Proposal to Cover DOD CBRS Band-Sharing Costs Seen as Important to Spectrum Policy Future
The FCC acknowledges in the draft bidding procedures notice for the 3.5 GHz citizens broadband radio service band it will provide compensation to DOD for sharing costs, as specified by the Commercial Spectrum Enhancement Act. Industry and government officials said DOD considered that critical, especially since CBRS could be a model for other bands. But there was some confusion whether the FCC would say CSEA language applied for the auction of priority access licenses, to start June 15 (see 2002040051). Commissioners will vote on the notice Feb. 28.
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“The compensation to DOD here is modest, but the precedent is important,” Michael Calabrese, director of the Wireless Future Program at New America, told us: “The FCC should always support compensation for DOD and other agencies that cooperate in sharing federal spectrum for commercial or public use.” The FCC didn’t comment.
“As required by the CSEA, the Commission provided notice of its intent to auction PALs [priority access licenses] to NTIA on or before September 5, 2018” and NTIA, “in turn, provided notice of estimated sharing costs and timelines for such sharing on December 20,” the draft says: “It is therefore necessary to establish a reserve price of no less than 110 percent of the estimated relocation or sharing costs provided by an eligible Federal entity.” The FCC said since NTIA estimated total sharing costs of $98.2 million, that means “an aggregate reserve price” of $108 million.
If the PAL auctions are successful, sharing costs are covered and the spectrum access system-enabled three-tiered system “works as intended, this could fundamentally revolutionize the way we allocate and utilize spectrum,” said Tom Struble, tech policy manager at the R Street Institute. “In the near term, successful PAL auctions would likely be held up as a template for how to open other government-held spectrum bands to new commercial services,” he said: “The CSEA clearly contemplates such a possibility, as it's not specific to 3.5 GHz or any other spectrum band, but instead serves as a general template for the process of repurposing government-held spectrum for commercial services.”
Struble predicted significant demand for the CBRS spectrum. “There is precious little mid-band spectrum available today, and with the delayed timeline on repurposing the C band … the 3.5 GHz PALs will be the only mid-band spectrum available for 5G in the near future,” he said. Even if the C-band auction goes as quickly as possible, the spectrum won't be available until at least late 2021, he noted. “It's hard to forecast just how much revenue the auctions will generate, given the unique technical parameters of the spectrum … but I expect total returns will be in the single-digit or low double-digit billions, easily covering the $108 million aggregate reserve price needed to cover the DOD's relocation and sharing costs,” he said.
The Navy is sharing the band for both licensed and unlicensed use “and the CBRS framework will generate auction revenue to pay their costs,” Calabrese said. “At the same time, Congress needs to amend the CSEA to ensure that federal agency costs can be reimbursed in situations where unlicensed or coordinated sharing without an auction is the highest and best use of an underutilized federal band,” he said.