TR Daily Senate Commerce Approves C-Band Bill Over Democratic Objections
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Wednesday, December 11, 2019

Senate Commerce Approves C-Band Bill Over Democratic Objections

Republicans on the Senate Commerce, Science, and Transportation Committee today approved a modified version of the 5G Spectrum Act of 2019 (S 2881) over the objections of Democrats who said it would not reserve enough funding for broadband deployment and other priorities and would provide a windfall for 3.7-4.2 gigahertz C-band satellite operators.

But the sponsors of S 2881, committee Chairman Roger Wicker (R., Miss.) and John Thune (R., S.D.), chairman of the communications, technology, innovation, and the Internet subcommittee, said that the FCC needs the flexibility to offer incentives to incumbent operators so they will cooperate in the repurposing of 280 megahertz of spectrum for 5G terrestrial use, which they said would ensure that the spectrum could be deployed quickly.

Meanwhile, the bill as amended would also repeal the congressional statutory requirement that the FCC auction public safety spectrum in the T-band by 2021 and relocate incumbents by 2023. The measure also would facilitate the repurposing of 4.9 GHz band spectrum allocated to public safety.

The substitute version of S 2881 approved on a 14-12 vote at this morning’s markup would require the FCC to auction at least 280 MHz of the C-band beginning by the end of next year, the same framework being pushed by FCC Chairman Ajit Pai. The Commission would be permitted to use auction proceeds to cover the costs of incumbent licensee or registered receive-only operator relocations as well as the relocation expenses of and compensation for licensees and entities with market access rights to the spectrum.

At least 50% of the gross proceeds 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 original bill as introduced last month only stipulated at least a 50% recovery for the Treasury and did not include funding for broadband (TR Daily, Nov. 18).

The bill also would provide an additional $885 million in next-generation 911 (NG-911) grants and require the FCC to adopt rules on permissible uses of 911 funds. The Enforcement Bureau would have to report 911 fee diversions to the U.S. attorney general and the AG, in consultation with the FCC, would have to convene an interagency working group to study the prosecution of fee diverters.

The bill also would require the FCC to evaluate the use of the 4.9 GHz band, which is used by public safety but not at usages considered adequate by some at the Commission and in industry. The FCC would have to impose a moratorium on granting 4.9 GHz band licenses if the bill becomes law and after completing its one-year evaluation of the band would be authorized to modify licenses in the spectrum. Licensees would not be permitted to protest modification of their licenses.

The bill also would authorize $100 million for fiscal year 2020 to the National Telecommunications and Information Administration for its spectrum management systems.

An amendment offered by Sen. Ted Cruz (R., Texas) that was wrapped into the package would require NTIA, by the end of next year, to identify 42 MHz of federal spectrum below 10,500 MHz to be reallocated “for the provision of private commercial mobile and fixed wireless broadband internet access service.” The FCC would have to reallocate and begin auctioning the spectrum by June 30, 2021.

Before approving the amended S 2881, the committee on a 14-12 vote rejected an amendment offered by Sen. Brian Schatz (D., Hawaii), ranking member of the chairman of the communications, technology, innovation, and the Internet subcommittee, on behalf of himself and full committee ranking member Maria Cantwell (D., Wash.) and Sens. Ed Markey (D., Mass.), Tammy Duckworth (D., Ill.), Tammy Baldwin (D., Wis.), Richard Blumenthal (D., Conn.), and Amy Klobuchar (D., Minn.).

The amendment included language from the America’s Digital Infrastructure Act (S 2956), which was introduced by Sens. Schatz, Markey, and Cantwell last month (TR Daily, Nov. 21), that would require the FCC to auction at least 200 MHz of the C-band, with nearly all of the proceeds being deposited into a Digital Divide Trust Fund, which could be used for wireless and wireline broadband deployment and infrastructure to support priorities such as telehealth, e-government, and educational purposes.

Before depositing auction proceeds into that fund, one third of the funds not exceeding $12.5 billion would have to be deposited into the Next Generation 911 Trust Fund, according to the amendment offered today.

The auction would have to commence between June 1, 2021, and Dec. 31, 2021.

