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FCC proposes Title II reclassification; AWS-3 auction breaks records

In telecom news, the FCC unveiled its proposal to reclassify the Internet under Title II, while telecom spending is expected to grow as carriers expand their networks.

This week in telecom news, the Federal Communications Commission (FCC) unveiled a proposal to reclassify Internet service providers as common carriers under Title II following its vote to update its broadband definition to 25 Mbps. Meanwhile, telecom spending on mobile and fixed networks is expected to grow this year as carriers look to improve their coverage and data capacity.

The FCC's AWS-3 auction has ended after nearly three months, raising a record-breaking $45 billion. The large number of bids indicates that carriers are expecting mobile data growth and need more spectrum to support it.

FCC to reclassify Internet, updates broadband definition

FCC Chairman Tom Wheeler announced today that the FCC intends to reclassify Internet service providers as common carriers under Title II of the Telecommunications Act.

In a statement given to Wired, Wheeler said the proposal will give the FCC authority to implement and enforce what he called the strongest open Internet protections. He said this proposal will also extend to mobile broadband and will modernize Title II to encourage competition and innovation, and preserve incentives for ISPs to invest in their networks.

The announcement will cause renewed debate and lobbying about net neutrality, since it will reclassify Internet service as a regulated telecommunications service instead of an information service. Wheeler may suggest a light approach to Title II regulations by not getting involved in pricing decisions, as it would under full utility regulation.

The announcement comes on the heels of the FCC's vote last week to change the definition of broadband from 4 Mbps to 25 Mbps in terms of download speeds. The vote was 3-2 along party lines. The agency also issues a notice of inquiry asking for ideas on how broadband deployment can be accelerated.

The FCC used this new broadband definition to determine that Internet service providers are not rolling out broadband across the country in a timely manner. An FCC report found that only 17% of U.S. residents have access to 25 Mbps broadband.

The new broadband definition could be used by the FCC in its net neutrality vote, which is scheduled for Feb. 26, although how the two could be related is not clear. The 1996 Telecommunications Act gives the FCC the authority to take action if it finds broadband isn't being rolled out in a timely manner.

Large broadband providers object to the FCC's decision, arguing that customers don't need such high speeds. Lawyers for Verizon wrote that instead, the FCC should find that providers are deploying broadband in a timely fashion because they have "invested hundreds of billions of dollars in deploying next-generation broadband networks."

Mobile and fixed network spending to grow

Global spending on mobile and fixed networks will continue to grow as carriers improve their coverage and data capacity to keep up with growing traffic from video and smartphones.

Gartner predicted carrier spending on mobile infrastructure, from radio base stations to small cells, will reach $43.36 billion. Investment in fixed networks is also predicted to increase 7.7% to $10.33 billion. 4G is also having an impact on spending as countries in Europe, Latin America and Africa look to build 4G networks.

"The 4G story is spreading after the first spurt of rollouts in the U.S., Japan and Korea is behind us," said Gartner analyst Deborah Kish. "Telcos in more far-flung places from Honduras to Croatia are looking to introduce more advanced services and move pre-paid customers on to contracts."

Telecom equipment spending will be more of a mixed bag due to consolidation among customers and slower 4G network buildouts in the U.S. and China, according to analyst and brokerage firstm Bernstein Research. The firm predicted that wireless equipment spending will rise 5% while fixed network equipment spending will remain flat.

AWS-3 auction breaks records

The FCC's AWS-3 wireless spectrum auction has finally ended, raising a record-breaking $45 billion. AT&T, Verizon, T-Mobile and Dish Network were the big winners.

The auction of AWS-3, the band that falls between the 2155 and 2175 MHz spectrum range, began on Nov. 13. Bidding in the auction was four times the FCC's reserve price minimum of just over $10 billion, indicating that mobile carriers anticipate heavy mobile data growth and need new sources of spectrum, according to Telecompetitor.

AT&T, Verizon, T-Mobile and Dish won licenses in both large and small spectrum markets, the FCC announced the following day. The winning carriers must pay a down payment of 20% of their winning bids and file an application for the licenses by Feb. 13.

The success of the AWS-3 auction sets the stage for the 2016 voluntary TV broadcast spectrum auction. Broadcasters will put some of their spectrum up for auction if mobile carriers can meet minimum bids set by the broadcasters. The success of the AWS-3 auction will give broadcasters high expectations about how much money could be raised.

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