Importance of FCC C Band Auction for 5G in the U.S.

FCC Chairman Ajit Pai has described the commission’s plan for its auction of a portion of the C-band — the 4Ghz to 8GHz radio frequencies used mostly for consumer satellite transmissions, but in the future for 5G mobile broadband.

The FCC wants to auction off the bottom 280MHz (the 3.7 – 4.2Ghz range) of the C-band and reserve 20Mhz of the band above that threshold for further needs. Both the FCC and current satellite operators say this will still leave enough spectrum for the operators to provide the same level of service that we have today.

The C-band is a valuable block of very underutilized spectrum. Portions of it are also a great addition to mobile operators who want to roll out 5G using the mid-band spectrum.

The 3.7 to 4.2Ghz range of the C band would offer a great balance of range and capacity which is important when carriers want to offer any real nationwide 5G service. A combination of low-band, mid-band, and upper millimeter-wave bands would offer carriers plenty of spectrum to maintain existing networks and add 5G expansion from coast to coast, and that’s what carriers and the current FCC wants to see happen.

Executives from Verizon, AT&T and T-Mobile stated their support for Federal Communications Commission (FCC) Chairman Ajit Pai’s proposal to get C-band spectrum cleared and available for a public auction, a plan that immediately saw backlash from some senators and public interest groups.

The network operators’ support isn’t surprising given they’ve been pressing for more mid-band spectrum for 5G and lobbying for quick action on C-band spectrum specifically, but they’re all coming at it from different places.

Currently, four satellite operators provide the majority of C-band satellite service in the U.S. — Intelsat, SES, Eutelsat, and Telesat. These are the companies that provide the actual satellite broadcast that you might be paying another company for and reach well over 100 million homes.

The satellites and ground equipment need to be changed so that they use the upper 200MHz of the C-band to transmit at the same level of service we’re all used to. The cost of this relocation is expected to be in the $3 billion to $5 billion range and will be covered by the auction winners.

The FCC would like this relocation, which is expected to be finished by September 2025, to be expedited. It proposes what chairman Pai calls “accelerated relocation payments.” These would also be paid by the winning bidders, but only if the satellite operators meet a specific schedule: free the lowest 100MHz of the spectrum by September 2021 and the remaining 180MHz by September 2023.  Should this occur, the fees would include these expedition bonuses and rise to $9.7 billion.

Chairman Pai says that this is almost necessary if the U.S. wants to be competitive with the rest of the world when it comes to 5G:

“It is in the public interest to make available frequency in the C-band as quickly as possible as part of a national priority to promote American leadership in 5G. To get the job done quickly, we need to align the private interest of satellite companies with the public interest.”

Pai also notes that these are simply FCC proposals and that Congress can overrule any or all of them.

While acknowledging that Congress can have the final say, Pai also stated the regulations that allow the FCC to make these decisions.

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Section 316 of the Federal Communications Act grants authority to modify any licenses granted to current holders of C-band spectrum, section 309 allows the FCC to auction the lower 280MHz of the spectrum for “flexible” use, section 303 allows the FCC to set new rules and regulations for the technical usage of the C-band, and Title 3 allows the FCC to require the auction winners to pay any and all relocations fees.

Pai also suggested that he hopes Congress will make a small override to the proposed FCC recommendations and offer 10% of the proceeds to rural broadband initiatives. This is a promise Pai has made and championed for since placed as FCC chair, yet so far we’ve seen no movement from carriers or to regulations.

If there is to be any real nationwide 5G network that’s reliable and stand-alone, we’ll have to see plenty of spectrum reallocation. Some, like this news, will be authorization for new use cases and others will be carriers repurposing existing holdings. It will take a lot of work before any country has a full 5G nationwide network.

References:

https://www.fiercewireless.com/regulatory/verizon-at-t-t-mobile-support-pai-s-c-band-plan-as-backlash-commences

https://www.bloomberg.com/news/articles/2020-01-06/c-band-analyst-says-spectrum-sale-may-net-50-billion-in-revenue

https://www.multichannel.com/news/c-band-auction-timetable-plan-faces-challenges

 

5 thoughts on “Importance of FCC C Band Auction for 5G in the U.S.

  1. The US Federal Communications Commission (FCC) has proposed to provide a group of satellite companies up to $14.7 billion in exchange for freeing up spectrum that could be used for 5G services.

