The New America Foundation's Open Technology Institute joined Public Knowledge in submitting comments to the Federal Communications Commission (FCC) on the auction of advanced wireless services licenses schedule for November 13, 2014. [Read full text of comments here [pdf](http://oti.newamerica.net/sites/newamerica.net/files/profiles/attachments/NAF%2BPK_ReplyComments_AWS-3.pdf)
The AWS-3 auction will result in a more or less competitive marketplace for mobile broadband services depending in part on the auction rules adopted in this proceeding. While it is clearly in the public interest to make these previously fallow or under-utilized bands available for commercial services, Auction 97 represents an equally important opportunity to ensure that the first major spectrum auction in seven years is conducted with an eye toward facilitating more mobile market competition while avoiding foreclosure by the most dominant national carriers. To that end, the Public Interest Organizations provides several recommendations concerning the auction structure and procedures.
First, while the Public Interest Organizations generally support the Bureau’s plan to conduct the AWS-3 auction using a simultaneous multiple-round (“SMR”) auction format, we strongly agree with the consensus expressed in comments filed by non-dominant carriers proposing that the Commission adopt separate bidding eligibility, activity waivers and stopping rules for the paired and unpaired spectrum blocks. By treating the paired and unpaired spectrum blocks as if they are fungible, a combined set of rules would permit certain large bidders to game the system by “parking” bidding eligibility in the unpaired blocks in order to drive up its cost and/or gain an advantage by switching their bids late in the auction. Separating the bidding eligibility, activity and closing rules for the paired and unpaired blocks in the auction will also reinforce a finding that that the failure to meet one of the two separate reserve prices established to satisfy the Federal agency reimbursements required by the Commercial Spectrum Enhancement Act will not result in the failure of the entire auction.
Second, the Public Interest Organizations strongly endorse the Bureau’s proposal to continue the Commission’s well-established and successful practice of anonymous bidding. While we can imagine circumstances where a rural or regional carrier might benefit by knowing what carrier is bidding against them, or who is bidding in neighboring markets, this is outweighed by the broader public interest in minimizing collusive and retaliatory bidding strategies that will tend in aggregate to favor the most dominant carriers and thereby undermine an auction outcome that best promotes mobile market competition.
Third, the Public Interest Organizations strongly support the Commission’s decision not to use package bidding in this auction. The Bureau should summarily reject Verizon’s proposal to allow applicants to bid on a nationwide package in each of the H, I, and J blocks, which represent 40 of the 50 MHz of paired spectrum in Auction 97. Verizon’s proposal is a thinly-veiled request for an opportunity to leverage the package bidding rules into a competitive foreclosure of the lion’s share – as much as 80 percent – of the paired AWS-3 spectrum and to acquire much of it at a discounted price compared to what rural and regional carriers would pay for licenses either in or as an extension of their home market areas.
