FCC Announces Procedures for 2.5 GHz Auction and Auction Start Date of July 29, 2022

On March 21, 2022, the FCC released a Public Notice adopting the procedures for Auction 108, which will auction approximately 8,000 flexible use licenses in the 2.5 GHz band.  Auction 108 will be conducted using the previously proposed Clock-1 Auction format, an ascending clock auction with a supply of one in each category of frequency-specific channel blocks.  An updated license inventory for Auction 108 can be found in Attachment A, which also contains the upfront payment and minimum opening bid amounts for each available license.  Bidding is scheduled to begin on July 29, 2022.

The FCC also released a Public Notice  announcing that it is launching a new mapping tool for the use of Auction 108 applicants.  Applicants may use this tool to determine if there is unassigned 2.5 GHz spectrum available in any US county.  The tool and instructions can be found on the Auction 108 website under the education tab: https://www.fcc.gov/auction/108.

The following relevant information was provided in the Procedures Public Notice:

  • Auction Dates and Deadlines
    • Auction Application Tutorial Available (via Internet) – No later than April 5, 2022
    • Short-Form Application Filing Window Opens – April 27, 2022, 12 PM Eastern Time
    • Short-Form Application Filing Window Deadline – May 10, 2022, 6 PM Eastern Time
    • Upfront Payments (via wire transfer) – June 23, 3033, 6 PM Eastern Time
    • Bidding Tutorial Available (via Internet) – No later than July 13, 2022
    • Mock Auction – July 26-27, 2022
    • Bidding Begins – July 29, 2022
  • Applying to Participate
    • Entities interested in participating in the Auction must submit a timely Short-Form Application and pay the Upfront Payment by the above deadlines and comply with all requirements in the Public Notice.
    • Applicants will be required to register each authorized bidder with CORES by providing a unique email address, and associating that email address with the FCC Username Account that is linked to the applicant’s FRN in CORES.
    • Applicants are required to select all the licenses areas on which it may want to bid in their Short-Form Application.
    • After the short-form filing deadline, all applicants are prohibited from cooperating or collaborating with respect to, communicating with or disclosing, to each other or any nationwide provider that is not an applicant, the substance of their own, each other’s, or any other applicants’ bid or bidding strategies until after the down payment deadline.
    • Bidding Credits:
      • Small businesses and rural service providers will be entitled to a bidding credit. These credits are not cumulative; an applicant may claim either a small business credit or a rural service provider credit, but not both.
        • Small Business Bidding Credit:
          • A small business (i.e., one with attributed average annual gross revenues that do not exceed $55 million for the preceding five years) is eligible for a 15% discount on its overall payment.
          • A very small business (i.e., one with attributed average annual gross revenues that do not exceed $20 million for the preceding five years) is eligible to receive a 25% discount on its overall payment.
          • The Small Business Bidding Credit is capped at $25 million
        • Rural Service Provider Bidding Credit: an eligible applicant may request a 15% discount on its overall payment, provided that the applicant must:
          • be a service provider that is in the business of providing commercial communications services and, together with its controlling interests, affiliates, and the affiliates of its controlling interests, has fewer than 250,000 combined wireless, wireline, broadband, and cable subscribers; and
          • serve predominantly rural areas.
          • The Rural Service Provider Bidding Credit is capped at $10 million.
        • Applicants intending to use its license(s) to deploy facilities and provide services to qualifying Tribal lands that have a wireline penetration rate equal to or below 85% are eligible for a Tribal lands bidding credit.  This may be applied in addition to a small business or rural provider credit.  Applicants apply for this credit after the auction.
  • Preparation for Bidding
    • Applicants are encouraged to review the new rules for the 2.5 GHz band as well as the applications filed in the Rural Tribal Priority Window when developing a business plan, assessing available licenses and locations for Auction 108, and evaluating the availability of equipment for 2.5 GHz operations
    • Applicants are reminded that the FCC did not impose a pre-auction bright-line limit on acquisitions in the 2.5 GHz band.  The Commission determined that “EBS white space spectrum should be considered ‘available’ for purposes of the spectrum screen.”
    • Qualified bidders will be automatically registered for the Auction and all registration materials will be distributed by overnight delivery prior to the Auction start date.
    • As in prior FCC auctions, the FCC will utilize remote electronic bidding via the FCC auction Bidding System, which requires that all qualified bidders have their own SecurID token.
  • Bidding Procedures
    • Format:
      • The FCC has selected the clock-1 auction format for Auction 108.  This format is similar to the clock phase of past FCC ascending clock auctions, but rather than offering multiple generic spectrum blocks in a category in a geographic area, it will only offer a single frequency-specific license in a category in a county.  Thus, by using a supply of 1 in each category, this auction format allows bidders to bid on frequency-specific licenses and negates the need for an assignment phase.
      • Bidders will only be able to bid on those licenses that were identified in their Sort-Form Application.
      • Licenses will be identified by category and county.  The FCC adopts the following categories:
        • Category 1 (“C1”) – 49.5 megahertz channel block
        • Category 2 (“C2”) – 50.5 megahertz channel block
        • Category 3 (“C3”) – 17.5 megahertz channel block.
      • Bidding:
        • Bidding will be conducted simultaneously for all licenses in a series of sequential rounds, followed by the release of round results.
        • Bidders are required to bid actively throughout the auction rather than waiting until late in the auction to participate. For this clock auction, a bidder’s activity in a round for purposes of the activity rule will be the sum of the bidding units associated with the bidder’s demands as applied by the auction system during bid processing.
        • Minimum bids will be determined the total potential MHz pops of each license offered in the auction, based on $0.006 per MHz-pop with a minimum of $500 per license. The price will increase by 10% each round, though that percentage may range from 5-30% depending on the round and interest.
        • Bidders will be permitted to make intra-round bids by indicating a point between the start-of-round price and the clock price at which its demand for a license changes. Intra-Round bids are optional and can only be used to indicate the point at which the bidder’s interest in a specific license drops to zero (i.e. the price has reached a point where the bidder no longer is willing to purchase it).
        • Bidders may also use proxy bids to reduce its demand for a license to zero at a price higher than the current round’s clock price.
        • Bidders will be permitted to make simple and switch bids.  A “simple” bid indicates a desired quantity (in this auction, one or zero) at a price. A “switch” bid allows the bidder to request to move its demand for a license from C1 to C2, or vice versa, within the same county at a price for the “from” category (either the clock price or an intra-round price).
  • Post-Auction Procedures
    • Bidders will be required to submit the balance for each of its winning bids within 10 days after the deadline for submitting down payments.
    • Long-Form applications are due within 10 business days after release do the auction closing public notice.

Finally, the FCC also released a Press Release announcing the procedures and start date for Auction 108.

Please Contact Us if you have any questions.

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