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Free State Backs Secondary-Market Repurposing of C-Band

WASHINGTON — The Free State Foundation has come out in support of secondary-market deals for C-band spectrum as a way to clear some or all of the band for 5G. 

The Federal Communications Commission is committed to freeing up spectrum in the band, used for satellite program delivery by broadcasters and cable operators, but has been collecting input on just how to do it. 

The C-Band Alliance, comprising the major satellite carriers licensed to use the C-band, has proposed a secondary market auction, rather than an FCC auction, saying that is the best and fastest way to free up the most spectrum. Free State, a Rockville, Maryland-based nonpartisan think tank promoting free market-oriented policies, generally likes the cut of that free-market jib.  

"We believe that, at the end of the day, the tradeoffs involved in such a free market-oriented approach will enhance overall consumer welfare and reduce overall societal costs by maximizing the efficient use of this valuable mid-band spectrum," wrote Free State president Randolph May and visiting fellow Gregory Vogt. 

May and Vogt said they recognize the FCC will have to work through some "nontrivial" issues related to that approach — "the amount of spectrum in the C-band to be reallocated, the legal basis for the market-based approach, and whether a portion of the sale proceeds should be contributed to the federal government" (as the C-Band Alliance has proposed). But they also said that "by maximizing overall consumer welfare and reducing overall societal costs, it comports with the public interest." That should be the FCC's policy objective, they said.  

FCC chairman Ajit Pai has also acknowledged the repurposing is, well, complicated. But he did tell Congress recently that he hopes to have something ready by the fall.  

Separately, legislation has been drafted by House Democrats that would require an FCC auction, plus a hefty contribution to the Treasury ($10 billion) to help close the rural digital divide.  

Cable operators and competitive carriers also have a proposal that would include an FCC auction, as well as possible payouts to cable and broadcasters as well as satellite companies.  

The C-band is the kind of midband spectrum — the sweet spot for 5G — that the FCC is under pressure to start clearing in greater abundance. President Donald Trump has directed his administration to come up with a new national spectrum policy plan with the goal of winning the race to 5G. 

CBA has dubbed its private auction FUEL (Flexible Use and Efficient Licensing) and says it would be a sealed-bid auction for "packages" of spectrum, private but overseen by the FCC, which could put conditions on the licenses if it chose. (The FCC has its own FAST (Facilitate America’s Superiority in 5G Technology) plan for getting spectrum into the hands of wireless broadband companies). 

The CBA auction was designed by Auctionomics, which has worked with the FCC on its spectrum auctions.