Advanced Television

Verizon and AT&T want early CBA action

November 29, 2019

Preston Padden, the first head of advocacy at the C-Band Alliance (he stepped down in March, and had been EVP of Government Relations at Disney) issued a slice of advice to his former colleagues in the Alliance.

In a Tweet this week he said: “C-Band lesson to all Spectrum licensees, Federal and Private – cling to every MHz of your usage rights!  Don’t make a good faith offer to part with even a little in the interest of our society, economy and tech leadership because the Jackals of the D.C. swamp will devour you.”

Coincidentally, telco giants Verizon and AT&T filed comments to the Federal Communications Commission (FCC) now that the FCC has taken control of the proposed C-band auction process.

“Verizon asks for the auction to happen in the same timeframe as would have happened with the CBA proposal. It suggests a straightforward, conventional auction and recommends the FCC identifies appropriate incentives (and penalties) for clearing the spectrum,” reported a note from investment bank Exane/BNPP.

“AT&T suggests the FCC issues an Order broadly outlining the re-banding and seek further comment on the auction process (the most likely scenario in our view). It asks for the auction to occur as soon as practicable and wants the FCC to appoint a Transition Facilitator that has experience in managing these transitions (in other words, not the CBA in our view). AT&T also argues that whatever the final auction design there are a variety of options to ensure that satellite companies receive compensation for (a) surrendering their rights and (b) playing a critical role in the transition,” stated the bank.

Sami Kassab, a media analyst at the bank, said: “We continue to believe that satellite companies are likely to be compensated for their C-band repacking and believe that SES (+) and Eutelsat (+) share price have been excessively de-rated.”

Both SES and Eutelsat are in the valuation doldrums (as is Intelsat). SES has suffered badly from the October and early November period when its share price was about €17.50 to its current €11.85 value. Eutelsat has also suffered. At the end of October its share price stood at €18.50, and has since slid to around €15 per share.  But both SES and Eutelsat look heroic compared with Intelsat, which has been hammered by the market. In October and early November Intelsat was trading at about $26 per share. Now shares have slumped in value to barely $6.50.

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