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Published: Feb. 3, 2008, 5:55 p.m.

b'The FCC 700 MHz Spectrum Auction

Intro: In this podcast we discuss the in-progress FCC 700 MHz spectrum auction.

Gordon:\\nMike, you are the reigning Global Wireless Education Consortium\\nEducator of the year so you know about this stuff - what exactly is\\nthis spectrum the FCC is auctioning and where did it come from?

Back in 2005 Congress passed a law that requires all U.S. TV\\nstations to convert to all digital broadcasts and give up analog\\nspectrum in the 700 MHz frequency band. This law will free up 62 MHz of\\nspectrum in the 700 MHz band and effectively eliminate channels between\\n52 and 69. This conversion, which has a deadline of February 18, 2009, has freed up spectrum that is being split up by the FCC into five blocks.

Gordon: What so interesting about this block of spectrum?

Cell coverage, required cell-site density and cost (total network cost and cost per customer).

I understand each\\nspectrum block in the 700 MHz auction, except for the national public\\nsafely D-Block, has been assigned an area designation by the FCC. Could you\\ndescribe those areas included in the 700 MHz auction using FCC definitions.

Economic Areas

Cellular Market Areas

Regional Economic Areas

\\n\\n

The\\nC-Block (22 MHz) is being auctioned using the 12 Regional Economic\\nAreas (REAs) created by the FCC. The REAs are an aggregation of the 52\\nMajor Economic Areas (MEAs) defined by the FCC.

\\n\\n REA Services include Wireless Communications Service (WCS)

All FCC areas, along with names, county lists, maps and map info data can be found on the Commission\'s website linked here.

\\n\\nMike: How is the auction being conducted?
\\n\\n\\n\\n

On their website, the Federal Communications Commission has\\xa0 a public notice titled Auction of 700 MHZ Band Licenses. This document describes the bidding procedure for the 214 companies that have qualified for the auction, which will be handled by the Wireless Telecommunications Bureau\\n(WTB). The WTB is one of seven FCC Bureaus and is responsible for all\\nFCC domestic wireless telecommunications programs and policies.

Here\'s a summary outline of the procedure pulled from the 12 page FCC document:

\\n\\n

• Bidding in Auction 73 started on Thursday, January 24, 2008.
• Each qualified bidder received prior to January 24:
  
  • At least two RSA SecurID tokens
  • An Integrated Spectrum Auction System (ISAS) Bidder\\u2019s Guide
  • A FCC Auction Bidder Line phone number
  \\n\\n

• The\\nFCC will conduct the auction over the Internet and telephonic bidding\\nwill also be available. In either case, each authorized bidder must\\nhave his or her own SecurID token.

  \\n\\n
• There will be a\\nminimum opening bid amount for each license and package and the minimum\\nopening bid amount is subject to reduction at the discretion of the WTB. The WTB will not entertain requests to lower minimum opening bid amounts.
  

• The WTB has established the following block-specific aggregate reserve prices for Auction 73:
  

  \\n\\n
  • Block A, $1.807380 billion;
    
  • Block B, $1.374426 billion;
    
  • Block C, $4.637854 billion;
    
  • Block D, $1.330000 billion;
    
  • Block E, $0.903690 billion.
    
  \\n\\n

\\n\\nMike:\\nIt\'s interesting the range of reserve prices - is it safe to say that\\nthese correlate to the "value" the FCC sees with each?

• If, at the close of bidding in Auction 73, the aggregate reserve price for the A, B, C and/or E Blocks has not been met, the WTB will issue an announcement that bidding in Auction 73 is closed and set a date for commencement of Auction 76.

  \\n\\n

• Round\\nresults will be available approximately 10 minutes after the close of\\neach round. and two types of reports will be available to bidders: (a)\\npublicly available information, and (b) bidder-specific information\\navailable only to that bidder when logged in to the FCC Auction System.

  \\n\\n

• Each\\nqualified bidder will have a default watchlist that contains every\\nlicense and packages of licenses selected on the bidder\\u2019s short-form\\napplication. Qualified bidders may also create custom watchlists.

  \\n\\n

• On Tuesday, January 22, the WTB conducted a mock auction, which will allow qualified bidders to\\nfamiliarize themselves with the FCC Auction System. Only qualified\\nbidders will be permitted to participate in the mock auction.
  

  \\n\\n
• Once\\nwinning bids are announced (either after Auction 73 or Auction 76) and\\nwinning bidders are announced, winning bidders will have 10 business\\ndays to file a long-form application (FCC Form 601) and make down\\npayments for all of the licenses it won.

\\n\\nMike: Who are some of the major bidders?

USA Today has published an interesting article titled Google could cause a stir in FCC\'s airwaves auction and, in the article, some of the leading bidders and their likely strategies are listed.

Let\'s take a quick look at some of the major bidders (in alphabetical order) and their expected bidding strategies. For additional detail be sure to read the USA Today Article.

Mike: Why is AT&T going after public-safety spectrum? Am I missing something?



Mike: Is this National Spectrum? As opposed to regional?



Mike: Can you give us some background on the auction to date?

The 26th round finished yesterday (Friday - Feb. 1, 2008) afternoon - here\'s a quick update from the FCC auction site:

\\n\\n

• Bidding Rounds to Date: 26
  
• Bid totals to Date: $18,554,080,600
  
• The A and B-Blocks have been getting most of the attention lately:
• The Los Angeles A-Block leads the A\'s with a current bid of $580,268,000.
• The Chicago B-Block leads the B\'s with a current bid of $892,400,000.
\\n\\n
• There has not been a C-Block bid since it passed the FCC reserve price on Thursday. The current C-Block bid is $4,713,823,000.
• The public safety D-Block has not had a bid in 25 consecutive rounds and is stuck at $472,042,000, well below the $1.3 Billion reserve price set by the FCC.
• E-Block bidding has been slow with the New York City E-Block leading at $178,897,000.
• 23 licenses had not registered a bid at the end of round 26, 19 of these 23 are in the E-Block.
  

\\n\\nMike: Any personal observations and opinions on the auction?

• It looks (to me anyways) like the C-Block bidding may be done. Since the FCC reserve price of $4.6 Billion has been passed, the \\nopen-access that Google wanted is assured. We won\'t know who the\\nwinning bidders are until after the auctions have closed but I\'d say\\nGoogle is the current leading C-Block bidder.
  
• Right\\nnow it does not look like the D-Block will meet the $1.3 Billion\\nreserve price and will end up being re-auctioned by the FCC.
• A number of E-Block licenses will not meet minimum bids and will also be re-auctioned.
  
• The\\nFCC had set an original goal of $10 Billion for the auction. With\\ncurrent bids totaling over $18 Billion, it appears the auction (from\\nthe FCC\'s perspective) will be a success.
  

\\n\\nBidding is closed for the weekend with round 27 starting Monday (Feb. 4, 2008) morning.

Mike: What\'s the best way to stay updated?

If you want to stay updated - the FCC Auction 73: 700 MHz Auction Summary page lists, among other things, results of the auction after each round. You can also watch my blog!

Mike: When will we know the winners?

The\\nauction will likely last a couple of months so we won\'t know the\\nwinners until then. We should start to see products from the winning\\nbidders that use the spectrum sometime next year.

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