The Upper C Band Auction and a Win for American Consumers

Full Transcript

Don Kellogg 0m10s

Hello, and welcome to the three hundred and fourth episode of the Week with Roger, a conversation between analysts about all things telecom, media, and technology by Recon Analytics. I'm Don Kellogg, and with me as always is Roger Entner. Roger, how are you doing?

Roger Entner 0m22s

I'm good. How are you?

Don Kellogg 0m24s

I'm good. So we've got some news about a new auction or the rules for I should say a new auction. Exactly. The FCC, a little bit ago, announced auction of a 160 megahertz of upper c band. Why don't you tell us about it?

Roger Entner 0m39s

Yeah. So on June 30, chairman Carr announced that they will vote on July 22 on auctioning the 160 megahertz of upper c band that the Big Beautiful Bill, or the One Big Beautiful Bill Act requires them to do. And they have done this in record time. I don't think, no, I'm pretty sure nobody pushed this through the administrative paper forest that exists faster than Chairman Carr and his team, and they are creating a four forty megahertz superband that is the whole c band. By the way, this was not easy, because you had to negotiate with the FAA and NTIA over airline safety, like the FAA.

Don Kellogg 1m36s

So no more radio altimeter issues, right?

Roger Entner 1m39s

Well, knock on wood. Right. Because they came back with this again with the same crap, sorry, that they pulled before, right? And he was able to overcome the opposition and find accommodation with them in record time. And we know last time it took them a year, they took like everybody hostage with the lower part of the C band.

Roger Entner 2m5s

And so with Chairman Carr's leadership, he was able to overcome this. And so we criticize people, we also give them recognition for a great job. And here, the FCC has done a fantastic job. And this is spectrum that will work for everybody.

Don Kellogg 2m25s

Well, it's contiguous too. I mean, everybody already has some c band holdings. Right? And so Yes. You could theoretically end up with this giant super band that makes a lot of difference, right, in terms of throughput and capacity.

Roger Entner 2m37s

For example, there are large swaths in The United States where Verizon bought, like, 200 megahertz of regular c band. They could theoretically, if nobody wants it and they wanna do this, they can create 400 megahertz of spectrum.

Don Kellogg 2m56s

440. Yeah. Yeah. It's even more than that. Right?

Don Kellogg 2m58s

440.

Roger Entner 2m59s

And it's like a 10 gigabit FWA pipe. It's just, like, bonkers.

Don Kellogg 3m5s

Right.

Roger Entner 3m5s

I talked about the AWS three auction where it was like basically the three nationwide providers bidding on it, and EchoStar bidding on it to make sure that the reserve price was met, and then they ran for the hills, and they got stuck with Guam, right, for $614,000 a license. I'm sure they will sell it, you know, because the mission was accomplished. But this one is a genuine auction where I think everybody has skin in the game with another 160 megahertz. We talked about Starlink. Starlink bought the uplink in Cincinnati, which was missing from what they bought from EchoStar in the first place, and they bought the Gulf Of America, you know, that's a headline, Starling buys the Gulf Of America in little print license, right?

Roger Entner 3m58s

Right. But here now, with this auction, I think a lot of people, including me, thinks they will build, because Elon is a builder, he's not a buyer, right, and he will build this from the ground up. And this is the put up or shut up moment for Starlink. When Shotwell talked about, oh, Starlink mobile will be awesome and everything, and I don't doubt them, but they need spectrum for this, especially in urban America, and this is it. They can probably do it with Starlink in rural America, but in urban America, they need real spectrum, terrestrial spectrum.

Roger Entner 4m39s

And so this will be the put up or shut up moment for that. What's also really exciting is what the FCC did, is that the top 75 markets, the carriers can launch this by December 2030. That's like within three years of them getting it, and the rest by July 2031. And so that's a huge amount of spectrum for the telcos, which they will use as a lot of it will be FWA, and it will make life a lot harder for the cable companies, right, because especially in lightly populated areas, you get like really high speeds. With multiplexing in rural America, and if somebody puts like all of that, you can probably get two, three, four gigabits with FWA, which on the other hand, will make it a lot harder for Starlink to compete there as well.

Roger Entner 5m35s

And so this auction, and if the telcos come through, will give rural America a real shot in the arm with available bandwidth through nontraditional means, meaning no terrestrial fiber. You will have a very, very strong FWA and a very strong satellite competition. And the FCC set this fight up for the benefit of the American people.

Don Kellogg 6m4s

Yeah. I mean, I think it's gonna be interesting to see what happens. Right? Because all of the telcos have been so focused on delevering and everything else for a period of time now. And now here comes another big blockbuster auction.

Don Kellogg 6m16s

Right? I mean, C band was more than $80,000,000,000 in gross bets. Right? So

Roger Entner 6m21s

Yeah, so they delevered to lever, right?

Don Kellogg 6m23s

There might be some more spending in the horizon. Yeah.

Roger Entner 6m26s

But yeah, they delevered to lever up again. Right. I think it was Randall Stephenson who said like, you know, when we look at spectrum, every time we buy it, we think it's like so expensive. And when we look at it in hindsight, it was all a bargain.

Don Kellogg 6m42s

Well, mean, look at look at the whole EchoStar thing. I mean, DISH made their money back, right?

Roger Entner 6m47s

So And some.

Don Kellogg 6m49s

And some. Right? Yeah. So, yeah, it'll be interesting and, you know, exciting both from the perspective of rural coverage, but also just the idea of a large contiguous super band like that, think, is really, really appealing in a lot of circumstances.

Roger Entner 7m3s

So Yeah.

Don Kellogg 7m4s

We'll keep an eye on it.

Roger Entner 7m5s

Exactly. Alright. Good.

Don Kellogg 7m7s

Thanks, Roger. We'll talk soon.

Roger Entner 7m9s

Okay. Bye bye.