The C-Band Alliance (CBA) has filed a comprehensive 16-page statement with the FCC that pulls no punches in its argument for a fair commercial reward for reallocating 280 MHz of its satellite spectrum over the US, for use by 5G operators.
Currently the FCC says it will itself manage an auction of the spectrum, and wrap up the sale by the end of this year.
The CBA (an alliance of Intelsat, SES and Telesat) admits that the FCC has “broad legal authority to manage spectrum in the public interest, and the FCC has long used this authority to enable new licensees to compensate incumbents for accelerated clearing when their spectrum is reallocated to a new use”.
The CBA says that there is broad consensus in the C-band proceedings that incumbent satellite operators should be compensated beyond the cost to clear spectrum. Such ‘acceleration payments’ must provide incumbents with fair incentives to take the business risks, divert corporate resources, and make the substantial new capital investments that will be required to efficiently and expeditiously clear the spectrum.
However, the CBA argues strongly that its proposed accelerated clearing would “more than double the value of the C-band spectrum”. The CBA uses an analysis from the Brattle Group which “concludes that a conservative estimate of the value created as a result of accelerated clearing is approximately 100 per cent of the auction winning bids, and thus represents a suitable incentive fee for accomplishing the accelerated clearing”.
The CBA, in its filing, gives detailed background data to the FCC (and which no doubt would provide the legal basis for any dispute down the line). But the CBA also states that its proposals would clear the spectrum more speedily, reduce legal uncertainty and thus benefit the US Treasury as well as CBA members.
Part of the filing reads: “Bidders who know the ultimate price they must pay to acquire unencumbered C-band spectrum will be more likely to bid aggressively, thus maximising proceeds. In addition, bidders who are assured that incumbents will be fairly compensated for accelerated clearing will bid more because they know that the incumbent licensees will be incentivised to quickly leave the spectrum, and because they will value the acquired spectrum asset more highly knowing that the Commission is likely to compensate them fairly if in the future the spectrum is again repurposed to a more efficient use.”
The CBA also dismisses the potential compensation claims from smaller satellite operators who have beams that “touch” the US, saying: “The CBA concludes that the small satellite operators’ (SSOs) assertion that they should be compensated for 100 per cent of the transponders on any C-band beam that touches even a small fraction of the continental US belies the technical limitations of their fleets and is completely inconsistent with the public interest in having the share of acceleration payments be directly related to clearing spectrum for 5G.”