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2/7/2020 Will FCC Chairman's $9.7B C-Band Offer Keep 5G’s Future out of Court? - Via Satellite -
https://www.satellitetoday.com/government-military/2020/02/06/fcc-chairman-pai-offers-satellite-operators-9-7-billion-to-clear-c-band/ 1/8
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Will FCC Chairman’s $9.7BC-Band O�er Keep 5G’sFuture out of Court?
Ajit Pai
FCC Chairman Ajit Pai has proposed accelerated relocation payments for
satellite operators that could total up to $9.7 billion as incentive to quickly
clear part of the C-band spectrum for 5G purposes.
Those payments, Pai said, would be paid by the winning bidders of a public C-
band auction, who would also reimburse operators for relocation costs, which
the FCC estimates at between $3 billion to $5 billion. The Chairman previewed
his draft proposal on Thursday afternoon, ahead of the full draft on Friday. He
said the FCC plans to begin the C-band auction on Dec. 8.
By Rachel Jewett | February 6, 2020
5G Broadband Financial
2/7/2020 Will FCC Chairman's $9.7B C-Band Offer Keep 5G’s Future out of Court? - Via Satellite -
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The FCC is expected to vote on the proposal at its upcoming Feb. 28 meeting,
and Commissioner Brendan Carr tweeted Thursday after Pai spoke that he
would vote in favor. Commissioner O’Rielly also issued a statement Thursday
that he expects to support it.
The Chairman’s remarks shed light on the FCC’s plans for a public auction of
C-band spectrum, which Pai announced in November 2019. The C-Band
Alliance (CBA), a group of operators that hold the licenses to the mid-band
spectrum, responded with opposition to the public auction proposal. The CBA
members, Intelsat, SES, and Telesat, committed in October 2019 to clearing
300 MHz of C-band spectrum, and proposed control of a privately held
auction.
If relocation costs are reimbursed at the highest FCC estimate of $5 billion,
operators would receive $14.7 billion to clear the spectrum. Pai called his
amount of $9.7 billion of incentives a “Goldilocks” proposal, to encourage
operators to quickly clear the spectrum, a goal that he said is in the public
interest.
“It is in the public interest to make available the C-band for 5G deployment as
quickly as possible, as part of the national priority to promote American
leadership in 5G,” Pai said. “And to get the job done quickly, we need to align
the satellite companies’ private interests with the public interest. That’s
precisely what accelerated relocation payments will do.”
During an FCC press conference following the Chairman’s remarks, a senior
FCC o�cial said that $9.7 billion will be su�cient to get satellite operators on
board with the accelerated relocation deadlines, and that the amount re�ects
a market value. The FCC did not share details Thursday about how the $9.7
billion would be allocated among the operators with licenses to the
spectrum.
The FCC provided this timeline for eligible satellite operators to clear the
spectrum: clearing 120 MHz of spectrum between 3.7-3.82 GHz by September
2021 in 46 of the top 50 Partial Economic Areas in the U.S.; and clearing the
remaining 180 MHz, from 3.82-4.0 GHz, in those areas, as well as all 300 MHz,
from 3.7-4.0 GHz, in the rest of the continental U.S. by September 2023.
To those who would rather have the FCC wait for Congress to pass legislation
on C-band, Pai said that would be a “boon for China and other countries eager
to seize a leadership role in 5G.” He made it clear, however, that Congress has
the ability to take action to direct a portion of auction proceeds to closing the
digital divide with rural broadband.
The CBA tweeted Thursday that it was “pleased” with Chairman Pai’s
statement. The alliance also issued a statement: “The imminent issuance of
the draft order re�ects the tireless e�orts of many over the past several years
to ensure that this critical spectrum comes to market safely, quickly, and
2/7/2020 Will FCC Chairman's $9.7B C-Band Offer Keep 5G’s Future out of Court? - Via Satellite -
https://www.satellitetoday.com/government-military/2020/02/06/fcc-chairman-pai-offers-satellite-operators-9-7-billion-to-clear-c-band/ 3/8
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e�ciently. Today’s comments by Chairman Pai are a signi�cant development
in this important proceeding. We look forward to reviewing the draft order,
once issued, to place Chairman Pai’s comments in full context.”
A day before Pai’s announcement, Bloomberg Law reported that Intelsat had
reportedly hired law �rm Kirkland & Ellis to consider a possible Chapter 11
bankruptcy if U.S. regulators did not increase the company’s compensation
for C-band spectrum. Intelsat told Via Satellite that it would not comment on
rumor, and Kirkland & Ellis did not respond to a request to comment.
Attorney Owen Kurtin of Kurtin PLLC said that Kirkland & Ellis is a leading law
�rm for bankruptcy debtors, and �ling for Chapter 11 now may be a “very
strategic” move on Intelsat’s part. Intelsat’s capital structure and debt, he said,
means that even with a viable business, it is di�cult for the company to be
pro�table, and many have expected Intelsat to �le for Chapter 11 bankruptcy
to reorganize for years — but �ling at this point could a�ect the C-band
auction.
“The court will stay any action by creditors on Intelsat’s assets, and the stay
might last for a couple of years while the bankruptcy plan is being negotiated,”
Kurtin said of what would happen if Intelsat �led for Chapter 11 to reorganize.
“The e�ect [of] that would be to prevent the FCC from auctioning o� Intelsat’s
C-band spectrum. … The FCC would be completely stopped, frozen, in its plan
to auction o� Intelsat’s part of the C-band spectrum.”
