Expanding Flexible Use of the 3.7 to 4.2 GHz Band

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1, 2, 25, 27, and 101

[GN Docket No. 18-122; FCC 20-22; FRS 16548]

Expanding Flexible Use of the 3.7 to 4.2 GHz Band

AGENCY:

Federal Communications Commission.

ACTION:

Final rule.

SUMMARY:

In this document, the Federal Communications Commission (Commission) adopts rules to reform the use of the 3.7-4.2 GHz band, also known as the C-Band. By repacking existing satellite operations into the upper 200 megahertz of the band (and reserving a 20 megahertz guard band), the Commission makes 280 megahertz of spectrum available for flexible use throughout the contiguous United States, and does so in a manner that ensures the continuous and uninterrupted delivery of services currently offered in the band. The Commission will hold a public auction to ensure that the public recovers a substantial portion of the value of this resource. And the Commission schedules that auction for later this year, with a robust transition schedule to ensure that a significant amount of spectrum is made available quickly for upcoming 5G deployments. This action is the next critical step in advancing American leadership in 5G and implementing the Commission's comprehensive 5G FAST Plan. The Commission modified the Report and Order released on March 3, 2020 with an erratum released on March 27, 2020 and a second erratum released on April 16, 2020. The changes from the first and second errata are included in this document.

DATES:

Effective date:

June 22, 2020.

Compliance date:

Compliance will not be required for §§ 25.138(a) and (b); 25.147(a) through (c); 27.14(w)(1) through (4); 27.1412(b)(3)(i), (c) introductory text, (c)(2), (d)(1) and (2), and (f) through (h); 27.1413(a)(2) and (3), (b), and (c)(3) and (7); 27.1414(b)(3), (b)(4)(i) and (iii), and (c)(1) through (3) and (6) and (7); 27.1415; 27.1416(a); 27.1417; 27.1419; 27.1421; 27.1422(c); 27.1424; and 101.101, Note (2) until the Commission publishes a document in the

Federal Register

announcing that compliance date.

ADDRESSES:

Federal Communications Commission, 445 12th Street SW, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT:

Anna Gentry of the Wireless Telecommunications Bureau, Mobility Division, at (202) 418-7769 or

Anna.Gentry@fcc.gov

. For information regarding the PRA information collection requirements contained in this PRA, contact Cathy Williams, Office of Managing Director, at (202) 418-2918 or

Cathy.Williams@fcc.gov

.

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's

Report and Order and Order of Proposed Modification

in GN Docket No. 18-122, FCC 20-22 adopted February 28, 2020 and released March 3, 2020. The full text of the

Report and Order and Order of Proposed Modification,

including all Appendices, is available for inspection and copying during normal business hours in the FCC Reference Center, 445 12th Street SW, Room CY-A257, Washington, DC 20554, or by downloading the text from the Commission's website at

http://docs.fcc.gov/public/attachments/FCC-20-22A1.pdf

. Alternative formats are available for people with disabilities (Braille, large print, electronic files, audio format), by sending an email to

FCC504@fcc.gov

or calling the Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

The Commission will send a copy of this

Report and Order and Order of Proposed Modification

in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act,

see

5 U.S.C. 801(a)(1)(A).

Final Regulatory Flexibility Analysis

The Regulatory Flexibility Act (RFA) requires that an agency prepare a regulatory flexibility analysis for notice and comment rulemakings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” Accordingly, the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) concerning the possible impact of the rule changes contained in this

Report and Order

on small entities. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated in the

Notice of Proposed Rulemaking (NPRM)

released in July 2018 in this proceeding (83 FR 44128, August 29, 2018). The Commission sought written public comment on the proposals in the

NPRM,

including comments on the IRFA. No comments were filed addressing the IRFA. This present Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

Paperwork Reduction Act

The requirements in §§ 25.138(a) and (b); 25.147(a) through (c); 27.14(w)(1) through (4); 27.1412(b)(3)(i), (c) introductory text, (c)(2), (d)(1) through (2), and (f) through (h); 27.1413(a)(2) and (3), (b), and (c)(3) and (7); 27.1414(b)(3), (b)(4)(i) and (iii), and (c)(1) through (3) and (6) and (7); 27.1415; 27.1416(a); 27.1417; 27.1419; 27.1421; 27.1422(c); 27.1424; and 101.101, Note (2) constitute new or modified collections subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. They will be submitted to the Office of Management and Budget (OMB) for review under Section 3507(d) of the PRA. OMB, the general public, and other Federal agencies will be invited to comment on the new or modified information collection requirements contained in this proceeding. In addition, the Commission notes that, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission previously sought, but did not receive, specific comment on how the Commission might further reduce the information collection burden for small business concerns with fewer than 25 employees. The Commission describes impacts that might affect small businesses, which includes more businesses with fewer than 25 employees, in the Final Regulatory Flexibility Analysis.

Congressional Review Act

The Commission will send a copy of this Report & Order to Congress and the Government Accountability Office pursuant to the Congressional Review Act.

See

5 U.S.C. 801(a)(1)(A). In addition, the Commission will send a copy of the

Report and Order and Order of Proposed Modification,

including this FRFA, to the Chief Counsel for Advocacy of the SBA. A copy of the

Report and Order and Order of Proposed Modification,

and FRFA (or summaries thereof) will also be published in the

Federal Register

.

Synopsis

I. Introduction

1. In this

Report and Order,

the Commission expands on its efforts to close the digital divide and promote U.S. leadership in the next generation of wireless services, including 5G wireless and other advanced spectrum-based services, by reforming the use of the 3.7-4.2 GHz band, also known as the C-Band. By repacking existing satellite operations into the upper 200 megahertz

of the band (and reserving a 20 megahertz guard band), the Commission makes a significant amount of spectrum—280 megahertz or more than half of the band—available for flexible use throughout the contiguous United States, and does so in a manner that ensures the continuous and uninterrupted delivery of services currently offered in the band. The Commission will hold a public auction to ensure that the public recovers a substantial portion of the value of this resource. And it schedules that auction for later this year, with a robust transition schedule to ensure that a significant amount of spectrum is made available quickly for upcoming 5G deployments. This action is the next critical step in advancing American leadership in 5G and implementing the Commission's comprehensive strategy to Facilitate America's Superiority in 5G Technology (the 5G FAST Plan).

II. Background

2. Mid-band spectrum is well-suited for next generation wireless broadband services given the combination of favorable propagation characteristics (as compared to high bands) and the opportunity for additional channel re-use (as compared to low bands). With the ever-increasing demand for more data on mobile networks, wireless network operators increasingly have focused on adding data capacity. One technique for adding capacity is to use smaller cell sizes—

i.e.,

have each base station provide coverage over a smaller area. Using mid-band frequencies can be advantageous for deploying a higher density of base stations. The decreased propagation distances at these frequencies reduce the interference between base stations using the same frequency, thereby allowing base stations to be more densely packed and increasing the overall system capacity. Mid-band spectrum thus presents wireless providers with the opportunity to deploy base stations using smaller cells to achieve higher spectrum reuse than the lower frequency bands while still providing indoor coverage. In addition, mid-band spectrum offers more favorable propagation characteristics relative to higher bands for fixed wireless broadband services in less densely populated areas. Given these characteristics, the Commission expects mid-band spectrum to play a prime role in next-generation wireless services, including 5G.

3. For these same reasons, mid-band spectrum was a key focus of Congress in the Making Opportunities for Broadband Investment and Limiting Excessive and Needless Obstacles to Wireless Act (MOBILE NOW Act), when it considered how to address the pressing need for more spectrum for wireless broadband. Specifically, Section 605(b) of the MOBILE NOW Act requires the Commission to evaluate “the feasibility of allowing commercial wireless services, licensed or unlicensed, to use or share use of the frequencies between 3700 megahertz and 4200 megahertz.” The MOBILE NOW Act also requires that, no later than December 31, 2022, the Secretary of Commerce and the Commission “identify a total of at least 255 megahertz of Federal and non-Federal spectrum for mobile and fixed wireless broadband use.” In making 255 megahertz available, the MOBILE NOW Act provides that 100 megahertz below 8 GHz shall be identified for unlicensed use, 100 megahertz below 6 GHz shall be identified for use on an exclusive, flexible-use, licensed basis for commercial mobile use, and 55 megahertz below 8 GHz shall be identified for licensed, unlicensed, or a combination of uses.

4. The United States is not alone in recognizing the potential of mid-band spectrum for 5G. International governing bodies and several other countries likewise are reviewing the suitability of a number of frequency bands for next generation 5G wireless services, including the 3.7-4.2 GHz bands. For example, the Radio Spectrum Policy Group of the European Commission issued a mandate to the European Conference of Postal and Telecommunications Administrations (CEPT) that the 3.4-3.8 GHz band be the first primary band for 5G, and CEPT currently is developing a report that will provide recommendations for updating the European regulatory framework for this band. A number of European governments are taking actions to make parts of the band available for 5G. Germany intends to make the 3.4-3.8 GHz band available by the end of 2021. In December 2019, France announced the procedures for awarding licenses in the 3.4-3.8 GHz band, which it allocated as a “core” 5G band, consistent with the European Commission's guidance. And the Austrian government held its first auction of 5G licenses in the 3.4-3.8 GHz band in the spring of 2019. There is also significant interest in parts of the band in Asia and in Australia. For example, the Ministry of Internal Affairs and Communications in Japan awarded licenses in the 3.6-4.1 GHz band for 5G in 2019. In August 2019, Australia initiated an initial investigation of possible arrangements for fixed and mobile broadband use in the 3.7-4.2 GHz band. And in November 2018, the United Arab Emirates issued licenses in the 3.3-3.8 GHz band for the establishment of 5G networks.

A. Current Use of the 3.7-4.2 GHz Band and Adjacent Bands

5. The 3.7-4.2 GHz band currently is allocated in the United States exclusively for non-Federal use on a primary basis for Fixed Satellite Service (FSS) and Fixed Service. For FSS, the 3.7-4.2 GHz band (space-to-Earth or downlink) is paired with the 5.925-6.425 GHz band (Earth-to-space or uplink), and collectively these bands are known as the “conventional C-band.” Domestically, space station operators use the 3.7-4.2 GHz band to provide downlink signals of various bandwidths to licensed transmit-receive, registered receive-only, and unregistered receive-only earth stations throughout the United States. FSS operators use this band to deliver programming to television and radio broadcasters throughout the country and to provide telephone and data services to consumers. The 3.7-4.2 GHz band is also used for reception of telemetry signals transmitted from satellites to earth stations, typically near the edges of the band,

i.e.,

at 3.7 GHz or 4.2 GHz.

6. Satellites operating in the C-band typically have 24 transponders, each with a bandwidth of 36 megahertz. Thus, the 24 transponders on a satellite use 864 megahertz of spectrum, or 364 megahertz more than the 500 megahertz available. This is the result of spectrum reuse—adjacent transponders overlap, and self-interference is avoided by using opposite polarizations. Under existing rules, space station operators in the 3.7-4.2 GHz band are authorized to use all 500 megahertz exclusively at any orbital slot, but non-exclusively in terms of geographic coverage. Therefore, multiple FSS incumbents using satellites deployed at different locations in the geostationary orbit can transmit within overlapping geographic boundaries. Space stations that serve or transmit signals into the U.S. market may also be providing service to other countries.

7. For the Fixed Service in the 3.7-4.2 GHz band, 20 megahertz paired channels are assigned for point-to-point common carrier or private operational fixed microwave links. There are fewer than 100 fixed service licensees operating in the band.

8. Last year, in response to a Bureau-level public notice, space station operators and earth station owners filed certifications and information regarding their 3.7-4.2 GHz usage. Intelsat License

LCC (Intelsat), SES Americom, Inc. (SES), Eutelsat S.A. (Eutelsat) and Telesat Canada, ABS Global (ABS), Hispamar S.A. (Hispasat), and Star One S.A. (Star One) provided specific information on the existing C-band downlink capacity and contracted use for 66 satellites authorized to provide service in the 3.7-4.2 GHz band to the United States. In March 2019, the most recent month of data collected, the combined FSS downlink capacity and usage of those 66 satellites was, respectively, 59,427 megahertz and 33,138 megahertz in total with 19,961 megahertz of usage providing service to the United States (

i.e.,

33.59% of the total capacity of the 66 satellites). Intelsat, SES, Eutelsat, Telesat Canada, and Star One have publicly disclosed the provision of service to registered earth stations in the United States in the 3.7-4.2 GHz band.

9. The spectrum band immediately below the 3.7-4.2 GHz band is already authorized for commercial wireless operations. In 2015, the Commission established the Citizens Broadband Radio Service in the 3.55-3.7 GHz band for shared use between commercial wireless operations and incumbent operations—including military radar systems, non-federal FSS earth stations, and, for a limited time, grandfathered wireless broadband licensees in the 3.65-3.7 GHz band. Under the Commission's rules, existing terrestrial wireless operations in the 3.65-3.7 GHz band are grandfathered for up to five years or until the end of their license term, whichever is longer. The Citizens Broadband Radio Service is available for flexible wireless use and will support next generation wireless services, including 5G. Spectrum at or below the 3.7 GHz band is also used for reception of telemetry signals transmitted by satellites. The band just above the 3.7-4.2 GHz band—4.2-4.4 GHz—is allocated for aeronautical radionavigation using radio altimeters in the United States. In 2015, the World Radio Conference added a global co-primary allocation for wireless avionics intra-communications systems. Radio altimeters are critical aeronautical safety-of-life systems primarily used at altitudes under 2500 feet and must operate without harmful interference. Wireless Avionics Intra-Communications systems provide communications over short distances between points on a single aircraft and are not intended to provide air-to-ground communications or communications between two or more aircraft.

B. Procedural History

10.

Mid-Band Notice of Inquiry.

—In the

NOI,

the Commission began an evaluation of whether spectrum between 3.7 GHz and 24 GHz could be made available for flexible wireless use. The

NOI

sought comment in particular on three mid-range bands that stakeholders had identified for expanded flexible use (3.7-4.2 GHz, 5.925-6.425 GHz, and 6.425-7.125 GHz), and it asked commenters to identify other mid-range frequencies that may be suitable for expanded flexible use. The Commission asked questions specific to the challenges and opportunities presented by each band. For example, the Commission asked commenters to identify options for more intensive fixed and mobile use in the 3.7-4.2 GHz band, including whether the band is desirable or suitable for mobile use, whether the existing Fixed Service rules should be modified to support more flexible and intensive fixed use, such as point-to-multipoint services.

11.

Freeze and Filing Window Public Notices.

—In April 2018, the Wireless Telecommunications, International, and Public Safety and Homeland Security Bureaus announced a temporary freeze on the filing of new or modified applications for earth station licenses, receive-only earth station registrations, and fixed microwave licenses in the 3.7-4.2 GHz band, in order to preserve the current landscape of authorized operations in the band pending the Commission's consideration of the issues raised in response to the

NOI.

In June 2018, the International Bureau established a window ending October 17, 2018 (later extended to October 31, 2018), for filing applications to license or register existing earth stations in the 3.7-4.2 GHz frequency band as a limited exception to the earth station application freeze. Further, the International Bureau announced a temporary freeze on the filing of certain space station applications, effective June 21, 2018.

