Intelsat CEO: Eutelsat CBA Withdrawal Not Impacting Timing

By Paul Kirby, 18 September 2019, TR Daily

Intelsat S.A. Chief Executive Officer Stephen Spengler said today that the withdrawal of Eutelsat Communications S.A. from the C-Band Alliance hasn’t seemed to impact FCC consideration of the CBA’s proposal for repurposing spectrum from the band, including the timing of action. Mr. Spengler also said that the CBA doesn’t plan to discuss the amount of its planned voluntary contribution to the U.S. Treasury until it becomes clear what the Commission might do.

In announcing its withdrawal from the CBA earlier this month, Eutelsat said that it wasn’t “aligned” with the group’s three other members – Intelsat, SES S.A., and Telesat (TR Daily, Sept. 3).

During a conference call with analysts in July, Eutelsat CEO Rodolphe Belmer said that there was no agreement within the CBA on the voluntary contribution that the alliance has pledged to make to the U.S. Treasury if the FCC approves its plan. He also said that the CBA had procrastinated on tallying up what each company’s share of the proceeds from the sale of the spectrum would be.

“We’re moving forward. We don’t see a slowdown at the FCC right now in terms of their activity,” Mr. Spengler said this morning at Goldman Sachs’ 28th Annual Communacopia Conference in New York.

“We would, you know, welcome them back in under the right circumstances, and we think … that’s probably a good thing,” Mr. Spengler added of Eutelsat. “But having said that, you know, we’re moving forward and trying to push this to the goal line.”

He noted that the remaining CBA members account for about 95% of 3.7-4.2 GHz band revenues.

Mr. Spengler said he did not want to discuss “internal discussions” involving CBA members or the reason Eutelsat withdrew from the coalition. But he said that CBA provisions, including the share of proceeds from the sale of C-band spectrum, were “well defined in our initial agreement.” Eutelsat would be welcomed back “if there’s agreement on those terms,” he said.

The CBA has proposed freeing up 200 megahertz of the 3.7-4.2 gigahertz band, including a 20-MHz guard band, for repurposing for terrestrial 5G services, through a private auction.

As for the pledged voluntary contribution, Mr. Spengler said that the CBA “wanted to get out in front of the noise in the marketplace” in making its commitment, but he said that the coalition doesn’t plan to discuss yet how much that contribution would be.

“There will be a time when we will sit down with the FCC … or others and discuss what that number is in the context of what the final order may look like,” he said. He also said that the pledge of a voluntary contribution “was positively received” by the Commission.

“The record is full,” Mr. Spengler said of the FCC proceeding, adding that the agency is “seeking clarifications from us, and I’m sure other parties. … We think this is good momentum for our proposal.”

But he also acknowledged that the CBA is aware of comments by Commissioners who want more than 200 MHz repurposed.

“We have been spending time with our customers trying to understand what’s possible,” he said, noting the need to implement compression technology to free up more of the band. “It’s complicated, it’s expensive, and it’s going to take some time.”

Asked if the satellite operators want the FCC in an order to lay out a path for freeing additional spectrum, Mr. Spengler replied, “We want to do what is in line with what the FCC wants to accomplish to the greatest degree we can, and so that’s what we’re seeking to do.”

A Eutelsat spokesperson said the company had no comment on Mr. Spengler’s comments.

Meanwhile, New Street Research LLC said in a note today that the CBA’s voluntary contribution might total about $10 billion. The note also cited language in a committee report to accompany a Senate fiscal year 2020 financial services and general government appropriations bill that encourages the FCC to conduct a “fair, open, and transparent” auction of the C-band.

Also, New Street Research said in a note yesterday that results of a German auction of 3.5 GHz band spectrum suggests that C-band spectrum in the U.S. could garner $50 billion.

Reprinted with permission of Telecommunications Reports