Intelsat and SES, the two largest operators of C-band frequencies over the US, have completed Phase 1 of their clearance of spectrum by the important June 1st deadline. It means that the two, plus Eutelsat and Telesat of Canada, can qualify for the FCC’s initial end-of-year pay-out of some $2 billion in so-called incentive payments.
The Phase 1 frequencies (totalling 120 MHz) have to be ready for 5G reallocation by December 5th.
The next stage, and one that would fully qualify for the FCC’s final incentive payments of an overall $9.7 billion plus up to an overall $5.2 billion to cover the costs of the repurposing exercise (mostly related to installing thousands of dish filters) and the launching of new satellites, must wrap by December 5th 2023. These Phase 2 frequencies total 180 MHz (and will be 160 MHz for reuse and a 20 MHz ‘guard band’.
The then chairman of the FCC, Ajit Pai, outlining the clearance scheme and incentive payments plan in February 2020, summed up the aim, saying: “I favour accelerated relocation payments because … it is in the public interest to make available the C-band for 5G deployment as quickly as possible, as part of the national priority to promote American leadership in 5G.”
Pai added: “The purpose is to expedite of the clearing of the lower portion of the band for 5G. On the other hand, there will be those who will complain that $9.7 billion in accelerated relocation payments is too much. They agree such a payment is necessary, but they would prefer a smaller amount—in the neighbourhood of $1 billion, for example. But that number would be far below the value to wireless companies of the accelerated clearing, and ultimately the value to American consumers of faster development of 5G. And it would not be enough to properly align the incentives of the satellite operators with our national interest of getting this C-band spectrum cleared quickly so it can be put to use for 5G.”
The FCC auction of the spectrum generated a total of $81 billion. AT&T, for example, paid the FCC $23.4 billion for 1621 licences for 5G.