12.

Order and Notice of Proposed Rulemaking.

—In July 2018, the Commission adopted an

Order and Notice of Proposed Rulemaking

(83 FR 44128, Aug. 28, 2018) (

Order and NPRM

) in this proceeding. To enable the Commission to make an informed decision about the proposals discussed in the

NPRM,

the

Order

required certain parties to file information about their operations—including information on the scope of current FSS use of the band—and it noted that several of the potential transition methods outlined in the

NPRM

might require additional earth station or space station information.

13. In the

NPRM,

the Commission sought comment generally on the future of incumbent use of the 3.7-4.2 GHz band and specifically on how to define the classes of incumbents, including earth stations, space stations, and point-to-point FS. The Commission sought comment on revising its part 25 rules to limit eligibility to file applications for earth station licenses or registrations to incumbent earth stations, proposed to update International Bureau Filing System (IBFS) to remove 3.7-4.2 GHz band earth station licenses or registrations for which the licensee or registrant did not file the certifications required in the

Order

(to the extent they were licensed or registered before April 19, 2018), and sought comment on how to maintain the accuracy of IBFS data. Regarding space stations, the Commission proposed to revise its rules to bar new applications for space station licenses and new petitions for market access concerning space-to-Earth operations in the 3.7-4.2 GHz band. Given the limited number of point-to-point Fixed Service licensees in the band, the Commission proposed to sunset point-to-point Fixed Service use in the band, and it sought comment on whether existing fixed links should be grandfathered or transitioned out of the band over some time period, after which all licenses would either be cancelled or modified to operate on a secondary, non-interference basis.

14. The Commission also sought comment on the current and future economic value of FSS in the band, on approaches for expanding flexible and more intensive fixed use of the band without causing harmful interference to incumbent operations, and on proposals to clear all or part of the band for flexible use. More specifically, the Commission sought comment on a variety of approaches for expanding flexible use in the 3.7-4.2 GHz band, including market-based, auction-based, hybrid, and other approaches to repurpose some or all of the band. The Commission also sought comment on the appropriate band plan, as well as the licensing, operating, and technical rules for any new flexible use licenses in the band. In response to the

NPRM,

comments and reply comments were due on October 29, 2018 and December 11, 2018, respectively.

15.

May Public Notice.

—On May 3, 2019, the International and Wireless Telecommunications Bureaus issued a public notice (84 FR 25514, June 3, 2019) (

May 3 Public Notice

) seeking comment on positions taken by the C-Band Alliance, the Small Satellite

Operators, and T-Mobile. The

May 3 Public Notice

sought comment on the enforceable interference protection rights, if any, granted to space station operators against co-primary terrestrial operations and whether those rights depend on the extent to which incumbent earth stations receive their transmissions within the United States. The

May 3 Public Notice

also sought comment on the enforceable interference protection rights granted to licensed or registered receive-only earth station operators against co-primary terrestrial operations and whether registered receive-only earth station operators are eligible as “licensee[s]” under Section 309(j)(8)(G), to voluntarily relinquish their rights to protection from harmful interference in the reverse phase of an incentive auction. The

May 3 Public Notice

also asked whether the Commission had authority to offer payments to such earth stations to induce them to modify or relocate their facilities. The

May 3 Public Notice

also sought comment on the limits, if any, that Section 316 of the Act places on the proposals raised by the Commission in the

NPRM

or by the commenters in this docket and on obligations, if any, that Section 316 of the Act places on the Commission vis-à-vis licensed or registered receive-only earth station operators.

16.

July Public Notice.

—On July 19, 2019, the Wireless Telecommunications Bureau, International Bureau, Office of Engineering and Technology, and Office of Economics and Analytics issued a public notice (84 FR 35365, July 23, 2019) (

July 19 Public Notice

) seeking comment on filings by: (1) ACA Connects—America's Communications Association, the Competitive Carriers Association, Charter Communications, Inc. (ACA Connects Coalition); (2) AT&T; and (3) the Wireless internet Service Providers Association, Google, and Microsoft (WISPA plan). In particular, the

July 19 Public Notice

sought comment on ways to increase the efficient shared use of the C-band through the submitted plans, the viability of ACA Connects Coalition's plan to move all video programming to fiber, and the viability of fiber generally.

III. Report and Order

17. The Commission believes C-band spectrum for terrestrial wireless uses will play a significant role in bringing next-generation services like 5G to the American public and assuring American leadership in the 5G ecosystem. The Commission takes action to make this valuable spectrum resource available for new terrestrial wireless uses as quickly as possible, while also preserving the continued operation of existing FSS services during and after the transition. The record in this proceeding makes clear that licensing mid-band spectrum for flexible use will lead to substantial economic gains, with some economists estimating billions of dollars in increases on spending, new jobs, and America's economy. At the same time, the Commission also recognizes the significant benefit to consumers provided by incumbent FSS services throughout the United States. Because the Commission finds that incumbent space station operators will be able to maintain the same services in the upper 200 megahertz as they are currently providing across the full 500 megahertz of C-band spectrum, the rules adopted in this

Report and Order

will benefit the American public by simultaneously preserving existing FSS services and making way for the provision of next-generation wireless services throughout the contiguous United States.

18. In this

Report and Order,

the Commission concludes that a public auction of the lower 280 megahertz of the C-band will best carry out the Commission's goals, and it adds a mobile allocation to the 3.7-4.0 GHz band so that next-generation services like 5G can use the band. Relying on the

Emerging Technologies

framework, the Commission adopts a process to relocate FSS operations into the upper 200 megahertz of the band, while fully reimbursing existing operators for the costs of this relocation and offering accelerated relocation payments to encourage a speedy transition. The Commission also adopts service and technical rules for overlay licensees in the 280 megahertz of spectrum designated for transition to flexible use.

A. Public Auction of 280 Megahertz of C-Band Spectrum for Flexible Use

19. After review of the extensive record in this proceeding, the Commission adopts a traditional Commission-administered public auction of overlay licenses in the 280 megahertz of C-band spectrum made available for flexible use. The Commission adopts this approach because it will rapidly and effectively repurpose this band for new wireless terrestrial uses, rely on established mechanisms for putting this valuable spectrum to its highest valued use pursuant to statutory criteria designed to promote competition and other important public interest goals, and provide reasonable accommodations to eligible space station operators and incumbent earth stations. The advantages of the public auction include making a significant amount of 3.7-4.2 GHz band spectrum available quickly for flexible-use licenses and adopting a transition period that aligns stakeholders' incentives, particularly those of incumbent FSS operators, so as to achieve an expeditious transition, while ensuring effective accommodation of relocated incumbent users.

20. In the

NPRM,

the Commission sought comment on a variety of market-based mechanisms for expanding flexible use in the 3.7-4.2 GHz band, including a private sale approach, auction mechanisms, and other hybrid approaches that combined elements of various mechanisms. For the private sale approach, the

NPRM

sought comment on a process whereby the satellite industry voluntarily would negotiate with any interested terrestrial operators for the sale of the space station operators' rights in the band and then would clear the negotiated-for spectrum and make it available for flexible use while ensuring uninterrupted incumbent earth station operations through a variety of potential means. With respect to more traditional, Commission-led transition mechanisms, the

NPRM

sought comment on various auction approaches, such as an overlay, incentive, and capacity auctions, including transition mechanisms used in prior proceedings. The

May 3 Public Notice

sought additional comment on the Commission's authority under the Act as well as approaches raised by the C-Band Alliance and T-Mobile. And the

July 19 Public Notice

sought additional comment on a public auction approach advocated by ACA Connects (the ACA Plan), among other issues. Under each of these approaches, the Commission sought comment on how to ensure that incumbent C-band users are effectively transitioned out of the spectrum made available for flexible-use and on whether to provide reimbursement to incumbent space station operators for the costs of transitioning their services.

21. The Commission adopts a traditional Commission-administered public auction of overlay licenses to make the C-band spectrum available expeditiously for next-generation terrestrial wireless use. With overlay licenses, the licensees obtain the rights to geographic area licenses “overlaid” on top of the incumbent licensees, meaning that they may operate anywhere within its geographic area, subject to protecting the operations of incumbent licensees. The Commission has offered two basic forms of overlay licenses: One that grandfathers legacy incumbents and allows their voluntary relocation, and another that makes relocation of incumbents to comparable facilities mandatory. The Commission

adopts the latter approach—assigning overlay licenses via public auction with rules for clearing the band for flexible use and holding incumbents harmless—for several reasons.

22.

First,

the Commission finds that a public auction of flexible-use licenses—conditioned upon relocation of incumbent operations—will best ensure fairness and competition in the allocation of these new flexible-use licenses. The Commission has a long and successful history conducting public auctions of spectrum and has well-established oversight processes designed to promote transparency and ensure that valuable public spectrum resources are put to their highest and best use, while also promoting other public interest goals articulated in Section 309(j) of the Act. In more recent years, public auctions of new flexible-use rights have played a pivotal role in transitioning existing bands and making spectrum available for new uses. Importantly, the Commission carefully designs each auction to include transparent procedures that promote fair-market pricing and robust participation from a diverse group of bidders. Commission control and oversight of the auction of new flexible-use licenses in the 3.7-3.98 GHz band will ensure that a wide range of interested parties have fair and equal access to new spectrum rights that will be vital to the introduction of next-generation wireless services.

23.

Second,

a public auction will maintain the Commission's ability to ensure that incumbent space station operators and earth station owners are able to provide and receive the services and content that they currently provide and receive both during and after mandatory relocation. The safeguards the Commission adopts in conjunction with a public auction ensure that the clearing process is both equitable and transparent and that it provides customers of these incumbent C-band providers assurance that they will continue to be able to receive C-band services during and after the transition. In addition to licensing and technical rules designed to promote harmony between existing C-band services and new flexible uses in the band, the Commission adopts rules for the transition process to ensure that all relevant stakeholders have access to information regarding the necessary steps, costs, respective obligations of each party, and overall timeline for transitioning existing C-band services to the upper 200 megahertz of the band. The Commission's experience in overseeing other complicated, multi-stakeholder transitions of diverse incumbents demonstrates the need for Commission rules and oversight of the transition process to mitigate disputes among stakeholders, expedite the clearing process, and ensure all affected parties receive what they are entitled to in a timely manner.

24.

Third,

the Commission finds that its authority to hold such an auction is firmly established. Section 309 governs the Commission's process for granting licenses under Title III, and it expressly grants the Commission authority to hold an auction where mutually exclusive applications are accepted for initial spectrum licenses. The Commission has used an auction of overlay licenses on a number of occasions to repurpose spectrum for a new service, by requiring incoming licensees to clear the band (typically by funding the relocation of incumbent licensees) in order to fully deploy the new service in a manner that meets the goals and requirements that the Commission had established under Section 303 for providing that service. Since 1992, the Commission has also adopted a series of rules to enable new licensees to enter into voluntary or mandatory negotiations with incumbent operators to clear a spectrum band after which, failing an agreement, the new entrant could involuntarily clear incumbent operations by expressing its intent to commence operations in that band and paying for all reasonable relocation costs. Courts repeatedly have approved the Commission's use of this authority as a means of introducing new services and ensuring that displaced incumbents are placed in positions comparable to those that they had occupied prior to displacement. In light of this well-established precedent and the Commission's repeated success in conducting such auctions in a manner that promotes the public interest, convenience, and necessity, the Commission finds that it has ample legal authority to employ an auction of overlay licenses as a means of introducing new flexible uses in the C-band.

25.

Fourth,

the Commission finds that holding a public auction will ensure this spectrum gets put to its highest, best use quickly. In formulating the transition process and rules adopted in this

Report and Order,

stakeholders have repeatedly emphasized the need to make C-band spectrum available for flexible use as quickly as possible, with the goal of conducting an auction of overlay licenses in the 3.7-3.98 GHz band by the end of 2020. Indeed, by seeking comment, in a separate public notice, on procedures for an auction of 3.7 GHz Service licenses concurrently with this

Report and Order,

the Commission immediately initiates the necessary Commission processes to prepare for an auction. Notably, while satisfying the administrative procedures and requirements associated with a Commission-administered auction, the timelines adopted in this

Report and Order

result in spectrum being made available for flexible use at least as quickly as any of the other transition mechanisms proposed in this proceeding.

26. The Commission's decision to hold a public auction has overwhelming support in the record. A range of commenters with diverse interests support Commission-led auction approaches—including those involving spectrum clearing and geographic clearing—and they emphasize the importance, regardless of the chosen transition approach, that the Commission maintain oversight throughout the transition process. Several commenters support a traditional forward auction, using a standard clock auction format such as that used in Auction 102 for the 24 GHz band. Many commenters that support a public auction of flexible-use licenses in a portion of the 3.7-4.2 GHz band emphasize that the approach must also include a condition on the licenses requiring new flexible-use licensees to reimburse incumbent C-band users for their relocation costs. Certain parties that originally advocated for alternate transition mechanisms in this proceeding have come to support a public auction of overlay licenses as an effective approach to repurposing C-band spectrum for flexible use.

27. Next, the Commission designates 280 megahertz of C-band spectrum (3.7-3.98 GHz) throughout the contiguous United States to be cleared for auction plus another 20 megahertz (3.98-4.0 GHz) to be cleared to serve as a guard band. Given the high demand for mid-band spectrum, the Commission in the

NPRM

sought comment on whether to set a “socially efficient amount of [C-band] spectrum” for repurposing in order to ensure this valuable spectrum is put to its highest and best use.

28. The Commission finds that clearing the lower 280 megahertz (plus a 20 megahertz guard band) of the C-band strikes the appropriate balance between making available as much spectrum as possible for terrestrial use in a short timeframe and ensuring sufficient spectrum remains to support and protect incumbent uses. In particular, the Commission finds that making 280 megahertz available for flexible use is sufficiently large to spur necessary investment in equipment and network deployment resources for next-

generation wireless services in this band. Numerous commenters support clearing 280 megahertz or more to support terrestrial 5G use.

29. The Commission's approach will permit all incumbents to maintain comparable service for existing customers and to obtain future customers in the upper part of the band, while making more efficient use of the band as a whole. C-band space station operators that currently are serving U.S. customers are in a unique position to quickly clear a significant portion of this band spectrally by transitioning their services to the upper portion of the band. Through a process of “satellite grooming,” each satellite company can use their internal fleet management resources to determine the most efficient way to migrate customers to the upper portion of the band, including in some instances by migrating customers to transponders on a different space station operator's fleet. The record adequately demonstrates the satellite industry's ability to clear 280 megahertz for public auction, along with a 20 megahertz guard band, while also ensuring that its customers and incumbent earth station operators are adequately transitioned and able to continue operations without interruption. Furthermore, the rules adopted in this

Report and Order

will ensure that incumbent operations are adequately accommodated and can continue to make use of existing satellite services, while incurring no significant transition costs. The Commission therefore finds that an auction of the lower 280 megahertz of C-band spectrum across the contiguous United States will best advance the Commission's goal of ensuring the United States' leadership in 5G deployment and service offerings without compromising the continued operation of existing C-band services.

30. The Commission's decision to hold a public auction of overlay licenses to operate in the 3.7-3.98 GHz band is the result of careful review of the extensive record in this proceeding, which included transition mechanism proposals submitted by a variety interested parties across stakeholder groups.

