CBA offers to contribute ‘billions’ to U.S. Treasury if its auction plan gets approved

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The C-Band Alliance says it can make 300 MHz of prime midband spectrum available for 5G use while managing the transition of existing users to prevent disruption in service. (Getty Images)

Itching to get its proposal across the finish line, the C-Band Alliance (CBA) filed a proposal with the Federal Communications Commission (FCC) that would see billions of dollars going to the U.S. Treasury if its auction of C-band spectrum gains approval.

It’s also promising to work with members of Congress to use a portion of the spectrum and some of the contributions to fund an open access 5G network for rural broadband.

The CBA is comprised of SES, Intelsat and Telesat, and critics of their plan have questioned why the U.S. would give up spectrum auction proceeds to foreign-owned companies. Until today, the CBA wasn’t publicly talking about specific amounts for the U.S. Treasury.

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RELATED: C-Band Alliance taken to task in FCC oversight hearing

CBA’s latest filing (PDF) states that if the FCC adopts the CBA proposal, the CBA commits to pay a portion of net proceeds of a CBA-led auction to the U.S. Treasury using a progressive formula that ranges from 30% to 75% of proceeds depending on the outcome of the auction.

The payment to the U.S. Treasury would be calculated after the netting of all costs incurred to plan for and take all actions to implement the CBA proposal to clear 300 MHz of spectrum and is inclusive of all federal income tax liabilities incurred by the CBA member companies as a direct result of the auction, according to the CBA.

“The CBA’s expedited timeline remains especially important as the U.S. seeks to maintain leadership in 5G over global competitors,” the group told the commission. “If the FCC acts in December to adopt the CBA proposal, the CBA commits to commence the auction in the first three months of 2020.”

Of course, it’s all contingent on a CBA spectrum clearing plan getting approved, and plenty of stakeholders have been critical of it, to the point they suggest its time-to-market advantage may be erased due to litigation.

Sweetening the deal, the CBA also said today that it has initiated discussions with members of Congress to develop a proposal to fund the deployment of an open access 5G network for rural broadband, which may include a combination of spectrum and capital contributions.

“This network would be deployed by a third party within 5 years of the spectrum being available and provide service on a nondiscriminatory, wholesale basis to over 100 million Americans,” the CBA added.

RELATED: CBA submits revised transition plan for C-band

Earlier this week, the CBA submitted to the FCC a report by the Brattle Group, which was prepared for the alliance, that analyzed the CBA’s market-based approach to repurpose C-band spectrum for 5G; that report discussed the public interest benefits of the CBA proposal.

The CBA also told the commission that a robust record, involving an array of stakeholders, has been developed over more than two years of deliberations and reiterated that its approach represents the fastest and most effective way to release mid-band spectrum for 5G.

The FCC’s last meeting of the year will be Dec. 12, and the agenda gets released three weeks before the meeting, so presumably the industry will know Nov. 21 if the C-band will make it on the agenda before 2020.

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