America's Big Midband Auction for 5G to Start in 2020, But Big Questions Remain

Mike Dano
11/18/2019

The FCC said it will conduct an auction of 280MHz of C-Band spectrum for 5G before the end of 2020, but the agency did not release critical details about how it would conduct the auction, including whether existing C-Band spectrum users like SES and Intelsat would get any money from the auction.

"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," FCC chairman Ajit Pai tweeted on Monday.

The agency's announcement essentially kicks the can down the road on the critical question of who will profit from the auction of C-Band spectrum for 5G.

However, for companies that want to buy lots of midband spectrum for 5G, the FCC's announcement today does provide answers to two burning questions: Specifically, when (next year) and how much spectrum (280MHz). Those two key pieces of information will likely help the likes of AT&T and Verizon formulate their C-Band bidding strategies and, ultimately, their 5G buildout plans.

After all, the C-Band has been widely touted as ideal midband spectrum for 5G, considering signals in the band can both travel long distances and carry lots of data. That's not true of highband spectrum like millimeter wave and lowband spectrum like 700MHz. Moreover, 280MHz is an enormous amount of spectrum considering today's wireless network operators often deal in 10MHz and 20MHz chunks of spectrum.

C-Band Alliance reacts
The FCC's announcement today essentially stands as a major rebuke to three of the big users of the C-Band today: Intelsat, SES and Telesat. Those are the three European satellite companies that had teamed up under the C-Band Alliance (CBA) banner to urge the FCC to let them conduct an auction of C-Band spectrum.

FCC officials said that the CBA's proposal was woefully inadequate, and that it wouldn't be fair to have private entities conduct a private auction.

In response to the FCC's announcement today, the CBA said the association would continue to work with the FCC on the matter. But it also warned that its members "will be required" to be involved in the proceeding.

"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 in a statement today. "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."

Continued the CBA: "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."

Details remain cloudy
FCC officials explained that the agency's five commissioners would vote on the details of a C-Band auction sometime early next year -- that essentially stands as a delay on the topic considering there was widespread expectations that the agency would vote on the topic during its December open meeting.

FCC officials also confirmed that companies like Intelsat and SES -- which are currently using the C-Band to deliver TV services across the US -- would have to update their existing systems to release C-Band spectrum for an auction. The FCC officials said that new video compression technology, new filters and new satellites would be needed to free up 280MHz of spectrum for an auction. However, they did not explain how those updates might be paid for. They also did not mention fiber as playing a role in the effort -- a noteworthy omission considering T-Mobile and others had urged the FCC to reroute some C-Band traffic onto fiber in order to free up the spectrum for 5G.

Intense lobbying
Considering some analysts estimate a C-Band auction could raise as much as $50 billion in bids, it's no surprise there was intense lobbying on the topic last week. Top executives from the likes of T-Mobile and Intelsat spoke with FCC officials late last week, according to filings at the agency.

Interestingly, President Trump was not among those lobbying FCC Chairman Pai on the issue, according to FCC officials. They said that Pai spoke with Trump on the phone on October 30 about the C-Band, but that the president did not offer an opinion on how the FCC should release C-Band spectrum for 5G and was only looking for an update on the topic.

That's noteworthy considering Sen. John Kennedy (R-La.) had urged Trump to push the FCC to conduct the auction rather than the CBA, arguing that proceeds from the auction could be used to pay for the president's wall separating the US and Mexico. Indeed, two other senators just today announced legislation that would have required the FCC to conduct an auction of C-Band spectrum rather than offloading the work to the CBA.

Kennedy and others have strongly pushed against a CBA-led auction of the C-Band, arguing that European satellite companies should not profit from the sale of American spectrum to American companies. The CBA sought to counter those concerns with a proposal late last week outlining exactly how much auction money it would funnel back to the US government. But that proposal appears to have failed.

Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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