Spectrum in the Senate's “Big, Beautiful” Bill: The End of the Beginning
What’s New: The Senate has now passed its version of the reconciliation bill, which differs on spectrum issues from the House version. The biggest change is calling for 800MHz to be reallocated, rather than the 600MHz called for by the House. In this note we analyze the Senate bill and the key points for investors to understand if the House now passes the legislation and sends it on to the President.
Related NSR notes
Spectrum in the Senate, May 28, 2025
CBO Releases Spectrum Score, May 21, 2025
President makes a push for 600MHz of spectrum to be auctioned, May 20, 2025
Pentagon Floats Spectrum Plan, (Policy) May 1, 2025
New DoD proposal on spectrum for carriers (Financial), May 1, 2025
Meanwhile, Back in Telecom Land, Fissures Among Republicans on Spectrum, USF and Bead, April 14, 2025
The next spectrum auctions: setting the stage, February 24, 2025
Spectrum Supply and Demand, February 21, 2025
Background. Here is the background for understanding the current state of play.
The issue before Congress is not about auction authority per se.
- A few years ago, the FCC lost auction authority but not because Congress did not like spectrum auctions.[1]
- Rather, the authority expired because the DoD wanted to block the FCC from taking steps to prepare to auction spectrum currently controlled by the Department.
- The DoD largely succeeded.[2]
- But now, the situation has changed. Auction authority will be returned to the FCC; the questions now are about how much spectrum will be auctioned, what specific bands will be ineligible for auction, and what the process to choose the spectrum bands for reallocation and auction will look like.
The DoD plan for 640 MHz. As we discussed early this month, the White House asked the DOD to come up with a plan to enable allocation of at least 600 MHz mid-band spectrum to the exclusive wireless community (LINK).
- The DOD began circulating its initial proposal (LINK).
- Part of the proposal would move the current CBRS licensees/users (which includes CMSCA and CHTR) from the 3.55GHz – 3.65GHz band to the 3.1GHz to 3.4 band to free up 100 MHz of spectrum that can be auctioned.[3]
- That part of the DoD framework is similar to one proposed by T, in that the key element to free up spectrum comes not from the DoD moving its equipment to another band but instead from materially changing the CBRS operations which have particularly benefited cable’s wireless efforts.[4]
- The DoD framework also mandates the FCC reallocating the Upper C-Band for mobile, an option the FCC is currently evaluating.
- While we didn’t think the proposal was likely to be adopted in its entirety, we thought by floating it, the game is afoot. The proposal both shows what the Administration is shooting for – at least 600 MHz of new spectrum for exclusive wireless – but also some of the difficulties in achieving that goal.
The House Republican Position.
- The House Reconciliation language on spectrum provides that “Not later than 2 years after the date of the enactment of this Act, the Assistant Secretary and the Commission shall identify, from spectrum in the covered band that is allocated for Federal use, non-Federal use, or shared Federal and non-Federal use, a total of not less than 600 megahertz of spectrum for reallocation for non-Federal use on an exclusive, licensed basis for mobile broadband services, fixed broadband services, mobile and fixed broadband services, or a combination thereof. There are a variety of options, ranging from providing specific mandates for the FCC to auction specific bands to a general mandate for the FCC to auction a specific minimum of spectrum without reference to the specific bands.”
- The language says the 600MHz shall be in the band between 1.3GHz and 10GHz but excludes the band from 3.1GHz-3.45GHz and the band from 5.925GHz-7.125GHz.
- The language requires the FCC to act to auction the spectrum within 6 years.
- The language also provides auction authority through September 30, 2034.
- The CBO scored the provisions as providing $88 billion in revenue to the government (LINK).[5]
The Senate Republican Leadership Position: A lot more spectrum than the House. In 2024 and again in 2025, Senate Commerce Committee Chairman Ted Cruz (and Senate Majority Leader Thune) introduced the Spectrum Pipeline Act.
- That legislation would require the FCC to auction 1,250 MHz for exclusive licensed use.
- That is more than double the amount of spectrum in the House bill.
- That legislation was endorsed by, among others, CTIA and T.
- In discussing the bill and in other places, Cruz has attacked the DoD for warehousing spectrum.[6]
The Senate Version. The key elements of the just passed Senate version are:
- The plan is to be completed by September 30, 2034.
