At the FCC's monthly open meeting on Wednesday, the agency's commissioners undertook two major actions with the intention of promoting the deployment of fifth-generation (5G) wireless broadband services throughout the U.S. In the first action, the FCC approved procedural rules which are expected to set the stage for incentive auctions of millimeter wave spectrum in the upper 37 GHz, 39 GHz and 47 GHz bands by year's end. In a second order which will enable commercial wireless entities to hold licenses in the 2.5 GHz band for the first time, the agency adopted flexible use rules for the 2.5 GHz band, which has been reserved for educational entities since the 1960s.
Scheduled to commence on December 10, the FCC's upcoming auction of wireless broadband licenses in the upper 37 GHz, 39 GHz and 47 GHz bands (known as Auction 103) will encompass 3,400 MHz of available spectrum assets to rank as the largest sale of licenses in the FCC's history. Auction 103 will also follow recent FCC sales of licenses in the 24 GHz and 28 GHz bands as the agency's third auction of millimeter wave upper microwave flexible use service (UMFUS) licenses which--together with the aforementioned mid-band channels in the 2.5 GHz band--are slated to support 5G wireless broadband services in the U.S.
As stated in an FCC news release, Auction 103 will be designed as an incentive auction "that will provide incentive payments to existing 39 GHz licensees that relinquish their spectrum usage rights." Licenses will be offered in 100 MHz license blocks in each of the nation's Partial Economic Areas (PEAs) with two categories of blocks--one for the upper 37 GHz and 39 GHz band, and the other covering the 47 GHz band--to be opened for bidding. The initial clock phase of the auction will determine both the winners of generic spectrum blocks and incentive payments to be allocated to incumbent 39 GHz licensees that opt to relinquish their spectrum rights. During the assignment phase, clock phase winners will bid on frequency-specific license assignments in each PEA. On August 23, the FCC will announce the specific number of blocks to be offered in the upper 37 GHz and 39 GHz bands after incumbents in the 39 GHz band decide whether they will relinquish their spectrum rights or accept configured licenses. Short form applications to participate in the auction will be due on September 9.
Meanwhile, the FCC's Report and Order updating the agency's regulatory framework for the 2.5 GHz band will provide prospective commercial wireless industry bidders with the opportunity to directly access spectrum assets that have been held (and largely unused) by educational institutions for decades. Until Wednesday's ruling, the 2.5 GHz band had been allocated to licensees in the Educational Broadband Service (EBS), known formerly as the Instructional Television Fixed Service. Though allocated for EBS use, the FCC has long permitted EBS licensees, under specified conditions, to lease their spectrum to commercial wireless carriers. Citing statistics which show that more than 95% of EBS licensees lease their spectrum to wireless companies, FCC Chairman Ajit Pai told the audience at Wednesday's open meeting that, "given today's imperative of 5G leadership and consumer demand for wireless services, the FCC extending this middleman model even further would be nonsensical."
Observing that the 2.5 GHz band "offers favorable coverage and capacity characteristics for next-generation mobile services," the FCC explained in a news release that the order "eliminates restrictions on the types of entities that can hold licenses as well as educational use requirements, while preserving incumbent licensees' private contractual arrangements and provisions in existing leases." As it described its action as "another step toward closing the digital divide, particularly in rural areas," the FCC confirmed that the order establishes a priority filing window for rural tribal entities "to provide them with an opportunity to obtain unassigned 2.5 GHz spectrum to address the communications needs of their communities." Upon completion of the priority filing window, remaining unassigned spectrum in the 2.5 GHz band will be offered to commercial wireless carriers through the competitive bidding process. To encourage auction participation by small carriers, the order prescribes (1) a county-size license design, (2) three band plans, consisting of blocks of 50.5 MHz, 49.5 MHz and 16.5 MHz each and (3) small business, rural provider, and tribal land bidding credits.
Auctions of 2.5 GHz licenses are expected to take place next year. Declaring, "at long last, we remove the burdensome restrictions on this band, allowing incumbents greater flexibility in their use of the spectrum and [introducing] a spectrum auction that will ensure that this public resource is finally devoted to its highest valued use," Pai told reporters that the FCC's actions "represent the latest step in advancing U.S. leadership in 5G."