The FCC has set rules and dates for an auction to permit commercial operation in the 3.5 GHz band (3550 – 3650 MHz). The auction is scheduled to begin on June 25, 2020.

The 3.5 GHz band is well-suited to 5G operation and is used throughout the world for 5G deployments.  Its spectrum propagation characteristics make it ideal for use in small cells and facilitate spectrum reuse.

In the US, until recently, this band  had been allocated to government use (primarily for shipborne, airborne, and ground-based radars) as well as for fixed satellite radar systems and other uses on a secondary basis.  The NTIA and the FCC identified the band in 2010 as one where private wireless users could coexist with incumbents provided suitable protection was provided.  In order to follow up on NTIA’s recommendations, in 2012, the Commission proposed reallocating the band to allow a new service called the Citizens Broadband Service (“CBRS”) to share the spectrum as long as incumbent users were protected from harmful interference.

We expect the spectrum to be used primarily for wireless broadband use, notably for 5G  networks, as well as for other services such as emergency services and industrial-scale Internet of Things (“IoT”) operations.  Incumbent Government operations as well as some non-governmental incumbents (“Tier 1” licensees) will receive protection from interference.  Some of the incumbent users are grandfathered until the expiration of their existing licenses while others will be permanently protected.

In order to ensure incumbent users are adequately protected and to foster efficient use of the band, the Commission will allow access and operations to be managed by private automated frequency coordinators called Spectrum Access Systems (“SAS”).  Currently, there are 5 authorized SAS administrators.  SAS operators will be able to rely on what’s termed an Environmental Sensing Capability (“ESC”), which is a network of sensors that detect transmissions from users that must be protected from interference.

New licensees will be divided into 2 categories: Priority Access Licenses (”PAL”) and General Authorized Access Licenses (“GAA”).  The band would be divided into 15 channels which will be 10 MHz in width with license terms of 10 years.

PAL licenses will be issued on a county-wide basis, and 7 PALs will be available in each county.  Each PAL will consist of a 10 MHz-wide unpaired channel.  PAL licensees will be permitted to aggregate up to 4 channels per county. In total, 22,631 licenses will be offered for auction.  Bidders may request a specific channel, but they are not guaranteed to get that channel, as SAS operators may assign channels to accommodate higher priority licensees and to fulfill their other responsibilities.  The licensees must also meet certain performance (i.e. build-out) requirements, but those requirements need only be satisfied at the end of the 10 -year term.

GAA licenses may operate on any frequency in the band not in use by Tier 1 or PAL licensees.  GAA licenses will be authorized by rule – similar to Part 15 devices – and they must accept interference from those higher tier operators.  Moreover, GAA users do not have an expectation of interference protection from other GAA users. They must also register their devices with an SAS administrator and provide information that will allow SAS administrators to identify each device and its operator as well as geo-location information.  It is expected GAA devices will be primarily used to provide fill-in coverage and to extend wireless coverage to unserved or underserved areas.

It is too early to tell if this novel reallocation will be successful, but there seems to be great interest in the band.  The first auction of PAL licenses is scheduled to commence on June 25, 2020.  It will use the ascending clock auction format that has been successfully used in several prior auctions.  Under that format, the auction will proceed in a series of bidding rounds. During each round, the Commission will announce a specific clock price for each available county license in that round.  If the demand for available blocks for that county exceeds the supply, the Commission will announce a higher clock price for the next round and so on until the demand does not exceed the supply.

We expect to see a great deal of interest from carriers and manufacturers as well as others.  If the new process turns out as well as anticipated, we also expect the Commission will likely adopt the same approach in other bands.