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The Upcoming FCC Spectrum Auction And You

April 21, 2016 - Written By Daniel Fuller

If you follow industry news in wireless, cable or just about any tech sphere, you’re likely well aware that the U.S. Federal Communications Commission will be holding an incentive auction of valuable, powerful and easy to deploy low-frequency wireless spectrum soon. What you may not be aware of is the fact that the initial auction itself is only the beginning of a process that will take years and has the potential to completely change the face of wireless in America.

To make a long story short, the spectrum auction and the giant operation surrounding it will happen in phases. The first phase will be a reverse auction, where the FCC will name a high price they’re willing to pay for a set amount of spectrum and broadcasters who hold that spectrum will offer to sell. The FCC will lower their price gradually and the bidder willing to accept the lowest offer gets the deal. This will happen until all of the spectrum in the 600MHz area is sold back to the FCC. After this, there will be a forward auction, where interested parties, mainly wireless carriers, will be bidding on the spectrum in normal auction fashion. No actual transfer of spectrum will happen until those two phases are over, at which point broadcasters must decommission the sold spectrum, retool it for wireless use, then give up their licenses for it to the FCC, who will in turn grant those licenses to winning bidders. The bidders must then make their own tweaks to make the spectrum usable for their purposes. The whole process is set to take about 39 months. While that timeline may seem long, a huge amount of equipment must be re-engineered, decommissioned or reconfigured by a huge amount of spectrum holders and buyers. This timeline, in fact, has been called “unrealistic” by some.

The big question on industry watchers’ minds, naturally, is “How will this affect me?” The first big effect will be faster, more reliable and further reaching wireless networks in the U.S. The leadup to networks becoming that way, however, will be fraught with all sorts of technical trouble as network equipment is reconfigured and large amounts of time and money are spent to make networks compatible with the new spectrum. Additionally, some TV and radio broadcast stations may change their frequency or go off the air entirely as a result of selling off the spectrum they were previously hosted on. This powerful spectrum will pave the way for wonderful things like consumer 5G networks, IoT enhancements and huge changes in the costs and packages offered by carriers in response to the fluctuating costs of running their networks in the wake of the auction and subsequent reconfiguration. In short, it will be a bumpy ride for everybody involved, but it will all be worth it in the end.