The legal dispute between SES and Intelsat has now extended itself to the FCC, and the FCC’s official licensing of C-band frequencies.
Intelsat, on June 11th, filed a formal submission to the FCC and clarified which of the many Intelsat businesses actually held the C-band licences over the US.
On June 10th, SES Americom filed a statement to the FCC saying that it “reserved its rights” in the dispute between SES and Intelsat in the claim by SES for some $420 million of extra cash – and potentially an overall $1.8 billion if punitive damages are awarded – in the division of the FCC’s assorted incentive payments for C-band restructuring over the US.
The SES letter to the FCC said the licensed satellite operator was Intelsat US LLC. The letter stated that SES reserves “its rights with respect to any and all claims that it may have against Intelsat or any of its affiliates, irrespective of which Intelsat entity may sign a particular contract, plan, or any other document or agreement arising from or related to the C-band proceeding and transition.”
‘Not quite’ implies Intelsat. Its June 11th letter to the FCC said that actual licence holder is Intelsat License LLC. The letter adds: “Intelsat License LLC has also always been the filer entity of all filings in this and other C-band related dockets. In order to avoid any potential for confusion, we again state for the record that Intelsat License LLC is the “electing satellite operator” as that term is defined in the Report and Order and FCC rules, and (as SES well knows) Intelsat License LLC will be the entity receiving the accelerated relocation payments that are earned. Moreover, to the extent that it matters, SES’s own past filings identified and acknowledged that Intelsat License LLC was and is the entity electing to undertake clearing responsibilities in the C-band.”
Intelsat also argues that SES’s “statement reserving its rights with respect to any and all claims that it may have against Intelsat or any of its affiliates” is legally meaningless.
Intelsat goes on to say that the FCC is not the forum where SES should further attempt to buttress its weak arguments in litigation which does not involve the FCC.
At the heart of the SES letter, and core to its argument in front of Intelsat’s Chapter 11 bankruptcy court, are worries that Intelsat could be involved in a deliberate “shell game” as regards Intelsat’s current and expected assets, and in particular the $5 billion which would flow from the FCC in respect to the C-band auction of spectrum.
A co-counsel lawyer for SES, Orin Snyder (of Gibson, Dunn & Crutcher LLP), recently told the bankruptcy court that the SES claim for $420 million was the largest against Intelsat. “However, when we win this claim it would be a pyrrhic victory if Intelsat had simply protected and moved its assets to other Intelsat entities.”
Snyder wanted the court to be very aware that the SES claim was against all the Intelsat entities involved in the Chapter 11 reconstruction.