TR Daily House Lawmakers Rip CBA’s Private Auction Proposal
Tuesday, October 29, 2019

House Lawmakers Rip CBA’s Private Auction Proposal

Numerous members of the House communications and technology subcommittee today ripped the C-Band Alliance’s private auction proposal for repurposing a portion of the 3.7-4.2 gigahertz band for 5G terrestrial services, saying that it would fail to ensure the transparency, fairness, and openness of an FCC-run sale and would short-change the public by as much as $60 billion by directing auction revenues to CBA members.

Lawmakers and witnesses who oppose the CBA plan also argued that it would take longer to deploy spectrum under the proposal due to litigation and they suggested the FCC lacks the authority to approve a private auction. They also criticized the CBA for suggesting it would make a voluntary contribution to the U.S. Treasury without detailing the amount of the contribution.

“There’s a lot about this proposal that is deeply concerning,” Rep. Mike Doyle (D., Pa.), the subcommittee’s chairman, said in his opening statement at a hearing today.

He noted that he and other lawmakers from both parties last week introduced the Clearing Broad Airwaves for New Deployment (C-BAND) Act (HR 4855), which would require the FCC to hold an auction of the C-band to license 200 to 300 megahertz of the spectrum, while protecting incumbent users of the frequencies (TR Daily, Oct. 24).

Mr. Doyle and other lawmakers said a public auction could raise funds for legislative priorities such as rural broadband deployment, rural telehealth initiatives, public safety communications, and next-generation 911 (NG-911) services.

“We are never going to get an opportunity like this again,” Rep. Doyle said. “There’s no other sources of revenue to do this.”

His comments were echoed by a number of other subcommittee members.

“This would be an unprecedented departure from the way Congress has instructed the FCC to reallocate spectrum in the past. 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 from these auctions,” said Rep. Frank Pallone Jr. (D., N.J.), chairman of the full Energy and Commerce Committee.

“And the revenues could go a long way in helping us invest in high-speed broadband in unserved and underserved areas and Next Generation 9-1-1 service, as we do in the LIFT America Act,” Mr. Pallone added. “Some estimates indicate the C-Band auction could yield as much as $60 billion to fund those priorities. A public auction conducted by the FCC would also ensure that the process is fair, transparent, and competitive. Furthermore, the FCC has the experience and the expertise to carry out this auction—after all, it has conducted over 100 public spectrum auctions that have already earned $120 billion.”

Rep. Greg Walden (R., Ore.), ranking member of the full committee, said “the process must lead to auction revenues and spectrum allocations benefitting Americans in all parts of our country. Second, we must preserve spectrum for those that are reliant on the current C-Band services now and into the future. Third, we must take interference concerns into account when redeploying the spectrum. Fourth, we should seek to make this critical mid-band spectrum quickly available for 5G. Fifth, this process should not overlook the opportunity to also facilitate resources for connecting rural communities with broadband, and upgrading our emergency call centers to Next Generation 9-1-1 (NG911) – all without any deficit spending. Lastly, the process must be fair, open, and transparent.”

Mr. Walden added, “With that in mind, I know there are differences of opinion from various stakeholders on how the FCC may proceed, and I would expect the Commission is taking a hard look at weighing the ramifications of each option. To further facilitate that public conversation, and to ensure our discussion moves to the next level without ceding the point on an auction mechanism, I’m pleased to see a legislative proposal for today’s hearing.”

Rep. Bob Latta (R., Ohio), the ranking member of the subcommittee, said he agreed that the spectrum must be auctioned in a transparent fashion, that rural carriers must have a chance to win spectrum, and that any process must be fair and “avoid costly court challenges.” He also noted that some committee members have “other views” on the matter than those expressed by supporters of HR 4855 and emphasized that the FCC and industry should be encouraged to work together on innovative spectrum management approaches.

Lawmakers and witnesses did not discuss a CBA filing today by Verizon Communications, Inc., AT&T, Inc., and other parties setting out principles for any auction of the C-band, including that any sale must not include sealed bids or package bidding and that bid data must be released after each round consistent with recent FCC auctions (see separate story). In committing to the principles, the CBA is backing away from its earlier auction design plan, which proposed a sealed-bid, second-price, combinatorial auction that would have only two rounds (TR Daily, June 11). That plan drew considerable criticism, but participants in today’s hearing referred to it, even though CBA is now supporting a new framework.

Also, CBA yesterday amended its spectrum repurposing proposal, saying that it now plans to make 300 MHz available, including a 20-MHz guard band, up from 200 MHz, including a 20-MHz guard band (TR Daily, Oct. 28).

In his testimony, Ross Lieberman, senior vice president-government affairs for ACA, mentioned the 300 MHz total during today’s hearing, but noted that yesterday’s filing was only three pages and said that it lacked necessary information. “We really have no details whatsoever,” he said.

ACA complained in a statement yesterday that the filing came “[a]t the eleventh hour and fifty-ninth minute” of the FCC’s proceeding.

Mr. Lieberman touted the 5G Plus Plan being pushed by ACA, the Competitive Carriers Association, and Charter Communications, Inc., including the proposal to repurpose through an FCC auction 370 MHz of spectrum for 5G terrestrial services, as well as its framework to deploy or lease fiber nationwide.

Some lawmakers suggested that a private auction should at least be considered.

During the questioning period, Mr. Latta asked about FCC mechanisms to enforce private or hybrid auction frameworks.

Rep. Adam Kinzinger (R., Ill.) acknowledged that a private auction has never been conducted before, but he said that various options should be considered “as we rethink government.”

Rep. Marc A. Veasey (D., Tex.) asked if it were possible to organize an “objective private auction,” while Rep. Susan Brooks (R., Ind.) wondered if it were possible to make a private sale “much more rural friendly.”

Jeff Campbell, vice president-government affairs and technology policy for Cisco, noted that the FCC could impose certain build-out requirements to benefit rural areas.

But Rep. Bill Johnson (R., Ohio), a sponsor of HR 4855, said that spectrum licenses don’t confer a property right, and he stressed the need to use proceeds from the sale for broadband deployment, which he said has been ignored for too long.

“I’ve grown tired and weary of the talk,” the congressman said. “It’s time for some action.”

As for the argument that a private sale could be conducted more quickly than an FCC auction, Rep. Peter Welch (D., Vt.) said that a public auction could be completed “faster rather than slower” and he complained that the CBA has yet to define what a significant contribution to the U.S. Treasury would be.

“When significant is undefined, what do you think the outcome’s going to be?” he asked. “This is not La La Land here.”

Rep. Bill Flores (R., Texas) asked each of the witnesses if their organizations planned to sue if the FCC acts in a way they oppose.

Mr. Lieberman and representatives of Public Knowledge and small satellite operators said they would have to see what the FCC does before deciding. The representative of Cisco Systems, Inc., said his company would not sue, while the representative for Citizens Against Government Waste said it doesn’t file such lawsuits.

Meanwhile, Sen. John Kennedy (R., La.) reiterated in a Senate floor speech today his call for the FCC to auction the C-band spectrum. “We need a level playing field. We need competition. Competition is a moral good. Everybody needs to get an equal bite at the apple. This doesn’t need to be done in a backroom swampy deal,” he said. —Paul Kirby, [email protected]

MainStory: Congress FederalNews SpectrumAllocation FCC Satellites WirelessDeployment

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