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FCC to vote on bidding procedures for auction of spectrum deemed 'prime' for 5G

The U.S. Federal Communications Commission will vote Sept. 26 at the agency's monthly open meeting on proposed auction procedures for a spectrum auction in the 3.5 GHz band, which wireless operators say is crucial for 5G deployment.

While FCC Chairman Ajit Pai said in a blog post earlier this month that the band is "prime spectrum" for 5G services, he noted that when he became chairman, the agency "didn't have the right rules in place to encourage the deployment of 5G in the band."

Prior to 2015, the band was primarily used by fixed satellite services and federal agencies, such as the U.S. Department of Defense. In 2015, the FCC sought to promote spectrum sharing among federal and nonfederal users in the 3.5 GHz band. The agency, in collaboration with key stakeholders, established three tiers of users, some of which were nonrenewable and confined geographically to a single census tract for three or six years.

In an effort to spur 5G investment and deployment in the band, the FCC voted in 2018 to expand priority access licenses, a user tier in the band, which is also known as the Citizens Broadband Radio Service band, to encompass entire counties. The order also extended the licensing terms to 10 years and added the option of making them renewable. These changes made them more in line with traditional wireless licenses.

Bidding in the auction is scheduled to commence on June 25, 2020. The FCC gave approval for initial commercial deployments to five companies in the 3.5 GHz mid-band spectrum on Sept. 16. Mid-band spectrum is seen as important for 5G since high band cannot travel far distances or penetrate certain surfaces and low-band spectrum has become crowded due to 4G wireless services.

The CBRS Alliance, an industry group representing Intel Corp. and Alphabet Inc.'s Google LLC that advocates for "the development, commercialization, and adoption of LTE solutions" for the CBRS band, has said the market value of the band could be as high as $15.6 billion.

When it comes to 5G readiness, the availability of mid-band spectrum is an area where the U.S. is thought to be lagging.

The commission will also consider a report and order that would allocate about $950 million for broadband networks in Puerto Rico and the U.S. Virgin Islands. The funds would be used to "storm-harden, improve, and expand broadband networks" in the territories, which were hit hard by hurricanes Irma and Maria in 2017, according to an FCC news release earlier this month.

If approved, the funds would be offered as a phase two round of funding to follow up on earlier assistance provided. Funds will come from the agency's Universal Service Fund, which connects unserved and rural areas with telecommunications services.

If approved, the latest funding round will expand on the FCC's Uniendo a Puerto Rico Fund and Connect USVI Fund, which was created in 2018. The first round provided assistance for restoration efforts in the aftermath of the hurricanes.

Additionally, the FCC will vote on an order that would, in part, eliminate the use of the agency's intercarrier compensation system to subsidize certain high-volume calling services. Intercarrier compensation occurs when a carrier pays another carrier to transport, originate or terminate telecommunications traffic. One form of compensation is an access charge, which applies to calls that start and end in different local calling areas.

Pai said in his blog post that "bad actors ... increase their access charge revenues (in other words, make money) by purposely and inefficiently inflating high-volume call traffic — like 'free' conferencing calling or chat line traffic."

As a result, long-distance carriers end up paying for the services, according to Pai. If approved, the order would switch the financial burden for excessive access charges to local exchange carriers.

As part of an effort to modernize media rules, the commission will also vote on a further notice of proposed rulemaking that would change a requirement that certain broadcast applicants to the FCC file a public notice in newspapers or on-air to allow broadcasters to provide public notice online.

Finally, the commission will vote on an order that would aim to modernize and streamline rules governing direct broadcast satellite service, which is a satellite television service that utilizes geostationary satellites to transmit signals.