FCC
FCC establishes Space Bureau dedicated to satellite industry oversight
The Federal Communications Commission (FCC) has set up a new bureau dedicated to improving the agency’s oversight of the satellite industry. It is one of two new offices to come out of an internal reorganization at the FCC, which has also created a standalone office of international affairs.
According to the FCC, the changes will help the agency fulfill its statutory obligations and to keep pace with the rapidly changing satellite industry and global communications policy. Establishing a standalone Space Bureau will elevate the importance of satellite programs and policy internally, and will also acknowledge the role of satellite communications in advancing domestic communications policy, according to the agency.
“The satellite industry is growing at a record pace, but here on the ground our regulatory frameworks for licensing them have not kept up. Over the past two years the agency has received applications for 64,000 new satellites. In addition, we are seeing new commercial models, new players, and new technologies coming together to pioneer a wide-range of new satellite services and space-based activities that need access to wireless airwaves,” said FCC Chairwoman Rosenworcel in her prepared remarks.
After identifying space tourism, satellite broadband, disaster recovery efforts and more, Rosenworcel said the interest in space as a new market for investment and a home for new kinds of services is vast. She noted that “private investment in space companies has reached more than $10 billion in the last year, the highest it has ever been.”
She also said that “the space sector has been on a monumental run. Satellite operators set a new record last year for the number of satellites launched into orbit, a record they will surpass again.”
Under the Communications Act of 1934, the FCC licenses radio frequency uses by satellites and ensures that space systems reviewed by the agency have sufficient plans to mitigate orbital debris.
The FCC said also that creating the two new separate offices will allow expertise to be more consistently leveraged across the organization’s different bureaus.
Commenting on the reorganization, FCC Chairwoman Rosenworcel said: “The satellite industry is growing at a record pace, but here on the ground our regulatory frameworks for licensing them have not kept up. Over the past two years, the agency has received applications for 64,000 new satellites. In addition, we are seeing new commercial models, new players, and new technologies coming together to pioneer a wide-range of new satellite services and space-based activities that need access to wireless airwaves.”
“Today, I announced a plan to build on this success and prepare for what comes next,” she added. “A new Space Bureau at the FCC will ensure that the agency’s resources are appropriately aligned to fulfill its statutory obligations, improve its coordination across the federal government, and support the 21st century satellite industry.”
Jennifer Warren, VP of technology, policy and regulation at Lockheed Martin, said during a panel following Rosenworcel’s announcement that the stakes are much bigger than broadband satellite launches. This new regulatory framework can clear the way for the US to be a leader in “the commercialization of space,” she said. “It’s not for the faint-hearted.”
The FCC bureau reorg “also gives encouragement to new space actors that there will be staff accessible to answer the many questions they must have as they try to enter this exciting industry,” according to Julie Zoller, Head of Global Regulatory Affairs, Project Kuiper at Amazon. “It’s a complex process, but it is one that is full of opportunity and benefits to consumers, as Chairwoman Rosenworcel mentioned. The number of broadband satellite systems is really supercharging the ability to bridge the digital divide curve at home and abroad.”
In August, the FCC signed a joint memorandum of understanding with the NTIA aimed at improving the coordination of federal spectrum management and efficient use of radio frequencies.
References:
FCC establishes new bureau dedicated to satellite industry oversight
https://www.lightreading.com/satellite/the-fcc-takes-its-bureaucracy-beyond-stars/d/d-id/781568
Advocates of 12 GHz for 5G and Broadcasters surprised by FCC notice of inquiry on 12.7-13.25 GHz
FCC Chairwoman Jessica Rosenworcel’s announcement on Monday that the FCC will launch a notice of inquiry on 12.7-13.25 GHz was a surprise to advocates of using 12.2-12.7 for 5G, but doesn’t necessarily have negative implications for a long-awaited order on the lower part of the spectrum range. Supporters of 5G in 12-2-12.7 GHz see it as a positive that Rosenworcel acknowledged that 12 GHz is mid-band spectrum, which the administration identified as critical to 5G. Some refer to the upper section as 13 GHz to avoid confusion with work on the ongoing 12 GHz band.
Rosenworcel said the country needs more mid-band spectrum in the pipeline. “We need to keep up our efforts to find more airwaves to fuel the mid-band spectrum pipeline, following our successful auctions of the 3.45 and 2.5 GHz bands … these are the airwaves that are essential for 5G services to reach everyone, everywhere.”
