On May 14th, SpaceX filed a document with the Federal Communications Commission (FCC) saying that the rocket launch company does not expect the current Covid-19 crisis will affect its ability to meet the FCC’s accelerated [launch] timeline at SpaceX’s standard fees of $62 million per Falcon 9 launch.
This prompted a note to clients from Sami Kassab at investment bank Exane/BNPP saying the bank believes this to be positive news underpinning SES and Eutelsat and that the satellite operators are “well on track” to earn the FCC’s significant “incentive” payments for clearing their C-band spectrum.
The bank expects SES to earn €5.50 per share and €1.40 per share for Eutelsat, and there’s the prospect of SES negotiating extra additional direct payments with the bidders at the FCC auction.
As for Intelsat, the bank reminds investors that its Chapter 11 move was largely expected. “More importantly, the company also said it intends to accept the FCC C-band payment proposal,” adds Kassab.
“We see this development as positive for SES and Eutelsat as it removes one major hurdle on the way to C-band payments for European operators. Without the inclusion of Intelsat in the accelerated clearing process, Eutelsat and SES would have received no payment according to the FCC proposal. We do not expect Intelsat Chapter 11 process to significantly alter the competitive landscape for SES and Eutelsat in the short to medium term,” says the bank’s note.
May 29th is ‘D-Day’ when the various players in the C-band saga must formally confirm their acceptance and inclusion in the FCC’s scheme. This includes Telesat of Canada which has already indicated its acceptance.
However, three other smaller satellite operators, ABS (of Bermuda and Hong Kong), Hispasat of Spain and Argentina’s Arsat, are collectively suing the FCC because they have been excluded from the incentive scheme. In their filing to the US Court of Appeal in DC they say: “The Small Satellite Operators respectfully request that this Court reverse and hold unlawful, vacate, enjoin, annul, and set aside the Report and Order in its entirety, and provide such additional relief as may be just and proper.”
The FCC’s ruling to exclude the trio from the incentive scheme was because they have few (or no) clients in the continental US taking their signals.
Hispasat is arguing that it has an evangelical church with nine satellite receive dishes. However, it seems the dishes were not registered. ABS is arguing that it was about to start a US service from its ABS-3A satellite.
Arsat missed a FCC deadline to register and disclose its US-based clients.