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700 MHz Auction Rules Wide Open
August 2007
printable version
Overview: The FCC handed partial victories to almost all commenting parties in the recently adopted final auction rules and band plan (see page 2 for the re-configured band plan) for the 700 MHz spectrum band, but ability to capitalize upon the new rules will vary among potential bidders. Because the propagation and penetration characteristics of the 700 MHz spectrum band are particularly well-suited to broadband (voice/data/video) transmission, the upcoming auction, which must by statute begin no later than January 28, 2008, is a last-in-this-generation opportunity for incumbents to strengthen their spectrum holdings and for new entrants to break into the broadband market.
Of the potential bidders, the relative winners are the incumbent telecom and cable operators. The incumbents are the most likely to be able to enhance their existing spectrum holdings at lower cost as a result of the distinct obligations placed on differing bands. Although non-traditional potential bidders such as Google (and other Internet-based members of the “Coalition for 4G”) were able to convince a majority to adopt two of four open access provisions, (viz., “device neutrality” and “application neutrality,” but not “services neutrality” or “network neutrality”) these successes were tempered by the FCC’s decision not to adopt wholesale reseller or interconnection requirements and, perhaps more significantly, to apply these platform neutrality provisions to only one segregable band (the 22 MHz C Block) within the larger 700 MHz band of 64 MHz, thereby limiting their effect. Furthermore, these net neutrality obligations will only apply prospectively, so all previously auctioned spectrum and the 700 MHz A & B Blocks are not burdened by these new mandates.
Although the FCC adopted a mix of regional and smaller geographic licensing areas, in an effort to stimulate rural deployment, the larger players are likely to be successful in out-bidding the smaller and rural providers, using their financial leverage to assemble national footprints. Moreover, the FCC declined to adopt bidding credits for small and rural DEs (“Designated Entities”).
In a threshold win for Frontline, the FCC created a combined commercial and public safety band (the new D Block) by adding 10 MHz at the top of the band to the existing
