Telesat Objections to C-Band Consortium Not Seen Derailing FCC Momentum
Telesat Canada objections to the C-band user consortium aspect of the Intelsat/Intel/SES band-clearing plan are attempts to ensure a bigger piece of a potential windfall from the band, but they shouldn't disrupt FCC moves toward allowing wireless access to the 3.7-4.2 GHz band, experts told us.
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The consortium being proposed by the satellite operators (see 1802120043 and 1804230054) would mean Intelsat and SES control making judgments about what constitutes equitable distribution of compensation given satellite operators for clearing spectrum in the band, said Telesat CEO Dan Goldberg in a call with analysts Thursday. "That doesn't work, that doesn't cut it," he said.
Unless the company can be persuaded the proceeds will be distributed equitably, Telesat will "oppose it vigorously," Goldberg said. Relying on two parties as representative of an entire industry "would be pretty unprecedented," he said.
Intelsat Vice President-Investor Relations Dianne VanBeber said it disagrees with Telesat's interpretation of how the consortium would work. She said voting by and compensation to consortium members would be weighted based on C-band allocation. She said Intelsat and SES envision all affected satellite operators being part of the consortium, and they've had discussions with Telesat about the consortium, and envision having more.
"Telesat is presumably playing hardball" as the last holdout of any size in C-band left to potentially consent, satellite and spectrum consultant Tim Farrar said. But since company objections don't involve allocation of the spectrum, and since there are many months before a potential order -- leaving plenty of time for negotiation -- the Telesat objections aren't likely to derail the FCC process, Farrar said.
Michael Calabrese, director of the Wireless Future Program at New America, said satellite operators arguably don't deserve any C-band windfall since the only stakeholders with anything of actual value are the earth station holders with protection rights who will need to switch transponders or substitute fiber to continue video distribution. He said the FCC won't want to involve itself in issues of sorting out payments and will let the C-band interests work that out among themselves.
The C-band plan already landed support from Eutelsat. In an earnings call earlier this year, CEO Rodolphe Belmer said the company would join the SES/Intelsat consortium. He said Eutelsat has only about 5 percent of the C-band market in North America, but "it doesn’t mean that we don’t want to be a player, we will be a player" and it wants a voice in C-band direction. Citing Eutelsat, VanBeber said SES and Intelsat expect other North American C-band satellite operators to join the consortium.
"We're grownups and sympathetic" to aims by the FCC and other regulators of opening up spectrum bands to terrestrial use, Goldberg said. Telesat Canada agrees with Intelsat and SES on "basic fundamental points" such as that the satellite industry has invested in mission-critical C-band services and reassignment of that spectrum for other uses by regulators should come with compensation, he said. An NPRM on the C-band plan is expected this summer (see 1804200003) and the FCC is taking comments now on wireless use or sharing of the band (see 1805010078).
Goldberg said Telesat has "a lot of skin in the game" on C-band, given it has three satellites with 50-state C-band coverage, but didn't say what percentage of its revenue comes from North American C-band. Intelsat said Eutelsat is the third-largest North American satellite user of C-band, behind Intelsat and SES.
Goldberg said one upside to the C-band clearing plan as proposed is that it recognizes the need for stakeholder consensus. "If these things are to work, you need industry reaching a consensus," he said.
The C-band plan is getting some objections from other corners. NPR in a docket 17-183 ex parte filing last week recapped a meeting with an aide to Commissioner Mike O'Rielly at which the broadcaster said it sounded an alarm about public radio distribution's reliance on satellite C-band use and the lack of cost-effective alternatives. It said it relies on 475 earth stations nationwide, all pointing at Intelsat's Galaxy 16 satellite, with those downlinks using 36 GHz of C-band. It said it would need 36 GHz of spectrum elsewhere in the band if forced to move because sharing spectrum isn't feasible due to the lack of proven interference protections, relocating some antennas plus fiber use would be very disruptive and going to an all-terrestrial system would add considerable cost and risk and preclude universal service.