Continuing its push to free up spectrum to support next-generation 5G services, the FCC plans to move forward on auctions of both mid- and high-band spectrum for commercial mobile use at its next open meeting scheduled for July 10, 2019. First, the FCC would establish new licensing rules for the 2.496-2.690 GHz band (“2.5 GHz Band”) currently used for educational television services to facilitate the auction of the spectrum next year. The FCC contends that the 2.5 GHz Band, which represents the largest contiguous block of mid-band spectrum considered for auction to date, has largely gone unused and should be opened up for commercial use. Second, the FCC would adopt application and bidding procedures for the auction of spectrum at 37.6-38.6 GHz (“Upper 37 GHz Band”), 38.6 GHz-40.0 GHz (“39 GHz Band”), and 47.2-48.2 GHz (“47 GHz Band”). This auction would be the FCC’s third auction of high-band spectrum, following the recent auctions of 24 GHz band and 28 GHz band spectrum. As we previously noted, this auction is complicated by the presence of incumbent licensees in the 39 GHz Band, who would be offered incentive payments to accept modified licenses or leave the Band under the FCC’s plan. Rounding out the major July actions, the FCC expects to seek comment on establishing a three-year, $100 million universal service pilot program to support telehealth services as well as eliminate pricing regulation and other restrictions on certain legacy data transport services offered by price cap carriers.
You will find more details on the most significant July meeting items after the break:
Mid-Band Spectrum Auction: The draft Order would set the stage for a 2.5 GHz Band auction by eliminating rules that prevented non-educational institutions from obtaining licenses, allowing commercial providers to enter the Band. New licensees would no longer be required to use the spectrum for educational purposes and would possess more flexibility in leasing spectrum to others. The auction would not affect existing contracts or leases for 2.5 GHz Band spectrum, which would remain in place. The FCC plans to provide rural Tribal organizations with a priority filing window for new 2.5 GHz Band licenses, but would not implement a similar window for educational institutions. After the close of the priority filing window, the FCC would auction the remaining 2.5 GHz Band spectrum in 100 megahertz or 16.5 megahertz blocks at the county level.
High-Band Spectrum Auction: The draft Public Notice would establish rules for the auction of Upper 37 GHz Band, 39 GHz Band, and 47 GHz Band spectrum for commercial mobile use. Auction participants would first bid on generic spectrum blocks covering partial economic areas. The bid amounts in this round would determine the size of the incentive payments received by incumbent 39 GHz Band licensees. Following the generic bidding round, auction participants would bid on frequency-specific spectrum blocks, with the aim of creating contiguous block assignments. The FCC plans to provide bidding credits to small businesses and rural service providers to encourage auction participation. The FCC would accept applications to participate in the auction beginning August 2, 2019, with the auction scheduled to start on December 10, 2019.
Connected Care Pilot Program: The draft Notice of Proposed Rulemaking (“NPRM”) would seek input on the eligibility requirements, application processes, goals, and evaluation metrics for the proposed Connected Care Pilot Program. The FCC anticipates operating the Connected Care Pilot Program as a new program within the Universal Service Fund (“USF”), supported by an additional assessment on telecommunications providers to be added to the contribution factor that will slightly increase USF contributions. The FCC therefore says it does not plan on diverting resources from existing USF programs to support the Connected Care Pilot Program. Moreover, in a reversal from its initial inquiry last year on the Connected Care Pilot Program, the FCC is no longer considering restricting program participation only to facilities-based eligible telecommunications carriers (“ETCs”); rather, service providers do not even have to be ETCs. Comments on the NPRM will be due 30 days after Federal Register publication of the NPRM, with reply comments due 30 days later.
Transport Services Reform: The draft Orders would relieve price cap carriers from pricing regulation of their lower-speed, legacy transport services known as Time Division Multiplexing (“TDM”) transport. The FCC would find that sufficient competition exists in the provision of TDM transport services to justify eliminating the pricing controls. Although the FCC already voted to eliminate TDM transport service pricing controls in 2017, a federal court subsequently returned the issue to the agency to allow for full notice and comment on the issue. The FCC also would forbear from enforcing its unbundling requirements for legacy transport services known as DS1 and DS3 transport, subject to certain conditions and a multi-year transition period. The forbearance would free price cap carriers from providing such legacy transport services based on regulated rates.