To ensure that I am behaving responsibly during this COVID-19 pandemic these past few months, I have mostly positioned myself on my couch where my live-in girlfriend and I exhaust all that online streaming services have to offer. Don’t believe me? Well, we are currently streaming ABC’s “Once Upon A Time.” For the unfamiliar, the show involves a group of Disney characters who are unwittingly hexed by a curse that shields them from their true identities and, what’s worse, they are stuck in Maine. One of the antagonists in this pinnacle of American entertainment is none other than the impish, yet Machiavellian, Rumpelstiltskin who, in essence, makes covertly self-enfranchising arrangements at the cost of everyone else. This is seemingly familiar to the actions foreign satellite companies appear to be engaging in when petitioning legislatures to stall the Federal Communications Commission’s (FCC’s) C-Band auction. But, as all the characters in the show soon find, working with “Rumple” comes at a dire price. In our case, we lose the race to 5G.
But first, what is C-Band and why does it matter to 5G? Paired with the FCC’s actions in the Citizens Broadband Radio Service band (3.5 GHz Band), opening up C-Band spectrum promotes nationwide 5G coverage, which ensures that all can participate in the Internet of things (IoT) economy. Without this spectrum, 5G will be limited to major urban markets only, thus, prohibiting millions of rural Americans from participating in the 5G-IoT economy. It is why the FCC made it part of its 5G-Fast Plan. The reason is that, unlike its milliwave counterparts, C-band is a swath of mid-band spectrum within 3.7-4.2 GHz frequencies that can travel greater distances. Currently, this invaluable spectrum lies fallow or, at best, is severely underutilized given its potential for 5G by its current incumbents. These incumbents are mainly made up of a handful of foreign satellite companies that generally provide legacy broadcast and audio services. C-band’s potential and lack of use rightfully encouraged the FCC to promulgate its rules for a public auction. This auction will allow wireless stakeholders to purchase 280 MHz of the band’s latter portion so that they may provide commercial 5G services.
Acknowledging this spectrum band’s importance to 5G, the FCC struck a measured and thoughtful compromise with its incumbents that attempts to clear the band for this new wireless use expeditiously. Additionally, the FCC has equitably provided incumbent-satellite companies enough time and monetary compensation to move to another channel without prohibitively frustrating their ability to provide their services. In fact, the FCC even developed generous incentive packages to assist these companies in their move. For example, the FCC offered these companies accelerated payments to the tune of $9.7 billion if they clear the lower 100 MHz of C-band in 46 of the top 50 Partial Economic Areas by September 2021 and the remaining 180 MHz of C-band by September 2023. We know that this was a generous offering because many of these satellite incumbents jumped when accepting the FCC’s offer for these accelerated payments, but oddly they still cry foul.
Here’s what we know, this spectrum band is critical for 5G to be nationwide. In fact, other governments, including China, have accelerated their investments to open up this and similar bands in their respective countries. If the FCC waited on Congress (even though its already well within its legal right to auction this spectrum), the US would be nowhere near prepared to hold an auction much less allow carriers to deploy 5G services in the band. This ultimately forfeits our dominant position in the international 5G race because many countries, currently, are nearing deployment stages. We know that these incumbent-satellite operators have the ability and, thanks to the FCC as explained above, the capital to move to another band. We also know that these incumbents significantly underutilizing the band even for their traditional offerings. This is because these same operators offered to auction off this spectrum themselves privately, which was an odd proposal as they do not own the spectrum, the public does. Moreover, the fact that they don’t own the spectrum is, in part, why we know the FCC moving to a public auction is the most appropriate arrangement.
Frankly, these satellite operators’ opposition to the FCC’s C-band auction is meritless and too clever by half. They are asserting rights to this band that they do not in fact have so as to obtain a higher payout. The real issue here is that their attempt to stall comes at the detriment of America’s competitiveness in the race to 5G. If Congress kneels to these foreign companies’ requests on this issue, then only these few satellite companies benefit. As Rumpelstiltskin warns in the show, every deal comes at a price. Let’s not make a deal that ultimately destroys our competitiveness in a 5G race we need to win.
With its C-band auction, it appears that the FCC has found an equitable solution to promote our 5G networks while also sufficiently compensating its current incumbents to clear the band. All this with nominal cost to the taxpayer, I’d say that’s a win-win that Congress should get behind.
