The reallocation of satellite C-band frequencies for 5G over the US, already supported by the FCC and likely to be approved by mid-2019 could well be extended to other nations, according to analysis by J. Armand Musey of Summit Ridge Capital.
Musey explains the rationale in a highly detailed and compressive study in Summit Ridge’s 2018 Spectrum Handbook just issued. Musey points out that global mobile data traffic, and thus spectrum demand, is growing at an explosive rate (63 per cent up in 2016, and by a similar amount in 2017).
Video downloading represented 69 per cent of consumer Internet traffic in 2017. Over 78 per cent of the world’s mobile data traffic will be video by 2021, says Musey, and leading to a crunch for operators. “Mobile is a big industry. Today, it supports over 4.7 million jobs and contributes around $475 billion annually to the US economy. One study suggests that mobile carriers in the US will spend $275 billion building 5G networks, creating 3 million new jobs and adding $500 billion to the economy. Thus, the mobile industry by adding the new 3 million jobs that are projected to be created, will approach 5 per cent of the total US job market.”
He says the C-band re-use could add potentially up from 100 to 500 MHz of additional spectrum for the 3.5 GHz CBRS [Citizens Band Radio Service, frequencies]. “Summit Ridge Group views this as an opportune time for satellite operators, because:
a) mobile carriers are hungry for mid-band spectrum that would increase the 3.5 GHz spectrum sharing from 150 MHz by at least 100 MHz (potentially as much as 500 MHz), and
b) satellite providers are currently facing a decline in their customer use of this spectrum.
Intelsat, SES, Eutelsat and Telesat have already formed the C-Band Alliance to help make progress in their dealings with the FCC and the industry in general.
Musey adds that satellite providers may view this as a once in a business-cycle opportunity to sell off their spectrum for terrestrial uses. “The process is different from the TV inventive auction, as that was run by the FCC and the [US] government kept roughly 50 per cent of the proceeds. The C-band proposal, on the other hand, is for the incumbent licensees to run a private process and keep all of the proceeds. In return, the satellite industry promised to have the spectrum reallocated in an expedient manner, potentially accelerating the process by years.”
“Other countries, such as the European Commission through the CEPT (European Conference of Postal & Telecommunications Administrations), Australia, and Japan, are looking at reallocating the C-band as the ‘first primary band for 5G’. Methods of reallocating the spectrum from satellite to mobile use could include FCC-type auctions or an innovative alternative to allow satellite providers to voluntarily sell spectrum through a secondary market method using an independent third party ‘Transition Facilitator’ to manage the valuation of the satellite spectrum and the sale of licenses to mobile carriers. The Transition Facilitator would be a cooperative entity with expert knowledge of satellite spectrum valuation and the satellite operators. It would be created by the relevant satellite operators to coordinate negotiations, clearing, and repacking the band. A Transition Facilitator would be more efficient and faster than an FCC auction and create a more coordinated market than satellite vendors selling on their own spectrum with the potential for holdouts creating gaps in the available spectrum. On the other hand, the satellite auction process could be directed by the FCC using an auction process similar to the Broadcast Incentive Auction process.”