The FCC has approved plans to auction key mid-band spectrum for 5G later this year. The full Commission approved the proposal to offer 280 MHz in the C band (3.7-4.2 GHz), currently used by satellite operators, for auction in December.
The C band has been under consideration by the FCC since 2017. While the satellite operators had hoped to sell off the frequencies themselves, FCC chairman Ajit Pai announced last year that he favoured a public auction. He has sweetened the offer with the promise of up to USD 9.7 billion in incentive payments for the satellite operators to vacate part of the band quickly.
The plan is to devote the lower 280 MHz of the range (3.7-3.98 MHz) to wireless broadband, install a guard band at 3.98-4.0 GHz, and leave the satellite operators the upper 200 MHz, at 4.0-4.2 GHz. Satellite operators would be reimbursed for the costs of refarming, such as new satellites and ground station filters, by the winners of the spectrum auction.
The additional incentive payments, paid by the winners of the auction as well, are designed to help speed up the release of the frequencies for 5G. Satellite operators would be eligible for the payments if they clear the lower 120 MHz by September 2021 in 46 of the country's 50 top economic areas and clear the remaining 180 MHz in those areas as well as all 300 MHz in the rest of the continental US by September 2023. Without the accelerated payments, the spectrum would need to be cleared by September 2025.
The FCC also adopted service and technical rules for the flexible-use licensees in the band and rules that require incumbent fixed microwave services licensees to relocate their point-to-point links to other bands by December 2023.
SES and Telesat, two members of the C Band Alliance formed to lobby the FCC on plans for the spectrum, congratulated Pai and the Commission on the adoption of the decision, calling it "a win-win-win for US leadership in 5G, American taxpayers, and the nearly 120 million U.S. households that rely on the C-band for their cable and broadcast programming".
In a statement, the companies said they would review the Commission’s order in detail and work with the FCC and all stakeholders "to accomplish an efficient and expeditious transition of the C-band while protecting critical satellite services".
Other satellite operators said they plan to oppose the FCC plan in court. The operator ABS said in a statement that the FCC plan was "fatally flawed by its misinterpretations of the Communications Act, and by its numerous arbitrary and capricious conclusions. The Small Satellite Operators are going to be harmed by the unlawful revocation of the right to use 60 percent of their licensed C-band spectrum, and we will ask the courts to overturn this order and to instruct the FCC to start the entire process again."
3.5 GHz auction rules approved
The FCC also approved plans to auction local licences in the 3.5 GHz band. Over 22,000 county-sized licences will be put up for sale in June, providing additional mid-band spectrum for 5G services.
Each licence will consist of a 10-MHz unpaired channel in the 3.55-3.65 GHz band. The FCC plans an ascending clock auction format in which bidders indicate their demand for generic licence blocks in specific counties as prices increase, and licensees will be dynamically assigned a specific channel by frequency coordinators known as Spectrum Access Systems. Each bidder faces a cap of four generic blocks of spectrum per county.
Bidding credit caps of USD 25 million for small businesses and $10 million for rural service providers will be available, with a USD 10 million cap on the overall amount of bidding credits that a small business bidder may apply to winning licences in smaller markets.