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    Announced on Thursday, FCC chairman Ajit Pai explained that the plan [PDF] would entail satellite companies giving up mid-band spectrum, known as the C-band, which would then be put up for auctions to telcos.

    According to Pai, the C-Band spectrum — which is in the 3.7-4.2GHz range of frequencies — is important as it provides wider geographic coverage than high-band spectrum, enabling ultra-high-speed, gigabit-plus wireless connectivity.

    “Midband spectrum is appealing for 5G largely because of physics: It combines good geographic coverage with good capacity,” Pai explained.

    In the proposal, Pai wants to provide satellite companies with funds, which could range from $3 billion to $5 billion, as compensation for abandoning the C-band spectrum and moving to another frequency in order for the airwaves to be auctioned for 5G services.

    In addition, the FCC is also proposing to provide “accelerated relocation payments”, valued up to $9.7 billion, to satellite operators if they are able to free up 100MHz of the C-band by September 2021 and another 180MHz of the C-band by September 2023.

    According to Pai, this would be four years and two years faster, respectively, than the September 2025 timeframe that the FCC expects it would take if satellite operators were to relocate at a normal pace.

    The C-band spectrum is currently used by satellite companies, including Intelsat and SES, primarily to beam content to video and audio broadcasters, cable systems, and other content distributors.

    “The issuance of the draft order represents a significant milestone in a process that we began in 2017. We look forward to reviewing the draft order, once issued, to place Chairman Pai’s comments in full context. We note with appreciation the hard work of all stakeholders to get to this juncture,” Intelsat CEO Steve Spengler said.

    If the proposal is accepted, the FCC said it would hold an auction for the C-band spectrum on December 8. The auction would make 280MHz of the C-band spectrum available for telcos to use.

    Telcos such as Verizon, AT&T, and T-Mobile are expected to bid for the freed frequencies, with Verizon CEO Hans Vestberg labelling the proposal as a “monumental” moment for the rollout of 5G networks in the US.

    “Today is a monumental day in our nation’s efforts to maintain wireless leadership in 5G. Chairman Pai’s historic announcement sets forth a bold vision for bringing much needed mid-band spectrum to auction this year,” Vestberg said.

    “Most importantly, his plan ensures that this critical spectrum is not only auctioned quickly, but cleared on an accelerated basis. This speedy transition will undoubtedly ensure that the US will preserve its global leadership in 5G and will produce hundreds of billions of dollars in economic benefits for the country.”

    Addressing the sum of money that would be paid to satellite companies under the proposal, Pai added that the amount paid would not exceed the amount captured in the 5G auction.

    “Accelerated relocation payments are designed to capture the value to auction winners of satellite operators clearing spectrum quickly. Therefore, those payments shouldn’t exceed the amount that wireless carriers would be willing to pay in a free-market transaction if one could solve the holdout and free-rider problems that would be inherent in any such negotiations,” Pai said.

    https://www.zdnet.com/article/fcc-proposes-multibillion-dollar-spend-to-free-up-mid-band-spectrum-for-5g-auction/

  2. Congressional leaders offered mixed reactions to Federal Communications Commission Chairman Ajit Pai’s proposal to compensate satellite owners for clearing 280 MHz of C-band spectrum. Senate Commerce Committee Chairman Roger Wicker, R-Miss., praised the action, but the head of the chamber’s Appropriations subcommittee, Sen. John Kennedy, R-La., and House Democrats were more skeptical.

    https://spacenews.com/fcc-c-band-plan-draws-mixed-reaction-from-congress/

  3. C-Band plan good for both wireless firms and satellite operators, says FCC’s O’Rielly
    FCC Commissioner Michael O’Rielly is deeply invested in FCC Chairman Ajit Pai’s draft C-Band order that was released and circulated last week. That’s because O’Rielly has been working on the C-Band plan for the past four years and believes this midband spectrum is critical to making 5G services more widely available in the US.

    In an interview with Light Reading on the sidelines of the University of Colorado’s annual Silicon Flatirons conference here, O’Rielly said that he is pleased with Pai’s proposal, but added that he still has to review some of the specifics of the plan. “I’m very excited to see where we are now,” he said. “This will address the need for midband spectrum like no other auction.”

