FCC Chairman Pai Reviews 5G FAST plan and importance of the C-Band (3.7 GHz to 4.2 GHz) auction

Speaking at the Americas Spectrum Management Conference on October 12th, FCC Chairman Ajit Pai assessed the Commission’s 5G Fast Plan and highlighted the importance of this December’s C-Band auction for 5G spectrum.

Pai said the 5G Fast Plan, introduced in 2018, had three central planks: freeing up spectrum, promoting wireless infrastructure, and modernizing our regulations to encourage more fiber deployment.  Pai said the FCC has been freeing up high-, mid-, and low-band spectrum for 5G:

High-band spectrum enables ultra-high-speed, gigabit-plus wireless connectivity. Last year, the FCC successfully concluded our nation’s first two auctions of millimeter-wave spectrum for 5G services, in the 28 GHz and 24 GHz bands, respectively. Earlier this year, we concluded bidding in an auction of the upper 37 GHz, 39 GHz, and 47 GHz spectrum bands. This was the largest auction in American history, releasing 3,400 megahertz of spectrum into the commercial marketplace.

All told, we’ve made available almost five gigahertz of high-band spectrum for commercial use though these auctions. To put that in perspective, that was more spectrum than was used before for terrestrial mobile broadband by all wireless service providers in the United States combined.

With respect to low-band spectrum, we’ve finished repurposing spectrum in the 600 MHz band, which was long used for broadcast television, for mobile broadband. To clear the 600 MHz band spectrum for wireless use, roughly half of our nation’s broadcast TV stations—nearly 1,000 total—had to change their transmission frequencies. This summer, we completed this enormous undertaking—known as the “repack.” Now, all of the valuable low-band airwaves sold in the ground-breaking broadcast incentive auction are available for wireless broadband service, and this spectrum is already being used to provide 5G service to areas where over 200 million Americans live.

Pai said the FCC has made the most headway on mid-band spectrum. Mid-band spectrum is appealing for 5G largely because of physics: it combines good geographic coverage with good capacity.  The FCC chairman claims the commission has systematically identified mid-band airwaves that were being underused and set plans to put these airwaves to work for the American people.

The FCC also targeted rule changes to bring the 3.5 GHz band into commercial use. The rules for this band had not been optimized to encourage 5G deployment.  But with the leadership of FCC Commissioner O’Rielly, new rules were promulgate to promote investment in the band. This August, the Commission successfully completed an auction of 70 megahertz of licensed spectrum in the 3.5 GHz band—the first-ever auction of mid-band spectrum for 5G. And we’ve completed the necessary technical work so that the band’s entire 150 megahertz is now available for commercial use.

Pai said the biggest move to free up mid-band spectrum for 5G is in the swath of spectrum from 3.7 GHz to 4.2 GHz—what is referred to as the C-band. This spectrum is mostly used by fixed-satellite companies to beam content to video and audio broadcasters, cable systems, and other content distributors. However, with advances in technology, these companies can now provide the same services using alternative technologies or considerably less spectrum.

This past February, the FCC voted to clear the lower 300 megahertz of the C-band and make 280 megahertz of this spectrum available for 5G through a public auction. All eligible space station operators currently using this spectrum have committed to an accelerated relocation to the upper 200 megahertz of the C-band—meaning that the lower 280 megahertz will become available for 5G two to four years earlier than otherwise would have been the case. The FCC will begin the auction of the lower 280 megahertz of the C-band on December 8th.

And just a couple weeks ago, at our September meeting, the Commission proposed to make the 3.45-3.55 GHz band available for innovative commercial operations while accommodating limited remaining operations by federal incumbents. This action follows through on the White House and the Defense Department’s August announcement that this 100 megahertz of contiguous mid-band spectrum should be made available for 5G as quickly as possible. I am optimistic that we will be able to auction the 3.45 GHz band next year.

The bottom line of all these mid-band efforts is this: With the aforementioned auctions of the C-band, the 3.5 GHz band, and a 2021 auction of the 3.45 GHz band, the FCC is on a path to have a contiguous 530-megahertz swath—from 3.45 to 3.98 GHz—of mid-band spectrum available for 5G.

60 GHz dynamic spectrum sharing access

GSA: “Global regulators have sought to open up access to the C-band, which has become (initially at least) the most important spectrum band for 5G.”

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Pai asserts that he has presided over the most aggressive FCC in history when it comes to spectrum. He claims that the FCC has been similarly productive on the other two planks of 5G FAST PLAN: promoting wireless infrastructure and modernizing our regulations to encourage more fiber deployment.

For example, the number of new cell sites in the United States has skyrocketed. We added fewer than 7,000 cell sites from 2013 to 2016, but added over 87,000 from 2016 to 2019, with an increase of over 46,000 in 2019 alone.  He said that the FCC is focused on the integrity of the communications supply chain—the process by which products and services are manufactured, distributed, sold, and ultimately integrated into our communications networks.

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Comment and Analysis on the C-band auction:

Analysts at Morgan Stanley Research raised their C-band mid-point auction forecasts from $23.5 billion in proceeds to about $26 billion, with their high-end estimates at $35.2 billion.  The firm cited a relatively low turnout in the Citizens Broadband Radio Service (CBRS) 3.5 GHz auction as a catalyst, as well as improved macro environment and supportive credit markets. The lower-than-expected turnout by big carriers in the CBRS auction indicates they’re likely saving their gun powder for the big C-band auction, which offers more unencumbered mid-band spectrum for 5G.