31.

C-Band Alliance.

—The Commission declines to adopt the C-Band Alliance proposal for a private sale approach led by incumbent C-band space station operators. The Commission finds that, relative to the C-Band Alliance proposal, the use of a public auction will provide a greater benefit to potential bidders, ensure Commission oversight and protect the interests of displaced incumbent C-band users, promote a rapid transition, and be more firmly grounded in established legal authority.

First,

the C-Band Alliance proposal would place the licensee selection process for an entire band of newly configured spectrum into private hands by vesting private entities with the exclusive ability to allocate new terrestrial rights to valuable C-band spectrum through privately negotiated sales that would not be subject to any of the procedural protections or public interest requirements that Commission-led auctions are designed to promote. Such an approach lacks the transparency and procompetitive features of a public auction and would provide bidders with less certainty about fair and equal access to new flexible-use licenses. In contrast to a private sale conducted by private entities whose primary incentive would be to maximize profits, a Commission-led auction will be driven by broader public interests, including robust participation by a diverse group of bidders, competitive pricing, and transparent allocation of this valuable public resource.

32.

Second,

Commission oversight of the public auction and issuance of flexible-use licenses conditioned upon relocation of incumbent operations will more effectively ensure that all incumbent C-band users are made whole upon completion of the transition. The C-Band Alliance's proposal would give certain incumbent space station operators substantial discretion to decide whether and to what extent all affected C-band users should be accommodated in the transition and compensated for their relocation costs. This responsibility is directly at odds with space station operators' fiduciary duties to their shareholders to maximize the retained profits from the private sale. In contrast, Commission oversight of a public auction and the transition process will be specifically designed to ensure that incumbent C-band users are able to maintain their existing services and are reimbursed for all reasonable costs associated with the transition.

33.

Third,

the Commission believes that a public auction of overlay licenses will make spectrum available for flexible-use just as fast as a private sale approach. Indeed, the Commission plans to hold the public auction this year—just as the C-Band Alliance had proposed for its private sale—and the Commission incorporates aspects of their proposed transition process and deadlines into this

Report and Order.

The Commission disagrees with the C-Band Alliance argument that any Commission-led auction mechanism would fail to overcome the holdout problem due to non-exclusive incumbent rights in the band and would require significant Commission intervention that would delay the auction approach relative to a market-based approach. Despite its initial claim that its private sale proposal would solve the holdout problem by incentivizing incumbent space station operators to cooperate in the transition and collectively sell their shared spectrum rights to new flexible-use licensees, only three incumbent C-band space station operators are members of the C-Band Alliance and have fully supported the C-Band Alliance's proposal. Unless the Commission were to adopt rules granting the C-Band Alliance exclusive authority to lead the transition and compelling non-member space station operators to cooperate with the C-Band Alliance's approach, there would be a potential, and indeed likely, holdout problem that could undermine the success of such a transition. The Commission believes such exclusive authority would raise significant competitive concerns in the absence of unanimity among incumbent space station operators. In other words, due to the existing licensing regime in this band, the potential holdout problem needs to be addressed regardless of whether the Commission adopts a public auction or private sale approach. The rules adopted in this

Report and Order

are specifically designed to reduce the risk of potential holdouts by aligning the incentives of all relevant C-band space station operators with the Commission's goals of rapid introduction of C-band spectrum into the marketplace, and the Commission finds that its public auction approach will provide for rapid clearing upon final action in this proceeding.

34.

Finally,

the Commission finds that a public auction is more consistent with the Commission's long-standing legal authority to manage spectrum in the public interest than a private sale conducted by incumbent space station operators. In contrast to the Commission's well-established authority to conduct auctions of overlay licenses conditioned upon the relocation of incumbent users, the C-Band Alliance proposal would require an unprecedented grant of authority to private entities to negotiate with new entrants for the conveyance of spectrum-use rights that FSS licensees do not currently have. While the Commission has previously modified the existing licenses of incumbents to assign new license rights without creating a mechanism to allow for the

filing of mutually exclusive applications, such modifications were adopted in order to authorize the incumbent licensees to provide new or additional services. Under the C-Band Alliance proposal, the Commission would be granting incumbent space station operators new flexible-use rights

solely

for the purpose of allowing the incumbents to sell those rights on the secondary market, without actually requiring them to meet any buildout requirements or initiate terrestrial service. Indeed, given the full band, full arc nature of FSS licenses, incumbent space station operators could not provide terrestrial mobile services without causing interference to existing C-band satellite services.

35.

T-Mobile Proposal.

—The Commission declines to adopt T-Mobile's proposal of an incentive auction and modified proposal of a more traditional forward auction of flexible-use licenses.

First,

T-Mobile's proposal exceeds our incentive auction authority. Section 309(j)(8)(G) restricts our use of incentive auctions so that only “licensees” may voluntarily relinquish licensed “spectrum usage rights” in exchange for accelerated relocation payments. Unlike the incumbent space station operators, earth station registrants are not licensees. The Communications Act defines the term “license” narrowly as “that instrument of authorization

required by

[the Act] or the rules and regulations of the Commission made pursuant to [the Act], for the use or operation of apparatus for

transmission

of energy, or communications, or signals by radio, by whatever name the instrument may be designated by the Commission.” Since 1979 the Commission has found that licensing receive-only earth stations was not required by the Communications Act because, by definition, such earth stations do not transmit energy, communications, or signals by radio, and since 1991 receive-only earth stations have not been eligible to apply for a Commission license. While some receive-only earth stations in the C-band are licensed to transmit in another band (

i.e.,

licensed transmit-receive earth stations), that license to transmit does not provide the earth station operator with the right to transmit in the C-band, where they hold no “licensed spectrum usage rights.” Because receive-only earth stations are (and must be) unlicensed and have no “transmission” authority, earth station registrants may not participate in the supply-side of an incentive auction.

36.

Second,

because FSS licensees in the C-band share the same non-exclusive rights to transmit nationwide, across the full 500 megahertz, their license rights are not substitutes such that they could compete against one another in a reverse auction to forfeit those rights; all incumbent space station operators would need to clear their existing services from a portion of the band in order to make that spectrum available for flexible use. Section 309(j)(8)(G) specifically requires that, in order for the Commission to hold an incentive auction, “at least two

competing

licensees participate in the reverse auction.” Because incumbent C-band space station operators are not competing licensees that could bid against one another in a reverse auction, T-Mobile's proposal would be an unlawful exercise of the Commission's incentive auction authority.

37.

Third,

the incentive auction would result in a patchwork of spectrum and geographic areas being made available for flexible use, rather than a uniform block of spectrum being cleared throughout the contiguous United States. T-Mobile's proposal would allow incumbent earth station owners to agree to clear geographically, for example by switching existing C-band services to fiber. This would likely result in a disproportionate amount of C-band spectrum being made available in urban areas, where the demand for C-band spectrum is higher and the costs of transitioning to alternative transition mechanisms is lower than in rural areas. The Commission therefore finds that T-Mobile's proposal would undermine the Commission's stated goals for this proceeding to close the digital divide and promote the introduction of next-generation wireless services in all communities, both rural and urban, throughout the contiguous United States.

38. Because our public auction of overlay licenses provides a Commission-led auction mechanism to make 280 megahertz available for flexible use throughout the contiguous United States and compensate incumbent C-band users for their relocation costs, the Commission finds that it captures all the benefits of T-Mobile's proposal while avoiding the legal and practical complications of an incentive auction in this band. Indeed, T-Mobile now agrees that a traditional forward auction of overlay licenses will be a more straight-forward approach to implement than the incentive auction it originally proposed.

39.

ACA Connects Coalition Proposal.

—The Commission declines to adopt the ACA Connects Coalition proposal to transition MVPD earth stations to fiber and repack remaining earth station users into the upper portion of the band.

First,

while the ACA Connects Coalition proposes a public auction to award new terrestrial flexible-use licenses and assign obligations for transition costs, it does not provide potential bidders with the same certainty as the public auction of overlay licenses adopted here. Importantly, the ACA Connects Coalition suggests that programmers, MVPDs, and C-band service providers would negotiate contracts and develop plans for the transition “in the period between an FCC decision and the completion of an auction.” However, such private contract negotiations would involve decisions—such as how much spectrum will be made available, in which geographic areas, and on what timeline—that would be crucial for potential bidders to understand in advance of the auction. It is unclear from the ACA Connects Coalition proposal when these decisions would be made and how that information would be conveyed to potential bidders such that they could make informed decisions about the spectrum band and geographic areas they would compete for at auction. The Commission finds that its public auction of overlay licenses will provide bidders with more certainty by designating a uniform block of 280 megahertz that will be made available for flexible use throughout the contiguous United States.

40.

Second,

the Commission finds that its approach will more effectively ensure that all incumbent C-band users are adequately transitioned and able to continue receiving C-band services after the introduction of new terrestrial wireless operations in the 3.7 GHz Service. The Commission agrees with those commenters who point out that the ACA Connects Coalition proposal lacks important implementation details, such as how to manage the transition of a wide variety of stakeholders, including the design, testing, construction, and integration of nationwide fiber networks and the necessary provisions for maintaining fiber operations in the future. In contrast to the ACA Connects Coalition proposal, the approach the Commission adopts here ensures that incumbent earth station owners will be effectively transitioned and will be able to receive the same C-band services after the transition as they do today.

41.

Third,

the Commission finds that the ACA Connects Coalition proposal is likely to underestimate the complexities and costs of transitioning from C-band satellite spectrum to fiber and would be unlikely to facilitate more rapid and extensive deployment of terrestrial wireless services than the approach the

Commission adopts in this

Report and Order.

The ACA Connects Coalition proposes that clearing would be conducted on a market-by-market basis, which would have “some urban markets” available for flexible-use in approximately 30 months, the “majority of remaining markets” in three years, and the last, “hard-to-build areas” in five years. The Commission shares the concerns of many commenters who doubt that the ACA Connects Coalition proposal could be completed by those timelines. The Commission finds that its approach minimizes the costs, complexities, and risks of delay inherent in the ACA Connects Coalition proposal and is therefore more likely to clear a substantial amount of C-band spectrum in a faster timeframe via a more efficient mechanism.

42.

Fourth,

the Commission finds that the approach adopted in this

Report and Order

is more consistent with the Commission's legal authority to manage spectrum and conduct auctions in the public interest than the ACA Connects Coalition proposal. Section 309(j) of the Act requires that all proceeds from the use of a competitive bidding system must be deposited in the U.S. Treasury. The ACA Connects Coalition proposal that the Commission retain a portion of the revenues from a traditional forward auction to cover the C-band incumbents' relocation costs would therefore violate the provisions of Section 309(j). There is an exception to this rule where the Commission exercises its incentive auction authority to incentivize incumbent licensees to relinquish their spectrum usage rights in exchange for a share of the auctions proceeds. However, because space station operators have non-exclusive rights the full C-band nationwide, an incentive auction in this band would fail to satisfy the Section 309(j)(8)(G) requirement that at least two competing licensees must participate in the reverse auction. The Commission therefore finds that the ACA Connects Coalition proposal would be an unlawful exercise of the Commission's incentive auction authority.

1. Allocation of the 3.7-4.2 GHz Band

43. The Commission adopts rules to add a primary non-Federal mobile, except aeronautical mobile, allocation to the 3.7-4.0 GHz band nationwide. In the United States, that band currently has exclusive non-Federal allocations for FSS and Fixed Service. In addition, the International Table of Frequency Allocations also has a mobile allocation worldwide in the band, with the limitation that in the Americas, Southeast Asia, Australia, and New Zealand, the mobile allocation excludes aeronautical mobile.

44. As the Commission noted in the

NPRM,

Section 303(y) provides the Commission with authority to provide for flexibility of use if: “(1) Such use is consistent with international agreements to which the United States is a party; and (2) the Commission finds, after notice and opportunity for public comment, that (A) such an allocation would be in the public interest; (B) such use would not deter investment in communications services and systems, or technology development; and (C) such use would not result in harmful interference among users.” Adopting a primary non-Federal mobile, except aeronautical mobile, allocation to the 3.7-4.0 GHz band and revising the FSS allocation within the contiguous United States will foster more efficient and intensive use of mid-band spectrum to facilitate and incentivize investment in next generation wireless services. Mid-band spectrum is important for next generation wireless broadband service due to its favorable propagation and capacity characteristics. Allocating the 3.7-4.0 GHz band nationwide for mobile services also meets the Commission's mandate under the MOBILE NOW Act to identify spectrum for mobile and fixed wireless broadband use. In addition, adopting this allocation will harmonize the Commission's allocations for the 3.7-4.0 GHz band with international allocations. Adding a primary mobile service allocation will provide the ability to make as much mid-band spectrum available as possible, which will help to ensure the nation's success in deploying the next generation of wireless services. Finally, because we adopt rules designating 3.98-4.0 GHz as a guard band and requiring FSS and Fixed Service licensees to transition their services to the upper portion of the band and to other bands, respectively, the introduction of mobile use will not result in harmful interference among users of the 3.7-4.2 GHz band.

45. The Commission also removes the FSS allocation within the contiguous United States in the 3.7-4.0 GHz band. To allow for flexible use of the 3.7-3.98 GHz band within the contiguous United States and for fixed use outside of the contiguous United States, the Commission leaves in place the existing Fixed Service allocation to the 3.7-4.2 GHz band while sunsetting the existing licenses for point-to-point operations within the contiguous United States. Authorizations for FSS and Fixed Service operations outside of the contiguous United States may continue to operate in the entire 3.7-4.2 GHz band. The Commission excludes locations outside of the contiguous United States from the public auction and relocation. Locations outside of the contiguous United States have a greater need for C-band services, particularly for the provision of services necessary for the protection of life and property—including telehealth, E911, and education services. The Commission agrees that Alaska, Hawaii, and the U.S. territories should be excluded from any reallocation and repurposing to terrestrial use because C-band service is often the only option available to reach remote villages to provide basic telephone service, E911, and broadband service used to support applications such as telehealth and distance learning. As a result, we believe it is appropriate to retain the FSS allocation across the 3.7-4.2 GHz band outside the contiguous United States.

46. The Commission also modifies footnote NG457A which describes the status of earth stations on vessels in 3.7-4.2 GHz to be consistent with its new band plan. NG457A will now provide that incumbent licensees may continue to provide service to earth stations on vessels on an unprotected basis vis-à-vis both fixed service operations and the new mobile services. In addition, NG457A will now limit the band where ESVs may be coordinated for up to 180 days to 4.0-4.2 GHz rather than 3.7-4.2 GHz as in the existing footnote because FSS will no longer have primary status below 4 GHz. These changes are necessary because of the addition of mobile services and the deletion of FSS in the 3.7-4.0 GHz band. While these changes to NG457A were not specifically proposed in the

NRPM,

they logically follow from the allocation changes that were proposed because earth stations on vessels are an application of the FSS and we proposed to remove FSS from some or all of the band in the

NPRM.

