Analysts say the major wireless companies would pay $30 billion to $50 billion for the rights to use a significant part of the C-band for 5G. Wireless companies say the mid-band spectrum from 3.7 GHz to 4.2 GHz would be perfect for next-gen wireless services. The upcoming decisions about the band will affect the wireless, satellite, broadcast and cable industries.
The C-band is already in use by satellite companies that use the band to deliver broadcast and cable programming. The FCC, plus incumbent users, are trying to figure out how much of the band incumbents could retain and how much of the rest could be auctioned for wireless use.
There’s a lot riding on the outcome, New Street Research analyst and former FCC official Blair Levin tells Fortune. “How soon will 5G roll-out, how competitive that market will be, what will the cost and quality of 5G be,” Levin says. And one more consideration, he adds: “Tens of billions of dollars.”
ACA Connects, a collection of cable and internet providers that has its own C-band plan, has estimated the value of the full 500 megahertz at up to $60 billion.
Some of the satellite companies that currently hold the C-band licenses have proposed a compromise. The C-Band Alliance offered to sell about 40 percent of the band to the wireless industry through a private sale. They’d keep some of the proceeds to pay for new satellites and filters to enable broadcasters’ satellite earth stations to still operate in the remaining spectrum. They say they need to do that to prevent earth stations from receiving harmful interference from the 5G operations next to them on the band, Inside Towers reported. The private sale could make some airwaves available within 18 months and the rest within three years, they say.
“A private auction from the consortium of satellite operators could occur in 2020 while a public auction may result in a longer timeline to deployment,” stated UBS analyst Navin Killa in a September 27 investor report.
But wireless carriers such as Verizon and T-Mobile want more of the band than proposed by the CBA; they also want an FCC-run auction to ensure what they say would be a fair price. In a government-run auction, the carriers bid against each other, sometimes with FCC-set minimum bids. In a private auction, however, they could face higher demands from the current license holders, reports Fortune.
That’s what happened in 2017 when the FCC undertook the broadcast incentive auction in an effort to reallocate 600 MHz spectrum from TV broadcasters to the wireless industry. Each station set a minimum price, and couldn’t be forced to sell for less.
More than 1,000 stations offered to sell their licenses for a total of $84 billion. In the end, only 175 licenses sold for $20 billion, with half of the money going to the stations and half to the government.
At the FCC, Pai is holding his cards close to the vest. “I’m optimistic that later this fall we’ll be voting on an order to make a significant amount of spectrum in the C-band available for 5G,” he said at the commission’s meeting on September 26, without specifying his position on the issues. He stuck to that timeline during a Senate Appropriations hearing Thursday, noting there are still “two months” left in the fall season.
Some of Pai’s colleagues have said they’re leaning towards the satellite industry’s plan because it would get the spectrum in the hands of wireless carriers for 5G more quickly. “In the grand scheme of things, if it is a contest between speed and government trying to extract a significant piece of the transaction through a lengthy process, I’ll take the speedy resolution,” FCC Commissioner Michael O’Rielly in a speech last month at a spectrum conference, Inside Towers reported.
The Commission released the agenda for this Friday’s meeting, and it didn’t include the C-band issue. That leaves only two more meetings, November 19, or December 12, to meet Pai’s timeline.
October 21, 2019