025 or by granting new licenses for expiring frequencies only until 2025. However, BNetzA does not seem to be too convinced by this scenario. In particular, market entry for newcomers would be rather difficult before such global auction. And then it might be difficult for any stakeholder to have the required funds for all frequency resources and network infrastructure available in one go.

Stakeholders now have the opportunity to comment on the scenarios presented by BNetzA until January 31, 2013. However, from the reasoning of the BNetzA discussion paper, an implementation of scenarios 1 (prolongation) or 4 (global allocation 2025) appears to be an unlikely outcome. BNetzA rather seems to be aiming at a middleground solution as described in scenarios 2 (allocation 900/1,800 MHz) and 3 (allocation 900/1,800 MHz plus), which gives newcomers an early opportunity for market entry and, at the same time, allows sufficient coordination in the allocation of the different frequency bands. This means that in the short to medium term, Germany is likely to see one or more frequency auctions that may have the potential to reshuffle the mobile broadband market. Stakeholders should continue to monitor this area to prepare for future BNetzA action. 

California AG Sends Enforcement Letter to Developers of Popular Mobile Apps

On Tuesday, October 30, the Office of California Attorney General Kamala Harris issued a press release confirming that it had begun “formally notifying” mobile device application (“app”) operators that they are out of compliance with the notice provisions of the California Online Privacy Protection Act of 2003 (“CalOPPA”).  Those companies -- many of which are major marketers -- now have 30 days to bring their apps in line with the statute’s privacy policy requirements or risk fines of up to $2,500 per app download.

As background, CalOPPA requires operators (i.e., owners) of commercial web sites or online services that collect personally identifiable information (“PII”) on California residents who use/visit the web sites or online service to “conspicuously post” a privacy policy. The Attorney General’s office has taken the position that mobile apps that use the Internet to collect PII are “online services” subject to CalOPPA.  California’s population size makes it safe for most app developers to assume that California residents comprise at least a portion of the app’s download audience.  This week, the Attorney General’s Office began sending letters to companies behind approximately 100 of the most popular apps asserting that they failed to “conspicuously post” the required privacy policy.



The letters are the latest effort by Harris to encourage companies to improve the transparency of their data privacy and security practices.  In February 2012, she entered into a Joint Statement of Principles agreement with six major app store platforms, setting forth requirements related to app privacy (see our prior update here).  Facebook later joined the agreement and is now requiring that all apps in its App Center have privacy policies.

Under the statute, the following information must be included in the privacy policy: (1) the categories of PII collected through the app and the categories of third-party persons or entities with whom the operator may share that PII; (2) the process by which consumers can review and request changes to any of their PII that was collected through the app, if the operator maintains such a process; (3) a description of the process by which the operator notifies app users of material changes to the policy; and (4) the effective date of the policy.

The letters are a reminder that app developers and their partners should review their app data privacy and security practices and ensure that any apps collecting PII comply with the CalOPPA requirements, as well as other applicable Federal and state laws.


FTC Provides Guidance to (All) Mobile App Developers

Marketing Your Mobile AppFollowing up on a public workshop held earlier this year, today the Federal Trade Commission (FTC) issued a set of truth-in-advertising and privacy guidelines for mobile device application (app) developers. Titled "Marketing Your Mobile App: Get it Right From the Start," the guidelines provide an overview of key issues for all app developers to consider.

At the outset, the FTC makes clear that these Guidelines are intended to apply to all app developers, large and small, start-up and established. It notes, however, that there is no "one-size-fits-all" approach to advertising and privacy compliance.

The privacy section of the Guidelines includes several key recommendations:

  • Build privacy considerations in from the start (i.e., Privacy by Design)
  • Be transparent about your data practices;
  • Offer choices that are easy to find and easy to use;
  • Honor your privacy promises;
  • Protect kids’ privacy;
  • Collect sensitive information only with consent; and
  • Keep user data secure.


  • Build privacy considerations in from the start (i.e., Privacy by Design). The Guidelines recommend that parties incorporate privacy protections into their practices, limit the information they collect, securely store collected information, and dispose of it safely when it is no longer needed. They also encourage parties to select default app settings based on what people using the app would expect. For any collection or sharing of information that is not apparent, the Guidelines state that app developers should obtain express agreement from users.
  • Be transparent about your data practices. App developers should “be clear to users” about their practices and explain what information is collected and how it is used. Interestingly, the Guidelines also reference an expanded disclosure for third-party sharing – “if you share information with another company, tell your users and give them information about that company’s data practices.”
  • Offer choices that are easy to find and easy to use. The Guidelines state that app developers should provide users with tools to exercise control how their personal information is collected and shared. Such tools should also be easy to find and use, and companies should honor users’ choices.
  • Honor your privacy promises. App developers must live up to their privacy promises. They also need to obtain affirmative consent to make materials changes to their privacy policies. The Guidelines note that such promises should also be made in clear language; easy to read on a small screen; and use colors, fonts, and other design elements to bring attention to key information.
  • Protect kids’ privacy. Apps designed for children or that collect personal information from kids may have additional requirements under the Children’s Online Privacy Protection Act (COPPA) and the FTC’s COPPA Rule.
  • Collect sensitive information only with consent. The Guidelines encourage parties to obtain affirmative consent before collecting “sensitive” data such as medical, financial, or precise geolocation information.
  • Keep user data secure. The Guidelines state that even if parties do not make specific data security promises, they “still have to take reasonable steps to keep sensitive data secure.” They also recommend that parties: (1) collect only the data they need; (2) secure the data by taking reasonable precautions against well-known security risks; (3) limit access to the data on a need-to-know basis; and (4) safely dispose of data that is no longer needed. App developers that work with contractors and other third parties should “make sure” that the third parties also comply with these standards.


