600 MHz spectrum auction update and impact on 5G – Carrier Wrap Episode 38

Описание к видео 600 MHz spectrum auction update and impact on 5G – Carrier Wrap Episode 38

On this week’s Carrier Wrap, we spoke with Dan Hays, principal at PwC’s Strategy& division to get his insight into the Federal Communications Commission’s ongoing 600 MHz spectrum auction proceedings.

The auction process recently completed its first reverse auction round, which resulted in television broadcasters setting an $86 billion clearing target to free up the maximum of 126 megahertz of the 600 MHz spectrum. That amount came in well above expectations, leading many to note the FCC will likely need to conduct additional bidding stages in order to hit financial levels in line with bidding demand.

FCC Chairman Tom Wheeler acknowledged the government agency may need to conduct further reverse auction stages should forward auction bidding not meet the current $86 billion clearing target. Those additional stages could result in less spectrum being transitioned from television broadcasters to mobile telecom operators.

“The auction is a market-based mechanism for matching supply with demand,” Wheeler explained. “Until the forward bidding concludes, we will not know whether the demand meets the large supply offered by broadcasters. Depending upon that response, it’s possible that we would need to move to additional stages to find the level where demand meets supply. The commission intentionally designed the auction to account for the possibility that supply and demand might not match at the initial clearing target. It’s something we planned for, and we’re fully prepared to implement if the need arises.”

In the meantime, the FCC is set to begin the first round of the proceedings forward auction, which is scheduled to begin Aug. 16. The government agency recently released a list of 62 companies qualified to participate in the process, which included three of the nation’s four largest operators, as well as a number of rural operators and designated entities. Those qualified include Verizon Wireless, AT&T, T-Mobile US, U.S. Cellular and C Spire, as well as some international interest in the form of Japan’s NTT DoCoMo, which is expected to bid on FCC controlled licenses covering Pacific islands.

Hays noted that it’s unlikely the forward auction will see total bids match the target set by television broadcasters, which will likely result in the FCC moving forward on plans to conduct a second round of activity. That move is expected to delay a potential end of the proceedings until next year, which when factoring in the 39-month spectrum transition time frame, will see all of the 600 MHz spectrum not available for commercial use until at least 2020, though some could be available sooner depending on transition plans.

In the meantime, the FCC recently moved forward on its Spectrum Frontiers proceedings, which will see the government agency look to bring both licensed and unlicensed spectrum to market ahead of “5G” standards. The spectrum is set to include 3.85 gigahertz for licensed use in the 64-71 GHz bands and 7 gigahertz for unlicensed – or “flexible” – use across the 28 GHz, 37 GHz and 39 GHz bands.

In touting the spectrum plan, Wheeler touched on what he sees as a leadership position for the country moving forward.

“With today’s order, we are repeating the proven formula that made the United States the world leader in 4G: one, make spectrum available quickly and in sufficient amounts; two, encourage and protect innovation-driving competition; and three, stay out of the way of market-driven, private sector technological development,” Wheeler noted in a statement. “Today’s order will make the United States the first country in the world to identify and open up vast amounts of high frequency spectrum for 5G applications. The big game-changer is that we are using much higher-frequency bands than previously thought viable for flexible uses, including mobile. The ability to use this high-frequency spectrum opens much bigger chunks of spectrum. Current blocks of licensed low-band spectrum are usually five to 10 megahertz in width. With 5G, however, we are looking at blocks of at least 200 megahertz in width. This will allow networks to carry much more traffic per user – gigabits of throughput instead of megabits. We’re talking about fiber-like capacity to wireless users. By opening up these higher-frequency bands, we are making available over four times the total amount of licensed spectrum currently available for mobile. And we’re not done. We’re asking questions about opening up a significant number of other bands.”

Hays noted the Spectrum Frontiers proceedings were an important step by the FCC in showing continued support for the domestic market in maintain a leadership position in the race for 5G.

Make sure to check us out again next week when we speak with Bill Ho, principal at 556 Ventures, to wrap up the latest quarterly results from domestic carriers, with an emphasis on results from T-Mobile US.

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