- The FCC is required to auction not less than 300 megahertz, including not less than 100 megahertz in the band between 3.98 gigahertz and 4.2 gigahertz, within two years;
- NTIA shall identify a further 500 MHz for reallocation to non-Federal and/or shared Federal use for full power commercial licensed use cases;
- Altogether, the Senate wants to auction 800 MHz (in contrast to the House’s 600 MHz).
- Congress directs the FCC and NTIA to consider the band of frequencies between 1.3GHz and 10.5GHz, excluding the frequencies between 3.1GHz and 3.45GHz and between 7.4GHz and 8.4GHz.
- Congress appropriates $50MM to the Department of Commerce to study the feasibility of auctioning spectrum from 2.7GHz to 2.9GHz, from 4.4GHz to 4.9GHz, and from 7.25GHz to 7.4GHz.
Analysis. The key points for investors to understand about the impact of the legislation are as follows:
The now-passed Senate version is likely to be the version that is in the final bill.
- While there is theoretically going to be a conference process to compromise between the House and Senate versions, we understand that the Senate version will largely control what is in the final.
This is not the beginning of the end of resolving spectrum issues; rather it is the end of the beginning.
- Basically, all the legislation does is move the ball into NTIA and the FCC’s court, set a goal, and protect some spectrum bands from consideration.
None of the Congressional goals are enforceable.
- While NTIA and the FCC will act in good faith to achieve the goals, there is no civil or criminal penalty for failing to do so.
- Many of the goals are to be achieved after the 2028 election. If the Democrats take back power, or if a different Republican is in power, they may feel differently about enforcing the 2025 mandate.[7]
The exclusive wireless industry (including T[8], VZ, TMUS) did better in this round than the industry that favors shared and unlicensed (including CMSCA and CHTR).
- The wireless industry now has the political capital to argue to NTIA and the FCC that Congress has required them to produce the amount of spectrum they want, the bands that they want, and on a timetable that they want.
- The Congress did not protect the CBRS bands that the shared (cable) community was hoping would be protected.
- The Congressional mandate gives the FCC and NTIA the authority to adopt the T reallocation plan that the exclusive wireless community generally supports and the cable community generally opposes.
While meeting the first goal of 100 MHz in the Upper C Band should not be hard, getting more could be tricky.
- While SES insists it can consolidate to provide more spectrum to wireless users, existing customers, such as broadcasters, may limit the consolidation to 100MHz;
- NTIA says it remains unclear how much separation altimeters need but we hear that estimates range between 40MHz and 100MHz;
- The FCC is still considering whether to allow SpaceX and other satellite companies to use some portion of the band.[9]
- It is not clear where the other 200 MHz comes from.
Other bands have similarly complicated issues.
- For another 200 MHz, we hear the mobile industry is advocating that the top 200MHz of 6GHz (~6925MHz – 7125MHz) be paired with 7125MHz-7250MHz (used for federal fixed links – but where reallocation is not opposed by DoD) which would create a valuable, nice contiguous chunk. Further, CTIA will most likely be able to argue that it aligns with the EU (last week RSPG proposed dividing the upper 6GHz – for them, above 6425MHz – although they offered 4 different variations). However, as U.S. tech is arguing in Europe, at that propagation, mobile would only use it in high density/high ARPU areas. For coverage they’d need a massive increase in tower/siting costs (and even then, the indoor signal would be inferior).
- As to the 4.4GHz-4.9GHz that the government will “study” and appears to be what exclusive wireless wants, it is all allocated to federal use today and early indications are that only 100MHz-200MHz might be made available.
- As to the 6GHz, while it is theoretically a potential target, there have been numerous reports that Senate leadership and the White House have told current users (for Wi-Fi) that they will be protected.[10]
- While the CBRS band is also now in play, reallocating spectrum where there are existing users always raises political and legal challenges, and again, there are indications that CBRS will be protected.
Bottom Line: Exclusive wireless accomplished what it wanted to in this round, and cable interests now have the challenge of defending their current interests in the CBRS and 6GHz band, but the real game will be played out over the next several years at the NTIA and the FCC.
[1] Let’s have an honest talk about what is going on. Almost everyone loves spectrum auctions. The federal treasury loves spectrum auctions. The world loves spectrum auctions. The Nobels love spectrum auction. The Oscars love spectrum auction. Even the f*#king Emmys love spectrum auctions. But there is one group that doesn’t: the Department of Defense. And it just so happens that there are several critical members of Congress who love spectrum auctions, but they love the DoD more. (Doesn’t this sound like the most boring rom-com ever?) We are not sure why a deal that gave the FCC spectrum auction authority for everything other than spectrum currently controlled by the DoD was not proposed and adopted during the Biden Administration, but we provide some clues in the next footnote.
