At its Open Meeting on Thursday (September 26), the FCC will be set to adopt a Public Notice that seeks comment on bidding procedures for Auction 105 – the long-anticipated auction of Priority Access Licenses (“PALs”) in the 3550-3650 MHz (“3.5 GHz”) band. According to a draft of the Public Notice released in early September, the Commission will auction seven unpaired 10-megahertz channels in each county-based license area for a total of 22,631 PALs nationwide. The Public Notice also seeks comment on allowing bidders the option to bid at a Cellular Market Area (“CMA”) level in the 172 top CMAs that incorporate multiple counties and are classified as Metropolitan Statistical Areas (“MSAs”). We identified this “package bidding” as a potential cause for dispute at this bidding procedures stage in our November 5, 2018 post on the Report and Order that modified the 3.5 GHz Band licensing regime.
In the October 2018 Report and Order, the Commission sought to promote greater investment in the band, by 5G proponents in particular, by making PALs more attractive to commercial mobile service providers. The Order sought to accomplish this by, among other things, increasing the size of PAL license areas from census tracts to counties (with the potential opportunity for package bidding in MSAs), and extending license terms from three to ten years with a renewal expectancy.
Since that Order, the Commission has moved forward with testing and approvals for three Environmental Sensing Capability (“ESC”) operators (Commscope, Federated Wireless and Google) to facilitate dynamic spectrum sharing (“DSS”) in the 3.5 GHz Band and six Spectrum Access System (“SAS”) Administrators (Amdocs, Commscope, Federated Wireless, Google and Sony) for initial commercial deployments. At a September 18, 2019 event, the FCC marked the launch of commercial services in the band – the General Authorized Access (“GAA”) operators that are licensed by rule and must avoid interference to both PALs and incumbents in the band.
In the Public Notice, the Commission seeks comment (penciled in for October 28, and replies by November 12), on the procedures for Auction 105 for the PALs. Individual licensees can hold up to four PALs out of the seven within the band in any license area at any given time. The Commission is proposing to use an ascending clock auction design in which anonymous bidders indicate their demands for generic license blocks in license areas. Unlike Auctions 102 and 103 for the millimeter wave Spectrum Frontiers bands, in the so-called 28 and 24 GHz Bands, respectively, PALs will not be assigned specific frequencies during the auction and instead will be authorized to use frequencies associated with their licenses as they are dynamically assigned by SAS Administrators, in accordance with the three-tier dynamic sharing arrangement in the band. The Commission plans to start the auction on June 25, 2020.
Perhaps the most politically controversial aspect of the Public Notice will be its proposal to allow bidders to elect, prior to the start of the auction, to bid at CMA-level for blocks in all of the counties comprising MSAs, which are the largest CMAs in the large metropolitan areas that incorporate multiple counties. In her dissent to the October 2018 Report and Order, Commissioner Rosenworcel (the lone Democrat at the time) lamented the “lost opportunity” in the band to auction smaller licenses for shorter terms as the original Obama-era rules provided for, which she believed would foster innovative and flexible new services and sensors. She criticized increasing the geographic size of licenses from census tracts to counties, and may well question allowing bidders seeking PAL MSA-wide access in the large metropolitan areas. Whether there will be a significant opposition to this concept in response to the new Public Notice, once it is adopted, will be one of the things to watch for as this long-anticipated auction draws near in what is recognized as a key candidate band for 5G deployment.