Auction No. 101 Scheduled to Begin November 14, 2018, AU Docket No. 18-85

The Federal Communications Commission (“FCC” or “Commission”) has released a Public Notice seeking comment on competitive bidding procedures for the auction of Upper Microwave Flexible Use Service (“UMFUS”) licenses in the 24 GHz and 28 GHz bands. A UMFUS licensee may provide any services permitted under a fixed or mobile allocation as set forth in Section 2.106 of the Commission’s rules.  The Commission will auction 3,074 county-based licenses in the 28 GHz band in Auction 101 beginning on November 14, 2018 and, upon the conclusion of that auction, 2,912 Partial Economic Area (“PEA”) -based licenses in the 24 GHz band in Auction 102.  The Commission will use a traditional license-by-license bidding format for Auction 101 because those licenses are less uniformly available.  Since there are less existing licensees in the 24 GHz band (only 9 PEAs), the Commission will use a clock auction with generic blocks for Auction 102.  UMFUS licenses will likely be a key component to fifth generation (“5G”) wireless networks.

Description of Licenses.  The 28 GHz band will be licensed as two 425 megahertz blocks (27.500- 27.925 GHz and 27.925-28.350 GHz) on a county-basis.  UMFUS licenses in the 28 GHz band are being made available on a sharing basis with FSS earth stations.  Grandfathered FSS earth stations in the 28 GHz band, those stations in existence as of July 14, 2016,[1]will have the right to operate under the terms of their existing authorizations without taking into account possible interference to UMFUS operations.  In addition, up to three transmitting FSS earth stations may be located in each county that are not required to protect UMFUS operations within a specified interference zone.[2]

Existing Local Multipoint Distribution Service (“LMDS”) licenses in the 28 GHz band will be converted to 425 megahertz block, county-sized UMFUS licenses.  The FCC will make UMFUS licenses available at auction for each of the remaining counties.  For each county in which 28 GHz licenses will be available at auction, both 425 megahertz blocks of the 28 GHz band will be available.

The 24 GHz band will be licensed as seven 100 MHz blocks (24.25-24.35, 24.35-24.45, 24.75-24.85, 24.85-24.95, 25.05-25.15, 25.15-25.25) on a PEA-basis.  Similar to the 28 GHz band, UMFUS licenses in the upper segment of the 24 GHz band (24.75-25.05) will be made available on a shared basis with incumbent Broadcast Satellite Service (“BSS”) feeder link stations.  The Commission has sought comment on licensing FSS earth stations in the 24.75-25.25.  A summary of the licenses to be offered in both auctions is accessible by clicking on “Attachment A” at the following link: www.fcc.gov/auction/101-102.

Separate Auctions/Prohibition on Certain Communications.  In its Public Notice, the Commission proposes to hold separate auctions for each spectrum band.  The 28 GHz band auction, Auction 101, is scheduled to commence on November 14, 2018. The 24 GHz band auction, Auction 102, will commence subsequent to the close of Auction 101 and will require separate applications and bidding processes.  Both auctions will utilize anonymous bidding, meaning that the identities of bidders placing specific bids or withdrawals and the net bid amounts (including bidding credits) would not be disclosed until after the close of bidding.  The Commission further proposes that information relating to either auction that is non-public remain non-public until the close of bothauctions.  As has been the case in previous spectrum auctions, the Commission proposes applying Section 1.2105(c)(1) of the Commission’s rules, which prohibits the communication of bids or bidding strategies after the short-form application has been filed, across both auctions.  An Auction 101 applicant would therefore be prohibited from discussing bids or bidding procedures with another Auction 101 applicant or with an Auction 102 applicant.  The Commission seeks comments on these proposals.

Bidding Credits. The Commission proposes a $25 million cap on the total amount of bidding credits, per auction, that may be awarded to an eligible small business and a $10 million cap on the total amount of bidding credits, per auction, that may be awarded to an eligible rural service provider.  In addition, to create parity among such bidders in less populated markets, the Commission proposes a $10 million cap on the total amount of bidding credits that any eligible small business may apply to winning licenses in markets with a population of 500,000 or less.  The Commission seeks comments on these proposals and also reminds all applicants of the prohibition against changes in ownership of the applicant that would constitute an assignment or transfer of control.

Proposed Bidding Procedures.

Auction 101 (28 GHz band). The proposed bidding procedures for Auction 101 are very similar to those of previous traditional FCC spectrum auctions.  Specifically, the FCC proposes to hold an anonymous, simultaneous multiple-round auction, which offers every license for bid at the same time and consists of successive bidding rounds.  The Commission proposes employing a simultaneous stopping rule approach, which means all licenses will remain available for bidding until bidding stops on every license.  The Commission seeks comments on whether to allow the Bureau the discretion to modify the stopping rule in certain circumstances, for example, where the auction is proceeding unusually slowly or quickly, and, if so, how.[3]

The Commission also proposes requiring applicants to submit upfront payments which are refundable to establish eligibility to participate in Auction 101.  The Commission proposes upfront payments based on $0.001 per MHz-pop.  The Commission also proposes to establish minimum opening bid amounts, calculated on a license-by-license basis, for Auction 101 at 0.002 per MHz-pop for each license.

Auction 102 (24 GHz band). The FCC plans to use a different format for Auction 102. Similar to the design used in the forward auction portion of the Broadcast Incentive Auction, the Commission proposes using an ascending clock format with generic blocks for Auction 102.  In the first phase of the auction, bidders will indicate their demands for categories of generic licenses blocks in specific PEAs.  There will be up to two generic blocks in the lower 24 GHz segment, 24.25-24.45, (Category L) and up to five generic block segments in the upper 24 GHz segment, 24.75-25.25 (Category U) in each of the 407 PEAs.  In the second phase of the auction, bidders can bid for frequency-specific license assignments.  In each geographic area, the clock price for a category would increase from round to round if total demand exceeds the number of blocks available.

Similar to its proposal for Auction 101, the Commission proposes requiring applicants to submit upfront payments based on $0.001 per MHz-pop to establish eligibility to bid.  The Commission proposes setting minimum opening bid amounts at $0.002 per MHz-pop.

If you have any questions, or would like to submit comments in this proceeding, please contact Dee Herman ([email protected]) or Clare Liedquist ([email protected]).  Comments are due May 9, 2018 and reply comments are due May 23, 2018.