FCC Releases Draft Order to Initiate Upper C-Band Transition

On July 1, 2026, the Federal Communications Commission (FCC or Commission) released a draft Report and Order, Order of Proposed Modification, and Order on Reconsideration (collectively, Draft Order) that would make 160 megahertz of the 3.98–4.2 GHz band (Upper C-band) available for terrestrial wireless use in the contiguous United States via a system of competitive bidding and establish a largely harmonized 440-megahertz "super band" from 3.7–4.14 GHz suitable for next-generation terrestrial wireless services. The actions in the Draft Order would fulfill the directive in the One Big Beautiful Bill Act to "complet[e] a system of competitive bidding . . . for not less than 100 megahertz in the band between 3.98 gigahertz and 4.2 gigahertz" by July 4, 2027. It would also build on the proposals in the Commission's 2025 Notice of Inquiry and Notice of Proposed Rulemaking (NPRM) as well as the framework that the Commission previously used to successfully transition the Lower C-band. According to the Draft Order, these actions would "put America on a path towards massive gains that could result in at least $264 billion in GDP, 1.5 million new jobs, and $388 billion in consumer surplus."

The Commission will consider the Draft Order at its July 22, 2026 Open Meeting. The provisions of the Draft Order are subject to change before the Open Meeting.

Key Takeaways

• The FCC's Draft Order would reallocate 160 megahertz of Upper C-band spectrum (3.98–4.14 GHz) for licensed terrestrial wireless use and establish a contiguous 440 megahertz band for the 3.7 GHz Service.
• The Draft Order would adopt licensing and auction rules for the Upper C-band that are largely consistent with the Lower C-band framework as well as generally harmonized technical and service rules for the combined 3.7 GHz Service.
• The Draft Order would establish a mandatory transition framework for incumbent Fixed Satellite Service (FSS) operations, including reimbursement obligations for new licensees and incentive payments for eligible space station operators.
• The Draft Order would preserve the existing "closed universe" of incumbent earth stations established in the Lower C-band proceeding and maintain the existing freeze on applications for new or modified earth station licenses and registrations in the band. Incumbent earth station operators would have the option of selecting either cost reimbursement or lump sum payments on a site-by-site basis.
• The transition schedule would require clearing of the top 75 Partial Economic Areas (PEAs) in the contiguous United States by December 30, 2030 (Primary Transition Deadline), with wireless operations eligible to commence on December 31, 2030. The remaining PEAs in the contiguous United States would be required to transition by June 30, 2031 (Final Transition Deadline), with wireless operations eligible to commence by July 1, 2031. Reimbursement and incentive eligibility would be tied to compliance with the Transition Deadlines.
• The Draft Order would adopt a comprehensive framework for coexistence between 3.7 GHz Service licensees and adjacent band radio altimeters, including revised technical rules for terrestrial wireless operations, Transition Deadlines aligned with the Federal Aviation Administration's (FAA) altimeter retrofit schedule, and a rebate program to support eligible radio altimeter retrofits. The FAA has indicated that it will issue final rules requiring radio altimeter upgrades later this summer.

Potentially Affected Stakeholders

If adopted, the Draft Order would have a significant impact on a wide range of current and future users of the Upper C-band and adjacent bands, including:

• Incumbent FSS operators currently providing Upper C-band services in the contiguous United States, including incumbent space station operators and incumbent earth station operators.
• Existing users of C-band satellite services, including broadcasters, content providers, multichannel video programming distributors, federal users, and other contractual customers that rely on FSS operations.
• Existing terrestrial wireless licensees in the Lower C-band, including operators that could be affected by the reconfiguration of the 3.7 GHz Service.
• Aircraft owners and operators that use radio altimeters in the adjacent 4.2–4.4 GHz band, including operators subject to FAA retrofit requirements.

