Eutelsat OK with FCC’s C-band auction plan provided satellite operator costs are covered 

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WASHINGTON — Eutelsat Communications, having already left the C-Band Alliance of satellite operators pushing for a private spectrum auction, told the FCC it supports the commission’s pan to run a public auction, but still wants satellite operators to get some of the auction proceeds to cover costs associated with losing the spectrum. 

The FCC announced Nov. 18 that it would auction off more than half of the 500 megahertz of C-band spectrum currently used by satellite operators so it can be repurposed for 5G cellular services. 

While Intelsat, SES and Telesat, the remaining members of the C-Band Alliance, expressed dissatisfaction with that approach, Eutelsat said it supports a government-run auction. 

Eutelsat had previously advocated for a satellite operator-led auction as part of the C-Band Alliance, but chose to go it alone after disagreeing with members on the size of a voluntary contribution to the U.S. treasury. 

In a Nov. 21 letter to the FCC,  Eutelsat told the commission that some proceeds from the spectrum sale should go toward covering costs satellite operators will incur moving out of the band, and to provide “incentive” payments to expedite the spectrum transition to new 5G users.

Analysts estimate a U.S. C-band auction could generate $30 billion to $60 billion in proceeds, which under a public auction would go to the U.S. government. A Senate bill introduced Nov. 18 called the 5G Spectrum Act of 2019 would direct some portion of the proceeds to cover satellite transition costs. The House’s Clearing Broad Airwaves for New Deployment (C-BAND Act), introduced Oct. 24, makes no such provision, but states that the reallocation should ensure existing users “receive equal or better service.”

Eutelsat said it doesn’t know how much of the proceeds should be used as incentives, and did not give a figure for covering transition costs. The C-Band Alliance has estimated transition costs at $2.5 billion to $3 billion, a range that covers eight replacement satellites, plus new ground infrastructure such as spectrum filters for dish antennas. 

Eutelsat said C-band satellite operators should be paid for “voluntarily relinquishing their authorizations for modification by the Commission,” plus managing the transition process to ensure C-band customers continue to have service. 

The company also suggested a “final incentive payment” that would be based on how well satellite operators achieve FCC-defined transition requirements. Companies that underperform would receive a smaller payment or would be otherwise penalized. 

Eutelsat said it should be left to satellite operators to transition their C-band customers — most of them television and radio broadcasters — out of the spectrum that regulators want for 5G. 

Who will manage the transition remains to be determined. ACA Connects, a group of 700 small and medium-sized telecom providers, criticized satellite operators before Congress last month as ill-suited to handle the transition. 

The C-Band Alliance has yet to detail its path forward in light of the FCC’s public auction decision. The alliance said Nov. 18 that it would “continue to work cooperatively with the FCC to develop an effective alternative plan” to the public auction. 

The Alliance said Nov. 25 that Intelsat CEO Stephen Spengler and SES CEO Steve Collar met with the FCC to talk about C-band. The executives discussed how the C-Band Alliance and the FCC could make an “effective plan in the shortest possible timeframe and achieve the best outcome for the American public while protecting the interests of its users and the rights of its companies,” according to the C-Band Alliance.