If anyone was looking for an answer to the C-band conundrum, there isn't one yet, but the panel hosted Wednesday by the Technology Policy Institute made clear the differing perspectives on the issue.
The final answer, of course, will be up to the Federal Communications Commission and potentially, Congress and courts, depending on how things go. More than a few entities have said litigation can be expected if the FCC signs onto the proposal by the C-Band Alliance (CBA), a group of four satellite companies currently using the C-band. Members of Congress also have signaled they don’t want spectrum proceeds to fall into the hands of four foreign satellite companies.
That proposal was under much scrutiny Wednesday as panelists questioned the CBA’s motives, and CBA defended its pitch as the fastest and most efficient way to get mid-band spectrum to market for 5G, one that CBA has described as a market-based approach. The panel included representatives from the National Association of Broadcasters, the University of Maryland, Charter Communications, the CBA and T-Mobile.
Peter Pitsch: Steve and I have been friends for 30 years and hope we will continue for many more, but incentive auction NPRM to Order takes 2 years and auction puts us at 2023— Sarah Oh (@sarahecon) June 5, 2019
Steve Sharkey, vice president of government affairs, engineering and technology policy at T-Mobile, reiterated one of the big problems that critics have with the CBA proposal: The CBA process “is not a market process. It’s a windfall process,” he said.
The satellite companies—which include Intelsat, Eutelsat, SES and Telesat—have been underutilizing this spectrum for many years, he said. They can free up unused spectrum and sell it at an immense profit that’s worth many times what the companies are worth, and at the same time they can keep their services in tact, he added.
One thing that a monopolist does is control supply, so if the satellite companies have a total of 500 MHz and can sell a portion now at a high cost and more later at a high cost, that might look better to them than selling a lot of it at a lower cost, Sharkey suggested. If the CBA undersupplies the market, one can expect prices to be extremely high, and they can retain a high rate of return.
T-Mobile has been lobbying for a plan of its own, proposing an incentive auction run by the FCC, which Sharkey described as a true market process for freeing up spectrum and deciding how much should be used for terrestrial and how much for satellites.
Peter Pitsch, formerly with Intel and now head of Advocacy and Government Relations at CBA, said T-Mobile’s proposal is fraught with problems. The CBA has promised to clear 180 MHz of spectrum within three years, although it has proposed that spectrum could be cleared in some markets in 18 months. The CBA’s plan also calls for buying eight new C-band satellites and installing tens of thousands of filters in earth stations.
Pitsch said the CBA has made a lot of effort to put details in the record, including a band plan, and its proposed auction design is being vetted with a lot of different companies. The commission will approve the design and ultimately grant the licenses. “The auction we’re going to conduct will look a lot like an FCC auction,” but it would be conducted three years faster, he said.
If the CBA members were trying to sell something they owned, there would be no controversy, according to T-Mobile's Sharkey. “The fact is they’re trying to sell something that they don’t own that doesn’t exist right now," which is mobile broadband rights to this spectrum, he said. The spectrum currently is licensed as satellite spectrum, and that’s what separates this from a normal secondary market transaction.
Colleen King, vice president of Regulatory Affairs at Charter Communications, said the services being offered by the band now must be protected; nobody wants disruption in services to their customers. But, the FCC should be considering all the different arguments and not just those of the satellite companies. It also is the expert at conducting auctions and should be the one in the driver’s seat with the C-band, according to King.