The most substantial objections are likely to come from broadcasters, though fixed service, satellite and other links are in the band.
NAB (National Association of Broadcasters) was surprised by Rosenworcel’s announcement and hadn’t received any indications from the agency before the speech that it was looking to the 13GHz band, said Robert Weller, Vice President-Spectrum Policy in an interview.
“We’re awaiting the NOI,” he said. TV stations use the band for fixed length transmissions from studio to transmitter, and for relays and electronic newsgathering, he said. “Records at the @FCC show 1,989 broadcast auxiliary authorizations in this band, including 400 ENG authorizations,” Weller tweeted Tuesday.
“The NOI (Notice of Inquiry), if adopted, would provide an opportunity for all stakeholders to provide information and views well in advance of any policy proposal,” said an FCC spokesperson.
“The FCC, on a bipartisan basis, recognizes we need more mid-band spectrum freed up for 5G,” said an industry expert active in the proceeding.
A top DOD official noted the difficulty of clearing the 3.1-3.45 GHz band, the top candidate band for 5G, experts said. They predicted analysis of the 13 GHz band would likely take several years.
“While certainly giving credit for recognizing the need to act on new commercial mid-band spectrum, the focus on the upper 12 GHz is a bit puzzling because an NOI could take years and lower 12 GHz is essentially ready to go,” former Commissioner Mike O’Rielly told us. “I have to hope yesterday’s announcement is part of a multipronged band identification and reallocation effort to be released soon, coupled with definitive action on lower 12 and lower 3 GHz,” he said. “The only mid-band spectrum that is available to be put to use quickly is 12.2 to 12.7,” said Jeff Blum, Dish Network executive vice president-external and legislative affairs. “We continue to urge the FCC to unleash that band for 5G to help Dish compete in the wireless market while protecting incumbent operations from harmful interference,” he told us. “It’s very encouraging for us in the 12 GHz band to see the commission recognizing the value of bringing mid-band spectrum in the 7-16 GHz range to the U.S.’s spectrum pipeline,” said RS Access CEO Noah Campbell. The lower 12 GHz band “is very unique, and it’s very important for continued U.S. 5G leadership,” he said. “The opportunity to create a 1,000 MHz block between 12.2 and 13.2 is extremely compelling,” he said.
The Rosenworcel comments show the FCC won’t act before it’s ready on 12 GHz, said Digital Progress Institute President Joel Thayer. “The chairwoman is standing with the FCC’s engineers and not bending to political pressure,” he said. “This proceeding has been unnecessarily politicized and this move sends a clear message that the engineering and FCC procedure will be the determining factor here, not corporate lobbying.” In a white paper last year, IEEE said the 13 GHz band “could be considered as a future candidate for unlicensed use due to its allocation to the same types of incumbents as the recently opened 6 GHz band.” IEEE found little interference risk. “The demand for unlicensed spectrum will continue to increase in the next years, it is necessary to study potential new bands to accommodate new technologies and services in the mid-band spectrum,” the report said.
Author’s Comment:
We’ve posted two articles on the battle for 12 GHz spectrum policy (see References below). It’s important that the FCC is proposing 12GHz for 5G despite that frequency band NOT included in revision 6 of ITU M.1036 Frequency Arrangements for IMT (and in particular for 5G).
References:
https://www.law360.com/media/articles/1531929/fcc-chair-plans-to-explore-revamp-of-12-7-ghz-band
Bloomberg: U.S. Billionaire’s Battle Over FCC’s 12 GHz Spectrum Policy
FCC to release U.S. broadband maps in November 2022
Today, the Federal Communications Commission (FCC) confirmed that its first data collection window for the broadband serviceable location fabric has closed. The agency also said it is targeting November 2022 for a public release of a first draft of the new map.
“For the first time ever, we have collected extensive location-by-location data on precisely where broadband services are available, and now we are ready to get to work and start developing new and improved broadband maps,” wrote Chairwoman Jessica Rosenworcel in a note on Friday afternoon. This comes after FCC work over the past 18 months to update and improve their broadband maps.
What’s next for the FCC’s broadband maps:
- FCC is targeting November 2022 for release of the first draft of the map.
