US attempt to grab mid-band spectrum for 5G gets messy

The US telecoms regulator wants satellite companies to hand over 300 MHz of C-band spectrum, but the question of how compensation remains unresolved.

FCC Chairman Ajit Pai recently made a rambling speech about how vital it is to US strategic interests that it lead the world in 5G. Apparently critical to this is a chunk of mid-band spectrum currently owned by a few satellite companies, so he wants to compel them to make it available to operators.

In return he’s going to get the operators to give the satellite companies up to $5 billion to cover the cost of vacating 300 MHz from 3.7-4 GHz and a further $9.7 billion to compensate them for the lost asset so long as they hand it over sharpish.

This is where things get complicated. On one hand it’s distinctly possible that the satellite companies will decide that’s not a fair valuation of their precious spectrum and thus hold out for more, with even the threat of bankruptcy apparently on the table. On the other hand there are people who thing that price is too high and in anyone’s going to extort US operators it should be the US state. And presumably the operators themselves would rather not get rinsed yet again.

“The imminent issuance of the draft order reflects the tireless efforts of many over the past several years to ensure that this critical spectrum comes to market safely, quickly, and efficiently,” said a statement issued by The C-Band Alliance, which represents the interests of Intelsat, SES and Telesat in this matter. “Today’s comments by Chairman Pai are a significant development in this important proceeding. We look forward to reviewing the draft order, once issued, to place Chairman Pai’s comments in full context.”

The danger for the C-Band Alliance is that the current US administration increasingly views 5G as a matter of national security and of strategic geopolitical significance. If Kennedy’s bleat is anything to go by, the US state is warming to the idea of unilaterally appropriating private property in the name of kicking 5G ass. 5G is important, but so are property rights and legal due process. Something’s got to give.

US starts edging towards mid-band spectrum release

The Federal Communications Commission (FCC) has released a statement all the telcos have been waiting for; there is finally going to be a spectrum auction for the 3.5 GHz band.

The telcos will have to wait more than year to access the valuable spectrum assets, though the FCC team will hope to discuss rules and procedures to carve up the much-desired mid-band spectrum next June. The auction will likely be later in the year or early 2021, though it is evidence of the slow-moving wheels of progress.

“Making more spectrum available for the commercial marketplace is a central plank of the Commission’s 5G FAST strategy,” FCC Chairman Ajit Pai said in a blog post.

“We’ve already completed two spectrum auctions this year and will begin a third on December 10. And at our September meeting, we will vote to seek comment on draft procedures for an auction of 70 MHz of spectrum in the 3.5 GHz band to begin on June 25, 2020.”

For the telcos, this will be welcome news. The US has largely focused on high-frequency spectrum bands, the mmWave assets, though commentators have suggested this has not been able to deliver the desired experience for 5G connectivity. High speeds might be achievable, however there is a serious compromise to be made on the coverage maps.

This is where the European telcos are reaping the benefits. Most of the 5G launches have been based on mid-band spectrum, striking what is a much more palatable balance between increased speeds and reasonable coverage. This coverage can later be supplemented by higher frequency connectivity to add additional speeds in the future, though the 100+ Mbps speeds should be more than enough for the moment.

“The 3.5 GHz band is prime spectrum for 5G services,” Pai said. “But when I became Chairman, we didn’t have the right rules in place to encourage the deployment of 5G in the band.

“That’s why I asked Commissioner O’Rielly to lead our effort to adopt targeted updates to the licensing and technical rules for the 3.5 GHz band with the aim of promoting more investment and innovation.”

Alongside frequencies in the 3.5 GHz band, the FCC is also considering new procedures to free-up more spectrum in the 3.7-4.2 GHz frequency range. Currently being used for video, this band will offer much more opportunity than the 70 MHz being released for auction in the 3.5 GHz band.

Although the mmWave frequencies will be critical in delivering the promised speeds for the 5G era, it does look like the US has gone the long-way around delivering the foundations for 5G. European telcos and regulators have generally prioritised mid-band spectrum, allowing for a 5G-ish experience on current network densities, with the long-term ambition of supplementing with higher frequencies.

This approach seems to be a much more reasonable one. It creates a foundation layer, with coverage maps consumers have come to expect, though speeds can grow as adoption increases and applications emerge which require the ridiculous speeds which are being promised.

With these auctions promised by the FCC, the US is heading in the right direction, albeit, quite slowly.