TR Daily Sources: FCC May Wait Until February to Consider C-Band Order
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Monday, January 6, 2020

Sources: FCC May Wait Until February to Consider C-Band Order

The FCC may wait until its Feb. 28 meeting to consider an order in its C-band proceeding, and the item may be a final, rather than an interim, order, according to multiple sources and Blair Levin, an adviser to New Street Research LLP and a former FCC chief of staff. Draft items for this month’s meeting are to be circulated to Commissioners this week.

Multiple sources who are following the proceeding closely told TR Daily today that they have heard that the FCC may adopt an order at next month’s meeting without also soliciting views on additional issues in a further notice. But some suggest that strategy could open the agency to legal challenges.

“We ended the year thinking the FCC would vote on an order at its January [30] meeting making some preliminary decisions but also asking a number of questions, running a quick process, and voting on a final order for the auction and the transition sometime in late March or April. We have since heard that some at the FCC believe they have enough information to go immediately to a final order without a further round of questions and commentary, though it may not be voted on until the February meeting,” Mr. Levin said in a research note yesterday.

“We think this is a problematic for various reasons—including raising legal risks – but if the FCC proceeds this way it could be done at the January or February meeting. We also note that Congress is considering legislation that could make a number of key decisions and reduce the legal risk, though we think the odds of such legislation passing is low,” Mr. Levin added.

“We remind investors however, that the FCC’s challenge here is not so much in running the auction—it has done over 100 and is regarded as world class in doing so. The challenge is in running the transition which results in the spectrum being reallocated,” he observed. “Many issues related to the transition have to be resolved before the auction starts, as uncertainly about the timing and process of the transition could diminish the amount buyers are willing to bid for the spectrum. Further, any payments to CBA [C-Band Alliance] members beyond relocation costs now have to justified” to show there is “a public benefit,” Mr. Levin added. “While we think the FCC can succeed in justifying such payments, we note that there remains a political challenge to allocating funds to the CBA members instead of the government, and that there is also a litigation risk that such an allocation might be held to violate the Miscellaneous Receipts Act, which generally prohibits allocating funds obtained in an auction to any entity other than the United States Treasury.”

Mr. Levin added that recent ex parte filings “suggest, to us, that no stakeholder consensus has yet emerged upon which the FCC can build its final order. We suspect, however, that there is a great deal of activity behind the scenes among the stakeholders to come up with that consensus, with the potential buyers being the most important but the current users also representing a powerful voice.”

Last November, FCC Chairman Ajit Pai announced that he plans to pursue an FCC-run auction of 280 megahertz of spectrum in the 3.7-4.2 gigahertz band rather than the private sale pushed by the CBA (TR Daily, Nov. 18, 2019). FCC officials have said that Mr. Pai plans to ask his colleagues to vote on an item early this year and that the Commission plans to commence an auction of the spectrum by the end of 2020.

Some stakeholders have urged the FCC to adopt an order as early as this month setting a broad framework for the repurposing of the spectrum, while also issuing a further notice seeking comment on additional issues to be considered, such as the FCC’s legal authority, including to compensate satellite incumbents, and the structure of the transition.

“As AT&T’s recent filings indicate, there’s strong sentiment among stakeholders that although the Commission could and should adopt a framework order on the high-level issues, that further comment and debate will be needed on key issues like incentive payments, whether the transition facilitator will be independent, the transition plan, [and] the scope of eligible cost reimbursements for incumbents,” Michael Calabrese, director of the Wireless Future Project at the New America Foundation’s Open Technology Institute, told TR Daily today. “Some of these have never been asked directly, creating APA [Administrative Procedure Act] problems if they went straight to a final order, particularly since the Chairman flipped the script to a public auction so recently and with no further notice in the interim.”

However, another source suggested that the FCC could be on sound legal fitting in terms of the APA if it structures an order correctly.

Multiple sources said today that they heard that the FCC is likely to vote on a C-band order at next month’s meeting, rather than this month’s, and that the agency hopes to address all the pertinent issues in that item. Following standard FCC procedure, the agency also plans to separately propose and adopt auction rules and procedures.

The FCC declined to comment today on the C-band speculation. —Paul Kirby, [email protected]

MainStory: FCC FederalNews SpectrumAllocation WirelessDeployment Satellites

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