47. The Commission's plan will ensure that content that FSS now delivers to incumbent earth stations will continue uninterrupted as an essential element of the transition mechanism. Although the Commission allocates the 3.98-4.0 GHz band to mobile services, except aeronautical, for flexible use, the Commission declines at this time to establish service rules for that band. Instead, it will function as a guard band to protect earth station registrants from harmful interference both during and after the transition. The Commission also declines to add a mobile allocation to the 4.0-4.2 GHz band reserved for primary FSS use at this time, as doing so could undermine investment in content distribution. Figures 1 and 2

below demonstrate the post-transition allocation and uses of the band in the contiguous United States and in the rest of the United States, respectively.

ER23AP20.000

ER23AP20.001

2. Competitive Bidding Rules

48. The Communications Act requires that the Commission resolve any mutually exclusive applications for new flexible-use licenses in this band through a system of competitive bidding. In the

NPRM,

the Commission sought comment on our proposal to conduct any auction for licenses in this band in conformity with the general competitive bidding rules set forth in part 1, subpart Q, of the Commission's rules. The Commission specifically proposed to employ part 1 rules governing competitive bidding design, application and certification procedures, reporting requirements, the prohibition on certain communications regarding the auction, and designated entity preferences and unjust enrichment. These competitive bidding rules provide a framework for the auction process. More detailed, auction-specific procedures will be addressed in the separate pre-auction process.

49. Given the record and the Commission's experience in successfully conducting auctions pursuant to the part 1 rules, the Commission adopts its proposal to employ those rules when developing the auction for new licenses in this band. Should the Commission subsequently modify its general competitive bidding rules, the modifications would apply as well.

50. We note that Section 647 of the Open-market Reorganization for the Betterment of International Telecommunications Act (ORBIT Act) prohibits the Commission from assigning by competitive bidding either orbital locations or spectrum used for the provision of international or global satellite communications services. In the

NPRM,

the Commission tentatively concluded that the ORBIT Act prohibition would not apply here, since any auctioned spectrum would be used for a new domestic terrestrial service, and the auction mechanisms would not be used to assign by competitive bidding orbital locations or spectrum used for the provision of international or global satellite communications services.

51. The Commission affirms its tentative conclusion. Based on the record and consistent with precedent on this issue, the Commission finds that Section 647 of the ORBIT Act does not prohibit it from assigning terrestrial licenses in this band through a system of competitive bidding.

a. Designated Entity Provisions

52. In the

NPRM,

the Commission sought comment on a proposal for bidding credits to be offered to designated entities when conducting an auction of new licenses in this band. In authorizing the Commission to use competitive bidding, Congress mandated that the Commission “ensure that small businesses, rural telephone companies, and businesses owned by members of minority groups and women are given the opportunity to participate in the provision of spectrum-based services.” Based on the its prior experience with the use of bidding credits in spectrum auctions, the Commission finds that using bidding credits is an effective tool to achieve the statutory objective of promoting participation of designated entities in the provision of spectrum-based service.

53.

Small Businesses.

—One way the Commission fulfills this mandate is through the award of bidding credits to small businesses. In the

Competitive Bidding Second Memorandum Opinion and Order,

the Commission stated that it would define eligibility requirements for small businesses on a service-specific basis, taking into account the capital requirements and other characteristics of each particular service in establishing the appropriate threshold. Further, in the

Part 1 Third Report and Order

and the more recent

Competitive Bidding Update Report and Order (81 FR 43523, July 5, 2016),

the Commission, while standardizing many auction rules, determined that it would continue a service-by-service approach to defining small businesses. In the

NPRM,

the Commission sought comment on whether to adopt bidding credits for the two larger designated entity business sizes provided in the part 1 rules.

54. In adopting competitive bidding rules for other spectrum bands that will

be used as part of 5G services, the Commission included provisions for designated entities to promote opportunities for small businesses, rural telephone companies, and businesses owned by members of minority groups and women to participate in the provision of spectrum-based services. For example, the Commission adopted two small business definitions for the auction of licenses in the Upper Microwave Flexible Use Service (39 GHz band). These two small business definitions are the highest two of three thresholds in the Commission's standardized schedule of bidding credits.

55. The Commission adopts its proposal to apply the two small business definitions with higher gross revenues thresholds to auctions of overlay licenses in the 3.7-3.98 GHz band. Accordingly, an entity with average annual gross revenues for the relevant preceding period not exceeding $55 million will qualify as a “small business,” while an entity with average annual gross revenues for the relevant preceding period not exceeding $20 million will qualify as a “very small business.” Since their adoption in 2015, the Commission has used these gross revenue thresholds in auctions for licenses likely to be used to provide 5G services in a variety of bands. The results in these auctions indicate that these gross revenue thresholds have provided an opportunity for bidders claiming eligibility as small businesses to win licenses to provide spectrum-based services at auction. These thresholds do not appear to be overly inclusive as a substantial number of qualified bidders in these auctions do not come within the thresholds. This helps preclude designated entity benefits from flowing to entities for which such credits are not necessary.

56. The Commission also adopts its proposal to provide qualifying “small businesses” with a bidding credit of 15% and qualifying “very small businesses” with a bidding credit of 25%, consistent with the standardized schedule in part 1 of the Commission's rules. This proposal was modeled on the small business size standards and associated bidding credits that the Commission adopted for a range of other services. The Commission believes that this two-tiered approach has been successful in the past, and it will employ it once again. The Commission believes that use of the small business tiers and associated bidding credits set forth in the part 1 bidding credit schedule will provide consistency and predictability for small businesses. No commenter provides any alternative or reason why the bidding credit thresholds or small business definitions that the Commission adopts would not work in this service.

57.

Rural Service Providers.

—In the

NPRM,

the Commission also sought comment on a proposal to offer a bidding credit for rural service providers. The rural service provider bidding credit awards a 15% bidding credit to those that service predominantly rural areas and that have fewer than 250,000 combined wireless, wireline, broadband and cable subscribers. As a general matter, the Commission “has made closing the digital divide between Americans with, and without, access to modern broadband networks its top priority . . . [and is] committed to ensuring that all Americans, including those in rural areas, Tribal lands, and disaster-affected areas, have the benefits of a high-speed broadband connection.”

58. The Commission finds that a targeted bidding credit will better enable entities already providing rural service to compete for spectrum licenses at auction and in doing so, will increase the availability of 5G service in rural areas. Accordingly, the Commission will apply the rural service provider bidding credit to auctioning new licenses in this band.

3. Licensing and Operating Rules

59. Building on its previous experience introducing mobile service in bands shared with fixed terrestrial and FSS users, the Commission adopts rules to license new mobile operations under its part 27 rules, with modifications to tailor certain rules to the specific characteristics of C-band spectrum. The Commission adopts licensing and operating rules that afford licensees the flexibility to align licenses in the 3.7-3.98 GHz band with licenses in other spectrum bands governed by part 27 of the Commission's rules and other flexible-use services. Specifically, finding no opposition in the record, the Commission adopts rules requiring 3.7 GHz Service licensees in the 3.7-3.98 GHz band to comply with licensing and operating rules that are applicable to all part 27 services, including flexible use, regulatory status, foreign ownership reporting, compliance with construction requirements, renewal criteria, permanent discontinuance of operations, partitioning and disaggregation, and spectrum leasing. In addition, the Commission adopts service-specific rules for the 3.7-3.98 GHz band, including eligibility, mobile spectrum holdings policies, license term, performance requirements, renewal term construction obligations, and other licensing and operating rules to be included in part 27.

a. Band Plan

60.

Block Size.

—The Commission will designate the lower 280 megahertz of C-band spectrum in 100 megahertz increments as the A and B Blocks and in an 80-megahertz increment as C Block. The Commission will issue licenses in the A, B, and C Blocks in 20 megahertz “sub-blocks.” Specifically, the A Block (3.7-3.8 GHz), B Block: (3.8-3.9 GHz), and C Block (3.9-3.98 GHz) will be licensed according to the following channel plan:

ER23AP20.002

61. In the

NPRM,

the Commission sought comment on whether 20 megahertz blocks would be appropriate for the wireless technologies that are likely to be deployed in this band. The Commission sought comment on the appropriate block size that would accommodate a wide range of terrestrial wireless services, while also providing sufficient bandwidth to support 5G services. Commenters support relatively smaller sized sub-blocks with the

potential to aggregate to larger sizes of 60 to 160 megahertz.

62. The Commission finds that 100 megahertz blocks, with 20 megahertz sub-blocks, will provide sufficient flexibility for interested bidders to tailor their decisions based on the anticipated clearing costs and accelerated relocation payment obligations associated with a particular amount of spectrum or geographic license area. For carrier frequencies below 6 GHz, 3GPP has specified thirteen possible channel bandwidths for 5G deployments as follows: 5, 10, 15, 20, 25, 30, 40, 50, 60, 70, 80, 90, and 100 megahertz. To facilitate operation of 100 megahertz bandwidth 5G channels, the Commission implements and defines the uniform block size of 100 megahertz that would run across the entire band from 3.7-4.0 GHz. By allowing new flexible-use licensees to acquire full 100-megahertz blocks, the Commission will ensure that C-band spectrum is licensed in sufficiently wide bandwidths to enable 5G deployments. The inclusion of 20 megahertz sub-blocks provides sufficient flexibility for manufacturers and licensees to tailor application of the band to suit future needs, especially when considering that LTE can be made to coexist within or adjacent to 5G operations. A number of commenters support a Commission auction of this spectrum in 20 megahertz blocks. Because it finds that 20 megahertz sub-blocks provide sufficient flexibility, the Commission finds it unnecessary to divide the blocks even smaller into 10 megahertz sub-blocks, as some commenters have proposed.

63.

Spectrum Block Configuration.

—The Commission adopts rules to license the A, B, and C 20 megahertz sub-blocks of C-band spectrum in an unpaired spectrum block configuration because there is wide support in the record for this approach, and it will enhance the flexible and efficient use of the band for next-generation services and other advance spectrum-based services. In contrast to a paired channel configuration that assumes frequency division duplex operations, an unpaired spectrum configuration is technology neutral,

i.e.,

enables time division duplex operations, which has become increasingly prevalent in deployments of digital broadband networks. In light of these considerations, the Commission concludes that an unpaired spectrum block configuration will provide licensees the flexibility necessary to increase the capacity of their networks and make the most efficient use of C-band spectrum.

64.

Use of Geographic Licensing.

—Consistent with its approach in several other bands used to provide fixed and mobile services, the Commission finds that it is in the public interest to license the A, B, and C Blocks in 20 megahertz sub-blocks on an exclusive, geographic area basis. Geographic area licensing provides flexibility to licensees, promotes efficient spectrum use, and helps facilitate rapid assignment of licenses, using competitive bidding when necessary. There is wide support in the record for licensing C-band flexible-use spectrum on an exclusive, geographic basis, and the Commission finds that such an approach will give certainty to licensees and provide the efficiencies of scale and scope that drive innovation, investment, and rapid deployment of next generation services.

65.

Geographic License Area.

—The Commission adopts PEAs as the geographic license area for new 3.7 GHz Service licenses and divide those licenses into 20 megahertz sub-blocks within the A, B, and C Blocks; the Commission finds that this license-area size best optimizes and balances our statutory and regulatory objectives in licensing spectrum. In determining the appropriate geographic license area size, the Commission must consider several factors, including: (1) Facilitating access to spectrum by both small and large providers; (2) providing for the efficient use of spectrum; (3) encouraging deployment of wireless broadband services to consumers, including those in rural areas and Tribal lands; and (4) promoting investment in and rapid deployment of new technologies and services. In the

NPRM,

the Commission sought comment on using PEAs, as well as on licensing on a county, nationwide, or other basis.

66. The Commission finds that licensing on a PEA basis strikes the appropriate balance between being sufficiently large to facilitate wide-area deployments of 5G, while also being sufficiently small to ensure that small and regional carriers are able to compete for new 3.7 GHz Service licenses. PEAs offer a compromise between EAs, on the one hand, and CMAs or counties, on the other hand, because they are smaller than EAs and serve to separate rural from urban markets to a greater degree than EAs do (given that EAs often include both rural and urban markets), yet PEAs are also subdivisions that “nest” within EAs and can easily be aggregated to larger areas such as EAs, Major Economic Areas, and Regional Economic Areas. As a result, licensing new 3.7 GHz Service licenses on a PEA basis in the contiguous United States will encourage entry by providers that contemplate offering wireless broadband service on a localized basis, yet at the same time will not preclude carriers that plan to provide service on a much larger geographic scale. PEAs therefore will encourage auction participation by a diverse group of buyers and will generate competition between large, regional, and small carriers across various geographic areas, while also minimizing the difficult coordination and border issues that might arise from smaller license areas. The Commission agrees with commenters that recommend excluding areas outside of the contiguous United States from the transition and will not issue licenses in those PEAs.

67. In summary, for Blocks A, B, and C, the Commission will issue 3.7 GHz Service licenses on a PEA basis for 20 megahertz sub-blocks in the contiguous states and the District of Columbia (PEAs 1-41, 43-211, 213-263, 265-297, 299-359, and 361-411). The Commission will not issue flexible-use licenses for Honolulu, Anchorage, Kodiak, Fairbanks, Juneau, Puerto Rico, Guam-Northern Mariana Islands, U.S. Virgin Islands, American Samoa, and the Gulf of Mexico (PEAs numbers 42, 212, 264, 298, 360, 412-416).

b. Application Requirements & Eligibility

68. Licensees in the A, B, and C blocks must comply with the Commission's general application requirements. Further, the Commission adopts an open eligibility standard for licenses in the A, B, and C Blocks. The Commission has determined that eligibility restrictions on licenses may be imposed only when open eligibility would pose a significant likelihood of substantial harm to competition in specific markets and when an eligibility restriction would be effective in eliminating that harm.

69. The Commission agrees that the record in this proceeding does not demonstrate a compelling need for regulatory intervention to exclude potential participants. The Commission finds that adopting an open eligibility standard appropriately relies on market forces and will encourage efforts to develop new technologies, products, and services, while helping to ensure efficient use of this spectrum. Generally applicable qualifications that may apply under the Commission's rules, including those relating to citizenship and character, apply to any and all licenses issued for flexible use of this spectrum, and any person who has been, for reasons of national security, barred by any agency of the Federal Government from bidding on a contract,

participating in an auction, or receiving a grant is ineligible.

c. Mobile Spectrum Holdings

70. The Commission does not impose a pre-auction bright-line limit on acquisitions of the 3.7-3.98 GHz band. Instead, it will incorporate into the spectrum screen the 280 megahertz of spectrum that we make available in the 3.7-3.98 GHz band. The Commission will also perform case-by-case review of the long-form license applications filed as a result of the auction.

71. In the

NPRM,

the Commission sought comment on whether and how to address mobile spectrum holdings issues to meet its statutory requirements and ensure competitive access in the 3.7-4.2 GHz band, including whether to include the 3.7-4.2 GHz band in the spectrum screen for secondary market transactions. The Commission proposed not to adopt a pre-auction bright-line limit on a party's ability to acquire spectrum in the 3.7-4.2 GHz band in a public auction. The Commission also asked whether to apply a post-auction case-by-case review of holdings when applications for initial licenses are filed and whether to limit the amount of spectrum one party can acquire through a market-based mechanism.

