FCC postpones auctions for 700MHz band licenses, upper and lower paging bands
The auction of licenses in the 747MHz-762MHz and 777MHz-792MHz bands, previously scheduled to begin on Sept. 12, will be delayed pending the FCC’s resolution of petitions for reconsideration and clarification of the Commission’s Third Report and Order in WT Docket No. 99-168, CS Docket No. 98-120, and MM Docket No. 00-39. Upon release of the federal agency’s order acting on those petitions for reconsideration, the FCC Wireless Telecommunications Bureau will release a public notice announcing key dates for a rescheduled auction.
Kathleen A. Kaercher, an attorney with Blooston, Mordkofsky, Dickens, Duffy & Prendergast in Washington, said that the FCC postponed the 700MHz auction for several reasons. The official reason given was so that the federal agency could come up with a coordinated, comprehensive approach to spectrum management. The 700MHz spectrum is occupied by broadcasters who do not have to vacate that spectrum until 2006, at the earliest.
“A complicating factor involves the continuing debacle of Auction 35, including NextWave and the PCS C-Block,” Kaercher said.
She said that the major carriers, who could be expected to bid in the 700MHz auction, are probably still reeling from participation in Auction 35, only to see the Court of Appeals rule that the FCC had no authority to auction licenses that NextWave had originally won. Although the winning carriers still need spectrum, it is not entirely clear what the FCC will do in response to that Court of Appeals decision. They could request a review by the entire court, a rehearing en banc, or they could appeal to the Supreme Court—although the Supreme Court recently declined to hear a similar case.
So, presuming the FCC does not appeal, what happens?
“NextWave is making noises about building out its properties and signing contracts with equipment suppliers, but when push comes to shove, if the ‘winning’ bidders of Auction 35 offer NextWave the same amount of money as they bid for the spectrum with the FCC, would NextWave take it? Will potential 700MHz bidders be able to get the spectrum they currently need on the private market, rather than at auction?” Kaercher mused.
Spectrum is a valuable commodity, but that combination of factors devalues it. The large carriers do not know how the NextWave situation will shake out or whether they can get the spectrum they need from NextWave. Plus, it will be years before the broadcasters have to move and, as a result, years before the operators will get to use the spectrum.
“A lot of things can happen between now and then, and the potential bidders are only too aware of that fact. This will cause them to reduce their bids. They know that, the FCC knows that, Congress knows that and the Bush Administration knows that. As a result, the auction has been put off indefinitely,” Kaercher said.
The reason the FCC put off the paging auction until Oct. 30 appears to be less complex. In a public notice released on May 25, its stated reason was that it had technical problems.
“When you think of auctioning off more than 15,000 licenses at one time, via a new interface, the Internet, you can see how there might be problems. I would hope, however, that they would make a determination of whether to go forward or not, prior to the opening of the filing window. While presumably each applicant will be able to file the same application as before, filing the application still takes time and effort, which will have been for naught if the FCC cannot conduct the auction,” Kaercher said.