TR Daily Eutelsat Withdraws From CBA, Citing Lack of Alignment
Tuesday, September 3, 2019

Eutelsat Withdraws From CBA, Citing Lack of Alignment

Eutelsat Communications S.A. today announced that it has withdrawn from the C-Band Alliance, saying that it wasn’t “aligned” with the group’s three other members.

“Eutelsat announces its withdrawal from the C-Band Alliance (‘CBA’), which has been formally notified to the CBA members today,” the carrier said in a brief statement. “As a reminder, the CBA is an organization tasked with the clearing and repurposing of C-band spectrum to make a portion of this band available for 5G services in the United States. Eutelsat wishes to take a direct active part in the discussions on C-band clearing and repurposing.”

In response to a question from TR Daily about the reason the company decided to pull out of the CBA, Marie-Sophie Ecuer, Eutelsat’s corporate communications director, said that “Eutelsat was not aligned with other members and the CBA leadership team on certain matters. In this context, leaving the CBA is the best way to have a direct involvement and to represent the interests of Eutelsat and its stakeholders in this C-band process. We cannot be more specific.”

Regarding Eutelsat’s position on the C-band, Ms. Ecuer said, “We support a market-based approach to make a portion of C-band satellite spectrum available for the mobile industry in the framework of the development of 5G and we will cooperate fully to attain this goal. We remain committed to protect the quality and reliability of the extensive services provided to U.S. broadcasters, media, and data companies. We believe that the best approach … to succeed is to take into account and to balance the legitimate interests of all the stakeholders—i.e., the earth-station operators, SSO[s] [small satellite operators], customers, content providers, etc.”

The CBA has proposed repurposing 200 megahertz of spectrum, including a 20-MHz guard band, in the 3.7-4.2 gigahertz C-band for terrestrial 5G services through a private auction. But the proposal has drawn opposition, including from ACA, the Competitive Carriers Association, and Charter Communications, Inc., which are pushing a “5G Plus” plan that would repurpose at least 370 MHz while using auction proceeds to build fiber to accommodate the needs of existing users of the C-band.

The CBA has also been criticized for not being willing to accommodate interests such as receive-only earth stations and SSOs.

A public notice released in May by the FCC’s International and Wireless Telecommunications bureaus soliciting additional comment on specific issues being considered in the agency’s proceeding sent “a clear message” to the CBA that it should consider the interests of small satellite and receive-only earth station operators, Eutelsat Chief Executive Officer Rodolphe Belmer said at the Satellite 2019 conference earlier this year (TR Daily, May 7). The public notice “pushes us to think of opening the approach to other stakeholders,” Mr. Belmer said. “I think it’s a clear message conveyed to … all us that we should take into consideration.”

During a conference call with analysts in July to discuss Eutelsat’s fiscal fourth-quarter financial results, Mr. 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.

The CBA’s remaining members are Intelsat S.A., SES S.A., and Telesat.

In a statement today, the CBA said that it “remains committed to delivering its expeditious, market-based proposal and the departure of Eutelsat does not impact the CBA’s ability to do so. The remaining members of the CBA, which represent approximately 95% of the affected revenues of the US C-band market, are aligned and committed to the process of engaging with the FCC on the proposal of rapidly clearing C-band spectrum to support the deployment of 5G services in the U.S.”

In another statement, ACA, CCA, and Charter said, “American consumers can have a win-win-win with a Commission-led auction of at least 300 megahertz of valuable C-Band spectrum. The pro-competition 5G Plus Plan will unleash 5G across the country, reimburse incumbent users including satellite companies, ensure U.S. taxpayers receive billions of dollars in spectrum sale proceeds and fund the push of ultra-high bandwidth fiber broadband further into rural and urban communities. All while ensuring consumers have future-proof access to the news and entertainment programming they need.”

Meanwhile, Patrick McFadden, associate general counsel of the National Association of Broadcasters, criticized former FCC Chief of Staff Blair Levin in a blog posting today for suggesting in a recent New Street Research LLC research note that the 5G Plus proposal gives FCC Chairman Ajit Pai “significant negotiating leverage” with the CBA (TR Daily, Aug. 26).

“Respectfully, that assessment is not only inaccurate, but, more importantly, it’s irrelevant,” Mr. McFadden suggested.

“First, an alternative proposal only gives you leverage in a transaction if it’s credible. In this case, the proposal to which Mr. Levin refers hasn’t been endorsed by a single programmer or network. It’s an ill-conceived, transparently self-interested proposal that has no chance of working in any reasonable timeframe. It’s also almost comically poorly timed, given that the FCC just released a report regarding CenturyLink’s 37-hour nationwide fiber network outage. If you’re buying a new car, trying to negotiate by telling the dealer you can get a better deal on a unicorn isn’t going to help,” Mr. McFadden said.

“Second, the focus on leverage misapprehends the central challenge before the Commission, which is not purely transactional, as Mr. Levin suggests. The FCC isn’t haggling over the price of a car, it’s effectively trying to figure out how many wheels the car needs to operate safely. Facts and physics determine that answer, not negotiating leverage,” he added. “While the FCC in Mr. Levin’s day may have operated in that manner, this one has not and should not. If the satellite operators say 200 MHz can be reallocated and others really want 400 MHz, the solution isn’t to browbeat the operators into giving up 300 MHz and throwing in a rustproofing treatment. Rather, the solution is to look at the information the operators have submitted regarding their transition plan and determine how much capacity can be made available without driving the entire American content ecosystem into a ditch.” —Paul Kirby, [email protected]

MainStory: FCC FederalNews WirelessDeployment SpectrumAllocation Satellites

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