Just exactly how much money are current C-Band users going to get? That's the big question that FCC Chairman Ajit Pai is expected to answer tomorrow.
Pai is scheduled to lay out his C-Band auction plan during a speech on Thursday at the Information Technology and Innovation Foundation headquarters in Washington. The event promises to cap months of intense lobbying by a variety of players in the telecom market on the C-Band issue.
Pai has already said that he wants the FCC to conduct a C-Band spectrum auction for 5G sometime later this year, and that he plans to bring the topic to a vote at the FCC's next open meeting on February 28.
But tomorrow, Pai is expected to say just exactly how much money the US government will pay current C-Band users to quickly move off a portion of the band so that it can be auctioned for 5G operations. If the number is too low, the incumbent C-Band users might file a lawsuit against the FCC in an attempt to stall the issue, which would cause plenty of heartache among US wireless network operators keen to get their hands on critical midband spectrum for 5G. But if the number is too high, US legislators like Sen. John Kennedy might balk at the notion of foreign C-Band incumbents profiting from the sale of US spectrum to US companies.
Pai has quietly proposed $5 billion in payments to C-Band incumbents, according to the Wall Street analysts at New Street Research. However, that figure could rise as high as $9 billion.
On the other side, the New Street analysts wrote that C-Band incumbents won't accept anything less than $12 billion.
Pai is widely expected to attempt to find the magic number between $9 billion and $12 billion during his speech tomorrow.
A decision worth up to $77 billion
At stake in the C-Band issue is roughly 280MHz of midband spectrum that could fetch up to $77 billion in a 5G spectrum auction, according to one estimate. The C-Band is currently being used by SES, Telesat, Eutelsat, Intelsat (which are all based in either Europe or Canada), as well as some other smaller satellite companies, to beam TV and radio content across the US. However, they don't need the full 500MHz allocated to them for this effort, and have proposed releasing more than half of the C-Band for 5G.
However, the satellite companies -- some of which are represented by the C-Band Alliance -- believe that they should receive "incentives" to quickly move their operations off of a portion of the C-Band. That "incentive" money would be separate from the money it will cost to physically update the companies' equipment so that it uses a smaller portion of the C-Band. The incentive money and the money needed to update equipment will come from the proceeds of the C-Band spectrum auction.
Will Pai be able to find the magic "incentive" number that will both quickly move C-Band incumbents and mollify US lawmakers at the same time? "With significant value at stake for both parties, we think there is a deal to be struck that is satisfactory to both sides," the New Street analysts wrote.