The Commission could use up to $5 billion of the proceeds to reimburse the costs incurred by licensees or entities holding market access rights and licensees or earth station registrants.

Sens. Wicker and Thune emphasized the benefits of their bill.

“This legislation would get crucial mid-band spectrum into the market to benefit the American people and secure our position as the leader in the race to 5G,” Sen. Wicker said. “The choice we make today is whether Congress will play a role in deciding how these very considerable option revenues are spent. The alternative is to forego any input and let the FCC proceed in its own fashion. I think Congress should be heard and I think every member of this committee agrees with that. Our bill would ensure that at least—at least—50 percent of gross auction revenues be reserved for the American people, and would allow the FCC to carefully tailor limited incentives to ensure that the value of the spectrum is maximized for the taxpayer and the economy. As auction revenues rise, so does the percentage reserved for the American people, so there is no windfall.”

Sen. Thune stressed the importance to the U.S. of getting mid-band spectrum into the market quickly for 5G services. Without monetary incentives for satellite operators to cooperate, there could be long delays, he said. “We can’t afford to be tied up in litigation for the next four or five years,” the senator added.

He also stressed that the bill “sets a floor, not a ceiling” for the amount of funds to be deposited into the U.S. Treasury, and he pledged to work with his Democratic colleagues in hopes adopting a higher percentage of auction proceeds for broadband infrastructure.

But Democrats said the bill would short-change Americans and provide a windfall to foreign satellite companies.

“Here the question is simple: Do you want the auction revenue to go to foreign satellite companies or do you want it to go to rural broadband and public safety?” asked Sen. Schatz. “None of the money in [his] amendment would be given to foreign satellite companies as a windfall.”

“We want to allocate as much of the proceeds of this auction to the taxpayer” and policies that benefit them, Sen. Wicker said. But he stressed the importance of giving the FCC the flexibility to provide incentives to satellite operators. He also said that “two major flaws” of the amendment offered by Sen. Schatz and other Democrats were that it would delay the sale by at least six months and auction less spectrum.

“We can find agreement here,” said Sen. Jon Tester (D., Mont.). “I don’t think it’s good policy to give money to companies when we’re paying for the transition cost anyway.” He also said that if the government has to incentivize satellite operators not to delay the proceeding with litigation, “we ought to have it in writing that they’re not going to sue us.”

“It’s a very, very bad precedent,” argued Sen. Cantwell. She noted that the FCC compensated TV broadcasters in the 600 MHz incentive auction, adding, “It’s another thing to say we’re going to give billions of dollars to foreign satellite companies because somehow you think they should be compensated for spectrum they don’t own.”

The T-band repeal provision advances legislation, the Don’t Break Up the T-Band Act (S 2748), which was introduced in October by Sens. Markey, Chuck Schumer (D., N.Y.), Kirsten Gillibrand (D., N.Y.), Elizabeth Warren (D., Mass.), and Bob Casey (D., Pa.) (TR Daily, Oct. 31). The bill was reintroduced in the House in January by Rep. Elliot Engel (D., N.Y.). Similar legislation failed to pass both chambers in the 115th Congress.

“From coast to coast, brave women and men use T-Band to communicate during emergencies to keep communities safe. We owe it to the public safety community to provide the infrastructure and tools they need to do their jobs. It is critical that Congress repeals the T-Band auction mandate before the end of this year,” Sen. Markey said in a statement today.

The bill drew mixed opinions from outside interests today.

The C-Band Alliance said that it “has consistently supported legislative initiatives that advance the FCC’s efforts to safely clear extremely valuable mid-band spectrum to enable 5G in the U.S. Today’s committee vote represents a good step in that direction and we thank Senators Wicker and Thune for their vigorous engagement. The fast and safe clearing of a portion of the C-band is essential so the U.S. can maintain its global technology leadership and reduce security and defense concerns with respect to our national telecommunications infrastructure, all while protecting the TV and radio services valued by nearly 120 million American households. We will continue to work with members of Congress and the FCC to reach the best outcome for the United States: a solution that quickly clears badly-needed C-band spectrum for 5G and acknowledges the CBA member companies’ role in the process, their legal rights and their significant investments over decades in the operating C-band ecosystem.” “I applaud Chairman Wicker’s leadership and the Committee’s approval of new statutory provisions to go after the remaining despicable states that are still diverting 9-1-1 funds. It’s even more urgent – given the huge investments needed for NG911, enhancing overall public safety and preserving the integrity of 9-1-1 systems – to prevent states and localities from misusing these vital, consumer-paid fees,” said FCC Commissioner Mike O’Rielly. “The solutions put forth by the Committee, as well as others, would go a long way to solving these issues once and for all. Kudos are also due to the Committee for seeking to repurpose the 4.9 GHz band.”

