As expected, FCC Chairman Tom Wheeler today circulated a draft of an order that would limit participation by the nation’s largest wireless network operators AT&T and Verizon in the upcoming 600 MHz spectrum auction of TV broadcast airwaves, which will be re-purposed for mobile broadband use. The plan reflects the value of low-frequency spectrum below 1 GHz, which has better propagation characteristics than higher-frequency spectrum, and the fact that AT&T and Verizon together currently hold 85% of the sub-1 GHz spectrum available for wireless service, an FCC official said today.
The draft order calls for up to 30 MHz of spectrum in a 600 MHz license area to be reserved for carriers that hold less than one-third of sub-1 GHz spectrum in the area. But as Wheeler explained in a blog post today, there will be no limits in the initial phase of the auction.
“Any party desiring to bid on any license area will be free to do so,” he said.
Limits will come into play only when the auction reaches a pre-set trigger point based primarily on meeting a price threshold, Wheeler said.
In some cases the amount of spectrum reserved for smaller carriers would be less than 30 MHz if, for example, only 30 MHz of spectrum in total were to be freed up in a specific license area, the senior FCC official explained. Different amounts of spectrum will be available in different areas, depending on what is voluntarily relinquished by broadcasters, who will have the opportunity to share in auction proceeds.
Wheeler earlier this month said he planned to establish limits on two national carriers who control the majority of low-bandwidth spectrum but did not provide details. AT&T said it would consider sitting out the auction if its participation were limited, and other critics said that auction proceeds would be lower if the limits were imposed.
The FCC official said the commission was focused on competition and consumers, and that the prices for licenses reserved for smaller carriers might not be substantially lower than for licenses available for all carriers, at least in some markets.
When Wheeler revealed plans for the limits earlier this month, he noted that rural areas often have fewer choices in wireless carriers than urban areas and that low-frequency spectrum is well suited for rural areas because it requires fewer towers. And noting that wireless equipment operating at lower frequencies does a better job of penetrating walls, he said consumers in urban areas should not be prevented from placing a 911 call from inside a building because their carrier lacked low-frequency spectrum.
The FCC official declined to provide details about the band plan other than to say that licenses would be auctioned on a partial economic area basis. That approach is designed to balance the needs of large and small carriers.
Previously FCC officials said Wheeler planned to propose licensing spectrum in 5 MHz paired bands.
Wheeler’s proposal requires a vote by the other commissioners before it can be formalized and the FCC official said it could be revised before the vote occurs.