With a 3-2 party-line vote, the Federal Communications Commission on Friday approved a plan to begin repurposing the airwaves for 5G mobile broadband services. The move means the satellite spectrum used by radio and television broadcasters will be repacked, new satellites will be launched, and filters will need to be placed on earth stations – how the agency refers to the satellite receivers that now sit at practically every station in America.
The C-band is a 500-megahertz segment of spectrum from 3.7 to 4.2 GHz. The FCC voted to make the lower 280 megahertz of the C-band available for other uses, including 5G. That would mean existing users, such as radio and TV, would be repacked into the upper 200 megahertz of the band. The plan would also set aside 20 megahertz above that as a “guard band” to address concerns raised about potential interference to broadcasters by mobile users.
To entice the satellite companies to give up spectrum and make the investment in repurposing what they currently control, the FCC approved a plan that pays them as much as $14.9 billion. That includes $9.7 billion in incentives to hit certain deadlines plus another $3.3 billion to $5.2 billion for repack-related expenses, such as launching new satellites.
Broadcasters would be in line for reimbursements too, according to senior FCC officials. Similar to how the agency has reimbursed radio during the TV repack, operators of incumbent earth stations that are registered with the FCC could be in line to have costs covered for such things as pass band filters and other new equipment, labor costs for repointing antennas or installing new antennas to ensure they can maintain service. Officials also expect to offer the option to allow stations to accept lump sum payments rather than submitting detailed accounting reports seeking reimbursement. The payouts would be based on the average estimated costs for the transition on an industry-wide basis.
The proposal was approved without the support of the two Democrats that serve on the Commission. Jessica Rosenworcel and Geoffrey Starks questioned whether the FCC had the legal authority to award incentive payments to the satellite companies. It has also drawn criticism from some Republicans in Congress. Senator John Kennedy (R-LA) said the move amounted to giving taxpayer dollars to foreign firms for the airwaves owned by the American people. “These foreign satellite firms want all four feet and their snout in the taxpayer trough. The FCC shouldn’t be helping them,” he said.
But Pai said he believed the FCC’s plan is taking a “conservative approach” which will result in $30 to $77 billion from the spectrum auction going to the U.S. Treasury. “Without a strong incentive for satellite operators to cooperate, it will take years longer to clear the spectrum,” he said. Pai compared it to the costs a homeowner faces when deciding whether to paint their home before putting it up for sale. “There are costs, but the costs are more than offset by the higher sale price,” he said.
Because broadcast and cable operators are currently the biggest users of the C-band, FCC staffers said Friday that it took a lot of negotiations to get industry on board. “It was not easy, and became intense at moments, and took a lot of effort, which proved fruitful, said Erik Beith, Attorney Advisor for the Auctions Division in the Office of Economics and Analytics.
The National Association of Broadcasters would have preferred the FCC didn’t touch the C-band but ultimately it endorsed the compromise. In November, the NAB and several major broadcast companies told the FCC they thought the repack plan was “effective and workable for satellite operators and their customers” such as broadcasters. The NAB is still studying the final outcome and has not yet said whether it supports where the FCC ultimately landed.
NCTA – The Internet & Television Association called the vote “an important milestone” to help redirect spectrum resources to how Americans are consuming media. They said it balanced the need for more wireless broadband spectrum with a commitment to protect programming delivery systems that today rely on the C-band to transmit cable and broadcast content.
If all goes as quickly as FCC Chair Ajit Pai hopes, the C-band spectrum could be redeployed as soon as September 2023. Bidding on the spectrum is currently set to begin Dec. 8.
Commissioner Michael O’Rielly said he appreciated the speed at which the FCC is moving to help enable 5G services to begin rolling out, especially to rural areas. “The wireless industry already needed this spectrum yesterday,” he said. O’Rielly also acknowledged the “tremendous effort” it took to reach a compromise that didn’t whack incumbent users like radio and TV.
“If things go as planned, all incumbents should be fully accommodated, with their concerns addressed,” said O’Rielly. “I find it highly unlikely that the Commission would turn off popular broadcast and cable programming should the restructuring of this band not be complete by 2025.”