72. Similar to its approach in the

2017 Spectrum Frontiers Order and FNPRM (83 FR 37, Jan. 2, 2018; 83 FR 85, Jan. 2, 2018)

and the

2018 Spectrum Frontiers Order and FNPRM

(83 FR 34478, July 20, 2018), the Commission finds that, “[g]enerally, bright-line, pre-auction limits may restrict unnecessarily the ability of entities to participate in and acquire spectrum in an auction, and we are not inclined to adopt such limits on auction participation absent a clear indication that they are necessary to address a specific competitive concern.”

73. The Commission agrees with commenters that an in-band spectrum aggregation limit is unnecessary for this band. Commenters requesting an in-band limit raise only general concerns regarding the need to prevent a few dominant carriers from obtaining an excessive concentration of this spectrum and to ensure smaller carriers have a fair opportunity to obtain the spectrum. But limiting the amount of 3.7-3.98 GHz band spectrum that one party can acquire, as these commenters request, could unnecessarily restrict providers' ability to participate in the auction and acquire spectrum in this band. This ultimately could “constrain providers in their paths towards 5G deployment,” limit providers' “incentives to invest” in the band, and “delay the realization of related economic benefits.” Further, “a variety of spectral paths to 5G deployment in the United States” exist, including the additional opportunities for access to spectrum through our recent actions to remove restrictions on the 2.5 GHz band, to make the 3.5 GHz band available for priority access licenses, and to make millimeter-wave spectrum available through auction. Because the Commission's “balancing of objectives” has “shift[ed] towards facilitating rapid 5G deployment in the United States,” and because commenters have not pointed to “a clear indication” that in-band limits “are necessary to address a specific competitive concern,” the Commission finds it unnecessary to impose an in-band limit on the 3.7-3.98 GHz band. Instead, the Commission finds that a case-by-case review of acquisitions of 3.7-3.98 GHz band spectrum will allow the Commission to review spectrum aggregation on market competition without unnecessarily restricting entities from acquiring spectrum to deploy 5G services.

74. The Commission will include the A, B, and C Blocks of the 3.7-3.98 GHz band in the screen for secondary market transactions because the spectrum will become “suitable and available in the near term for the provision of mobile telephony/broadband services.” The relevant product market for the screen incorporates both mobile voice and data services, including services provided over advanced broadband wireless networks—particularly emerging, next generation wireless services. The Commission adopts flexible-use rules here to enable terrestrial mobile use for 5G deployment. Accordingly, it is appropriate to incorporate this band into the screen for mobile telephony/broadband services.

75. The Commission will add the 280 megahertz to the spectrum screen once the auction closes. While winners of the auction must clear incumbents from the band following the auction, the Commission finds it is “fairly certain” that the auctioned spectrum “will meet the criteria for suitable spectrum in the near term” once the auction closes, given the Commission's transition plan. This is consistent with its approach for the 600 MHz band (where the Commission found that the spectrum was available following the Broadcast Incentive Auction, even though incumbents had to be moved) and the 700 MHz band (where the Commission found that the spectrum was available a year and a half before the spectrum would be cleared by incumbents).

76. Finally, the Commission will perform case-by-case review of the long form applications of the 3.7-3.98 GHz spectrum following the auction. The Commission will use the same case-by-case review as it does for secondary market transactions, updated to account for the additional 3.7-3.98 GHz spectrum. As the Commission has explained, case-by-case review “permits bidders to participate fully” in acquiring the spectrum, “while still allowing the Commission to assess the impact on competition from the assignment of initial . . . licenses, and to take appropriate action to preserve or protect competition only where necessary.” As it has done in other bands made available for flexible use, the Commission will apply the standard articulated in the 2008

Union Telephone Order.

This review will create sufficient bidder certainty for the auction, consistent with Section 309(j)(3)(E).

d. License Term

77. The Commission finds that a 15-year license term will provide sufficient time to encourage investment in the 3.7-3.98 GHz band given the clearing, relocation, and repacking that must occur prior to mobile operations. In the

NPRM,

the Commission proposed a 15-year license term for this very reason, suggesting that 15 years would afford licensees sufficient time to achieve significant buildout obligations post-transition. Many commenters agree that a longer term is warranted where time-consuming activities are needed to ready the spectrum for mobile use, and several argue that 15 years will promote the provision of innovative services and applications.

78. The Commission agrees and concludes that a 15-year license term for the A, B, and C Blocks best serves the public interest by providing the time needed for significant investment that ultimately will usher in valuable services to consumers.

e. Performance Requirements; Renewal

79. The Commission recognizes the critical role that performance requirements play in ensuring that licensed spectrum does not lie fallow. The performance requirements the Commission adopts for the 3.7-3.98 GHz band take into account the unique characteristics of this band, but also will ensure that licensees begin providing service to consumers in a timely manner by relying on specific quantifiable benchmarks. To support a variety of different use cases in this spectrum, the Commission adopts below specific metrics for mobile/point-to-multipoint, fixed, and IoT services in the A, B, and C Blocks, consistent with its proposal in the

NPRM.

80.

Mobile or Point-to-Multipoint Performance Requirements.

—The Commission concludes that licensees in the A, B, and C Blocks offering mobile or point-to-multipoint services must provide reliable signal coverage and offer service to at least 45% of the population in each of their license areas within eight years of the license issue date (first performance benchmark), and to at least 80% of the population in each of their license areas within 12 years from the license issue date (second performance benchmark). These population benchmarks are slightly more aggressive than those for other flexible-use services under part 27. Given the critical role of mid-band spectrum in today's spectral environment, the Commission finds that this approach is warranted.

81. Commenters generally support performance requirements to prevent warehousing of this valuable spectrum, but some object that these benchmarks are more stringent than for other part 27 services in lower frequency bands that have better propagation characteristics,

e.g.,

BRS, H Block, AWS-3, AWS-4, 600 MHz, and 700 MHz Upper C Band, that have better propagation characteristics than the 3.7-3.98 GHz band.

82. In the

NPRM,

the Commission proposed that the deadline for the first performance benchmark would be six years from the license issue date. However, consistent with the rules the Commission adopts for the transition of existing space station and earth station operations to the upper 200 megahertz of the band, new flexible-use licensees may not commence operations until the necessary clearing has been completed and the flexible-use licensee has complied with all obligations to provide reimbursement for relocation costs and any additional accelerated relocation payments have been made. The Commission anticipates that flexible-use licensees will begin deploying their systems and constructing their networks while incumbents are still transitioning out of the 3.7-3.98 GHz band so that flexible-use licensees are able to commence operations soon after incumbent clearing is complete. Nevertheless, given the potential length of that transition, the Commission finds that a six-year initial benchmark may not be reasonable. The Commission therefore finds it appropriate to adjust its proposed deadline for the first performance benchmark to eight years from the license issue date, in order to provide licensees additional time to deploy once the license area has been cleared of FSS use.

83. The Commission believes that 12 years will provide sufficient time for A, B, and C Block licensees, relying on mobile or point-to-multipoint service in accordance with our part 27 rules, to meet the proposed coverage requirements. Given the expected desirability of mid-band spectrum for the provision of innovative 5G services that promote American competitiveness, the performance benchmarks the Commission adopts are not unduly burdensome because it expects that the market will drive deployment beyond these Commission's benchmarks. The Commission anticipates that after satisfying the 12-year second performance benchmark, a licensee will continue to provide reliable signal coverage, or point-to-point links, as applicable, and offer service at or above that level for the remaining three years in the 15-year license term prior to renewal. The Commission, therefore, declines to set the second performance benchmark at the end of the license term, as some commenters proposed. Establishing benchmarks before the end of the license term will ensure continuity of service over the license term, which is essential to the Commission's evaluation under its renewal standards. We note that our Wireless Radio Services Renewal requirements include safe harbor certifications, in lieu of a detailed renewal showing, for qualified licensees.

84.

Alternate IoT Performance Requirements.

—The Commission recognized in the

NPRM

that 3.7-3.98 GHz licenses have flexibility to provide services potentially less suited to a population coverage metric. Therefore, the Commission sought comment on an alternative performance benchmark metric for licensees providing IoT-type fixed and mobile services. Based on the record evidence, the Commission will provide licensees in the A, B, and C Blocks the flexibility to demonstrate that they offer geographic area coverage of 35% of the license area at the first (eight-year) performance benchmark, and geographic area coverage of 65% of the license area at the second (12-year) performance benchmark. The Commission finds that the aforementioned levels of geographic coverage maintain reasonable parity between the requirements in these IoT-focused metrics and the requirements for mobile providers relying on population-based coverage metrics. This framework is intended to provide enough certainty to licensees to encourage investment and deployment in these bands as soon as possible, while retaining enough flexibility to accommodate both traditional services and innovative services or deployment patterns.

85. A performance metric based on geographic area coverage (or presence) will allow for networks that provide meaningful service but deploy along lines other than residential population. This definition separates “traditional” point-to-point links from the sensor and device connections that likely will be part of new IoT networks in these bands and applies to a network of fixed sensors or smart devices operating at low power over short distances. Although the Commission adopts an additional metric in order to facilitate the deployment of IoT and other innovative services, there is no requirement that a licensee build a particular type of network or provide a particular type of service in order to use whatever metric it selects to demonstrate that it met its performance requirement.

86.

Fixed Point-to-Point Under Flexible Use.

—Recognizing that its part 27 flexible-use policies enable licensees to potentially offer a variety of different services in the 3.7-3.98 GHz band, the Commission sought comment in the

NPRM

on performance metrics for licensees offering point-to-point service in the band. For licensees providing fixed, point-to-point links, the Commission generally has evaluated buildout by comparing the number of links in operation to the population of the license area.

87. The Commission adopts performance metrics using this framework, as proposed in the

NPRM.

Specifically, the Commission adopts a requirement that part 27 geographic area licensees providing Fixed Service in the A, B, and C Blocks band must demonstrate within eight years of the license issue date (first performance benchmark) that they have four links operating and providing service, either to customers or for internal use, if the population within the license area is equal to or less than 268,000. If the population within the license area is greater than 268,000, the Commission requires a licensee relying on point-to-point service to demonstrate it has at least one link in operation and providing service, either to customers or for internal use, per every 67,000 persons within a license area. The Commission requires licensees relying on point-to-point service to demonstrate within 12 years of the license issue date (final performance benchmark) that they have eight links operating and providing service, either to customers or for internal use, if the population within the license area is equal to or less than 268,000. If the population within the

license area is greater than 268,000, the Commission requires a licensee relying on point-to-point service to demonstrate it is providing service and has at least two links in operation per every 67,000 persons within a license area.

88. These standards are generally similar to the standards the Commission established for fixed point-to-point services in the 2.3 GHz band and several

Spectrum Frontiers

bands. In the

NPRM,

the Commission also asked whether to require point-to-point links to operate with a transmit power greater than +43 dBm in order to be eligible to be counted under the point-to-point buildout standard. The Commission observed that for the UMFUS bands, the 43 dBm minimum power requirement is intended to separate traditional point-to-point links from the sensor and device connections anticipated to be part of new Internet of Things networks in those bands. The Commission received no comment on this issue. Based on the record, including the different propagation characteristics of the 3.7-3.98 GHz band, the Commission find that its approach in the

Spectrum Frontiers

proceeding does not support adoption of a similar rule for the 3.7-3.98 GHz band. Links in the 3.7-3.98 GHz band, however, must be part of a network that is actually providing service, whether to unaffiliated customers or for private, internal uses, and all links must be present and operational in accordance with our discontinuance and renewal rules. As with the mobile performance milestone, the size of the population will be calculated over the entire license area.

89.

Penalty for Failure To Meet Performance Requirements.

—Along with performance benchmarks, the Commission adopts meaningful and enforceable penalties for failing to ensure timely build-out. Specifically, as proposed in the

NPRM,

the Commission adopts a rule requiring that, in the event a licensee in the A, B, or C Block fails to meet the first performance benchmark, the licensee's second benchmark and license term would be reduced by two years, thereby requiring it to meet the second performance benchmark two years sooner (at 10 years into the license term) and reducing its license term to 13 years. Consistent with the approach in many other bands, the Commission concludes that, if a licensee fails to meet the second performance benchmark for a particular license area, its authorization for each license area in which it fails to meet the performance requirement shall terminate automatically without Commission action.

90. This approach will promote prompt buildout and appropriately penalize a licensee for not meeting its performance obligations for a particular license area. The Commission declines to adopt a “use-or-lose” regime, as suggested by some commenters, under which a licensee would lose only those areas within a license area that are not developed. The Commission finds that such an approach, which has been adopted rarely for other bands, likely would reduce incentives for licensees to build out to the less populated areas covered by their license, and would be less effective in ensuring use of the spectrum. In addition, in the event a licensee's authority to operate terminates, the licensee's spectrum rights would become available for reassignment pursuant to the competitive bidding provisions of Section 309(j) and any licensee who forfeits its license for failure to meet its performance requirements would be precluded from regaining the license.

91.

Compliance Procedures.

—In addition to compliance procedures applicable to all part 27 licensees, including the filing of electronic coverage maps and supporting documentation, the Commission adopts a rule requiring that such electronic coverage maps must accurately depict both the boundaries of each licensed area and the coverage boundaries of the actual areas to which the licensee provides service. Although the Commission sought comment on additional compliance procedures in the

NPRM,

only a small number of commenters addressed this issue.

92. As proposed in the

NPRM,

the rule the Commission is adopting requires measurements of populations served on areas no larger than the Census Tract level so a licensee deploying small cells has the option to measure its coverage using a smaller acceptable identifier such as a Census Block. The Commission finds that such procedures will confirm that the spectrum is being used consistent with the performance requirements. If a licensee does not provide reliable signal coverage to an entire license area, the licensee must provide a map that accurately depicts the boundaries of the area or areas within each license area not being served. Each licensee also must file supporting documentation certifying the type of service it is providing for each licensed area within its service territory and the type of technology used to provide such service. Supporting documentation must include the assumptions used to create the coverage maps, including the propagation model and the signal strength necessary to provide reliable service with the licensee's technology. The Commission will adopt conforming amendments to part 27 to include these requirements. The Commission directs the Wireless Telecommunications Bureau to specify the format of submissions, consistent with these determinations.

93.

License Renewal.

—As proposed in the

NPRM,

the Commission will apply the general renewal requirements applicable to all Wireless Radio Services licensees to 3.7-3.98 GHz band licensees in the A, B, and C Blocks. This approach will promote consistency across services.

94.

Renewal Term Construction Obligation.

—In addition to, and independent of, these general renewal provisions, the Commission finds that any additional renewal term construction obligations adopted in the

Wireless Radio Services Renewal Reform

proceeding would apply to licenses in the A, B, and C Blocks of the 3.7-3.98 GHz band.

95. In the

NPRM,

the Commission noted that the

Wireless Radio Services Renewal Reform FNPRM

(82 FR 41580, Sept. 1, 2017) sought comment on various renewal term construction obligations such as incremental increases in the construction metric in each subsequent renewal term. The Commission also noted that the

Wireless Radio Services Renewal Reform FNPRM

proposed to apply any rules adopted in that proceeding to all flexible geographic licenses. Commenters generally support the Commission's adopting renewal term construction obligations for the 3.7-3.98 GHz band in the context of the

Wireless Radio Services Renewal Reform

proceeding, as its decision ensures consistency across services.

