FCC Sticks with 30-MHz Spectrum Reserve for 600-MHz Auctions

Federal Communications Commission Chairman Tom Wheeler has decided to keep the original 30-MHz set aside for “smaller carriers” when crafting rules for the 600-MHz spectrum auction, despite lobbying by some, including especially T-Mobile US, for a bigger set-aside.

“The draft revised rules I circulated to the other Commissioners today would provide greater flexibility for qualified small businesses so that they can better compete,” said Wheeler.

For example, in today’s mature mobile business, scale matters. “Facilities-based wireless service is no longer a viable business plan for small enterprises, yet that’s what our rules require in order for small businesses to qualify for bidding credits,” Wheeler said.

The remedy is a change. The new rules create a new rural business bidding credit to provide new incentives for rural service providers.

The new proposed rules also will attempt to clamp down on “gaming” of the system, an apparent remedy for a tactic used by Dish Network in the recent auctions for AWS-3 spectrum.

The Commission plans to establish the first-ever cap on the total value of bidding credits, minimizing an incentive for major corporations to try to take advantage of the program.

The FCC also plans to better verify that small businesses receiving credits are exercising independent decision-making authority, and are not simply stalking horses for major carriers.

The Commission earlier voted to create a spectrumreserve of up to 30 megahertz of spectrum per market in the “Incentive Auction” for bidders that do not currently hold significant amounts of low-band spectrum.

“With more than 70 percent of low-band spectrum in the hands of just two providers, one of the Commission’s priorities is to ensure that multiple providers have a meaningful opportunity to acquire these valuable airwaves,” said Wheeler.

Wheeler will encourage the Commission not to expand the size of the reserve.