Spectrum Auctions and Sharing Take Center Stage at 4G World
Peter Rysavy files a report from 4G World in Chcago for Information Week on two of the major spectrum issues.
The first is the FCC’s upcoming spectrum incentive auction:
In the past the FCC simply reassigned or designated spectrum for commercial mobile use and then conducted an auction. As explained by Ajit Pai, this time, in the first of the three steps, the FCC will first conduct a reverse auction to determine what broadcasters might wish to relinquish their spectrum in exchange for compensation. The amount of compensation will depend on the amount of spectrum the FCC is trying to carve out in each market and how many broadcasters wish to vacate spectrum. It is unclear how many broadcasters and in what markets spectrum will be relinquished. The reverse auction is supposed to provide answers to all these unknowns, making it an unprecedented auction design, and how it will be done exactly is under discussion.
The second step is to completely reorganize and repack the relinquished channels as well as channels needed for broadcasters that want to keep broadcasting so as to make useful blocks of spectrum for mobile broadband. This itself will also be complicated, and is likely to result in varying amounts of spectrum in each market available for auction to commercial operators. In the third and final step, mobile operators will bid for spectrum in a forward auction, similar to past spectrum auctions. As Commissioner Pai said, doing any one of these steps would be a challenge, but “doing them in conjunction will be daunting indeed.”
An auction this complex is fraught with difficulty, but you can’t exactly do something like this on eBay. The second and third steps are actually quite straightforward, but they interact with the much more complicated first step. Are local broadcasters going to be willing to break from their lobbying group, the National Association of Broadcasters, and put substantial assets up for sale? With the audience for over-the-air TV dwindling, it seems that common sense would dictate making this move, as the spectrum is worth much more to the mobile networks than it is to the broadcasters. But they correctly perceive that it’s only going to be worth more in the future, so why sell it now if you can get double or triple the return in five or ten years? It’s up to the FCC to prevent the broadcasters from hoarding spectrum by asserting its power to repack and to mandate channel sharing in the second step.
The other issue at 4G World this week is the long-debated PCAST Report and the NTIA’s stance on the 1755-1780 band. The networking companies want to pair this spectrum with another band for international harmonization:
The band that will get the most immediate scrutiny as possibly ripe for sharing rather than clearing is 1755 MHz to 1780 MHz, currently used by multiple government applications. The mobile industry as well as the FCC wants to see this band paired with 2155 MHz to 2180 MHz, a band already available for mobile. By law, this band must be auctioned by 2015. The government, however, wishes the 1755 MHz to 1780 MHz portion to be shared. Whether this is possible or not is under investigation and nobody yet knows the answer. The lessons learned in this process, however, will provide valuable insight on spectrum sharing in other bands.
Government systems in this band simply need to be upgraded and relocated above 3 GHz.
Rysavy’s piece is a good summary of the two debates and related news, so go read it.