Wireless lobby reassures critics on demand for spectrum sale

Wireless lobby reassures critics on demand for spectrum sale

A major Washington wireless trade group on Wednesday said that participation in the first part of an historic spectrum sale had been robust, even though it did not hit a key target.

Bidding ended late Tuesday in the first stage of an auction of wireless spectrum by the Federal Communications Commission (FCC) — the frequencies that carry data to mobile devices from broadcast stations to mobile providers and other buyers.

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Bidders, including major carriers like AT&T and Verizon, failed to hit the high $88.3 billion price target set during the broadcaster section of the sale.

The National Association of Broadcasters used the results from the first round to cast doubt on wireless industry claims of the sale's necessity, with executive Dennis Wharton saying the group was “surprised by the modest participation by wireless carriers.”

“Perhaps the notion of a ‘spectrum crisis’ pedaled in Washington for the last seven years is not as acute as policymakers were led to believe,” he said in a statement.

But wireless trade group CTIA Vice President for Regulatory Affairs Scott Bergmann painted the more than $20 billion that was bid as a victory.

“As we turn the page on Stage 1, it is notable that forward auction bidders have already produced the second-highest bidding total in FCC auction history, totaling $23.1 billion,” he said in a Wednesday blog post.

“This is already bigger than the last low-band auction of 700 MHz ($18.96 billion) that was heralded at the time by the FCC as a 'history-making auction.' "

The auction represents the FCC’s attempt to meet the high demand for spectrum generated by smartphone usage. Earlier this year, broadcasters agreed to give up their space on the dial — for a price. Now the FCC is attempting to repackage that spectrum and sell it to a pool of bidders including the major wireless carriers and Comcast and T-Mobile.

Since the first stage of the auction failed to meet the $88.3 billion figure, the FCC will now move to a second stage in which it attempts to transfer a smaller amount of spectrum. The broadcast section of the second stage will begin Sept. 13, the agency said Wednesday.

Bergmann sought to tamp down any concerns that moving to a second round was abnormal.

“It was widely anticipated, if not fully expected, that the auction would not close after the first round,” said Bergmann. “This is how the Incentive Auction was designed to work.”

The FCC has set high expectations for the auction, opting to choose the highest possible clearing target for the start of the sale. FCC Chairman Tom Wheeler has also predicted that the sale will be a “spectrum extravaganza.”