Upcoming FCC Spectrum Auctions

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					   Upcoming FCC
  Spectrum Auctions

      Bryan N. Tramont
Wilkinson Barker Knauer, LLP
     www.wbklaw.com
      Upcoming Spectrum
     Auctions/Opportunities
• AWS-1: 90 MHz – scheduled for June 29, 2006
• 700 MHz: 60 MHz – legislation requires FCC to
  begin auction by Jan. 28, 2008 (broadcasters will
  exit the band by Feb. 2009)
• AWS-2: 40 MHz – service rules not yet set;
  auction not yet scheduled
• To put this 190 MHz in perspective,
  approximately 180 MHz of spectrum is currently
  allocated for all of cellular/PCS
• Other spectrum opportunities include: BRS/EBS,
  3650-3700 MHz, and White Spaces


                                                  2
    AWS-1 Auction History
•   November 2002: FCC allocates AWS-1 spectrum
•   November 2003: FCC adopts initial band plan and service rules for
    AWS-1
•   December 2004: Commercial Spectrum Enhancement Act (CSEA)
    becomes law
     – Establishes Spectrum Relocation Trust Fund and sets reserve
         price mechanism for spectrum, tied to NTIA estimate
•   August 2005: On reconsideration, FCC revisits AWS-1 band plan to
    make more spectrum available in smaller areas, and promises rule
    making proceeding on Designated Entity (DE) issues
•   December 2005: NTIA produces estimate of relocation costs (as
    required by CSEA)
     – Estimate lower than anticipated
     – CSEA requires six month period before auction can begin
•   January 2006: FCC schedules AWS-1 auction to begin on June 29,
    2006
•   February 2006: FCC initiates NPRM to evaluate DE program
•   April 2006: FCC announces that typical bidder information available
    after each bidding round will likely be withheld in this auction
•   April 2006: FCC also substantially limits DEs’ ability to lease or
    resell spectrum acquired in the AWS-1 auction                       3
 AWS-1 Band Plan (adopted August 2005)
BLOCK                      FREQUENCIES (MHz)                                                SVC.                 # OF LICENSES
                                                                                            AREA

Block A: 20 MHz 1710-1720/2110-2120                                                         MSA/RSA                   734 licenses
Block B: 20 MHz 1720-1730/2120-2130                                                         EA                        176 licenses
Block C: 10 MHz 1730-1735/2130-2135                                                         EA                        176 licenses
Block D: 10 MHz 1735-1740/2135-2140                                                         REAG                       12 licenses
Block E: 10 MHz 1740-1745/2140-2145                                                         REAG                       12 licenses
Block F: 20 MHz 1745-1755/2145-2155                                                         REAG                       12 licenses
                                                                                            TOTAL                    1122 licenses

                           MOBILE                                                                                    BASE
1710         1720        1730        1735       1740       1745          1755        2110         2120        2130        2135       2140       2145          2155




       A            B           C           D          E           F       ..... .           A           B            C          D          E           F



       CMA          EA          EA      REAG       REAG           REAG                      CMA          EA          EA      REAG       REAG           REAG

                                                                                                                                                              4
AWS-1 License Areas




                      5
   AWS-1 Specific Issues
• Auction Procedures
• Revised Designated Entity Rules
• Incumbent Relocation




                                    6
     Auction Procedures
• Auction Procedures Proceeding
   – Short form applications were filed May 10,
     2006; FCC to release list of applicants soon
   – Typical bidder identity information available
     after each bidding round likely to be withheld
     in this auction
• Auction must raise 110% of CSEA
  Relocation costs for auction of 1710-1755
  ($1.029 billion). Total revenue from
  paired blocks must exceed $2.06 billion

                                                  7
    Bidding Credits: DE
• Two tiers of DEs
  – “Small Business”
     • 15% bidding credit
     • $40 million in revenue (average gross
       revenue past three years)
  – “Very Small Business”
     • 25% bidding credit
     • $15 million in revenue (average gross
       revenue past three years)
• No spectrum set aside in this auction

                                               8
    Bidding Credits: DE
• Designated Entity (DE) Rulemaking
  – NRPM – Feb. 3, 2006; Order – April 25, 2006
  – The FCC decided not to adopt specific
    restrictions on the ability of bidders that
    qualify for bidding credits to partner with any
    group or class of investors, but it substantially
    limited their ability to lease spectrum or offer
    it for resale.
  – The FCC adopted a 2nd Further Notice seeking
    comment on whether additional restrictions
    are warranted to safeguard the DE program
    and DE benefits.

