Framework of C-Band Order Expected to Be Approved Largely as Proposed
The C-band order will get some changes from the draft circulated by FCC Chairman Ajit Pai three weeks ago, industry and FCC officials said in interviews Thursday. They said the overall framework will be the same as was proposed by Pai, with a few changes proposed in recent filings. When commissioners vote Friday on the rules, Commissioners Jessica Rosenworcel and Geoffrey Starks are expected to express concerns and may dissent.
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The $9.7 billion for accelerated relocation payments isn't expected to increase. Likely changes include decoupling phases one and two payments, providing more flexibility if the transition deadline is missed, and addressing concerns raised by NAB and America's Communications Association, officials said. Pai isn’t expected to make concessions on spectrum aggregation limits, which could be a sore point with FCC Democrats. An advocate of limits said the lack of concessions on that point means a 5-0 vote is unlikely. Lawyers active in the proceeding said most changes will focus on transition issues.
Pai won’t “show susceptibility to pressure over the amount of payments” and the split among satellite operators likely won’t change, consultant Tim Farrar said. Satellite operators won’t walk away because “they have too much to lose,” Farrar told us: “Pai does need to maximize the bidding, hence he wouldn’t limit the amount Verizon can buy, because it will look bad if the total auction proceeds are less than the $13 [billion]-15 billion in relocation payments and costs, and that’s already a serious possibility here.”
The FCC should rethink spectrum aggregation limits, emailed Michael Calabrese, director of the Wireless Future Program at New America. “A large bloc of mid-band spectrum is a prerequisite to viability for any 5G mobile carrier,” he said: “Allowing one or two dominant mobile carriers to acquire all the best mid-band spectrum completely contradicts the FCC majority’s claim that there could still be four-carrier competition for 5G subsequent to the T-Mobile/Sprint merger.”
The FCC “gave a good story” to justify the $9.7 billion plan and “that’s important,” said Lawrence Spiwak, Phoenix Center president. “You had an economic problem. You had a legal problem. It’s a really tough nut to crack overall.” Many parties and issues were involved, he said.
The order will “set the table for the next stage of lobbying over on the Hill,” said Public Knowledge Senior Vice President Harold Feld. “For Pai, the winning strategy is to have enough people happy enough with the order that you don't have a huge push just to get something passed,” Feld said: “It's smart politics for Pai to placate NAB, for example, since if NAB had concerns that impact their interests they would add their lobbying heft to simply getting a bill out, even if they didn't care about 90% of what's in it.”
Republicans who want to see legislation passed are mostly concerned with money, but Democrats are likely to want aggregation caps, Feld said. “Republicans traditionally oppose aggregation caps, but some Republicans eager to bring broadband home to their district may be willing to deal.” Also important is whether legislation, if it happens, is a stand-alone bill or part of something else, like a supplemental budget request to address the coronavirus, he said.
Saying it's "extremely concerned" the order won't address issues of U.S. International Telecommunications Satellite Organization obligations in the C band or financial compensation to ITSO parties for reduced value of the spectrum, the group hopes to work out solutions with the FCC. The international group might have to bring the matter up at the ITSO Assembly of Parties in April, said a docket 18-122 posting Wednesday.
An executive at a company active in the proceeding said the agency has seemed somewhat flexible on such issues as how to divide up the accelerated relocation payments. But an outside counsel who has been active in the proceeding said multiple seemingly reasonable tweaks have been suggested, but there's no sense the FCC will adopt any because it seems especially dug in.
"The C-Band proceeding has been a long and complicated one, but it seems like the FCC finally found a plan that will work and fairly accommodate all,” said Tom Struble, tech policy manager at the R Street Institute: “That doesn't mean that the draft C-band order is perfect, but the fundamental structure of the deal is now in place.”
“The FCC was right to look at and ultimately address the grossly underutilized C band,” said Louis Peraertz, Wireless ISP Association vice president-policy. In a “spectrum-constrained world,” 500 MHz of spectrum shouldn’t “essentially lay fallow,” he said. WISPA hopes the FCC will revisit sharing in the band. “More than 250 entities supported our proposal,” he said: “No commenters presented any technical evidence refuting our technical evidence and study.”