96. The Commission finds that applying any additional renewal term construction obligations adopted in the

Wireless Radio Services Renewal Reform

proceeding to licenses in the A, B, and C Blocks will encourage robust deployment and maintain consistency across flexible geographic licensees.

B. The Transition of FSS Operations

97. For a successful public auction of overlay licenses in the 3.7-3.98 GHz band, bidders need to know before an auction commences when they will get access to that currently occupied spectrum as well as the costs they will incur as a condition of their overlay license. In this section, the Commission addresses precisely those questions while also setting forth a transition path that ensures that incumbent FSS users will continue to receive the content they

do today both during and after the transition.

98. That transition of FSS operations relies on the Commission's

Emerging Technologies

framework, a framework the Commission has relied on since the early 1990s to facilitate the swift transition of spectrum from one use to another. In short, the framework allows for new licensees to incentivize a swift transition while requiring those licensees to hold incumbents harmless during the transition. Specifically, the Commission requires overlay licensees to pay for the reasonable relocation costs of incumbent space station and incumbent earth station operators who are required to clear the lower 300 megahertz of the C-band spectrum in the contiguous United States.

99. To effectuate that process, the Commission takes several steps.

First,

the Commission defines the class of incumbent earth stations and incumbent space stations to make clear what FSS entities it expects to take part in the transition (and what entities may be eligible for relocation payments).

Second,

the Commission lays out its legal authority to carry out the transition as well as the effect of that transition on future operations in the C-band.

Third,

the Commission sets a deadline for clearing the band by 2025 while offering incumbent space station operators the option to accelerate that process to 2021 for the lower 120 megahertz and 2023 for the upper 180 megahertz.

Fourth,

the Commission sets forth the relocation payments we expect incumbent operators to receive and how to apportion such payments among overlay licensees.

Fifth,

the Commission establishes a neutral, third-party clearinghouse to manage collection and distribution of relocation payments.

Sixth,

the Commission describes the logistics of transitioning FSS operations out of the lower 300 megahertz of the C-band spectrum.

Finally,

the Commission addresses additional issues related to the FSS transition, including the maintenance of IBFS data and revisions to the coordination policy for FSS and Fixed Services. The Commission finds that these rules will best promote the rapid and effective transition of incumbent FSS operations out of the portion of C-band spectrum to be made available for public auction.

1. Incumbent FSS Operations

100. In this section, the Commission defines the class of incumbent FSS space stations and earth stations that must be accommodated during the transition and reimbursed for their relocation costs. The Commission finds that its definition of incumbents effectively captures existing C-band FSS users that will need to be transitioned and protected in order to ensure that they are able to continue providing and receiving their existing services during and after the transition. Commenters generally agree that the Commission should define incumbent FSS operations for these purposes.

101.

Incumbent Space Station Operators.

—The Commission defines “incumbent space station operators” to include all C-band space station operators authorized to provide service to any part of the contiguous United States pursuant to an FCC-issued license or grant of market access as of June 21, 2018—the date of the International Bureau's temporary freeze on certain new space station applications in the 3.7-4.2 GHz band. There are eight such operators: ABS, Empresa, Eutelsat, Hispasat, Intelsat, SES, Star One, and Telesat.

102.

Incumbent Earth Stations.

—The Commission defines “incumbent earth stations” to be protected from interference from flexible-use licensees to include FSS earth stations that: (1) Were operational as of April 19, 2018; (2) are licensed or registered (or had a pending application for license or registration) in the IBFS database as of November 7, 2018; and (3) have timely certified, to the extent required by the July 2018

Order

adopted in FCC 18-91 (as we clarify below to include certain renewal applications and license and registration applications filed through November 7, 2018), the accuracy of information on file with the Commission.

103. This definition largely parallels the definition the Commission proposed in the

NPRM,

with a few minor changes. For one, the Commission affirms the finding of the International Bureau that registrants and licensees that filed applications or modifications during the processing window, which effectively updated or confirmed their earth station details, are exempt from the separate certification requirement. For another, the Commission includes all license and registration applications that were filed through November 7, 2018, rather than the initial filing window deadline (October 17, 2018) or the extended filing deadline (October 31, 2018) due to outages in the IBFS filing system around that deadline. Under the approach the Commission adopts, the fact that an earth station has not filed an exhibit demonstrating coordination with terrestrial Fixed Service stations will not disqualify it as an incumbent earth station. For earth stations licensed or registered before the processing window, the Commission finds that renewal applications, as well as certifications, filed by the May 28, 2019 certification deadline, effectively updated or confirmed their earth station details. And finally, the Commission makes clear that the definition does not include those whose authorization terminated by law because the earth station was not operational for more than 90 days.

104. Several commenters, including CCA, Microsoft, Motorola, and Verizon, support the Commission's proposed definition of incumbent earth stations. The Commission disagrees with commenters who assert the definition is too restrictive. Earth station operators have been provided ample opportunity to register their earth stations with the Commission. In addition to waiving the coordination requirement during the freeze filing window, the International Bureau took numerous other steps to ease the filing process, including conducting tutorials and providing step-by-step filing instructions on the Commission's website to assist those unfamiliar with the International Bureau's filing system. Moreover, the filing deadline was extended numerous times to accommodate filers. Therefore, contrary to the arguments of some commenters, the Commission has decided not to open another window for the registration of earth stations that existed as of April 19, 2018.

105. The Commission also declines to adopt the C-Band Alliance's suggestion that incumbent earth stations should encompass all earth stations identified by the C-Band Alliance. The Commission finds that there is a significant public interest in providing a stable, comprehensive list of incumbent earth stations that meet the criteria described above. The members of the C-Band Alliance and other space station operators may, of course, treat unregistered earth stations like incumbent earth stations for their own commercial purposes. But any such commercial decisions are outside the scope of this proceeding.

106. The Commission also adopts the proposal in the

NPRM

that the classes of earth stations entitled to protection and transition are those registered as fixed or temporary fixed (

i.e.,

transportable) earth stations in IBFS. That proposal was supported by the record. The Commission did not propose to include other classes of earth stations registered in IBFS, such as earth stations on vessels and other licensees operating under blanket earth stations, and the record does not support the inclusion of any additional classes of earth stations. The Commission directs the International Bureau to complete the

processing of earth station license and registration applications filed during the limited freeze filing window.

107. As the Commission proposed in the

NPRM,

any receive-only earth stations that failed to meet the requirements to be incumbent earth stations will be removed from IBFS. In the

NPRM,

the Commission proposed to update IBFS to terminate 3.7-4.2 GHz band earth stations licenses or registrations for which the licensee or registrant had not timely filed the certification required by the

July 2018 Order

(to the extent it held or applied for a license or registration before April 19, 2018). Several commenters support such termination, as well as eliminating an obligation to protect those stations from harmful interference. For the same reasons that the Commission limits incumbent earth stations to those that timely filed the required certifications or submitted renewal applications by the certification deadline, the Commission now directs the International Bureau to terminate automatically the registrations of those uncertified receive-only earth stations in IBFS, consistent with our treatment of surrendered licenses and registrations that no longer authorize operations. The Commission proposes to modify the licenses of transmit-receive earth stations that failed to submit a certification or submit a renewal application by the certification deadline to remove their protection rights in 3.7-4.0 GHz and to allow them to continue to receive transmissions on an unprotected basis in 4.0-4.2 GHz. These licensed transmit-receive earth stations will not be considered eligible earth stations and will not be eligible to have their relocation expenses reimbursed, but can adjust their reception so as to receive transmissions to the upper 200 megahertz at their own expense.

2. Clearing the 3.7-4.0 GHz Band of FSS Operations

108. The Commission next adopts rules to limit FSS operations to the 4.0-4.2 GHz band in the contiguous United States. To accomplish this goal and make the 3.7-4.0 GHz band available for terrestrial wireless use, the Commission uses its authority under Section 316 of the Communications Act to modify the existing FSS licenses and market access authorizations held by space station operators in the band. The Commission finds that such modifications are consistent with its statutory authority, supported by judicial and Commission precedent, and will serve the public interest. The Commission also revises its rules to prohibit new applications for space station licenses and new petitions for market access concerning space-to-Earth operations in the 3.7-4.0 GHz band in the contiguous United States.

109.

Clearing Space Station Operations.

—Section 316 of the Communications Act vests the Commission with broad authority to modify licenses “if in the judgment of the Commission such action will promote the public interest, convenience, and necessity.” The Commission finds that modifying the authorizations of incumbent space station operators to clear use of the 3.7-4.0 GHz band (and confine their operations in the contiguous United States to the 4.0-4.2 GHz band) is within the Commission's statutory authority, consistent with prior Commission practice, and will promote the public interest convenience, and necessity. The Commission accordingly proposes to modify the authorizations of the incumbent space station operations to carry out the clearing of this band.

110. The Commission has long relied on Section 316 to change or reduce the frequencies used by a licensed service where it has found that doing so would serve the public interest. For example, in the

2002 MSS Order,

the Commission relied on its Section 316 authority to relocate the Motient Services, Inc. (Motient) spectrum assignment from solely upper L-band frequencies to mostly lower, internationally coordinated L-band frequencies and reduce it from 28 to 20 megahertz, to enable Motient to construct and operate an economically viable MSS system without interfering with maritime distress and safety communications. In the

DEMS Relocation Order,

the Commission, pursuant to Section 316, modified licenses to relocate the operations of certain Digital Electronic Message Service (DEMS) licensees from the 18 GHz band to the 24 GHz band, in order to accommodate Department of Defense military systems. Similarly, in the 2004

800 MHz Order (69 FR 67823, Nov. 22, 2004),

the Commission relied on Section 316 to relocate the public safety and other land mobile communications systems operating in the 800 MHz band to new spectral locations both within and outside the band (including the relocation of a large set of licenses then held by Nextel Communications, Inc., to the 1.9 GHz band), in order to eliminate the interference to the public safety and other high site, non-cellular systems caused by the inherently incompatible operations of the band's cellular-architecture multi-cell systems. The Commission has also relied on its Section 316 authority to “rearrang[e] licensees within a spectrum band.” And as part of the recent

Spectrum Frontiers

incentive auction, the Commission modified the authorizations of incumbent licensees by altering their assigned frequencies and, in many cases, their geographic service areas, in a way that ensured that the spectrum usage rights under the modified licenses were comparable to those under the originally configured licenses.

111. Notably, the Commission's modification authority under Section 316 does not require the consent of licensees. As the United States Court of Appeals for the District of Columbia Circuit has stressed, “if modification of licenses were entirely dependent upon the wishes of existing licensees, a large part of the regulatory power of the Commission would be nullified.”

1

Indeed, that court has reiterated that Congress broadened the Commission's discretion by adding Section 316, which “provides the FCC with the authority to modify licenses without the approval of their holders.”

2

Rather, the Commission need only find, as it does here, that the modification “serves the public interest, convenience and necessity.”

3

Further, the courts have consistently held that the Commission may exercise its license modification authority as part of a rulemaking proceeding, as it does here.

4

1

Peoples Broadcasting Co.

v.

United States,

209 F.2d 286, 288 (D.C. Cir. 1953).

2

Rainbow Broadcasting

v.

FCC,

949 F.2d 405, 410 (D.C. Cir. 1991).

3

California Metro Mobile Commc'ns, Inc.

v.

FCC,

365 F.3d 38, 45 (D.C. Cir. 2004). As the D.C. Circuit has noted, the Commission's judgements on the public interest arising from a license modification “are entitled to substantial judicial deference.”

NTCH, Inc.

v.

FCC,

—F.3d —, 2020 WL 855465 at *7 (D.C. Circ. 2020).

4

See Celtronix Telemetry, Inc.

v.

FCC,

272 F.3d 585, 589 (D.C. Cir. 2001) (citing cases and noting that the Commission retains the power “to alter the term[s] of existing licenses by rulemaking”).

112. The International and Wireless Telecommunications Bureaus sought comment on the scope of our Section 316 authority to modify licenses in this proceeding in the

May 3 Public Notice.

The record confirms that modifying the licenses of the incumbent space station operators falls within the scope of the Commission's authority and would serve the public interest. As several commenters argue, modifying the authorizations of the incumbent space station operators is in the public interest because it will enable the clearing of 280 megahertz for public auction while preserving the content distribution system currently offered over the C-band spectrum by reserving for incumbent space station operators the upper 200 megahertz of the band.

113. One constraint, however, is that Congress limited the Commission's

authority to only “modify” a license under Section 316, which the courts have construed to mean we may not effect a “fundamental change” to a license under this authority. Although effectively revoking a license or substantially disrupting a licensee's ability to provide service may amount to a fundamental change, courts have repeatedly found that if a licensee can continue to provide substantially the same service, a modification to that license is not a fundamental change.

114. The Commission finds that the upper 200 megahertz of spectrum it is reserving for future FSS operations is sufficient to continue the services that are provided today over the whole 500 megahertz of the C-band. Indeed, all incumbent space station operators that responded to the space-station data collection have agreed that the upper 200 megahertz portion of the band provides a sufficient amount of spectrum to support their services. Users of FSS services, agree that 200 megahertz is a sufficient amount of spectrum for space station operators to continue their services uninterrupted. Indeed, by adopting the clearing plan proposed by incumbent space station operators themselves and that they themselves have claimed allows for the full range of C-band services to continue in the contiguous United States, the Commission is confident that incumbent space station operators can continue to offer the services they do today after they clear their operations out of the 3.7-4.0 GHz band (and thus that this license modification does not constitute a fundamental change).

115. In sum, the Commission finds that a Section 316 modification would serve the public interest, as it will spur the investment in and deployment of next generation wireless services, while ensuring that incumbent space station services will be able to maintain the same services as they are currently providing. Consistent with prior practice, in these circumstances the Commission will accord to grants of market access the same protections in this regard that we accord to Commission licenses and grants of market access.

116. The Commission notes that, consistent with the scope of the public auction it adopts, the Section 316 license modification that the Commission adopts applies only to licenses and grants of market access held within the contiguous United States; authorizations for FSS operations outside of the contiguous United States may continue to operate in the entire 3.7-4.2 GHz band. Commenters argue, and the Commission agrees, that the Commission should exclude locations outside of the contiguous United States from the license modification. Locations outside of the contiguous United States, many of which are remote, have a greater need for a wide variety of C-band services, particularly for the provision of services necessary for the protection of life and property—including telehealth, E911, and education services.

117. The Commission finds that retaining C-band operation is important for the time being in areas outside of the contiguous United States. As a result, the Commission believes it is appropriate to exclude PEAs outside of the contiguous United States from the proposed license modification, notably in the Honolulu, Anchorage, Kodiak, Fairbanks, Juneau, Puerto Rico, Guam-Northern Mariana Islands, U.S. Virgin Islands, American Samoa, and the Gulf of Mexico PEAs (PEA numbers 42, 212, 264, 298, 360, 412-416) and FSS operations in those PEAs may continue to use the entire 3.7-4.2 GHz band.

