FCC Adopts Final Rules for 700 MHz Auction
In a proceeding that generated an unusual amount of press coverage and widespread industry interest, the Federal Communications Commission (FCC) on July 31 adopted revised band plan and services rules for its upcoming auction of 700 MHz band spectrum. The FCC will auction a total of 62 MHz of spectrum during the 700 MHz auction, which according to federal law must begin by Jan. 28, 2008. This spectrum is coveted by companies both within and outside of the wireless industry because it is ideal for carrying wireless signals.
The text of the FCC’s Order has not yet been released, so the specific details of the new auction rules are not yet known. We have summarized the key elements of the FCC’s News Release below, and will issue further advice when the FCC’s final 700 MHz Auction order is released.
Revised 700 MHz Band Plan
The FCC adopted a revised band plan for the “Lower” and “Upper” 700 MHz bands. In general, the 700 MHz band encompasses spectrum from 698 MHz to 806 MHz. Some of the spectrum within this band previously was auctioned and licensed by the FCC. In the upcoming 700 MHz auction, the FCC will auction a total of 62 MHz of spectrum, divided among five spectrum blocks. Some of the specifics for each of these spectrum blocks are:
Block
Bandwidth/Pairing
Frequencies
Market Type/Size
Lower A Block
12 MHz/2 x 6 MHz
698-704 MHz/
728-734 MHz
EA -Economic Area (larger than CMAs)
Lower B Block
12 MHz/2 x 6 MHz
704-710 MHz/
734-740 MHz
CMA - Cellular Market Areas (smallest market size)
Lower E Block
6 MHz/Unpaired
722-728 MHz
Economic Area
Upper C Block
(Open Access)
22 MHz/2 x 11 MHz
746-757 MHz/
776-787 MHz
REAG – Large multi-state regions of US
Upper D Block
(Public/Private)
10 MHz/2 x 5 MHz
758-763 MHz/
788-793 MHz
Nationwide License
The FCC also adopted several significant revisions to the public safety spectrum allocations within the 700 MHz band.
Performance Requirements
The FCC adopted new, more stringent build-out and performance requirements for the new 700 MHz licensees. The performance requirements described below were strongly opposed by the wireless industry.
- For smaller geographic market-area licenses (such as Economic Area licenses and Cellular Market Area licenses), licensees will be required to provide service to cover at least 35 percent of the geographic area of the licensed market within four years of license issuance; and 70 percent of the geographic area by the end of the license term.
- For the larger, REAG market licenses, licensees will be required to provide service to cover at least 40 percent of the population of the licensed market within four years of license issuance; and 75 percent of the population by the end of the license term.
- The FCC did not identify specific build-out requirements for the nationwide Upper D block license. This licensee will be required to partner with an adjacent Public Safety Broadband Licensee, and to negotiate a Network Sharing Agreement to be approved by the FCC, which will govern construction deadlines, among other issues.
- If a licensee does not meet the four-year performance benchmarks, the FCC will reduce its license term from ten to eight years, thereby imposing an accelerated construction schedule.
- If a licensee fails to meet the end-of-term construction requirements, the FCC will automatically reclaim any unserved areas of its license area and re-license those areas.
Open Access
One of the more controversial aspects of the FCC’s new rules is its decision to impose “open platform” requirements on the winning bidder of the 22 MHz Upper C Block license. Specifically, the Upper C Block licensee will be required to provide a platform that will allow customers, device manufacturers, third-party application developers and others to use the device and applications of their choice on this spectrum block, subject to the condition that these devices and applications do not harm the network.
Public Safety/Private Partnership
As mentioned above, the FCC will require that the winner of the 10 MHz Upper D Block nationwide license form a Public Safety/Private Partnership with an adjacent nationwide public safety licensee, to develop a shared, interoperable broadband network for both public safety and commercial use. Under the new rules, public safety will have priority access to the Upper D Block commercial spectrum in times of emergency, and the commercial licensee will have preemptible, secondary access to the adjacent public safety broadband spectrum.
Auction Procedures
The FCC adopted three noteworthy changes to its auction procedures for the 700 MHz auction. First, the FCC will use anonymous bidding for the auction, regardless of any pre-auction assessment of how competitive the auction will be. Second, the FCC will use “package bidding” procedures to auction the 12 Upper C Block REAG licenses, to assist bidders that are seeking to create a nationwide footprint. Finally, the FCC directed its staff to establish “reserve prices” for this auction. These prices will allow the FCC to decline to auction the 22 MHz Upper C Block license if the newly imposed open access requirements on this spectrum depress bidding to an unacceptably low level.
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For more information, please contact:
Theresa Cavanaugh, Washington, D.C., (202) 973-4257, terrycavanaugh@dwt.com
Chris Fedeli, Washington, D.C., (202) 973-4274, chrisfedeli@dwt.com