- The Fabric challenge process will begin in 10 days.
- The Fabric is the first-ever national dataset capturing individual locations that should have fixed broadband service availability. It is the product of integrating multiple data sources for each state and territory—in other words, hundreds of data sources. These data sources include, among other things, address records, tax assessment records, imagery and building footprints, Census data, land use records, parcel boundaries, and geo-spatial road and street data. Our old broadband maps, in contrast, lacked any of this location-specific information.
- Broadband providers reported their own availability data to the locations identified in the Fabric.
- The FCC is continually working to improve our Fabric through additional data sources, such as LIDAR data and new satellite and aerial imagery sources, as they become available and through our upcoming challenge processes.
- States, local governments, Tribal governments, and providers can now access the initial Fabric data, and, in 10 days we will open up a window for them to challenge this data.
In a public notice, the FCC set some parameters for that process, writing: “We remind governments, service providers, and other entities and organizations planning to submit challenges that the Fabric is intended to identify BSLs as defined by the Commission, which will not necessarily include all structures at a particular location or parcel.” The FCC will host a webinar on September 7, at 2 p.m. ET, “to assist state, local, and Tribal governments, service providers, and other entities who intend to submit bulk challenges, or proposed corrections, to the location data in the Fabric,” it said.
Once the maps are released, FCC will open a process for the public and other stakeholders to make challenges directly through the map interface.
Looking ahead, there’s one more important thing to note about the new maps. When the first draft is released, it will provide a far more accurate picture of broadband availability in the United States than our old maps ever did. That’s worth celebrating. But our work will in no way be done. That’s because these maps are iterative. They are designed to updated, refined, and improved over time.
Broadband providers are constantly updating and expanding their networks. We have set up a process to make sure our maps will reflect these changes and yield more precise data over time. We have also built a process in which state, local and Tribal governments, other third parties and, perhaps most importantly, consumers, will be able to give us feedback on the maps and help us continually improve and refine the data we receive from providers. All of this will require persistent effort—from the agency, providers, and other stakeholders. The Commission is committed to doing this hard work and keeping the public informed of our efforts every step of the way.
Here’s the most current broadband map for Santa Clara County, CA (oven referred to as Silicon Valley and previously as the Valley of Hearts Delight):
References:
https://www.fcc.gov/news-events/notes/2022/09/02/another-step-toward-better-broadband-maps
https://www.fcc.gov/document/start-bulk-fabric-challenge-process-announced
FCC Auction 108 (2.5 GHz) ends with total proceeds << than expected; T-Mobile expected to be #1 spectrum buyer
The FCC’s 2.5 GHz auction (FCC Auction 108) ended Monday, after 73 rounds, reaching net proceeds of only $427.8 million (M). The FCC found winning bidders for 7,872 of the 8,017 licenses offered. The FCC holds the remaining 145 licenses. Proceeds were much less than anticipated before the auction. Pre-auction estimates had run as high as $3B, or in the range of $0.10 to $0.20 per MHz-POP. In reality, the end result was just $427.8M in aggregate proceeds, and less than two cents per MHz-POP on average.
“After some extended bidding in Guam today, Auction 108 finally came to an end,” wrote Sasha Javid, BitPath chief operating officer. “While the end of this auction should not be a surprise for those following activity on Friday, it certainly ended faster than I expected just a week ago.”
With no assignment phase, Javid predicted the FCC will issue a closing public notice in about a week, with details on where each bidder won licenses. T-Mobile was expected to be the dominant bidder as it fills in gaps in the 2.5 GHz coverage it’s using to offer 5G. AT&T, Verizon and Dish Network qualified to bid but weren’t expected to acquire many licenses (see Craig Moffett’s comments below).
New Street analysts significantly downgraded projections for the auction as it unfolded, from $3.4 billion, to less than $452 million in its latest projection. New Street’s Phillip Burnett told investors Sunday Guam Telephone Authority was likely the company making a push for the license there. The authority owns citizens broadband radio service and high-band licenses “but lacks a powerful mid-band license” since “no C-Band or 3.45GHz licenses were offered for Guam,” he said. “We still assume T-Mobile won essentially all the licenses,” Burnett said in a Monday note. The auction translated to just 2 cents/MHz POP, 8 cents excluding the areas where T-Mobile is already operating, he said: “This will make it the cheapest of the 5G upper mid-band auctions at the FCC to date, both in terms of unit and aggregate prices. However, given how odd these licenses were, we wouldn’t expect to see the auction used as a marker for mid-band values going forward.”