118. The Commission also notes that, due to the nature of space-to-earth transmissions and the practicalities of space-to-earth communications, it does not modify the authorizations of incumbent space station operators to prohibit transmissions in the 3.7-4.0 GHz band entirely. Transmissions from space station operators can reach many countries at the same time. As a result of this, many transmissions from space station operators sent to locations outside of the contiguous United States and other countries may incidentally transmit to earth stations within the contiguous United States. Since space-to Earth transmissions pose no risk of harmful interference to terrestrial wireless operations, the Commission will allow such incidental transmissions without penalty, if the transmissions are duly authorized by a foreign government or the Federal Communications Commission. In other words, the Commission allows those transmissions that incidentally occur within the contiguous United States but are directed at earth stations outside that area. Beyond these incidental transmissions, the Commission will only permit space station operators to continue to operate in the contiguous United States in the 3.7-4.0 GHz band on an unprotected basis after the sunset date for the purpose of transmitting service to earth stations at four designated TT&C sites.

119. The C-Band Alliance and the Small Satellite Operators have argued that eliminating their right to operate and be protected from harmful interference over the lower 300 megahertz of the C-band without their consent would constitute a fundamental change to their license. The C-Band Alliance and the Small Satellite Operators also argue that, even if their existing services could continue after the transition, modifying their licensees would impermissibly alter their ability to expand their services to additional customers. The Commission disagrees. The D.C. Circuit has consistently upheld the Commission's authority to modify licenses where the affected licensee is able to continue providing substantially the same service following the modification. Thus, regardless of the amount of spectrum being repurposed or the licensees' ability to expand its operations after its license is modified, the primary consideration in determining whether a Section 316 modification is valid is whether the licensee will be able to provide substantially the same service after the modification as it was able to provide before. In the case of the C-Band Alliance and Eutelsat, the record clearly demonstrates that C-Band Alliance members will—by their own admission—be able to continue to provide service to their existing customers after the transition. For the Small Satellite Operators, the record clearly demonstrates that their members provide little to no service in the contiguous United States today and, as such, the remaining 200 megahertz of spectrum available after the transition period exceeds any reasonable estimate of their needs.

120.

First,

the amount of spectrum repurposed under a 316 modification is not the controlling factor in determining whether such a modification is valid. The C-Band Alliance and the Small Satellite Operators in particular contend that removing a licensee's rights to operate in 60% of the spectrum covered by its license constitutes a fundamental change to the license on its face. They argue that a reduction in the spectrum use rights afforded a licensee constitutes a fundamental change, regardless of whether the licensee is actually using the spectrum at the time. Both the C-Band Alliance and the Small Satellite Operators point to a decision by the Supreme Court,

MCI Telecommunications Corp.

v.

FCC,

which they assert supports their argument that the reduction of a certain percentage of a licensee's spectrum usage rights has been found to exceed the Commission's “modification authority.”

5

However, the Court in

MCI

was addressing a statutory

interpretation question under Title II of the Act: Whether “the statutory phrase `modify any requirement' gave it authority to eliminate rate-filing requirements, `the essential characteristic of a rate regulated industry,' for long-distance telephone carriers.”

6

It was not examining the scope of the Commission's ability to modify a license pursuant to its “broad authority to manage spectrum” under Title III

7

including its specific authority under Section 316 to modify the terms of licenses if—“in the judgment of the Commission”—such action “will promote the public interest, convenience, and necessity.”

8

Ultimately, the Court concluded that rather than a legitimate exercise of the Commission's authority to make modifications in the tariffing requirement established by the Act, “[w]hat we have here, in reality, is a fundamental revision of the statute, changing it from a scheme of rate regulation in long-distance common-carrier communications to a scheme of rate regulation only where effective competition does not exist. That may be a good idea, but it was not the idea Congress enacted into law in 1934.”

5

MCI Telecommunications Corp.

v.

AT&T,

512 U.S. 218, 228-29 (1994).

6

City of Arlington

v.

FCC,

569 U.S. 290, 304 (2013).

7

Cellco P'ship

v.

FCC,

700 F.3d 534, 541-42 (D.C. Cir. 2012) (D.C. Cir. 2012) (“expansive powers”), quoting

NBC

v.

United States,

319 U.S. 190, 216 (1943);

see also NTCH, Inc.

v.

FCC,

—F.3d—, 2020 WL 855465 at *6 (D.C. Cir. 2020).

8

47 U.S.C. 316(a)(1).

121. Rather than standing, as the C-Band Alliance and the Small Satellite Operators would have it, for the proposition that a 60% change of anything, under any circumstances, cannot be regarded as a modification,

MCI

represents the Court's view that eliminating a requirement entirely is not a “modification” of that requirement. In this context, the Commission agrees that eliminating an incumbent space station operator's right to transmit entirely would not be a modification—but that is not what the Commission does here. Instead, the Commission finds that where an incumbent will be fully reimbursed to upgrade its facilities so that it can provide the same level of service more efficiently using less spectrum, requiring the incumbent to do so falls within the Commission's Title III authority to modify a license. In other words, a 60% reduction in spectrum available to an incumbent space station licensee—under the terms and conditions specified herein that provide the continuation of service throughout and after a transition—would not fundamentally change the overall nature of the rights and privileges originally granted under its license, and that the action therefore falls within the modification authority that Congress intended to bestow upon the Commission in granting this agency its broad Section 316 authority.

122. Indeed, since

MCI,

courts have examined various license modifications that the Commission has ordered under its Section 316 authority under the same basic standard the Commission is applying here—asking whether the modifications have worked a fundamental change in the nature of the license, using as a touchstone whether the licensee can still provide the same basic service under the modified license that it could prior to the modification. This functional test does not apply an arbitrary numerical limit on the amount of spectrum that must be preserved under a license. Thus, the C-Band Alliance and Small Satellite Operators' argument for applying such a test is contrary to both case law and Commission precedent.

123.

Second,

the Commission rejects C-Band Alliance and the Small Satellite Operators' contention that, since they will be foreclosed from transmitting to earth stations below 4.0 GHz, their licenses will be fundamentally altered. To the extent their argument rests on the potential foreclosure of the future reception of their signals by registered earth stations in the 3.7-4.0 GHz band, the Commission finds that any harm is, at best, speculative. The incumbent space station licensees will retain flexibility to expand their business within the 4.0-4.2 GHz band after the transition. With the deployment of compression and other technologies, this block is sufficient to at least serve the licensees' existing customers—which is the relevant standard governing the legality of a 316 modification—and may provide flexibility to obtain additional customers. The Commission notes that the failure of the Small Satellite Operators to demonstrate any significant past, present, or future base of earth station customers makes it reasonable to assume that any opportunities they might be losing as a result of the Commission's actions are, on a practical level,

de minimis.

Moreover, the opportunities they will have to continue to serve existing customers and to obtain new customers are sufficient to support the Commission's determination that the modification the Commission makes to their authorizations does not constitute a fundamental change. The Small Satellite Operators have failed to demonstrate their ability to lure existing customers away from their contracts with other providers or to explain how they had planned to obtain new customers, including how they planned to compete against the growing reliance on fiber delivery services as a high-quality substitute for satellite delivery.

124.

Third,

space station incumbents will not incur any unreimbursed reasonable expenses as a result of this license modification. Under the rules adopted here, the new C-band entrants would pay for the cost of the reconfiguration of all incumbent earth stations, as well as reasonable relocation costs associated with repacking FSS operations into the upper portion of the band. In sum, because the record indicates that space station operators will continue to be able to serve their customers with essentially the same services under very similar terms following the license modification we adopt today, and should not suffer any interruption of service during the repacking process, the Commission concludes that any reduction in spectrum access rights here will not effect a “fundamental change” for these companies under Section 316 precedent.

9

9

See Mobile Relay Assocs.

v.

FCC,

457 F.3d 1, 12 (D.C. Cir. 2006) (upholding the Commission's decision not to compensate a licensee for hypothetical customer loss it might suffer as a result of rebanding).

125. The record in this proceeding, which sought comment on this question, supports this conclusion. The Commission also rejects the argument that, by modifying FSS space station licenses to remove their authorization in the lower 300 megahertz, the Commission will establish a “dangerous precedent about the FCC's ability to unilaterally devalue existing licenses.”

First,

it is unlikely that the Commission's decision to modify incumbent licenses in a manner that will allow them to continue to provide service to their customers and reimburse them for all of the relocation costs associated with the transition will appreciably devalue other, similarly situated non-exclusive licenses. According to SIA, the C-band satellite industry has been able to realize a return on their investments in the band amounting to an estimated $340 million in revenue per year. Given that incumbent space station operators will be fully reimbursed for the transition, the Commission finds that they will be able to continue to realize such returns after they transition to the upper 200 megahertz of the band, and that the actions the Commission takes here will not have a chilling effect on potential licensees going forward.

126.

Second,

by their very nature, these incumbent space station licenses are fundamentally distinct, and easily distinguishable, from the exclusive geographic terrestrial licenses that the Commission issues through competitive bidding both in the rights conferred to the licensees and the method by which they are issued. Incumbent space station licensees have non-exclusive access to the band and did not obtain their current licenses through competitive bidding. Indeed, space station operators with grants of market access did not even have to pay an application fee to receive their license and have not been obligated to pay any regulatory fees as a condition of the authorization. Thus, unlike terrestrial licensees, incumbent space station operators have no expectation of exclusive access to a particular spectrum band and incurred no appreciable costs for use of this valuable public resource beyond investment in their own network. These clear differences are more than sufficient to distinguish incumbent space station licenses from exclusive terrestrial licenses and should reassure terrestrial licensees that their license rights will not be appreciably devalued by our actions in this order.

127. What is more, satellite licensees in this band can effectively reuse spectrum at the same terrestrial location without causing interference to overlapping transmissions. This effectively gives them more capacity than the spectrum in their licenses would provide without these techniques, and this will continue to be the case when they transition to the upper 200 megahertz of the band. Space station operators in the 3.7-4.2 GHz band are authorized to use the entire band exclusively at any orbital slot, but non-exclusively in terms of geographic coverage. Satellites operating in the C-band typically have 24 transponders, each with a bandwidth of 36 megahertz. Thus, the 24 transponders on a given satellite provide capacity that is equivalent to 864 megahertz of spectrum, or 364 megahertz more than the 500 megahertz currently available. This is the result of spectrum reuse—adjacent transponders overlap, and self-interference is avoided by using opposite polarizations. Today, multiple FSS incumbents using satellites deployed at different locations in the geostationary orbit can transmit within the same geographic boundaries over different frequencies or polarizations. After the transition, space station operators will still be able to use the same mechanisms to effectively achieve more capacity than the spectrum in their licenses will provide. In addition, they will be able to take advantage of new technologies to improve spectral efficiency (that will be implemented and funded by the transition), such as improved data compression and modulation techniques to further improve their spectral efficiency.

128. The Commission likewise rejects the argument that a Section 316 modification of FSS space station licenses to remove authorization in the lower 300 megahertz would constitute an unlawful “taking” under the Takings Clause of the U.S. Constitution. Commission licenses do not constitute a property right. Section 301 of the Act states that Commission licenses “provide for the use of [radio] channels, but

not the ownership thereof,

by persons for limited periods of time.” Section 304 of the Act requires licensees to waive “any claim to the use of any particular frequency or of the electromagnetic spectrum as against the regulatory power of the United States because of the previous use of the same, whether by license or otherwise.” Courts have generally affirmed that spectrum rights are not property rights subject to the Takings Clause.

10

The plain language of the Act makes clear that a spectrum license is just that—a license to use spectrum—not a deed of ownership. The mere existence of Section 316 authority to modify licenses, including by removing authorization to operate on certain frequencies, makes clear that a Commission license is not an absolute property right to which the Takings Clause might apply.

10

See, e.g., NextWave Pers. Commc'ns, Inc.,

200 F.3d 43, 51 (2d Cir. 1999),

cert. denied,

531 U.S. 924 (2000) (citing 47 U.S.C. 301 (the purpose of the Communications Act is to “to provide for the use of [radio] channels, but not the ownership thereof”)).

129. Furthermore, even if FSS space station authorizations conferred cognizable property rights, which they do not, the license modification the Commission adopts in this

Report and Order

would not amount to a taking. A regulatory taking occurs “where a regulation denies all economically beneficial or productive use” of the property.

11

The Commission agrees that, “because C-band satellites will still have significant economic benefit for the duration of their authorizations despite the C-band transition, the potential for a regulatory taking is significantly diminished.” The U.S. Supreme Court has explained that a taking is not readily found where “interference arises from some public program adjusting the benefits and burdens of economic life to promote the common good.”

12

Here, by the space station operators' own admission, they will be able to continue to provide service to their existing customers after the transition, and the Commission adopts rules ensuring that incumbent FSS licensees are made whole for any costs they incur as a result of the transition. The Commission's modification of incumbent FSS licenses therefore does not amount to a taking under the U.S. Constitution.

11

See Lucas

v.

South Carolina Coastal Council,

505 U.S. 1003, 1015 (1992);

Agins

v.

City of Tiburon,

447 U.S. 255, 260-61 (1980) (balancing the property owner's economic losses and lost reasonable investment-backed expectations against the character of the government action).

12

Penn Central Transportation Co.

v.

New York City,

438 U.S. 104, 124 (1978) (citing

Pennsylvania Coal Co.

v.

Mahon,

260 U.S. 393, 413 (1991) (“[g]overnment hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law”)).

130.

Clearing Earth Station Operations.

—Finally, the Commission's public interest analysis for transitioning the 3.7-3.98 GHz band to flexible use and reserving the 3.98-4.0 GHz band as a guard band extends to incumbent earth stations. The Commission reiterates its finding above that earth station registrants are not licensees. The Commission issues licenses pursuant to its authority under Title III of the Act, which requires a license for “the

transmission

of energy, or communications or signals by radio.” The Commission has long concluded that, because receive-only earth stations do not transmit, they do not require a license under Section 301 of the Act. In adopting rules providing for earth station registrants to receive interference protection through voluntary coordination, the Commission has done so under its Title I ancillary authority to its “other regulatory responsibilities to maximize effective use of satellite communications” over which the Commission has express Title III authority, including its Section 301 licensing and conditioning authority and its Section 303 authority to regulate radio transmissions in various specified ways, and made clear that a receive-only earth station registration does not confer a license. While Section 316 governs the Commission's modification of licenses, the Commission is not required by the Act to license receive-only earth stations and has found that it is not in the public interest to do so. The Commission has therefore relied on its ancillary authority to administer a registration regime for these stations, which it has an ongoing responsibility to modify as appropriate to ensure that it remains consistent with its regulation in the

public interest of the licensed satellite stations. As an exercise of that responsibility, the Commission is thus modifying the earth station registrations to comport with the C-band reconfiguration it is ordering herein, by limiting the frequencies on which these earth stations may receive interference protection to the upper 200 megahertz of C-band spectrum.

131. A relatively small number of earth stations that receive in the 3.7-4.2 GHz band are licensed to transmit in another band (

i.e.,

licensed transmit-receive earth stations). That license to transmit does not provide the earth station operator with the right to transmit in the C-band, where they hold no “licensed spectrum usage rights.” To the extent earth stations have licenses to transmit in another band, the Commission finds that it has ample authority to propose to modify their authorizations to eliminate their interference protection rights in the lower 300 megahertz of the band, once cleared of satellite operations under the Commission's Section 316 authority. Like with the space station operators, this proposed modification does not effect a fundamental change because earth stations will continue to receive the same level of service (from satellite providers operating in the upper 200 megahertz of the band) and will remain able to provide the same services to their own customers as before their registration or license modification.

