March 18, 2021
The US Federal Communications Commission will auction off 100 MHz of spectrum in the 3.45 GHz band in the autumn, with bidding set to begin in early October.
The US regulator is seeking comment on its plans for the sale, dubbed auction 110, including a proposed reserve price of more than $14.7 billion, a sum that will enable it to meet the requirement that auction proceeds cover the expected sharing and relocation costs for federal users in the band.
The FCC intends to split the available frequencies into ten 10 MHz blocks licensed by geographic areas known as Partial Economic Areas (PEAs); there will be 4,060 flexible-use licenses across the contiguous US. The proposed auction will consist of a clock phase, in which bidders offer on generic blocks of spectrum, followed by an assignment phase which determines the winning bidders’ actual positions on the spectrum, much like in the recently-concluded C-band sale.
Although the C-band sale, auction 107, brought in massive sums for state coffers – $81.17 billion to be exact, with the winning bidders having to suck up an additional $13 billion in clearing costs payable to the satellite incumbents – the FCC is keen to do things differently this time round. The C-band auction was set out under the previous administration, of course…
“Today’s decision commits to the idea that successful auctions have many bidders,” said acting FCC chairwoman Jessica Rosenworcel, noting that more than 90% of the 5,684 licenses available in C-band auction were won by the top two bidders. In order to remedy that perceived problem the regulator has imposed a 40 MHz spectrum cap that “will expand opportunity for service providers in every market in the United States,” Rosenworcel said, adding that by auctioning the frequencies in smaller blocks the sale will encourage broader participation from smaller providers.
Commissioner Brendan Carr, of opposite political leanings, who delivered a pro-spectrum auction address to the American Enterprise Institute earlier this week, is not happy about a couple of aspects of the proposed auction, including the spectrum cap.
“To be sure, industry may want the government to limit competition and divvy up the market through these types of mechanisms, but particularly given the aggregate reserve price of over $14 billion for this auction, I think we should have refrained from doing so and instead maximized the chances for a successful auction,” he said.
Success can be measured in any number of different ways, of course, even when it comes to spectrum auctions.
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