The Federal Communications Commission (“FCC”) is deep in the midst of planning the world’s first broadcast incentive auction, currently slated for mid-2015. The ...23 September 2014
U.S. FCC AWS-3 Auction Revenue Surpasses $16 Billion
After four days and fifteen rounds of bidding, bidding for paired spectrum in the U.S. Federal Communications Commission AWS-3 spectrum auction (Auction 97) remained very strong today. Total revenue accelerated past its $10+ billion reserve price this morning and closed the day in excess of $16 billion. The current revenue level ensures that Auction 97 will fully cover the remaining funds for the First Responder Network Authority (FirstNet), even assuming the most expensive possible costs for clearing the band and the largest possible discounts for Designated Entities. The robust revenues should silence critics, who had claimed that FirstNet funding goals would not be met, and will reduce revenue requirements for the upcoming 600 MHz Incentive Auction. Although bidding for the paired blocks appears to be extremely competitive, bidding for the 15 MHz of unpaired uplink spectrum remains well short of the reserve price. Bids are increasing for the unpaired blocks, but only slowly.
Auction 97 includes 65 MHz of spectrum that is adjacent to the current AWS-1 band, a band currently used by T-Mobile, Verizon, AT&T and other wireless operators, primarily for LTE broadband data services. Large amounts of contiguous spectrum are especially valuable for LTE deployments, for which the maximum channel size is 20 MHz. The additional paired band of 25+25 MHz from 1755-1780 MHz and 2155-2180 MHz available in the AWS-3 auction effectively extends the AWS-1 band to a total of 70+70 MHz contiguous paired spectrum. Meanwhile, the 15 MHz of unpaired uplink spectrum from 1695-1710 MHz extends the AWS-1 uplink and provides a possible pairing for unpaired downlink spectrum. The paired spectrum is divided into three blocks of 5+5 MHz each (the G, H and I blocks) and one block of 10+10 MHz (the J block). The unpaired spectrum is divided into two blocks: A1, which is 5 MHz, and B1, which is 10 MHz. For licensing purposes, all blocks are geographically divided into 176 Basic Economic Area (BEA) except the G block, which is divided into 734 Cellular Market Areas (CMAs).
By: Coleman Bazelon & Giulia McHenry, The Brattle Group; Trey Hanbury, Hogan Lovells
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