Tech & Telecom Law News

Senators Question FCC’s Pai on Proposed Satellite Airwaves Sale

May 7, 2019, 9:38 PM

Federal Communications Commission Chairman Ajit Pai faced tough questions from senators scrutinizing a satellite company proposal that would allow them to sell their rights to public airwaves for billions of dollars.

Pai was asked about the agency’s deliberations on repurposing the satellite airwaves during a May 7 Senate Appropriations Financial Services and General Government Subcommittee hearing. The FCC is weighing the proposal by four satellite companies, including Intelsat S.A. and SES S.A., to auction the mid-band airwaves known as the C- band. Private sector groups estimate the airwaves are worth tens of billions of dollars.

The wireless industry says opening up C-band airwaves to carriers is crucial to ensuring the U.S. is the first country to launch 5G networks before China -- a top Trump administration priority. The satellite companies argue that their proposal would transition the airwaves faster than holding an auction. But the U.S. Treasury wouldn’t get any share of the proceeds from a private sale of the spectrum.

Subcommittee Chairman John Kennedy (R-La.), and Sens. Chris Coons (D-Del.), and Steve Daines (R-Mont.), questioned the merits of holding a public auction versus the private sale the satellite companies have proposed.

“How do you know you’re getting a better deal for the American taxpayer in a private sale versus an auction if you don’t hold the auction?” Kennedy said.

Pai said it would take longer for spectrum rights to change hands if private sales were prohibited altogether.

Satellite companies are using the C-band airwaves to to transmit TV and cable programming. Mobile carriers say they need C-band airwaves to power 5G networks.

The FCC is weighing whether getting the spectrum in the hands of carriers quickly is more important than holding an auction, Pai said.

The commission is also weighing legal questions on the private sale and auction approaches, Pai said.

“That’s one of the reasons why we’ve been thinking about in the C-band proceeding: How important of a priority is it to be able to move quicker even if that means we proceed with something other than an auction,” Pai said.

To contact the reporter on this story: Jon Reid in Washington at jreid@bloomberglaw.com

To contact the editor responsible for this story: Keith Perine at kperine@bloomberglaw.com

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