Citing the sum of $121.7 billion—the amount of revenue that spectrum auctions have raised for the government since 1994—Citizens Against Government Waste (CAGW) released a new report that seeks to keep taxpayers’ interests above those of satellite companies in the debate over how to reconfigure the C-band for terrestrial 5G services.
CAGW generally supports selling federal assets, whether it be land or some other asset, and spectrum auctions have certainly been the most successful strategy and brought in the most money, said Thomas Schatz, president of CAGW.
“We went into the FCC website and added up, I think for the first time, although it’s there, how much money has been brought in for the taxpayers over the past 25 years from the sale of spectrum, and it’s $121.7 billion,” he told FierceWirelessTech. “All of those auctions have been conducted by the FCC; they have the authority, the experience and the fiduciary duty to taxpayers to conduct these auctions.”
CAGW is among several groups, including T-Mobile, that are urging the FCC to reject the C-Band Alliance's (CBA) market-based proposal to vacate 200 megahertz of spectrum between 3.7 and 4.2 GHz in order to make way for 5G.
CAGW estimates that an FCC-run auction of C-band spectrum could generate an additional $11 billion to $60 billion to taxpayers, depending on the amount of spectrum made available for sale.
Currently, the four members of the CBA—Intelsat, SES, Eutelsat Communications and Telesat—use the C-band, which spans 500 megahertz, to provide services that ultimately deliver broadcast and audio content to millions of Americans. They say they can only give up 200 megahertz, and they want to do it through a sale to interested parties, the details of which it has been releasing through FCC filings (PDF).
Schatz said some satellite companies are missing from the CBA—namely JSAT, which also uses the C-band, as well as smaller satellite companies that are not represented by the alliance.
At the crux of the matter is that the CBA doesn’t own the spectrum that it would like to sell, and “in fact, they need to get the FCC to effectively give them the spectrum before they can sell it,” he said. “They don’t own any of it and they don’t represent all of the satellite providers.”
The issue of spectrum ownership is relevant given that spectrum licenses nowadays are typically awarded to the highest bidders via established auction procedures, and there are build-out requirements that must be met.
“We’re not saying it’s not complicated,” Schatz said, but “it isn’t theirs. They don’t own it. The taxpayers are the owners of this spectrum, and they should be the sole beneficiaries from the sale.”
In collateral material distributed Thursday (PDF), the CBA addressed the “myth” that only a government auction will benefit taxpayers, saying the public interest is served not only by generating tax revenues. Technology innovation, job creation and the spread of broadband services also create significant benefits to society, it said. Plus, government-run reallocations and auctions of spectrum have historically taken many years to complete, whereas its plan will get spectrum cleared in 18 to 36 months. (The time advantage the alliance touts has been challenged.)
“The overriding goal of good spectrum policy is to move spectrum to its highest and best use as quickly as possible at the lowest possible cost to society,” said Peter Pitsch, head of advocacy and government relations at the CBA, in a statement. “The 'market-based approach' advocated by the C-Band Alliance is the best means of achieving that goal: the larger public interest benefits of quickly enabling 5G use of this 'goldilocks' midband spectrum dwarf any benefits of any revenues gained from a public auction at some point years in the future.”
As for an FCC-run process being the only fair way to auction spectrum and ensure taxpayer benefit, the CBA said that private sales of spectrum happen frequently in the U.S., and the CBA proposal includes FCC oversight at every important stage of the process.