Another Month, Another Spectrum Auction - But This Time, With a Couple of Twists

Coming soon: Innovative auction to dispose of innovative spectrum.

The FCC has announced yet another spectrum auction. Ho-hum, right?

WRONG - this isn't like any previous auction.

First, there's the spectrum that's up for bids. According to the FCC, bidders will be bidding on "newly-discovered" spectrum. It appears that the Commission has had a task force of its best engineers running elaborate tests at the Columbia, Maryland lab. Their quest: any and all spectrum that might have escaped everybody's attention thus far.

The effort appears to have paid off, in spades, with the first new spectrum unearthed since James Clark Maxwell predicted radio waves in 1867. "It must have been lying there the whole time," said an FCC engineer who requested confidentiality. "We just happened to look in the right place."

Sources indicate that the spectrum about to make its debut is being referred to by FCC insiders as the "Bleen Band", a tongue-in-cheek homage to social commentator George Carlin. The Commission is officially mum (apparently preferring to avoid rampant market speculation and potential legislative or judicial interference). But reports leaking from the Columbia lab say that Bleen Band spectrum has propagation characteristics ideal for a vast range of services, including broadcast, fixed and mobile wireless, radar, Wi-Fi, and those things that unlock your car from across the street. FCC sources say that signals on the Bleen Band "go forever", "penetrate just about anything", aren't susceptible to any known atmospheric conditions, and require very little power.

In the words of one knowledgeable Commission insider, it's "like El Dorado, the Fountain of Youth, desktop fusion and a perpetual motion machine all rolled into one, with an antenna - and a small antenna at that." Despite these rave reviews, though, don't count on any pre-auction guarantees of performance from the FCC. According to more than one Commission rep (all speaking on condition of anonymity), the agency's usual auction-related disclaimers ("The FCC makes no representations or warranties about the use of this spectrum for particular services, yada yada yada") will apply, but "just to make the lawyers happy".

And how better to sell innovative spectrum than with an innovative auction format?

While the precise details will be spelled out in a future public notice, the format looks to be even more innovative than the simultaneous "reverse/forward" approach in the works for the upcoming incentive auction. The hook this time? The Bleen Band will be auctioned pursuant to a "reverse blind" method.

"Blind" auctions, of course, involve auctions in which sealed bids are submitted simultaneously so that no bidder knows what other bidders have offered. In the FCC's "reverse blind" approach, bids will be universally available when they are made, but the precise nature and amount of the Bleen Band spectrum being bid on will not be disclosed to anyone (including bidders) prior to the completion of the auction. Recognizing that this might deter some bidders unsure whether the new spectrum will live up to its hype, the FCC plans to allow successful bidder(s) to craft their own service and licensing rules that will govern use of the spectrum acquired in the auction. Still open is the question whether the new net neutrality rules will apply to services offered over this spectrum.

If you're interested, you'd better get yourself up to speed fast. While specific dates have not yet been announced, the Commission has emphasized that the auction must be completed - and payments of all successful bids must be in the FCC's hands - no later than September 30, 2015. Some sources, noting that September 30 is the last day of the federal government's fiscal year, have suggested that the last-minute influx of cash may be needed to offset the unexpected (and unbudgeted-for) 2014 expense of hiring several thousand temporary staff persons to review, organize, digest and summarize each of the 4,000,000+ comments in the recent net neutrality proceeding.

Happy April Fool's Day!