Senator pushes for FCC, not satellite operators, to run C-band auction

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WASHINGTON — The chairman of a Senate subcommittee that oversees the FCC wants the agency to auction off C-band spectrum used for satellite communications and deposit the proceeds in the U.S. treasury rather than let commercial satellite operators reap the rewards.

Sen. John Kennedy (R-La.), chairman of the Senate Appropriations financial services and general government subcommittee, said at an Oct. 17 hearing that he is unconvinced a private auction led by commercial satellite operators will be faster at transitioning the spectrum for 5G wireless service than the Federal Communications Commission. 

Commercial satellite operators Intelsat, SES and Telesat — via the C-Band Alliance  — have told the FCC they can clear 200 megahertz of U.S. C-band spectrum within three years if permitted to hold a private auction expected to fetch billions of dollars.  

Kennedy said the FCC should be able to clear the spectrum just as fast, if not  faster, by holding a public auction.

“I’ve been around government long enough, there’s going to be one, if not more, that’s going to go ‘oh Mr. Chairman, you don’t know how hard it is. It’s going to take us seven years.’ That’s the one you fire,” Kennedy said. “Say you’re going to do this in two to three years. If [the C-Band Alliance] can do it, then we can do it.”

FCC Chairman Ajit Pai, one of three witnesses called to testify during the hearing on the FCC’s spectrum auction program, said that the agency “favors a market-based approach” to making spectrum available for 5G. 

“We have eschewed command-and-control, top-down mandates in favor of flexible use for wireless spectrum whenever feasible,” he said. “The free market best determines what technology should be deployed in what band, especially as the pace of technology accelerates more rapidly and demand for spectrum continues to grow.”

Pai said the principles guiding the FCC’s C-band decision are ensuring sufficient spectrum for 5G in a timely manner without disrupting incumbent satellite services. The FCC hasn’t decided on a public or private auction, but expects to do so this year, he said. 

Under the C-Band Alliance’s private auction proposal, clearing 200 megahertz of C-band spectrum satellite operators use primarily for downlinking television signals could raise a few billion dollars, analysts have estimated. ACA Connects, a rival group of terrestrial telecom providers who favor a public auction, estimates the full 500 megahertz of satellite C-band spectrum could fetch as much as $60 billion at auction. 

The C-Band Alliance has proposed a voluntary contribution to the U.S. treasury from any private auction proceeds. 

Kennedy said all proceeds from selling off public airwaves should benefit U.S. taxpayers.

“I’m a free enterprise guy, but that money ought to go to the America people. Think of what we could do with it,” he said. The billions in proceeds anticipated from a C-band auction, he said, would “solve all of the president’s wall problems.” Estimates for the border wall President Donald Trump wants built between the United States and Mexico run as high as $20 billion. 

The other two witnesses at the Oct. 17 hearing, Citizens Against Government Waste President Tom Schatz and Taxpayers Protection Alliance President David Williams, agreed with Kennedy that U.S. taxpayers, not commercial satellite operators, should be the primary beneficiaries of any spectrum auction. 

Kennedy also questioned whether the FCC has the authority to allow a private auction. 

“My reading of the Communications Act tells me that you have to do a public auction, [and] that this private deal is not permissible,” Kennedy said.

Pai said the FCC’s legal team is reviewing the extent of the agency’s auction authority under Section 309 of the Communications Act, the 1934 law that established the FCC to oversee telephone, telegraph and radio communications. 

Kennedy said a private auction would likely spawn lawsuits that would add years to the process of transferring the spectrum to 5G service providers. That litigation, he said, would “probably go to the United States Supreme Court.” 

Kennedy said he is considering holding another C-band hearing to delve into how long a public auction would take.