FCC Backs C-Band Auction Plan That May Bring $9.7B to Satellite Companies

SHARE THIS ARTICLE

Share on facebook
Share on google
Share on twitter
Share on linkedin

In a move that FCC Chairman Ajit Pai said he hoped would quickly free up spectrum for 5G, the FCC voted 3-2 Friday in favor of allowing incentivised C-band auction payments to satellite companies. The C-band spectrum, slated to be auctioned off, is currently used by those high-flying companies to deliver video and radio programming to 120 million U.S. households. The FCC wants to divert much of the under-utilized band to 5G but has been debating with Congress on how best to do it.

“We want satellite operators to vacate the lower portion of the C-band quickly. And this transition will be much faster if we align the incentives of satellite operators with the incentives of wireless providers who want expedited access to that spectrum,” Pai said.

The satellite companies, according to Reuters, can make up to $9.7 billion in potential incentive payments from the auction with Intelsat SA receiving up to $4.9B, with other C-band Alliance non-U.S.-based companies like SES SA, and Telesat garnering the remains.   

The debate over selling valuable U.S. spectrum with foriegn companies as the recipient has drawn bi-partisan criticism. FCC Commissioner Jessica Rosenworcel, who voted against the deal said, “C-band auction winners are being forced to pay nearly $10 billion to incumbent satellite operators over and above their relocation costs,” Rosenworcel said. “It looks a lot like an effort to justify backroom deals and promised payoffs.”

Senator John Kennedy (R-LA) and some Democrats have been critical of the satellite companies reaping the rewards and are pushing legislation that would reduce the compensation to C-band Alliance companies. Kennedy said Friday that “shelling out billions for airwaves we already own is no way to handle taxpayer money—especially when taxpayers want those dollars to support rural broadband.”

Major carriers applauded the vote. Verizon CEO Hans Vestberg said the FCC “clearly understands the need to move swiftly to ensure that critical wireless spectrum is quickly made available so that we can build the networks of the future.” Other reactions include:

  • “Today’s vote is another major step toward unleashing mid-band spectrum for 5G,” said AT&T EVP Joan Marsh. “Making the C-Band available for mobile flexible use will provide a vital resource for deploying next generation wireless networks and securing U.S. 5G leadership.”  
  • “I applaud the Commission for voting in favor of the C-band auction rules,” said Competitive Carriers Association President Steven K. Berry. “C-band spectrum provides incredible potential for all carriers – both large and small – to deploy next-generation technologies, and a public auction of this invaluable resource is certainly the right decision. An auction of 280 megahertz will go a long way to helping meet consumers’ insatiable demand for more. While we would have liked to have seen a limit on spectrum aggregation to further promote competition, we commend the Commission for its work on this enormously complex issue and look forward to a robust auction in the near future.” 
  • “We applaud the FCC for bringing essential mid-band spectrum to auction. Thanks to the efforts of Ajit Pai, we’re well on our way to making 2020 the Year of Mid-Band.” – Meredith Attwell Baker, President & CEO, CTIA
  • “The U.S. must win the race to 5G,” said House Energy and Commerce Committee ranking member Greg Walden (R-OR) and Communications Subcommittee ranking member Bob Latta (R-OH) in a joint statement. 

The FCC also would allocate up to $5.2 billion to cover the costs of shifting the spectrum users on top of the incentive payments, Reuters reported. The FCC said the money will be needed to launch new satellites and install filters placed on earth stations to shift spectrum.

Reader Interactions

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.