Major Carriers Seek a Few Changes to AWS-3 Bidding Rules
AT&T, T-Mobile and Verizon Wireless expressed general support for the FCC’s proposed bidding rules for the AWS-3 auction, scheduled to start Nov. 13. Comments on the rules were due June 9 in docket 14-78, but only posted Friday. All three asked for a few tweaks, which each said would make the auction a more likely success. Sprint, the No. 3 U.S. carrier, did not file comments, but Dish Network did. The FCC approved service rules for a 65 MHz AWS-3 auction March 31 (CD April 1 p1), setting the stage for the agency’s first major spectrum sale since 2008.
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T-Mobile said it agreed with the proposal that the agency conduct the auction using a simultaneous multiple-round auction format. But the FCC should also recognize that it’s offering two very different spectrum bands: 1695-1710 MHz, licensed in an unpaired configuration for low-power uplink operations, and 1755-1780 MHz band, which will be paired with the 2155-2180 MHz band, the carrier said (http://bit.ly/1l9awlo). “Not only will licensees in these bands have different technical requirements, but they will also have different obligations with respect to coordination with federal users,” T-Mobile noted. The FCC should be willing to stop the auction at a different time for both types of spectrum, said the carrier: If bidding stops on the 1695-1710 MHz band “there is no reason to keep the auction open” even if bidding continues for the other bands.
The FCC should also treat the spectrum differently in regard to the reserve price that must be met for the auction to not be canceled, T-Mobile said. The FCC proposes a reserve price of $10 billion for the paired 1755-1780/2155-2180 MHz bands and only $580 million for the 1695-1710 MHz band. “Although the two bands are included in the same auction, there is no reason that the entire auction should be declared invalid if the reserve price is not met for one band,” T-Mobile said. The FCC should also be careful about restricting the amount of information available to bidders about potential interference risks, the carrier said. “Bidders need as much information as possible in advance about their potential obligations in order to make informed decisions about their business needs and their level of engagement in the auction process.”
AT&T said the FCC generally is on the right track in proposed auction rules. The rules on upfront payments, bidding eligibility, activity, reserve prices and minimum opening bids, bid amount and post-auction payments “are generally in line with those adopted in prior Commission auctions” based on a track record of “proven success,” AT&T said (http://bit.ly/1kwukt1). The firm said the FCC should address the former defaulter rule, which requires companies to make larger upfront payments for licenses if they ever defaulted on a license or were delinquent on a debt owed to a federal agency (CD June 3 p1). Provisions in the “prohibited communications” rules “unnecessarily chill secondary market activity and serve as a disincentive to auction participation without adding to the deterrent effect against collusion that the antitrust laws’ remedies -- criminal penalties and treble damages -- provide,” AT&T said.
Verizon Wireless was also mostly pleased with the proposed rules, but sought a few changes, including the liberalization of the former defaulter rule. “While there may have been a valid premise for this rule at one time, the rule as adopted is overly broad and applies to any and all debts, regardless of how small and whether the debt has long since been paid,” Verizon said (http://bit.ly/1nBGIN0). The carrier also said the FCC should permit package bidding, allowing carriers to bid for a nationwide package of licenses. C-Spire Wireless said a blind SMR auction without package bidding will likely mean “robust participation” (http://bit.ly/1qHE5d1).
Dish said the FCC should provide separate bidding eligibility, activity waivers and stopping rules for the different spectrum offered for sale (http://bit.ly/1ltpEIF). Dish also proposed that the FCC conduct at least two mock auctions prior to the actual auction and reform the former defaulter rule.