132.

New Earth Stations.

—On April 19, 2018, the staff released the

Freeze and 90-Day Earth Station Filing Window Public Notice (83 FR 35454, July 26, 2018),

which froze applications for new or modified earth stations in the 3.7-4.2 GHz band to preserve the current landscape of authorized operations pending action as part of the Commission's ongoing inquiry into the possibility of permitting mobile broadband use and more intensive fixed use of the band through this proceeding. Given its decision to limit FSS operations in the 3.7-4.0 GHz band in the contiguous United States but not elsewhere, the Commission converts the freeze for new FSS earth stations in the 3.7-4.0 GHz band in the contiguous United States into an elimination of the application process for registrations and licenses for those operations, and the Commission lifts the freeze for new FSS earth stations in the 3.7-4.2 GHz band outside of the contiguous United States as of the publication date of the

Report and Order.

133. The Commission revises the part 25 rules such that applications for 3.7-4.0 GHz band earth station licenses or registrations in the contiguous United States will no longer be accepted. Several commenters support permanently limiting eligibility to file applications for earth station licenses or registrations to incumbent earth stations. The Commission finds that limiting, as described, the registration of new earth stations in spectrum being transitioned to primary terrestrial use will provide a stable spectral environment for more intensive terrestrial use of 3.7-3.98 GHz and facilitate the rapid transition to terrestrial use.

134. With respect to registered incumbent earth stations that are transitioned to the 4.0-4.2 GHz band, the Commission will permit these earth stations to be renewed and/or modified to maintain their operations in the 4.0-4.2 GHz band. The Commission will not, however, accept applications for new earth stations in the 4.0-4.2 GHz portion of the band for the time being, during this transition period.

135.

New Space Station Operations.

—Consistent with its decision to continue to permit satellite operations in the upper 200 megahertz of the C-band, the Commission modifies its proposal to revise the rules to codify the International Bureau's June 21, 2018 freeze. Specifically, the Commission revises its rules to prohibit new applications for space station licenses and new petitions for market access concerning space-to-Earth operations in the 3.7-4.0 GHz band in the contiguous United States. Outside the contiguous United States for the 3.7-4.2 GHz band and nationwide for the 4.0-4.2 GHz band, these revisions do not apply. For the contiguous United States, allowing new satellite space station applicants to claim access to the 4.0-4.2 GHz FSS band could complicate the transition process. Accordingly, the Commission will continue the freeze on new applicants until the transition is completed, which will allow incumbent space station operators the flexibility to launch additional satellites to achieve an efficient transition to the upper portion of the band. Once the transition is completed, the International Bureau is directed to release a public notice announcing that the freeze is lifted.

136. Several terrestrial wireless operators support limiting new space station operations as proposed by the Commission. The Commission finds its approach strikes the appropriate balance between not allowing new space station applicants to claim access to the band to complicate the transition process and providing incumbent space station operators the flexibility to launch additional satellites to achieve an efficient transition to the upper portion of the band.

3. Transition Schedule

137. Consistent with the

Emerging Technologies

framework, the Commission finds a mix of carrots and sticks best accommodates the need to clear FSS operations out of the lower 300 megahertz as quickly as possible to facilitate new terrestrial, flexible-use operations and the need to preserve the content distribution ecosystem now contained in the C-band. Given the disagreements in the record on how long the transition will take, the Commission finds that a multi-stage transition that offers both positive incentives to operators for clearing early as well as negative incentives for operators that fail to clear by the end of the sunset period will best serve these goals.

138. The Commission establishes a Relocation Deadline of December 5, 2025 to ensure that all FSS operations are cleared in a timely manner, as well as two Accelerated Relocation Deadlines—a Phase I deadline of December 5, 2021 and a Phase II deadline of December 5, 2023—for incumbent space station operators that voluntarily relocate on an accelerated schedule (with additional obligations and incentives for such operators). And the Commission sets forth the consequences for meeting or failing to meet these deadlines.

139. In the

NPRM,

the Commission sought comment on reasonable benchmarks for incumbent space station operators to clear and make C-band spectrum available for flexible use to ensure a timely transition process. Recognizing that spectrum would likely be cleared incrementally over the course of the full clearing process, the Commission sought comment on appropriate periodic reporting requirements, as well as any procedural safeguards or penalties that may be necessary if the transition facilitator is unable to clear the spectrum within the designated clearing time period.

140. The record is divided on how long it will take to clear the lower 300 megahertz for terrestrial operations and relocate incumbent space station operators and incumbent earth stations to the upper 200 megahertz. In the context of proposing a private sale, the C-Band Alliance states that it could clear and repack enough satellite transponders to make 280 megahertz of spectrum available for 5G use in the contiguous United States within 36 months of such a sale in a two-step process. First, within 18 months of Commission action in this proceeding,

the C-Band Alliance would be able to clear 120 megahertz in 46 of the top 50 PEAs. The C-Band Alliance claims it could achieve this benchmark without the need to launch new satellites. To achieve this, the C-Band Alliance proposes to provide passband filters to all earth stations that potentially may be affected by wireless terrestrial operations anywhere within the PEA, including earth stations that are outside of, but near enough to, the PEA to experience harmful interference. Second, within 36 months of its private sale, the C-Band Alliance would be able to clear the remaining PEAs for the first 120 megahertz, as well as an additional 180 megahertz throughout the contiguous United States. Space station operators that are not members of the C-Band Alliance support a rapid transition of C-band spectrum and have put forth similar transition timelines to those proposed by the C-Band Alliance. Eutelsat supports the 18- and 36-month timelines proposed by the C-Band Alliance, and states that, with diligent effort from all interested parties, an auction could commence in 2020, with transition milestones for the release of 100 megahertz and 300 megahertz of spectrum for flexible use at the end of 2021 and 2023, respectively. The Small Satellite Operators agree that 300 megahertz of C-band spectrum could be made available for 5G within 18 to 36 months through the use of non-proprietary, readily available compression technology. And other commenters agree that the proposed 18-month and 36-month timelines are attainable if all stakeholders' incentives are properly aligned.

141. Some commenters express skepticism that a transition of FSS operations can be accomplished under the timelines proposed by the C-Band Alliance. Meanwhile, users of FSS services like broadcasters simply caution that the transition will be enormous and complex.”

142. Given that the members of the C-Band Alliance and Eutelsat manage most of the C-band satellite traffic today and are the most knowledgeable parties about their operations in the C-band, the Commission is inclined to give the C-Band Alliance and Eutelsat the opportunity to make good on their claims that they can relocate existing C-band operations into the upper 200 megahertz quickly and to provide incentives for them to do so. The Commission nonetheless recognizes that the transition may take longer than the C-Band Alliance and Eutelsat claimed was necessary as a technical matter. Given the reasoned skepticism of many in the record and our own agreement with commenters that this transition will be an enormous and complex task, the Commission adopts a somewhat longer Relocation Deadline of five years to ensure the protection of incumbent earth stations should the transition take longer than the C-Band Alliance has forecast.

143. Specifically, the Commission concludes that a Relocation Deadline of December 5, 2025 is in the public interest. In particular, the Commission finds that the December 5, 2025 transition date strikes a fair and appropriate balance between bringing C-band spectrum to market and ensuring space station operators, earth station operators, and other stakeholders have the necessary time to complete this transition in a careful, fair, and cost-effective manner. This date ensures this spectrum will be made available for flexible use, while guaranteeing that vital television and radio services currently provided using the C-band will continue operating without interruption, both during and after the transition.

144. FSS operations in the C-band are critical to the delivery of television and radio programming, as well as many other services, for tens of millions of Americans, and it is in the public interest to ensure that these services are not disrupted. Given this, it is in the public interest to avoid sunsetting FSS operations before all services can be transitioned fully out of this part of the band. And the Commission finds that, even with the uncertainties in the record, a transition period through December 5, 2025 will be sufficient to ensure continued operations throughout the contiguous United States and the relocation of stations to the upper 200 megahertz of the band.

145. In setting the Relocation Deadline, the Commission must also account for the costs to the American public from delays in freeing up this important mid-band spectrum for terrestrial use, including for 5G. The C-Band Alliance itself has claimed that “[e]ach year of [delaying the deployment of C-band spectrum for flexible use] is value lost forever—here, about $50 billion or more per year in consumer surplus.” Whatever the merits of that particular valuation, the Commission agrees that delaying the transition of this spectrum longer than necessary will have significant negative effects for the American consumer and American leadership in 5G. The Commission thus finds that because a 2025 deadline is sufficient to relocate existing FSS operations, it is imperative we set the Relocation Deadline no later than 2025 so that we do not delay the use of this valuable public resource any longer than necessary.

146. The Commission notes that a five-year Relocation Deadline is wholly consistent with our precedent and past spectrum transitions. The Commission has overseen several complex transitions in other bands, involving thousands of authorized entities with diverse operational needs, customer bases, and technical requirements. Recent transition timelines have been as short as 39 months—such as in the Broadcast Incentive Auction—or longer than fourteen years—as in the 800 MHz transition.

147. In the

800 MHz Order,

the Commission repacked portions of the 800 MHz band to address a growing problem of harmful interference to 800 MHz public safety communication systems caused by the inherent incompatibility of those systems with high-density commercial wireless systems when situated in an increasingly congested, interleaved spectral environment. The 800 MHz repack has taken over fourteen years to complete, due to the need to ensure public safety transmissions are not disrupted. In contrast, the Commission expects the transition after the Broadcast Incentive Auction, which involves repacking full power and Class A television broadcast facilities, will take only 39 months. The Broadcast Incentive Auction, authorized by Congress, sought to reallocate spectrum used by TV broadcasters in order to provide new spectrum to be used for next generation wireless services. TV broadcasters, who previously used portions of spectrum above Channel 37, ranging from 614 MHz to 698 MHz, were assigned to a channel ranging from Channel 2 to Channel 36, consisting of the VHF low band (between Channel 2 and Channel 6), the VHF high band (between Channel 7 and 13), and the UHF band (between Channel 14 and 36). Additionally, some TV broadcasters operating in channels below Channel 37 were relocated to other channels below Channel 37.

148. The Commission sees this transition as more analogous to the Broadcast Incentive Auction repacking than it is to the 800 MHz transition. Here, unlike the 800 MHz transition, public safety services are not at stake and—although incumbent operations will be protected throughout the transition—moving FSS transmissions will not require the careful incremental adjustments required in the 800 MHz repack. As a result, repacking FSS transmission will not need as much time as has been needed for the repack of the 800 MHz band. However, the

Commission also believes that the C-band transition may take longer than the Broadcast Incentive Auction, as this transition will involve a variety of different and complex elements that may require a longer transition timeline. For example, the transition here will likely require the design, construction, launch, and deployment of additional new satellites. Additionally, that transition involved only 987 TV licenses and not communications and coordination among and reimbursement to thousands of satellite and earth station stakeholders.

149. C-band space station operators do not have direct contractual relationships with many of the earth stations that receive their service transmissions and, as such, it may take additional time and effort to ascertain which FSS earth stations receive content from each incumbent space station operator and to assign responsibility for clearing each earth station. Regardless, the incumbent space station operators are in the best position to expeditiously transition this band to flexible use service and we note that they have already made significant progress in identifying earth stations and developing transition plans.

150. Despite having claimed it can complete the transition in three years, the C-Band Alliance has recently suggested that Commission precedent could require a 10-year (or greater) deadline for relocation under the

Emerging Technologies

precedent. The Commission disagrees. The Commission acknowledges that the Commission can and has set a 10-year deadline before, for example, when it relied on the

Emerging Technologies

framework to transition terrestrial fixed service licensees relocating from the 18.58-18.8 GHz and 18.8-19.3 GHz bands, to the 17.7-18.3 GHz band, in addition to allowing operations in the 18.3-18.58 GHz and 19.3-19.7 GHz bands on a co-primary basis. But in doing so, the Commission expressly found that, based on the circumstances before it, a sunset period of ten years for continued co-primary status of existing terrestrial fixed stations was an appropriate compromise that will allow these systems to continue to operate in these bands, while giving FSS interests the option to pay the cost of relocating such systems if FSS interests want to deploy operations in those areas before the 10-year sunset. But just because the Commission determined a ten-year transition was appropriate under one set of facts does not mean that a ten-year sunset period is appropriate or necessary for clearing the C-band. And the C-Band Alliance fails to acknowledge that involuntary relocation procedures became available after only two years in the precedent it cites—so no incumbent was “entitled” to a ten-year transition.

151.

Accelerated Relocation.

—The Commission also adopts two Accelerated Relocation Deadlines—a Phase I deadline of December 5, 2021 and a Phase II deadline of December 5, 2023—for incumbent space station operators that voluntarily relocate on an accelerated schedule (with additional obligations and incentives for such operators). The Commission will provide an opportunity for accelerated clearing by space station operators by making them eligible for accelerated relocation payments, if those space station operators are able to meet certain early clearance benchmarks for the band.

152. The Commission also finds that adopting rules to provide for Accelerated Relocation Deadlines, with incentives for eligible space station operators that voluntarily relocate according to an accelerated schedule, will promote the rapid introduction of a significant tranche of C-band spectrum by leveraging the technical and operational knowledge of space station operators, aligning their incentives to achieve a timely transition, and enabling that transition to begin as quickly as possible. It is undisputed in the record that eligible C-band space station operators are in a unique position to quickly clear a significant portion of this band spectrally by using satellite grooming to repack existing services into the upper portion of the band. Thus, under this scenario, the clearing process would begin much sooner and proceed at a more rapid pace in the years following release of this

Report and Order

than if the Commission relied on the December 5, 2025 sunset date as the sole means of incentivizing space station operators to make C-band spectrum available for flexible use.

153. Specifically, eligible space station operators will have the option to clear according to the following accelerated clearing timeline: (1) Clearing 100 megahertz (3.7-3.8 GHz) by December 5, 2021, and (2) clearing the remaining 180 megahertz (3.8-3.98 GHz) by December 5, 2023. To satisfy the early clearing benchmarks, space station operators would be required to clear an additional 20 megahertz by the end of the clearing period to be used as a guard band to protect FSS users that will continue to operate in the upper portion of the band.

154. In order to satisfy the Phase I Accelerated Relocation Deadline, a space station operator must repack any existing services and relocate associated incumbent earth stations throughout the contiguous United States into the upper 380 megahertz of the C-band (3820-4200 MHz) and must also provide passband filters to block signals from the 3700-3820 MHz band to associated incumbent earth stations in 46 of the top 50 PEAs by December 5, 2021. To satisfy the Phase II Accelerated Relocation Deadline, a space station operator must repack any existing service and relocate associated incumbent earth stations throughout the contiguous United States into the upper 200 megahertz of the C-band (4.0-4.2 GHz), and provide passband filters to block signals from the 3700-4000 MHz band to all associated incumbent earth stations in the contiguous United States by December 5, 2023. In both instances, the space station operator must not knowingly cause the incumbent earth stations

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