Sprinting forward in what has been dubbed the “global race to 5G,” the Federal Communications Commission (“FCC”) this past month unanimously adopted a public notice seeking comment on the auction of 5,986 licenses in the 28 GHz and 24 GHz bands. The FCC plans to open bidding in the 28 GHz auction (Auction 101) on November 14, 2018, with the 24 GHz auction (Auction 102) scheduled to commence “subsequent to the close of bidding” in the 28 GHz auction.
These proposed millimeter wave band auctions further propel FCC Chairman Ajit Pai’s plans to promote “U.S. innovation in 5G wireless services, the Internet of Things, and many technological ‘firsts’ in these previously-underused, high-band frequencies.” Deploying 5G technology in millimeter wave spectrum holds the promise of offering a mobile wireless service with faster speeds, more capacity, and low latency that can support technologies ranging from “autonomous cars” to “industrial Internet of Things and smart city applications.” In adopting its 5G Auction Public Notice, the FCC also noted that the auctions are a step towards securing the United States’ place in a global 5G race where “South Korea, Germany, Australia, the United Kingdom, and Romania have already announced plans for 5G auctions” and “China also has big plans in the works with significant amounts of mid-band and high-band spectrum already identified for 5G.”
New Auction Procedures
The FCC proposed to adopt two separate application and bidding processes for the 24 GHz and 28 GHz auctions, with the different formats reflecting the spectrum inventories available in each band. The Commission also proposed separate auction windows for the two bands, though it seeks comment on whether to open the application filing window for Auction 102 prior to or after the close of bidding in Auction 101.
For Auction 101 (28 GHz), the FCC proposed to use its “standard” simultaneous multiple-round (“SMR”) auction format, consisting of sequential bidding rounds with a simultaneous stopping rule. Under this type of auction, each individual license is offered for bid at the same time and consists of successive rounds of bidding. Bidding typically remains open on all licenses until bidding stops on every license. The SMR format is regarded as better suited to a band where the blocks are less uniformly available, as is true for the 28 GHz spectrum, which is being made available on a shared basis with FSS earth stations on a co-primary basis.
For Auction 102 (24 GHz) the FCC proposed a “clock auction format,” comprising two phases. The first phase of the auction will consist of successive rounds of bids on categories of generic license blocks in specific geographic areas at prices offered by the Commission, followed by a second “assignment” phase with bidding for frequency-specific license assignments. This was the approach used in the broadcast incentive auction and should expedite bidding relative to license-by-license bidding.
In each auction, the FCC proposes to apply its prohibition on certain communications (also known as the “Anti-Collusion Rule”) and its prohibition on joint bidding. The FCC also proposes a $25 million bidding credit cap for eligible small businesses and a $10 million bidding credit cap for rural service providers, as well as a $10 million cap for each auction on the overall amount of bidding credits that any winning small business provider may apply to winning licenses in markets with a population of 500,000 or less.
Next Steps and the Future of 5G
Auctions 101 and 102 are the first of what will likely be a series of millimeter wave auctions in the near future. Comments on these auction proposals are due on May 9 with reply comments due on May 23. The Commission intends to adopt the final auction procedures in advance of the planned November 14 Auction 101 commencement date. Though the Commission has declined to offer a timeline for future auctions, it has expressed its intention to “move forward as quickly as possible to auction the non-Federal, exclusive use [millimeter wave] spectrum.”
The proposed 24 GHz and 28 GHz auctions also complement the Commission’s broader strategy for 5G advancement, following on the heels of the Commission’s March order streamlining “small cell” wireless deployment and infrastructure, and a 2017 order making available 1700 megahertz of millimeter wave spectrum in the 24 GHz and 47.2 – 48.2 GHz bands. In addition, the FCC has been exploring next-generation wireless broadband opportunities in mid-band spectrum over the last few years through an experimental sharing regime in the 3.5 GHz band, and recently opened a docket to explore the possibilities in the 3.7 – 24 GHz bands, including 3.7 – 4.2 GHz, following up with a temporary freeze on new and modified FSS stations in the latter band.
We expect the FCC to continue to aggressively auction and explore opportunities in mid- and high-band spectrum to provide the United States with the regulatory edge to “win” the global race to roll out 5G.