Wireless Spectrum Auctions

There's widespread interest in the citizens broadband radio service auction, but it’s not clear who will pursue licenses or how they will be used, Commissioner Mike O’Rielly said during a FierceWireless webinar Monday. The FCC faced pressure to delay the start of the auction July 23 because of credit market jitters tied to COVID-19 (see 2005140050). “The insatiable demand” for mid-band spectrum “is only going to increase over time,” he said.

Small satellite operators (SSO) challenging the FCC's C-band clearing order (see 2005050047) asked the agency to delay acting further pending judicial review before the U.S. Court of Appeals for the D.C. Circuit. Proceeding watchers said the agency is unlikely to accede. The commission didn't comment.

Commissioners will act at their June 9 meeting on CTIA and Wireless Infrastructure Association proposals for more changes to wireless infrastructure rules designed to accelerate siting of towers and other 5G facilities, FCC Chairman Ajit Pai said Monday. The move was expected, as is a fight from local and state governments (see 2005110029). Pai will also ask commissioners to approve auction procedures for Phase I of the FCC's 10-year, $20.4 billion Rural Digital Opportunity Fund and proposed an NPRM on the use of very high-band spectrum. ATSC 3.0 also is on the agenda (see 2005180066).

The FCC confirmed Monday that members' next meeting tentatively will include a vote on wireless infrastructure, as we reported last week. Other items potentially on tap for a June 9 vote are auction procedures for the $16.4 billion, 10-year high-cost USF; high-band spectrum action; and on ATSC 3.0.

With the FCC citizens broadband radio service auction set to start, the agency is under pressure to further delay the auction because of credit market issues. Markets remain jittery due to the pandemic, a problem for small players that may need to raise the money to bid. The FCC postponed the auction in March to July 23, from June 25, because of COVID-19 concerns (see 2003250052).

New satellites and other C-band clearing expenses -- an estimated $1.2 billion worth through the end of 2021 and $1.6 billion in total -- helped prompt Intelsat to file for Chapter 11 bankruptcy Wednesday, said in its application with U.S. Bankruptcy Court in Richmond. Chief Financial Officer David Tolley said in a declaration (in Pacer, case 20-32299) the company intends to clear the lowest 120 MHz of the band by the Dec. 21, 2021, deadline to be eligible for $4.87 billion in accelerated clearing payments. Tolley said Intelsat has close to $15 billion in debt, but "business prospects remain healthy." He said it also has "materially lower revenues" due to COVID-19's effect on such key customers as airlines and cruise ships, and on its business carrying broadcast signals of sports and other live events. Tolley said the company has a commitment for financing that needs court approval but would give it enough working capital to clear the C band, fund the bankruptcy case and let Intelsat operate. An accompanying motion asked for permission to incur obligations for the clearing. It said its three-part clearance plan involves building and launching multiple satellites over the next 30 months to replace the capacity lost from the C-band compression upgrades and relocating teleport sites from urban to rural locations to mitigate 5G interference. The company asked the court to authorize it to implement the clearance on an accelerated schedule. The FCC emailed Thursday that it "appreciates Intelsat's statement that '[o]ne of the primary catalysts' for its voluntary filing for bankruptcy is a 'desire to participate in the accelerated clearing of C-band spectrum.' We will continue to move forward with the C-band auction process and look forward to working with satellite operators, wireless companies, and others toward that goal." Senate Appropriations Financial Services Subcommittee Chairman John Kennedy, R-La., said Intelsat’s bankruptcy announcement “reveals what many suspected all along: Intelsat had no intention of accepting the FCC’s deal” on the C-band auction. The FCC “should withdraw its offer, take control of America’s spectrum and save taxpayers billions of dollars instead of shelling out that money to foreign companies,” Kennedy said. He has repeatedly raised concerns about the FCC’s C-band auction plan, including its proposal for $9.7 billion in incentive payments to Intelsat and other satellite incumbents (see 2003100022). SES also said it plans to make the accelerated C-band clearing deadlines (see 2005140055).

The FCC approved 5-0 allowing broadband in 900 MHz, reallocating a 6 MHz swath while keeping 4 MHz for narrowband. Commissioners voted electronically (see 2005130008) before Wednesday's abbreviated virtual meeting, as expected (see 2005070054). Anterix executives said the spectrum could help utilities across the U.S. update operations and move to a smart grid.

Uncertainty remains about what COVID-19 will mean for AT&T and the wireless industry, Chief Financial Officer John Stephens said at a MoffettNathanson conference Tuesday. Speakers on a small-cells webinar said COVID-19 is adding to data growth and to the demand on carriers to densify their networks.

Verizon is reopening many of the company stores shuttered due to the COVID-19 pandemic, Chief Financial Officer Matt Ellis said at a MoffettNathanson virtual conference Monday. The carrier was down to 30% of stores open, which increased to 40% last week and is expected to hit 50% in June, he said. T-Mobile executives also said more stores are coming online in some locations based on state guidelines. While 80% of T-Mobile and 70% of Sprint stores closed, business as usual will return at a different rate in different parts of the country, said CFO Braxton Carter. The two companies combined earlier this year.

House Commerce Committee Chairman Frank Pallone, D-N.J., and three other committee leaders Friday filed a companion version of the Utilizing Strategic Allied (USA) Telecommunications Act (S-3189). The bill would require the FCC to direct at least $750 million, or up to 5 percent of annual spectrum auction proceeds, to create an NTIA-managed open radio access network R&D fund to spur movement to open-architecture, software-based wireless technologies. Senate Intelligence Committee leaders filed S-3189 in January (see 2001140067). Congress “took strong action to protect our communications networks against foreign interference from dangerous companies like Huawei and ZTE” last month via the Secure and Trusted Communications Networks Act (HR-4998), said Pallone and the other three leaders: House Commerce Oversight Subcommittee ranking member Brett Guthrie, R-Ky.; House Commerce ranking member Greg Walden, R-Ore.; and House Communications Subcommittee Vice Chair Doris Matsui, D-Calif. “Now, we must follow that up by promoting equipment and technologies that can ensure a more diverse, sustainable, and competitive supply chain for America’s 5G networks.” HR-4998 allocates at least $1 billion to help U.S. communications providers remove from their networks Chinese equipment determined to threaten national security (see 2003040056). Mavenir CEO Pardeep Kohli praised the USA Telecommunications Act, saying in a statement that “advancing the deployment of OpenRAN technology is key to ensuring American leadership in building next-generation networks and creating a more competitive and innovative wireless marketplace.” Dish Network Senior Vice President-Public Policy and Government Affairs Jeff Blum said the bill's proposed grants "will enhance mobile access, spur job creation, and boost American efforts to lead the global race to 5G.”