If FCC Chairman Ajit Pai gets his way, the auction of 280 MHz of C-band spectrum for wireless use will begin December 8 of this year. In a speech before a think tank in Washington, D.C. this afternoon, Pai answered a big question that has been key to the issue – how much money would incumbent satellite companies be reimbursed for being repacked into the upper portion of the band? The C-band is a 500 megahertz swath of spectrum from 3.7 GHz to 4.2 GHz.
He told the Information Technology & Innovation Foundation the proposed figure for “accelerated relocation payments” is a total of $9.7 billion, to be paid by the winning auction bidders, the carriers that want to use the C-band spectrum for 5G. But there’s a caveat. In order to get the incentive payments, the satellite companies must clear the lower 100 MHz of the C-band in 46 of the top 50 Partial Economic Areas by September 2021 and the remaining 180 MHz of the C-band by September 2023.
Why pay out incentives at all? “Speed. This transition will be much faster if we create powerful incentives. I favor [incentives] because they’re in the public interest,” he said. “To get the job done quickly we need to align the interests of the private satellite companies and the public interest.”
Pai acknowledged the satellite companies have been asking for “a lot more money.” However, the purpose of the incentives is to expedite clearing of the spectrum, he said.
Pai made clear the incentive payments would be paid by the winning bidders, not the FCC. Pai said the number came about when the agency tried to figure out what the value of the spectrum would be to prospective bidders if they, “had to go to a free market transaction.”
The details of the proposal, which Pai circulated among his fellow Commissioners today, will be made public tomorrow. He hopes to place the plan on the monthly Commission agenda meeting for a vote on February 28.
By Leslie Stimson, Inside Towers Washington Bureau Chief