2/23 FCC Comments on Auction Rules for the 2.5 GHz Auction to Promote Competition

New America's Open Technology Institute wrote and filed comments, co-signed by the Schools, Health & Libraries Broadband (SHLB) Coalition, with the Federal Communications Commission (Commission) urging the adoption of competition-friendly rules for the upcoming 2.5 GHz auction. The rules of the auction are key to ensuring competitive providers, carriers in rural and Tribal areas, and community anchor institutions are able to purchase licenses in competition with the largest carriers. In that vein, OTI and SHLB proposed the Commission adopt a single-round auction to avoid large carriers dominating the bidding rounds and winning all the licenses available. An introduction and summary is available below:

New America’s Open Technology Institute and the Schools, Health & Libraries Broadband (SHLB) Coalition (“OTI and SHLB”) respectfully submit these comments in response to the Commission’s Further Public Notice seeking responses to the auction format choices the Commission is considering to assign licenses in the 2.5 GHz band.

The auction of licenses for unassigned portions of the 2.5 GHz band represents an important opportunity to make spectrum available to smaller local and regional ISPs in rural, Tribal, and other underserved areas that historically have been left behind. The largest national carriers generally dominate the Commission’s spectrum auctions absent aggressive, proactive measures aimed at leveling the playing field and promoting competitive entry. Having missed the opportunity to adopt a spectrum cap for this auction, as the Commission did with great success prior to the 3.45-3.55 GHz and CBRS auctions, the agency should at a minimum streamline this auction to allow parties to submit a single sealed bid that reflects what they believe a license is worth in relation to their own intended use. Both the Communications Act and President Biden’s July 2021 Executive Order on competition policy explicitly support rules that encourage rather than discourage a larger and more diverse number of bidders to participate and win.

The proposed ascending clock-1 auction format, while marginally better than the simultaneous multi-round (SMR) spectrum auction format designed to enable the business model of large national and regional mobile carriers, is still needlessly costly and complex. It is likely to discourage participation by small, rural and competitive providers. Even with the positive addition of a proxy bidding option, a format with multiple rounds tips the balance strongly in favor of the largest providers with the deepest pockets. This is aggravated by an enormous information asymmetry due to the Commission’s failure to require leasing transparency. The record reflects extensive support for a single-round auction format’s ability to better level the playing field among bidders, catalyze a diverse wireless marketplace, and improve the choice for reliable and affordable broadband.

A single-round bidding process would also provide an opportunity for educational institutions, or a consortium of educational institutions, to submit bids in the auction. Colleges, universities, and K-12 schools have a long history of involvement in the EBS marketplace, and many of these educational institutions still operate EBS-based networks today, as do some local governments and universities. A single-round option would lower the barrier for educational institutions—and other anchor institutions or local governments—to meaningfully participate in the EBS auction and help to close the homework gap in their communities.