Democrats, Some in GOP Favor Public C-Band Auction; Kennedy Meeting Trump on Concerns

Senate Appropriations Financial Services Subcommittee Chairman John Kennedy, R-La., is escalating his bid to curtail the FCC from allowing a private C-band auction, telling reporters he will meet with President Donald Trump and FCC auction staff in the coming days. Kennedy spoke about his concerns on the Senate floor. “I want us to do a public auction” and even CBA's revised proposal released Monday evening is akin to “a bunch of hogs putting all four feet in the trough,” Kennedy told reporters. “I just can't imagine that the FCC would agree to it.” Kennedy has been working to retain Senate Appropriations Committee-backed pro-public auction language (see 1909190079) in the chamber's version of the FY 2020 FCC-FTC budget bill (S-2524) despite opposition from Senate Commerce Committee GOP leaders.

Kennedy is waiting until after his meeting with FCC staff to decide whether he will hold a Senate Appropriations Financial Services C-band-centric meeting, following a panel earlier this month in which he grilled Pai (see 1910170038). Kennedy is aiming to meet with Trump either this week or “early next" week. “I've already talked to [Trump] about it briefly, but we didn't have time to go into detail," Kennedy said. He wants to learn more about the FCC's “auction process” but again promised that if the commission decides to adopt a private sale plan, “I am going to raise more hell than they can possibly imagine.”

Three of five witnesses at House Communications favored legislation like the Doyle-led Clearing Broad Airwaves for New Deployment (C-Band) Act, as expected. HR-4855 would require a public FCC auction of 200-300 MHz of “contiguous” spectrum in the swath by Sept. 30, 2022 (see 1910240046). Some subcommittee Republicans appeared to show interest in finding a compromise involving some hybrid public sale or allowing a private sale with requiring a significant portion of the proceeds go to the Treasury and bidding transparency.

There appears to be “strong bipartisan support for moving towards a public auction” of C-band spectrum and “there seemed to be virtually no support that I could determine for the [CBA] proposal,” Doyle told reporters. “We're going to continue to talk with my colleagues on both sides of the aisle, try to collect some more co-sponsors” and decide how to advance legislation. Doyle filed HR-4855 with two House GOP co-sponsors: Bill Johnson of Ohio and Greg Gianforte of Montana. Communications Vice Chair Doris Matsui, D-Calif., is also an original co-sponsor.

Doyle is unconvinced by CBA's revised plan. He noted during the hearing he finds it “deeply disturbing” that it would direct most of an auction's proceeds away from federal coffers despite those frequencies being a “precious national resource.” A private sale is unlikely to pass legal muster and doesn't “give the taxpayers the revenue that they're due,” Doyle told reporters. “This is a once and maybe the only chance we're going to have” to find a clear “pay-for for things that we have been trying to do for years but have never been able to figure out where the money's going to come from” like rural broadband deployments and next-generation 911.

Bipartisan View

House Communications members from both parties echoed Doyle during the hearing.

Johnson has “grown tired and weary” of years of debating how to increase rural broadband and believes “it's time for some action,” including via HR-4855. Rep. Jerry McNerney, D-Calif., said the FCC should use its “time-tested” method of public auctions for the C-band spectrum because the “untested nature” of the CBA proposal poses significant risks. The “significant” risk of litigation challenging a private auction could itself delay the process of repurposing, which would negate CBA's argument it can make the frequencies available for commercial use faster than the FCC, McNerney said.

Any FCC decision to allow a private auction would be an “unprecedented departure from the way Congress has instructed the [commission] to reallocate spectrum,” said House Commerce Committee Chairman Frank Pallone, D-N.J. “Under the Communications Act, we required the FCC to run auctions that provide revenues to the Treasury, which is critical to ensuring the American people benefit.”

House Commerce ranking member Greg Walden, R-Ore., and Communications ranking member Bob Latta, R-Ohio, didn't outright endorse or criticize a plan. Latta noted the “impending need to clear more spectrum now” and said “our main objectives no matter the approach [to a C-band auction] should be to get the spectrum to market quickly, fairly and transparently.” There are “very few legislative days left” in 2019, which means “time is running out to legislate the type of detail that was necessary to unlock the spectrum” identified in the 2012 Spectrum Act, Latta said. “However, there is clearly a role for Congress to play in ensuring the public interest is served through effective spectrum policy and its related revenues.”

“We all agree that we must make this critical mid-band spectrum available” and “do so quickly,” Walden said. “If we are questioning how the [FCC] may act, we have an obligation to clear that up, rather than direct fire at [Pai], so the [commission] has clear direction from us on how to accomplish our shared goals.” If “there is a concern over the time frame it would take to complete a public auction due to outdated software that can’t run multiple or complex auctions, we should take up reauthorizations for the FCC and NTIA so they have state-of-the-art tools for their respective spectrum management,” Walden said.

Hybrid Plan

Rep. Adam Kinzinger, Ill., and some other Republicans probed potential merits of a modified or hybrid auction, such as the one ABS CEO James Frownfelter proposed.

