FCC sets date for wireless auction, proposes rule change
Commercial wireless operators will have an opportunity in June to bid on 90 MHz of spectrum that is targeted for 3G services, but many large carriers likely will have to pay more than they did in previous auctions because of a rule change.
Bidding on frequencies in the 1710 MHz to 1755 MHz band — airwaves vacated by government agencies, including the military — and the 2110 MHz to 2155 MHz band is scheduled begin on June 29, according to the FCC’s wireless bureau. The auction will feature new rules regarding so-called “designated entities” — smaller wireless operators — that would alter bidding by large carriers.
Designated-entity rules were established to let small wireless providers bid for spectrum against deep-pocketed incumbents by granting bidding credits to the small operators. But a more common practice was for large carriers to contract with a designated entity to acquire the spectrum via auction with its bidding credit, then sell the spectrum license to the large carrier after network-buildout milestones were met five years later, according to an FCC source. The maneuver effectively let the large carrier obtain spectrum for less than it would have paid had it bid on the airwaves itself.
In a notice of proposed rulemaking released last month, the FCC tentatively concluded that a designated entity should not receive bidding credits during the auction if it has a “material relationship” with a “large, in-region incumbent carrier.”