PARIS — Eutelsat Chief Executive Rodolphe Belmer said his company left the C-Band Alliance last week because the other members of the group didn’t pay sufficient attention to the company’s concerns.
The C-Band Alliance, now down to Intelsat, SES and Telesat, is still the best organization to facilitate the transition of some satellite C-band spectrum to cellular 5G networks in the United States, but Eutelsat still felt it would be better off to go it alone, Belmer said Sept. 9 during a World Satellite Business Week panel here.
“Our share of the C-Band Alliance was very, very small,” Belmer said. “In that context, it is difficult to get your voice heard within a group with much larger players.”
Paris-based Eutelsat constituted about 5% of the 2017 revenue generated from C-band satellites over the continental United States, according to the C-Band Alliance. The group is using the 2017 C-band revenues to determine the percentage of proceeds its members will receive from a spectrum sale, should federal regulators accept their plan.
Intelsat and SES had 90-95% of U.S. C-band revenues in 2017, Intelsat vice president of investor relations Diane Van Beber told SpaceNews by email but declined to specify how much each company earned individually, or how much of the 2017 total was earned by Canada-based Telesat.
Belmer said Eutelsat wanted greater influence on CBA decisions, such as how an anticipated multibillion dollar windfall would be distributed, how much spectrum the operators should sell, and what, if any contribution the group should voluntarily make to the U.S. Treasury.
“All those elements needed to be taken into consideration, and the rights of each stakeholder needs to be respected in their own interest,” he said.
The U.S. Federal Communications Commission is expected to make a decision on C-band, including how much spectrum to repurpose and by what means, this fall. Executives from Intelsat and SES, the two largest members of the C-Band Alliance, say they are still optimistic about their C-band spectrum plan advancing in the United States despite the risk of a “holdout problem” from Eutelsat.
“It would be beneficial if we were all working together, but I equally don’t think it’s in any way upsetting of the progress we’ve had for Rodolphe and Eutelsat to have their own representation,” SES CEO Steve Collar said.
Collar and Intelsat CEO Steve Spengler said they both respect Eutelsat’s Sept. 3 decision to quit the C-Band Alliance, despite their desire to work together with the company.
“We would still like to be all together, but as Steve said earlier, we respect Rodolphe’s decision based on what he needs to do for his company and shareholders,” Spengler said.
Solving the holdout problem
The CBA now has to deal with a situation that it had previously told the FCC its plan avoided — a holdout.
Intelsat, SES, Eutelsat and Telesat all have equal rights to the 500 megahertz block of C-band downlink spectrum the FCC is considering for 5G. Those overlapping rights mean all four operators have to work together, at least according to CBA arguments made before the FCC and Congress when Eutelsat was a member.
Spengler said avoiding a holdout problem was an attribute of the CBA proposal when it was four companies, but that this wasn’t the core of the proposal.
“The No. 1 attribute is still speed,” he said. The CBA argues that it can clear 200 megahertz of spectrum — 180 usable megahertz plus a 20 megahertz guard band — in 18 to 36 months of an FCC order.
“If there are holdout situations, the FCC will have to consider that,” Spengler said. “That has been something they have had to deal with in the past, and I suspect that will have solutions for that problem as things go forward.”
“From my perspective, I think Rodolphe has to make the right decisions for Eutelsat,” Collar said. “Similarly, we are obviously continuing with the plan. We still feel like with SES, Intelsat and Telesat that this represents the best way to free up valuable spectrum for 5G in the U.S. We can do that while still protecting our customers.”
Telesat CEO Dan Goldberg, while on the panel, did not weigh in on the C-band discussion beyond saying that getting “a good outcome in the U.S. on the C-band proceeding” is a goal for the next 12 months.
Belmer said Eutelsat is “not against the CBA at all,” but believes the company can defend its own interests more aggressively outside of the alliance.
“I prefer driving myself,” he said.
