FCC C-band plan draws mixed reaction from Congress

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WASHINGTON — A Federal Communications Commission plan to auction satellite C-band spectrum without waiting for legislation garnered mixed reactions from U.S. lawmakers who oversee the FCC. 

On Thursday, Ajit Pai, chairman of the U.S. Federal Communications Commission, outlined the agency’s plan to commence an auction Dec. 8 to license the spectrum to 5G network operators. That plan includes bidder payments to satellite operators worth up to $14.7 billion to speed the process and cover satellite transition costs. 

Three out of five FCC commissioners — Pai, Michael O’Rielly and Brendan Carr — support the plan, giving it enough votes to pass during an open meeting scheduled for Feb. 28. 

Pai’s announcement drew immediate praise from the Republican leaders of the Senate Commerce Committee and its FCC oversight subcommittee.

Senate Commerce Committee Chairman Roger Wicker (R-Miss.) and Sen. John Thune (R-S.D.), the subcommittee chairman, said the FCC’s proposal “reflects the principles” of a bill the pair introduced last year that would require the U.S. treasury to receive at least half of any C-band auction proceeds, but would place no cap on what satellite operators could receive. 

Wicker and Thune’s bill, known as the 5G Spectrum Act, cleared the Senate Commerce Committee but appeared to stall when it failed to garner bipartisan support.

Wicker and Thune’s counterparts in the House of Representatives, where Democrats hold the majority, took issue with the satellite incentive payments and criticized Pai’s plan to push ahead with the C-band auction without waiting for Congress to impose its own guidelines. 

“We believe that this proposal only reiterates the need for legislation,” House Energy and Commerce Committee Chairman Frank Pallone (D-N.J.) and Rep. Mike Doyle (D-Pa.), chairman of the communications and technology subcommittee, said in a joint statement Feb. 6. 

“The questionable legal basis for the satellite incentives will likely result in litigation, which will delay the deployment of 5G,” Pallone and Doyle said. “Moreover, without Congressional action, this auction will not fund critical public safety infrastructure or bridge the digital divide.”

Pai’s proposal for sharing auction proceeds with the satellite industry is also a sticking point for Sen. John Kennedy (R-La.), who chairs the Senate Appropriations subcommittee that has jurisdiction over the FCC’s budget. Kennedy was one of the leading critics of the Intelsat, SES and Telesat Canada’s earlier proposal to let the satellite industry conduct a private auction to transfer C-band spectrum to 5G providers. 

“My duty, and the FCC’s duty, is to the American taxpayers,” Kennedy said in a Feb. 6 statement. “The C-Band spectrum belongs to them, and the 5G opportunities it represents are also theirs.”

Kennedy said he disapproves of how much money the FCC is willing to make available to satellite operators — up to $5 billion to continue their services with less spectrum and up to $9.7 billion in incentives to accelerate clearing C-band airwaves for cellular 5G services. 

“Unfortunately, the sum Chairman Pai suggested giving to foreign satellite companies is much too high, and it’s highly unfair to those taxpayers,” Kennedy said. “We shouldn’t be in the business of spearheading Luxembourg bailouts when there are towns in Louisiana and across the country without access to broadband service.”

Intelsat and SES, the two companies with the lion’s share of C-band satellite capacity over the United States, are Luxembourg companies, though Intelsat is headquartered in Tysons Corner, Virginia. Intelsat and SES plan to buy at least eight satellites from U.S. manufacturers to replace capacity lost through the spectrum transfer. 

Pai said Feb. 6 that the FCC views the incentive payments as important to ensure spectrum gets transferred faster than the commission could by itself. The FCC has the legal authority to conduct the auction, and needs to free up 280 megahertz of C-band quickly to ensure U.S. leadership in 5G, he said. 

“Some argue that the FCC should wait for Congress to legislate on the C-band,” Pai said. “But if you believe that advancing American leadership in 5G is important, if you believe it is a priority to make 5G spectrum available quickly, and if you believe that mid-band spectrum is especially critical, waiting for Congress to act first isn’t the best strategy. In fact, some might call it the absence of a strategy.”

Kennedy introduced a bill last month with Sens. Brian Schatz (D-Hawaii) and Maria Cantwell (D-Wash.) that would cap the satellite industry’s share of auction proceeds at $6 billion and put the rest toward public use such as paying down the national debt and modernizing 911 emergency services. 

Kennedy’s bill, the Spectrum Management and Reallocation for Taxpayers (SMART) Act, was referred in late January to the Senate Commerce Committee. Its chances of clearing the committee appear slim now that Wicker and Thune have announced their support for the FCC’s plan.

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