Eutelsat, not for the first time, has formally complained to the FCC over the Commission’s ruling that it would pay around $5 billion to both Intelsat and SES in ‘incentive payments’ for clearing certain C-band frequencies over the USA.
In essence, Eutelsat is fearful that the payments – and the related reimbursements of actual costs of new C-band satellites over the US – will mean that Intelsat and SES will use the cash to expand functionality and coverage beyond a one-for-one simple replacement scheme. Eutelsat says the FCC’s official estimates (aided by analysis by RKF Engineering Solutions) of the costs of these replacement satellites are far too high and thus are more sophisticated satellites than currently being used.
Both Intelsat and SES are looking to order between four and six satellites to replace the lost frequencies. SES, speaking to Advanced-Television on June 2nd, said that it was still in negotiation on the satellite contracts but it was likely that six satellites would ordered, although two would be ground spares.
Eutelsat’s comments added: “Such disproportionately large relocation reimbursement payments could only be for satellites with large (and heavy) buses, with large arrays of transponders operating on multiple frequency bands over large, non-CONUS regions,” Eutelsat stated. “Such payments, in effect, would improperly subsidize non-C-band satellite costs that are completely unrelated to the relocation process.”
Its formal letter to the FCC stated: “[Satellite] Reimbursement eligibility should be limited to in-orbit delivery of comparable facilities providing C-band capacity over [the Continental US]”.
Eutelsat argued that: “Because expectations regarding future relocation costs will directly impact the proceeds of the upcoming auction of this spectrum, the Commission should narrowly limit the range of eligible costs to those truly “necessary” to relocate incumbent services to comparable facilities.”