Craig Moffett of MoffettNathanson wrote:
While we won’t know for sure who “won” the licenses in question for another week or so, it is universally assumed that T-Mobile was far and away the auction’s principal buyer. They are the only U.S. company that uses 2.5 GHz spectrum (2.5 GHz is the backbone spectrum band of their 5G network), and the licenses at auction were best seen as the “holes in the Swiss cheese” of T-Mobile’s otherwise national 2.5 GHz footprint. There was a great deal of spectrum here for sale, but it wasn’t geographically contiguous, and thus it would be difficult for anyone other than T-Mobile to use it. Nor should one expect spectrum speculators to have played a large role; after all, if there is but one true exit – i.e., to sell to T-Mobile – then bidding more than T-Mobile was willing to pay would seem an ill-advised strategy. Usually, we refrain from using the term “winner” when discussing auction results.
Winning, after all, depends on price paid. In this case, however, there can be little argument that T-Mobile is the auction’s big winner (assuming, again, that it was indeed T-Mobile that bought almost everything here). They will have significantly expanded their already-large spectrum advantage versus Verizon and AT&T and they will have done so at a much lower price than had been expected. Remember that not only does T-Mobile enjoy a spectrum quantity advantage versus Verizon and AT&T– they already had more mid-band spectrum than either VZ or T, and now they will have significantly augmented their already prodigious holdings – but they also have a spectrum quality advantage, inasmuch as 2.5 GHz spectrum propagates better than the 3.7 GHz C-Band spectrum used for 5G by Verizon and AT&T, and therefore promises better coverage and fewer dead spots with less required capital spending for density/coverage.
T-Mobile just a few weeks ago invested about $3.5B in low frequency spectrum, allocating about the same amount of capital many had expected them to spend on Auction 108. But their low (600 MHz) frequency spectrum purchase – done at what we assume is $2.53 per MHz-POP in a two-part acquisition from private equity owners – is for spectrum they were already leasing, so it represents a direct substitution of capital for opex without changing the amount of spectrum employed in their network. Margins should be higher, as what was previously leased is now owned. And, happily, they got the deal done just before the Inflation Reduction Act eliminated the cash tax shield from spectrum purchases as it relates to the 15% minimum corporate tax rate on future spectrum purchases.
If there is one additional takeaway here, it is the reminder that spectrum is NOT a commodity, where prices inherently reflect some immutable “intrinsic value.” Instead, they are highly volatile, reflecting much more the dynamics of supply and demand for each individual spectrum band at any given moment, factoring in not just how much different carriers might want the spectrum, but also what their balance sheets will bear.
Our long-term tracking of spectrum transactions, sorted into low-band, mid-band, upper mid-band, and millimeter wave cohorts, now updated to include both Auction 108 and T-Mobile’s private market transactions for 600 MHz spectrum, tells the tale:
References:
https://www.fcc.gov/document/auction-108-25-ghz-band-qualified-bidders
FCC: Over $640 Million for Rural Broadband in 26 States via Rural Digital Opportunity Fund
The FCC has announced that over $640 million of funding will be made available through the Rural Digital Opportunity Fund. The investment will be used for new broadband deployments in 26 states and will cover nearly 250,000 locations.
The Rural Digital Opportunity Fund has already provided over $4.7B in Broadband funding for nearly 300 carriers in 47 states serving over 2.6M U.S. locations.
On January 30, 2020, the Commission adopted the Rural Digital Opportunity Fund Report and Order, which establishes the framework for the Rural Digital Opportunity Fund, building on the success of the CAF Phase II auction by using reverse auctions in two phases. The Phase I auction, which began on October 29, 2020, and ended on November 25, 2020, awarded support to bring broadband to over five million homes and businesses in census blocks that were entirely unserved by voice and broadband with download speeds of at least 25 Mbps. Phase II will cover locations in census blocks that are partially served, as well as locations not funded in Phase I. The Rural Digital Opportunity Fund will ensure that networks stand the test of time by prioritizing higher network speeds and lower latency, so that those benefitting from these networks will be able to use tomorrow’s Internet applications as well as today’s.