Spectrum Reconfiguration and Auction Framework

Reallocation. The Draft Order would add a primary nonfederal mobile, except aeronautical mobile, allocation to the 4.0–4.16 GHz portion of the band nationwide and would remove the FSS allocation from this portion of the band within the contiguous United States. A guard band would also be established from 4.14–4.16 GHz to ensure effective coexistence with remaining FSS operations in the 4.16–4.2 GHz band. Consistent with the proposals in the NPRM, the Draft Order preserves the current operating environment outside the contiguous United States.

Licensing rules. Under the Draft Order, the band plan for the Upper C-band would consist of eight 20-megahertz unpaired blocks. Licenses would be issued on a Partial Economic Area (PEA) basis in the contiguous United States, with 15-year license terms. In general, the licensing and operating rules governing these licenses would mirror the Lower C-band framework.

The Draft Order would, however, depart from the Lower C-band order with regard to performance requirements for licensees by disallowing the use of alternative metrics for internet of things applications, fixed point-to-point operations, or private internal network operations to meet buildout and coverage requirements. In addition, the performance timeframe would be measured from the relevant Transition Deadline (Primary or Final) for each PEA. Failure to meet either of the two performance benchmarks would result in automatic termination of the license in the affected license area.

Auction framework. For the licenses in the newly reconfigured 3.98–4.14 GHz segment, the FCC would auction licenses using its existing Part 1 competitive bidding rules, with auction-specific mechanics largely aligned with those used in the Lower C-band auction.

While the specific processes will be established in more detail in an upcoming auction procedures public notice, the Draft Order sets the overarching framework, in which the FCC would:

• Decline to adopt a pre-auction spectrum aggregation limit.
• Add the new 160 megahertz to the FCC's spectrum screen after the auction closes, at which point applicants would be subject to case-by-case review of their long-form applications and secondary market transactions.
• Adopt much of the bidding credit framework from the Lower C-band, including a 15% credit for qualifying small businesses, a 25% credit for qualifying very small businesses, and a 15% rural service provider credit (but not the 35% bidding credit for the smallest revenue tier).
• Reject requests to implement a rural reserve auction or a Tribal licensing window.

Transition of Incumbent FSS Operations

The Draft Order would adopt a transition framework for incumbent FSS operations that is designed to be consistent with the Commission's Emerging Technologies precedents and is expressly modeled on the Lower C-band transition framework. The Draft Order would also implement several important modifications to address the unique characteristics of the Upper C-band transition, including the need to migrate many incumbent operators out of the C-band entirely, the shorter transition period, and the need to align clearing timelines with the FAA's radio altimeter retrofit timetable. In broad terms, the Commission would use its well-established Emerging Technologies framework to clear incumbent FSS operations from 4.0–4.16 GHz in the contiguous United States, retain post-transition FSS operations in 4.16–4.2 GHz, require new Upper C-band licensees to reimburse eligible transition costs, offer a per-site lump sum election to incumbent earth station operators, and establish separate incentive payments for eligible space station operators.

Incumbent Eligibility

Incumbent space stations. The Draft Order would carry forward the Lower C-band definitions of incumbent space station and eligible space station operator from the Lower C-band Order. The Draft Order identifies the remaining incumbent space station operators as Empresa, Eutelsat, Hispasat, SES, and Telesat, and identifies Eutelsat, SES, and Telesat as the remaining "eligible space station operators" for cost reimbursement purposes.

Incumbent earth stations. The Draft Order would likewise carry forward the Lower C-band definition of incumbent earth station. Under that definition, qualifying earth stations are those that were operational as of April 19, 2018, continued to be operational, were licensed or registered in the Commission's database by November 7, 2018, and timely certified the accuracy of their information by May 28, 2019.

