300 MHz and I’ll Throw in Floor Mats: Why Haggling Won’t Help the C-band Proceeding

In the coming months, the Federal Communications Commission (FCC) will begin to make final policy determinations concerning a slice of spectrum known as the C-band. The C-band is currently used by satellite operators to distribute content for networks and programmers to broadcasters and plays a critical role in a reliable content distribution system that viewers and listeners rely on today. At the same time, the C-band is attractive spectrum for wireless carriers that seek to add “mid-band” spectrum to their portfolios. The FCC’s challenge is how to provide additional spectrum for mobile broadband services while ensuring viewers and listeners are protected from outages and service disruptions. Central to that challenge is the question of how much spectrum can be reallocated while protecting content distribution.

The satellite operators themselves have stated that the right number is 200 MHz and have demonstrated how they can accommodate content distribution in the remaining 300 MHz. Whether one agrees with that or any other amount is not a matter of personal preference, but a technical, scientific one. There’s either enough capacity to distribute content using a certain amount of spectrum or there’s not. If there isn’t, forcing satellite operators to come up with 300 MHz for wireless companies has serious, real-life consequences, such as forcing content onto less reliable distribution platforms (e.g., fiber). That could lead to service disruptions or outages.

Unfortunately, the distinction between a technical, fact-driven policy proceeding and one where the sides are just trading numbers appears to elude some observers who really ought to know better. Last week, New Street’s Blair Levin, a former FCC official, suggested that an alternative proposal to replace C-band distribution with fiber has given the FCC “significant negotiating leverage” with the satellite operators. Respectfully, that assessment is not only inaccurate, but, more importantly, it’s irrelevant.

First, an alternative proposal only gives you leverage in a transaction if it’s credible. In this case, the proposal to which Mr. Levin refers hasn’t been endorsed by a single programmer or network. It’s an ill-conceived, transparently self-interested proposal that has no chance of working in any reasonable timeframe. It’s also almost comically poorly timed, given that the FCC just released a report regarding CenturyLink’s 37-hour nationwide fiber network outage. If you’re buying a new car, trying to negotiate by telling the dealer you can get a better deal on a unicorn isn’t going to help.

Second, the focus on leverage misapprehends the central challenge before the Commission, which is not purely transactional, as Mr. Levin suggests. The FCC isn’t haggling over the price of a car, it’s effectively trying to figure out how many wheels the car needs to operate safely. Facts and physics determine that answer, not negotiating leverage. While the FCC in Mr. Levin’s day may have operated in that manner, this one has not and should not. If the satellite operators say 200 MHz can be reallocated and others really want 400 MHz, the solution isn’t to browbeat the operators into giving up 300 MHz and throwing in a rustproofing treatment. Rather, the solution is to look at the information the operators have submitted regarding their transition plan and determine how much capacity can be made available without driving the entire American content ecosystem into a ditch.

To its enormous credit, the FCC has taken a pragmatic and cautious approach so far in this proceeding and shows every indication that it will continue to do so. That means ignoring calls to take advantage of perceived leverage to try to force an outcome that satellite operators and content providers simply cannot make work with existing technology. We hope the FCC continues down this prudent course so that we all don’t end up with a lemon.