FCC Proposes Incentives for Satellite Spectrum Shift

FCC Chairman Ajit Pai has proposed $9.7 billion in “accelerated relocation payments” to expedite the clearing of C-band electromagnetic spectrum, ideal for 5G wireless networks. The payments will incentivize the current users of that spectrum, satellite TV and internet companies, to move operations to a different frequency. The money will be generated from the forthcoming C-band auction. The available spectrum will be auctioned off beginning December 8. Chairman Pai estimates the real cost of moving satellite frequencies is between $3 to $5 billion.

Satellite companies, such as Intelsat SA, are thought to support the proposal to incentivize their spectrum reconfiguration. Chairman Pai stated he supports the payments to “make available the C-band for 5G deployment as quickly as possible.” He also wants to “align the satellite companies’ private interests with the public interest.”

The proposal “would be the Commission’s most significant action yet to repurpose mid-band airwaves and would represent a critical step toward securing United States leadership in 5G. It would quickly free up a significant amount of spectrum for next-generation wireless services, and it would generate significant revenue for the U.S. Treasury.”

To reconfigure, satellite companies will launch new satellites and place filters on earth stations, Paid said. Satellite companies are looking for “fair compensation” to quickly relocate and free the spectrum. Pai said the payments “create powerful incentives for incumbent operators to expedite the transition.”

The proposal “would make the lower 280 megahertz of the C-band (3.7-3.98 GHz) available for flexible use, including 5G. The 20 megahertz above that (3.98-4 GHz) would serve as a guard band. Existing satellite operations (primarily used to carry video programming to cable TV headends) would be repacked into the upper 200 megahertz of the band (4.0-4.2 GHz).”

Satellite providers will receive the payments if they can free up the C-band’s lower portion on the short timeline, making the spectrum available for 5G. The plan “calls for clearing the lower 100 MHz of the C-band in 46 of the nation’s top 50 Partial Economic Areas by September 2021 and reclaiming the remaining spectrum by September 2023.”

Some are critical of these payments. Sen. John Kennedy (R-La.) stated, “My duty, and the FCC’s duty, is to the American taxpayers. The C-Band spectrum belongs to them, and the 5G opportunities it represents are also theirs. Unfortunately, the sum Chairman Pai suggested giving to foreign satellite companies is much too high, and it’s highly unfair to those taxpayers. We shouldn’t be in the business of spearheading Luxembourg bailouts when there are towns in Louisiana and across the country without access to broadband service.”  He has proposed a bipartisan bill he believes would help solve some of the broadband problems in the U.S.

FCC Chairman Pai stated the proposal for the auction and incentive payments “frees up a significant amount of C-band spectrum for 5G. It does so quickly. It generates revenue for the U.S. Treasury. And it protects the services that are currently delivered using this spectrum. And I would add that it is a win for innovators who want to introduce new services in the C-band. It is a win for incumbents who will be fairly compensated during this transition. And, most importantly, it is a win for the American people, who will enjoy the rollout of new 5G services.”

The FCC will vote on the Chairman’s proposal on February 28.