Battle lines drawn over American C-band

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This article originally appeared in the August 19, 2019 issue of SpaceNews magazine.

When the U.S. Federal Communications Commission issued a public notice July 19 asking for more input on how to repurpose C-band spectrum, it took the industry by surprise.

Satellite operators were under the impression that the FCC would announce a decision this summer about the spectrum, deemed vital for rolling out high-speed 5G cellular services. The request for more input means the spectrum debate will continue at least a little longer. The FCC is now expected to reach a verdict this fall.

The main reason for the FCC’s extended review is the late introduction of a new spectrum proposal in July from ACA Connects, a trade association of 700 small and mid-size communications providers that has joined forces with the Competitive Carriers Association and the second largest U.S. cable company, Charter Communications, to shape the debate. Before the ACA Connects plan, the two competing proposals came from the C-Band Alliance — Intelsat, SES, Eutelsat and Telesat — and cellular network operator T-Mobile.

The C-Band Alliance wants to lead a private auction for 180 megahertz of C-band separated from satellite signals by a 20-megahertz guard band. T-Mobile is asking the FCC to lead a public auction for up to 500 megahertz — the entire allotment for U.S. C-band satellite communications — with satellite confined to rural areas where 5G spectrum demand is low.

The ACA Connects coalition is proposing the FCC lead an auction for 350 megahertz (also protected by a 20-megahertz guard band), and use the proceeds to replace satellite links with fiber. ACA Connects estimates the sale of C-band spectrum could generate $60 billion, of which it believes $6 billion to $7 billion would cover the switchover.

GROWING URGENCY

Behind the push for C-band spectrum is a concern among U.S. policymakers and the White House that the country is in a heated race with China to lead the world in 5G. Whichever country develops 5G technology faster will not only have an edge domestically, but can export its technology for inclusion in networks around the world.

The U.S. government views China’s 5G ambitions as a security concern, evidenced by the Commerce Department and President Donald Trump’s actions to limit the flow of cellular technology into the U.S. from Chinese tech giant Huawei. Playing to that concern, Preston Padden, the former head of advocacy and government relations for the C-Band Alliance, concluded a February letter to the FCC in Chinese. ”The time to approve the CBA plan is now,” he wrote in English, appending a Chinese phrase that loosely translates as “before it’s too late.”

The C-Band Alliance is not alone in emphasizing speed. Verizon wrote the FCC Aug. 7, saying the late introduction of the ACA Connects coalition proposal “raises more questions than it answers at a time when stakeholders should be narrowing issues in the proceeding.”

The C-Band Alliance argues that its plan is the fastest way to take C-band satellite spectrum, used mainly for broadcasting, and repurpose it for 5G while protecting incumbent users.

Within 36 months of an FCC order, the alliance plan would make 180 megahertz usable for 5G. The first 60-megahertz could be ready across most of the country in 18 months, according to the alliance.

The ACA Connects coalition argues that its plan, though introduced at the eleventh hour, is faster than the C-Band Alliance’s. Switching TV and radio broadcasters from satellite to fiber would take 18 months in urban areas, the coalition says, with most the country finished in 36 months. A few outlier regions would need five years to complete the transition, freeing up 350 usable megahertz for 5G networks.

Complicating any timeliness claims are warnings from backers of public and private auctions that dissenting plans lack legal support and are all but certain to trigger time-consuming lawsuits.

T-Mobile wrote the FCC Aug. 7 largely praising the plan from the ACA Connects coalition. That the coalition’s plan calls for a public auction instead of a satellite operator-led approach sits favorably with T-Mobile, though the cellphone giant said 370 megahertz “should be viewed as a nationwide spectrum floor, not a ceiling.”

The C-Band Alliance was harshly critical of the ACA Connects proposal. “Short on details and long on unsubstantiated promises, the Coalition proposal relies upon faulty assumptions to grossly underestimate the complexity of transitioning content delivery mechanisms in the C-Band and the time it would take to do so,” the C-Band Alliance wrote Aug. 7. “The devil is in the Coalition’s complete lack of details.”

The C-Band Alliance said factoring in time to design, test and introduce fiber will take far longer than the ACA Connects coalition suggests. The alliance called switching urban areas from satellite to fiber in 18 months “impossible.”