• The Draft Order expressly rejects requests to recognize previously unregistered earth station facilities, facilities previously found ineligible in the Lower C-band process, or facilities later expanded or relocated after the original freeze.
• The Draft Order would also maintain the earth station application freeze throughout the Upper C-band transition. As a result, the protected and reimbursable incumbent earth station population would remain a closed universe, as defined during the Lower C-band proceeding.
• The Draft Order would use the most recently released incumbent earth station list from the Lower C-band transition as the baseline going forward. The Space Bureau would be empowered to update the list throughout the transition process, consistent with the approach taken in the Lower C-band transition.

Legal Authority for Transitioning Incumbent FSS Operations

Consistent with the approach in the Lower C-band Order, the Draft Order invokes the Commission's authority under Section 316 of the Communications Act to "modify, as needed, the existing licenses, market access authorizations, and registrations currently held by FSS C-band incumbents to clear 4.0–4.16 GHz." The Draft Order states that Section 316 gives the Commission broad authority to modify licenses when doing so serves the public interest, convenience, and necessity, and that such authority has long been used to change frequencies, rearrange authorizations within a band, and facilitate spectrum repurposing. The Draft Order would rely on Section 316 and related Commission authority to authorize the following modifications:

• Incumbent space stations. All incumbent C-band space station operations would be limited to the 4.16–4.2 GHz band after the transition.
• Receive-only earth stations. The Draft Order relies on the Commission's regulatory authority over interference protection rights for those facilities as part of its broader statutory authority over satellite communications.
• Transmit-receive earth stations. The Draft Order states that, although those entities hold licenses for their transmitting operations, they do not possess licensed spectrum-usage rights in the 4.0–4.2 GHz downlink band.

The Draft Order asserts that incumbent FSS operators could continue to provide "substantially the same" service after the transition, even though some services or links may no longer remain wholly in the C-band. In support of this conclusion, the Draft Order cites the satellite operators' proposed use of measures such as new Ku-band satellites, optimized beam design, cross-strapped Ku-band downlinks with existing C-band uplinks, retrofitted or replacement earth station equipment, and terrestrial recovery networks to mitigate packet loss or other service degradation. The Draft Order also emphasizes that "post-transition services need only be comparable in nature to the pre-transition ones," and need not be "exactly the same." The Draft Order also states that the Commission's recent decision to update satellite spectrum sharing rules in the Ku-band would not diminish the Ku-band's suitability to provide substantially the same service as part of a hybrid transition model.

Transition Schedule

The Draft Order would establish two formal Transition Deadlines:

• Primary Transition Deadline (December 30, 2030). Relocation of all incumbent FSS operations in the top 75 PEAs in the contiguous United States (PEAs 1–41 and 43–76), allowing terrestrial operations to begin on December 31, 2030. The Draft Order asserts this would make Upper C-band available in markets representing over 70% of the U.S. population and is intended to align with the FAA's first radio altimeter retrofit deadline.
• Final Transition Deadline (June 30, 2031). Relocation of all incumbent FSS operations in the remaining PEAs in the contiguous United States, allowing terrestrial wireless operations to begin on July 1, 2031, or earlier.

These Transition Deadlines are tied to the incentive payments discussed below. Unlike the Lower C-band transition process, which established an "opt-in" process for accelerated relocation with a later Transition Deadline for FSS operations as a backstop, these Transition Deadlines are mandatory. Under the Draft Order, if an eligible space station operator misses the Final Transition Deadline, it would lose the right to transition cost reimbursement and incentive payments. In addition, any post-deadline transmissions in the 4.0–4.16 GHz band could expose the operator to penalties for unauthorized operations.

Transition Cost Reimbursement

The Draft Order would require new Upper C-band terrestrial wireless licensees to reimburse eligible Upper C-band incumbent operators for the "reasonable and necessary" costs of clearing existing FSS services from 4.0–4.16 GHz in the contiguous United States. The Commission would also apply several general reimbursement principles drawn from the Lower C-band transition. Incumbent operators would remain responsible for incremental upgrades beyond what is necessary to clear the band. If an expense is deemed unreasonable, reimbursement would be limited to the reasonable cost that would have been incurred through a more prudent choice.

