In an unexpected move, the Federal Communications Commission (FCC) said Friday it has set an initial spectrum clearing target of 126 MHz for the first round of its reverse auction.
The selection of the highest clearing target possible means 100 MHz, or 10 paired blocks, of spectrum will be offered in most markets nationwide in the forward auction for wireless bidders.
“Today’s announcement reflects the voluntary decision by many broadcasters that this auction truly is a once-in-a-lifetime opportunity,” FCC chairman Tom Wheeler said in a statement. “The 126 MHz initial clearing target ensures that wireless carriers and other forward auction bidders have their chance to compete for the maximum amount of low-band ‘beachfront’ spectrum. The wireless industry has said it needs additional spectrum to meet growing customer demand and usher in the age of 5G. The broadcasters have stepped up and done their part to fulfill that demand.”
99 percent unimpaired
According to senior FCC officials, the band plan calls for the sale of 10 blocks in each of the country’s 416 designated economic areas, for a total of 4160 blocks. The FCC, however, will only offer a total of 4048 licenses in the forward auction, as 112 blocks will not be sold due to an excessive amount of impairment on the spectrum.
Impairment refers to interference from TV stations in the wireless band. Category one licenses include 15 percent impairment or less. Category two licenses include 15 to 50 percent impairment.
Out of the 4048 licenses to be offered, the senior FCC officials said 4030 are category one licenses. Nearly 99 percent of the licenses to be offered, or 3,999 blocks, are zero percent impaired, they said. Only 18 licenses nationwide will be category two licenses with 15 to 50 percent impairment, the officials said.
The full ten blocks of spectrum with varying degrees of impairment will be available in 91 percent of the 416 markets nationwide, the officials said. At least eight blocks of spectrum will be available in 97 percent of the markets.
The FCC’s breakdown of available forward auction blocks in each economic area and the corresponding impairment levels paints a rosy picture for wireless operators.
A total of ten category one blocks will be available in seven of the top ten markets, including New York, N.Y., Chicago, Ill., San Francisco, Calif., Boston, Mass., Dallas, Texas, Miami, Fla., and Houston, Texas. All 10 blocks in Chicago, San Francisco, Boston, Dallas, Miami and Houston will come with zero impairment. New York will offer nine blocks of unimpaired spectrum.
The Baltimore, Md./Washington, DC and Philadelphia, Pa., markets will offer a total of eight and nine category one blocks, respectively. Carrier will be able to snag seven blocks of unimpaired spectrum in the Baltimore/DC market and eight unimpaired blocks in Philadelphia.
Competition will likely be tighter in the Los Angeles, Calif., market, where a total of five blocks will be offered. All five blocks in that market will come with zero impairment.
The FCC’s selection of the maximum band plan means the most reserve spectrum available in any market will be 30 MHz, or three paired blocks, officials said. However, in accordance with auction rules, officials said the actual amount of reserve spectrum available will be a function of whether reserve-eligible bidders have actually bid on the spectrum in a given market. If no bids are placed for the spectrum reserve, it will become non-reserve spectrum.
According to the list of reserve-eligible providers released by the FCC in October, T-Mobile is the only participating Tier-1 reserve-eligible carrier in eight of the top ten markets, including Los Angeles. The Un-carrier, though, will be up against Verizon for reserve spectrum in Dallas and Miami.
The FCC also announced a May 31 start date for the reverse auction. Officials said there will be one round of bidding on each of the first two days of the auction, from 10 a.m. to 4 p.m. ET on May 31 and 10 a.m. to 2 p.m. on June 1. Thereafter, two rounds of bidding will be held per day, from 10 a.m. to 12 p.m. and 3 p.m. to 5 p.m.
The FCC said it is sending a confidential letter to inform each applicant that was permitted to make an initial commitment in the reverse auction of its status with respect to the clock phase of the reverse auction.
The commission said it will offer a number of educational opportunities for bidders ahead of the auction’s start. Resources will include an online bidding tutorial on May 18, a bidding preview period May 23-24, a clock phase workshop on May 24 and a mock auction May 25-26.