The National Association of Broadcasters (NAB) — whose members rely on satellite C-band — echoed those concerns, asking the FCC to reject the 370 megahertz proposal.

“While pitched as a partial reallocation of the C-band, the proposal would likely lead to reallocation of the entire band, as it would leave satellite operators with a small fraction of their spectrum and customer base,” the NAB wrote Aug. 8. “The proposal is transparently self-interested and plainly intended to create new revenues for its proponents while undermining competition for content distribution and gaining price-setting power over the distribution market. It is a recipe for disaster for the content ecosystem.”

The NAB said no more than 200 megahertz should be reallocated to ensure existing C-band users can continue their services without interruption — an amount in line with the C-Band Alliance proposal.

The ACA Connects coalition is striving to fill gaps in its plan. Ross Lieberman, ACA Connects senior vice president of government affairs, told the FCC Aug. 6 that it is weeks away from “supplementing its original proposal” with more details on how a rapid switchover from satellite to fiber could be done. Fiber could provide equal or more reliable service than C-band satellites, Lieberman wrote.

LAST-MINUTE TWEAKS

While the ACA Connects plan is the latest major change to the U.S. C-band debate, it is not the only one.

The C-Band Alliance said Aug. 7 that it was incorporating technical advice from AT&T to make its plan better. One change is to concentrate ground stations that handle vital telemetry, tracking and command functions away from metropolitan areas.

C-Band Alliance members have 14 such sites, and say they need 150-kilometer exclusion zones free of 5G signal emitters to prevent interference. After AT&T questioned the size of those exclusion zones, the C-Band Alliance, which was already planning to close all but four sites, has agreed to keep only those that are far from urban areas.

For C-band user dishes, the C-Band Alliance estimates the 150-meter exclusion zone it previously vouched for could be smaller with better signal filters. The C-Band Alliance said it has tested dozens of prototypes and believes better filters are possible, as does AT&T.

A more contentious change involves a commitment to voluntarily give some spectrum proceeds to the U.S. Treasury should the C-Band Alliance plan get accepted.

The coalition and T-Mobile plans include provisions that would send some proceeds from a spectrum auction to the U.S. Treasury, which could then be reapplied to 5G rollouts in rural areas.

Peter Pitsch, the alliance’s new executive vice president of advocacy and government relations, told Congress July 16 that the satellite operators had agreed to make a “significant voluntary contribution to the U.S. Treasury” from any sale proceeds.

In earnings calls since then, chief executives from Intelsat, SES and Telesat all described the Treasury contribution as an important adaptation to keep the C-Band Alliance plan competitive with public auction ideas. Eutelsat CEO Rodolphe Belmer dissented, however, saying there was “no real agreement” on a Treasury contribution.

REGIONAL OPERATORS STILL VYING FOR A WINDFALL

Three satellite operators left out of the C-Band Alliance are also still trying to carve out a portion of any spectrum proceeds, regardless of who conducts an auction.

ABS of Bermuda, Hispasat of Spain and Star One of Brazil tried to join the C-Band Alliance last year, but were rejected. The C-Band Alliance’s strategy for dividing any spectrum proceeds among its members depends on revenue generated from C-band customers in 2017. Though ABS, Hispasat and Star One all have some coverage of the U.S. in C-band, none had any customers using that spectrum as of fall 2018.

In a letter to the FCC Aug. 9, the three operators said they “would be happy with either a public or a private auction, provided that taxpayers, satellite operators, and earth station owners were all treated fairly.”

The regional operators don’t support T-Mobile or the ACA Connects coalition proposals, they said.

Like other critics of the ACA Connects coalition plan, the regional operators said a rapid transition from satellite to fiber is destined for delays and therefore unrealistic.

T-Mobile’s plan, the operators said, would pit C-band dish operators against satellite operators in an auction, devaluing spectrum licenses, which are held by satellite operators.

The regional operators did not side with the C-Band Alliance on the amount of spectrum to be repurposed. They said 300 megahertz could be made available within 18 to 36 months through the use of better signal compression technology.

Executives from Intelsat and SES, the two largest members of the C-Band Alliance, have said that as broadcasters adopt a standard called High Efficiency Video Coding, more C-band spectrum could eventually be cleared for 5G terrestrial services. They have not described that as possible within the 36 months considered feasible for 200 megahertz, however.