It is for the FCC to determine the terms and financial obligations of the C-Band Alliance’s scheme for the restructuring of satellite spectrum over the US. While nothing is yet agreed, a consensus has emerged that the three key members of the Alliance (Intelsat, SES and Telesat) will volunteer to pay a 25 per cent ‘windfall’ tax of their expected revenues to the US Treasury. These three players control about 95 per cent of the satellite spectrum in use over the US.
However, Eutelsat, a former member of the Alliance, is proposing a voluntary payment of 50 per cent. If this doesn’t totally upset its former partners, then a rehashed set of proposals from Eutelsat including how auction revenues should be divided up will certainly raise its former partner’s temperatures.
Eutelsat in a November 7th letter to the FCC now says that the FCC should itself handle the auction, and argues that the FCC should “closely oversee and control the auction of this spectrum to ensure a fair, transparent, equitable, and impartial auction and proceeds distribution process.”
Eutelsat told the FCC: “Eutelsat suggests that US taxpayers should receive the benefit of depositing up to 50 percent of the auction proceeds in the U.S. Treasury.”
Worse, if at all possible, Eutelsat which only controls about 5 percent of the C-band coverage over the US (and thanks mainly to two satellites acquired from Satmex in 2013) wants a complex payment split where the operator with the youngest fleet will receive regardless of whether these satellites have any clients using their frequencies.
“Regardless of revenue from CONUS C-band customers, C-band satellite operators are relinquishing spectrum, will face a fundamental change to their authorizations, and have made sunk capital investments in satellite capacity to serve the United States, which they will be required to abandon if the Commission moves forward with this transition,” Eutelsat stated in its submission to the FCC.
Perhaps the FCC should accept the various proposals; ‘Taxing’ the C-Band Alliance at a 25 per cent rate, and taxing Eutelsat at their proposed 50 per cent, then all could potentially be happy.
Meanwhile, the Alliance has submitted its own revised transition plan to the FCC, including a commitment to buy 8 new satellites from US manufacturers to replace re-assigned satellite capacity.