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FCC Sets H Block Auction Date; $1.56 Billion Reserve

The FCC has set a date for a wireless spectrum auction, but not the one broadcasters are most concerned about.

This is the auction of the H block, 10 Mhz of advanced wireless spectrum the FCC must auction per statute. The FCC last held a wireless auction in 2008.

Earlier in the week, acting FCC Chairwoman Mignon Clyburn signaled that the FCC was on track for the January date for auctioning the spectrum.

The FCC announced Friday that Jan. 14 date, but it exposed a disagreement between the commission's two Democrats.

Proceeds from the H Block auction will be used to help pay for a nationwide, interoperable broadband emergency communications network, which the broadcaster incentive auctions are also meant to help pay for. The more the FCC gets from the H Block for that network, the less financial pressure there is on the broadcast incentive auctions to pay for them. But Commissioner Jessica Rosenworcel is concerned the FCC may be missing the mark by not combining into a single auction all 65 Mhz Congress directed be auctioned, which she argues would make it even more valuable and pay for more of that emergency network.

Rosenworcel worked on the incentive auction legislation as a top aide to Senate Commerce Chairman Jay Rockefeller (D-W. Va.), a driving force behind the network.

The FCC came up with rules of the road for opening up more mobile broadband in the H Block in Clyburn's first public meeting as acting chair.

The legislation creating the broadcast incentive auctions--broadcasters are still waiting for more info on just when and how the FCC plans to auction that spectrum--also requires the FCC to license that 10 MHz of H block spectrum for flexible use by 2015.

"Today the Commission announced that the PCS H block auction will be held on January 14, 2014, and set a reserve price of $1.56 billion," said Clyburn. "I am pleased that the FCC is moving expeditiously to implement Congress's direction to auction this spectrum, and that we are doing so in a way that ensures substantial revenues will flow to FirstNet.  This will be the first major spectrum auction since 2008, and will help close the spectrum gap as well as contributing to the goal of making mobile broadband available to our nation's first responders."

Rosenworcel was less sanguine about the prospects than her colleagues.

"The 10 megahertz of spectrum comprising the H block is part of a larger 65 megahertz of spectrum that Congress directed the Commission to auction in the Middle Class Tax Relief and Job Creation Act. This 65 megahertz of spectrum is laid out in a single list in Section 6401 of this law.  Moreover, under this law the revenue raised from the auction of this 65 megahertz will serve as a down payment toward a nationwide, interoperable public safety broadband network-—known as the First Responder Network Authority. More than 12 years after the horror of 9/11, it is essential that we make smart spectrum choices so that our first responders have the support they need to communicate in times of crisis.

"I fear this approach fails that test. That is because holding a single auction of all 65 megahertz at once is bound to yield more interest, more bidders, and more revenue than dividing this spectrum up and holding an auction of the 10 megahertz H block alone. As Wall Street analysts have noted, splitting this spectrum up for auction will likely limit interest in the H block to only one, or possibly two bidders. If that is true, we will have a retail sale—-not an auction. Moreover, it will mean reduced revenue from this spectrum--and less support for our nation's first responders."

Commissioner Ajit Pai suggested that date had a familiar ring to it. "This summer, I proposed that the H-Block auction start on January 14, 2014, and I applaud Chairwoman Clyburn and the Wireless Telecommunications Bureau for today's Public Notice announcing that the auction will commence on that date. Bringing this valuable 10 MHz of paired spectrum into the commercial marketplace as soon as possible will benefit Americans in two ways. First, it will help deliver bandwidth-intensive mobile services and applications. Second, the proceeds of the auction will provide much-needed revenue for the First Responder Network Authority to build out a nationwide, interoperable broadband public safety network."