Incentive Payments are Efficient, Fair, and Necessary to Win the 5G Race with China

Yesterday, a Senate subcommittee held a hearing on the Federal Communications Commission’s (FCC) spectrum auctions program. The witness, FCC Chairman Ajit Pai, spent much of the hearing explaining the FCC’s plan for auctioning the C-Band spectrum this December. While Republicans have consistently praised Chairman Pai for his efforts, Senator John Kennedy (R-LA) has been consistently critical of a plan that is the most fair and efficient means of America winning the race to 5G.

Chairman Pai’s plan involves $9.7 billion in “acceleration payments” to the satellite companies currently occupying the C-band. These payments are dependent on the satellite companies meeting certain deadlines, and subsequently serve as an incentive for these companies to rapidly clear the band. Losing this race means ceding the economy of the future and worldwide technological dominance to China – incentives help prevent these grave consequences.

Senator Kennedy’s primary concern is that this $9.7 billion belongs to the taxpayer, and should be spent on bringing broadband to the more rural areas of the country. But, a recent Phoenix Center study reveals that the incentive payments will actually increase, not decrease, the money available for the Treasury to fund social programs – like broadband. Chairman Pai’s plan is designed to increase auction revenues by an amount larger than the acceleration payments. In fact, this plan is expected to increase the funds available for social programs by about $1 billion over what is available without acceleration payments.

Besides increasing the efficiency of deploying 5G in America and funds available for the Treasury, incentive payments are fair to satellite companies. These are private enterprises that have invested a lot of time, energy, and money into developing the C-band spectrum, where they then provided TV and radio to hundreds of millions of American households. There is nothing unjust about fairly compensating companies for an investment, and it should not be labeled as such.

Falling behind China on 5G deployment is not acceptable and the FCC acted swiftly and smartly to help us catch up. China is winning this race right now, but Chairman Pai’s plan has the potential to put America in front – incentive payments are a huge aspect of making that a reality, and that makes them a fair necessity.

About 5G Action Now

5G Action Now was founded to establish the United States as the worldwide leader in 5G. Our goal is to elevate the conversation regarding American national security and the economic benefits of winning the 5G innovation and deployment battle against China. 5G will spur economic growth in rural America, create an environment for technological expansion, and put the U.S. on strong national security footing for generations to come.

5G Action Now supports the Federal Communications Commission’s (FCC) goal of a 2020 C-band auction. Additionally, we support Members of Congress of both parties working together with the federal government to win the 5G race against China.

About Mike Rogers

Mike Rogers is the former Chairman of the House Permanent Select Committee on Intelligence and now serves as the Chairman of 5G Action Now.

In Congress, Chairman Rogers worked with two presidents, Congressional leadership, foreign leaders, diplomats, and intelligence professionals, and oversaw the Intelligence Community’s $70 billion budget that funded the nation’s 17 intelligence agencies. Before being elected to represent Michigan in the House of Representatives, he was an FBI special agent and member of the U.S. Army.

Today, he hosts the CNN Original Series Declassified, regularly appears on various TV and radio shows, and frequently contributes to major print outlets. He is also a Senior Fellow at Harvard University’s Belfer Center where he is leading a program on 5G, national security, and intelligence policy.