FCC to Auction C-Band Spectrum; Satellite Industry Reacts

On November 18, the Federal Communications Commission (FCC) announced that it will have a public auction for rights to electromagnetic spectrum in order to provide for 5G telecommunications.

5G is the fifth generation of the mobile wireless network that will provide faster speeds and the ability to connect a variety of more devices. 5G will be crucial in many industries and is said to facilitate the implementation and creation of smart cities and homes.

5G has traditionally used higher frequency bands in the radio spectrum, which can carry more information but at a shorter wavelength, which makes it more difficult for the waves to penetrate buildings.  However, the C-band set to be auctioned is a lower frequency, ameliorating some of these concerns

“I’ve concluded that the best way to advance these principles is through a public auction of 280 megahertz of the C-band,” Ajit Pai, FCC Chairman said. “I’m confident they’ll quickly conduct a public auction that will give everyone a fair chance to compete.”

The FCC has the authority to regulate and issue licenses for the electromagnetic spectrum and occasionally will hold an auction to assign frequencies to certain companies and purposes.  Currently, four satellite internet providers use the C-band frequencies (the 4 to 8 GHz range) to provide service to about 120 million American households. The FCC has proposed to repurpose the C-band spectrum for 5G; the auction for this move is expected to raise tens of billions of dollars. The money would go to the government, however, satellite providers under the C-Band Alliance oppose this.

The C-Band Alliance proposed a private auction, in which the satellite companies would keep some of the proceeds, pay taxes on the sale and contribute at least $8 billion to the government and to potentially help fund a rural 5G network.

The satellite companies said Chairman Pai’s proposal did not address “the critical involvement of the incumbent satellite operators in executing the complex task of reconfiguring and transitioning their networks.” The group said it would “continue to work cooperatively with the FCC to develop an effective alternative plan and achieve the best outcome for the American public while protecting the interests of our users and the rights of our companies.”

Satellite provider Intelsat’s shares declined 40 percent after news of the public auction broke. “What we’ll likely see happen, which is the worst case scenario, is that the satellite operators have every incentive to drag their heels and take this to the courts, because they’re no longer being compensated for this spectrum,” said Chris Quilty, president of satellite financial services firm Quilty Analytics.

Experts think the C-Band spectrum can be split with its current use and future 5G function. This move is thought to be the fastest solution to get 5G the capabilities and spectrum it needs. “The public auction would distribute rights to 280 MHz of lower spectrum within the total 500 MHz of the C-band.” The remaining amount would be used to continue to provide coverage to the 120 million American households with satellite service from the C-band. The C-band is a mid-band spectrum, offering a balance between speed and distance covered.

Reuters reported that “[m]id-band spectrum is critical for 5G because it offers ‘both geographic coverage and the capacity to transmit large amounts of data — a combination that is appealing to entrepreneurs and wireless consumers alike,’ Pai said in a letter to lawmakers.”

The U.S. pushed for 5G to compete with other nations, including China in the race for 5G network technology. The mid-spectrum C-band is crucial for the creation and implementation of 5G network technology. The race to 5G is important for worldwide standardization and for the economic and business opportunities it could bring.