Anterix Outlines Strategy for 900 MHz Spectrum in SEC Filings
Tuesday, August 11, 2020 | Comments

In a quarterly filing with the Securities and Exchange Commission (SEC), Anterix highlighted its strategy for the recently realigned 900 MHz band.

In mid-May, the FCC made sweeping changes to the 900 MHz band by approving a report and order that made 6 megahertz of low-band spectrum available for critical wireless broadband services. The order also created a narrowband segment to move incumbents in broadband segment to.

Anterix, then called pdvWireless, first petitioned the FCC for such a realignment in 2014.

Anterix is the largest holder of licensed spectrum in the 900 MHz band, and plans to provide private broadband networks for critical infrastructure industries (CII). In its quarterly SEC filing, the company said it is now working to secure and qualify for broadband licenses in the realigned band. The company said it initially plans to focus on counties in which it believes there are the most near-term commercial opportunities.

Under the new rules, the FCC uses counties as the sub units for determining whether or not an entity is eligible for a broadband license. In order to be eligible for a license in the new broadband spectrum, entities must meet three requirements.

The first requirement is the 50% licensed spectrum test. Under this, an entity must demonstrate that it holds more than 50% of the outstanding licensed channels in a county. Anterix said that right now, it satisfies the 50% test in more than 3,100 of the 3,223 counties in the U.S.

The second test is the 90% broadband segment test, under which an entity must show that it holds or has agreements with incumbents for 90% of the licensed channels in the broadband segment in a county and within 70 miles of the county’s boundaries.

Anterix said that the 900 MHz band currently has 241 channels in it, meaning that it will need 217 channels within the segment to cover this requirement. The company must have this requirement satisfied before it can file for a broadband license.

“Only after we satisfy the 90% broadband segment test will the FCC issue a broadband license to us and commence the mandatory retuning period,” Anterix’s filing said. “During this period, any covered incumbents that remain in the broadband segment (other than complex systems) are required to negotiate with us in good faith to clear the broadband segment, subject to FCC intervention if the parties cannot reach an agreement.”

Complex systems — systems with at least 45 integrated sites — are exempt from the mandatory retuning process. Anterix said that of all the systems that qualify for as complex systems, it has identified all but one as target customers for its broadband service.

The final requirement is that an entity surrender 6 MHz of spectrum, or 240 channels, in a county in order to receive the broadband license. Entities that do not have that many channels to return then must make an anti-windfall payment before it can receive the license. The amount of that anti-windfall payment will be determined by the average price paid in the FCC’s 6 GHz auction in a given county.

“Importantly, the markets where the FCC has channels in inventory and where we may need to make anti-windfall Payments to effectively return 240 channels to the FCC are generally in smaller urban, suburban and rural markets,” the filing said. “Our spectrum position is greatest in the largest, most populated and therefore most expensive markets, with a few exceptions. Although we will need to make anti-windfall payments to secure broadband licenses in some counties, the cost for the channels, on average, will be lower than the nationwide average amount paid in the FCC’s 600 MHz auction.”

Anterix said that between spectrum clearing and acquisition costs and the anti-windfall payments, it anticipates spending between $130 million and $160 million. The company plans to spend most of that by the end of the 2024 fiscal year, the filing said. Would you like to comment on this story? Find our comments system below.

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