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FCC Opposes, ACAC Encourages Federal Court Delay of C-Band Payment Deadline

(Image credit: Future Media)

The Federal Communications Commission and ACA Connects - America’s Communications Association have taken predictably contrary stances in their filings Tuesday (Sept. 8) about the FCC’s proposed Sept. 14 deadline for C-Band earth station operators (which includes cable companies) to opt for a lump sum payment to abandon spectrum that will be reallocated quickly for a 5G spectrum auction.

In filings to the U.S. Court of Appeals, which ACAC asked last month to stay the FCC’s Sept. 14 deadline, both sides explained the dire implications of next week’s target date - either meeting it or delaying it.

There is no initial indication of when the Appeals Court will respond. 

The FCC, in its opposition to ACAC’s Writ of Mandamus appeal (asking the Federal court to stop the clock), contended that “speed is essential.”

The Commission said that stakeholders ”have repeatedly emphasized the need to make C-Band spectrum available for [terrestrial wireless] use as quickly as possible,” and emphasized that “delaying the transition of this spectrum longer than necessary will have significant negative effects …[on] the American consumer and American leadership in 5G.”  The FCC contends that the C-Band’s 3.7 GHz and 4.2 GHz spectrum “is essential for 5G buildout due to its desirable coverage, capacity, and propagation characteristics.”

Related: FCC Sets December Auction for C-Band Spectrum

ACAC countered that the FCC’s demand that earth station operators make “irrevocable elections about their technological future” is unreasonable.  It cited possibilities for relocation or fiber adoption and argued that the upcoming deadline has destroyed the promised equality that was an intent of the lump sum payment process.

The Association also argues that the relocation lump sum “pales in comparison to other uncertainties” of the 5G auction, where bidders may spend $43 to $77 billion dollars for licenses, according to ACAC.  “At most, lump-sum elections would affect barely 1% of total payments,” it said, adding that results of a competitive auction are ”inherently unpredictable” and may “vary by tens of billions of dollars.”  

“Speculation that a stay could jeopardize the C-Band transition is unfounded,” ACA said, pointing out that the “earliest transition date is not until December 2021.”

Harsh Regulatory Skirmish

Setting the tone for its stance, the FCC in its introductory comments charged that the “ACA’s (sic) desire for more money to subsidize member MVPDs’ transition to fiber fails to justify its request for this extraordinary relief.”

“The FCC has consistently made clear that the lump sum was not intended to provide this sort of windfall to MVPDs,” the filing continues, further charging that “disrupting the C-Band relocation would severely harm the interests of the many other participants—and the public—in a smooth and speedy transition.” The agency further argues that pushing back the lump sum payment deadline will affect the repacking process, which would “impede the efforts of potential bidders to prepare for the upcoming C-Band auction.”

The FCC also singles out the potential “harm to programmers and broadcasters that depend on satellites to deliver their programming to television viewers.” It cites concerns that shortening the timetable would delay “the determination of critical information for satellite operators’ planning”  which could “increase the potential for mistakes” during the transition, including the “failure of program delivery.”

For its part, ACAC said that the FCC’s Wireless Telecommunications Bureau was wrong in its fundamental decision about the payment plan.

ACAC said the FCC has not explained the inconsistency in claiming that “physically installing earth station IRDs [integrated receiver/decoders] is ‘necessary’” but that the cost of “obtaining those same IRDs is not.” Excluding the cost from the lump sum payment “is utterly illogical.”

The Association also charged the Wireless bureau with violating standard decision-making procedures, and not disclosing its calculation process.  It claimed that “threshold” estimates vary widely - sometimes affecting 5% of earth stations, other times 30% - with no explanation for the “glaring inconsistencies.” ACAC pointed out that its own methodology for cost estimates was transparent.

“The Bureau’s deficient lump-sum determination defeats efficient decision-making,” ACAC said, adding that the harm of a premature process “cannot be dismissed as purely monetary.”

“An MVPD that elects a lump sum now and applies the money toward relocation cannot later go back in time and reallocate already spent funds toward fiber – even if the MVPD would have applied a properly-determined lump sum toward fiber” initially, ACAC said.

Finally, ACAC dismissed “alarmist” cries that a stay would interfere with the C-Band transition. Delaying the deadline would only affect “the subset of earth stations that would opt out of relocation if offered a properly-determined lump sum. … And if a stay enables more earth station operators to opt out of relocations, that would lessen satellite operators’ burden.”