TR Daily Kennedy, Schatz, Cantwell Offer Compromise C-Band Legislation
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Tuesday, January 28, 2020

Kennedy, Schatz, Cantwell Offer Compromise C-Band Legislation

Sens. John Kennedy (R., La.), Brian Schatz (D., Hawaii), and Maria Cantwell (D., Wash.) today introduced compromise C-band legislation that would reserve $5 billion for the relocation expenses of incumbents but only $1 billion for incentive payments. The bill would require that $5 billion of auction proceeds go to deficit reduction with the rest going to next-generation 911 (NG-911) and broadband priorities.

Under the Spectrum Management and Reallocation for Taxpayers Act (SMART Act), the FCC would have to repurpose 300 megahertz of C-band spectrum for terrestrial 5G use, including a 20-MHz guard band.

The bill would require that $5 billion of auction proceeds be used for deficit reduction, while up to $12.5 billion would go to an NG-911 Trust Fund with remaining funds going to a Digital Divide Trust Fund, which would be used to deploy wired and wireless broadband infrastructure in unserved and underserved areas and to deploy broadband infrastructure to support priorities such as telehealth, e-government, and educational uses.

The bill would establish a C-Band Reimbursement and Implementation Fund. The FCC could use up to $5 billion from that fund to reimburse entities with licenses or market rights authorization, licensees or registrants of earth stations, and other incumbents that are relocated for their reasonable costs. The FCC could use up to $1 billion from the fund “for payments to incentivize incumbent holders of licenses or market access rights for use of the electromagnetic spectrum … to reduce their usage of that spectrum … in a more timely fashion.”

Any amounts unspent from the C-band reimbursement fund after three years would be transferred to the Digital Divide Trust Fund.

C-band users would have to receive service at least as good as what they received before the spectrum repurposing and they would have to receive continuous service during the transition. The Commission also would be required to protect aviation and other safety-of-life services from interference.

“The SMART Act would ensure that the FCC has the authority to expedite the public auction and clearing of the C-Band for 5G while protecting the millions of people currently using the C-Band,” a news release said.

“The real winners here are the American taxpayers who not only own the C-Band, but stand to reap the benefits of 5G,” said Sen. Kennedy, who is a member of the Senate Commerce, Science, and Transportation Committee. “Rather than bailing out foreign satellite companies, money from the auction of this spectrum should go to American priorities. This bill gives us the chance to pay down the national debt, improve public safety and get broadband to rural communities that are still handcuffed to dial-up internet.”

“Our bipartisan bill will raise billions so that more people can access the internet. As technology accelerates, we need to do more to close the digital divide and help ensure that everyone benefits,” said Sen. Schatz, who is ranking member of the Senate communications, technology, innovation, and the Internet subcommittee.

“We need money for rural broadband and not giveaways for foreign satellite companies. This bill is a good bipartisan step forward,” said Sen. Cantwell, who is ranking member of the Senate Commerce Committee.

The bipartisan legislation represents a compromise from earlier C-band bills introduced by the senators.

Sen. Kennedy, who has often talked about how foreign satellite companies operating in the C-band shouldn’t get a financial windfall at the expense of taxpayers, had introduced the Clearing Broad Airwaves for New Deployment Act (S 2921), which would require between 200 and 300 MHz of C-band spectrum, including a 20-MHz guard band, to be repurposed and mandate that all of the proceeds of an auction be deposited into the U.S. Treasury. The bill would direct that $10 billion of those funds be used to construct and maintain rural broadband infrastructure in unserved communities (TR Daily, Nov. 21, 2019).

For their part, Sens. Schatz, Cantwell, and Ed Markey (D., Mass.) introduced the Investing in America’s Digital Infrastructure Act (S 2956), which would require the FCC to auction at least 200 MHz of the C-band, with nearly all of the proceeds being deposited into the Digital Divide Trust Fund. The funds could be used for rural broadband services, including education and health care and the deployment of NG-911 offerings (TR Daily, Nov. 21, 2019).

Also, last month, the Senate Commerce Committee approved a modified version of the 5G Spectrum Act of 2019 (S 2881) (TR Daily, Dec. 11, 2019).

Under the bill, which was introduced by committee Chairman Roger Wicker (R., Miss.) and Sen. John Thune (R., S.D.), chairman of the communications subcommittee, at least 50% of the gross proceeds of a C-band auction would have to be deposited into the U.S. Treasury if the auction raised up to $40 billion, at least 75% for the next $10 billion, and at least 90% for the remaining proceeds.

The bill also would require the FCC to reserve 10% of the proceeds for broadband infrastructure in unserved or underserved areas. The bill would require that 10% of that amount be used in tribal areas. The bill also would provide an additional $885 million in NG-911 grants and require the FCC to adopt rules on permissible uses of 911 funds.

The C-Band Alliance (CBA) told the FCC earlier this month that it should approve “acceleration payments” equal to 100% of the winning bids in the C-band auction to incentivize incumbent satellite operators to clear a portion of the 3.7-4.2 gigahertz band for terrestrial 5G services within 18 to 36 months (TR Daily, Jan. 16). It said the FCC should require auction winners to make the incentive payments to satellite operators.

“What’s the goal here? To ensure that America gets 5G quickly, unlocking hundreds of billions of dollars in economic development and the benefits of leading the next wave of global tech innovation. To do this, satellite operators need to be incentivized to clear the spectrum quickly,” CBA spokeswoman Dianne VanBeber said today. “But we also need to protect the incredibly valuable American video distribution system which serves 120 million American homes—many in rural areas that are virtually impossible to fiber. Given that the CBA members are public companies, we are obligated under our fiduciary responsibility to our investors—many of which are American citizens—to receive fair compensation for our assets. That is our ask—to be treated fairly for the value we bring to achieving the objective--nothing more and nothing less. We think there should be a path that allows for fair treatment so that the greater goal—5G and its benefits—can be realized.” “The bipartisan Senate bill introduced today is needed to ensure the FCC is not held hostage to the demands of foreign satellite companies seeking an unjustified windfall at taxpayer expense,” argued Michael Calabrese, director of the Wireless Future Program at the New America Foundation’s Open Technology Institute. “The American public owns the airwaves. This bill mandates an early auction and provides a generous incentive payment to satellite incumbents, but it also redirects $15 billion or more in auction revenue to fund major investments in rural broadband, digital inclusion programs and to modernize public safety infrastructure.”

He added that it makes sense to give satellite incumbents a fixed fee rather than a percentage of auction proceeds.

Referring to Sen. Kennedy, Preston Padden, a consultant to the CBA who said he was speaking for himself and not the CBA, said that the legislation introduced today “is about what you would expect from someone who actually said that 15 year FCC satellite licenses with legally enforceable renewal expectancy are like ‘a 30 day month-to-month lease.’”

“NENA is pleased to see funding for Next Generation 9-1-1 included in the SMART Act introduced by Senators Kennedy, Schatz, and Cantwell,” said Dan Henry, director-government relations for the public safety group. “The $12.5 billion set aside for NG9-1-1 aligns with the cost estimate provided to OMB by the National 911 Office. With this funding, 9-1-1 authorities will be able to implement modern, resilient, interoperable, standards-based NG9-1-1 systems across the country.” —Paul Kirby, [email protected]

MainStory: Congress FederalNews FCC SpectrumAllocation WirelessDeployment Satellites PublicSafety

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