Spectrum Auction Moves Forward

A November 10, 2015 report from Gartner noted that the Internet of Things (IoT) will reach 6.4 billion devices in 2016.  By 2020, that number will potentially reach 20.8 billion devices, all of which will need access to spectrum in order to function.  However, spectrum is already limited in availability due to the use of mobile technology, digital goods, and mobile Internet.

The strain on spectrum will grow even further as the wireless industry works to develop the next generation (G) of wireless connections.  Under 3G technology, individuals can make phone calls, text message and browse the Internet; 4G added the ability to download and upload large video files; and 5G wireless communications will open the door to even greater capabilities for mobile devices.

The first in a series of efforts over the past six years to expand the amount of spectrum for mobile providers began in 2010, when the Federal Communications Commission (FCC) released the National Broadband Plan.  In 2012, Congress passed the Middle Class Tax Relief and Job Creation Act of 2012, which included provisions to increase the amount of spectrum available for mobile use by allocating additional federally held unused spectrum to be auctioned by the Federal Communications Commission (FCC).  The bill also allowed the FCC to hold broadcaster reverse incentive auctions in order to make additional spectrum available to mobile providers.  In addition to providing more spectrum for mobile use, the proceeds are intended to be used to help fund the FirstNet first responder network, with any leftover funds used to reduce the deficit.

In January 2015, the FCC completed Auction #97 for spectrum previously held by federal agencies in the AWS-3 range.  After 341 rounds of bidding, the auction garnered nearly $45 billion for the federal government and provided much-needed funding for the FirstNet network.  On March, 29, 2016, the FCC began the broadcaster reverse incentive auction process.  Spectrum that is not currently being used by the broadcasting industry will be sold in a reverse auction process through which the government will buy it back, repackage the spectrum to optimize its value, and then auction the repackaged spectrum to mobile carriers.  As FCC Chairman Tom Wheeler stated, “If broadband Internet service is an engine for economic growth, then mobile broadband has been its booster rocket, creating a platform for innovation, competition and new markets.”

On April 29, 2016, the FCC announced that enough broadcasters had agreed to sell spectrum back to the government to move the reverse auction forward.  The auction will begin on May 31, and the FCC hopes to achieve an initial target of 126 MHz of low-band spectrum.  There are currently 104 applications to bid for this spectrum.

Successful auctions are essential to both meet growing customer demands and also enable carriers to begin the transition from 4G to 5G technology.  To date, they have been one of the few helpful endeavors for the telecommunications industry undertaken by the FCC during the Obama administration.