CBA still facing tough opposition
October 7, 2019
By Chris Forester
According to a statement from Senator John Kennedy, who had objected to the C-Band Alliance being responsible for auctioning off C-band spectrum over the US, he remains committed to a public auction as distinct to a private sale of spectrum.
This does not mean that the Federal Communications Commission has to abide rigidly to his viewpoint and need not materially affect the sort of cash ‘windfall’ the satellite operators could receive.
Senator Kennedy (who chairs the Senate’s Appropriation sub-Committee) in his statement published overnight on October 4th, says that he has secured language in the Financial Services and General Government Appropriations Act of 2020 (HR3351) that will free up C-band spectrum for 5G technologies but through a public auction. This Appropriations Act funds the Federal Communications Commission (FCC) for 2020.
Sen. Kennedy’s statement is plain: “The choice is clear. A private sale has too many pitfalls, including the risk of an inefficient deployment of 5G spectrum that will shut out our rural families. Our country is great because of competition,” said Sen. Kennedy. “A transparent public auction will save American taxpayers millions of dollars. It will ensure that you can watch the Saints win the Super Bowl regardless of whether you live in New Orleans or Mamou.”
The Senator has previously said: “A spectrum sale should not enrich foreign companies and possibly deny broadband to American customers.” A letter of September 26th from him said that since the FCC began auctioning off spectrum [US] taxpayers have received more than $122 billion from such sales.
In comments from Sami Kassab, a media analyst at investment bank Exane/BNPP, in a note to clients says: “A public auction is not what the CBA wanted – and we also believe this is not the preferred choice of the FCC. However, as long as the auction design (and US Treasury contribution) satisfies satellite operators, we believe a public/private [auction] makes little difference to the economic benefits SES, Intelsat and Eutelsat are to derive from the C-band spectrum reallocation, except on timing. The FCC commented that organising a public auction might take up to 6/7 years. In the case of a public auction, the economic proceeds to satellite operators would probably be delayed in time.”
Kassab reminds investors that the Appropriation Act has not yet been signed into law. “There is disagreement within the US Senate between these 3 Republican Senators on the nature of the C-band auction. Senators in charge of Commerce, Communications Technology are sensitive to the timing of 5G. Senator Kennedy is in charge or protecting tax-payers and he is sensitive to the tax-payer funding foreign satellite operators for C-band spectrum. We do not have a clear view on the Trump’s administration preference for the nature of the auction. However, we doubt that the administration will take the view of delaying the repurposing of C-band spectrum and hence the roll out of 5G in the US.”