Four satellite companies known as the C-Band Alliance have enlisted a spectrum auction expert to develop a plan for an auction of spectrum in the coveted spectrum band known as the C-band. The alliance – comprised of Intelsat, SES, Eutelsat and Telesat — has outlined that plan to the FCC and a white paper with more details about the C-Band Alliance auction proposal is expected to be released later this week.
The four satellite companies comprising the C-Band Alliance currently hold licenses for that spectrum, which is used primarily to deliver video programming. As technology has changed, that video delivery method has become less critical and the alliance now proposes to relinquish 200 MHz of the band through an auction process that the alliance would run, with proceeds shared between alliance members and the federal government. The entire band is comprised of 500 MHz of spectrum in total and is considered “mid-band” spectrum, a band that wireless network operators are expected to use to support 5G deployments.
The idea of current license holders sharing auction proceeds with the government is not a new one. That approach was used in a previous auction of TV broadcast spectrum. What would be unprecedented is having a private entity, rather than the FCC, in charge of the auction. According to the C-Band Alliance, the advantage of this approach is that spectrum could be made available for 5G deployments more quickly, helping the U.S. to remain on the vanguard of 5G technology.
The C-Band Alliance previously asked the FCC for permission to sell a portion of members’ spectrum holdings but didn’t provide details about how that would occur. The alliance’s initial request drew considerable criticism from T-Mobile, from rural industry groups and from at least one consumer group. Opponents argue that the FCC should be in charge of any auction of C-band spectrum.
According to a C-Band Alliance press release, the proposed auction would have “appropriate FCC oversight at critical junctures in the process,” but that assurance would appear insufficient to appease opponents. For example, Citizens Against Government Waste has estimated that a C-band auction could generate $11 billion to $60 billion for taxpayers and the group doesn’t want to see much, if any, of that to go to the satellite operators.
C-Band Alliance Auction
The C-Band Alliance auction proposal was crafted by Professor Paul Milgrom and his firm Auctionomics. Key points about the proposed auction, according to the alliance, include:
- Auction would be a sealed-bid, second-price auction process
- Winners would be announced within two to four weeks
- Bidders would have flexibility in the packages they want to bid on, which according to the alliance would “allow successful participation by entities of every size”
- Winners would be able to begin the 5G build-out process within 18 to 36 months of a final FCC order
- Incumbent C-Band services would be concentrated in the 300 MHz of the spectrum band that would not be subject to auction
Telecompetitor looks forward to reviewing the white paper that the C-Band pledged to release later this week, as there are numerous questions that the C-Band Alliance press release about the auction proposal doesn’t address such as what happens to those C-band spectrum holders that are not in the alliance and whether there is a spectrum sharing component to the proposal.
Spectrum sharing technology has advanced considerably in recent years, enabling different types of users to share spectrum, with one group having priority but other entities allowed to use the spectrum in areas where it is not in use by priority users.