Bifurcating Rules for Paired, Unpaired Spectrum in AWS-3 Auction Emerges as Big Issue
The upcoming AWS-3 auction should lead to a more competitive wireless industry, but only if the FCC gets the rules right at the start, said the Open Technology Institute at the New America Foundation and Public Knowledge, in reply comments. NAF, PK and other commenters stressed the importance of the FCC imposing different rules for the paired and unpaired spectrum blocks that will be up for sale in the auction. 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. Replies on proposed bidding rules were due Monday in docket 14-78. The auction is to begin Nov. 13.
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To promote wireless competition, the FCC needs to make sure the auction “is conducted with an eye toward facilitating more mobile market competition while avoiding foreclosure by the most dominant national carriers,” PK and NAF said (http://bit.ly/1iBXnkn). The groups advised against allowing package bidding, but said bidding information should be anonymous as the auction progresses. PK and NAF also said the FCC should adopt separate bidding eligibility, activity waivers and stopping rules for the paired and unpaired spectrum blocks. Dish Network and T-Mobile urged bifurcated rules, in initial comments (CD June 16 p8).
The auction will offer both 1695-1710 MHz spectrum, 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. “By treating the paired and unpaired spectrum blocks as if they are fungible, a combined set of rules would permit certain large bidders to game the system by ‘parking’ bidding eligibility in the unpaired blocks in order to drive up its cost and/or gain an advantage by switching their bids late in the auction,” NAF and PK said.
The paired and unpaired blocks “are not substitutes or interchangeable and should not be treated as such,” said the Competitive Carriers Association (http://bit.ly/1wsIAew). Bifurcated rules would prevent “parking” of bidding eligibility “to artificially prolong the auction,” CCA said.
AT&T disagreed sharply with arguments in favor of bifurcating the auction. These arguments “are premised on two false assumptions,” said the carrier (http://bit.ly/1pJxHmt): “That the different technical characteristics of the paired and unpaired bands warrant separate auction treatment” and “that employing common auction procedures for both bands will encourage ‘parking.'” The FCC should let the market decide “through a single set of auction procedures, the degree to which market participants view the AWS-3 spectrum blocks as substitutable,” AT&T said.