TR Daily Court Hears Challenges to FCC’s C-Band Order
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Wednesday, October 28, 2020

Court Hears Challenges to FCC’s C-Band Order

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit today mulled challenges to the FCC’s C-band order, including arguments that the Commission exceeded its authority under section 316 of the Communications Act of 1934, as amended, by fundamentally changing the licenses of small satellite licensees and a transmission company.

The order, which was adopted in February (TR Daily, Feb. 28), is being challenged in PSSI Global Services L.L.C v. FCC (consolidated cases beginning at 20-1142) by small satellite licensees ABS Global Ltd., Empresa Argentina de Soluciones Satelitales S.A., Hispamar Satélites S.A., and Hispasat S.A., as well as by PSSI, a satellite transmission company.

The order established a framework to repurpose 300 megahertz of the 3.7-.4.2 gigahertz band for terrestrial 5G services by relocating incumbent operations to the 4.0-4.2 GHz band. Incumbent satellite operators are eligible to receive $9.7 billion in accelerated relocation payments from auction winners to clear the spectrum two years early. They also will receive regular relocation payments, which the agency estimates will total between $3.3 billion and $5.2 billion. An auction of the spectrum is scheduled to start Dec. 8.

Circuit Judges Robert L. Wilkins, Gregory G. Katsas, and Justin R. Walker heard this morning’s oral argument.

Chris Wright, an attorney at Harris, Wiltshire & Grannis LLP who represents the SSOs, told the court that the FCC impermissibly fundamentally changed his clients’ licenses rather than just modifying them by not providing replacement spectrum or compensation in funding, as he said the FCC has done in the past. He said the SSOs had "no notice that we would lose spectrum without being made whole."

"Taking away 60% of the licenses is more than a modification," said Mr. Wright, who also argued that the use of an "existing customer standard was unprecedented here." He also cited a case in saying that "the Commission is not due any deference when applying an unprecedented rule."

Mr. Wright also said that "our main concern is that the Commission has given a war chest to our … competitors." The $9.7 billion in accelerated relocation payments is "pure profit," Mr. Wright said.

Stephen Diaz Gavin, an attorney at Rimon P.C. who represents PSSI, said that the FCC’s action resulted in a "fundamental change" to his client’s licenses. "PSSI cannot provide the same level of service," he said, citing the potential for interference and difficulty in coordinating frequencies.

He also complained that the FCC’s action also violated the ORBIT Act, which prohibits the auction of spectrum for international or global satellite communications services. He said the FCC’s argument that the ORBIT Act is not relevant because it cites a Northpoint case that involved domestic satellite services.

One judge noted that the court must give deference to the FCC on issues involving competing substantial evidence of "a factual dispute."

FCC Deputy General Counsel Ashley Stocks Boizelle defended the FCC’s order, saying it used its "broad spectrum management" authority to free up spectrum for 5G services. The action "was in service of the public interest and warrants deference," she added.

She said that the FCC used "a comparable service standard" that is consistent with prior court case and the Act and considered existing customers and likely future business when deciding that the remaining 200 MHz would be sufficient to accommodate the operations of the parties.

She also said that the SSOs expressed support for repurposing all but 200 MHz of the C-band spectrum, while PSSI also suggested it would be alright with that action.

Judge Walker said he didn’t think that the SSOs have "standing to challenge the payments from one company to another company" and asked Ms. Boizelle for the FCC’s view on their standing on other issues. She said the agency was not arguing that the SSOs lack standing.

Peter Karanjia, an attorney at DLA Piper US LLP who represents wireless industry intervenors CTIA, Verizon Communications, Inc., and AT&T, Inc., spoke in support of the FCC’s order. He noted that his clients are also licensees and while they believe the FCC acted correctly in this case, they don’t want the FCC to have "a blank check" to make license modifications under section 316.

Paul Anthony Werner III, an attorney at Sheppard Mullin Richter & Hampton LLP who represents SES Americom, Inc., said his client believes that the SSOs lack standing to challenge the payments from wireless carriers because they are not "current and direct competitors."

The FCC concluded that "the SSOs are nothing more than paper networks," he added.

He also said he agreed that a petition for review filed by SES should be dismissed. SES, which has begun the C-band transition, has said it filed its petition only as a precaution. —Paul Kirby, [email protected]

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