Failure to meet 39-month repack plan could spell trouble for FCC, carriers warn

SAN FRANCISCO—Bidders may not be as eager to participate in spectrum auctions if the FCC can’t fulfill its commitment to free up 600 MHz airwaves available for wireless use within the next three years, carrier executives said this week.

Bidders committed more than $19.63 billion for TV broadcasters’ airwaves during the FCC’s incentive auction, which ended last spring, with T-Mobile leading the way by spending $8 billion on 600 MHz licenses. Operators have repeatedly urged the agency to stick to the 39-month repacking plan it has allotted to reshuffle TV broadcasters’ airwaves for wireless use to avoid interference problems as the spectrum is redeployed.

But clearing those airwaves for wireless use may actually take twice that long, Robert Gutman of Guggenheim Equity Research wrote a few weeks ago, citing a recent report from Inside Towers. And a significant delay could cause bidders to think twice before spending big money on airwaves at future auctions, carrier executives suggested during a panel discussion at Mobile World Congress Americas this week.

“We bid $8 billion with the understanding we'd have access to this spectrum within 39 months,’’ said Kathleen Ham, T-Mobile’s senior vice president of affairs. “You want bidders going in thinking that the rules of the road are the rules of the road.”

T-Mobile is moving to deploy services on its new spectrum as quickly as possible, starting with last month’s launch in Cheyenne, Wyoming. The carrier has vowed to roll out 600 MHz at a “record-shattering pace” starting in rural markets where the airwaves have been cleared by the TV broadcasters that once controlled that spectrum, “compressing what would normally be a two-year process from auction to consumer availability” in 6 months.

Grant Spellmeyer, vice president of federal affairs and public policy at U.S. Cellular, agreed, although both executives noted the importance of TV broadcasters being able to provide service within the allotted time frame.

“I do think the broadcasters should be made whole,” Spellmeyer said. “I think the only question is, when does that get done?”

T-Mobile said in June it would cover the costs for rural public TV low-power facilities to relocate to new frequencies, and it worked with the 3GPP to help hammer out specifications for the airwaves in May. And Ham hinted a deal with “a major broadcaster” may be in the works to free up spectrum for T-Mobile more quickly.

But the National Association of Broadcasters continues to push back against the 39-month plan. The group this week launched a website aiming to educate consumers about what they’ll need to do to continue receiving broadcasts during the incentive auction repack, and NAB Executive Vice President Dennis Wharton earlier this year described the time frame as “ambitious to say the least.”

But as carriers continue to lobby the FCC to free up more mid- and high-band airwaves for wireless use for 5G offerings, Ham warned that bidders may be hesitant to pony up in the future if they’re concerned they can’t lay their hands on that spectrum quickly.

“There are going to be more auctions down the road. This is a real test case, I think,” she said. “I think it’s really important that there is integrity of the auction.”