Oct 17, 2019

FCC's Pai to face lawmakers on sought-after 5G spectrum

FCC Chairman Ajit Pai

FCC Chairman Ajit Pai. Photo: Chip Somodevilla/Getty Images

The debate over a proposed private sale of valuable airwaves that are key to companies' 5G plans will get aired before Congress Thursday.

Why it matters: Midband airwaves are coveted for 5G service because they can carry more data than lower-frequency spectrum while traveling greater distances than high-frequency airwaves.

  • Satellite companies, wireless providers and nearly every other sector the FCC regulates have been wrangling for months over midband spectrum known as the "C-band."
  • A Morgan Stanley research note this month estimated the C-band spectrum is worth between $10 billion and $30 billion.

Driving the news: Republican Sen. John Kennedy is using his perch on the Senate appropriations financial services subcommittee to press FCC Chairman Ajit Pai on spectrum auction programs at a Thursday hearing.

State of play: A group of satellite providers is pushing the FCC to allow them to privately sell their spectrum licenses. But cable companies — and Kennedy — want the FCC to run a public auction, with a portion of the proceeds going to government coffers.

The players: Broadcasters and cable companies currently use the spectrum to receive programming and are worried about losing access.

  • Some of the foreign satellite operators that hold the licenses — Intelsat, SES and Telesat — formed the C-Band Alliance and pitched a plan to move their customers to a smaller portion of the spectrum and sell the extra airwaves for 5G services.
  • Verizon and AT&T see a private auction as the quickest path to buying the airwaves, although AT&T wants an auction to be run like a traditional FCC auction.
  • Meanwhile, small cable companies oppose the private sale and have offered an alternative proposal of their own, which Charter Communications also supports.

The big questions: How much spectrum will be freed up, who will run the auction, and whether any of the proceeds will end up in the U.S. Treasury.

  • The C-Band Alliance said it could free up 200 MHz of spectrum, but is revising that estimate after FCC commissioners called for 300 MHz to be made available.
  • CBA also said it would make a “contribution” to the U.S. Treasury, but have not said how much. Previous airwaves auctions run by the FCC have raised billions to pay down government debt.

Bottom line: The wireless industry says these airwaves are essential for U.S. 5G deployments, but an airwave auction that doesn't send sizable proceeds to the U.S. Treasury is proving to be a tough hurdle with Congress.

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