America's big midband spectrum auction for 5G clears another obstacle
Two critical pieces of the C-Band puzzle fell into place this week, with Intelsat and SES both agreeing to participate in the FCC's "accelerated clearing" program. The program is designed to quickly free up midband spectrum for 5G in the US.
The development puts the United States one step closer to releasing vast swathes of midband spectrum for 5G networks. That's important considering the US wireless industry has been loudly complaining about the lack of midband spectrum in the country, warning that the situation will allow Chinese 5G providers – already in the midst of a massive deployment of 5G in midband spectrum – to take an insurmountable lead in the global 5G market.
Indeed, most commercial 5G operations in the US currently work on either lowband spectrum (in the case of T-Mobile) or highband spectrum (in the case of Verizon). 5G in lowband spectrum can cover wide geographic areas but cannot support fast speeds, while 5G in highband spectrum can support blazing fast speeds but covers relatively paltry geographic areas. That's why midband spectrum has been described as "Goldilocks" spectrum, because it's "just right" in terms of support for broad geographic coverage and speedy connections.
"We embrace America's drive to adopt 5G and recognize the important role that Intelsat will play in accelerating the clearing of the C-Band spectrum to ensure the US maintains its leadership in 5G and other advanced telecommunications technologies for decades to come," said Intelsat CEO Stephen Spengler, in a release from the company announcing its new C-Band plans.
Spengler's statement caps months of fierce wrangling about the C-Band spectrum auction for 5G, and serves to brush away at least some of the clouds around Intelsat specifically and the auction in general.
A winding auction road
That's because Intelsat was one of the main members of the C-Band Alliance (CBA), a group of foreign satellite companies that currently use C-Band spectrum between 3.7GHz and 4.2GHz to transmit TV and radio services across the US. Those companies initially petitioned the FCC to allow them to privately auction C-Band spectrum for 5G, thus reaping the profits of sales of licenses to the likes of AT&T, Verizon and T-Mobile. Amid heated opposition from some US lawmakers, the FCC rejected the CBA's proposal, opting instead to handle the auction itself. However, the agency did offer CBA members an olive branch in the form of roughly $9.7 billion (mostly split between Intelsat's $4.9 billion and SES's $4 billion), cash the companies could only get if they agreed to quickly modify their existing C-Band operations to free up roughly 300MHz of the 500MHz spectrum in the C-Band for a 5G auction.
Intelsat initially balked at the offer, arguing the FCC wasn't providing enough money. And then the company filed for bankruptcy earlier this month. But Intelsat's announcement this week that it will participate in the FCC's C-Band plans indicates it has mostly agreed to the agency's terms.
"We are glad the saga of changing 300MHz of C-Band spectrum from satellite to terrestrial wireless service is another step closer to being done, and that the recent bankruptcy filing by Intelsat did not delay the process. And we believe this important spectrum for deploying 5G networks could start showing up on towers by early 2022 unless it gets tangled up with the upcoming presidential election," wrote the Wall Street analysts at research firm Raymond James in a recent note to investors. The C-Band auction is scheduled to start Dec. 8, shortly after America's November election cycle concludes.
SSO obstacles and 12GHz options
However, as highlighted by the Wall Street analysts at New Street Research, there remain a few outstanding hiccups in the FCC's C-Band plans. Last week, a group of smaller satellite operators – companies that use relatively small slices of C-Band spectrum – challenged the FCC's C-Band proposal, arguing they should get some cash too.
The FCC's C-Band proposal "unlawfully modifies the SSOs’ [small satellite operators'] licenses and gives away billions of dollars to the SSOs’ largest competitors," the companies recently wrote to the FCC. The SSOs include ABS Global, Empresa Argentina de Soluciones Satelitales, Hispamar Satélites and Hispasat.
However, the New Street analysts don't expect the courtroom challenge to affect the auction. "We believe the FCC is likely to win," they wrote.
Finally, it's worth noting that the C-Band allotment isn't the only spectrum that 5G providers are hoping to obtain. A number of other spectrum bands are also being pursued by various industry players.
In fact, proponents of 5G in the 12GHz band gained some high-profile supporters this week when a group of public-interest groups and trade associations urged the FCC to issue new rules around the band that would allow 5G operations in 12GHz.
"We respectfully request that the Commission move forward and issue a notice of proposed rulemaking as soon as possible to consider making this spectrum available for two-way, mobile and fixed 5G wireless broadband services," wrote officials from the Competitive Carriers Association, Computer & Communications Industry Association, Incompas, Open Technology Institute at New America and Public Knowledge in a new FCC filing.
In doing so, the groups join RS Access and Dish Network in pushing for 5G in the 12GHz band.