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FCC to auction C-band spectrum for 5G

The agency will auction critical mid-band spectrum for 5G rather than allowing satellite companies to sell licenses in a private sale to carriers.

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FCC Chairman Ajit Pai announced the FCC will auction off C-band spectrum for 5G services, killing the satellite industry's hopes of selling the spectrum themselves.

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Federal Communications Commission Chairman Ajit Pai said Monday the agency will hold a public auction of mid-band wireless spectrum to fuel the deployment of 5G. The decision to auction the spectrum ends months of speculation about how the much sought-after airwaves would be put to use to help build the next generation of wireless networks. 

The so-called C-band spectrum, which includes 500 MHz of spectrum between 3.7 and 4.2 GHz, is used today by satellite providers to deliver video programming to cable providers. Pai said on Monday that the agency plans to auction 280 MHz of the block of spectrum while preserving about 200 MHz that will continue to be used for TV programming. 

The next generation of wireless, 5G is expected to increase network speeds and make networks more responsive. The technology could help make applications like autonomous vehicles a reality and will deliver new AR and VR experiences to smartphones. Mid-band spectrum, such as the C-band, is considered important for 5G deployments because it "offers both geographic coverage and the capacity to transmit large amounts of data -- a combination that is appealing to entrepreneurs and wireless consumers alike," Pai explained in a letter to lawmakers on Monday announcing his decision. 

Pai is not alone in recognizing the importance of this swath of wireless spectrum. Politicians on both sides of the political aisles, as well as wireless carriers and consumer advocates, have also expressed the need for the FCC to get this spectrum into the market quickly. But how the spectrum will make it into the market has been debated. 

The controversy around the C-band comes from whether satellite providers should be allowed to sell the spectrum, an approach satellite companies, such as Intelsat, Telesat and SES, say will get the spectrum into the market more quickly. These satellite providers proposed a private sale of the spectrum to wireless carriers looking to build 5G networks. But several lawmakers on Capitol Hill have balked at the notion of private companies enriching themselves from the sale of a public asset. Instead, they've pressed the FCC to auction the spectrum. 

Read: When will cheap 5G come to the masses?

The controversy

While everyone agrees this spectrum needs to be made available, the timing of when that spectrum comes to market could benefit some wireless operators over others. For example, a speedier sale of the spectrum would likely benefit Verizon, which doesn't have a large cache of mid-band spectrum in its portfolio and needs more mid-band spectrum to fill out its 5G deployments. By contrast, AT&T and T-Mobile, through its acquisition of Sprint, have stronger mid-band spectrum holdings. A delay in the sale of C-band spectrum could benefit them as it would keep a key asset for 5G networks from rival Verizon. 

Pai has been reviewing options for what to do with the C-band for several months. There's been some speculation that Pai favored a private sale of the auction. But today, he indicated that "after much deliberation and a thorough review of the extensive record" the best course of action is for the FCC to auction the airwaves. 

 "With a quarter century track record of transparent and successful auctions, I am confident that they [FCC staff] will conduct a public auction that will afford all parties a fair opportunity to compete for this 5G spectrum," he said.

He also acknowledged the importance of moving fast. "We must make C-band spectrum available for 5G quickly," Pai noted as one of the four main objectives in his plan.  

Pai's proposal was announced at the same time that Sens. Roger Wicker, a Republican from Mississippi and chairman of the Senate Commerce Committee, and Sen. John Thune, a Republican from South Dakota and chairman of the Communications subcommittee announced a bill requiring the FCC to "conduct a public auction of C band spectrum." The bill also indicates the auction should start no later than Dec. 31, 2020. 

Carrier reactions to the proposal 

In a statement following the announcement, AT&T said it supports the "approach outlined by Chairman Pai today."

"As we have previously said, any path forward must chart a course toward a fair, open and transparent auction; compensation to C-band licensees for relinquishing rights and relocating services; proceeds for the U.S. Treasury; and a clear and reasonable transition plan that ensures broadcasters, programmers and earth station operators that their services will not be interrupted and that their relocation costs will be reimbursed," Joan Marsh, AT&T Executive Vice President of Regulatory & State External Affairs, said in a statement.

Verizon was more cautious, reiterating the need to get the spectrum into the market quickly to ensure that the US beats China in the race to 5G. 

"The United States has gotten off to a fast start in the race to 5G," Craig Silliman, a Verizon executive vice president, said in a statement. "But for the US to continue to lead this race, it is critical that the FCC move quickly to make C-band spectrum available for 5G."

He encouraged the FCC to "move with urgency" to get the spectrum in the market as soon as possible. And he said the FCC needs to ensure any auction it puts together includes "appropriate incentives and protections to ensure it could be put to use in short order."

He continued, "China and other countries have already provided huge blocks of mid-band spectrum to carriers for 5G, and there is a risk that those countries will become the hub of 5G innovation and investment if the US fails to act promptly to do the same."

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