NTIA received letters of intent from 39 out of 56 states and territories indicating their interest in participating in the agency’s $42.5 billion broadband, equity, access, and deployment program, said Administrator Alan Davidson Thursday during a Media Institute event. “It’s going really well,” Davidson said: “We’ve been talking about the digital divide in this country for over 20 years … and finally, thanks to the bipartisan infrastructure law and other funding out there, we’ve been given this historic opportunity to really do something about it.”
Wireless Spectrum Auctions
The FCC manages and licenses the electromagnetic spectrum used by wireless, broadcast, satellite and other telecommunications services for government and commercial users. This activity includes organizing specific telecommunications modes to only use specific frequencies and maintaining the licensing systems for each frequency such that communications services and devices using different bands receive as little interference as possible.
What are spectrum auctions?
The FCC will periodically hold auctions of unused or newly available spectrum frequencies, in which potential licensees can bid to acquire the rights to use a specific frequency for a specific purpose. As an example, over the last few years the U.S. government has conducted periodic auctions of different GHz bands to support the growth of 5G services.
The 4.9 GHz band appears to be one of the wireless items likely to get further FCC action relatively soon, industry and FCC officials told us. Comments have been in since January on rewriting the rules, and 4.9 has long been a focus of Chairwoman Jessica Rosenworcel. There's also general agreement that the band has been underutilized for a long time.
Inflation is running “at a faster clip” than AT&T expected, and is the biggest concern for the immediate future, AT&T Chief Financial Officer Pascal Desroches warned at a Credit Suisse financial conference Tuesday. Desroches said AT&T may have to consider raising prices for its service plans for a second time this year (see 2205030066). “We built in a fairly healthy level of inflationary expectations into our budget,” Desroches said: “With that said, it's running harder than we thought, and you saw one of the things that we did recently was to raise prices in response. … We're seeing inflation in labor, supplies, energy, transport.” The AT&T executive expressed optimism about the C-band, with the next phase of deployment looming. “Our network is reliable, consistent, and it's better than it's ever been and getting better every day,” he said. He noted the nearly $40 billion of mid-band spectrum the company bought in the 3.45 GHz and C-band auctions: “We expect to deploy that over the next 18 to 24 months and as we deploy, the network will only get better.” Churn was low during the COVID-19 pandemic, as many consumers benefited from stimulus payments, Desroches said. Churn could rise due to inflation, he said. “As I look at the inflationary expectation over the next several quarters, it's hard for me to envision that that's not going to impact the consumers negatively and that we and others will see some pressure,” he said. Wireless competition isn’t increasing, Desroches said. The market has “been competitive for some time” and “remains competitive,” he said. AT&T has been targeting segments of the population that are underserved, he said, citing FirstNet and outreach to Hispanics. “We are being very surgical,” he said. “We have stepped up our investment [in wireless] to match the competitors and that has helped enormously,” he said. Other markets are also growing, Desroches said: “You're seeing kids getting phones at an earlier age. You have older people getting phones that never had them. You're seeing all of a sudden a separation of your work life from your home life, so people [are] getting multiple devices.” New business formation has also been “really strong” since the start of the COVID-19 pandemic, he said. AT&T recently eliminated HBO Max from its premium unlimited wireless plan as a free perk for new customers. Desroches said the carrier is trying out other included features, such as hot spot data, to bring in more customers. “It’s really not anything against HBO Max,” he said: “It’s us trying to drive deeper penetration to different portions of our customer base.”
Top members of the House and Senate Commerce committees are having varying levels of success in moving forward in the coming weeks on spectrum legislation. The House Communications Subcommittee plans to mark up a revised version of the Extending America’s Spectrum Auction Leadership Act (HR-7783) Wednesday along with other legislation, subpanel Chairman Mike Doyle, D-Pa., said in an interview. Senate Commerce leaders, meanwhile, told us they're still grappling with how to move forward on the Improving Spectrum Coordination Act (S-1472) after an amendment fight prompted them to remove it from a markup last month (see 2205250063).
Major industry players expected to play in the 2.5 GHz auction, which starts July 29, were on the list of bidders with complete applications to participate in the FCC’s next big 5G spectrum sale, the FCC said Thursday. AT&T, Dish Network, bidding as Carbonate Wireless, T-Mobile and UScellular are among the 39 with complete applications. Verizon put in an application, deemed incomplete, joining 53 bidders on that list. There appears to be more interest in this auction than in the 3.45 GHz sale, which had 42 applications, while the C-band auction had 74 applications filed. Smaller players are among the qualified bidders, with 17 seeking rural provider bidding credits and nine small business credits. Questions continue over the extent to which small players will jump in or T-Mobile will dominate the auction (see 2204140062). T-Mobile has a dominant position in the band since its buy of Sprint, and is using 2.5 GHz for its 5G rollout. “At first glance, the list of bidders for 2.5 GHz auction (whether qualified or not) does not reveal too many surprises,” emailed Sasha Javid, BitPath chief operating officer. “Submitting an application does not mean that Verizon or AT&T are necessarily interested in bidding for this spectrum,” he said: “It is a low-cost way to muddy the waters for bidders that are truly interested in acquiring the spectrum. If there is one initial takeaway, it is that this auction did not get as many prospective bidders as the [citizens broadband radio service] auction, which also featured smaller county-sized licenses.” The 2020 CBRS auction attracted 271 qualified bidders (see 2007200049). Those with complete short-form applications must submit upfront payments June 23, to be deemed qualified bidders. Others must resubmit their applications, and make an upfront payment, by the same date.
The FCC unanimously approved a public notice seeking to refresh the record on improving how wireless 911 calls are routed to the appropriate first responders (see 2206060052), as expected. Commissioners at Wednesday's meeting also agreed to propose a $34,000 fine against an Idaho man for allegedly interfering with emergency communications as firefighters took on a wildfire, the largest fine of its kind, officials said.
The FCC’s notice of inquiry on offshore spectrum issues is expected to be approved 4-0 at the commissioners' meeting Wednesday with few changes to the draft circulated by Chairwoman Jessica Rosenworcel (see 2205180065), industry and FCC officials said. Industry experts said it makes sense for the FCC to ask questions, but market interest in licenses for offshore areas is likely to be low.
The Senate Commerce Committee pulled the Improving Spectrum Coordination Act (S-1472) Tuesday night from the agenda for a Wednesday executive session amid objections to some proposed amendments to the measure, lawmakers and lobbyists said in interviews. S-1472 would require the FCC and NTIA to update their spectrum memorandum of understanding, including to add language on a process for addressing interagency policy differences and instituting a resolution process. Senate Commerce leaders said they hope further revisions won’t significantly delay bringing the bill up again.
Dynamic spectrum sharing is a slow, expensive process, and though it has a role to play in meeting growing needs for mobile spectrum, it's not the silver bullet, Peter Rysavy, president of wireless tech consultancy Rysavy Research, said Wednesday in a Georgetown University Center for Business and Public Policy presentation. Beyond more spectrum, the U.S. also needs denser networks and better antenna technology to increase capacity, he said.
House Communications Subcommittee members voiced strong support during a Tuesday hearing for the Extending America’s Spectrum Auction Leadership Act (HR-7783) and two NTIA-focused spectrum bills, echoing expected backing from Wiley’s Anna Gomez and CommScope Business Development and Spectrum Policy Director Mark Gibson (see 2205230061). Lawmakers broadly supported elements of the Safe Connections Act (HR-7132), but opinions on the Ensuring Phone and Internet Access for Supplemental Nutrition Assistance Program Recipients Act (HR-4275) divided along party lines.