The Federal Communications Commission (FCC) voted 3-2 on Friday to adopt rules to auction a key band spectrum (3.7-3.98 GHz portion of the C-band) for wireless use that includes up to $9.7 billion in potential incentive payments to satellite companies.

Bidding in this auction is scheduled to commence on December 8, 2020. FCC's Public Notice seeks comment on proposed upfront payment and minimum opening bid amounts for 5,684 new flexible-use overlay licenses. It also proposes to establish two categories of spectrum blocks in each region: five 20-megahertz blocks in the lower 100 megahertz (3.7–3.8 GHz) and nine 20-megahertz blocks in the remaining 180 megahertz (3.8–3.98 GHz).

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. The FCC says it is critical it free up spectrum for next-generation 5G networks.

The FCC also would authorize up to $5.2 billion in payments to cover the costs of shifting the spectrum users on top of the incentive payments. The FCC has said new satellites will need to be launched, and filters placed on earth stations to shift spectrum.

Major satellite service providers include Intelsat, SES SA and Telesat, which all form the C-Band Alliance. The organization said last month it was seeking “fair compensation” to quickly clear the spectrum.

FCC Chairman Ajit Pai said the payments are needed to ensure the spectrum is freed up quickly.

“We want satellite operators to vacate the lower portion of the C-band quickly. And this transition will be much faster if we align the incentives of satellite operators with the incentives of wireless providers who want expedited access to that spectrum,” Pai said.

Legislation is pending in Congress that would reduce the amount that satellite companies would receive.