CBA: “Satellite industry lacking unity”

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The US Congress Energy & Commerce Committee held a formal hearing into the C-Band Alliance’s plan for spectrum reallocation over the US on October 29th. The meeting did not go well for the Alliance.

The Committee already has a Bill (the C-Band Act) before Congress and the Bill is co-sponsored by Democrats and Republicans, and seeks to prevent a private auction – as proposed by the CBA – being held.

Sami Kassab, satellite analyst at investment bank Exane/BNPP issued a warning note to clients. He pointed out that Committee only invited 5 organisations to appear before it, and only one supports the CBA scheme (tech giant Cisco). Four others are all highly vocal in opposing the CBA’s plan.

Kassab said: “In our view the nature of this hearing was to provide support for the C-Band Act rather than a fair hearing of various parties arguments. As a result the discussion was largely negative for the CBA.”

He cautioned that the meeting and other sentiments being aired suggest there are “growing headwinds” for the CBA’s proposals.

“In our view the two key questions are:
1. What level of political support is the C-Band Act going to get from Congress and the [FCC] Administration?
2.
whether the FCC can convince Congress of a hybrid approach (combining elements of the CBA proposal and sufficient regulatory oversight coupled to donations to the Treasury) to alleviate political concerns? This remains the most likely outcome in our view as it provides both for speedy spectrum reallocation and incentives for private parties to free up Spectrum in the future. But political headwinds are multiplying.”

He added that he believed that the battle between a public and private auction is a “red herring” and says “An FCC-run auction with proper compensation for satellite operators (to avoid lengthy litigation) is likely to result in similar profits for SES, Intelsat and Eutelsat than a private-run auction with heavy regulatory oversight.”


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