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 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.
AT&T, for example, is both a big user of C-band services for fixed satellite service (FSS) and a 5G service provider. T-Mobile could get a windfall of mid-band spectrum if its merger with Sprint goes through and none if it doesn't. Verizon also needs mid-band spectrum as much as anybody.
The chairman’s proposal would make the lower 280 megahertz of the C-band available for flexible use, including 5G, through a public auction—one in which the mobile carriers are expected to participate. Currently, satellite operators use the entire 500 MHz band to serve content distribution customers, and while Pai is proposing the winning bidders in the C-band auction cover the satellite players’ relocation costs, he’s also proposing accelerated relocation payments to get the incumbents to move more quickly. The accelerated payments, which also would be paid by winning bidders, could total up to $9.7 billion.
"Today is a monumental day in our nation’s efforts to maintain wireless leadership in 5G,” said Verizon CEO Hans Vestberg in a statement on Thursday. “Chairman Pai’s historic announcement sets forth a bold vision for bringing much needed mid-band spectrum to auction this year. 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 U.S. will preserve its global leadership in 5G and will produce hundreds of billions of dollars in economic benefits for the country."
A similar reaction came from the AT&T camp. “We are encouraged that the FCC is taking the next critical step toward making this valuable mid-band spectrum available for mobile flexible use, while at the same time recognizing the critical need to have an orderly and timely transition in place to protect the content programming ecosystem currently relying on C-Band and impacting over 100 million U.S. households,” said AT&T Executive Vice President of Regulatory & State External Affairs Joan Marsh. “We look forward to reviewing the details of the draft order and working with all stakeholders to ensure that both the auction and the transition are a success.”
T-Mobile CEO John Legere, who made his last appearance on a T-Mobile earnings call yesterday—COO Mike Seivert takes the role over in May—sent out his support over Twitter.
T-Mobile President of Technology Neville Ray posted his take as well.
CTIA President and CEO Meredith Attwell Baker earlier this week blogged about the need to free up 280 megahertz of C-band spectrum. She called Pai’s proposal “a critical step” in making 2020 the year of mid-band, securing U.S. global leadership in the emerging 5G economy. ”The wireless industry applauds Chairman Pai for moving forward with the C-Band auction this year,” she said in a statement.
CCA President and CEO Steve Berry, whose organization includes Tier 2 and 3 wireless operators, thanked the chairman for his commitment to a public auction. “There is no question the transition process, including adequate incentive payments for the satellite companies, is one of the most critical components,” Berry said. “All carriers – both large and small – must have the opportunity to access C-band spectrum. I encourage the FCC to keep moving forward on this issue so that consumers, particularly those in rural areas, can reap the benefits of next-generation technologies as quickly as possible.”
Calls for legislation
Pai, who announced his plan at an Information Technology & Innovation Foundation event Thursday, acknowledged his proposal would receive criticism from both sides, and sure enough, that came swiftly. While one of the big goals at the FCC has been to avoid litigation, Energy and Commerce Committee Chairman Frank Pallone, Jr., (D-New Jersey) and Communications and Technology Subcommittee Chairman Mike Doyle (D-Pennsylvania) suggested that’s exactly what’s going to happen without legislation.
“We believe that this proposal only reiterates the need for legislation,” they said in a joint statement. “The questionable legal basis for the satellite incentives will likely result in litigation, which will delay the deployment of 5G. Moreover, without Congressional action, this auction will not fund critical public safety infrastructure or bridge the digital divide. That is why we need legislation to provide the certainty needed for a rapid rollout of 5G and ensure all Americans benefit from the auction of the public’s airwaves. We continue to work with our Republican colleagues to achieve that end.”
Last month, Senators John Kennedy (R-Louisiana), Brian Schatz (D-Hawaii) and Maria Cantwell (D-Washington) introduced the Spectrum Management and Reallocation for Taxpayers (SMART) Act, which would ensure proceeds from the public auction of C-band spectrum benefit taxpayers.
Pai noted that proposed legislation and a bill proposed earlier by Senators John Thune, (R-South Dakota) and Roger Wicker, (R-Mississippi) both call for making 280 megahertz of C-band available for flexible use. He said some would argue that the FCC should wait for Congress to legislate on the C-band, but he countered that would take too long.
Senator Kennedy did not waste any time on Thursday voicing his opposition to the chairman’s plan.
The sum @AjitPaiFCC suggests giving to foreign satellite companies to clear the C-Band is much too high.— John Kennedy (@SenJohnKennedy) February 6, 2020
We shouldn’t be spearheading Luxembourg bailouts when there are towns in Louisiana and across the country without access to broadband service.
My full statement: pic.twitter.com/9vO1jaLB6q
In a statement, Commissioner Jessica Rosenworcel, a Democrat, said she fears the FCC is trying to substitute its will for the will of Congress. She previously said any directive should come from Congress.
“By ignoring ongoing legislative work, the agency is putting the future of 5G service on shaky legal ground,” she said. “That’s because over time it has become clear that the Communications Act does not provide a clear pathway for key payments the agency plans to make here. By doing this on its own the FCC is denying the American public what could be extraordinary benefits from the auction of public airwaves.”
Michael Calabrese, director of the Wireless Future Program at New America’s Open Technology Institute, said it was disappointing that Chairman Pai would “propose to stretch the FCC’s authority to require auction winners to make excessive windfall payments to foreign satellite companies that are not fully using C-band spectrum. That $9.7 billion will come straight out of taxpayers’ pockets.”
Calabrese added: “The FCC should give Congress a chance to pass legislation that clarifies its authority, sets reasonable incentive payments, and earmarks the revenue for rural broadband and public safety, as a bipartisan group of lawmakers in Congress have proposed.”
It's worth nothing that Pai said if Congress wants to direct auction proceeds to address national priorities like rural broadband, he’s all for that. If the FCC approves an order later this month, Congress still has time this year to require the auction proceeds be used to close the digital divide, implement Next-Generation 911 or any other similar priority, he said.