On Thursday, February 6, in a speech at the Information Technology and Innovation Foundation, Federal Communications Chairman Ajit Pai outlined his proposal for the realignment of 3.7-4.2 GHz, the so-called C-Band. Later in the day, the FCC website posted a summary of the Chairman’s proposals, and Republican Commissioners Carr and O’Rielly released statements in support of the initiative. A draft order is expected sometime today, February 7, which will fill in a lot of gaps missing from the broad brushstrokes the Chairman outlined.
While many details were lacking, the Chairman confirmed his previously shared intentions that the FCC adopt rules to move existing satellite operators and earth stations outside of the 3700-4000 MHz range to make way for a public auction of the lower 280 megahertz of spectrum in that range, beginning as early as December 8, 2020. The top 200 megahertz of the C-Band (4000-4200 MHz) would be available for repacking the earth station operators currently in the lower 300 megahertz.
The Chairman’s remarks and summary also proposes what he calls “accelerated relocation payments” designed to create incentives for an early migration from the lower portion of the band. His proposal would entitle satellite operators to receive these payments if they clear the lower 100 megahertz of the C-band in 46 of the top fifty Partial Economic Areas by September 2021 and the remaining 180 megahertz of the C-band by September 2023. Apart from the general statements about timing, the exact mechanics and conditions for satellite operators’ receipt of the payments were not spelled out except that there would be accelerated relocation payments from the winning bidders outside of winning bid payments to the FCC/US Treasury and there would be no pro-rated accelerated relocation payments. He also explained that satellite operators may be entitled to total accelerated relocation payments of up to $9.7 billion. Because of questions about the Commission’s authority to do so, without Congressional action, the Chairman explained that satellite operators would not receive a percentage of auction revenues.
Chairman Pai recommitted to a framework by which winning bidders would also reimburse satellite operators for “every single reasonable cost” of relocation, noting that “[a]mong other things, new satellites will need to be launched, and filters will need to be placed on earth stations,” estimating total relocation costs of $3-5 billion.
The Chairman also explained why he is not waiting for Congressional action before moving to adopt rules, despite continued calls from Capitol Hill that the Commission do so. First and foremost, in order to maintain what Chairman Pai called the U.S. leadership in 5G, he believes the time to move and make available significant mid-band spectrum for advanced flexible use applications is now. He also expressed a confidence that there are no legal impediments to his proposed rules. He explained his view that, under the Communications Act, “we have the authority to modify the licenses of C-band incumbents, which would still be able to provide the same level of service to their customers that they do today,” noting the Commission’s general auction and rulemaking authority, and hearkening to the FCC’s court-tested Emerging Technologies Framework precedents by which the Commission has required winning auction bidders to pay for the relocation of affected incumbents. While dismissing arguments that the Commission should wait for Congress before acting, Chairman Pai welcomed Congressional action that would direct some of the auction proceeds to address national priorities like rural broadband, closing the “digital divide,” and Next-Generation 911.
Commissioner Carr’s statement expressed “strong support” for the Chairman and what he termed the “right decision.” Commissioner O’Rielly was “incredibly excited” to see the C-Band draft circulated and the item moving forward at the February meeting, noting that he “still need[ed] to review the particulars.” No comments were posted by the two Democratic Commissioners.
The Chairman’s preview was silent on the technical details regarding protection of incumbents and other services, such those in adjacent bands, e.g., radio altimeters in the 4200-4400 MHz band, and the matter of whether the upper 200 megahertz of the C-band would be made available for point-to-multipoint, or P2MP, operations, as advanced by several tech companies and public interest groups. The draft report and order likely to be issued today will merit a close review from all interested stakeholders, and the Commission will continue to take ex parte meetings and receive submissions until the Sunshine Notice for the February 28 Open Meeting is issued, which is expected on February 21.