    Pai’s draft proposal calls for the lower 280MHz of the C-Band to be made available for flexible use, including 5G, through a public auction that will begin December 8. Currently, satellite operators use the entire 500MHz of the C-Band to deliver video and radio content to Americans.

    What’s controversial about Pai’s proposal is that he calls for the allocation of $9.7 billion in accelerated relocation payments for the satellite companies. That money would come from the companies that bid for C-Band spectrum in the auction and would be distributed to the satellite companies that are currently using the C-Band, in order to get them to move off the band more quickly. In fact, the fees will only be paid if the satellite companies move their operations in major U.S. cities by 2021. And that $9.7 billion is in addition to the $3 billion to $5 billion that Pai is offering to pay the satellite firms to update their equipment in order to clear the 280MHz of the C-Band that has been earmarked for 5G.

    Publicly the satellite firms have been guarded in their response. The C-Band Alliance, which is comprised of satellite firms Intelsat, SES and Telesat, only said that it was looking forward to reviewing Pai’s draft order.

    But O’Reilly said that, based upon his conversations with the satellite companies, they are pleased with the plan – or more specifically, the money piece of the plan. “They see that the Commission respected their rights and that we appreciate what they do today,” O’Reilly said. “We’ve had many conversations with them.”

    Wall Street investment firm New Street Research noted that, based on the FCC’s calculations, Intelsat is eligible for up to half of the total $9.7 billion in accelerated relocation payments, or roughly $4.85 billion. SES is eligible for $4 billion, Eutelsat is eligible for $467 million and Telesat is eligible for $374 million. Star One is eligible for the smallest amount of $13.6 million.

    O’Reilly also noted that giving the satellite companies an incentive to clear the midband spectrum as quickly as possible is critical to the 5G timeline. “If we get that auction scheduled, we can make the timelines to clear the band,” he said.

    The C-Band plan is currently scheduled to go to the full commission for a vote during an open meeting scheduled for Feb. 28. It is expected that three out of the five FCC commissioners – Pai, O’Reilly and Brandan Carr – will support the plan, giving it enough votes to pass.

    https://www.lightreading.com/5g/c-band-plan-good-for-both-wireless-firms-and-satellite-operators-says-fccs-orielly-/d/d-id/757425?

    1. Why are you asking the IEEE Techblog content manager and readers that question? We are not the FCC to whom you should address all such questions!

      Reference: https://www.fcc.gov/document/fcc-proposes-c-band-auction-procedures-0

      86. Under our proposal, in each assignment round, a bidder will be asked to assign a price to one or more possible frequency assignments for which it wishes to express a preference, consistent with its winnings for generic blocks in the clock phase. The price will represent a maximum payment that the bidder is willing to pay, in addition to the base price established in the clock phase for the generic blocks, for the frequency-specific license or licenses in its bid. If there are two categories, we propose that a bidder will submit its preferences for blocks it won in the 3.7–3.8 GHz and 3.8–3.98 GHz bands separately, rather than submitting bids for preferences that include blocks in both categories. That is, if a bidder won one block in Category A and two blocks in Category BC, it would not be able to submit a single bid amount for an assignment that included both categories. Instead, it would submit its bid or bids for assignments in Category A separately from its bid or bids for assignments in Category BC.
      87. We propose to use an optimization approach to determine the winning frequency assignment for each category in each PEA or PEA group. We propose that the auction system will select the assignment that maximizes the sum of bid amounts among all assignments that satisfy the contiguity requirements. Furthermore, if multiple blocks in a category in a PEA remain unsold, the unsold licenses will be contiguous.
      We propose that the additional price a bidder will pay for a specific frequency assignment (above the base price) will be calculated consistent with a generalized “second price” approach—that is, the winner will pay a price that would be just sufficient to result in the bidder receiving that same winning frequency assignment while ensuring that no group of bidders is willing to pay more for an alternative assignment that satisfies the contiguity restrictions. The Assignment Phase Technical Guide provides mathematical details of this proposal.
        This price will be less than or equal to the price the bidder indicated it was willing to pay for the assignment. We propose to determine prices in this way because it facilitates bidding strategy for the bidders, encouraging them to bid their full value for the assignment, knowing that if the assignment is selected, they will pay no more than would be necessary to ensure that the outcome is competitive. We propose to determine prices using the Vickrey-nearest approach, which is described in the Assignment Phase Technical Guide.

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