“The IAFC is pleased that the Senate Commerce Committee included the T-Band provision in the 5G Spectrum Act,” said Gary Ludwig, president and chairman of the board of the International Association of Fire Chiefs. “The T-Band supports critical public safety communications in our nation’s major cities and surrounding areas. We thank Senator Markey for his leadership on this important issue and urge Congress to protect public safety by repealing the T-Band auction mandate this year.”

“The federal government estimates that a nationwide transition to Next Generation 9-1-1 will require $12B in federal funding. NENA supports any and all efforts by Congress to enable a timely and uniform deployment of NG9-1-1, but cautions that partially funding this deployment will likely result in increased costs and uneven distribution of funds,” said Dan Henry, director-government relations for NENA.

“NPSTC and public safety oppose any reallocation and auction of the 4.9 GHz band (or any segment of the band) for commercial use,” said Doug Aiken, acting chair of the National Public Safety Telecommunication Council, which is a federation of major public safety groups. “Spectrum in the 4.9 GHz band is licensed by state and/or local entities in almost every state in the U.S. Just the states alone that hold licenses in the band cover a total population of 138 million, with additional population served by public safety in localities that hold licenses outside of those states. NPSTC demonstrated how this spectrum can be instrumental in supporting emerging technologies beneficial to public safety, including aeronautical, both manned and unmanned (UAS), robotics, and the public safety Internet of Things (PS IoT). NPSTC has provided additional information to the FCC on each of these types of emerging uses and the additional need for the 4.9 GHz spectrum they will require.”

Mr. Aiken added that “NPSTC also opposes the diversion of any 9-1-1 funds from their intended purpose – support of existing and Next Generation 9-1-1 systems which provide the link between the public and the first responders that provide fire, EMS, law enforcement and other vital services.”

He also said that NPSTC supports the addition of the Don't Break Up the T-Band bill to the 5G Spectrum Act. He noted that NPSTC “has conducted two studies demonstrating the lack of spectrum alternatives for 5 of the 11 metropolitan areas impacted and the cost to move would be close to $6 billion if such relocation were possible, and that cost would likely far exceed any net auction revenue.”

Christina Mason, vice president-government affairs for the Wireless Internet Service Providers Association, said the Senate Commerce Committee “should be commended for its work to free up for new uses 280 MHz of C-band spectrum via an FCC-administered, public auction. This is the most fair, effective and taxpayer-friendly way to distribute such a valuable, limited resource. Moreover, it is good spectrum policy, which will help more Americans get innovative and competitive broadband services. In all, there is 500 MHz of C-band spectrum which can find better, more efficient use by others. Fixed wireless service providers currently share the C-band with the satellite industry for point-to-point fixed broadband service.

“WISPA has urged that as the C-band is cleared for auction, a portion of the remaining spectrum allow for shared use by fixed providers through proven, automated frequency coordination,” Ms. Mason noted. “Though S. 2881 does not require any such sharing, it does not preclude it either. This is, we believe, a tacit recognition by policymakers that spectrum sharing models must play an integral and growing role in alleviating the near ceaseless demand for spectrum. Further, it also keeps open the possibility that the FCC could easily and quickly permit new coordinated, point-to-multi-point uses in the C-band, both protecting the delivery of programming and expeditiously bridging digital divides in rural areas through the provision of new broadband services.” —Paul Kirby, [email protected]

MainStory: Congress FederalNews SpectrumAllocation WirelessDeployment Satellites PublicSafety

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