Satellite and Wireless Operators Debate the FCC’s NPRM to Transition a Portion of the C-Band for Flexible Use

(GN Docket No. 18-122; GN Docket No. 17-183; RM-11791; RM-11778)

The Federal Communications Commission (“FCC” or the “Commission”) is currently considering clearing up to 500 megahertz of mid-band spectrum, currently used for satellite services, for flexible use, including wireless mobile broadband and point to multipoint fixed wireless services. Rural telecom groups have yet to weigh in on the proceeding and certain satellite providers are asking for their support. Below is a summary of the Commission’s Order and Notice of Proposed Rulemaking (“NPRM“) as well as the leading proposals being considered.

Background.
 On July 13, 2018, the Commission adopted an Order (“Order“) collecting information on satellite usage of the 3.7 to 4.2 GHz band (the “C-Band” or the “Band”) and a NPRM proposing new opportunities for flexible use in up to 500 megahertz of the C-Band that is considered “well-suited” for next-generation wireless services. This proceeding comes as part of the Commission’s drive to make additional spectrum, including mid-band spectrum, available as quickly as possible for 5G deployment. The C-Band is currently allocated to satellite operators to provide downlink signals, generally television and radio signals, to earth stations.

In the NPRM, the Commission proposed adding a mobile, except aeronautical mobile, and flexible use allocation to the Band and sought comment on a variety of proposed options for clearing spectrum in the band for new wireless uses. Specifically, the Commission sought comment on how it should transition all or part of the Band for flexible use, and whether it should use a market-based, or secondary market, approach, an auction approach, or alternative mechanisms.

Leading C-Band Proposals. 
In response to the Commission’s NPRM, a number of commenters submitted proposals for licensing the 3.7-4.2 GHz band for wireless mobile broadband services. The leading proposals, discussed herein, have come from the C-Band Alliance and T-Mobile. The C-Band Alliance argues that a secondary market-based mechanism is the fastest and most efficient way to clear spectrum for 5G purposes. T-Mobile, on the other hand, argues that a market-based incentive auction would maximize the amount of spectrum made available for terrestrial use.

Secondary Market-Based Proposal – The C-Band Alliance, a consortium made up of four leading satellite operators,[1] proposed a market-based proposal for freeing up 200 megahertz of mid-band spectrum (3.7 GHz to 3.9 GHz) for mobile carriers through secondary market transactions.  Under the proposed framework, the satellite operators would act as an independent Transition Facilitator in clearing and repurposing the Band for wireless providers to access the C-Band. The C-Band Alliance estimates that its proposal will make 200 megahertz (180 MHz and 20 MHz of guard band) of the mid-band spectrum available in 18 to 36 months from a Commission Order. The C-Band Alliance argues that this market-based approach is the fastest option to repurpose the Band for 5G services, protects incumbent earth stations users of C-Band satellite services and will avoid lengthy FCC intervention that is often associated with an auction, enabling the United States to win the race to 5G.

However, a number of other participants in the proceeding have pointed out potential shortcomings of the C-Band Alliance’s proposal. Many wireless service providers and industry leaders argue that the C-Band Alliance’s proposal provides insufficient spectrum to meet the critical wireless broadband needs for mid-band spectrum. Those commenters push for a minimum of 300-320 MHz to be made available for terrestrial services. Furthermore, the C-Band Alliance’s proposal provides for very little oversight, leaving the potential to be non-transparent.  A number of commenters argue that the private sales would incentivize incumbent operators to maximize their own profits and the funds developed from the private sales would not result in any return to the U.S. Treasury.

Incentive Auction Proposal – Alternatively, T-Mobile argues that an incentive auction would be a better way to maximize the amount of spectrum for terrestrial services and would allow some of the auction generated revenue to benefit U.S. taxpayers and incumbents. T-Mobile’s market-based proposal involves auctioning spectrum in multiple phases with a consortium of satellite licensees acting as the seller and the potential wireless providers acting as buyers. The Commission would make a decreasing amount of spectrum available each round until it reaches the minimum amount for terrestrial networks. T-Mobile recommends setting the floor in most areas at 300 megahertz with the remaining 200 megahertz retained by incumbent satellite operators, except for certain areas, mostly rural, where satellite companies can designate a lower floor for terrestrial services depending on the needs of satellite users. T-Mobile argues that this proposal provides an open and transparent method for making a sufficient amount of mid-band spectrum available to meet the needs of terrestrial mobile wireless providers.

The C-Band Alliance and other satellite operators reject the incentive auction proposal, claiming that it is not only slower but it also requires far more heavy-handed government intervention than a secondary market-based proposal. Opposing groups assert that the auction-based mechanisms do not account for time-consuming delays caused by legal and implementation issues and price increases for downstream services. The C-Band Alliance also opposes the forced participation of a satellite consortium included in T-Mobile’s plan and states that its consortium will not exist in an auction setting.

As stated above, rural telecom groups have yet to speak out in support of either of the proposals. The C-Band Alliance is seeking support of its proposal and is willing to make concessions for rural telecom groups, including carving out a block of spectrum, perhaps 30-40 MHz, in rural areas to be reserved for Tier 2 and Tier 3 wireless providers. If you have any questions, would like to discuss additional ideas for the C-Band Alliance proposal or would like to support a particular proposal, please contact Dee Herman at dee@hermanwhiteaker.com, Clare Liedquist at cliedquist@hermanwhiteaker.com, or Molly O’Conor at moconor@hermanwhiteaker.com. We will continue to monitor the proceeding and provide updates as needed.