TR Daily Intelsat CEO Defends CBA Plan, Blasts T-Mobile Auction Proposal
Wednesday, February 20, 2019

Intelsat CEO Defends CBA Plan, Blasts T-Mobile Auction Proposal

Intelsat S.A. Chief Executive Officer Stephen Spengler today defended the C-Band Alliance’s market-based plan to repurpose 200 megahertz of spectrum in the 3.7-4.2 gigahertz band for terrestrial 5G services and criticized T-Mobile US, Inc.’s revised incentive auction proposal for the C-band.

“Our proposal protects our current C-band users’ networks in all respects,” Mr. Spengler told analysts during a call this morning to announce Intelsat’s fourth-quarter and full-year 2018 financial results. “It enables the U.S. to accelerate the technical innovation and economic benefits that will accompany the 5G era. Clearing C-band spectrum is a complex endeavor. This complexity is what gives us confidence in the strength of our proposal. The CBA proposal is the only one before the FCC that includes an interference mitigation plan. This key element of our proposal is supported by detailed, cross-sector technical analyses demonstrating the feasibility of 5G-satellite service coexistence.”

He noted that CBA members plan to launch additional satellites to provide additional capacity so incumbents won’t be negatively impacted through the repurposing of 200 MHz of spectrum, including a 20-MHz guard band, and that the plan calls for the spectrum to be cleared within 18 to 36 months.

“In short, our proposal is the only one that can be implemented the moment the FCC issues an order. We will be ready to go,” Mr. Spengler said.

He said that CBA members have worked with customers for months on how to manage the relocation of services and worked with industry partners on technical aspects of plan. The industry has designed a filter and tested it in front of customers, he said.

By contrast, T-Mobile’s proposal is “extremely complicated, and we don’t view it as workable,” Mr. Spengler said.

Under a revised proposal released last week, T-Mobile said that satellite earth station registrants would be able to participate in the incentive auction, which T-Mobile said could result in the repurposing of more spectrum — up to 500 MHz (TR Daily, Feb. 19).

Mr. Spengler said T-Mobile’s plan has “technical flaws” because spectrum would be auctioned via partial economic areas (PEAs), rather than nationwide, which he said “would result in massive interference” between 5G and satellite operators. He also said that extending the auction process to 17,000 receive-earth stations “is really ... unworkable. It’s adding huge amount of complexity, and it would result in effectively having thousands of auctions.” And he said extending spectrum rights to earth station registrants runs counter to the FCC’s statutory authority to license satellite operators, not earth stations.

“The proposed approach is so complex, it appears to be written for this exact purpose: to delay the process,” Mr. Spengler suggested. “And we assume that’s done for competitive reasons related to the Sprint–T-Mobile merger to protect their position in C-band spectrum.”

Mr. Spengler also said CBA received a response “from quite a few parties” to 400 letters it mailed those possibly interested in the C-band spectrum, adding that the alliance is discussing their needs and requirements with them, including possible band plans.

CBA wants “to design a band plan and approach that addresses a wide variety of potential users of this C-band in the wireless … spectrum. So, we’re seeing market interest and we’re seeing very clear market requirements from big and small players,” Mr. Spengler said.

He also said that while discussions with the FCC were halted during the partial government shutdown, they have since resumed.

“Regarding timing, we are still expecting the timing to be roughly in the middle of the year, as the last word from the FCC was they wanted to get an order out in the second quarter of 2019,” Mr. Spengler said.

As to whether CBA would agree to clear some spectrum before the 18- to 36-month timeframe, he said, “I think it’s fair to say we’re looking at all … possibilities. If it’s attractive to potential users of the spectrum to try to accelerate part of it, we ... will try to do that, but we don’t have plans for that yet.”

Mr. Spengler also said that if the FCC adopts an order in the expected timeframe, CBA would be able to begin reaching spectrum agreements with parties “certainly in 2019.” He also said the clearing costs of satellite operators would be in the $1 billion to $2 billion range, which includes launching new satellites, installing filters in downlink earth stations, and relocating incumbents.

Mr. Spengler also criticized the suggestion that fiber could replace satellite technology. “It is really not feasible to connect all the headends across the country by fiber. It would be extremely costly” and not as reliable, he said.

As for legal challenges to CBA’s plan, Mr. Spengler acknowledged that they are always possible.

Asked if he thinks some parties are “playing both sides” by criticizing CBA’s plan while talking with the alliance, he replied that CBA has had discussions “with a wide range of parties” from the wireless, cable, and tech sectors “and what we have learned in those discussions don’t always match up with the external public comments.”

During a recent Washington event, Charter Communications, Inc., representatives said they have made it clear that they favor an FCC auction, although they said they have talked with CBA in case the FCC approves the market-based proposal (TR Daily, Feb. 5).

Critics of CBA’s plan argue that the Commission is obligated to hold an auction of the 3.7-4.2 GHz band to repurpose frequencies and that it would set an ill-advised precedent if it allowed spectrum licensees to hold out in the future for a financial windfall before agreeing to relinquish or share spectrum.

Critics also have expressed frustration that they have not been able to get sufficient detail about the CBA proposal to ensure that cable and other customers that rely on the C-band to deliver programming will be protected from interference and that there will be adequate spectrum left for incumbents. —Paul Kirby, [email protected]


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