United States 2008 wireless spectrum auction

The United States 700 MHz FCC wireless spectrum auction, officially known as Auction 73, was started by the Federal Communications Commission (FCC) on January 24, 2008 for the rights to operate the 700 MHz radio frequency band in the United States. The details of process were the subject of debate among several telecommunications companies, including Verizon Wireless, AT&T Mobility, as well as the Internet company Google. Much of the debate swirled around the open access requirements set down by the Second Report and Order released by the FCC determining the process and rules for the auction. All bidding was required by law to commence by January 28. The United States 700 MHz FCC wireless spectrum auction, officially known as Auction 73, was started by the Federal Communications Commission (FCC) on January 24, 2008 for the rights to operate the 700 MHz radio frequency band in the United States. The details of process were the subject of debate among several telecommunications companies, including Verizon Wireless, AT&T Mobility, as well as the Internet company Google. Much of the debate swirled around the open access requirements set down by the Second Report and Order released by the FCC determining the process and rules for the auction. All bidding was required by law to commence by January 28. Full-power TV stations were forced to transition to digital broadcasting in order to free 108 MHz of radio spectrum for newer wireless services. Most analog broadcasts ceased on June 12, 2009. The 700 MHz spectrum was previously used for analog television broadcasting, specifically UHF channels 52 through 69. The FCC ruled that the 700 MHz spectrum would no longer be necessary for TV because of the improved spectral efficiency of digital broadcasts. Digital broadcasts allow TV channels to be broadcast on adjacent channels without having to leave empty TV channels as guard bands between them. All broadcasters were required to move to the frequencies occupied by channels 2 through 51 as part of the digital TV transition. A similar reallocation was employed in 1989 to expand analog cellphone service, having previously eliminated TV channels 70-83 at the uppermost UHF frequencies. This created an unusual situation where old TV tuning equipment was able to listen to cellular phone calls, although such activity was made illegal and the FCC prohibited the sale of future devices with that capability. Some of the 700 MHz spectrum licenses were already auctioned in Auctions 44 and 49. Paired channels 54/59 (lower-700 MHz block C) and unpaired channel 55 (block D) were sold and in some areas were already being used for broadcasting and Internet access. For example, Qualcomm MediaFLO in 2007 started using channel 55 for broadcasting mobile TV to cell phones in New York, San Diego, Atlanta, and elsewhere. Qualcomm later ended the service and sold (at a large profit) channel 55 nationwide to AT&T Mobility, along with channel 56 in the Northeast Corridor and much of California. Dish Network bought channel 56 (block E) licenses in the remainder of the nation's media markets, so far using it only for testing ATSC-M/H. As of 2015, AT&T does not appear to be using block D or E (band class 29) yet, but plans to use link aggregation for increased download speeds and capacity. For the 700-MHz auction, the FCC designed a new multi-round process that limits the number of package bids that each bidder can submit (12 items and 12 package bids) and the prices at which they can be submitted, provides computationally intensive feedback prices similar to the pricing approach. This package bidding process (which is often referred to as combinatorial auctions) was the first of its kind to be used by the FCC in an actual auction. Bidders were allowed to bid on individual licenses or on an all-or-nothing bid which could be done up to twelve packages, which the bidder determined at any point in the auction. Doing the auction this way allowed the bidder to avoid the exposure problem when licenses are complements. The provisional winning bids are the set of consistent bids that maximize total revenues. The 700 MHz auction represented a good test-case for package bidding for two reasons. First, the 700 MHz auction only involves 12 licenses: 2 bands (one 10 MHz and one 20 MHz) in each of the 6 regions. Secondly, prospective bidders had expressed interest in alternative packaging because some Internet service providers had different needs and the flexibility would benefit them. The FCC issued Public Notice DA00-1486 adopted and described the package bidding rules for the 700 MHz auction.