Hill, Tech, ACA Converge Over C-Band Auction

FCC must make big decision on direction of 5G makeover
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Why This Matters: The FCC faces heavy pressure from the Trump administration to free up spectrum to roll out advanced 5G wireless service.

The FCC’s search for a blueprint for migrating C-band spectrum to 5G has drawn a crowd, with new proposals from Capitol Hill and a coalition of cable broadband operators and competitive carriers, as technology and public-interest groups push hard for no international satellite “giveaways.” The uniting principle is that the regulator should auction the spectrum rather than let satellite carriers strike deals for it.

The FCC is under pressure from the White House to make sure the United States is the leader in 5G spectrum by next year.

The idea is to free up as much of the C-band satellite spectrum (3.7 Gigahertz to 4.2 GHz) as possible for terrestrial wireless. Since that bandwidth is currently used by cable operators and broadcasters to get networks from programmers to their viewers and content from remote locations to studios, it must also do so while protecting that programming from interference.

One big issue is whether to have the FCC auction the spectrum, or to let the international satellite services companies that control the licenses strike marketplace deals with wireless carriers.

The first would put more money into the Treasury, money that could go for deploying rural broadband. Backers of that approach say that should be a priority if one of the avowed goals of freeing up spectrum for 5G (and it is) is closing the rural digital divide. The second could possibly speed the spectrum to market.

Big Tech Backs Auction

High-tech companies, public-interest groups and others favor an FCC auction over private-market deals for the spectrum, valued at between $10 billion and $30 billion, they noted.

The tech-backed Open Technology Institute (OTI) has said the FCC doesn’t have the authority to approve a private auction of the spectrum anyway, so the point should be moot.

“The FCC lacks legal authority to allow a private auction and windfall to satellite companies that never paid for spectrum,” said Michael Calabrese, director of the Wireless Future Program at OTI, part of a coalition pushing for the FCC auction.

But supporters of a marketplace approach, including the C-Band Alliance of satellite carriers that would strike those deals, have said the FCC can and should let the marketplace decide, as it were. They argue an auction would take years to get the spectrum to wireless carriers, while they could get the process going within months.

Rep. Doris Matsui (D-Calif.), co-chair of the Congressional Spectrum Caucus, has released a draft bill that would have the FCC auction the spectrum, but with tweaks to try and please both sides.

There has been some hesitancy to engage the issue on the Hill and Matsui is hoping to change that with a discussion draft that she hopes could gain some industry traction and then more Hill support.

Broadcasters could be a harder group to publicly get on board. They are happy with the possibility of their own payout and the bill’s language about doing no harm to incumbents, but to the degree that it incentivizes more spectrum to be cleared more quickly, that raises fears about interference — always a big issue with stations.

Matsui Floats a Compromise

Rep. Doris Matsui

Rep. Doris Matsui

Matsui’s Wireless Investment Now in (WIN) 5G Act would have the FCC auction the spectrum, but put it on the clock. Satellite operators would receive an escalating cut of the auction proceeds based on how much of the spectrum could be freed up.

The plan would cover the transition costs of incumbent cable operators and broadcasters, plus at least potentially give them a cut of the auction proceeds above those transition costs, with the remainder of the auction proceeds going to a new rural broadband fund.

The bill tries to incentivize freeing up as much spectrum as possible. Not only does it not cap the amount of spectrum freed up at 200 MHz, as satellite carriers have proposed, it requires the parties to free up as much spectrum as practicable, including all if that were possible. But it also says that the amount cleared is limited to what will do no harm to incumbent users.

Satellite operators’ cut of the auction proceeds would increase as the more spectrum that could be freed up.

The bill would also free up more funds for R&D into federal spectrum repurposing, including agencies operating on the 3.45-3.55 GHz band. If that band can be repurposed, the bill directs the FCC to auction it by 2025 and reallocate it for commercial use by 2026.

Instead, smaller, independent cable operators (ACA Connects) and competitive carriers (the Competitive Carriers Association) have joined with Charter Communications to offer up their own proposal for clearing a bunch — 370 MHz at least — of C-band spectrum.

The proposal:

● “Frees up at least 370 MHz (and likely more) of the C-band spectrum on a nationwide basis and on an expedited time frame;
● “Makes whole all incumbents — including the satellite industry, its customers, and earth station users — and provides all of these stakeholders with long-term certain protection for existing services;
● “Contributes to the goal of building fiber to provide highspeed broadband in unserved or underserved rural areas;
● “Ensures a transparent FCC-led auction that will ensure the public receives all spectrum sale proceeds (expected to be in the billions) beyond what is required to reimburse costs and incentivize current users; and
● “Creates 100,000 ‘direct’ jobs and as many as another 100,000 ‘indirect’ jobs in communities across the country.”

While smaller operators are on board, NCTA-The Internet & Television Association (though Charter is a member) was not part of the filing and had no comment on that or the Matsui proposal.

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