FCC Chairman Ajit Pai announced his plan today to make spectrum available for flexible use in the C Band, from 3.7 to 4.2 GHz, through an FCC-run auction of 280 megahertz at the offices of the Information Technology and Innovation Foundation in Washington, D.C.
“My decision is based on four principles,” Pai said. “First we must make a significant amount of spectrum available for 5G; second, we must do so quickly; third, we must generate revenue for the U.S. government; and fourth, we must ensure that services that are currently being provided in the C Band can continue to be delivered.”
The key elements of Pai’s plan include a public auction to repurpose spectrum in the C Band for flexible use, as opposed to a private auction run by the incumbent satellite users. The auction could begin as early as Dec. 8, 2020.
“With [the FCC’s] proven record of success running spectrum auctions, demonstrable transparency, a public auction is the best bet to ensure fairness,” Pai said. “We would get the auction going quickly, before the end of 2020.
While some have called for a 5G allocation of as little as 100 megahertz and others have gone for the whole 500 megahertz in the C-band, Pai proposed using the lower 280 megahertz of the band, with a 20 megahertz guard band, relocating the incumbent satellite companies to the upper 200 megahertz.
“I think this strikes the appropriate balance between making a large amount of spectrum available for 5G and preserving sufficient spectrum for incumbent uses,” Pai said. The chairman believes he has support from the congress and the C Band Alliance for this position.
Pai proposed that the winning bidders would be required to pay for incumbents’ reasonable relocation costs, which the FCC estimates will be upwards of $3B to $5B.
“It is only fair that, from launching new satellites to placing filters on earth stations, every legitimate cost should be covered for the incumbents’ relocation,” Pai said.
When it came to the ticklish question of how much compensation incumbent operator’s should receive, Pai proposed the provision of accelerated satellite relocation bonuses of $9.7B, paid by the spectrum auction winners if they meet certain deadlines for moving of their spectrum. Satellite operators would receive a payment if they relocated from the bottom 100 megahertz of spectrum in 46 partial economic areas by September 2021, and the remaining 180 megahertz by September of 2023, which is four years and two years, respectively, faster than the 2025 timeframe that the FCC expects relocation to be completed.
“Why accelerated relocation payments necessary? Speed. We are not just asking them to relocate. We want them to move quickly to free up spectrum for 5G sooner rather than later. This transition will move much faster if we can create powerful incentives and make sure they follow through,” Pai said.