                                                   9
      Incumbent Relocation
 1710-1755 MHz – USG Operations
• Relocation funded by auction proceeds
• 2240 assignments to be relocated
   – Includes 904 fixed systems, 12 nationwide systems, 460
     mobile systems
• 31 DoD classified systems
   – Location, frequency unknown
• 21% will be relocated within 12 months; 49%
  within 24 months; 90% within 36 months; and
  96% within 48 months
• FCC/NTIA established coordination procedure to
  allow AWS licensees to begin service during the
  transition without causing harmful interference to
  federal operations.
   – Interference analysis based on TIA Bulletin 10F
                                                        10
      Incumbent Relocation
 2110-2150 MHz – Microwave Links
• Approximately 5,500 links to be relocated
• AWS licensee to perform a frequency
  coordination analysis; in the event of
  interference, the incumbent must be relocated
  prior to AWS operation.
• Rules are largely identical to the rules used to
  relocate fixed services from the PCS bands
  beginning in the mid 90s.
   – But now “rolling” date will begin 2-year mandatory
     negotiation period for each incumbent facility, triggered
     by new entrant
   – Involuntary relocation follows mandatory period;
     incumbent is entitled to comparable facilities only
   – Relocation rules will sunset 10 years after the first
     AWS license is issued.
                                                           11
     Incumbent Relocation
        2150-2155 MHz – BRS
• Approximately 30-50 BRS systems to be
  relocated
• AWS licensee to determine whether
  proposed facility will cause interference;
  if so, AWS must relocate the incumbent
  (both hub and subscribers) prior to AWS
  operations
• Rolling date will begin 3-year mandatory
  negotiation period, followed by
  involuntary relocation period
• Relocation rules will sunset 15 years after
  the first AWS license is issued
                                            12
          700 MHz Band
• Congress decreed broadcasters must turn
  back analog broadcast spectrum in the 700
  MHz spectrum band by February 19, 2009
• 108 MHz (698-806 MHz)
   – 24 MHz has already been allocated to public
     safety
   – 24 MHz has already been auctioned for
     commercial use
   – The remaining 60 MHz must be auctioned no
     later than January 28, 2008

                                               13
                                              700 MHz Band Plan
                                            60 MHz of Spectrum to be Auctioned
BLOCK                                   FREQUENCIES (MHz)                                  SVC. AREA                          # OF LICENSES

Lower Block A                                698-704/728-734                                     EAG                           6 licenses
Lower Block B                                704-710/734-740                                     EAG                           6 licenses
Lower Block E                                722-728                                             EAG                           6 licenses
Upper Block C                                747-752/777-782                                     EAG                           6 licenses
Upper Block D                                752-762/782-792                                     EAG                           6 licenses
                                                                                                 TOTAL                        30 licenses




                               Lower 700 MHz Band                                                           Upper 700 MHz Band
                                                                                     746


                                                                                           747



                                                                                                  752




                                                                                                             762


                                                                                                                   764




                                                                                                                               776


                                                                                                                                     777



                                                                                                                                           782




                                                                                                                                                     792
 698




           704




                     710




                                  716




                                             722




                                                       728




                                                                 734




                                                                           740




                                                                                                                     Public
       A         B         C            D          E         A         B         C   A      C           D    B                  A    C           D   B
                                                                                                                     Safety




                                                                                                                                                           14
   700 MHz Issues to Watch
• Led by Morgan O’Brien, Cyren Call
  Communications filed a petition for rulemaking
  in April 2006 with the FCC asking to reallocate
  30 of the 60 MHz to public safety and issue a
  single nationwide license to a trust that would
  auction off rights to lease spectrum and build out
  a public safety broadband in exchange for the
  right to commercial use
• In July 2005 Rural Cellular Association asked the
  FCC to revisit the 700 MHz license area sizes and
  provide for smaller area licenses
• In the 24 MHz of spectrum previously auctioned
  700 MHz spectrum, the 6 MHz Guard Band
  spectrum may be reassessed; some licenses
  available for repurposing (Nextel returned much
  of it in the 800 MHz re-banding proceeding)
                                                 15
 Other Spectrum Opportunities

• BRS/EBS (2.5 GHz)
  – Band plan conversion
  – Relocation of MDS Channels 1 & 2
• White Spaces (in broadcast
  spectrum)
  – FCC NPRM on whether to allow
    unlicensed devices to operate on a non-
    interference basis in the TV spectrum
  – Legislative proposals pending
                                         16
Other Spectrum Opportunities
• AWS-2
  – “H” Block (1915-1920/1995-2000 MHz) and
    “J” Block (2020-2025/2175-2180 MHz):
    service and technical rule proceeding initiated
    in 2004
  – 2155-2175 reallocated to AWS in 2005
     • May 2005 M2Z filing seeks nationwide license to
       offer free broadband service
• 3650-3700 MHz
  – Order adopted in 2005 creating non-exclusive
    licensing regime for broadband or backhaul
    offering with new interference mitigation
    technique
  – Petitions for reconsideration pending
                                                     17
For additional information:

        Bryan N. Tramont
     btramont@wbklaw.com
          202-383-3331


    Wilkinson Barker Knauer, LLP
      2300 N Street, NW Suite 700
        Washington DC 20037
   P: 202-783-4141 F: 202-783-5851
           www.wbklaw.com
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