# Expanding Flexible Use of the 3.7 to 4.2 GHz Band

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URL: https://www.frixlaw.com/law-library/documents/fr%3A2020-05164

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** April 23, 2020
- **Citation:** 85 FR 22804

## Text

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

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2020-05164. Public record. Not legal advice.