The Federal Communications Commission (FCC) has set the date for an auction of frequencies in the 1900 MHz band for January, in spite of concerns from analysts, operators and one of the regulator’s commissioners. The tender of the ‘H block’…
The Federal Communications Commission (FCC) has set the date for an auction of frequencies in the 1900 MHz band for January, in spite of concerns from analysts, operators and one of the regulator’s commissioners.
The tender of the ‘H block’ licences marks the US’ first significant spectrum sale since 2008. It is part of an order by Congress to bring 65 MHz of new frequencies to the market by February 2015.
Sprint Corporation is seen as the likely acquirer of the licences as it has spectrum in the neighbouring band. It has been lobbying for the auction to happen sooner rather than later.
DTH provider Dish Network also has frequencies in an adjacent band, but said in an August filing that it was not likely to “meaningfully participate” citing regulatory requirements for H Block and AWS-4, previously S-band satellite spectrum.
In a separate filing it supported the regulator’s decision to set a reserve price for the spectrum at US$1.56bn.
However, one of its commissioners argues it could raise more by selling the spectrum in a different way. Jessica Rosenworcel, who came second in the race to become the FCC’s chair earlier this year, said in a statement following the announcement that “holding a single auction of all 65 MHz at once is bound to yield more interest, more bidders, and more revenue than dividing this spectrum up and holding an auction of the 10 MHz H block alone. As Wall Street analysts have noted, splitting this spectrum up for auction will likely limit interest in the H block to only one, or possibly two bidders. If that is true, we will have a retail sale – not an auction.”
One such Wall Street analyst, BTIG’s Walter Piecyk, commented in a note: “A premature auction threatens to restrict the efficient use of spectrum, reduce the money payable to the government and hamper the ability to attract broadcasters to the subsequent incentive auction.”
“This is a lose-lose situation for everyone involved other than Sprint but the FCC should not be engineering an auction for the benefit of one company.”
One of Sprint’s main competitors, T-Mobile US, raised a similar concern in a filing with the regulator in August.
“If the H block is auctioned on its own, it is possible that only one bidder will participate,” the company told the Commission.
T-Mobile said it was not likely to bid for the H block if auctioned separately. However, it said it was more likely to if the frequencies were sold off with the AWS-3 licences, which are also set to come to market.
