Auctions

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.

Democratic Reps of the House Commerce Committee, a panel considering the first reauthorization of the Federal Communications Commission in 27 years, are finding some common cause with their Senate Republican counterparts in efforts likely to help the broadcasting industry. The Democratic Reps and Senate Commerce Committee Republicans both support some version of the Viewer Protection Act, introduced by House Commerce Ranking Member Frank Pallone (D-NJ).

The House bill would create a $1 billion fund to facilitate broadcasters’ move to other channels — in a process known as repacking — after they gave up their low-band spectrum for an FCC auction offered to wireless carriers that want to use those airwaves for next-generation services. Pallone’s legislation also calls for $90 million that would go specifically toward educating viewers on the transition. Across the Capitol, several Senate Commerce Committee Republicans support legislation similar to the Viewer Protection Act.

I think it’s time for a National Broadband Map that offers an honest picture of wired and wireless broadband across the country. Too often the Federal Communications Commission cobbles together data for each individual rulemaking and report without a comprehensive and updated snapshot of where service is and is not. We can build this map in Washington, but it would be great if we had a clearer picture on the ground. I’m a big believer in the wisdom of crowds, so I think we should put it to the public. If you’ve not been able to get service, or live in an area that lacks it, help us make a map and write me at broadbandfail@fcc.gov. I’ve set this account up to take in your ideas. I will share every one of them with the agency Chairman—and put on pressure to do something about it.

For decades, the FCC has led the world with its auction models for the distribution of spectrum licenses. We’ve made a lot of progress powering the mobile devices that so many of us rely on every day. But take a drive along some rural roads and you will know there is room for improvement. It’s one reason why the AIRWAVES Act from Sen Maggie Hassan (D-NH) and Sen Cory Gardner (R-CO) is so important. It helps identify more licensed and unlicensed spectrum that can be brought to market to improve wireless broadband. On top of that, it sets up a fund whereby auction revenues will help support wireless broadband infrastructure in rural America. It’s the kind of creative effort that would in time lead to more coverage on a broadband map and also help bridge the Homework Gap.

I’ve been asked to talk about where we are with spectrum policy in the United States, and what lies ahead. Federal Communications Commission. Chairman Pai has two overarching goals at the top of the Commission’s wireless agenda. First, we want to unleash spectrum to meet growing consumer demand and enable new waves of wireless innovations that will grow our economy and improve the standard of living for the American people. The second key goal of our wireless agenda is harnessing the power of spectrum to help bridge the digital divide.

One foundational principle is flexible use for wireless spectrum. Instead of mandating that a particular spectrum band be used with a specific type of wireless technology, the government should leave that choice to the private sector, which has a much better sense of consumer demand. The Commission has a role to play in crafting light-touch regulatory frameworks, with clear and technology-neutral rules. Basically, we want to put spectrum into the marketplace and then let the market and innovators go to work. Flexible use for spectrum is a proven practice. For decades, it has enabled wireless networks in the U.S. to evolve with technology and to do so much more quickly than if operators had to obtain government sign-off each step of the way. Another principle is our commitment to continue to identify possibilities to put airwaves to more efficient use. Chairman Pai believes we need an all-of-the-above approach to this spectrum endeavor, looking at low-, mid-, and high-band spectrum.