Former FCC Chairman Tom Wheeler said, “One of the challenges the FCC faces is that the allocation of spectrum was first made from analog assumptions that have been rewritten as a result of digital technology.”  Consider the transition from analog to digital TV, where an analog TV signal took up 6MHz of spectrum and required guard bands on either side to avoid interference, four or five digital signals can fit into that one channel.

“I went through it with the [Department of Defense], with the satellite companies, and the fact of the matter is that one of the big regulatory challenges is that nobody wants to give up the nice secure position that they have based on analog assumptions,” said Wheeler. “I think you also have to pay serious consideration, but I found that claims of interference were the first refuge of people who didn’t like the threat of competition or anything else.”

“As we look at C-Band, it brings forward some use cases that could increase the size of the 5G opportunity for us,” Verizon CFO Matt Ellis said during a recent investor event.  While Verizon has purchased billions of dollars worth of unused millimeter wave (mmWave) spectrum for 5G, such spectrum isn’t suitable for covering large geographic areas because transmissions in such bands can only travel a few thousand feet in the best of conditions and requires line of sight communications (no trees, walls, buildings between cell site and mmWave end point subscriber),

Indeed, analyst Craig Moffett forecasts that Verizon will need to spend as much as $20B on spectrum  in order to keep pace with T-Mobile, which currently enjoys a huge spectrum advantage by virtue of their 2.5 GHz spectrum. He says that even if Verizon acquires C-Band spectrum, its propagation shortcomings relative to T-Mobile’s 2.5 GHz spectrum suggest that Verizon will still be disadvantaged in either coverage or cost.

Craig believes that AT&T won’t be able to keep pace with Verizon’s bidding at the C-band auction. The New York Post reported that a sale of all of DirecTV (owned by AT&T) might yield less than what Verizon is expected to spend in the upcoming C-Band auction alone.   Without a large block of mid-band spectrum to compete with T-Mobile and Verizon, AT&T’s Mobility segment could fall behind for a generation.  Satellite-TV provider Dish Network, which is building out a 5G network, isn’t participating in the auction, according to several sources.

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References:

https://www.fcc.gov/document/fcc-establishes-bidding-procedures-december-c-band-auction-0

https://www.fcc.gov/news-events/blog/2020/07/15/need-speed

https://www.fiercewireless.com/regulatory/analysts-beef-up-c-band-auction-forecast-to-26b-35-2b-range

https://www.networkworld.com/article/3584072/fcc-auctions-should-be-a-long-term-boost-for-5g-availability.html

https://nypost.com/2020/10/06/att-pushes-ahead-with-auction-of-directv-despite-lowball-bids/

https://www.tvtechnology.com/news/fcc-issues-c-band-auctions-draft-procedures

https://www.rcrwireless.com/20200106/spectrum/gsa-c-band-is-most-important-spectrum-band-for-5g

3 thoughts on “FCC Chairman Pai Reviews 5G FAST plan and importance of the C-Band (3.7 GHz to 4.2 GHz) auction

  1. Some good tidbits in there, Alan. I didn’t realize the impressive growth of cell sites in the past few years. Of course, the majority of those are probably small cells serving the shorter-range, mm-wave bands.

    What is amazing is that the release of all of this spectrum hasn’t depressed the auction prices. Of course, maybe it has depressed prices, but it isn’t noticeable as perhaps the value of the spectrum is increasing faster than supply.

    Of course, to support all this spectrum, an enormous amount of new fiber-optic infrastructure is needed. And that same fiber plant that is often serving FTTH customers, which are the same customers that Verizon is targeting with its 5G Home Internet product.

  2. Agree with all your points Ken, especially “value of the spectrum is increasing faster than supply” The mid band spectrum in C-Band seems the sweet spot for both 5G cellular providers and entities wanting to deploy private 5G networks. Thanks!

  3. The FCC Monday released a list of entities that have registered interest in participating in the agency’s upcoming C-band spectrum auction – an event that some analysts believe could be the biggest auction of spectrum ever.

    The financial analysts at New Street Research expect the C-band auction to raise a total of $51 billion in bids. After all, the auction seeks to release valuable midband spectrum for 5G, a once-in-a-lifetime event that would free up spectrum that can support both broad coverage areas and blazing fast speeds. Verizon is expected to walk away with the bulk of the C-band licenses.

    Based on an initial check of the entities registering interest with the FCC for the C-band auction, dubbed Auction 107, it appears that most of the market’s major players plan to show up. Noteworthy names include Verizon, AT&T, T-Mobile, Charter Communications, Cox Communications, Altice USA, Columbia Capital, Dish Network, Viasat and U.S. Cellular, among others.

    As in past auctions, bidders are only identified by their “bidding entity.” In some cases, the identity of that bidding entity is pretty clear: For example, AT&T is bidding under the name “AT&T Spectrum Frontiers LLC.” Dish appears to be bidding under the name “Little Bear Wireless.”

    A number of companies contacted by Light Reading, including Dish and Comcast, did not immediately respond to questions about the C-band. However, one financial analyst with Evercore said that the “C&C Wireless” bidding entity is a 50/50 joint venture between Comcast and Charter.

    As in previous auctions, the FCC released two lists of potential auction participants. One list comprised entities that correctly filled out their auction application and another list that contained entities that did not correctly fill out their bidding application. However, entities can correct their filings, so the fact that some companies aren’t listed among the entities that filed incomplete applications isn’t important.
    https://www.lightreading.com/iot/verizon-atandt-charter-cox-dish-among-c-band-bidders/d/d-id/764736?

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