CBA: FCC adds detail to its thinking

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Last week, Eutelsat’s CEO Rodolphe Belmer met with the FCC’s Chairman Ajit Pai. Belmer said that satellite operators should receive an upfront ‘stage’ payment for handing over their spectrum.

A report from analyst Sami Kassab at Exane/BNPP gives a detailed background to the event, saying that  Belmer discussed the principles that should govern the transition, compensation and incentive processes for satellite operators. Belmer suggested that the FCC should place responsibility directly with each C-band satellite operator to manage the repacking [of spectrum]. He argued that satellite operators should receive an up-front fixed incentive payment as well as a final incentive payment based on achieving FCC-defined transition requirements.

Also last week the so-called ‘Small Satellite Operators’ (SSO), who have not been part of the C-Band Alliance’s strategy of submissions to the FCC, issued their own filing to the FCC and in support of a public auction – which the FCC has now decided upon.

The SSOs are ABS, Hispasat and Star One. The CBA’s view is that these SSOs do not have revenue-generating services in C-band over the US, and by implication do not need compensating.

The SSOs outlined their own thinking as to how proceeds should be divided and were not backward in coming forward. The SSOs want 14 per cent of any eventual proceeds, and suggesting that Intelsat receive 44 per cent, SES 23 per cent, Eutelsat 13 per cent and Telesat 4 per cent.

This breakdown is significantly different from the CBA’s proposed – although not confirmed – which is for an equal share (more or less) for Intelsat and SES with much smaller pay-outs for Telesat and Eutelsat.

Kassab, in his note, says that using the controversial Eutelsat formula suggests Intelsat at 45 per cent, SES at 35 per cent, Eutelsat 10 per cent, SSOs at 7 per cent and Telesat at just 3 per cent.

As reported on November 25th, FCC Commissioner Jessica Rosenworcel is in favour of “incentivising” the satellite operators to free up their spectrum, and to make them “return the maximum amount of airwaves”.

Most helpfully, one of her colleagues on the Commission said: “I’ve met with some of the CBA members within the last few days. I don’t get the sense anybody is dug in opposition. I think within this framework there can be the right incentives for everybody… the American people, the CBA, the SatCos and our 5G build to see a win out of this. We are focused on that.”


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