CBA files FUEL auction plan
June 12, 2019
By Chris Forrester
The C-Band Alliance (CBA) has submitted its FUEL (Flexible Use and Efficient Licensing) auction plan to the Federal Communications Commission on June 11th to cover the proposed reallocation of 180 MHz of satellite spectrum for 5G use.
The comprehensive White Paper has been issued following extensive meetings with the FCC on June 6th-7th, and the many previous discussions and industry meetings. The auction proposals are summarised in the filing as:
- Being fast, efficient, flexible, fair, effective, and transparent
- Provides unprecedented flexibility to bidders
- Features appropriate FCC oversight at critical junctures in the process
- Represents the next evolution in auction design, based on technology and principles used by the FCC in its own auctions
The CBA says its proposed auction design is based on the FCC’s own extremely-successful secondary market policies and draws from the most effective auction policies employed by the FCC and other countries. The auction process is a sealed-bid, second-price auction that allows participants to bid on packages of spectrum that best suit their needs.
“The model, which is designed to accommodate the specifics and complexities of the C-band in the continental US, was created by Professor Paul Milgrom and his firm, Auctionomics. Together, they have worked with the FCC on auctions for more than two decades. Prof. Milgrom is highly regarded by auction experts and his expertise is sought not only by the FCC, but also by regulators around the globe. Using protocols established over 20 years of designing auctions, the CBA model translates best practices from various models into a smart auction design to best manage the complexity and time pressure of this auction, creating opportunities for all sizes of bidders and all kinds of combinations,” says the CBA.
The document highlights how the auction process could be structured to address important FCC objectives, says the Alliance. Moreover, the plan deals with the complexity of the nine blocks of 20 MHz C-band spectrum on offer, as well as the potential combinations of 406 Partial Economic Areas (PEAs), with individual combinations possible for large and small bidders for bandwidth.
The CBA says that once a “sealed bid” auction is underway the end result will be speedy, and the winners can be announced 2-4 weeks after the auction begins.
The Alliance says that its proposed auction involves the FCC “every step of the way” and that “We expect and invite FCC oversight of our auction process, which would be approved by the FCC before moving forward. Moreover, nothing about the proposed auction would change the process whereby FCC issues licenses for terrestrial mobile operation.”
- Fast – The auction process will allow the CBA to announce winning bidders within two-to-four weeks.
- Efficient – The CBA auction puts spectrum to use at the earliest possible date, reduces bid preparation time, minimises bidding errors, and allows values rather than strategic calculations to determine the outcome.
- Flexible – The CBA auction is designed to allow successful participation by entities of every size, from large national bidders to mid-sized regional bidders to small rural bidders. The design also allows bidders flexibility in the packages they want to bid on and the prices they are willing to pay, while promoting head-to-head competition over individual licences in specific economic areas. Yet the design also protects each bidder against winning either too little spectrum or too few areas to support its business plan.
- Fair – The proposed auction is purposefully simple to encourage the greatest range of participants. The simplicity of the auction, combined with a training period, will ensure that all participants understand the process and are ready to bid. The auction will be transparent and subject to FCC oversight, thus increasing the fairness and effectiveness of the market process.
- Effective – At the close of the auction process, winners can begin the 5G build-out process within 18 months of a final FCC order in key economic areas of the US, with a roll-out of the repurposing throughout continental US within 36 months of the final FCC order.