C-Band Auction Opens at $1.9B in Bids Despite Aviation Challenge

The FCC’s C-band auction opened Tuesday with $1.9 billion in bids after the initial two bidding rounds. The auction continues Wednesday with three rounds. Most observers are focused on Verizon and how much it bids as the major carrier with the least mid-band spectrum. The auction opened despite a late challenge from aviation interests raising interference concerns. Earlier in the day, a court ruled it won't intervene in related FCC activities (see 2012080020).

In a Monday letter, aviation industry groups said they have told the FCC since 2017 “deployment of 5G networks in this frequency band may introduce harmful … interference to radar altimeters currently operating in the globally-allocated 4.2–4.4 GHz aeronautical band.” Safety is at issue, they said. “Radar altimeters are deployed on tens of thousands of civil aircraft in the United States and worldwide to support several critical safety-of-life aircraft functions throughout multiple phases of flight,” the letter said. Signers included the Aerospace Industries Association, Air Line Pilots Association, Aircraft Electronics Association, Aircraft Owners and Pilots Association, Airlines for America, General Aviation Manufacturers Association and National Air Carrier Association.

The groups want the FCC to suspend the auction, CTIA responded, in a filing posted Tuesday in docket 18-122. “The request, submitted a day before the auction launches and more than three years after the Commission first began exploring the band for wireless use, relies on the filing parties’ unsound and unsupported technical findings and should be summarily rejected.”

The Taxpayers Protection Alliance slammed the aviation filing. “Instead of rejoicing at this welcome news, many in Washington special interest spheres are launching last-ditch efforts to stifle the auction and the benefits it will bring,” the group said: “A coalition of aviation interest groups are claiming this new spectrum being used for 5G developments will interfere with the electronics on aircrafts and potentially lead to more frequent plane crashes. This is shameless fear-mongering and rent-seeking behavior.”

MoffettNathanson’s Craig Moffett said the auction may be the most important of the 5G era. “Who ‘wins’ the C-Band auction will shape the competitive dynamics of 5G for a decade,” Moffett wrote. “The stakes really are that high,” he told investors: “In the days before 5G, mid-band spectrum was all about capacity; a carrier could add capacity through a variety of means, of which adding spectrum was only one. Verizon, with less mid-band spectrum than its peers, has fared just fine in LTE, thank you very much. They have simply prioritized network densification over spectrum accumulation for capacity enhancement. … The 5G specification calls for very large block widths of spectrum.”

S&P Global Advisors projected Dish Network will need to bid about $5 billion and “fund this amount entirely with debt to increase its leverage above our downside trigger of 6.5x over the next year.” S&P said the band offers “a good balance of coverage and capacity and is well suited for 5G, which suggests DISH will likely be interested in participating” in the auction.

“By freeing up this wide swath of critical mid-band spectrum, the FCC is paving the way for Americans to receive fast 5G wireless services,” said Chairman Ajit Pai. Commissioner Mike O’Rielly also welcomed the start. “I’m so proud of leading charge for four-plus years to reallocate this best mid-band spectrum for new wireless purposes,” he tweeted: “The twists and turns were worth the prize.” House Commerce Committee Republicans tweeted “Kudos to Chairman Pai & the @FCC for working to get this historic #CBand auction done to improve connectivity.”

The FCC should have considered a sharing model similar to that in the citizens broadband radio service band, emailed Federated Wireless CEO Iyad Tarazi. “CBRS continues to be a cornerstone for the initial applications of 5G services in the U.S. and we see great promise in the two bands being used together in the future for supporting 5G growth.”