Powell Says FCC Plans to Auction 3G Spectrum in Summer of 2006

December 29, 2004. Federal Communications Commission (FCC) Chairman Michael Powell sent a letter [PDF] to National Telecommunications and Information Administration (NTIA) head Michael Gallagher in which he stated that the FCC "plans to commence the auction of licenses in the 1432-1435 MHz band and the 1710-1755 MHz band as early as June 2006".

The FCC and NTIA have been working for several years to make at least an additional 90 MHz of spectrum, below 3 GHz, available for what has variously been described as Third Generation (3G) wireless services, advanced wireless services (AWS), and wireless broadband.

The 1710-1755 MHz band has been identified as 45 MHz of this 90 MHz. (The 2110-2155 MHz band has also been identified.) However, the 1710-1755 MHz band has long been used by the Department of Defense (DOD) for various vital military operations. These operations need to be relocated to other bands. This will cause the DOD to incur great expense. The FCC plans to auction this 90 MHz of spectrum to private sector licensees for the purpose of providing wireless broadband services.

Powell's letter follows by six days President Bush's signing of HR 5419, which includes the Commercial Spectrum Enhancement Act (CSEA). See story titled "Bush Signs Telecom Bill" in TLJ Daily E-Mail Alert No. 1,045, December 28, 2004.

The CSEA changes the process for reallocating spectrum from federal users to commercial users that plan to use it to provide wireless broadband services. The bill creates a Spectrum Relocation Fund, funded by auction proceeds, to compensate federal agencies for the cost of relocating. The procedure specified by the bill replaces the role otherwise played by the House and Senate Appropriations Committees.

The CSEA is Title II of HR 5419. It applies to "the 216-220 megahertz band, the 1432-1435 megahertz band, the 1710-1755 megahertz band, and the 2385-2390 megahertz band of frequencies" and "any other band of frequencies reallocated from Federal use to non-Federal use after January 1, 2003, that is assigned by competitive bidding pursuant to section 309(j) of the Communications Act of 1934", with exceptions.

The CSEA creates a Spectrum Allocation Fund, funded by these auction proceeds. It provides that "Any Federal entity that operates a Federal Government station assigned to a band of frequencies" that is referenced above, "and that incurs relocation costs because of the reallocation of frequencies from Federal use to non-Federal use shall receive payment for such costs from the Spectrum Relocation Fund ..."

The CSEA also provides that the FCC "shall notify the NTIA at least 18 months prior to the commencement of any auction of eligible frequencies". Hence, June 2006 is the earliest possible time for commencing the auctions.

Powell (at right) wrote that "I am confident that the relocation trust fund mechanism that Congress has established will result in successful auctions, smooth relocation of important government operations and, most importantly, competitive high quality communications services being provided to American consumers."

Powell wrote that the FCC plans to commence the auction of spectrum in the 1710-1755 MHz and 2110-2155 MHz bands in June 2006. He also wrote that the FCC plans to commence the action of spectrum in the 1432-1435 MHz band in "July or August 2006".

Powell also proposed the formation of a "joint working group on federal relocation related to the auctions" of the above referenced bands.

The CSEA was previously considered as a stand alone bill, HR 1320, titled the "Commercial Spectrum Enhancement Act". The House passed its version on June 11, 2003. See, stories titled "House Subcommittee Holds Hearing On Commercial Spectrum Enhancement Act" in TLJ Daily E-Mail Alert No. 631, March 26, 2003; "House Subcommittee Approves Spectrum Relocation Fund Bill" in TLJ Daily E-Mail Alert No. 641, April 10, 2003; "House Commerce Committee Passes Spectrum Relocation Bill" in TLJ Daily E-Mail Alert No. 653, May 1, 2003; and "House Passes Commercial Spectrum Enhancement Act" in TLJ Daily E-Mail Alert No. 679, June 12, 2003. The Senate Commerce Committee passed its version on June 26, 2003. See, story titled "Senate Commerce Committee Approves Commercial Spectrum Enhancement Act" in TLJ Daily E-Mail Alert No. 689, June 27, 2003.