FCC chairman Pai says a public auction is the way to go

FCC chairman Ajit Pai’s decision on how to clear C-band spectrum for 5G is a partial victory for cable operators and broadcasters, who use that satellite spectrum to deliver their program networks, and a big smackdown for the satellite companies that provide those content delivery services.

Pai signaled on Nov. 18 that the agency would clear 280 MHz of the midband spectrum (3.7-4.2 Megahertz) via an FCC auction. Cable operators are OK with that arrangement as long as they are compensated for moving to smaller spectrum quarters, namely the 200 MHZ left after the FCC creates a guard band of 20 MHz to protect against interference.

Some cable operators would have preferred the FCC clear more spectrum. ACA Connects and Charter Communications had proposed clearing 370 MHz, and ultimately perhaps all of it, with network delivery moving to fiber.

Broadcasters were OK with an FCC auction, too, as long as there was enough satellite spectrum left over for their networks. They diverge from cable interests on the issue of fiber delivery, saying that would be too risky given that an errant backhoe could do in their network programming feeds.

Comcast, with both cable and TV-station interests, told the FCC that 300 MHz was enough to clear and the rest must be preserved for future innovative video uses. In fact, it said the final order needed to have an “unqualified assurance” that the FCC would not try to clear more than that 300 MHz.

FCC officials speaking on background confirmed their plan was to reserve the remaining 200 MHz for continued satellite delivery of incumbent programming services.

The FCC said the auction will be held by the end of 2020, but it will not vote on a final order until early next year, so there will be a race to come up with a framework for the auction before that time. FCC officials suggested the regulator’s experienced auction staff was up to the task.

The big loser in the announcement was the C-Band Alliance, a point FCC officials were not quiet about. CBA comprises the major satellite companies that will be giving up spectrum in the auction. They had pitched a private sale, saying that was the best and fastest way to free up the spectrum. Many in Congress had disagreed, arguing that the money from the spectrum should go to the Treasury to fund activities like rural broadband rollouts and emergency communications. The FCC appeared to agree with that logic.

In a background call with reporters, top FCC officials said that the CBA’s private sale approach would not bring spectrum to market in a fair and transparent way, and would instead facilitate backroom deals. Comcast concurred, telling the FCC “the clock has run out on seriously considering CBA’s approach.”

The FCC plan is to move directly to an order on the auction, which Pai said he expected to be voted by early next year, rather than a notice of proposed rulemaking (NPRM) with additional time for public comment. But there will have to be an NPRM for the auction framework and specific rules.