Kurtin said he thinks Intelsat may have a “very good argument” to say that
although spectrum is a public good, it is a key asset to its business and
therefore should be subject to a stay. He also hypothesized that a Chapter 11
�ling could even hold up the entire auction if the FCC decides against
auctioning o� the other operators’ spectrum while Intelsat is tied up in court.
Kurtin pointed to the 2003 case FCC v. NextWave Personal Communications,
in which the U.S. Supreme Court held that under section 525(a) of the U.S.
Bankruptcy Code (11 U.S.C.), the FCC could not revoke the spectrum license of
a bankrupt licensee of that spectrum just for failure to make timely payments
of the license fees. “The licensed spectrum was an asset of the bankrupt
licensee that the FCC could not just take away by itself without the disposition
of the Bankruptcy Court,” he said.
For now, it appears that the FCC is trying to avoid legal action. Thursday
morning, ahead of Chariman Pai’s remarks, Commissioner Carr tweeted,
“Never assume your toddler wants their wa�e cut the same way today as
yesterday. A lot can change in 24 hours.”
2/7/2020 Will FCC Chairman's $9.7B C-Band Offer Keep 5G’s Future out of Court? - Via Satellite -
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The Consequences of WRC-19: Initial Observations
2/7/2020 Will FCC Chairman's $9.7B C-Band Offer Keep 5G’s Future out of Court? - Via Satellite -
https://www.satellitetoday.com/government-military/2020/02/06/fcc-chairman-pai-offers-satellite-operators-9-7-billion-to-clear-c-band/ 5/8
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The WRC 2019 conference preparatory meeting. Photo: ITU
The 2019 World Radiocommunication Conference (WRC-19), a “death-by-a-
thousand-cuts” experience for the satellite industry held every four years by
the International Telecommunication Union (ITU), has just wrapped up its
latest get-together in Sharm el Sheikh, Egypt. The event, attended by 3,400
delegates from around the world, produced less-than-optimal results for
satellite operators.
Let’s start with the good news about C-band spectrum. Delegates at WRC-19
established an allocation of Ultra High Frequency (UHF) spectrum to mobile,
while protecting the high range of C-band spectrum for broadcasters. This
frequency range is used for the satellite distribution of broadcast channels to
Europe, the Americas, Asia, and Africa.
UHF spectrum is also used for Digital Terrestrial Television (DTT) broadcasts,
and is also considered ideal for 5G broadcast systems. Broadcasters were
able to stop the bleeding of UHF spectrum to mobile operators, and secure an
agreement for a neutral review of UHF spectrum at the next WRC conference
in 2023. Whew!
“The hard-won agreements at WRC-19 will favorably impact the lives of
billions of people around the world, creating a digital landscape for
sustainable growth and development,” ITU Director Mario Maniewicz said
during proceedings. “The achievements of WRC-19 in enabling new
communication technologies and the protection of existing services will be
re�ected in the continuous growth of the trillion dollar telecommunication
and ICT industry.”
By Je�rey Hill | December 5, 2019
Government Spectrum
2/7/2020 Will FCC Chairman's $9.7B C-Band Offer Keep 5G’s Future out of Court? - Via Satellite -
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Now, the bad news. Before WRC-19, the FCC and its chairman Ajit Pai, had
been signaling that it was open to a C-band spectrum sharing proposal put
forth by the C-Band Alliance (CBA), an organization of major international
satellite operators (Intelsat, SES, and Telesat). The Alliance had been working
to negotiate a fair exchange of C-band supply with 5G-hungry mobile
operators, proposing control of a privately held auction that would bring in
revenue for the operators.
After all, the operators have held licenses to this C-band spectrum for
decades. They were granted these licenses by the U.S. government in
exchange for promises to build satellites and a satellite ground network
system. Satellite operators lived up to their end of the bargain and are now
looking to be compensated.
Leading up to WRC-19, after complaints by Republican members of Congress,
the FCC’s position on the auction began to change. The FCC now proposes a
public auction, the proceeds from which could be subject to a hefty federal
tax.
“The FCC Chairman’s indication that he intends to pursue a public auction of
C-band spectrum is a signi�cant departure from the CBA’s market-based
proposal,” the Alliance said in a statement. “The announcement does not
address the critical involvement of the incumbent satellite operators in
executing the complex task of re-con�guring and transitioning their networks.
Nor does the announcement address the fundamental modi�cation of the
rights a�orded by the existing FCC licenses held by the CBA members which
would be required under a public auction approach.”
The CBA also threatened to cease its “full cooperation” with mobile operators,
and suggested a lengthy legal battle which could delay the rollout of 5G
services. “We will continue to work cooperatively with the FCC to develop an
e�ective alternative plan and achieve the best outcome for the American
public while protecting the interests of our users and the rights of our
companies,” the Alliance said.
Sources tell Via Satellite that they expect FCC Chairman Pai to clarify the
Commission’s position on the C-band auction during his planned remarks at
the 33rd Annual FCBA Chairman’s Dinner on Tuesday, Dec. 10.
Separately, there was a very surprising development that emerged from WRC-
19 regarding Ku-band. The conference announced it would begin researching
the potential use of certain bandwidths for �xed wireless broadband
“International Mobile Telecommunication” technologies. Ku-band, speci�cally
the bandwidth between 10.7 GHz and 11.7 GHz, was placed on the list of
spectrum to be studied. This is the bandwidth that is used for Direct-to-Home
(DTH) reception around the world.
2/7/2020 Will FCC Chairman's $9.7B C-Band Offer Keep 5G’s Future out of Court? - Via Satellite -
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While the decision states that Ku-band and these other bandwidths would not
be up for o�cial discussion until at least 2027, it provides satellite operators
with yet another call to action to protect future bandwidth supply.
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