The Draft Order identifies certain types of potentially compensable costs for both repacked Upper C-band services and services that would be migrated to the Ku-band or a hybrid distribution model. Consistent with the Lower C-band approach, the Draft Order would direct the Wireless Telecommunications Bureau (WTB) to develop a Cost Catalog to provide guidance to both eligible FSS incumbents and potential auction bidders about a range of presumptively reasonable transition costs.

The Draft Order would also identify specific categories of non-compensable claims, including reimbursement for speculative lost business opportunities, lost revenues, and ongoing operating expenses. It would also not allow reimbursement for redundancies or additional delivery systems chosen by incumbent earth station operators themselves beyond what is reasonably necessary for the transition.

Lump Sum Option for Incumbent Earth Station Operators

Consistent with the Lower C-band framework, the Draft Order would offer incumbent earth station operators the option to receive a lump sum payment in lieu of transition cost reimbursement. Unlike the Lower C-band approach, however, incumbent earth station operators would be permitted to make elections on a per-site basis instead of being required to make a single selection for all of their eligible earth stations. For each site, the lump sum electee would be required to inform the Commission whether it would be:

• Performing its own transition work to maintain FSS service.
• Migrating to an alternative distribution technology such as IP-delivered service.
• Discontinuing service altogether.

Once made, the election would be irrevocable, and the electing operator would assume responsibility for its own transition work at that site and would have to comply with the applicable Transition Deadline.

Under the Draft Order, WTB would determine the specific lump sum amounts and procedures through the Cost Catalog process. Those amounts should reflect the average estimated reasonable costs of transition, including costs associated with migration to Ku-band related delivery where applicable. The election deadline for incumbent earth station operators would be 45 days after the Cost Catalog's release.

Incentive Payments for Eligible Space Station Operators

In addition to reimbursement of actual transition costs, new Upper C-band licensees would also be required to make incentive payments to eligible space station operators if those operators satisfy the applicable Transition Deadlines. The Draft Order presents this incentive framework as a modified successor to the Lower C-band accelerated relocation payment structure. However, the incentive payments are not aligned with an optional accelerated relocation process as they were in the Lower C-band proceeding. Rather, the Draft Order aligns those payments with the mandatory Transition Deadlines without a separate final transition backstop. Operators that do not meet the Primary Transition Deadline would remain eligible for incrementally reduced payments for up to 180 days, consistent with the approach used in the Lower C-band proceeding.

At this time, the total amount of the incentive pool and the operator-specific allocations are not publicly available and the underlying financial figures are redacted from the Draft Order. The Commission plans to disclose this information once it adopts and releases the finalized Order.

Upper C-Band Clearinghouse

Consistent with the Lower C-band transition, under the Draft Order, the Commission would again use an independent, third-party clearinghouse to administer the financial side of the transition. This clearinghouse would review actual cost and lump sum claims, allocate payment obligations among Upper C-band licensees, distribute approved payments, administer dispute resolution procedures, and issue periodic public reporting on the status of the reimbursement program. The Draft Order also contemplates that the same clearinghouse would administer the adjacent band radio altimeter rebate program. The clearinghouse, and the transition cost reimbursement program more generally, would be overseen by WTB.

The Draft Order would establish a clearinghouse selection process that would require a stakeholder selection committee to convene within 60 days after Federal Register publication, identify a candidate by December 15, 2026, and, if necessary, proceed through a modified fallback process to select a candidate by January 15, 2027. If the fallback process fails, the Draft Order would direct the Office of the Managing Director (OMD) to initiate a procurement process and WTB to take other actions necessary to establish a clearinghouse to oversee the transition.

Relocation Logistics

Consistent with the Lower C-band transition process, under the Draft Order, the operational work of transition would remain the responsibility of the eligible space station operators, subject to Commission oversight and assisted by a Relocation Coordinator. In practical terms, the satellite operators would remain responsible for planning and executing the migration of affected services and associated earth station work, except where an incumbent earth station operator elects the lump sum option and assumes responsibility for its own sites.

