Verizon & T-Mobile support CBA incentives
January 29, 2020
By Chris Forrester
Two US cellular giants are supporting the C-Band Alliance’s request for incentive payments to be made and thus speedily free up spectrum for 5G deployment for the US.
Investment bank Exane/BNPP, in a note to clients, said that their valuation model for C-band remains unchanged. “According to Verizon the FCC’s broad spectrum management authority and its Emerging Technologies policies provide ample legal authority and precedent for a C-band clearing framework that includes incentive payments to satellite operators in return for the expedited availability of C-band spectrum. It should adopt an auction framework that provides for incentive payments to satellite operators in return for clearing of the spectrum on the 18-36 month timetable that they have proposed,” said the bank’s note.
“A modified Emerging Technologies approach (from the FCC) would address the holdout and free-rider problems. This approach should have two components:
(1) a transparent way to identify and calculate the premium payment prior to auction rather than the standard post-auction bargaining under Emerging Technologies, and
(2) certainty that both the satellite operators and winning bidders are bound by the result and winning bidders will commit in advance to the premium payment” added the bank.
“In our view,” said the bank, “while Verizon does not directly endorse the CBA incentive payment framework, we believe that the two principles it has laid out have been embraced by Intelsat and SES in their recent filing.”
“T-Mobile’s filing also shows they believe the FCC has legal authority to mandate C band bidders pay satellite companies a clearing fee. However, T-Mobile sides with Eutelsat and suggests the FCC should determine a fixed dollar amount rather than let the clearing fee be a function of auction winning bids,” added the bank’s report.