8th Floor Expected to Get Array of Proposed C-Band Plan Stakeholder Asks

The draft takes a pass on spectrum aggregation limits. It says putting limits on the amount of spectrum one party could acquire might unnecessarily restrict providers' ability to participate in the auction. It would have the 280 MHz licensed in 20-MHz "sub-blocks," arguing that size gives enough flexibility for bidders.

A wireless industry lawyer said that beyond seeking aggregation limits, some in the industry might push for 10 MHz channels. A cable lawyer said there are earth station concerns that the proceeding focuses on speed of clearing the spectrum, perhaps to the detriment of guaranteeing that clearing work is done in a way that protects incumbents. Nothing in the draft order addresses doing the earth station repacking work well, he said.

The FCC “will endeavor to keep members and staff of the Senate and House Appropriations and Commerce Committees apprised of our progress” in planning the C-band auction “in a timely” manner, Pai wrote Senate Appropriations Financial Services Subcommittee Chairman John Kennedy, R-La., in a letter released Friday. Kennedy pressed Pai in January to keep the senator fully informed of the commission’s planning for the auction, including how it wanted to compensate satellite incumbents on the C band (see 2001140033).

The draft C-band order and auction procedures public notice commissioners will vote on Feb. 28 are “a critical procedural step toward a 2020 auction, and ultimately toward” repurposing the C-band “spectrum so that it can be used to provide next-generation wireless services to the American people,” Pai said. Kennedy has since vocally opposed Pai’s proposed $15 billion allocation of sale proceeds for relocation and incentive payments. The senator said Thursday he wants to meet again with or talk to President Donald Trump about the direction of the auction plans, despite endorsements of Pai’s proposal from Vice President Mike Pence and National Economic Council Director Larry Kudlow (see 2002130053).

Senate Minority Leader Chuck Schumer, D-N.Y., signed on Thursday as a co-sponsor of Kennedy’s C-band-centric Spectrum Management And Reallocation for Taxpayers (Smart) Act. S-3246 would set aside some sale proceeds for relocation, incentive and U.S. Treasury payments. It would reserve the bulk of the money for rural broadband and next-generation 911. Senate Commerce Committee ranking member Maria Cantwell, D-Wash., and Communications Subcommittee ranking member Brian Schatz, D-Hawaii, are also co-sponsoring the measure (see 2001280041).

The C-band plan got numerous industry plaudits. They reflected general acceptance of the plan framework, and there's wiggle room on issues like satellite spectrum for backhaul, said Public Knowledge Senior Vice President Harold Feld. He expects money negotiations about how compensation for expenses will work, with satellite operators wanting maximum flexibility on what expenses are eligible for compensation, and wireless interests will want some control of those costs and certitude about how much they're bidding at the time of the auction.

A satellite industry executive said earth station operators may push to reopen the FCC's database for another attempt at making sure as many incumbents as possible are registered, since only registered earth stations get reimbursed, saying many remain unregistered. Discussions are possible about the timing of the September 2021 deadline, such as the need to start clearing antennas almost immediately to meet that deadline, and about some terms and conditions for clearing, like paragraphs 173-174 and 262-265, she said. There could be programmers upset over the five-year sunsetting of the band instead of the seven to 10 years that has been more traditional with the FCC, she said.

Eutelsat, in meetings with aides to Chairman Ajit Pai and other commissioners, in a docket 18-122 posting Friday, said it has "great concern" about the accelerated relocation payment plan. The company said it should be allocated based on a satellite operator's relative proportions of stranded capacity so as not to "fundamentally alter the competitive landscape of the satellite service sector."

The draft order is legally flawed, ABS CEO James Frownfelter told Commissioners Brendan Carr, Rosenworcel and Starks. Absent that, small satellite operator Hispasat should be eligible for relocation costs and accelerated relocation payments because it has at least nine earth stations in the U.S., serving a customer who didn't register those earth stations with the agency, he said. He said the FCC should reimburse incumbent satellite operators for recently constructed facilities that won't have comparable use after the transition, for example ABS' ABS-3 satellite that got U.S. market access approval just months before the FCC froze new C-band applications, forestalling ABS from getting customers.

NAB, Disney, Fox, ViacomCBS and Discovery, meeting with aides to Pai, Starks, Rosenworcel and Commissioner Mike O'Rielly, urged that the order explicitly say satellite operators are obliged to preserve C-band broadcast service and that such preservation should be part of the definition of a successful transition. "Satellite companies should be held to the commitments made to their customers throughout the course of this proceeding," the programmers said. That includes satellite customers getting to comment on each satcom operator's transition plan before the agency OKs it, and the FCC getting information from stakeholders beyond satcom operators to confirm the transition was successfully completed, they said. They said the FCC created "a hazardous set of incentives" for satcom operators that makes meeting deadlines the primary obligation, and suggested a sliding scale alternative where acceleration payments decrease over time and extensions of the final clearing deadline in the event of external delays.

Lobbying was notably light in the docket in the days after the draft order was issued, though that will change, predicted Kelley Drye communications lawyers Chip Yorkgitis and Josh Guyan in a podcast Thursday. They said the issue of whether limiting fixed satellite service operators to just the upper 200 MHz of the band would constitute a modification of FSS licenses or a fundamental change could still be an issue lobbied over and even subject of litigation. There could be lobbying over how incumbent earth station operators are reimbursed, they said.

A party in the C-band proceeding told us many are upset at the large size of the incentive payments and that there might not be enough time to pass legislation ensuring auction proceeds get directed toward such needs as rural broadband infrastructure and public safety. He said multiple potential bidders would have liked lower incentive payments because a mandate for $14.7 billion outside the auction could jack up overall costs.