SES and Eutelsat make their own cases for more C-band money

by

WASHINGTON — SES is now arguing that it deserves as much money as Intelsat to clear C-band satellite spectrum for 5G cellular networks, following Intelsat’s solo effort last week to increase its share of the FCC’s $9.7 billion fund. 

Meanwhile, Eutelsat, a former partner of Intelsat, SES and Telesat in the now fractured C-Band Alliance, is seeking around $1 billion more for itself. 

The FCC is scheduled to vote Feb. 28 on a plan that includes $9.7 billion to accelerate spectrum clearing by September 2023 instead of 2025 and that covers new satellites and other infrastructure needed to continue services with less spectrum. The total amount for both is around $14.9 billion, though the final tally could be higher. The FCC cautioned that its $3.3 billion to $5.2 billion price tag for replacement infrastructure is just an estimate. 

The FCC’s plan, unveiled Feb. 7, calls for giving the largest share of accelerated clearing payments to Intelsat. Its 50% share could be worth up to $4.85 billion, if the spectrum is cleared by the FCC’s 2023 deadline.  

SES would be eligible for a 41% share, or up to $4 billion, with smaller players Eutelsat, Telesat and Embratel Star One dividing a 9% share. 

Intelsat broke ranks last week with the C-Band Alliance it helped create, telling the FCC Feb. 19 that it deserves 60-67% of the proposed $9.7 billion in accelerated clearing payments since it needs to clear the largest share of North American C-band spectrum to make way for 5G.

Intelsat, in making its case for more money, told the FCC to treat the C-Band Alliance as defunct. 

SES, which publicly rebuked both actions, told the FCC in a letter released late Feb. 20 that Intelsat “has no right to unilaterally disband the [C-Band Alliance].” SES added that the FCC should not “take proposed payments from SES in order to placate disgruntled, financially-troubled companies.”

“SES rejects the assertion by Intelsat that ‘there will be no C-Band Alliance going forward’,” the company wrote.

SES has nonetheless started its own campaign for more money, arguing that “undisputed facts conclusively show that Intelsat and SES deserve equal shares of any accelerated relocation payments.”

The two satellite operators will need to install roughly equal numbers of new C-band dishes and signal filters for customers affected by the spectrum loss, SES said. Both companies will need to decommission six command and control gateway sites, as well, according to SES. 

If the FCC’s metric is the contribution each satellite operator must make to clear spectrum, “then SES is entitled to more than the amount set forth in the draft Report and Order,” the company said. 

In the letter, SES reiterated its intent to make Intelsat fulfill commitments made under the C-Band Alliance, but said if that proves impossible, each company will need more satellites than anticipated to replace spectrum lost during the transfer.

C-Band Alliance members had agreed to work together to clear spectrum by consolidating new satellite orders and sharing teleports. Eight to 10 satellites would cover all C-Band Alliance member needs. Without that agreement, SES will need six new satellites by itself, and Intelsat six to seven satellites, according to SES. No mention of Telesat’s satellite needs was included in the letter. Telesat has stayed silent as its two larger partners feud.

Eutelsat sides with Intelsat, mostly

Fleet operator Eutelsat, which helped form the C-Band Alliance with Intelsat, SES and Telesat in 2018 but quit the group a year later after disagreeing with its members, aligned itself with Intelsat in a letter released Feb. 21. 

Eutelsat said the FCC should allocate 62.6%, or $6.07 billion of its proposed accelerated clearing payments to Intelsat. Eutelsat’s reasoning is that Intelsat has a younger and larger C-band fleet than SES, and therefore deserves more incentive payments. 

By that same logic, Eutelsat argues it too deserves a larger amount — 15.2%, or $1.47 billion — more than triple what’s allocated in the FCC proposal. 

To provide Intelsat more payments, the FCC should reduce SES’s share to 22.1%, ($2.15 billion), Telesat’s share to 0.12% ($11.2 million) and Star One’s share to 0.03% ($2.7 million), Eutelsat said. 

Eutelsat said it disagrees with the weight Intelsat gives to the number of C-band dishes it must modify, move or replace, and to operator C-band revenues, but that it nonetheless reached a similar conclusion in how much Intelsat ought to receive.