Doyle later told reporters he didn't believe those queries signaled significant GOP interest in such an approach and doesn't “think it is a format that could work.” It's “really important for us” to explore different options for selling the spectrum, Kinzinger said. Rep. Bill Flores, R-Texas, believes any plan needs “sufficient commitments” to allocate part of the proceeds to Treasury. Rep. Tim Walberg, R-Mich., asked whether Congress could set rules for a private auction.

Reps. Tom O'Halleran of Arizona and Peter Welch of Vermont, led a letter to Pai with six other House Communications Democrats ahead of the hearing noting their “strong preference for a public auction.” The FCC “must fulfill its mandate to ensure that all aspects of the reallocation and transfer of spectrum are done in the public interest,” the Democrats wrote Pai. “Private sale will transfer revenue out of the hands of the American taxpayer, and into the pockets of foreign satellite companies.” Commerce Vice Chair Yvette Clarke of New York, McNerney, G.K. Butterfield of North Carolina, Tony Cardenas of California, Anna Eshoo of California and David Loebsack of Iowa also signed.

American Consumer Institute Center for Citizen Research President Steve Pociask and others backed CBA, in a letter to Walden and Latta. “The C-band is the most readily available mid-band spectrum,” the signers said. “Private auctions will put that spectrum into the hands of U.S. wireless providers much more quickly.” Also signing were Heritage Action for America Executive Director Tim Chapman, Lincoln Network Head-Policy Zach Graves, American Enterprise Institute scholars Mark Jamison and Roslyn Layton, Competitive Enterprise Institute Center for Technology and Innovation Associate Director Jessica Melugin and R Street Institute Tech Policy Manager Tom Struble.

FCC Lobbying

Meetings and filings continue at the FCC.

CBA, Verizon, AT&T and other carriers agreed on the principles in the CBA plan. “These principles should help guide an auction, regardless of the ultimate outcome of this proceeding, as the Commission moves to repurpose this critical piece of mid-band spectrum as quickly as possible,” they said Tuesday in docket 18-122. “While we may not agree on all facets of how this proceeding should be resolved, there is strong consensus that all potential, qualified bidders should be welcome to participate and have clarity on the rules and procedures that will govern the sales and licensing process. Openness and transparency are critical to achieving a successful transition for all interested parties.” Also signing were U.S. Cellular, Bluegrass Cellular and Pine Belt Wireless.

“The auction design outlined in the principles agreed to by the CBA and the wireless operators addresses the shared goals of fairness and transparency and assures that the auction is open to all qualified bidders, consistent with FCC practice,” CBA announced. “The auction principles suggest use of a multi-round ascending clock auction format that is substantively similar to other recent FCC auctions.” The companies are on board for auctioning at least 280 MHz in 20 MHz chunks in partial economic areas.

T-Mobile Chief Technology Officer Neville Ray and Senior Vice President-Government Affairs Kathleen Ham met Commissioner Brendan Carr on their push to maximize the amount of C-band spectrum offered for 5G. “The spectrum should be made available through a public auction and not in a private auction,” said a filing posted Monday: There's “strong support" for "transitioning much of the current C-band operations to fiber, allowing the Commission to maximize the amount of spectrum designated for mobile broadband.”

Intelsat

CBA is “acutely focused” on Pai’s goals for the band, Intelsat CEO Stephen Spengler said on a call Tuesday with analysts. Those goals are clearing a “significant amount of spectrum,” while protecting incumbents and doing so quickly, and returning money to the U.S. Treasury, the executive said.

“Yesterday's filing announcing our ability to clear 300 MHz of spectrum, inclusive of a 20-MHz guard band, demonstrates our significant progress,” Spengler said. “We collaborated with our C-band customers to design updated compression-centric television distribution networks. This allows us to clear additional spectrum while ensuring the quality and continuity of critical television distribution requirements of our customers.” Intelsat's “confident that our proposal generates the greatest value for the U.S. government in terms of both public interest and economic benefit and is the right path for enabling" U.S. 5G leadership, he said.

Spengler said C-band end users have become more receptive to high efficiency video coding (HEVC) compression. “By working with each one of these major customers on their longer-term plans, we were able to conclude that it was possible to clear more spectrum,” he said. This switch is "a major change to these customers' networks or requires an equipment change at both the uplinks as well as the downlinks in the change of their operations." Implementing the plan will take eight satellites, Spengler said: “It may take more as we finalize our plans ... perhaps one more.”

Representatives from 22 aviation and aerospace organizations met with Wireless Bureau and Office of Engineering and Technology staff on their concerns about interference to radio altimeters operating at 4.2-4.4 GHz from 5G in the C band. It's “the only piece of equipment that can provide the necessary accuracy and reliability for altitude readings and terrain avoidance to the pilot for operations at low altitudes above terrain, including landings,” the groups said. They include the Aerospace Industries Association, Air Line Pilots Association, Airlines for America, Boeing, Delta, Southwest and United Parcel Service.