FCC approves $9.7 billion payout to quickly clear C-band for 5G

Mid band radio frequencies are widely believed to be critical to deploying 5G cellular services, and the Federal Communications Commission (FCC) is continuing its push to open additional spectrum to U.S. carriers. Today, the FCC voted to approve a controversial payment package to incumbent users of the 3.7GHz to 3.98GHz band, offering satellite companies $9.7 billion in total to clear 280MHz of spectrum ahead of an auction to 5G carriers.

The 3-to-2 vote could significantly bolster 5G’s growth in the United States, as large channels of mid band spectrum provide carriers with a great compromise between transmitting distance and bandwidth. International 5G deployments on similar frequencies have already seen multi-Gbps speeds comparable to millimeter wave 5G, while most U.S. carriers have had to choose between slow but long-reaching low band frequencies or fast but short-distance high band alternatives.

Unfortunately, the plan’s approval doesn’t appear to guarantee that satellite companies will accept the payouts. The incumbent holders previously maintained a unified “C-band Alliance,” but split up to make individual demands after the FCC announced preliminary plans for the payments. It’s unclear whether the companies will accept their billion-dollar incentives, and moreover, whether the payments are legally permitted absent Congressional approval.

Democratic commissioners Jessica Rosenworcel and Geoffrey Starks voted against the payment plan, with Starks suggesting that “today’s order will only encourage demands for similar treatment from similarly situated incumbents, at the expense of both competition and the American taxpayer.” Starks also noted that there’s a “very real possibility” that both the payments and C-band auction could wind up delayed by litigation, regardless of the huge incentives being promised for “accelerated relocation.”

The vote was split on party lines, with FCC Chairman Ajit Pai backed by Republican commissioners Michael O’Rielly and Brendan Carr. If everything moves according to the current schedule, the C-band auction will begin in December 2020, and likely continue into early 2021 with multiple rounds of bidding covering specific blocks of spectrum and geographic areas.