T-Mobile's merger proposal with Sprint is all about picking up the latter's 2.5GHz mid-band spectrum. With it, T-Mobile will be able to enhance its nationwide 5G network and cover rural Americans with the next generation of wireless connectivity. But there is a good chance that the merger gets blocked and in that situation, T-Mobile is going to need to come up with some mid-band spectrum to replace the airwaves it won't be receiving from Sprint.
FCC Chairman Ajit Pai told reporters on Thursday (via Fierce Wireless) that the agency is planning on auctioning off mid-band spectrum in the C-band sometime this year. This includes spectrum in the 3.7GHz-4.2GHz range which would make it a decent replacement for Sprint's airwaves. Currently, the airwaves are being used by satellite companies offering streaming video to 120 million U.S. subscribers. The satellite firms are willing to give up 280MHz of the 500MHz band but want to be reimbursed for the costs of moving to new airwaves. Pai said that this will be on the agenda for the FCC's February 28th meeting. At the same time, U.S. lawmakers are loath to have the foreign-owned satellite firms score a windfall profit from airwaves that are essentially owned by U.S. taxpayers.
T-Mobile says the FCC has the power to unilaterally force a deal on the C-band Alliance
Commissioner Mike O'Rielly has been working on the C-band issue for a number of years and says that he has come up with a proposal that will get the satellite providers to feel more comfortable getting involved with the FCC. O'Rielly has been working with these companies with for years and says that they don't want to feel as though a proposal is being forced down their throats. Fellow Commissioner Brendan Carr said, "I look forward to reading the details...I think we have a very good shot at a win-win-win for all parties involved here."
Getting its hands on mid-band spectrum is so important to T-Mobile that the carrier wrote a letter to the FCC. In that letter, T-Mobile's counsel reminded the regulatory agency that it has the power to demand that the satellite operators currently using the C-band accelerate their relocation to another band. The letter also made it clear that T-Mobile believes that the FCC should exercise this power. And if the satellite operators don't leave the C-band voluntarily, T-Mobile says that the FCC should force them to go. The letter states, "T-Mobile joins others in urging the Commission to employ its authority under the Communications Act of 1934 ("Act") to require, as a condition of receiving a license, that winning bidders pay incumbent license holders to voluntarily relocate their current C-band operations on an accelerated basis."
The C-band Alliance (CBA), which is made up of the satellite companies that will be giving up their spectrum in the auction, says that the payments they receive for giving up their airwaves and relocating should be based on the amount of money that the spectrum is valued at during the auction. T-Mobile disagrees and says that the "moving expenses" and "incentive payments" should be calculated before the auction takes place. The carrier says that these figures could include an estimate of how much the spectrum will bring at auction and the risks that they face for an expedited move.
T-Mobile also included in the letter a paragraph about the FCC's power to force the satellite firms into completing a deal unilaterally even if one or more of them hold out. "T-Mobile’s Relocation Payment proposal would facilitate voluntary relocation on terms that ought to be acceptable to all parties. Should some of the incumbents nevertheless attempt to block the transition by “holding out,” the Commission possesses ample authority to implement the C-band transition unilaterally. The CBA’s recent efforts to question that authority lack legal support and should be disregarded."