Transition Plans. Each eligible space station operator would be required to file an initial public Transition Plan by November 5, 2026, describing which services will remain repacked in the C-band, which services will migrate, what earth station work will be required, the projected schedule, and the estimated costs. Those plans would then be subject to public input and later amendment procedures established by WTB.

Relocation Coordinator. The Relocation Coordinator would be responsible for coordinating the clearing schedule across operators, helping assign or track migration work where necessary, assessing clearing progress by PEA, and mediating scheduling disputes. The selection committee for the Relocation Coordinator would have to convene by October 1, 2026. If the committee fails to identify a qualified Relocation Coordinator by January 1, 2027, OMD and WTB would initiate a procurement-based fallback process.

Technical Rules for the Unified C-Band

The Draft Order would largely harmonize the technical rules across the Lower and Upper C-band to create a single 3.7 GHz Service from 3.7–4.14 GHz. The Draft Order would also adopt targeted measures to facilitate coexistence with adjacent band radio altimeters and remaining satellite operations.

Base station power limits. Under the Draft Order, fixed and base stations in non-rural areas could operate at up to 1640 watts/MHz Equivalent Isotropically Radiated Power (EIRP), while rural base stations could operate at up to 3280 watts/MHz EIRP, with those limits applying to the aggregate power of all antenna elements in a sector. This approach would be consistent with the power limits adopted by the Commission for the Lower C-band and other broadband mobile services in nearby bands.

Mobile and portable power limits. The Draft Order would also adopt a power limit of 4 watts EIRP rather than the 1 watt EIRP power limit that was proposed in the NPRM. To create consistency within the combined band, the Draft Order would also apply this higher power limit across the 3.7–4.14 GHz band.

Out-of-band emissions (OOBE). The Draft Order would adopt an option-driven approach to permissible OOBE to ensure effective coexistence with post-retrofit radio altimeters. Under this approach, the Draft Order would require licensees to limit emissions into the adjacent 4.2–4.4 GHz band to either -28.4 dBm/MHz EIRP or a conducted power limit of -46 dBm/MHz. This modified OOBE limit would be applied to operations across the Upper and Lower C-band. Emissions into other bands would remain subject to a -13 dBm/MHz conducted power limit, and mobile and portable devices would remain subject to a -13 dBm/MHz conducted power limit outside their authorized band.

Additional operating limits and other Part 27 rules. The Draft Order would also apply a number of Part 27 rules to the Upper C-band, impose a 450-foot above ground level antenna height limit for operations in 3.98–4.14 GHz, and require compliance with international coordination agreements at the Canadian and Mexican borders. The draft Order would also require mobile and portable devices to be operable across the entire 3.7–4.14 GHz band.

Incumbent FSS and existing telemetry, tracking, and command (TT&C) protections. The new framework would also mirror much of the Lower C-band's incumbent protection rules, retaining the same FSS protection measures and maintaining existing protection measures for TT&C facilities through December 5, 2030. The Draft Order would decline to extend new formal protections to teleport or gateway sites or to adopt formal protections for radio astronomy facilities.

Adjacent-Band Radio Altimeter Coexistence Framework and Retrofit Rebates

The Draft Order would establish a comprehensive coexistence framework for terrestrial wireless operations in the Upper and Lower C-band and radio altimeters operating in the adjacent 4.2–4.4 GHz band and establish a rebate program to help fund altimeter retrofits.

Radio Altimeter Coexistence Framework

Technical rules. The Draft Order identifies three of the rule changes summarized above that would specifically support radio altimeter coexistence: (1) OOBE limits into the 4.2–4.4 GHz band; (2) antenna height restrictions; and (3) base station power limits. The Draft Order states that these rules "are intended to align with the FAA's independent safety-based decisions and promote a harmonious spectral environment between terrestrial wireless operations throughout the entire C-band and adjacent band radio altimeters."

