FCC issues full broadcast spectrum auction orders

This week, the FCC released the full orders covering the upcoming broadcast spectrum auction. Like many political compromises, it’s not simple. But the FCC is attempting to balance competing forces among the buyers and sellers of public spectrum.

According to FCC Chairman Tom Wheeler, the Mobile Spectrum Holdings rules, as they’re formally called, consist of three interrelated actions.

•    increase the amount of spectrum included in the spectrum screen to reflect that which is currently suitable and available for mobile broadband.
•    look closely at low-band spectrum transactions in a competitive review of proposed transactions.
•    set clear pre-auction rules regarding spectrum aggregation for upcoming auctions

The complexity, though, is in auction process. All carriers can bid until a reserve price is reached, after which carriers with a significant amount of low-frequency spectrum – AT&T and Verizon – are limited in the amount of spectrum they can bid on. This creates a special rule for Sprint and T-Mobile in the broadcast spectrum auction, but Wheeler explains it this way, “... we are adopting a limited rule that says the biggest holders of low-band spectrum can’t run the table, as long as there is sufficient demand for reserved spectrum.”

Consequently, the FCC will include all of Sprint’s large spectrum holdings in its screen. This same spectrum screen is used in merger reviews to evaluate potentially anti-competitive combinations. As a result of this action, the much-reported probable Sprint-T-Mobile deal would result in a combined company that far exceeds the spectrum screen.

The end result is uncertain, but Wheeler makes the following prediction:

“For consumers, the mobile spectrum holdings rules we adopt today will mean more competition in more markets. All American consumers, regardless of where they live, should enjoy the benefits that competition can bring: more choices of wireless providers, lower prices, and higher quality mobile services.”

On May 15, the FCC released a fact sheet for those interested in the details of the auction.

Spectrum auction orders (FCC, Jun. 2, 2014)

Wheeler on Policies Regarding Mobile Spectrum Holdings (FCC, Jun. 2, 2014)

Mobile Spectrum Holdings Rules (FCC, May 15, 2014)