Senator Kennedy Tells Pai C-Band Plan is “Too Generous”

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Sen. John Kennedy (R-LA) says the FCC should continue to negotiate with incumbent satellite licensees using the C-band spectrum to drive down the price auction bidders will pay the satcos to move to the upper portion of the band. During a hearing Tuesday of a subcommittee of the Appropriations Committee, Kennedy pressed Chairman Ajit Pai several times to describe how the Commission determined what figure to offer the satellite companies to clear the spectrum quickly.

Under the proposal passed by the majority last month, winning auction bidders would pay the satellite licensees from $3 to $5 billion for relocation costs and up to another $9.7 billion in incentives if they clear the spectrum quickly. They have until June 12, to tell the Commission if they accept the terms.

In order to get the incentive payments, the satellite companies must clear the lower 100 MHz of the C-band in 46 of the top 50 Partial Economic Areas by September 2021, and the remaining 180 MHz of the C-band by September 2023. If they cannot meet the deadlines, the lower portion of the band must be cleared by September 30, 2025.  

After the FCC told the satcos the agency would not agree to a private spectrum auction, “They came back with a 50-50 split. We countered” on the $9.7 billion, Pai explained. He said previously the agency used mathematical formulas to determine how much more the spectrum would be worth if wireless carriers could bid on it early.

Sen. Chris Coons (D-DE) asked whether Commissioners are certain the plan will work and if the satcos could sue the agency instead.  

“We believe it will work,” replied Pai. He explained there are specific guidelines concerning spectrum clearing and the FCC has broad authority to modify licenses. “What is the alternative?” Pai asked rhetorically. “Stop until Congress legislates?” That would guarantee litigation, he said, as well as slow 5G.

Fellow Commissioners Jessica Rosenworcel and Geoffrey Starks disagree with the approach the majority took on C-band. Starks said, “The proposal goes too far, and enriches satellite companies who may not keep their end of the bargain.” He referred to “whispers” that Intelsat and SES “had a divorce” in their C-Band alliance. Eutelsat left the group before the FCC vote. “We need to either proceed or we do need congressional action.”   

“We are headed fast to litigation. We’re going to the courts,” said Rosenworcel. “If Congress helps us we can clear the spectrum,” quickly, she said, nodding to the “model” taken in 2012, when lawmakers okayed re-purposing television spectrum for wireless use.

What if Congress could act quickly, Coons asked.

“In the political reality that we are in, the notion that we should wait for Congress is crazy … in the hope that lawmakers come together and pass a unicorn bill,” said Pai.

In a final attempt to get the FCC to renegotiate the proposal with the satcos, Kennedy said the terms, “are too generous. You are going to get sued anyway by the small satellite companies. They’re going to sue the bejeezus out of you. The issue is whether someone will get an injunction and stop you.”

Kennedy said he doesn’t understand where the $10 billion figure came from “and the satellite companies aren’t going to accept it, it looks to me. Spectrum is a finite resource. The next time you want to move somebody to move, they’re going to say ‘pay me or trade me.’” Kennedy supports his legislation, which would pay the satellite companies $1 billion to move to the upper portion of the band.     

Coons suggested the subcommittee hold another hearing. It would discuss, “if we move forward with legislation, [and] what that would look like.” 

By Leslie Stimson, Inside Towers Washington Bureau Chief

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