Auctions

[Commentary] On November 16, the Federal Communications Commission granted TV licensees the right to provide what it euphemistically called “the next generation TV broadcast standard.” Although this giveaway of spectrum rights (popularly known as the “public airwaves”) to media plutocrats had substantial benefits for the American public, it also had needlessly high costs.

The Office of Engineering and Technology seeks comment on spectrum policy recommendations that the FCC's Technological Advisory Council (TAC) has made to the FCC through its Chairman and has elaborated on in more detail through several white papers.

The stakeholders the US Government Accountability Office spoke with identified two primary spectrum-related challenges for the internet of things (IoT)—the availability of spectrum and managing interference. Although not considered an immediate concern, Federal Communications Commission (FCC) staff and some stakeholders noted that rapid increases in IoT devices that use large amounts of spectrum—called high-bandwidth devices—could quickly overwhelm networks, as happened with smart phones.

Since this is my first official speech, I want to highlight a few of the issues I hope to focus on during my time on the Federal Communications Commission. I intend for this to be the beginning of a conversation. I welcome all stakeholders to reach out with ideas on where you think the FCC should be heading.

I want to focus my remarks this morning on some of the ways the FCC can incentivize even greater broadband deployment. This is particularly important as we make the transition to 5G—a shift that will require a massive investment in both wired and wireless infrastructure. In fact, if we get the right policies in place, this transition could mean $275 billion in network investment, three million new jobs, and a half a trillion dollars added to the GDP. So how do we get there? How do we ensure that the United States wins the global race to 5G? I want to talk this morning about three of the key pieces—(1) spectrum, (2) infrastructure, and (3) ensuring we have the skilled workforce in place to deploy these next-generation networks—before I talk more broadly about the need for regulatory reform.

The Federal Communications Commission is having second thoughts about the auctioned “middle layer” of the planned Citizens Broadband Radio Service at 3550-3700 MHz.

You may remember how this is all supposed to work, with three categories of users. The “Incumbent Access” (IA) users, already in place in the band, will have interference protection from all the others. Least protected are the General Access (GA) users, who will contend in real time with other GA users for whatever GA spectrum is available. In between are the Priority Access (PA) users, who will bid at auction for the privilege of on-demand access (except in IA protection zones).A “Spectrum Access System” (SAS) will assign frequencies to each user on the fly, implementing the various priorities. The SAS is still under development. In the meantime, the FCC is taking another look at the PA auctions.

Oct 24, the Federal Communications Commission voted to approve a Notice of Proposed Rulemaking (NPRM) that will undo years of the FCC’s work to improve wireless deployments in rural areas, close the digital divide, and promote spectrum use by a wide range of users with diverse and innovative business models in the 150 megahertz between 3550-3700 MHz (the 3.5 GHz Band or Band).

Adopting the NPRM is the first step to undermining the FCC’s work in the 3.5 GHz Band, and represents a rare lose-lose-lose scenario in spectrum policy making. The draft NPRM explores expanding the geographic size of 3.5 GHz Band Priority Access Licenses (PALs) from the size of census tracts to Partial Economic Areas (PEAs), extending the license term from three years to 10 years, and to making PALs renewable. Currently, it appears the Commission (thanks to FCC Commissioner Mignon Clyburn) may have resisted its worst impulses and walked back its draft proposal to license all PALs by PEA. However, If eventually adopted as the licensing scheme for the 3.5 GHz Band, the NPRM’s proposals would make licenses unaffordable for rural broadband providers seeking to serve targeted, unserved communities, and other innovative wireless uses (e.g., an Internet of Things network on a corporate campus or distribution warehouse, or a wireless network to serve an airport, shopping center, arena, or stadium), and make it unlikely that the 3.5 GHz Band is actually put to use closing the digital divide in rural America.

The Federal Communications Commission proposed revisions to its rules in the 3.5 GHz band to promote investment, keep up with technological advancements, and maintain US leadership in the deployment of next-generation services. In particular, the FCC seeks comment on changes to the rules governing the second service tier, known as Priority Access Licenses, of the band’s novel three-tier framework. These changes include longer license terms with the possibility of renewal; larger geographic license areas; and modifications to the rules governing license auctions, secondary market transactions, and certain technical criteria.

These changes to the licensing and technical rules in the band could help increase incentives for investment, encourage more efficient spectrum use, and promote robust network deployments in both urban and rural communities. Additionally, over the past few years, it has become clear that the 3.5 GHz band will be a core component of 5G network deployments, with several countries moving forward with policies that will make this band available for such services. These rule changes will facilitate the implementation of 5G networks in this band and accelerate deployment of a promising new generation of wireless technologies for all Americans

[Commentary] As nearly all usable radio spectrum has been allocated to particular uses and assigned to particular users, shifting spectrum toward modern uses almost certainly requires taking from one use or user to give to other uses and users. Such spectrum repurposing need not be contentious and is often successful. The recent $41 billion AWS-3 spectrum auction, the largest-grossing auction in history, involved spectrum repurposed from Federal government incumbents to mobile wireless providers. Yet, success is not guaranteed.

Spectrum, like land, is typically “zoned” to particular uses that play nice together. For instance, a relatively low-powered satellite signal might be drowned in a sea of high-powered, land-based cellular signals. Like small and big dogs being kept separate at a dog park, different types of radio signals are managed to mitigate conflict using technical means such as power limitations and boundaries between interfering frequencies or assigning users and uses varying degrees of priority. Before one can reassign satellite spectrum to terrestrial wireless broadband use, therefore, one must seek permission from the FCC: terrestrial services are prone to interfering with satellite signals, so an approval requires a demonstration that interference with others is not a problem.

[Dr. George S. Ford is Chief Economist of the Phoenix Center for Advanced Legal & Economic Public Policy Studies]

The Incentive Auction Task Force and the Media Bureau announce the issuance of an initial allocation of the TV Broadcaster Relocation Fund in the total amount of $1 billion to begin to reimburse eligible full power and Class A broadcasters and multichannel video programming distributors (MVPDs), for expenses related to the construction of station facilities on reassigned channels. The Bureau will continue to monitor closely the draw-down of Fund amounts and allocate additional amounts later in the transition period.

A letter from almost five dozen members of Congress, including from both parties, calls on Federal Communications Commission Chairman Ajit Pai not to move off the FCC's current timeline for repacking TV stations after the incentive auction and freeing up spectrum for wireless broadband. "We write to urge you to ensure the 600 MHz spectrum...is cleared no later than July 3, 2020, as currently scheduled" they wrote Oct 16. They said clearing the band of broadcasters as quickly as possible was a critical component of deploying high-speed broadband, including to rural areas, a particular concern of the FCC's, as well as many of the letter signatories, including Rep Anna Eshoo (D-CA).

They said freeing up that spectrum and connecting homes across the country to broadband is not just about jobs or economic growth, but is a necessity in a connected world. They praised Pai's work to date to boost broadband deployment in underserved communities and said they supported a "robust" waiver process for stations who need flexibility in making their channel moves, and want stakeholders to work together to find creative solutions. But the bottom line is: Wrap it up by that 2020 date.