- Sending letters to 197 applicants concerning areas where there was evidence of existing service or questions of waste. Bidders have already chosen not to pursue support in approximately 5,000 census blocks in response to the Commission’s letters.
- Denying waivers for winning bidders that have not made appropriate efforts to secure state approvals or prosecute their applications. These bidders would have otherwise received approximately $350 million.
- Conducting an exhaustive technical, financial, and legal review of all winning bidders.
- A list of the eligible census blocks covered by the winning bids announced today is available under the “Results” tab.
- For a list of RDOF providers and funding amounts by state is at: https://www.fcc.gov/auction/904.
March 25th Update:
The FCC has authorized more than $313 million through the Rural Digital Opportunity Fund to finance new broadband deployments in 19 states bringing service to over 130,000 locations. This is the eighth round of funding in the program, which to date has provided over $5 billion in funding for new deployments in 47 states to bring broadband to over 2.8 million locations.
“The funding announced today will help hundreds of thousands of Americans get access to high-speed, reliable broadband service,” said Chairwoman Jessica Rosenworcel. “We continue our expanded oversight of this program through the Rural Broadband Accountability Plan to make sure that applicants deliver services as promised to areas that truly need help.”
The Rural Digital Opportunity Fund aims to fund new broadband deployments in areas across the U.S. with limited or no connectivity.
The winning bidders from the latest round are:
- Carolina Telephone and Telegraph
- Central Telephone Company of Virginia
- Central Virginia Services
- CenturyLink of Louisiana
- CenturyTel of Alabama
- CenturyTel of Michigan
- CenturyTel of Montana
- CenturyTel of Northwest Arkansas
- CenturyTel of the Midwest – Wisconsin
- CenturyTel of Washington
- Co-Mo Comm
- Columbia Fiber
- Embarq Florida
- Jasper County Rural Electric Membership Corporation
- LigTel Communications
- OzarksGo
- Qwest Corporation
- South Central ConnectSpectra Communications Group
- Tri-County Electric Cooperative
https://www.fcc.gov/document/fcc-announces-313-million-through-rural-digital-opportunity-fund
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References:
https://www.fcc.gov/document/fcc-announces-over-640-million-rural-broadband-26-states
https://www.totaltele.com/512752/FCC-announces-640-funding-for-rural-broadband-deployment
https://www.fcc.gov/document/fcc-creates-ruralbroadband-accountability-plan
https://www.emarketer.com/content/fcc-announces-1-2b-rural-broadband-fund-32-states
https://www.fcc.gov/auction/904
https://www.fcc.gov/document/fcc-auction-bring-broadband-over-10-million-rural-americans
FCC announces $1.2 billion fund for broadband deployment in rural areas
The Federal Communications Commission (FCC) has announced over $1.2 billion in funding through the Rural Digital Opportunity Fund [1.] to expand broadband service across 32 U.S. states. The FCC calls this “the largest funding round to date,” and notes 23 broadband companies will provide service to more than one million new areas.
Note 1. A total of $20.4 billion to be awarded by the FCC over 10 years. Up to $16 billion will be made available for Phase I of the Rural Digital Opportunity Fund auction, and the remaining Phase I budget, along with $4.4 billion, will be awarded for Phase II of the auction.
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In addition, the FCC also introduced the Rural Broadband Accountability Plan, which will double the number of audits and verifications performed this year in comparison to 2021. It will also require the FCC to make the results of verifications, audits as well as speed and latency tests public on the Universal Service Administration Company’s (USAC) website.
The pandemic only amplified the gaps in connectivity affecting rural America, as employees transitioned to working from home and kids attended class virtually. To help remedy the issue, President Joe Biden signed off on a $1 trillion infrastructure package in November that allocates $65 billion to providing broadband to every American household. The FCC also launched a program that provides cheaper internet to low-income households late last year.
In December 2020, the FCC awarded companies a total of $9.2 billion under the Rural Digital Opportunity fund, and that included an $886 million subsidy for SpaceX. The Elon Musk-owned company was supposed to deploy its satellite internet network in rural areas, but last year, the FCC warned SpaceX and other providers to stop misusing these funds to provide service to well-connected areas.
