Investment in the 3.5 GHz band is vital for its long-term success, and there are concerns that the current rules for Priority Access Licensees (PALs) are inadequate to foster such investment. PAL rules that restrict investment in the licensed tier of spectrum risk turning the 3.5 GHz band into merely another unlicensed band. For the 3.5 GHz band to truly live up to the promise of the original proposal from the President’s Council of Advisors on Science and Technology (PCAST), the Citizens Broadband Radio Service (CBRS) framework for the 3.5 GHz band must foster strong investment in PALs while also leaving ample spectrum available for opportunistic GAA use. Therefore, R Street commends the FCC for launching this notice of proposed rulemaking (NPRM) and seeking comment on potential ways to encourage investment in PALs and, ultimately, utilization of CBRS throughout the 3.5 GHz band.

In these reply comments, we address four aspects of the PAL licensing rules and respond to arguments raised on both sides of each:

  • First, on the issue of geographic license areas for PALs, the Commission should adopt a hybrid approach that utilizes larger license areas for urban areas while maintaining smaller ones for rural areas.
  • Second, on the issue of term lengths and renewability, the Commission should adopt longer term lengths and a renewal regime designed both to maximize efficient use of the 3.5 GHz band and to stimulate secondary-market transactions among PALs.
  • Third, on the issue of how many PALs will be auctioned in each license area, the Commission should eliminate the N-1 rule and make seven PALs available in each license area.
  • Finally, on the issue of specific-channel bidding, the Commission should weigh the costs and benefits of the proposal, and perhaps seek further comment, as it is unclear whether the benefits of implementing specific-channel bidding would outweigh the associated costs.