FCC Moves Forward On Incentive Auctions To Free Up Mobile Spectrum

By Alexandra Burlacu | Sep 30, 2012 11:03 AM EDT

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The U.S. Federal Communications Commission (FCC) took the first step on Friday, Sept. 28, toward auctioning television spectrum to mobile carriers faced with increasingly high bandwidth demands from their customers.

On Friday, the FCC approved a notice of proposed rulemaking (NPRM) that outlines proposed rules, and asks for public comment on the incentive auctions in which U.S. TV stations would give up their spectrum in exchange for proceeds from auctions of that respective spectrum.

The NPRM is the first step in a complicated process at the agency, with the FCC estimating that auctions to mobile carriers would occur in 2014.

"This is a big deal," said FCC Chairman Julius Genachowski, referring to the FCC's move towards the world's first incentive auctions. "The world is watching."

The auctions will involve a comprehensive three-step process. In a first step, TV stations will voluntarily give up their spectrum in a reverse auction. The FCC will then reconfigure the remaining TV spectrum to increase efficiency, and ultimately it will auction the available spectrum to mobile carriers.

These incentive auctions aim to address an expected spectrum shortage and help carriers improve their mobile service offerings, reducing the amount of dropped calls and spinning pinwheels, noted Genachowski. Meanwhile, the auctions would also boost the U.S. in a global race, providing a "strategic bandwidth advantage."

"Success will unleash waves of innovation that will go a long way toward determining who leads our global economy in the 21^st century," explained the Chairman.

The FCC's two Republican members, however, expressed a number of concerns about the proposal, including whether it would result in too much spectrum left unsold for unlicensed uses, creating a swath of unlicensed spectrum across the nation.

The U.S. Congress had targeted raising $7 billion for a nationwide public safety network. According to Republican Commissioner Robert McDowell, the proposal's cap on the amount of spectrum one carrier is allowed to buy could result in the auction falling short of that target. McDowell further urged the FCC to consider alternative ideas.

"This being literally, as I've said before, the most complex auction in world history, I think we should keep all our options open," said McDowell.

Meanwhile, Genachowski and other Democratic members of the commission defended the unlicensed spectrum plans. Commissioner Jessica Rosenworcel said that Wi-Fi, TV remote control devices, and even garage door openers use unlicensed spectrum, and insisted that "good spectrum policy" has room for licensed and unlicensed spectrum as well.

"This is a time to be embracing and extending WiFi-like uses of spectrum," noted Genachowski. "Unlicensed spectrum has a powerful record of driving innovation, driving investment and economic growth."