The challenges of the COVID-19 pandemic made the FCC more determined to eliminate unnecessary regulation, Chairman Ajit Pai said during the Wireless Infrastructure Association’s virtual version of its annual ConnectX. The agency also Tuesday released its draft version of proposed changes to infrastructure rules, proposed by WIA and CTIA (see 2005190058). Commissioners Mike O’Rielly and Brendan Carr also spoke.
Wireless Spectrum Auctions
The FCC manages and licenses the electromagnetic spectrum used by wireless, broadcast, satellite and other telecommunications services for government and commercial users. This activity includes organizing specific telecommunications modes to only use specific frequencies and maintaining the licensing systems for each frequency such that communications services and devices using different bands receive as little interference as possible.
What are spectrum auctions?
The FCC will periodically hold auctions of unused or newly available spectrum frequencies, in which potential licensees can bid to acquire the rights to use a specific frequency for a specific purpose. As an example, over the last few years the U.S. government has conducted periodic auctions of different GHz bands to support the growth of 5G services.
U.S. carriers have kept up with unprecedented demand under COVID-19, American Tower CEO Tom Bartlett told the Wireless Infrastructure Association’s ConnectX virtual conference Tuesday. The conference's goal is to help explain what’s happening “on the ground” during the pandemic, said WIA President Jonathan Adelstein. “Everybody recognizes how essential having reliable wireless service is.”
Commissioners will act at their June 9 meeting on CTIA and Wireless Infrastructure Association proposals for more changes to wireless infrastructure rules designed to accelerate siting of towers and other 5G facilities, FCC Chairman Ajit Pai said Monday. The move was expected, as is a fight from local and state governments (see 2005110029). Pai will also ask commissioners to approve auction procedures for Phase I of the FCC's 10-year, $20.4 billion Rural Digital Opportunity Fund and proposed an NPRM on the use of very high-band spectrum. ATSC 3.0 also is on the agenda (see 2005180066).
Small satellite operators (SSO) challenging the FCC's C-band clearing order (see 2005050047) asked the agency to delay acting further pending judicial review before the U.S. Court of Appeals for the D.C. Circuit. Proceeding watchers said the agency is unlikely to accede. The commission didn't comment.
There's widespread interest in the citizens broadband radio service auction, but it’s not clear who will pursue licenses or how they will be used, Commissioner Mike O’Rielly said during a FierceWireless webinar Monday. The FCC faced pressure to delay the start of the auction July 23 because of credit market jitters tied to COVID-19 (see 2005140050). “The insatiable demand” for mid-band spectrum “is only going to increase over time,” he said.
The FCC confirmed Monday that members' next meeting tentatively will include a vote on wireless infrastructure, as we reported last week. Other items potentially on tap for a June 9 vote are auction procedures for the $16.4 billion, 10-year high-cost USF; high-band spectrum action; and on ATSC 3.0.
New satellites and other C-band clearing expenses -- an estimated $1.2 billion worth through the end of 2021 and $1.6 billion in total -- helped prompt Intelsat to file for Chapter 11 bankruptcy Wednesday, said in its application with U.S. Bankruptcy Court in Richmond. Chief Financial Officer David Tolley said in a declaration (in Pacer, case 20-32299) the company intends to clear the lowest 120 MHz of the band by the Dec. 21, 2021, deadline to be eligible for $4.87 billion in accelerated clearing payments. Tolley said Intelsat has close to $15 billion in debt, but "business prospects remain healthy." He said it also has "materially lower revenues" due to COVID-19's effect on such key customers as airlines and cruise ships, and on its business carrying broadcast signals of sports and other live events. Tolley said the company has a commitment for financing that needs court approval but would give it enough working capital to clear the C band, fund the bankruptcy case and let Intelsat operate. An accompanying motion asked for permission to incur obligations for the clearing. It said its three-part clearance plan involves building and launching multiple satellites over the next 30 months to replace the capacity lost from the C-band compression upgrades and relocating teleport sites from urban to rural locations to mitigate 5G interference. The company asked the court to authorize it to implement the clearance on an accelerated schedule. The FCC emailed Thursday that it "appreciates Intelsat's statement that '[o]ne of the primary catalysts' for its voluntary filing for bankruptcy is a 'desire to participate in the accelerated clearing of C-band spectrum.' We will continue to move forward with the C-band auction process and look forward to working with satellite operators, wireless companies, and others toward that goal." Senate Appropriations Financial Services Subcommittee Chairman John Kennedy, R-La., said Intelsat’s bankruptcy announcement “reveals what many suspected all along: Intelsat had no intention of accepting the FCC’s deal” on the C-band auction. The FCC “should withdraw its offer, take control of America’s spectrum and save taxpayers billions of dollars instead of shelling out that money to foreign companies,” Kennedy said. He has repeatedly raised concerns about the FCC’s C-band auction plan, including its proposal for $9.7 billion in incentive payments to Intelsat and other satellite incumbents (see 2003100022). SES also said it plans to make the accelerated C-band clearing deadlines (see 2005140055).
With the FCC citizens broadband radio service auction set to start, the agency is under pressure to further delay the auction because of credit market issues. Markets remain jittery due to the pandemic, a problem for small players that may need to raise the money to bid. The FCC postponed the auction in March to July 23, from June 25, because of COVID-19 concerns (see 2003250052).
The FCC approved 5-0 allowing broadband in 900 MHz, reallocating a 6 MHz swath while keeping 4 MHz for narrowband. Commissioners voted electronically (see 2005130008) before Wednesday's abbreviated virtual meeting, as expected (see 2005070054). Anterix executives said the spectrum could help utilities across the U.S. update operations and move to a smart grid.
Uncertainty remains about what COVID-19 will mean for AT&T and the wireless industry, Chief Financial Officer John Stephens said at a MoffettNathanson conference Tuesday. Speakers on a small-cells webinar said COVID-19 is adding to data growth and to the demand on carriers to densify their networks.