C-Band Order Possible in February; Legislators Discussing Proceeds Allocation

Capitol Hill lawmakers remain very interested in addressing how to allocate proceeds from the coming auction (see 1912240001). But congressional leaders said in interviews last week that the divisions that prevented them from reaching agreement before the end-of-year recess remain unresolved. Senate Commerce Chairman Roger Wicker, R-Miss., wasn’t able to reach an accord with Democratic lawmakers (see 1912160061) to attach language from his C-band-centric 5G Spectrum Act (S-2881) to one of two FY 2020 minibus appropriations bills that President Donald Trump signed in December.

February is probably a reasonable target to get things in motion in time for a 2020 C-band auction, an FCC official said. A lawyer active in the proceeding said Chairman Ajit Pai indicated a draft order would come early in the year, so February seems a good guess. The agency declined to comment Friday.

The agency likely will need to address multiple issues after the draft, many stakeholders said. America's Communications Association Senior Vice President-Government Affairs Ross Lieberman said since the FCC opted to go for a public auction regime, it probably was hopeful for some to think the commission could get all that work done in time for a January draft order. He said there's much to figure out.

FCC and other officials at CES told us the C band is likely to be a February or March item. Commissioners Mike O’Rielly, Brendan Carr and Geoffrey Starks noted the importance of making the band available, during a CES session (see 2001080035). O’Rielly said the C band has “its own peculiar issues.” Chairman Ajit Pai didn’t discuss timing of an order (see 2001070054)

“February at the earliest,” predicted a former FCC spectrum official: “High Hill interest is stalling actual activity at the agency.” Other former FCC officials said the agency has been working to get an item ready and wants to have something ready by at least March, so an auction can start this year.

A lawyer in the proceeding said there also could be a strategic decision to not seek further comment on issues like reimbursements of incumbents in the band, but to craft a draft order that wraps up a lot of matters. That would give the agency more time and avoid more notice-and-comment deadlines. He said an alternative of a draft order in February plus a Further NPRM on band and auction issues leaves little time to get details squared away by early fall, which is the kind of lead time prospective bidders would need. The agency has the option of issuing a public notice and building a subsequent draft order, giving it more time than the FNPRM route. That could mean potentially no final draft order until spring or multiple orders before year’s end.

Draft order timing seems to be up in the air, said Jessica DeSimone Gyllstrom of Telecommunications Law Professionals. She said there had been a general expectation of a January draft order but crafting that order likely became more complex when Pai opted for a public auction. Others worry a 2020 C band auction mightn't happen after all.

Hill Talks

Wicker confirmed to us the post-recess restart of Hill talks on a legislative deal. “We’re sure trying to move something substantive” on C-band issues given some lawmakers’ substantial interest. He appeared more open to a compromise between his S-2881 and other lawmakers’ proposals.

Wicker lamented the collapse of talks to fast-track the bill. S-2881 would set a graduated scale for amounts the FCC would be required to return to the Treasury, beginning with “not less than 50 percent” of the first $40 billion in proceeds. Senate Commerce advanced the measure in December on a party-line vote amid objections from committee ranking member Maria Cantwell of Washington and other Democrats (see 1912110038).

“We still have work to do” to reach a C-band legislative deal and lawmakers will be looking to put work on that “on the fast track,” said House Communications Subcommittee Chairman Mike Doyle, D-Pa., in an interview last week. “We need to move quickly” because the FCC “has made pretty clear that they’re going to move forward on it” soon and Trump “wants to move forward on it” too, Doyle said. He and others back the Clearing Broad Airwaves for New Deployment (C-Band) Act (HR-4855/S-2921), which favors allocating auction proceeds for rural broadband and other telecom priorities.

“We’re having some discussions," but the failure to attach C-band language to the minibus spending bill made clear there “are lots of differences of opinion” among lawmakers, said House Commerce Committee ranking member Greg Walden, R-Ore. “We’re not there yet.” He added that “there’s general agreement that we need to move forward.”

Senate Appropriations Financial Services Subcommittee Chairman John Kennedy, R-La., is mulling holding additional C-band-centric hearings “once we finish” the pending Trump impeachment trial. He’s “interested in hearing a lot more on how the FCC is planning on allocating or attempting to allocate” auction proceeds. Kennedy led filing of S-2921 and wrote Senate Appropriations Committee-backed pro-public auction language (see 1909190079) to the report on the chamber's version of the FY 2020 FCC-FTC budget bill (S-2524). There was opposition from Wicker and Senate Communications Chairman John Thune, R-S.D.

Doyle said he wants to “find where the sweet spot is” between the auction proceeds positions of Wicker and Kennedy. “Obviously, there’s going to be incentive payments” to the satellite incumbents on the C band but “the goal here is to maximize the money of the Treasury so that we can have a pay-for” to fund telecom projects “that are very important,” Doyle said. “If the money all goes to satellite companies, we’re not going to accomplish our goal.” Congressional Democrats “recognize that there’s got to be some give and take on it and we’re looking at different ways of how that would make sense based on how much spectrum we’re actually going to auction,” he said.

Doyle criticized Wicker’s bid to attach language to S-2881 to repeal a provision of the 2012 spectrum law that mandates public safety move off the 470-512 MHz T band by 2021. “We’re not trading” S-2881’s approach to auction proceeds allocation to ensure T-band mandate repeal, Doyle said. “We’re going to” address both matters but T-band repeal shouldn’t “be leverage” to address C-band rules “in the way that [Wicker] wants to do it.”