Carriers Likely to Pursue Upper C-Band Spectrum Regardless of Current Holdings

Former FCC Commissioner Mike O’Rielly told us he expects a “robust” upper C-band auction. "Trying to time a spectrum auction is extremely hard, and a number of secondary transactions may occupy wireless providers' immediate attention,” he said. But carriers are also “well aware that spectrum auctions like this don't happen all the time,” and they have to address “longer-term spectrum needs, given that clearing will take a considerable effort.”

Cooley’s Robert McDowell, a former FCC member, noted that the upper C band is being made available only after a “yearslong bipartisan push from Congress to get more spectrum into the hands of consumers through auctions." Given “clear statements” by top officials at the FCC and NTIA on making spectrum auctions a priority, it’s “safe to say that auctions are coming whether the bidders are ready or not.”

If carriers “don't have their business cases and financing lined up, they should hurry up and do so,” McDowell said, adding that they should also be ready for more secondary market spectrum transactions.

The three major carriers are in different positions on spectrum. T-Mobile has built a likely lead through the 2.5 GHz band it got as part of its purchase of Sprint. AT&T recently agreed to buy 3.45 GHz and 600 MHz licenses from EchoStar for $23 billion (see 2508260005) in a deal expected to preoccupy the company for at least a year. Verizon is widely seen as the carrier currently most in need of a spectrum infusion.

Verizon and AT&T both faced questions on Wall Street and saw their stocks downgraded when they collectively spent nearly $70 billion during the first C-band auction in 2021 (see 2102250046).

Spectrum auction consultant David Salant told us that an upper C-band auction isn’t likely to raise the many billions that the previous one did. The last auction benefited from a “weird dynamic” where Verizon and T-Mobile needed spectrum, he said, and that demand this time will be less robust, as the two companies now have lots of midband spectrum.

A Unified Message

CTIA officials, joined by officials from Verizon, T-Mobile and AT&T, met with aides to FCC Chairman Brendan Carr last week to urge the commission to move quickly on the auction. “The success of the initial C-band auction and transition was due to favorable characteristics of mid-band airwaves, decisive actions by the FCC, and substantial work that myriad stakeholders undertook to rapidly transition and safely deploy the band,” said a filing posted Friday in docket 25-59. “The Upper C-band holds this same promise.”

One of the Carr aides at the meeting, Arpan Sura, warned at an NTIA spectrum symposium last week (see 2509100051) that the upper C band is “our first, our best, and potentially our only shot to get a large amount of midband spectrum into the market by the end of this administration.”

“There’s a lot of interest in the upper C band, especially for the carriers who secured C-band licenses in the last auction,” said Competitive Carriers Association CEO Tim Donovan. “There’s a little bit more caution in looking at the steps that have to come after” an auction. “It wasn’t an easy journey” after the last C-band auction because of radio altimeter and relocation issues, he said. “If you can have contiguous midband spectrum, that’s really what all carriers are driving towards trying to have.”

The upper C-band auction likely will follow the same mechanics of other big midband auctions, with a clock auction format and licensing in blocks, said Andreas Bitzarakis, managing director of broadband at consultancy Select Spectrum.

An upper C-band auction would feature less spectrum than the 2021 one, and with heavier incumbent use in the band, stricter power limits and guard bands are likely, Bitzarakis said. He said bidders' participation will be “a little bit more surgical,” as demand will be more tempered. Verizon and the other national carriers will take part but more selectively than last time, he said, noting that technical restrictions on the spectrum also could limit how soon it can be employed in some areas.

The FCC will need to clear incumbents out of the upper C band, so some incentive structure will be used, Bitzarakis said. He added that the appetite -- and budget -- for an incentives package for accelerated clearing of the band could be smaller this time around. Satellite operator Eutelsat has pushed for a similar framework as that used in the C-band transition, including structured financial incentives (see 2507290051).

With the Intelsat/SES merger and Eutelsat's challenges, “the upper C-band incumbents are likely ready to vacate with a reasonable deal, and that's half the battle,” said Summit Ridge Group President Armand Musey. Beyond the big three, “others will likely participate to some extent.” The FCC appears to be “more focused on making spectrum available for mobile broadband than maximizing auction revenue. The upper C band seems to be the shortest route to making more midband spectrum available.”

The commission is looking at a multiyear process, “even if all parties and agencies work diligently,” emailed Joe Kane, the Information Technology and Innovation Foundation's director of broadband and spectrum policy. “It's important to create the conditions for repurposing spectrum to more productive uses, regardless of whether any particular potential users' financial timeline.” If some carriers don't bid, “maybe others will, or maybe the prices will be lower,” he said.

The wireless industry “continues to stress how critical additional spectrum resources are and will be to their businesses and network performance,” emailed Jeffrey Westling, director of technology and innovation policy at the American Action Forum. “If carriers simply think, ‘well, I have these rights, I am good for now,’ when they need more [spectrum], it will take years and their business will suffer.”

Another big issue that policymakers must address is radio altimeters. Protections for the safety devices, which use adjacent spectrum, slowed initial C-band deployments by Verizon and AT&T. Discussions are ongoing ahead of another auction, officials say (see 2509040059).

William McKenna, the FAA's chief counsel, said at last week’s NTIA forum that he has been “heartened” by the level of coordination developing around the upper C band, noting that the airlines and wireless carriers are talking. “It looks very different than it looked when we were talking about [the lower C band] a few years ago,” he said. “That’s a good sign.”