Retrofit timing. The Draft Order also again notes that the Primary Transition Deadline is aligned with the FAA's first retrofit deadline and acknowledges that the Lower C-band licensees that previously entered into voluntary commitments on specific technical and deployment issues to facilitate coexistence with radio altimeters have agreed to extend those commitments through the Primary Transition Deadline. The FAA's second retrofit deadline is October 31, 2034, well after the conclusion of the Upper C-band transition.

Radio Altimeter Retrofit Rebates

The Draft Order would not adopt an actual cost reimbursement model for radio altimeter retrofits. Instead, it would establish a rebate structure under which WTB would set rebate categories and fixed amounts based on factors including the number of radio altimeters involved, the general level of retrofit effort, and the applicable compliance deadline. The Draft Order asserts that those rebates would not be issued under the Emerging Technologies framework because radio altimeters: (1) operate in the adjacent band; (2) would not be relocated; and (3) would not have their authorizations modified. Instead, the Draft Order relies on the Commission's broad Title III spectrum management and licensing authority to condition new Upper C-band terrestrial wireless licenses on the payment of these rebates.

Eligibility. For the first FAA retrofit deadline, rebates would be available for aircraft operators holding a U.S. operating certificate under 14 CFR Part 119 and for aircraft manufactured before January 1, 2030, with one or more installed radio altimeters that operate in the contiguous United States under 14 CFR Part 121 and are subject to the first FAA deadline.

For the second FAA retrofit deadline, rebates would be available for aircraft owners listed in the FAA Aircraft Registry and for aircraft manufactured before July 1, 2031, with one or more installed radio altimeters that operate in the contiguous United States under 14 CFR Part 91 and are subject to the second FAA deadline.

Scope. The rebate program would be limited to retrofits of radio altimeters already installed in eligible aircraft. The rebate program would not cover spare inventory, would not extend to foreign-registered aircraft owners or operators, and would not be available to radio altimeter manufacturers as direct recipients.

Administration. The Draft Order would delegate broad authority to WTB to establish the rebate categories, dollar amounts, documentation requirements, and related procedures. The Draft Order would direct WTB to seek public comment on draft rebate proposals by October 6, 2026.

Next Steps

Prospective bidders and affected stakeholders should consider planning now for the compressed schedule that would be created by the Draft Order and the statutory July 4, 2027, auction deadline. In particular:

• Prospective bidders should assess auction strategy, likely cost reimbursement, incentive payment, and rebate exposure, post-auction spectrum screen implications, and deployment planning with the 2030–2031 clearing schedule in mind.
• Incumbent FSS operators, programmers, broadcasters, cable operators, and other satellite-reliant stakeholders should confirm whether their operations fall within the closed universe of eligible incumbents and closely assess the Transition Plan, Cost Catalog, clearinghouse, and relocation coordinator processes.
• Aviation stakeholders should likewise evaluate fleet-level exposure to the FAA retrofit deadlines of December 30, 2030, and October 31, 2034, and monitor WTB's upcoming actions on rebate categories, amounts, documentation requirements, and related procedures.

Finally, all affected parties should take note of the redacted financial figures in this Draft Order and should continue to monitor this proceeding through the Federal Register publication process, the 30-day Section 316 protest window, and the subsequent public notices that will establish the practical mechanics of the auction, transition, reimbursement, and rebate processes. We will update this Alert after the final text is released and published in the Federal Register.

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Paul Powell is of counsel and Heather Moelter is an associate, both located in DWT's Portland office. DWT's communications practice group is monitoring the Upper C-band proceeding and related developments. The group regularly advises wireless, satellite, cable, broadband, and other communications sector clients on FCC proceedings, spectrum policy, licensing, auctions, and technology issues, and is well positioned to help clients assess the regulatory and business implications of the Upper C-band transition. For more information, please contact the authors or another member of our communications team and sign up for our Alerts.