C-Band Legislative Prospects Dim Further Amid Pandemic Priorities

Prospects for advancing legislation on allocating proceeds from the FCC’s coming auction involving of spectrum in the 3.7-4.2 GHz C band have become increasingly doubtful after more than two months in which negotiations were largely in stasis due to Capitol Hill's shift in priority to the COVID-19 pandemic, lawmakers and communications sector officials said in interviews. Senate Appropriations Financial Services Subcommittee Chairman John Kennedy, R-La., and Democratic backers of C band remain interested in pressing forward. Republicans on the House and Senate Commerce committees believe the time for pursuing legislation has largely passed given FCC moves to advance the auction. Wireless and satellite interests cited concerns with the FCC's order in petitions for reconsideration filed Wednesday (see 2005270031).

Kennedy showed the strongest interest in pursuing C-band matters short term, though for now it’s limited to a likely June Senate Appropriations Financial Services hearing. “I’ll probably do a mixture” of virtual and in-person testimony, he told us. Other Senate committees held similar hybrid hearings in May (see 2005180042). Kennedy didn’t rule out attaching a rider to the subcommittee’s FY 2021 FCC appropriations bill to allocate C-band sales money, one of several legislative efforts he pursued over the past year (see 2002130053).

“I want an update from the FCC in light of” Intelsat filing for Chapter 11 bankruptcy, Kennedy told us. Immediately after the company's announcement, he said the FCC should “withdraw” its C-band auction plans, including a proposal for $9.7 billion in incentive payments to satellite incumbents (see 2005140028). Intelsat is among the satellite companies that committed to clear the C band using the FCC’s incentivized accelerated timeline (see 2005260037).

Kennedy wants "to know a little bit more about the insider trading allegations” against major Intelsat investors BC Partners and Silver Lake Group, accused of selling stock in the satellite company just before the FCC announced its C-band auction plans (see 2004080064). He said he wants “to know more about” a related meeting between “private individuals” and “an FCC representative.” Intelsat, BC Partners and Silver Lake didn't comment.

Senate Commerce Committee ranking member Maria Cantwell, D-Wash., wants to pursue C-band legislation like the Spectrum Management And Reallocation for Taxpayers (Smart) Act (S-3246), which she co-sponsored with Kennedy and Senate Communications Subcommittee ranking member Brian Schatz, D-Hawaii. That bill would set aside all but $11 billion of the money for telecom projects (see 2001280063). “There’s plenty of time” to enact C-band legislation before the auction, Cantwell said. The FCC plans to begin the sale Dec. 8. Some believe it could get pushed to next year (see 2003250052).

Schatz believes advancing a bill is unlikely “any time soon” because “there’s not the political bandwidth” to address it during the pandemic. Conditions could improve later this year, he said.

Little Time

House Commerce ranking member Greg Walden, R-Ore., contended “the clock ran out” on the viability of such legislation before the pandemic. “We tried to engage” negotiations between last fall and earlier this year and “couldn’t get much action out of the Democrats,” he told us. There was a time when Congress had a chance to “direct some of the funding," but “that window slammed shut on our fingers once the [FCC] moved forward” in February on auction rules (see 2002280044). The House Communications Subcommittee advanced the Clearing Broad Airwaves for New Deployment (C-Band) Act (HR-4855) in March, despite concerns from Walden and other Republicans (see 2003100067). That bill, like S-3246, would allocate most sale money to fund telecom projects.

“I don’t want to be in the middle of causing disruption and damage to a very important auction” by passing legislation after the FCC began setting auction rules, Walden said. “I didn’t see a path forward in the Senate” and “some of the budgetary opportunities departed” because agency rules affected Congressional Budget Office’s scoring of the auction. CBO estimated $32 billion in total sales, of which about $15 billion would go to relocation and incentive payments. The office of HR-4855 lead sponsor and House Communications Chairman Mike Doyle, D-Pa., declined interview requests.

“There’s less reason” to pursue legislation “as the clock ticks” down toward bidding, said Senate Commerce Chairman Roger Wicker, R-Miss. He wasn’t able to reach agreement in December with Cantwell and other Democrats (see 1912160061) to attach language from his C-band-centric 5G Spectrum Act (S-2881) to FY 2020 appropriations measures. S-2881 would set a graduated scale for amounts the FCC would be required to return to the Treasury, beginning with “not less than 50 percent” of the first $40 billion.

Senate Communications Chairman John Thune, R-S.D., believes a C-band-centric bill isn’t needed now since the FCC is “doing a pretty good job” handling the auction. “What I’d like to do is still legislate” via the Streamlining the Rapid Evolution and Modernization of Leading-Edge Infrastructure Necessary to Enhance (Streamline) Small Cell Deployment Act (S-1699), he told us. The bill would implement “reasonable process and timeframe guidelines” for state and local small-cell consideration (see 1906030068).

S-1699 “would make it easier to install the infrastructure that’s necessary for the networks and streamline that process,” Thune said. “I’ve talked to folks who want to make investments" in broadband who "are very interested in that legislation.” Locality groups opposed the measure in the past (see 1810040055).

'Less Motivation'

The proposed broadband funding included in HR-4855 and other C-band bills pales in comparison to what's included in pandemic aid legislation like the House-passed Health and Economic Recovery Omnibus Emergency Solutions Act (HR-6800), some officials told us. “The notion of saving the federal government a few more billion dollars … doesn’t have the same political resonance it did in February” given HR-6800 proposes $3 trillion in aid (see 2005130059) and recent measures like the Coronavirus Aid, Relief and Economic Security Act included similarly large funding levels, said Brookings Institution Senior Fellow Blair Levin.

“There’s certainly less motivation” to pursue allocating C-band sales to fund broadband “given the kind of money that’s been thrown around" in HR-6800 and other measures, said New America Open Technology Institute's Wireless Future Project Director Michael Calabrese. HR-6800 includes an $8.8 billion Emergency Broadband Connectivity Fund and $5 billion for E-rate. Lawmakers could resurrect C-band allocations as a priority if talks to marry HR-6800 and a Senate-preferred aid package end up focusing on cost concerns, he said.

Experts noted the amount of money available from the C-band sale to fund broadband could be even less depending on how the pandemic and other market forces affect the auction yield. “Presumably, [the spectrum] is worth something less” now than CBO projected earlier this year, Levin said. That uncertainty isn’t “just because of” the pandemic, since several major companies' interest in bidding for the spectrum is in doubt, Calabrese said.

NTCA CEO Shirley Bloomfield said she believes lawmakers should continue to pursue C-band legislation in combination with measures like the Universal Broadband Act (HR-6723) as “ways to pay for expanding connectivity” during the pandemic. “You’ve got to look at everything, because it’s easy to just keep saying ‘let’s put another $1 trillion here’ and ‘let’s expand E-rate,’” but that’s unsustainable without dedicated funding sources, she said. HR-6723 would increase the USF contribution base to include all broadband services rather than drawing support only from phone services (see 2005050064).