FCC to pay satellite companies billions to make space for wireless networks

It's the only fair way to go about it, according to FCC Chairman Ajit Pai.

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Federal regulators are trying to incentivize satellite networks into freeing up a portion of the C-band spectrum, which is typically used by satellite companies and cable providers.

On Thursday, the Federal Communications Commission revealed its plan to give up to $14.9 billion to satellite firms if they open up highly coveted space in the C-band airwaves. In his speech at the Information Technology and Innovation Foundation, the agency's chairman Ajit Pai claimed that satellite firms don't need the entire band and could make space for wireless networks.

5G, of course — If these companies agree to Pai's terms, giants like Verizon, T-Mobile, and AT&T say that they can create faster 5G networks with the new frequencies. To ensure this happens, Pai is trying to make an offer satellite companies can't refuse.

If the proposal is approved — and that's a big "if," as satellite companies could refuse the terms — Pai plans to federally auction these airwaves on December 8 of this year, otherwise September 2025 is the expected year for the relocation.

Big money — The federal document disclosed that satellite providers like Intelsat SA and others could receive as much as $9.7 billion — on the condition that they readily clear out the required C-band spectrum. The agency is willing to add another $3.3 to $5.2 billion to help cover the expenses.

Targeting only a piece of the band — According to Pai's proposal, the deal would ensure that "the lower 280 megahertz of the C-band [is] available for flexible use, including 5G, through a public auction."

At the core of this draft, the federal agency is attempting to make sure that the United States is a few steps ahead of competitors when it comes to 5G technology, especially China's Huawei. To that end, the FCC notes that the proposal "would quickly free up a significant amount of spectrum for next-generation wireless services" and perhaps most important to those in the White House, "it would generate significant revenue for the United States Treasury."