Planned spectrum auction sees FCC offer $9.7 bn for satellite companies to vacate C-band

At the end of last month, the Federal Communications Commission (FCC) voted to auction a large portion of valuable C-band spectrum in December this month. This mid-band spectrum will be crucial to the widescale rollout of US 5G, but is currently used by various satellite companies, such as Intelsat, SES SA, and Telesat.

 

The FCC’s new plan is to encourage satellite operators to shift away from these bands, offering them billions in incentives to do so by 2023, as opposed to the previous date of 2025. These heady incentives, up to $9.7 billion, will be incorporated into the price of spectrum at auction, thus paid for by the bidding operators. 

 

280 MHz of the 3.7–3.98 MHz band will be on offer at the auction, which is scheduled for December this year. Satellite operators will be left with the upper 200 MHz of the 4.0–4.2 MHz band.

 

There has been much debate surrounding this plan, with detractors suggesting that it may not be legal and is not transparent. Small Satellite Operators are set to be hit the hardest, potentially losing around 60% of their C-band holdings.

 

However, FCC chairman Ajit Pai defended the decision, saying: “Without a strong incentive for satellite operators to cooperate, it will take years longer to clear this spectrum, dramatically reducing the value of this spectrum opportunity to wireless bidders.” 

 

The size of the incentives have also been criticised as a wasteful use of taxpayer funds.

 

“Shelling out billions for airwaves we already own is no way to handle taxpayer money — especially when taxpayers want those dollars to support rural broadband,” argued Senator John Kennedy.

 

On the other hand, major satellite operators praised the plan, with SES calling it a “win–win–win” for 5G, taxpayers, and US households that rely on C-band.

 

The December auction is set to raise $30–$77 billion in proceeds.