Finalizing C-Band Order Seen as Tough Challenge for the FCC

FCC Chairman Ajit Pai said in a recent C-SPAN interview he has no timetable for making C-band or other mid-band spectrum available for 5G. Each of the bands presents “very complicated issues,” Pai said (see 1812140014). “On C-band, for example, we need to study the record and make an informed decision,” he said. “That’s not going to be easy to do.”

The CBA proposal “retains the pole position in terms of FCC support,” New Street Research’s Blair Levin wrote investors Monday. “Getting its proposal over the finish line successfully, however, requires building a political alliance that includes more support from others that this latest round of filings did not generate,” Levin said. “We still think CBA is likely to get there but we did not see any opposition softening or new ideas emerging to overcome some of the differences.”

Levin said “arguments about potential windfalls to the large satellite operators” appeared to pick up steam in replies. AT&T’s filing was particularly hard to read, he said. AT&T proposed that proceeds from the sale of C-band spectrum should go to incumbents, but with tight FCC controls, including having the CBA put out its own plan for notice and comment and the sale largely following auction rules. “AT&T’s real objective is unclear and the company remains a critical wildcard,” Levin wrote. “Given its position as a political heavyweight, it has the power at the current FCC to move the debate.”

“This is a thorny issue for the FCC, but it has to be addressed as America’s appetite for spectrum appears to be insatiable,” said former Commissioner Robert McDowell, now at Cooley. “Many of the options on the table would leave one constituency or another unhappy. The good news is that the record is full of data and differing policy outlooks, so almost whatever direction the chairman pursues will be well supported.”

Lawyers working on C-band issues agreed the FCC faces a tough road over the next year as it works on a plan. "Nothing about the C-band is going to be easy," said a lawyer with wireless carrier clients.

One big question is whether the FCC will be happy with the amount CBA says can be cleared or whether a mechanism will be needed to free up more spectrum in specific markets where the need is greatest, said spectrum consultant Tim Farrar. “This is unclear, but freeing up more spectrum would be complicated and would prolong the process of getting to a report and order,” he said. “It’s unclear whether the cable industry will agree, or even have a consensus position.”

The other big question is what format a sale would take, Farrar said. "It seems clear that it would be controlled by CBA, and they would keep the proceeds, but an open auction structured along the lines of previous FCC-run auctions … would presumably be more palatable to others.” CBA has the needed expertise to run such an auction, he said. “An initial offer from Verizon … might be helpful in setting the reserve price for an open auction and ensuring that it can be completed with total proceeds that are acceptable to the satellite operators,” he said.

CBA Optimism

CBA’s plan will clear up to 200 MHz, provided there is demand, said Preston Padden, head-advocacy and government relations. Based on conversations with wireless carriers and cable companies, “there appears to be plenty of demand,” he said. Padden noted several replies in docket 18-122 (see 1812120010 and 1812110054)

AT&T’s replies are a big movement in CBA’s direction compared to its initial comments, Padden said. The biggest difference between CBA’s position and AT&T’s is AT&T wants more FCC involvement in the details, but CBA would “prefer more flexibility,” not less, he said. More FCC involvement means slower process, and “we take seriously all the ‘win the race to 5G speeches,’" he said. Padden questioned whether T-Mobile’s proposal for an auction is workable. "All four domestic C-band customers have equal rights to the 500 MHz, so if you want to do something voluntary, you need all four parties to agree," he said. Any other plan would have the FCC trying to extract the spectrum involuntarily, triggering “at least a decade of litigation,” he said. Hispasat and other satellite operators licensed to use the C-band in the U.S. are free to join CBA, but only companies with U.S. customers and revenue should get a share of the proceeds, Padden said: Others “have no losses because they have no revenues to lose.”

The FCC is likely to adopt the AT&T proposal “because it accomplishes the goal of re-purposing a significant portion of the C-Band to 5G use without creating a major lawsuit risk,” predicted Richard Bennett, network architect and free-market blogger. “The five-phase T-Mobile proposal is absurdly slow and the original CBA plan suffers from insufficient FCC oversight. The auction must facilitate speedy re-purposing without sacrificing the pre-requisites of meaningful consumer choice among 5G providers.”

Meanwhile, T-Mobile made the case for its proposal in meetings with Mike O’Rielly and Brendan Carr and aides to the other commissioners. The T-Mobile plan “would maximize the amount of spectrum that would be made available for terrestrial services, including by allowing variable amounts of spectrum to be licensed in different areas, depending on the needs of satellite users,” the carrier said. “It would ensure the continued delivery of programming and other valuable content; it would assure a minimum level of spectrum being designated for terrestrial services -- an amount sufficient to support multiple carriers; spectrum would be made available through an open, public, and transparent process accessible by all interested providers.”