FCC Establishes Procedures for Auction of C-Band Spectrum – Auction to Begin on December 8, 2020
Today, the Federal Communications Commission (FCC" or the Commission") released a Public Notice that establishes the procedures for Auction 107, which will make available spectrum in the lower portion of the C-Band, at 3.7-3.98 GHz. The auction will be for new flexible-use overlay licenses, intended primarily to further the deployment of fifth-generation (5G) wireless, the Internet of Things (IoT), and other advanced spectrum-based services. The bidding for these spanking-new licenses is scheduled to commence on December 8, 2020. Short-form applications must be filed in a window between September 9 and September 22, 2020, and upfront payments will be due by November 2, 2020.
Auction 107 will offer 5,684 new flexible-use overlay licenses, subject to clearing of incumbent users. The 280 megahertz of spectrum available in Auction 107 will be licensed on an unpaired basis in three blocks divided into 20-megahertz sub-blocks by partial economic area (PEA) in the 48 contiguous states and the District of Columbia. Specifically, the A Block will cover 100 megahertz from 3.7-3.8 GHz in five 20-megahertz sub-blocks: 3700-3720 MHz (A1), 3720-3740 MHz (A2), 3740-3760 MHz (A3), 3760-3780 MHz (A4), and 3780-3800 MHz (A5). The B Block will cover 100 megahertz from 3.8-3.9 GHz in five 20-megahertz sub-blocks: 3800-3820 MHz (B1), 3820-3840 MHz (B2), 3840-3860 MHz (B3), 3860-3880 MHz (B4), and 3880-3900 MHz (B5). The C Block will cover 80 megahertz from 3.9-3.98 GHz, and four 20-megahertz sub-blocks will be licensed for flexible use: 3900-3920 MHz (C1), 3920-3940 MHz (C2), 3940-3960 MHz (C3), and 3960-3980 MHz (C4). The 20 megahertz at 3980-4000 MHz will be a guard band and not available for auction.
3.7 GHz Service licenses will be issued for 15-year, renewable license terms. A licensee in the 3.7-3.98 GHz band may provide any services permitted for terrestrial fixed or mobile allocations in the Commission's rules.
Previously, the Commission announced that incumbent satellite operators in the C-Band had, in aggregate, made sufficient commitments to clear the 3.7-4.0 GHz band on an accelerated timeline. As a result, licenses in the A Block in 46 of the top 50 PEAs will be subject to the Phase I accelerated relocation deadline, and licenses in the B and C Blocks in the 46 PEAs and in the A, B, and C Blocks in the remaining 360 PEAs will be subject to the Phase II accelerated relocation deadline.
As is the case in many recent auctions, designated entity bidding credits will be available to applicants in Auction 107 demonstrating eligibility for a small business (15% and 25%) or a rural service (15%) provider bidding credit who subsequently win licenses. Bidding credit discounts of 15% are available to entities whose average gross revenues for the preceding five years do not exceed $55 million, and discounts of 25% are available to entities whose average gross revenues for the preceding five years do not exceed $20 million. These bidding credits will not be cumulative-an applicant is permitted to claim either a small business bidding credit or a rural service provider bidding credit, but not both. In addition, the FCC adopted a $25 million cap on the total amount of bidding credit discounts that may be awarded to an eligible small business and a $10 million cap on the total amount of bidding credit discounts that may be awarded to an eligible rural service provider.
There are a number of other important and complex legal requirements discussed in the Public Notice, regarding disclosures of ownership and bidding arrangements, prohibited communications, and compliance with Antitrust laws, so potential bidders should review these carefully, and consult with communications counsel. If you have any questions or are interested in participating in the auction, please contact us.