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FCC Seeks Comment on Procedures for Auction 108 (2.5 GHz Overlay Licenses)

Posted by CommLaw | Jan 18, 2021 | 0 Comments

The FCC issued a Public Notice seeking comment on proposed procedures for Auction 108, which will offer approximately 8,300 geographic overlay licenses in the 2496-2690 MHz (2.5 GHz) band, the largest band of contiguous spectrum below 3 GHz. Comments and reply comments on the issues addressed in the Public Notice will be due 60 days and 75 days, respectively, after publication in the Federal Register.

Auction 108 will be the FCC's third auction of mid-band spectrum for 5G, following last year's auction of 3.5 GHz band licenses (Auction 105) and the recently concluded auction of 3.7-3.98 GHz band licenses (Auction 107). Portions of the 2.5 GHz band have long been licensed for the Educational Broadband Service (EBS) and the Broadband Radio Service (BRS).

In a 2019 2.5 GHz Report and Order, the FCC noted that much of the 2.5 GHz band has not been used, particularly west of the Mississippi River, and permitted more efficient use of the band while eliminating EBS eligibility and use restrictions.

Last year, the FCC prioritized deployment of next-generation services to rural Tribal communities by creating a Rural Tribal Priority (RTP) Window. The RTP Window, which closed September 2, 2020, allowed federally recognized Tribes to submit applications to acquire new 2.5 GHz licenses for currently unassigned 2.5 GHz spectrum to provide service on rural Tribal lands before the remaining unassigned spectrum is auctioned. To date, the FCC has granted 182 RTP Window applications.

Licenses to Be Offered in Auction 108

Auction 108 will offer geographic overlay licenses for unassigned spectrum in the 2.5 GHz (2496–2690 MHz) band. Up to three blocks will be licensed on a county basis:

  • Channels A1–A3, B1–B3, C1–C3 (up to 49.5 MHz total).
  • Channels D1–D3, the J channels, and channels A4–G4 (up to 50.5 MHz total).
  • Channels G1–G3 and the relevant K channels (up to 16.5 MHz of contiguous spectrum and 1 MHz of the K channels associated with the G channel group).

New overlay licenses will be issued for the EBS portion of the 2.5 GHz band for 10-year, renewable terms. 

A file listing all county and frequency block combinations potentially available for Auction 108 is in the Attachment A file at www.fcc.gov/auction/108; however, the specific licenses to be auctioned remain unknown. Due to the presence of existing licenses and RTP Window applications, significant due diligence will be needed to determine what spectrum will be authorized by any particular overlay license. Before announcing the final license inventory, the FCC plans to provide a mapping tool and other resources to help applicants analyze possible encumbrances in the band. The FCC will announce the final license inventory after processing RTP Window applications, and before the deadline for submitting applications to bid in Auction 108.

Auction Format

The Public Notice seeks comment on two alternative formats: a single bidding round that would remain open long enough to give bidders time to submit, review and potentially resubmit, and confirm their bids; or a simultaneous multiple-round (SMR) auction format similar to most prior FCC spectrum auctions. 

With respect to a single-round format, the FCC seeks comment on appropriate upfront payment amounts (proposed amounts are in the Attachment A file at www.fcc.gov/auction/108); determining bidding eligibility; use of a “pay-as-bid” pricing rule; package bidding; proposed minimum bids (also set forth in the Attachment A file at www.fcc.gov/auction/108); and allowing a bidder to indicate that certain of its individual or package bids are to be treated as mutually exclusive, and to indicate that it wants to win only one bid in a group of bids.

With respect to an SMR format, in which every license is offered for bidding at the same time, with successive rounds of bidding, and bidding remaining open on all licenses until bidding stops on every license, the FCC seeks comment on appropriate upfront payment amounts; determining bidding eligibility; bidding schedule; minimum opening bids and minimum acceptable bid amounts; bidding activity requirements and activity rule waivers; bid removal and bid withdrawal procedures; and stopping rules.

The Public Notice discusses certain advantages that a single-round format may offer over an SMR format. In particular, a single bidding round could be completed within a week, whereas an SMR auction could last several months due to the large number of licenses available, and require a commitment of resources that may adversely impact smaller entities. A single-round format also may help smaller bidders overcome the disadvantages of bidding in an SMR auction against T-Mobile and its affiliates, which already hold a large share of 2.5 GHz spectrum rights. As the FCC notes, the SMR format allows a bidder a greater opportunity to outbid competitors, and smaller entities thus may be disinclined to participate. According to the FCC, the majority of potential Auction 108 bidders are likely to be entities with specific local or regional interests who will not be hampered significantly by a lack of price discovery, and these entities can use information from secondary market activity in the 2.5 GHz band, data in ULS, and spectrum values from recent mid-band spectrum auctions, to help determine valuations. The Public Notice also notes that the licenses to be offered (county-based, with nonuniform encumbrances across areas) make them less suitable for larger-scale operations.

Other Auction Rules

The FCC also asks for comment on various procedures that generally will apply to either a single-round or SMR format. These include requiring all applicants to certify that they have familiarized themselves with the procedures and requirements for obtaining a license in Auction 108 and operating 2.5 GHz facilities, and establishing caps on the total bidding credit amount that may be awarded to an eligible small business and to rural service providers.

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