In November, President Donald Trump called Ajit Pai, chairman of the Federal Communications Commission, to talk about spectrum. At the time, the FCC was considering a proposal to allow four satellite operators to privately sell a massively valuable swath of public airwaves directly to the U.S. wireless carriers. The carriers said they needed it to “win the race” to deploy 5G mobile networks.
It seemed likely that the commission was going to allow the sale to go forward. But Sen. John Kennedy, a Republican from Louisiana and a close Trump ally, had been campaigning hard against it. In a statement early on in the debate, Kennedy fumed that instead of being sold directly to those wireless companies, the spectrum and revenue raised by selling it could be put to better use—like helping people in rural areas get better internet access.
We don’t know exactly what Trump said on that call to Pai. (An FCC spokesman told Reuters that Trump merely called to “find out what the issue was about.”) But soon after, Pai announced a surprise turnabout via tweet: The commission would not vote on the private sale proposal after all. Instead, it would conduct a public auction for the spectrum by the end of 2020.
A private sale would have provided a massive windfall to the four satellite companies currently using the spectrum, even though they don’t own it. Consumer advocates and many other parties also argued it would violate the Communications Act. Now, thanks to Pai’s pivot, the FCC will conduct a transparent public auction that allows all bidders the opportunity to buy what the mobile industry deems prime real estate in their effort to roll out 5G networks nationwide. The sale could yield an estimated $20 billion to $40 billion for the U.S. Treasury, help mobile carriers build 5G networks, and offer wireless internet service providers the opportunity to bring high-speed broadband to rural and hard-to-serve areas—if policymakers get this moment right.
Use of the airwaves—that is, spectrum—is a public resource that the government licenses to companies and individuals based on public auctions or coordinated sharing. The spectrum in question with this proposal is called C-band—the airwaves at the frequency of 3700–4200 megahertz. Currently, it’s used by satellites to relay television and radio programming to most American homes.
However, that satellite service occupies more than twice as much spectrum as it really needs. There is a broad consensus that the FCC can reallocate the lower half of the band (as much as 280 MHz out of the 500 currently in use) for mobile 5G services without reducing its use for video distribution. And even if the satellite service consolidates into the upper half of C-band, the FCC is considering a proposal to allow rural broadband providers to share even more unused portions of the band.
Spectrum is an extremely valuable resource in part due to its scarcity. The laws of physics dictate which bands of airwaves are useful for connectivity and broadcasting—and some bands of spectrum are more effective for certain uses than others. The finite amount of spectrum leads to a scramble from companies in industries reliant on these airwaves to press for more bands to be auctioned, shared, or otherwise be made available. Mobile companies have been at the forefront of this effort. As mobile data traffic is projected to grow globally at the rate of 46 percent per year from 2017 to 2022, spectrum is needed in ever larger amounts to power our mobile devices and, soon, the Internet of Things. The problem is that all the really useful frequencies of the spectrum are occupied, making underutilized spectrum (such as C-band) a prime target for reallocation or sharing.
Mobile 5G providers want C-band spectrum so they can build out gigabit-fast 5G networks capable of covering suburban and possibly even rural areas. Just as 4G mobile networks made mobile video streaming and app-based businesses like Uber possible, 5G networks promise far greater capacity, near-real-time interactive services, and the ability to connect hundreds of devices, sensors, and people in small areas. Mobile carriers have touted the speeds and capabilities that could come with 5G as revolutionary, though the greatest benefits of this technology will likely be highly targeted at densely populated urban areas.
Everyone agrees that roughly half the spectrum should go to mobile 5G broadband providers. But the satellite companies wanted to privately sell the spectrum, even though they only have a temporary license to share the C-band. They don’t own the spectrum or even a permanent right to use it—that still belongs to the U.S. government, and to the American public more broadly, as it does in every nation worldwide. Their argument has been that if they have a sufficient incentive, they will cooperate to clear the spectrum for mobile 5G services in record time. And if they don’t, they will sue the FCC, claiming that the government is unjustly taking their spectrum. The satellite companies’ underlying argument is that the FCC should simply allow them to conduct a private sale for the sake of speeding up the process of repurposing these airwaves for mobile carriers to build 5G networks.
A public auction marks a good first step—even if it’s ludicrous, in hindsight, that a private sale was even considered. But now lawmakers and the FCC need to do more to ensure that 5G reaches all Americans, particularly those communities currently disadvantaged by the rural digital divide. The FCC, in its most recent Broadband Deployment Report, highlighted the necessity to address the rural digital divide, reporting that more than 26 percent of Americans in rural areas and 32 percent of Americans in tribal lands do not have access to high-speed broadband.
The lower portion of C-band that is auctioned will generate billions. Congress should invest that money in fiber and other broadband infrastructure in unserved and underserved areas. In addition, the upper portion of C-band, which will remain in use for satellites, should be shared on the ground to allow rural wireless internet service providers to deploy their own networks. This would present providers with an affordable way to access the airwaves needed to extend high-capacity wireless services to homes and small businesses in those same areas where building out fiber is too slow and expensive.
Proposals to leverage both C-band auction revenue and unused spectrum capacity are already pending, respectively, before Congress (which must appropriate the money) and the FCC (which must enact sharing rules). In the House, a bipartisan bill requiring a public auction, led by Communications Subcommittee Chairman Mike Doyle, a Democrat from Pennsylvania, was introduced earlier this fall. Senior Democrats on the Senate Commerce Committee recently introduced legislation that would also require a public auction, compensate current users of the spectrum for any costs associated with them relocating to a new band of spectrum, and designate the net revenue for a “Digital Divide Trust Fund” to pay for rural broadband and Next Generation 911 services.
While the Senate bill does not specify exactly how the C-band revenue would be allocated, the proceeds from this auction could fund the build-out of fiber networks deep into communities that lack the fat pipes essential for both mobile 5G and gigabit Wi-Fi connectivity in homes, schools, and small businesses. High-capacity fiber serves as a crucial backbone to the next generation of both wired and wireless networks. Opening more fiber networks to both large and small competitors in rural and less densely populated areas is essential, since the alternative is that 5G networks (which mobile carriers will build out first in the most profitable areas) are likely to exacerbate the digital divide if only wealthy, densely populated urban areas see the full benefits of advanced 5G connectivity.
The FCC can also make unused C-band airwaves available to the hundreds of rural broadband providers that cannot afford to pay tens or hundreds of millions to purchase exclusive licenses to spectrum. As the FCC describes in its C-band notice of proposed rulemaking, the commission (or Congress) can authorize coordinated and shared access to unused spectrum across the entire C-band provided that it does not interfere with ground-based satellite receivers or future licensed mobile services. This spectrum can serve as a central piece of infrastructure for wireless ISPs in rural and other underserved areas. Studies show that WISPs are able to build and deploy fixed wireless networks at a fraction of the cost of trenching fiber.
The FCC has made a strong first move to ensure that the public interest is protected as the agency seeks to give wireless carriers access to the spectrum they need to build 5G networks. Policymakers must seize this opportunity to bridge the digital divide—Americans everywhere are counting on them to get it right.