Said key is to sell modified, not new, terrestrial use licenses

AT&T has been pitching its variant on a private C-Band auction to numerous FCC officials, according to an ex parte filing with the commission. 

Satellite operators, who use the band to deliver network programming to cable operator and broadcast customers for distribution to their subs, favor a private auction, which they have proposed collectively as the C-Band Alliance (CBA) while cable operators want the FCC to auction the spectrum, perhaps transitioning network program distribution to fiber to allow for clearing as much C-Band spectrum as possible (cable operators are eyeing their own uses for 5G), while broadcasters generally just want to make sure that their network feeds continue without interference, preferably via satellite rather than fiber, which they argue is susceptible to any errant, utility-not-missing, drag of the backhoe. 

Related: Sen. Thune Helps Mark Launch of Verizon 5G in Sioux Falls 

The FCC is trying to free up C-Band (midband) satellite spectrum for terrestrial 5G service--winning the race to 5G is an FCC and Trump Administration imperative--and plans to vote on an item to that effect before year's end, according to FCC chair Ajit Pai. 

AT&T is likely to be one of the buyers of those satellite licenses in the secondary market. 

In meetings with FCC officials last week, AT&T execs said that the spectrum should be reallocated as quickly and practicably as possible--particularly avoiding potential legal challenges. They said that should come through a private auction of modified licenses, not initial ones, and only in an auction closely monitored by the FCC, with clear technical and service rules and a transition plan put out for public comment. 

Related: Padden Says Private C-Band Deals Would Hardly Be Unprecedented 

AT&T signaled that was preferable to the CBA auction plan. That plan, they suggested, could produce a "measure once, cut twice" outcome of "hasty reallocation, relying on vague promises and a shaky legal justification," resulting in "delay and disruption."  

AT&T said the key to a private auction is for the FCC to modify existing satellite operator licenses before they are sold to allow for flexible terrestrial use of those licenses. Then, satellite operators could be required to sell those modified licenses (for terrestrial 5G use by carriers buying them), by a certain date. That would turn the private auction into a secondary-market sale of the licenses, for which there is precedent, rather than allowing for the private sale of new terrestrial licenses for the spectrum, which critics of the CBA auction have argued the FCC is not authorized to do.  

"[N]o purchaser of a license under this auction plan would ever have to file an application for an 'initial license,'" the execs pointed out, "which means that the [government] auction requirements...which apply only to initial licenses, would never be implicated." 

Related: Hill Leans Toward Public Auction of C-Band 

Some critics said a private auction would be an impermissible "sub-delegation" of FCC authority to a private entity. AT&T said if the FCC modifies the licenses for secondary-market sale, that objection is no longer credible. 

AT&T also said the FCC could come up with a transition plan for the spectrum that protects incumbents, ensures the transition costs are known, and ensures that they will be covered. Absent a detailed transition plan that makes clear how current stakeholders will be made whole, current C-Band licensees and their customers will face significant risks of fundamental business disruption and, as a result, are far more likely to oppose and resist the reallocation, which could only lead to delays.

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