The C-Band Alliance has submitted a what it calls a “treasury contribution proposal” to the FCC that would call for the alliance to conduct an auction of spectrum in the C-band and give a portion of the proceeds to the U.S. Treasury. The alliance, which is comprised of satellite operators that hold licenses for the C-band, also said it has “initiated discussions with members of Congress” about a proposal for a 5G rural broadband open access network, “which may include a combination of spectrum and capital contributions.”
The alliance did not immediately respond to a request from Telecompetitor for more information about the proposals, but a cover letter sent with the auction proposal to the FCC offers a bit more information. According to the letter, the C-Band Alliance would give the U.S. Treasury 30% of net proceeds from the proposed auction up to $0.35 MHz-POP, 50% of incremental net proceeds up to $0.70/MHz-POP and 75% of incremental net proceeds thereafter.
The C-band includes spectrum in the 3700-4200 MHz band and is considered mid-band spectrum. Some stakeholders have said there is a need for more mid-band spectrum, which they believe offers the optimum mixture of coverage and bandwidth for 5G. The satellite operators traditionally used the spectrum primarily for distribution of video content to video service providers but with advances in technology, they no longer need the full band and have proposed to auction 300 MHz of the band.
The alliance wants to conduct the auction because members say the auction would occur more quickly than if the FCC were to conduct it. Opponents say the FCC should conduct the auction and want to see as much as 370 MHz of the band auctioned.
Rural Network Idea
The C-Band Alliance didn’t offer information or respond to Telecompetitor’s inquiry about the rural network idea. But based on the information provided in a press release, the idea would appear to be somewhat similar to what occurred when a portion of the proceeds from the 600 MHz auction in 2017 were allocated to the construction of the FirstNet mobile broadband public safety network. That plan required an act of Congress, as would a plan to use any proceeds from a C-band auction for a rural 5G network.
The money raised in the 600 MHz auction for FirstNet, along with 20 MHz of spectrum for the network, ultimately went to AT&T, which won a contract to construct the network. Importantly, the carrier also agreed to invest a considerably larger sum of its own in the network.
The C-Band Alliance didn’t say how much spectrum it proposes to make available for the proposed open access 5G rural broadband network, but it would seem that it would be a portion of the 300 MHz that the alliance proposes to free up, but only in certain areas. Potentially auction participants could bid on the full 300 MHz of spectrum in metro areas, with a portion being reserved for the open access network only in rural areas.
Considering that it’s harder to build a business case for network deployments in rural areas, the idea of multiple carriers sharing a rural broadband network might seem appealing, on the surface at least. The nation’s major carriers have not embraced the open access concept to date, however. And that raises the question of whether anyone would bid to build and operate an open access rural broadband network, considering that potentially only the major carriers would have the resources to take on such a major project. I would expect the major carriers to be particularly unlikely to bid to build the open access network if they would have to cover the majority of network construction costs as AT&T is doing with FirstNet.