C-Band spectrum will go up for auction on Dec. 8, under a plan that the Federal Communications Commission adopted Thursday (August 6) in its controversial decision to sell 280 megahertz in the 3.7–3.98 GHz mid-band frequencies for 5G “and other advanced wireless services.” The FCC expects the auction will offer 5,684 new flexible-use overlay licenses based on Partial Economic Areas (PEAs) for spectrum.
The plan envisions procedures that will ensure that auction winners receive contiguous spectrum blocks that will enable wide channel bandwidths to support 5G deployment.
The FCC adopted the plan on a partisan 3-2 vote, with Democrats Jessica Rosenworcel and Geoffrey Sparks approving in part and dissenting in part from the auction plan.
Chairman Ajit Pai acknowledged the dissent, saying, “That’s why we rejected politically motivated calls to do literally nothing until Congress passed a law on the subject,” Pai said, noting that Congress has not addressed the issue in the six months since the FCC made plans for the mid-band auction.
He also emphasized the “accelerated relocation payments to incumbent satellite operators that will make spectrum available for 5G two to four years earlier than otherwise would have been the case.”
Bidding in Auction 107 (as the C-Band auction is designated) will begin on Dec. 8, 2020. There will be two clock-phase categories of certain parts of PEAs that are scheduled for the first early clearing deadline in December 2021. The rules also specify upfront payment and minimum opening bid amounts as well as bidding credit caps for rural service providers and small businesses.
“Mid-band already is providing hundreds of megabits of 5G mobile performance in markets across the country,” Commissioner Brendan Carr said, citing the spectrum’s value in new telehealth, remote learning and work-from-home activities. “We can be sure that this mid-band capacity will help us meet” further demands.
Rosenworcel Wanted Congressional Action
In her partial dissenting statement, Commissioner Rosenworcel acknowledged that the mid-band ruling “may prove to be one of the more consequential auctions in this agency’s history” because the spectrum is “uniquely suited for next-generation 5G service.” But she cautioned that this was the first time that the FCC alone determined the value of spectrum – rather than letting “an efficient and effective market” set the price.
“Instead, bids in this auction will be distorted by a nearly $10 billion payment to incumbent satellite operators that was negotiated outside the light of day,” Rosenworcel said. “Whatever hazy deal this agency cut with existing licensees is hard to square with our clear statutory duty to deposit auction proceeds in the United States Treasury. … That means the public foots this $10 billion bill without the traditional tools of accountability that our auctions have relied on in the past.”
“We should have worked with Congress on a more transparent path,” she said as she complimented the FCC staff for setting the auction rules but dissented from the process “because I continue to believe how we got here is misguided.”
Meredith Attwell Baker, president/CEO of CTIA, the wireless industry association, called the decision an “important milestone [toward] American leadership in 5G.”
“Keeping the C-Band auction on schedule is critical to making sure we have the mid-band spectrum we need,” she said, adding that CTIA looks forward “to a successful auction … to bring more mid-band spectrum to market.”
ACA Connects President/CEO Matthew Polka criticized “the rush to get things done” during which the FCC’s Wireless Bureau “wholly discarded the directions of the Commission. As a result, Polka said, “small cable operators … are denied the promises the Commission made to them in the C-band Order.”
“The Bureau could have taken another couple of months to get the lump sum amount right without compromising the C-band auction schedule or the accelerated transition deadlines,” Polka said. “Instead of following the clear instructions of the FCC’s February Order to announce a lump sum amount for earth station operators who want to relocate out of the lower portion of C-band on their own, the Wireless Telecommunications Bureau chose to eviscerate the lump sum concept.” He said that “hundreds of MVPDs who were relying on the text of the FCC’s Order will now be forced to abandon their shovel-ready plans to deploy and use fiber as a satellite replacement.”
FCC Drops AM-FM Radio Duplication Rule
Separately, the FCC, in another “Media Modernization” move, eliminated a 56-year-old rule that precluded radio owners from duplicating AM and FM radio programming within a market. The restriction was originally adopted in 1964 and updated several times to reflect marketplace changes, most recently in 1992.
The FCC ruled that eliminating the radio duplication restriction will help struggling stations and give licensees “greater flexibility to address issues of local concern.” It also deemed that lifting the non-dupe requirement would enable easier format changes and “facilitate a potential voluntary digital transition in the AM service.”
The National Association of Broadcasters welcomed the long-sought freedom.
"Given that there is no longer any rationale for imposing a ban on duplicating one's radio signal, we appreciate the FCC’s decision to rescind the rule," said Ann Marie Cumming, NAB’s senior VP, communications.
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Contributor Gary Arlen is known for his insights into the convergence of media, telecom, content and technology. Gary was founder/editor/publisher of Interactivity Report, TeleServices Report and other influential newsletters; he was the longtime “curmudgeon” columnist for Multichannel News as well as a regular contributor to AdMap, Washington Technology and Telecommunications Reports. He writes regularly about trends and media/marketing for the Consumer Technology Association's i3 magazine plus several blogs. Gary has taught media-focused courses on the adjunct faculties at George Mason University and American University and has guest-lectured at MIT, Harvard, UCLA, University of Southern California and Northwestern University and at countless media, marketing and technology industry events. As President of Arlen Communications LLC, he has provided analyses about the development of applications and services for entertainment, marketing and e-commerce.