House lawmakers, with legislation in tow, push for public C-band auction

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WASHINGTON — More than half a dozen House lawmakers said Oct. 29 that the FCC, not the satellite industry, should conduct an upcoming auction to transfer C-band spectrum to the 5G wireless industry.

Several of those members, speaking at an Oct. 29 hearing by the House Energy and Commerce communications and technology subcommittee, questioned the legality of an industry-run auction, saying the Federal Communications Commission is the only body authorized to conduct U.S. spectrum auctions. 

“This would be an unprecedented departure from the way Congress has instructed the FCC to reallocate spectrum in the past,” House Energy and Commerce Committee Chairman Frank Pallone (D-NJ) said. “Under the Communications Act, we required the FCC to run auctions that provide revenue to the treasury, which is critical to ensuring the American people benefit from these auctions.”

The FCC is expected to decide on how to reallocate some or all of the 500 megahertz of C-band satellite downlink spectrum for cellular 5G services by the end of this year. FCC Chairman Ajit Pai said during an Oct. 17 Senate hearing that the commission was reviewing its auction authority under Section 309 of the Communications Act, the 1934 law that established the FCC to oversee telephone, telegraph and radio communications. 

Four House members — Reps Mike Doyle (D-Pa.), Doris Matsui (D-Calif.), Bill Johnson (R-Ohio), and Greg Gianforte (R-Mont.) — introduced a bill Oct. 24 to mandate the commission conduct the C-band auction itself. 

The Clearing Broad Airwaves for New Deployment, or C-BAND Act, requires a public auction of 200 to 300 megahertz of the spectrum. 

“The [FCC] chairman does not have the authority to conduct a private auction of the C-band, and must use the auction authority provided by Congress through an FCC-led public auction,” Matsui said. “Abandoning this proven model could lead to protracted litigation, causing unnecessary delays in making this 5G spectrum available, and shortchange the American taxpayer.”

Luxembourg-based Intelsat and SES, and Telesat Canada, working together as the C-Band Alliance, had gained favor at the FCC for coming forward with their own plan to relinquish spectrum they in the past sought to preserve. 

During the Oct. 29 hearing, Reps Bob Latta (R-Ohio), Tom O’Halleran (D-Ariz) and Tony Cárdenas (D-Calif.), also said they prefer a public auction. Many suggested proceeds from selling the spectrum — which could range from a few billion dollars to $60 billion — should go to government programs to bring broadband to rural and underserved areas. 

Pressure now exists in both chambers of Congress for a public auction, after Sen. John Kennedy (R-La.), chairman of the Senate Appropriations financial services and general government subcommittee, pushed for a public auction during an Oct. 17 hearing.

Industry reactions 

C-Band Alliance officials were not among the five witnesses at the Oct. 29 hearing, but representatives with competing proposals were. 

Ross Lieberman, senior vice president of ACA Connects, a group of 700 small and medium-sized telecom providers, reiterated the group’s proposal for a public auction of 370 megahertz of C-band spectrum. ACA Connects, Charter Communications and the Competitive Carriers Association say the FCC should use some proceeds from the auction to build fiber as a replacement for satellite C-band infrastructure — a task they estimate would cost $6 billion to $7 billion and take five years to complete. 

The C-Band Alliance plan would leave ACA Connects members with too little spectrum to ensure stable continuity of service, Lieberman said. 

“Without a fiber alternative, our members will be stuck with higher prices to use a less reliable C-band that is more prone to interference and unable to meet future demands,” he said. 

Lieberman also criticized the C-Band Alliance’s estimate that it can clear 300 megahertz of spectrum in 36 months of an FCC order, arguing that cable operators would have to do most of the work upgrading and reconfiguring their systems to use less spectrum. 

Jim Frownfelter, CEO of satellite operator ABS, rebutted Lieberman’s criticism, but didn’t advocate for the C-Band Alliance plan. 

Frownfelter, who was president of Panamsat, and then at Intelsat after the latter bought Panamsat in 2005, said the satellite industry undertook a similar hardware overhaul in the early 2000s when the proliferation of high-definition channels required massive infrastructure upgrades. 

“That effort is extensively more complicated than what we are talking about here,” he said. 

Frownfelter advocated for a private spectrum auction, but using a plan put forward by Bermuda-based ABS, Spanish operator Hispasat and Brazilian operator Embratel Star One. 

Frownfelter said the C-Band Alliance plan excludes the three regional operators because they didn’t generate any C-band revenue in 2017, despite having at least partial coverage of the United States. 

ABS received its FCC license to provide C-band services in the United States in 2017, meaning the company, which has global ambitions, didn’t have time to monetize its U.S. C-band coverage, he said. 

ABS, Hispasat and Star One each spent close to $250 million building and launching satellites designed, at least in part, to serve the U.S. market, Frownfelter said. Any spectrum auction, public or private, that squanders those investments would be unfair, he argued. 

All three operators “have invested a fortune in reliance on FCC rules and have done everything right,” Frownfelter said. “We hope that the FCC and Congress will do right by us too.”

Frownfelter said the regional operator’s proposal ensures all FCC-licensed satellite operators are compensated for any spectrum loss, ensures a multi-billion-dollar contribution to the U.S. treasury, and provides financial incentives to earth-station operators that could result in a faster clearing of spectrum than the C-Band Alliance plan. 

The evening before the hearing, the C-Band Alliance increased the amount of spectrum it said it could part with from 200 megahertz to 300 megahertz. The alliance also filed a letter with the FCC — co-signed by U.S. cellular network giants AT&T and Verizon, and smaller companies Pine Belt Wireless, Bluegrass Cellular and U.S. Cellular — highlighting “areas of consensus” on C-band. 

The C-Band Alliance and other signatories listed eight such areas of consensus covering auction details that they said should help guide any auction type, “regardless of the ultimate outcome of this proceeding.”