WCA Calls FCC’s Proposed Minimum Prices for BRS Auction High
The Wireless Communications Association and the Ad Hoc BRS Applicants Association asked the FCC to keep minimum prices reasonable to encourage vigorous bidding in an auction of broadband radio service licenses in 78 markets. In April, the FCC sought comment on the rules for auction 86, scheduled to start Oct. 27. The Wireless Bureau proposed an across-the-board 1 cent per MHz/POP price for the spectrum in each market, and a minimum bid of $20,000 a license. Comments were due Friday.
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“Several of the licenses to be auctioned are so heavily encumbered by pre-existing incumbent BRS licenses that the proposed upfront payment and corresponding minimum opening bid amounts may discourage potential bidders from participating unless those payments are modified to reflect the incumbency,” WCA said. The group asked the FCC to adjust the upfront payment and minimum opening bid amounts “to reflect differing levels of existing encumbrances.”
WCA compared prices for the licenses to buying carpeting. “Carpet … has an easily quantifiable value if it can be cut into a uniform size that fits an average room,” the group said. “Small, odd-shaped, or non-uniform remnants, however, may have almost no value or only limited value to a small pool of buyers. In an auction of such remnants, setting the ‘gate fee’ low enough that potential bidders are not deterred may be necessary to attract a buyer.”
The ad hoc applicants group said the FCC acknowledges that the spectrum is “heavily encumbered,” and bidders must take the use into account. “In most of the areas at issue, there are incumbent licensees on all of the channels to be auctioned,” the group said. “This leaves only slivers and fragments of unlicensed ‘white space’ in each [market]. Not only are these slivers and fragments relatively unpopulated (and thus less valuable), but their placement in narrow sleeves on the fringes of large incumbent service areas will make it extremely difficult to serve those areas without adverse effects on the incumbents.” Those realities “serve to severely circumscribe the utility of the spectrum to be auctioned and accordingly will depress the bids that can realistically be expected,” it said.
Utopian Wireless said the auction should begin no later than the proposed starting date, so buyers may be able to use broadband stimulus money to roll out service using the licenses. “That way, winning BRS Auction applicants will have enough time to apply for federal funding to help build out newly acquired BRS stations in unserved and underserved areas,” the company said. The Public Interest Spectrum Coalition urged the commission to go through with its proposal to require anonymous auction bidding. “As demonstrated by the use of anonymous bidding in Auction 73 (the ‘700 MHz Auction'), anonymous bidding eliminates the ability of bidders to engage in certain types of strategic behavior” and “promotes increased competition for licenses and greater return to the public for use of the spectrum public asset,” the coalition said.