Next year, the Federal Communications Commission (or FCC) is set to manage an auction of 600 MHz spectrum, which is being old on from television broadcasters to the mobile networks or carriers. This low frequency spectrum will go on to become another frequency our smartphones, tablets and other devices will be wanting to connect to for data connectivity. Lower frequency signal has the advantages of much better building penetration and range compared with higher frequency spectrum, but has lower maximum data transfer speeds. Unfortunately, for both the FCC and the US telecommunications industry, the 600 MHz spectrum auctions are a mire of complexity with many different interested parties. The broadcasters want to ensure the best possible price for their spectrum whereas the FCC wishes to make sure that the larger carriers, with deeper pockets, do not offer the most money and buy up all of the available spectrum – but also need to keep the broadcasters happy!
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This week, we were scheduled to be seeing the rules published that outline how the auction processes were going to work. Unfortunately, the FCC has announced that it is postponing its vote on the rules until the next meeting on the 6 August, a move that has angered many interested parties. Tom Wheeler optimistically said this on the matter: “In the spirit of cooperation that has marked our work together on the incentive auctions, I am today postponing Commission consideration of this order and the related reconsideration of the mobile spectrum holdings order until the Commission’s next regularly scheduled meeting on August 6. I believe that even with this delay we will be able to stay on course for the first quarter of 2016.” This delay may be expected to push everything back by a few weeks, but the decision now due in early August concerns the opening bit prices, the spectrum reserve set aside for the smaller and regional carriers, and the structure of the auctions.
The main reason for the delay in the decision appears to be the amount and complexity of the data that must be considered as part of the decision. Last Friday, the FCC’s Incentive Auction Task Force added new data based on computer simulations of how the auctions might proceed depending on the amount of spectrum that the broadcasters could give up. The data is complex because there are many variables, but despite this the National Association of Broadcasters issued a filing expressing deep concerns over the simulation data and that it was inadequate. Broadcasters do not know where and what spectrum they will be allocated and if this will include so-called “guard bands,” an area of spectrum currently used for an eclectic mix of unlicensed and licensed devices such as WiFi and wireless microphones. The FCC do not know how many broadcasters will participate in the auction or how much spectrum they may require. We have something of a classic chicken and egg situation. It is also likely that the current FCC is mindful that the 600 MHz auction could be their final administrative change to the American airwaves before the Presidential Election next year