FCC lays out 700 MHz rules: limited open access, public-safety sharing get OK: Auction to include blind bidding

The Federal Communications Commission approved 700 MHz auctions rules to foster the creation of a nationwide public safety-commercial broadband network and the introduction of new devices and applications in the wireless space.
The agency voted to designate for auction a nationwide 10-megahertz spectrum block adjacent to a 12-megahertz public-safety block that will be available for consumer and first-responder communications, with the latter having priority access during emergencies.
A separate 22-megahertz block of spectrum divided into regional licenses will be subject to limited open-access requirements, meaning the winning bidder cannot block third-party devices and applications on the network so long as they cause no disruption to other communications. If a reserve price of $4.6 billion is not reached, however, the open-access condition will disappear. Other spectrum blocks will have reserve prices as well.
The FCC rejected a wholesale mandate for the 22-megahertz spectrum block, triggering criticism by Democratic FCC Commissioners Michael Copps and Jonathan Adelstein. Silicon Valley-backed Frontline Wireless L.L.C., Google Inc., Skype Ltd., consumer and public interest groups, some lawmakers and others argued forcefully for making wholesale stipulations a component of open access. A wholesale mandate would have required licensees to lease or sub-license spectrum to others.
While Frontline Wireless initially indicated it still plans to compete in the auction, which could generate $10 billion to $15 billion for the U.S. Treasury, Google said it remains undecided whether it will participate in biding.
The FCC adopted an anonymous bidding approach to prevent gaming in the 700 MHz auction, which FCC Chairman Kevin Martin predicted will begin in late December or early January. The blind-bidding technique means the identity of parties bidding and winning bids themselves will not be revealed until after the auction closes.
“We have worked long and hard in recent months to help the FCC forge this order in a manner that will benefit public safety to the maximum degree possible. While we need to review the text of the FCC’s order, it appears that the commission has addressed most of our concerns,” said Wanda McCarley, president of the Association of Public Safety Communications Officials International.
Cyren Call Communications Corp., a persistent force for public-safety reform, said the FCC ruling advances the cause of first responders whose communications woes were highlighted in the aftermath of the Sept. 11, 2001, terrorist attacks and Hurricane Katrina.
“Today, one chapter closes and a new one begins regarding the creation of a nationwide wireless broadband network for our nation’s first responders,” stated Cyren Call. “Cyren Call entered the national conversation on this matter more than a year ago, and today’s action represents the most significant step forward in providing the critical communications tools desperately needed by public safety. We applaud the FCC’s leadership on this issue and look forward to reviewing additional details in the report and order on this rulemaking.”
The FCC decision represented a setback for the mobile phone industry, which largely opposed any conditions on the 62 megahertz of spectrum to be auctioned.
“The FCC’s considerable deliberation over the 700 MHz auction rules has left us pleased in a number of respects and still concerned in others,” said Steve Largent, president of cellular industry association CTIA. “Specifically, we believe the commission has taken the appropriate approach by recognizing the importance of not restricting the number of auction entrants, nor requiring them to fulfill wholesale-licensing requirements or requiring geographic build-out on all the licenses. In these regards the FCC has replicated past auctions that have led to tremendous benefits for consumers and the U.S. Treasury.
“At the same time,” added Largent, “we are disappointed that a significant portion of this valuable spectrum will be encumbered with mandates that could significantly reduce the number of interested bidders. We remain committed to the principle that wireless consumers and American taxpayers are best served when such a valuable commodity is auctioned in a fair and competitive manner with no strings attached, and we commend Commissioner Robert McDowell for his belief in flexible auction rules and the free-market system.”