Going Into Year 3 Without FCC Spectrum Auction Authority

The Federal Communications Commission went its first full year without the ability to auction off airwaves in 2024, and the gridlock doesn’t show signs of letting up in the near future. 

Prospects for a single auction—not blanket authority—got a lot better this week, however.

Congress passed a defense policy bill Wednesday that included a provision fully funding the FCC’s Rip and Replace program, which reimburses smaller providers for swapping Chinese gear from blacklisted suppliers out of their networks. The extra $3 billion needed for the effort would come from the agency reauctioning licenses in the AWS-3 band—spectrum used by mobile carriers—in the only such action the bill provides for. As of this writing, President Joe Biden has yet to sign the bill into law, but he’s expected to do so.

FCC Chairwoman Jessica Rosenworcel was pleased both by the extra funding–the agency and providers have been pushing lawmakers hard on the issue all year–and the prospect of another auction. She also took the chance to urge restoring the agency’s blanket authority to sell off airwaves at its discretion.

“I want to thank the House and the Senate for allocating the full amount required to protect our Nation’s communications networks, and for recognizing that the FCC’s spectrum auction authority can play an important national security role,” Rosenworcel said in a statement Wednesday. “I call on Congress to restore it in full.”

How we got here

For the first time in three decades, the agency’s authority to auction spectrum to the private sector expired in March 2023 amid a battle over the Defense Department’s lower 3 GigaHertz (GHz) band. The 5G industry has been eyeing the band, which would be ideal for mobile coverage, but the military isn’t interested in moving its radars elsewhere. 

In April, DoD released the public version of a report that said relocating to make space for the exclusive licenses mobile carriers were looking for wasn’t going to work, and even a sharing arrangement wouldn’t be possible unless certain conditions were met.

The same month, Senate Commerce Committee Chair Maria Cantwell, D-Wash., unveiled draft legislation that would have restored the FCC’s auction authority for five years, plus tapped the revenue for extending the Affordable Connectivity Program—it at that point had yet to run out of cash—in addition to Rip and Replace and spectrum sharing research.

It would set up a conflict with Sen. Ted Cruz, R-Texas, the committee’s ranking member and likely its next chairman. He and Sen. John Thune, R-S.D., who has since been tapped to be the GOP majority leader, had already introduced a reauthorization bill that mandated a certain amount of federal spectrum be auctioned off for full-power, exclusive licenses, earning it strong 5G industry support.

In May and June, markup sessions for Cantwell's bill were scrapped repeatedly amid a lack of GOP support, both because of the bill’s emphasis on sharing and its move to fund the ACP, which Republicans wanted to make more restrictive before extending. The DoD and National Telecommunications and Information Administration, which manages federal spectrum, eventually signed on to the bill after edits that, among other things, removed any mandated auctions, but Republicans never got on board and the bill stalled.

Less publicly, both NTIA and DoD have been working with the FCC to study federal bands for potential repurposing. The Biden administration laid out its spectrum strategy late in 2023, which called for reviewing nearly 2,800 megahertz of government airwaves.

Studies on the lower 3 GHz and 7/8 GHz bands—the more sought after by the 5G industry—are due in October 2026 according to the plan’s timetable, but the agencies finished studying the lower 37 GHz band earlier this month and found the millimeter wave spectrum could likely be shared without major disruptions. Officials say the 18 GHz band study is ahead of schedule.

Other avenues

With the FCC on ice, carriers looked to some other sources for extra airwaves—the agency itself launched an inquiry in April on how to get spectrum out the door without auctions. In late 2023, T-Mobile was successful in urging lawmakers to pass a bill allowing the FCC to issue the company licenses it had already won, but wasn’t able to formally acquire before auction authority expired. It allowed the company to scoop up more of the 2.5 GHz band, which T-Mobile favors over higher frequency bands used by other 5G carriers, and deploy the spectrum across more of its network.

The company also moved in May to purchase UScellular, a smaller mobile carrier, along with nearly a third of its spectrum, including some 2.45 GHz. Verizon and AT&T later scooped up more of UScellular’s licenses, each spending about $1 billion.

T-Mobile’s purchase of the company is still pending FCC approval. The agency this month handed the review off to federal law enforcement officials that review foreign ownership in telecom; T-Mobile is owned by German firm Deutsche Telekom.

AT&T also successfully backed a proposal at the FCC to allow FirstNet, the nationwide first responder network the company operates, to access parts of the 4.9 GHz band. The company can use dormant FirstNet spectrum for commercial purposes under its contract, but it won’t see the airwaves in the immediate future—the FCC still needs to pick a band manager to work with FirstNet.

Mobile carriers have also been pushing the agency to increase power levels in the CBRS band, which sits in the 3.5 GHz band and would be good for 5G. It’s currently used in a tired sharing system that doesn’t permit the higher power levels that would make it more useful for mobile coverage, although it is still used for fixed and mobile broadband among other things.

AT&T went a bit further, suggesting the CBRS system itself should be moved elsewhere and its current spectrum should be auctioned off. Proponents of the band and spectrum sharing generally were strongly opposed to both ideas, arguing the interference of higher power would be disruptive.

Going forward

The FCC is likely to at least be able to auction the AWS-3 licenses Dish returned last year, provided Biden signs the defense bill. Experts at a Broadband Breakfast policy event last week said that should be relatively straightforward as the rules are already in place. The 37 GHz spectrum also wouldn’t require an auction—the agencies settled on an idea floated by the FCC in its inquiry: non-exclusive site-based licenses, which the FCC can issue without the auction process—and could be moved on relatively quickly, they said.

Brendan Carr, the agency’s senior GOP commissioner and incoming chairman, has been outspoken about getting more spectrum into industry’s hands, but there isn’t a lot that can be done without Congress moving on auction authority. Rosenworcel’s view is that the agency can’t do prep work for auctions, a complicated, arduous process, without that authority, but former commissioner Robert McDowell has said Carr could plausibly interpret the relevant law differently and get started on that sooner.

Rep. Bob Latta, R-Ohio, who heads the House Communications and Technology Subcommittee, said at the same event he was hopeful auction authority could be attached to a budget reconciliation package next year, something McDowell agreed was being floated on Capitol Hill. Cruz will be heading the Senate Commerce Committee and will likely want that to align with his bill, experts said, but they noted Defense support is seen as increasingly crucial.

If some kind of reauthorization does make it into a reconciliation package, McDowell said, “we could see this resolved by, let’s say, summer, late summer, early fall. We’ll see.”