Intelsat and SES go head to head

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Another suite of missives from Intelsat were issued to the FCC on February 21st explaining where Intelsat stood on the CBA and the FCC’s decision to apportion proceeds from the upcoming auction in an equal split between Intelsat and SES. SES has let its disappoinment about Intelsat’s actions be known.

In one FCC filing, Intelsat pulling no punches, said: “Nonetheless, on February 20, SES Americom Inc. (“SES”) filed a startling and incorrect Ex Parte document with the Commission, in which it relied on a defunct voluntary agreement and confidential audit report to advocate for a greater allocation of incentive payments. This is unfounded, and the willful misuse of confidential information and deliberate mischaracterization of such report before a federal agency, is indefensible.”

“Given the FCC’s decision not to pursue a private market-based approach, and instead to structure the clearing of the C-band through mandates, incentives, and reimbursements directed at each satellite operator in its individual capacity, SES’s invocation of a private agreement that was predicated on a completely different structure is legally irrelevant and factually unsupported,” stated Intelsat.

Intelsat says it wants “at least” 60 per cent of the revenue share.

Another separate filing to the FCC complains that the spectrum it (and SES and Telesat) is giving up for auction is admitted by the FCC to be worth tens of billions of dollars, “with some parties submitting estimates as high as $77 billion”.

It also argues that the FCC is wrong to consider its authority to decide in favour of an FCC-organised auction, saying that the FCC’s own rules only permits it to “modify” existing licences and not to make fundamental changes to its licences. “Forcing licensees to involuntarily relinquish more than half of the spectrum covered by their licenses, as well as to take on billions of dollars in accompanying relocation costs under a transition plan that has a number of unpredictable moving parts and potential payment clawbacks, cannot be fairly characterized as a mere “modification” to the licenses at issue,” says Intelsat.

“In short,” states Intelsat, “as the hundreds of megahertz and billions of dollars at stake make clear, along with the massive new risks and obligations FSS providers would shoulder under the proposed transition plans, the changes to existing licenses proposed in the Draft Order are too extensive to be considered mere “modifications” that the Commission can require even if the affected licensees do consent.”

Intelsat accuses the FCC of being “capricious” and “arbitrary” and “irrational” in its decision-making.

The satellite operator says it still supports the FCC’s overall goal, but the Draft Order now on the table “cannot advance the FCC’s objectives in its current form”.

The FCC is expected to issue its final Order on February 28th.


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