Satellite Technology Could Boost Competition in FCC Spectrum Auction

By Saara Khan

Satellite Technology Could Boost Competition in FCC Spectrum Auction

For decades, terrestrial telecommunications providers have dominated the market for wireless spectrum. But as satellite companies develop technology capable of connecting directly to ordinary smartphones, the FCC’s next spectrum auction could attract a new class of competitors and potentially generate greater returns for taxpayers.

On October 7, the FCC announced plans to auction 25 MHz of prime mid-band spectrum, opening the door to both conventional 5G networks and direct-to-device (D2D) satellite services. The proposal reflects a broader shift in the wireless market: satellite technology is creating new commercial uses for spectrum, allowing satellite operators to compete more directly with traditional cellular providers.

Unlike conventional mobile phones, which rely on nearby cell towers, D2D services allow compatible devices to connect directly to satellites. This can extend connectivity to areas with limited terrestrial coverage while creating new opportunities for competition in the mobile market.

Companies are already investing in this technology. Amazon is expanding its satellite network and pursuing Globalstar’s satellite assets, while SpaceX has acquired spectrum rights to strengthen Starlink’s direct-to-cell capabilities. As these companies expand their services, access to suitable spectrum becomes increasingly important.

The FCC’s proposal covers two bands: 1675–1695 MHz, which includes frequencies associated with federal meteorological services, and 2020–2025 MHz, allocated for nonfederal fixed and mobile services. Together, the bands represent 25 MHz of spectrum that could support additional wireless capacity and satellite connectivity, subject to the FCC’s final rules and protections for existing users.

The proposal’s flexible-use approach is particularly significant. Rather than restricting the spectrum to a single network architecture, the FCC would allow eligible terrestrial and satellite operators to pursue different uses. Wireless carriers could seek additional capacity for their networks, while satellite companies could use the frequencies to expand D2D services. Some providers may also pursue hybrid networks that combine satellite and terrestrial infrastructure.

This creates the potential for a broader pool of bidders. Terrestrial carriers have historically been the major participants in spectrum auctions, but satellite operators increasingly have commercial reasons to pursue the same frequencies. Although the companies may value individual licenses differently, their overlapping interests could bring additional competition to the auction.

More bidders very likely means higher auction proceeds. Spectrum auctions allow companies to compete for licenses based on their expected commercial value. When more firms want the same licenses, competition can push winning bids higher than they otherwise would have been. If satellite operators join terrestrial providers in pursuing these frequencies, the resulting demand could increase the revenue generated by the auction.

Higher proceeds are not guaranteed. Actual results will depend on bidder participation, spectrum value, auction design, and the technical conditions attached to the licenses. Nevertheless, the possibility illustrates how technological innovation can increase demand for a scarce public resource.

The FCC’s broader agenda points in the same direction. They have proposed exploring access to an additional 482 MHz of spectrum for satellite connectivity. Together, these efforts suggest a growing focus on accommodating new commercial uses of spectrum as satellite and terrestrial communications increasingly overlap.

Flexible licensing could help the FCC respond to this changing market without favoring a single technology or business model. However, spectrum is not interchangeable, and satellite and terrestrial operators will not necessarily compete for every frequency.

Ultimately, the goal should be to allocate spectrum efficiently while encouraging investment and competition. As direct-to-device technology expands the number of companies capable of using America’s airwaves, the FCC has an opportunity to attract new bidders, potentially increase auction proceeds, and support further innovation in wireless connectivity.