Wires

UPDATE 1-FCC chairman backs $9.7 billion in incentive payments to satellite firms to shift spectrum

David Shepardson

firms to shift spectrum@ (Update with Pai comments)

WASHINGTON, Feb 6 (Reuters) - Federal Communications Commission Chairman Ajit Pai on Thursday proposed $9.7 billion in incentive payments to accelerate the freeing up spectrum in the key C-band by shifting existing satellite users, a person familiar with the matter said on Thursday.

The FCC had earlier told lawmakers last month it was considering proposing "single-digit billions" in payments. Major satellite firms, including Intelsat SA, are expected to back Pai's proposal to shift them to different parts of the spectrum band, a person briefed on the matter said.

The C-band is a block of spectrum used by satellite company customers to deliver video and radio programming to 120 million U.S. households. Pai said the auction will begin on Dec. 8 and is critical to the deployment of next-generation 5G wireless.

Pai said he expects the actual costs of relocating satellite companies is in the $3 billion to $5 billion range.

Pai said he wants to fund transition and incentive payments with a surcharge paid by winners of an auction of 280 megahertz of the C-Band. Experts believe the C-Band spectrum can be divided to maintain existing service and deliver additional 5G service.

Major satellite service providers including Intelsat, Telesat and SES SA, which form the C-Band Alliance, said last month they were seeking "fair compensation" to quickly clear the spectrum. They argue that without their cooperation, "this critical 5G spectrum will not be made available for at least 10 years." (Reporting by David Shepardson; Editing by Tom Brown and Jonathan Oatis)