Intelsat gets tough in C-band dispute

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The avalanche of legal filings and motions in the increasingly bitter dispute between SES and Intelsat over the division of C-band ‘incentives’ from the FCC is simply immense.

April 14th saw another flood of documents, but one stood out, which contained Intelsat’s strong rebuttal of some of SES arguments. The opening paragraph says it all: “SES’s Motion is mostly a continuation of its smear campaign against [Intelsat], SES’s largest competitor. SES first seeks to intervene in a lawsuit that does not exist”.

The filing to Intelsat’s bankruptcy court then takes 17 pages of legalese to expand on its rebuttal of SES’s arguments, and states: “SES has pursued its claim through bombastic character assassination, in an effort to advance SES’s competitive efforts against the Debtors, while ignoring the text of the contract it signed and the FCC Order that the Debtors are working to implement…. SES’s approach is simply not how bankruptcy works. SES (and all other creditors) will have every opportunity to advance its opposing assertions about payments flowing from the FCC Order during [Intelsat’s exit from bankruptcy plan] confirmation proceedings.”

The invective from Intelsat certainly manages to match that already filed by SES. Intelsat claims that the C-Band Alliance – the initial entity which negotiated with the FCC over the allocation of C-band frequencies over the US – had no role once the FCC had determined its auction process.

Intelsat argues that “none of the proceeds from the FCC-run auction will flow to the CBA or any of the satellite operators; instead, those proceeds will all go to the U.S. Treasury. The payments allocated to each separate satellite operator under the FCC regime are for their actions separately—and they are not related to the auction proceeds. As such, the acceleration payments were not a part of the Market Approach nor even contemplated by the Agreement”.

“SES is trying to pocket for itself money that Intelsat is eligible for on account of Intelsat’s rights in the C-Band—and that value belongs to Intelsat’s real creditors (not its chief competitor),” states the Intelsat filing, adding ”The reality is clear: SES, the Debtors’ fiercest competitor, seeks a windfall for doing nothing while the Debtors earn incentive payments, described in the FCC Order, for the benefit of the Debtors’ stakeholders”.

The judge in this case needs – and probably has – the wisdom of Solomon!


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