References:
https://www.theverge.com/2022/1/29/22908024/fcc-rural-broadband-deployment-funding
FCC Auction 110 rakes in $22.5 billion in gross proceeds for 3.45 GHz Service
The results of the FCC’s 3.45 GHz auction were announced today. On January 4, 2022, bidding in Auction 110—the auction of new flexible-use licenses in the 3.45–3.55 GHz band—concluded following the close of bidding in the assignment phase.1 Auction 110 raised a total of $22,418,284,236 in net bids and $22,513,601,811 in gross bids, with 23 bidders winning a total of 4,041 licenses.
With $22.5 billion in gross proceeds, Auction 110 was the third highest grossing auction in the FCC’s history.
The 3.45 GHz action makes available 100 megahertz of mid-band spectrum for commercial use across the contiguous United States. Licensees can use it for fixed or mobile uses.
Here are the big winners:
- AT&T: $9.1B
- Dish: $7.3B
- T-Mobile: $2.9B
AT&T won 1,624 licenses in the 3.45 GHz auction, and Dish, bidding under the name Weminuche LLC, won 1,232 licenses. US Cellular acquired 380 licenses, followed by Cherry Wireless LCC with 319. T-Mobile acquired 199 licenses. Meanwhile, Verizon bid =ZERO.
The remainder went to a relatively familiar list of private equity investors, including Grain Capital, Columbia Capital, and Charlie Townsend’s Bluewater Wireless. Here’s the complete list of bidders:
| Bidder | Bidding entity | Winning bids | Licenses won |
| AT&T | AT&T Auction Holdings, LLC | $9 billion | 1,624 |
| Dish Network | Weminuche L.L.C. | $7.3 billion | 1,232 |
| T-Mobile | T-Mobile License LLC | $2.9 billion | 199 |
| Columbia Capital | Three Forty-Five Spectrum, LLC | $1.4 billion | 18 |
| Uscellular | United States Cellular Corporation | $580 million | 380 |
| Whitewater Wireless II, L.P. | $428 million | 14 | |
| Grain Management | NewLevel III, L.P. 0 | $376 million | 8 |
| Moise Advisory | Cherry Wireless, LLC | $211 million | 319 |
| N Squared Wireless, LLC | $101.8 million | 55 | |
| Skylake Wireless II, LLC | $39 million | 57 | |
| Blue Ridge Wireless LLC | $8.9 million | 39 | |
| Agri-Valley Communications | Agri-Valley Communications | $8 million | 7 |
| LICT | LICT Wireless Broadband Company, LLC | $7.7 million | 24 |
| Viaero | NE Colorado Cellular, Inc. | $6.7 million | 18 |
| Nsight | Nsight Spectrum, LLC | $4.7 million | 6 |
| East Kentucky Network | East Kentucky Network, LLC | $4.4 million | 2 |
| Carolina West Wireless | Carolina West Wireless, Inc. | $3.8 million | 11 |
| PVT | PVT Networks, Inc. | $2 million | 6 |
| Chat Mobility | RSA 1 Limited Partnership | $1.7 million | 1 |
| Raptor Wireless LLC | $845,700 | 6 | |
| Horry Telephone | Horry Telephone | $88,060 | 12 |
| PocketiNet | PocketiNet Communications | $59,501 | 1 |
| Jones, Anthony L | $1,575 | 2 | |
| Bidder identity included where available. Source: FCC | |||
The results were pretty much as expected- Dish spent more than expected, and AT&T a bit less, but in rank order and in magnitude, the numbers were relatively close to expectations.
Credit: Getty Images
The “mid-band spectrum” that was auctioned off is considered crucial for mobile operators’ deployment of next generation of wireless service such as 5G, which promises to deliver much faster wireless service and a more responsive network. Mid-band spectrum provides more-balanced coverage and capacity due to its ability to cover a several-mile radius with 5G, despite needing more cell sites than lower-tiered spectrum bands. Its ability to connect more devices and offer real-time feedback is expected to spark a sea change in how we live and work, ushering in new advances like self-driving cars and advanced augmented reality experiences.
“Today’s 3.45 GHz auction results demonstrate that the Commission’s pivot to mid-band spectrum for 5G was the right move,” said FCC Chairwoman Jessica Rosenworcel. “I am pleased to see that this auction also is creating opportunities for a wider variety of competitors, including small businesses and rural service providers. This is a direct result of the Commission’s efforts to structure this auction with diversity and competition front of mind.”
