FCC Chairman Pai announces plan to auction 280 MHz of C-band spectrum next year

Commercial wireless carriers will be able to bid on 280 MHz of C-band spectrum—from 3.70 GHz to 3.98 GHz—in an auction beginning late next year, if FCC Chairman Ajit Pai’s announced plan for the valuable mid-band 5G airwaves becomes reality.

Pai made his plan public yesterday with the release of a letter he sent to Sen. Roger Wicker (R-Miss.) that outlines his plan to clear 300 MHz of spectrum for 5G use by repacking the operation of existing licensees—satellite service providers—into the upper 200 MHz (4.00 GHz to 4.20 GHz) of the C-band swath. This would make the mid-band spectrum available for an FCC auction that would begin before the end of 2020, according to an FCC official.

This repacking approach was proposed initially by the C-Band Alliance (CBA), which had hoped to lead a private sale of the valuable C-band airwaves. But Pai decided to have the FCC conduct the auction to ensure a fair and transparent process—something that many questioned whether the CBA would do, if the organization was allowed to lead the process, according to an FCC official.

FCC commissioners are expected to vote early next year on a report and order establishing the FCC’s intent to auction the C-band spectrum, according to an FCC official. The FCC also would have conduct a proceeding regarding the rules for the auction and approve the auction rules before an auction could begin before the end of 2020.

If approved, the Pai plan for a C-band auction—combined with another auction of 3.5 GHz Citizens Broadband Radio Services (CBRS) spectrum early in 2020—would dramatically alter the spectral landscape for U.S. wireless carriers wanting to deliver 5G services.

While all U.S. carriers have announced 5G plans, most of those plans have centered around operations on low-band spectrum below 1 GHz or millimeter-wave spectrum above 24 GHz, which each have significant limitations. Low-band airwaves propagate signals well—T-Mobile and AT&T have announced plans to provide nationwide 5G on such spectrum in the coming months—but the limited amount of available spectrum means that 5G performance is only an incremental improvement when compared to advanced 4G offerings, according to industry experts.

Conversely, 5G deployments on vast swaths of millimeter-wave spectrum—the focus of Verizon, with AT&T using the approach for targeted enterprise deployments—can enable data speeds of more than 1 Gbps, but coverage is sparse, meaning carriers would need significantly more cell sites to provide service.

Given these realities, wireless-industry representatives repeatedly have called on the FCC to make large swaths of mid-band spectrum available to carriers, so they can have a spectral platform that supports higher data throughputs than low-band airwaves can provide and significantly greater coverage than a millimeter-wave deployment. In addition, other countries—notably South Korea—are using mid-band spectrum as the foundation of their 5G rollouts, so equipment is available and proven.

Pai previously announced that he would make a decision about how he believes the FCC should proceed this fall, based on four principles that he outlined in his letter to Sen. Wicker:

“First, we must make available a significant amount of C-band spectrum for 5G,” Pai stated in the letter. “Second, we must make C-band spectrum available for 5G quickly. Third, we must generate revenue for the federal government. And fourth, we must protect the services that are currently delivered using the C-band so they can continue to be delivered to the American people.”

Although he eschewed the C-Band Alliance’s private-auction proposals, Pai is confident that the FCC has the legal authority to implement his auction plan and that necessary incentives to satellite providers can be aligned with the FCC’s public-interest mandate, according to an FCC official.

One significant issue is how much of the proceeds from an FCC auction of C-band spectrum—a total that could approach $50 billion, by some analysts’ estimations—would be provided to incumbent satellite operators and how much would be delivered to the U.S. Treasury. Pai is not making any announcement about the matter at this time, according to an FCC official.

In a statement, the C-Band Alliance (CBA) expressed concerns with Pai’s announced plan to have the FCC auction the C-band spectrum.

“The FCC Chairman’s indication that he intends to pursue a public auction of C-band spectrum is a significant departure from the CBA’s market-based proposal,” according to the CBA statement. “The announcement does not address the critical involvement of the incumbent satellite operators in executing the complex task of reconfiguring and transitioning their networks. Nor does the announcement address the fundamental modification of the rights afforded by the existing FCC licenses held by the CBA members which would be required under a public-auction approach.

“To ensure U.S. national security interests, U.S. leadership in 5G innovation and the expected accompanying GDP and job growth, the full cooperation of the satellite operators will be required to ensure the successful clearing of the C-band while protecting the incumbent broadcast services enjoyed by millions of U.S. households.

“We will continue to work cooperatively with the FCC to develop an effective alternative plan and achieve the best outcome for the American public while protecting the interests of our users and the rights of our companies.”