CBA's Losing Eutelsat Seen Hurting Band-Clearing Plan

The Wireless ISP Association said Wednesday it led a letter with more than 230 wireless ISP companies and officials raising concerns about the effect the CBA proposal and lawmakers' legislation would have on the wireless ISP industry's ability to access the C band. House Communications Subcommittee Vice Chair Doris Matsui, D-Calif., filed her Wireless Investment Now in (Win) 5G Act (HR-4171) in August (see 1908070073) to set up a tiered system for satellite companies to benefit from an FCC-administered auction of C-band spectrum in which freeing up additional spectrum would increase satellite companies share. Subcommittee Chairman Mike Doyle, D-Pa., is circulating draft legislation ahead of a likely September filing to require a public auction of 400 megahertz of spectrum on the band (see 1908230049). Senate Appropriations Financial Services Subcommittee Chairman John Kennedy, R-La., is considering attaching a pro-public C-band auction rider to the subcommittee’s FY 2020 budget bill, which would include annual funding for the FCC.

The ISPs didn't say which of the “prominent proposals” from members of Congress concerned them but said the legislation echoes CBA in “instructing the FCC to auction off hundreds-of-megahertz of spectrum ostensibly for 5G use.” Although “we support the rapid development” of 5G “services, we harbor concerns about how that would be done” via the proposals, the ISPs wrote the leaders of the House and Senate Commerce committees and the Communications subcommittees. “Because there are no clear directives to employ specific sharing requirements, this could be interpreted as constricting the FCC to an 'auction-only' approach of allocating the C-band for commercial use. We believe such an approach would greatly limit meaningful access to that valuable spectrum for our companies, consequently exacerbating the digital divide.”

Eutelsat’s withdrawal “will certainly fracture the optics” that there’s a cooperative effort to establish a regulatory framework for the band, emailed Space Law and Policy Solutions principal Michael Listner. He said Eutelsat’s leaving appears to be a strategic move by the company to bypass CBA internal politics and let it have more direct influence on the regulatory process. What kind of influence a solo Eutelsat will have on C-band regulation remains to be seen, he said.

Any coalition’s loss of a member weakens the coalition’s bargaining strength, emailed former FCC Commissioner Robert McDowell, now at Cooley. “The bigger and more diverse a coalition is the more effective it can be,” he said. But the various issues to be decided for the 3.7-4.2 GHz band's future are so complex “that one maverick blazing its own path isn’t going to be fatal,” he said. Whatever the Pai administration decides will be “a big legacy item for this FCC,” he said.

Why Eutelsat left is key to what effect that will have on CBA's chance before the FCC, and a split over strategy is far more damning than one over CBA resources or logistics, said Gigi Sohn, aide to then-FCC Chairman Tom Wheeler. If Eutelsat were to lobby against the CBA position, "obviously that's not good," she said, adding it's unlikely a disagreement on CBA plan substance emerged at this late date. If Eutelsat were silent, "no harm no foul," she said. Eutelsat outside counsel didn't comment.

A satellite lawyer with clients interested in the proceeding said there was some skepticism that the CBA plan would go forward because of the lack of proceeds going to the Treasury. He said another headwind was that over the past decade, the FCC has become quick and efficient at auctions, unlike the substantial time it used to take to construct and implement one, and that makes the CBA claim its approach would be faster than an FCC-led one questionable. Given that, CBA's fraying now isn't surprising, he said. He said it’s not clear why Eutelsat dropped out but that with Intelsat and SES being by far the band's biggest U.S. satellite users, Eutelsat has less to win or lose in the band-clearing process. He said it hurts CBA chances before the FCC because now operators aren’t all behind its plan. While CBA had argued its proposal was the easiest route forward, now that route is less simple, the lawyer said.

At a Capitol Hill briefing Wednesday by America's Communications Association (ACA), CCA and Charter Communications on their joint band-clearing plan, Taxpayers Protection Alliance Policy Director Ross Marchand said Eutelsat’s dropping out was seemingly over internal CBA disagreements about voluntary contributions of spectrum sale proceeds to the Treasury. He said a lack of guaranteed returns to taxpayers is a major weakness of the CBA plan. The CBA didn’t comment.

ACA/CCA/Charter and backers had numerous criticisms of the CBA plan. Public Knowledge Policy Director Phillip Berenbroick said the FCC has years of auction experience and the private sale idea championed by CBA “is unproven” and technically illegal under the Communications Act. He said it also sets “a dangerous precedent” that existing license holders can expect to be paid next time the FCC wants to clear or repack a swath of spectrum.

Asked about a hybrid approach, with private sales of some spectrum initially and an auction process later of more, Berenbroick said smaller carriers might never get the opportunity to get their hands on spectrum. Added ACA Senior Vice President-Government Affairs Ross Lieberman, reallocating some C band now and some later would be a considerable disruption to existing users and create sizable business uncertainty. He said it also raises the risk that if satellite operators took in considerable proceeds in the initial private sales, not much money may be left for an auction process to make everyone whole.

ACA President Matt Polka said the 120,000 new route miles of fiber that would be built within five years would be used not only for video delivery but also as infrastructure for delivery of services like 5G, smart grids and telehealth to rural areas.

Of the 500 MHz of C band, 180 MHz isn’t being used, and 170 MHz is being used for MVPD programming, which would be moved to fiber distribution, said Cartesian Consulting Principal Nikos Andrikogiannopoulos. He said the ACA/CCA/Charter plan would bring as much as $29 billion to the Treasury, covering transition and incentive costs as well as the $6 billion to $7 billion that would be needed for the new fiber miles.