FCC to auction unserved cellular areas, 2.3 GHz for wireless

Mobile Phone News, Nov 18, 1996

Last week, the FCC released its plans to auction licenses for unserved cellular areas and spectrum in the 2.3 GHz band for any "wireless communications service" (WCS), including fixed, mobile or radiolocation services or satellite digital audio radio services. Congress ordered the FCC to auction off spectrum for wireless in the 2305-2320 MHz and 2345-2360 MHz bands by April 15, 1997, so that the proceeds can be deposited in the U.S. Treasury by Sept. 30, 1997.

The FCC is seeking comment on four issues regarding the 2.3 GHz auction: how the licenses should be divided up geographically; amount of spectrum per license; how the FCC should address the needs of public safety radio; and whether the FCC should adopt buildout requirements.

The first unserved cellular areas auction will begin on Jan. 13, 1997, at which time 25 Phase I unserved cellular areas and two Phase II unserved cellular areas will be on the block. Parties interested in participating in the auction first must submit an FCC Form 175 by Dec. 16.

The commission requires an initial payment of $5,000 per license to participate in the auction. The auction will resemble the current D- and F-block auctions for personal communications services spectrum. The licenses do fall under the spectrum cap rules, which limit companies to 45 MHz of commercial mobile radio services (CMRS) spectrum (MPN, Sept. 9).

For those areas where applications were filed before July 26, 1993, the commission chose to use the lottery process. The last lottery was held June 11, 1996, awarding licenses covering parts of the Minneapolis and Los Angeles markets (MPN, April 22 and June 17). A lottery for six markets was postponed in October and is pending the outcome of a petition from Communications of Puerto Rico Inc., which requested that these licenses be auctioned (MPN, Nov. 4).

However, the June lottery's outcome was suspended by a recent court ruling. The U.S. Court of Appeals for the District of Columbia remanded McElroy Electronics Corp. v. FCC, instructing the agency to award the two licenses to McElroy. McElroy had filed applications for those areas before the FCC had written its rules on unserved areas. After the commission denied the applications because of insufficient rules, McElroy took the case to court.

Applications filed after July 26, 1993, or licenses awarded by lottery that were revoked due to a failure to build out fall under the competitive bidding rules and, therefore, will be auctioned. Specific rules regarding the auction process are available at http://www.fcc.gov/cellunsv/f96-361.txt (Ninth Report and Order, combined PP Docket No. 93-253 and CC Docket No. 90-6). Procedures for the Jan. 13 auction are at http//www.fcc.gov/cellunsr/d96-1850.txt.