The FCC today released a Public Notice establishing the schedule and procedures for Auction 107, which will offer overlay licenses in the 3.7-3.98 MHz band. Auction 107 will be the second auction of mid-band spectrum (following Auction 105, currently ongoing), and is intended to promote the deployment of 5G wireless, Internet of Things, and other advanced spectrum-based services. The FCC adopted a Report and Order earlier this year establishing rules for the 3.7 GHz Service and for the relocation of Fixed Satellite Service (FSS) operators currently operating throughout the 3.7-4.2 GHz band (C-band), who will be relocated to the 4.0-4.2 portion of the band.

Earlier this week, the FCC's Wireless Telecommunications Bureau released a Public Notice seeking comment on whether the Relocation Payment Clearinghouse selected by C-band stakeholders satisfies FCC requirements, and a separate Public Notice seeking comment on whether the Relocation Coordinator selected by FSS operators satisfies the FCC's criteria.

Auction Schedule

• Short-Form Application (FCC Form 175) Filing Window: September 9-September 22, 2020
• Upfront Payment Deadline: November 2, 2020
• Mock Auction: December 3, 2020
• Bidding Begins: December 8, 2020

Licenses to Be Auctioned

A total of 5,684 new licenses for spectrum in the 3.7–3.98 GHz band will be offered. The 280 MHz of spectrum will be licensed on a partial economic area (PEA) basis only in the contiguous states and the District of Columbia (PEAs 1–41, 43–211, 213–263, 265–297, 299–359, and 361–411).

In each PEA, the FCC will auction 14 unpaired licenses of 20 MHz each. Blocks A1, A2, A3, A4 and A5 in the 3700-3800 portion of the band; Blocks B1, B2, B3, B4, and B5 in the 3800-3900 portion of the band, and Blocks C1, C2, C3, and C4 in the 3900-3980 MHz portion. 3980–4000 MHz will be a guard band and not available for auction.

License Term

3.7 GHz Service licenses will be issued for 15-year, renewable license terms.

Services

A 3.7–3.98 GHz Service licensee may provide any services permitted under terrestrial fixed or mobile allocations.

Reimbursement of Incumbent Clearing Expenses

3.7 GHz Service licenses must pay a specified share of accelerated relocation payments and relocation expenses to reimburse FSS incumbents for the reasonable costs of transitioning out of the 3.7-3.98 GHz portion of the C-band. 

Auction Procedures

Auction 107 will use an ascending clock auction design with two phases. The first, clock phase, will consist of successive clock bidding rounds for generic license blocks in specific categories and PEAs, with ascending clock round bid prices. In the second, assignment phase, winning clock phase bidders will have the option to bid on preferred combinations of frequency-specific license assignments, in a series of sealed-bid rounds.

In 46 PEAs where certain blocks are subject to the Phase I incumbent relocation deadline and other blocks are subject only to the Phase II deadline, clock phase bidding will be conducted for two categories of generic blocks, based on which deadline applies to the specific blocks. Thus, in 46 PEAs, the first category (Category A) of generic blocks will consist of the five A Block licenses that are subject to the Phase I deadline. The second category (Category BC) of generic blocks will consist of the nine B Block and C Block licenses that are subject to the Phase II deadline. In the other 360 PEAs, where no blocks are subject to the Phase I deadline, there will be a single bidding category (Category ABC), consisting of all 14 20-MHz blocks.

The Public Notice also established the bidding units, upfront payment amount, and minimum opening bid amounts for each PEA and license. To assist prospective bidders in preparing for the auction, he FCC has made available its Clock Phase Technical Guide and Assignment Phase Technical Guide.

Bidding Credits

The following discounts on winning bid amounts will be available to bidders in Auction 107.

• A bidder that qualifies as a “small business”––i.e., one with attributed average annual gross revenues that do not exceed $55 million for the preceding five years––is eligible to receive a 15% discount on its gross winning bids.
• A bidder that qualifies as a “very small business”—i.e., one with attributed average annual gross revenues that do not exceed $20 million for the preceding five years—is eligible to receive a 25% discount on its gross winning bids.
• A bidder that qualifies as a “rural service provider” (RSP) – i.e., a provider that is in the business of providing commercial communications services and, together with its controlling interests, affiliates, and the affiliates of its controlling interests, has fewer than 250,000 combined wireless, wireline, broadband, and cable subscribers; and that serves predominantly rural areas – is eligible to receive a 15% discount on its gross winning bids.

There is a $25 million cap on the total bidding credits that may be awarded to an eligible small business or very small business, and a $10 million cap on the total bidding credits that may be awarded to an eligible RSP. To create parity among eligible small businesses and RSPs competing against each other in smaller markets, no winning designated entity bidder will receive more than $10 million in bidding credit discounts in total for licenses won in markets with a population of 500,000 or less.