The FCC under Chairman Pai has been focused intensely on establishing and maintaining U.S. leadership in the deployment of 5G networks.   Chairman Pai’s 5G FAST Plan, which outlined a comprehensive strategy on 5G, included as a cornerstone the reallocation of essential 5G spectrum, including low-, mid- and high-band allocations.

On high-band opportunities, the FCC has moved aggressively to repurpose and auction millimeter wave bands, with an important mmWave auction set to commence this December. On low-band, AT&T and other carriers have signaled plans to repurpose and use some of their licensed low-band frequencies to support 5G. New mid-band allocations, however, remain a critical target.

Mid-band spectrum is important for 5G because it provides a mix of strong signal propagation with the opportunity for the higher capacity and speeds that large mid-band blocks can deliver. Enter the C-Band (3.7-4.2 GHz), currently used primarily for the delivery of video programming to MVPDs (multichannel video programming distributors). This band is broadly seen as the best near-term source for a wide swath of mid-band spectrum that could be repurposed for 5G, promising significant coverage and capacity support.

Indeed, to their credit, the satellite companies that currently operate in the C-Band were the first to recognize the opportunity and formed a consortium called the C-Band Alliance (CBA) early in 2018 to pursue it. The CBA’s proposals have evolved over time, but current trajectory suggests that an auction and phased repacking of the band could clear around 300 MHz of new spectrum for 5G.

Through our Warner Media affiliates, AT&T is a significant user of C-Band services and believes that retaining part of the C-Band for video delivery is essential. In that regard, the FCC appears to be nearing decision on an approach that will strike a careful balance between clearing essential mid-band spectrum while also maintaining needed C-Band satellite connectivity for existing users. However, a number of important issues remain to be resolved.

First, there is the ongoing debate on who should run the auction. I think that asks the wrong question. The focus should instead be on getting the auction format, platform and rules correct.

As with any auction, adoption of a fair and transparent auction framework is essential. We support a multi-round, clock auction format. It is the approach that was used to reallocate the 600 MHz band and one well known to the FCC and industry bidders. CBA previously proposed an auction structure that was unproven, complex and incomplete. We opposed it — we should not be experimenting with unproven or truncated auction formats with an auction of this importance. We also support proceeding with a single auction with two clearing phases as opposed to two separate auctions.

Once the format is established, the Commission will also need to adopt rules for engaging in the auction, which allow for fair participation by all qualified bidders, appropriate price discovery and transparent bidding. These rules, as well as service rules including interference thresholds, should be established by the FCC well in advance of the auction so bidders have clarity and confidence around the spectrum being sold.

In addition to auction and service rules, the FCC will need to adopt an appropriate and well-defined transition process that allows sufficient time for the needed repacking without disrupting important video delivery. The record suggests that up to 100 MHz can be cleared relatively quickly (within 18 months), largely through the deployment of new earth station receiver filters.

In contrast, clearing 300 MHz will likely require the elimination of standard definition video and the universal adoption of more efficient encoding, compression and modulation technologies. This process will in turn require new hardware installation and re-configuration of thousands of affiliate reception sites – installations that may vary in significant detail from provider to provider and even within the various head-ends of a single provider. We have separately documented these issues and encourage the FCC to develop a more detailed record.

Detailed transition planning should be completed prior to the auction, both to provide certainty to bidders on when the new mid-band spectrum will be available, and to ensure that the aggregate cost of reimbursing C-Band satellite service providers and users is known and can be accommodated in reserve pricing.

As long as these predicates are met, we would support a private auction with robust FCC oversight to ensure that the auction rules as adopted are properly enforced.

There are also outstanding questions on how the proceeds will be split and whether the U.S. Treasury will benefit from the auction. There is no doubt that this auction, if designed effectively, could garner billions in proceeds. While we’ll let others opine on how the U.S. purse gets its fair share, we support ensuring that all reasonable programmer relocation costs get reimbursed, including the cost of adopting new compression technologies that will make the use of the remaining part of the satellite C-Band more efficient.

The C-Band is an enormous opportunity for U.S. 5G deployment. While it’s time to move forward, it’s paramount that the FCC move the auction and related planning forward on solid footing. We look forward to reviewing the draft Order that we expect Chairman Pai to circulate in the near term.

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