With respect to truth-in-advertising, the Guidelines advise parties to:

  • Tell the truth about what your app can do
  • Be transparent about your data practices.

The Guidelines encourage app developers to look at their product -- and their advertising -- from "the perspective of average users, not just software engineers or app experts." Objective claims need to be backed up with solid proof, also referred to as “competent and reliable evidence.” Health, safety, or performance claims may need competent and reliable scientific evidence. Disclosures need to be "big enough and clear enough that users actually notice them and understand what they say." In other words, avoid burying important terms and conditions.

Parties Divided Over FCC Involvement in Mobile Privacy

Parties that submitted comments and replies in response to a Federal Communications Commission (FCC) Public Notice on the privacy and security of information stored on mobile devices are deeply divided over whether the agency should pursue further action in the area.  The FCC proceeding follows up on a recent report from the agency on Location-Based Services, issued earlier this year.  It also references last year’s Carrier IQ news headlines and notes that much has changed in the wireless industry during the last five years (the last time that the FCC sought comment on these issues).

Parties that submitted comments and replies in response to a Federal Communications Commission (FCC) Public Notice on the privacy and security of information stored on mobile devices are deeply divided over whether the agency should pursue further action in the area.  The FCC proceeding follows up on a recent report from the agency on Location-Based Services, issued earlier this year.  It also references last year’s Carrier IQ news headlines and notes that much has changed in the wireless industry during the last five years (the last time that the FCC sought comment on these issues).

In their comments, public interest groups and privacy advocates generally called for the FCC to ramp up its efforts to protect consumer privacy and data security, with some seeking new mobile regulations focused on wireless carrier activity.  The Electronic Privacy Information Center, for example, suggested that the FCC require carriers to implement “comprehensive privacy and security protections based on Fair Information Practices” and “give consumers a range of choices about the collection and retention of consumer data before or at the time of collection.”  The New America Foundation’s Open Technology Institute added that last year’s Carrier IQ events “make it clear that [industry] efforts, if they are occurring, are inadequate to give consumers knowledge and control to ensure that their data is being protected.”

Wireless carriers and other industry commenters, on the other hand, encouraged the FCC to defer to current self-regulatory efforts, as well as the ongoing NTIA multistakeholder process. They also pointed out the FCC’s limited jurisdiction in this area and its inability to address comprehensively problems involving a wide range of parties in the mobile wireless ecosystem.  But public interest groups responded that the FCC is the agency best suited to regulate customer proprietary network information (CPNI) and has explicit statutory authority to address CPNI issues.  Those groups also noted that the NTIA effort could be a lengthy endeavor. 

The Future of Privacy Forum, which has actively worked to focus attention on the data collection issues raised by mobile apps and other mobile services, encouraged the FCC to work with stakeholders and help educate consumers and app developers about the importance of protecting personal information.

The Federal Trade Commission also commented in the proceeding, detailing its privacy experience and noting that it “look[ed] forward to working with the FCC to ensure that [they] avoid duplicative actions in areas where . . . jurisdictions may be overlapping.”

Most observers believe that the FCC is unlikely to move forward on these issues in the near future, although some think it could be heading towards a set of proposed rules to update its legacy CPNI framework.

Mobile Data Monitoring -- Draft U.S. Congressional Bill Would Impose New Requirements

A draft bill circulated by Rep. Ed Markey (D-Mass) would require the Federal Trade Commission (FTC) to adopt regulations addressing monitoring software installed on mobile devices.  The bill stems from media reports last year regarding Carrier IQ's monitoring software, which is installed on millions of mobile devices.  If enacted, the Mobile Device Privacy Act would result in new obligations for wireless service providers, equipment manufacturers, device retailers, operating system providers, website operators, and other online service providers, underscoring both the number of industry segments involved and the complexity of addressing privacy concerns in today's mobile ecosystem.

One particularly noteworthy element of the Markey bill is the definition of monitoring software that spurs a host of new regulations.

The term monitoring software means software that has the capability automatically to monitor the usage of a mobile telephone or the location of the user and to transmit the information collected to another device or system, whether or not such capability is the primary function of the software or the purpose for which the software is marketed.

This broad definition would encompass a wide array of mobile apps and services available today.

Under the draft Mobile Device Privacy Act, the FTC would have one year to issue regulations requiring carriers and device retailers to disclose at the point of sale in a clear and conspicuous manner the fact that monitoring software is installed, the type of information the software is capable of collecting and transmitting, the identity of parties with which the information will be shared, and how the information will be used.  If the monitoring software is installed after the consumer purchases the device or service, the entity installing the software or providing the software download (e.g., carrier, equipment manufacturer, operating system provider, website operator, or other online service provider) would have to make the disclosure. 

The bill would also require parties to obtain express consent from consumers before the monitoring software begins collecting and transmitting data.

In addition, the bill would impose new information security requirements.  The FTC would have one year to adopt regulations requiring recipients of the monitoring data to establish information security policies and procedures to protect the data.  Parties that enter into agreements to share the monitoring data would have to file those agreements with the FTC and the Federal Communications Commission (FCC).

The Markey bill would also establish joint FTC and FCC enforcement, with the FCC having enforcement authority over commercial mobile service providers, mobile broadband service providers, and mobile telephone manufacturers and the FTC having authority over other parties.  The bill also provides for state attorney general suits and a private right of action.