Pai tells senators that C Band auction will be conducted publicly by the FCC
Federal Communications Commission Chair Ajit Pai said in a letter to Congress that the C Band auction will be public and conducted by the FCC, dashing satellite operators’ hopes that they might be able to auction 300 megahertz of prime mid-band spectrum for terrestrial 5G services in an FCC-like auction with minimal involvement from the FCC.
Pai’s letter came on the same day that U.S. Senators Roger Wicker (R-Miss.), who is chairman of the Senate Committee on Commerce, Science, and Transportation, and John Thune (R-S.D.), chairman of the Subcommittee on Communications, Technology, Innovation, and the Internet, introduced new legislation to require that the C Band spectrum be auctioned publicly and at least 50% of the auction revenues go to taxpayers in the form of a payment to the U.S. Treasury.
The C Band Alliance of three major satellite operators had recently proposed a payment of at least 30% of net auction proceeds to the Treasury, and said it was “working in good faith with various members of Congress to develop a proposal using a portion of the contribution to the U.S. Treasury to fund the deployment of an open access 5G network for rural broadband.”
Part of the appeal that the CBA was pushing in its private auction was making the mid-band spectrum available rapidly if the CBA, rather than the FCC, was in charge of the process. The CBA had said it could conduct the private auction during the first quarter of 2020; Wicker and Thune’s 5G Spectrum Act would require the auction to start no later than Dec. 31, 2020 and include at least 280 megahertz of C Band spectrum. The C Band Alliance of satellite operators has committed to making available 300 MHz of C-band spectrum at 3.7-4.2 GHz, including 280 megahertz of usable spectrum plus a 20 MHz guard band, in a private auction.
In his letter, which he also tweeted portions of, Pai outlined the four principals that the FCC should be guided by in the C Band decision: free up significant spectrum for 5G; do it quickly; generate revenue for the federal government; and “protect the services that are currently delivered using the C-band so they can continue to be delivered to the American people.”
After much deliberation and a thorough review of the extensive record, I've concluded that the best way to advance these principles is through a public auction of 280 megahertz of the C-band conducted by the @FCC's excellent staff.
— Ajit Pai (@AjitPai) November 18, 2019
“With a quarter century track record of transparent and successful auctions, I am confident that [FCC staff] will conduct a public auction that will afford all parties a fair opportunity to compete for this 5G spectrum, while preserving the availability of the upper 200 megahertz of this band for the continued delivery of programming,” Pai concluded.
The C Band Alliance called Pai’s decision on the auction “a significant departure from the CBA’s market-based proposal.
“The announcement does not address the critical involvement of the incumbent satellite operators in executing the complex task of reconfiguring and transitioning their networks,” the CBA said. “Nor does the announcement address the fundamental modification of the rights afforded by the existing FCC licenses held by the CBA members which would be required under a public auction approach. To ensure U.S. national security interests, U.S. leadership in 5G innovation and the expected accompanying GDP and job growth, the full cooperation of the satellite operators will be required to ensure the successful clearing of the C-band while protecting the incumbent broadcast services enjoyed by millions of U.S. households.”
Meanwhile, AT&T, which — along with a number of other network operators — had indicated support for some common auction principals for the C Band, responded to Pai’s statemeny by saying that it backs a public auction.
“As we have previously said, any path forward must chart a course toward a fair, open and transparent auction; compensation to C-Band licensees for relinquishing rights and relocating services; proceeds for the U.S. Treasury; and a clear and reasonable transition plan that ensures broadcasters, programmers and earth station operators that their services will not be interrupted and that their relocation costs will be reimbursed,” said Joan Marsh, AT&T executive VP of regulatory and state external affairs. “We support the approach outlined by Chairman Pai today and we look forward to working with the commission to help unleash this important spectrum for 5G.”
Marsh had noted in a blog post earlier this year that through its Warner Media affiliates, AT&T is a “significant user of C-Band services and believes that retaining part of the C-Band for video delivery is essential.”
Louis Peraertz, VP of policy for the Wireless Internet Service Providers Association, called Pai’s statement and guiding principals for the auction “good news for the fixed wireless industry and rural Americans.”
“One of the services currently using the C-Band is point-to-point fixed wireless services,” Peraertz added. “With the announcement, WISPA believes it leaves open the possibility that with a few technical rule changes, the FCC could easily and quickly permit new coordinated point-to-multi-point uses, both protecting the delivery of programming and expeditiously bridging digital divides in rural areas. We are greatly encouraged by these positive developments, and we hope the FCC takes the additional step of promoting more fixed wireless sharing in the C-band so that more rural Americans can quickly access the Internet via 5G or other high-speed broadband services.”