The 700 MHZ Spectrum; The Auction And Usage Roel Dela Cruz Juan Johnson Chad Kipper Edgar Medina Michael Rogriquez Lisa Tsyplakova Management Information Systems HTM 304 Spring 2008 Profesor Fang FangThe history of the 700 MHz Spectrum The 700 MHz spectrum is a broadcasting spectrum that is part of the Ultra High Frequency (UHF) band which transmits analog television signals. The 700 MHz spectrum is broken up into two parts. The spectrum consists of an upper 700 MHz band and a lower 700 MHz band. The lower band consists of a 48 MHz spread whereas the upper band is a 60 MHz spread. The lower band includes frequencies from 698 MHz to 746 MHz while the upper band includes frequencies from 746 MHz to 806 MHz, which, for the lower band is channels is 52-59 and 60-69 for the upper band (Malik). Currently, the 700 MHz spectrum is used for broadcasting analog television signals; however, the government has ordered all television broadcasters to switch to digital television signals by February 19, 2009 as mandated by the Digital Television Transition and Public Safety Act of 2005 (Mullin). Since TV broadcasters will be making the switch to digital signals and vacating the 700 MHz spectrum, the FCC has decided to auction the free space to the general public. This auction has generated much attention from big telecommunications companies like AT&T and Verizon. One of the reasons the auction is generating so much attention is because the physical properties of this particular spectrum is very much sought after by telecommunications giants like AT&T and Verizon. The 700 MHz is very much sought after because its signal can propagate through walls (Malik). Thiskind of signal opens the door for many wireless applications including mobile WiMAX (Barthold). In 2002 and 2003, the FCC reallocated the 700 MHz spectrum which freed up the lower 700 MHz band. This reallocation was necessary as the FCC pushes for all broadcasters to make the switch to digital television (Malik). As a result, the lower 700 MHz band was freed up and sold to the general public. Some of the largest bidders for the lower 700 MHz band included Aloha Partners, Qualcomm, Vulcan Spectrum and Cavalier Group, LLC (FCC). Currently, the largest owners of the lower 700 MHz band include Qualcomm and AT&T. In 2007, Aloha Partners sold their portion of the lower 700 MHz spectrum, a total of 12 MHz, to AT&T for a whopping US$2.5 billion (Gross). In February of 2006, The Digital Television Transition and Public Safety Act of 2005 was signed into law by President George W. Bush. This act gave all television broadcasters an absolute deadline to stop broadcasting analog television signals and makes the switch to digital television (Mullin). Television broadcasters currently use up a total of 60 MHz which is the upper 700 MHz band. Of that 60 MHz, the FCC has guaranteed to allocate 24 MHz to Public Safety once television broadcasters vacate the spectrum (Malik). The figure below shows the different blocks that were auctioned off in the January 2008 auction for the 700 MHz spectrum.The FCC has held auctions for the 700 MHz spectrum a total of six times. Each time the FCC holds any type of auction, they use a numbering system to identify the different auctions. The auction numbers for the 700 MHz spectrum are auctions 33, 38, 44, 49, 60, and 73. Auctions 33 and 38 were for the upper 700 MHz guard bands and auctions 44, 49, and 60 were for the lower 700 MHz band while auction 73 was for the upper 700 MHz band (FCC). The FCC Established by the Communications Act of 1934, the Federal Communications Commission (FCC) is an independent United States government agency that regulates all interstate and national communications. The FCC regulates communications through satellite, radio, cable, television and wire. The FCC is the regulatory agency that overlooks the 700 MHz spectrum. The FCC’s main responsibilities with the 700 MHz spectrum are to create the band’s service rules for efficient commercialwireless use and to intensify these services as well. The band’s service rules will also apply to certain broadcast services that meet the technical rules for efficient use of the spectrum. The FCC will be shutting down analog television broadcasting by February of 2009. The switch that will take place will be to digital TV. This will free up space that is now occupied by the Ultra High Frequency (UHF) channels 59 to 69. The FCC has the responsibility to create the guidance regarding the voluntary band clearing. The FCC will make sure that this voluntary clearing will be in the best interest of the public. As discussed earlier, it will. It will implement advanced wireless services and broadcast stations will be switching to DTV. People might be asking themselves, what is going to happen to my local channels? Well the FCC will obligate cable systems to carry local broadcasters’ digital signals. The FCC is looking for ways to accelerate the transition to DTV. The FCC is looking into a possible three way voluntary relocation agreement that involve the broadcasters in channels 59-69, broadcasters with operations on lower channels and the new 700 MHz licensees. The FCC is also looking into the possibility of allowing the broadcasters in channels 59-69 and the new 700 MHz service providers to share the spectrum in time and/or in bits. Another question is if the broadcasters should be allowed to share DTV facilities and spectrum during the DTV transition? The FCC will also allow base and mobiletransmissions in the lower and upper 700 MHz bands. This will allow for Time Division Duplex (TDD) technologies to be used in these bands. How the FCC implemented the first spectrum auction? In August 1993, President Clinton signed a historical law that granted the United States Federal Communications Commission (FCC) the authority to auction radio frequency or spectrum. Winning the auction meant the owner was able to use the frequencies in accordance with the license. The FCC started the first auction on July 25, 1994. In order to run an auction, the FCC needed to choose an auction design. The auction design needed to be simple to understand because the spectrum auctions were conducted for the first time with inexperienced bidders. After designing the spectrum auctions, the FCC implemented it, relying on outside contractors to develop auction software. Timely implementation was particularly challenging given that the Commission decided
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