Pai’s plan would set a C Band auction for early December 2020
Federal Communications Commission Chairman Ajit Pai today outlined plans for a public auction of mid-band airwaves that would make 280 megahertz of spectrum available for terrestrial 5G services, raise money for the U.S. Treasury and offer incentive payments to satellite providers if they clear the band rapidly.
He proposed that the auction begin on December 8 of this year, with the spectrum possibly available as soon as September 2021.
In remarks at the Information Technology & Innovation Foundation in Washington, D.C., Pai called the C Band “one of the most complicated and contentious proceedings during my chairmanship,” but went on to add that the band “presents an enormous opportunity if we are willing to be creative and do the hard work. That’s because satellite companies don’t need the entire C Band to provide the same services they are providing today. This creates an opportunity for a consumer-friendly transition.”
Out of the 500 megahertz of C Band spectrum, existing satellite operations would be repacked into the upper 200 megahertz (4.0-4.2 GHz) of the band, with “reasonable” relocation costs covered out of auction proceeds, according to Pai. The lower 280 megahertz (3.7-3.98 GHz) would be made available for flexible use, and there would be a 20-megahertz guard band in place at 3.98-4 GHz.
Pai said Thursday that this approach “strikes the appropriate balance between making a large amount of spectrum available for 5G and preserving sufficient spectrum for incumbent uses.”
Some mobile network operators had hoped for more than 280 megahertz of C Band spectrum. Pai noted that the C Band Alliance of satellite operators put forward a plan that would clear the same amount of spectrum that Pai is proposing, and told the FCC that the upper 200 megahertz of the band was sufficient for their content broadcasting needs.
“So if anyone tells you that my plan would mean that millions of Americans would no longer be able to see their favorite television shows, don’t believe it for a second. It’s nothing but fearmongering,” Pai added.
Pai said that the FCC estimates that, based on the submitted record, the costs of satellite relocation will be between $3-5 billion. In addition to covering relocation costs, he is proposing up to $9.7 billion in incentive payments for accelerated spectrum clearing.
Those payments would be paid by winning bidders in the C-band auction, according to the plan. Satellite providers could receive incentive payments if they clear 120 megahertz of spectrum (3.7-3.82 GHz) by September 2021 in 46 of the top 50 U.S. Partial Economic Areas, and by clearing the remaining 180 megahertz (3.82-4.0 GHz) in those areas as well as all 300 megahertz (including the guard band) by September 2023.
“Some might ask—and I’m sure some will—Why are any accelerated relocation payments necessary?” Pai said. “The answer is pretty simple: speed. Remember, we aren’t just asking the incumbents to move their services to the upper 200 megahertz of the C-band. We want them to do that quickly in order to free up spectrum for 5G sooner rather than later. And this transition will be much faster if we can create powerful incentives for incumbent operators to expedite the transition. And to make sure they follow through—they would only be paid the full amount if in fact they did so. That is why I favor targeted accelerated relocation payments.”
He added: “To be clear, I don’t favor accelerated relocation payments because they are in the private interest of satellite companies. The balance sheets of private companies are not my concern. I favor accelerated relocation payments because … it is in the public interest to make available the C-band for 5G deployment as quickly as possible, as part of the national priority to promote American leadership in 5G.”
“Under the accelerated timeframe, 5G deployments could happen in the lower 100 megahertz of the C Band in 46 of the nation’s top 50 Partial Economic Areas by September 2021 and in the remaining spectrum by September 2023. This is much sooner than September 2025, which would be the timeframe without accelerated relocation payments,” according to the summary of Pai’s plan.
In his speech, Pai reiterated the four principles which guided his plan: freeing up significant spectrum for 5G; doing it quickly; generating revenue for the federal government; and to protecting incumbent services in the band.
“I’ve been in this job long enough to realize that this proposal will receive criticism from both sides,” he said Thursday. “On the one hand, satellite companies have been asking for a lot more money. But the purpose of an accelerated relocation payment is not to compensate them for the expected value of the spectrum. The purpose is to expedite of the clearing of the lower portion of the band for 5G. On the other hand, there will be those who will complain that $9.7 billion in accelerated relocation payments is too much. They agree such a payment is necessary, but they would prefer a smaller amount—in the neighborhood of $1 billion, for example. But that number would be far below the value to wireless companies of the accelerated clearing, and ultimately the value to American consumers of faster development of 5G. And it would not be enough to properly align the incentives of the satellite operators with our national interest of getting this C-band spectrum cleared quickly so it can be put to use for 5G.”
Reaction from telecom players to the plan was generally positive, if a bit reserved.
“We are encouraged that the FCC is taking the next critical step toward making this valuable mid-band spectrum available for mobile flexible use, while at the same time recognizing the critical need to have an orderly and timely transition in place to protect the content programming ecosystem currently relying on C-Band and impacting over 100 million U.S. households,” said Joan Marsh, AT&T EVP of regulatory and state external affairs. “We look forward to reviewing the details of the draft order and working with all stakeholders to ensure that both the auction and the transition are a success.”
Competitive Carriers Association President and CEO Steven Berry thank Pai for committing to a public auction and added that “there is no question the transition process, including adequate incentive payments for the satellite companies, is one of the most critical components. All carriers – both large and small – must have the opportunity to access C-band spectrum. I encourage the FCC to keep moving forward on this issue so that consumers, particularly those in rural areas, can reap the benefits of next-generation technologies as quickly as possible.”
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