Craig Moffett wrote in a note to clients shortly after the auction results were announced by the FCC:
“After the almost $100B spent on the C-Band auction [1.], these numbers might sound almost quaint. Still, AT&T’s $9B translates to nearly a quarter turn of additional leverage. And for Dish Network, it is roughly two years of EBITDA, or two full turns. As always, spending money on spectrum is only the beginning. Now starts the spending on putting the new spectrum to work. The carriers did not pay up for this spectrum to allow it to languish in a fallow state, and the Towers will be natural beneficiaries of the deployment process over the coming years. Carrier plans for the C-Band suggest that spectrum will ultimately be deployed in a fairly broad-based manner, rather than just in more densely populated areas of the country, and a similar result seems likely for this spectrum, given its broadly similar propagation attributes.”
Note 1. The C-band auction broke records with its $81.2 billion in gross proceeds.
Analysts at New Street Research thought T-Mobile was going to win more spectrum than it did. They were predicting T-Mobile to spend in the range of $6.6 billion and Dish to spend about $5 billion. The FCC is planning for even more auctions in the future.
References:
https://www.fcc.gov/document/fcc-announces-winning-bidders-345-ghz-service-auction
https://www.fcc.gov/auction/110
FCC Auction 110 for mid-band 5G spectrum gets $21.9B in winning bids
https://www.cnet.com/tech/mobile/at-t-and-dish-big-winners-in-latest-5g-auction/
https://www.fiercewireless.com/wireless/att-dish-top-list-fccs-345-ghz-auction-winners
GAO: U.S. Broadband Benchmark Speeds Too Slow; FCC Should Analyze Small Business Speed Needs
In a report released Thursday, the U.S. Government Accountability Office (GAO) said that the FCC’s benchmark for minimum broadband internet speeds (set six years ago at “always on” access of 25 Mbps downstream and 3 Mbps upstream) is no longer fast enough. That’s especially the case for small business owners. After conducting a study on the matter, the GAO recommends the FCC analyze small business speed requirements at this time and reconsider its current definition.
“FCC officials said they are not aware of any small business requirements that have been taken into consideration in determining the minimum speed benchmark,” the GAO says. “Analyzing small business speed requirements could help inform FCC’s determination of the benchmark speed for broadband.”
The figure below illustrates the various kinds of business broadband use and the associated relative speed requirements.
Illustrative Examples of Different Kinds of U.S. Business Broadband Use:
Sources vary in terms of the specific speeds they recommend for small businesses. For example, in 2017, BroadbandUSA—a National Telecommunications and Information Administration program—published a fact sheet stating that small businesses need a minimum of 50 Mbps speeds in order to conduct tasks such as managing inventory, operating point-of-sale terminals, and coordinating shipping. A 2019 USDA report on rural broadband and agriculture stated that, as technology advances and volumes of data needed to manage agriculture production grow, speeds in excess of 25/3 Mbps with more equal download and upload speeds will likely be necessary.
Reports from small businesses show that many want a download speed of at least 100 Mbps to run their operations more effectively. According to the FCC’s data, about 67 percent of rural Americans have access to 100 Mbps down/10 Mbps up speeds, compared to about 83 percent with access to the agency’s current minimum benchmark.
To fulfill a statutory requirement to determine annually whether advanced telecommunications capability is being deployed on a reasonable and timely basis to all Americans, FCC sets a minimum broadband speed benchmark.
In its 2021 Broadband Deployment Report, FCC stated that the current benchmark, last set in 2015, continues to meet that requirement. However, FCC officials said they are not aware of any small business requirements that have been taken into consideration in determining the minimum speed benchmark. Analyzing small business speed requirements could help inform FCC’s determination of the benchmark speed for broadband.
Recommendations:
GAO is making one recommendation to FCC to solicit stakeholder input and analyze small business broadband speed needs and incorporate the results of this analysis into the benchmark for broadband. FCC agreed with this recommendation.
References:
https://www.gao.gov/products/gao-21-494
https://www.gao.gov/assets/gao-21-494-highlights.pdf
https://gizmodo.com/the-fccs-definition-of-broadband-internet-is-too-slow-1847257425