FCC Seen Likely to Drop Push for CMA-Level Bidding in Final CBRS Rules
The FCC may have to backtrack on proposed rules for the citizens broadband radio service band after getting essentially no support in the record for cellular market area-level bidding in June’s auction of priority access licenses (PALs). Only T-Mobile backed CMA-level bidding but not using the FCC-proposed scheme (see 1911130056). Commissioners approved a notice in September that proposes to allow bidding on a CMA-level basis, rather than just by counties, in the top 172 CMAs. Commissioners Jessica Rosenworcel and Geoffrey Starks voted for the notice, though with reservations on CMA-level bidding (see 1909260040).
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Former FCC officials said the FCC could have a tough time justifying CMA-level bidding without a record supporting the change. The FCC declined to comment.
With “virtually no support in the record for CMA-level bidding, we expect the commission to drop that proposal and return to the straightforward, county-by-county bidding,” said Michael Calabrese, director of the Wireless Future Program at New America. “Bidding on strictly a county basis was the expected based on the hard-fought compromise in last year’s order that greatly expanded the size of license areas from census tracts to counties.”
“The vast majority of commenters, including one major nationwide mobile wireless carrier, oppose the commission’s CMA-level bidding proposal,” agreed Louis Peraertz, Wireless ISP Association vice president. “Stakeholders of all shapes and sizes have questioned the utility and complexity of the proposal and its potential for mischief.” The proposal would force WISPs and others to bid for markets they don't want to serve, he said. “CMA-level bidding creates incentives for companies to inefficiently increase the bids for rural counties in CMAs to artificially high levels and foreclose smaller companies from a fair opportunity to acquire PALs,” he said.
But R Street Institute Resident Fellow Jeffrey Westling said the FCC has some wiggle room. For the commission to act, “the decision needs to be supported by substantial evidence in the record, but it isn't a popular vote,” he emailed: “Proponents have come out in favor of CMA in larger markets for a variety of reasons: reduction of transaction costs, interference concerns could be alleviated, etc. Even if only one commenter is strongly in favor of CMAs, the commission could still go that route if they believe it is the best option based on the relative strengths of the arguments presented.”
The challenge for the FCC is the lack of backing for the proposal as written, Westling said. “T-Mobile's support is qualified in that they want to ban county-level bidding in the markets designated for CMA licenses,” he said: “If this is the only party in support of CMAs and that support is qualified, then the commission would need to craft a justification citing the benefits of both approaches, but also the drawbacks. This theoretically could be done by citing T-Mobile's support of CMA licenses as a concept, but then lay out the support of county based licenses to justify allowing parties to select how they would like to bid in those markets.”
The FCC will likely drop the CMA proposal, predicted Doug Brake, Information Technology and Innovation Foundation director-broadband and spectrum policy. “The FCC knows how important it is to get quality mid-band licenses out there, so I can understand its impulse to try to design the auction to facilitate large investments,” he said. “But CMA bidding comes with big downsides, complexities, and potential for gaming. There’s not a lot of support for CMA bidding, and what little support there is remains qualified or contingent.”