LONDON — The C-Band Alliance of satellite operators seeking U.S. regulatory approval for a CBA-managed auction of satellite spectrum told the U.S. Congress that an FCC-run auction — an alternative some CBA opponents have proposed — would face legal challenge from many quarters, starting with the CBA itself.
In a Nov. 7 letter to the U.S. House Subcommittee on Communications and Technology, the CBA it doubted whether the U.S. Federal Communications Commission (FCC) had the authority to reclaim spectrum licensed to satellite operators and distribute it to 5G terrestrial wireless operators.
“Several parties, including the CBA, have raised concerns that the FCC lacks the authority to confiscate C-band spectrum without compensating the satellite operators that currently use the spectrum.”
Signed by CBA Executive Vice President Peter Pitsch, the letter said proceeds from an FCC-managed auction to 5G bidders would by law go directly to the U.S. Treasury.
That being the case, the auction winners “would likely need to directly negotiate and fund [spectrum] clearing with the multiple C-band operators and thousands of Earth stations.”
The letter’s was ostensibly intended to correct what CBA said were inaccurate statements made by witnesses at an Oct. 29 subcommittee hearing. It reasserts its previous message that China is advancing quickly in 5G and could overtake the United States if U.S. regulators did not act quickly.
The letter also addressed the “holdout problem” that results from the fact that any auction would need to compensate all eligible C-band spectrum license holders, since the licenses grant each of them access to the full 500 MHz of spectrum, 3.7-4.2 GHz, covered by their operating licenses.
That means all eligible satellite operators with C-band licenses in the United States need to be compensated.
The CBA now has three members — Intelsat, SES and Telesat. Fleet operator Eutelsat has left the alliance, raising the issue of whether Eutelsat could itself constitute a “holdout” and complicate a CBA-managed auction.
But while Eutelsat has quit the alliance, seeking a larger share of the CBA-led auction proceeds, it has not challenged the CBA’s position.
In an Oct. 3 letter to the FCC, Eutelsat said its chief executive, Rodolphe Belmer, “stressed the legitimacy of the CBA to act as the transition facilitator and would therefore agree to rejoin for the transition stage of the process.”
While Eutelsat has questioned CBA’s offer of a “voluntary contribution” to the U.S. Treasury of a share of the proceeds — and has said any contribution should not exceed 50% of the proceeds net of costs to transition customers to a small slice of the C-band spectrum — it is not opposed to it.
“Mr. Belmer clearly expressed his agreement to a significant contribution,” the Eutelsat letter to the FCC said.
Intelsat has said it has no idea where Eutelsat came up with the 50% figure, and has warned Eutelsat that staying out of the CBA could compromise its rights to the eventual auction proceeds: http://bit.ly/2pnHecE
Intelsat said the CBA’s latest proposal of clearing 300 of the 500 MHz, including a 20-MHz guard band, would cost the satellite operators about $3 billion to modify broadcast customers’ Earth stations and launch eight new satellites — four each from Intelsat and SES as part of a planned joint procurement by the two companies.
Aside from launching satellites to allow current C-band customers to continue their current programing with 40% less spectrum, CBA said it would need to design and install some 100,000 filters for 35,000 antennas in the continental United States and implement new-generation signal-compression technologies.
There is no other scenario, including an FCC-managed auction, that would assure this investment would be made, CBA said.