[2] The DoD is very good at Hill politics. But they were aided in this case by both the FCC Chair and the Biden White House not being very good on the Hill on this specific issue. We think the current chair and the current White House are much better at Hill politics on spectrum and, as discussed further in the text, we think they will succeed in some of their spectrum ambitions but perhaps not as much as currently advertised.
[3] VZ also has some CBRS licenses. But we believe that that they would trade off moving those licenses for the opportunity to have more mid-band spectrum and therefore are not as troubled as the cable players are by the prospect of moving.
[4] One spectrum expert, and CBRS supporter, Michael Calabrese, director of New America’s Wireless Future Program, cautioned that moving Navy radars from the current CBRS band doesn’t add 100 MHz for auction “since 70 megahertz has already been auctioned…(and)would pull the rug out from under more than 1,000 CBRS operators that have deployed more than 400,000 base stations. While they could, in theory, share DOD spectrum lower in the band, that spectrum will now be so congested it’s unclear how or when that could be implemented.” Another legal question could be whether there is functional equivalency when the international equipment standard may make equipment cheaper and/or better in the current CBRS band than in the future band. These, of course, are factual questions that could be relevant to the litigation discussed later in the text.
[5] There is an odd inconsistency between the requirement for auctions within six years and the CBO scoring in which most of the revenues are realized in the back end of the ten-year authority. But we don’t think that has any relevance for investors (see footnote 8 below) so, for now, we will regard it as a MacGuffin.
[6] In Cruz’ press announcement, he said, “For many years now, U.S. government incumbents, particularly bureaucrats at the Pentagon under the direction of Mark Milley, have insisted they are using every single megahertz as efficiently as possible and must maintain absolute control of their vast spectrum holdings. Look, I am open to compromise on what the aggregate pipeline target number should be, but zero is objectively unreasonable. And no institution should be afforded blind deference—especially not one that can’t even pass an audit and claimed that leaving billions in tanks, helicopters, and weapons in Afghanistan was more efficient than bringing them home. But don’t just take it from me. Military analysts with firsthand experience agree that we are falling behind, both in terms of its effective usage, and in the development of intellectual property and wireless capabilities. Further, the Pentagon is not the only user of the airwaves globally. Many of the bands used by DoD are used commercially in countries like Taiwan, Japan, and Korea. If DoD cannot operate alongside wireless carriers using these bands domestically, how can we expect it to prevail in a Pacific conflict? There are also significant opportunity costs for our national defense in delaying spectrum auctions. A pipeline would be lucrative, raising $100 billion or more for rebuilding our military, funding border security, and financing Coast Guard polar icebreakers. That’s a valuable offset for reconciliation.”
[7] There is a specific provision that allows the President to “modify or withdraw any frequency proposed for reallocation under this section not later than 60 days before the commencement of a system of competitive bidding scheduled by the Commission with respect to that frequency, if the President determines that such modification or withdrawal is necessary to protect the national security of the United States.” That is, putting aside all other forms of Executive Power, the President in 2029 can adjust any decision that calls for auction in 2029 or beyond.
[8] T was able to prevail even though the President apparently does not know who the CEO of T is, as Trump yesterday posted on Truth Social after a problem on a mass conference call on T’s network that “AT&T obviously does not know what it is doing…. If the Boss of AT&T, whoever that may be, could get involved — It would be good.” An alternative theory is that even if Trump knows who John Stankey is, Trump wants to set the stage for arguing that Trump Mobile is a better product than T.
[9] Of course, all of this can change if Musk follows through on his threat to fund opponents of the reconciliation act but at this point, particularly with the Fourth of July holiday within earshot, we have no desire to engage in speculation about how that roller-coaster ride ends.
[10] The practice of Senators telling an unhappy constituency that they will be protected down the road is a common practice. Blair recalls that during the implementation of the 1996 Act, that some stakeholders would tell him that a certain important Senator promised them the FCC would interpret the law one way while the opposing stakeholders would tell him that the same Senator promised that the FCC would interpret the law the opposite way. We have no way to know whether those offering assurances mean to abide by their words but the key investor point is that, just as with the 1996 Act, a new game begins when the bill turns over the authority to the FCC (and in this case, NTIA).