TR Daily SES, Telesat Accept FCC’s Proposed C-Band Relocation Payment
Monday, February 24, 2020

SES, Telesat Accept FCC’s Proposed C-Band Relocation Payment

SES Americom, Inc., and Telesat Canada told the FCC today they will accept the C-band accelerated relocation payments proposed in a draft order that the FCC plans to consider at its meeting Friday and they criticized Intelsat S.A. for saying it should get a greater share of the $9.7 billion proposed in the item.

In a filing in GN docket 18-122, SES and Telesat complained that Intelsat in a recent submission “goes to great lengths to downplay Intelsat’s membership in the C-Band Alliance (the ‘CBA’) in an effort to distract from its acknowledged agreements — both in the RSM report [commissioned by CBA members] and the CBA governing documents — to split proceeds from spectrum clearing evenly between Intelsat and SES. At the outset, we stress that we are not asking the Commission to ‘enforce’ these agreements. Rather, the Draft Report and Order lays out the same allocation rationale that the CBA members considered when agreeing to allocations among themselves — their relative contributions to clearing the spectrum. These agreed allocations are thus the best evidence of the operators’ relative contributions and appropriate allocations under the same criteria the Commission identified in the Draft Report and Order. SES and Telesat support the FCC maintaining the allocations in the Draft Report and Order, and this evidence provides ample justification for those existing allocations and for denying Intelsat’s demand for more.”

SES and Telesat said that “Intelsat does not and cannot challenge two fundamental principles that give the Commission all the reason it needs to reject Intelsat’s eleventh-hour request for a greater share of the accelerated relocation payments at the expense of other CBA members: 1. The work to clear the spectrum remains unchanged. The actual results that CBA members collectively will need to achieve to clear the spectrum is the same as envisioned by the CBA when it was founded and in all its subsequent submissions to the Commission. Intelsat not only fails to challenge this fact, but it has acknowledged its veracity as recently as February 19, 2020 — citing the CBA’s own filings as evidence of the time needed to clear the spectrum and the costs associated with doing so. 2. The operators’ relative contributions to clearing are unchanged.”

In a separate filing posted today, SES said that although it believes it should get the same accelerated relocation payment as Intelsat, it “will accept the Commission’s draft payment schedule in the interest of working cooperatively with Chairman [Ajit] Pai, the Commission, and other stakeholders to ensure the expeditious availability of a portion of the C-band for terrestrial 5G services.”

The FCC has proposed to give Intelsat 50% of the payments, but Intelsat said that it is entitled to between 60 and 67%. Under the draft order as circulated, SES would get 41%, or about $4 billion, in accelerated payments. The draft order proposes to give Telesat $374.8 million. Intelsat has threatened to sue the Commission.

“It is clear from the draft Report and Order that the Commission carefully listened to the concerns and proposals of the CBA [C-Band Alliance] and adopted a transition framework consistent with the CBA’s revised proposal. For that reason, SES supports the draft Report and Order and is eager to work with the Commission and other stakeholders to achieve the Commission’s objectives,” SES said in its filing posted today. “In this letter, SES provides targeted suggestions to facilitate a timely and successful clearing process.”

For example, SES asked the FCC to better align the incentives provided space station operators and auction bidders to ensure the repurposed spectrum is cleared in an expeditious and efficient manner.

“Eligible space station operators that elect to meet the Phase I clearing deadline will undertake significant financial risk and are not guaranteed to receive such payments if Auction 107 winners cannot make associated payments. Thus, the Commission should require Auction 107 bidders to secure a letter of credit for their pro rata portion of the accelerated relocation payments, which would protect eligible space station operators from unexpected risk of loss,” SES said. “In the alternative, Auction 107 winners should be required to pay their pro rata share of accelerated relocation payments into an escrow account shortly after Auction 107 closes.”

The Commission also should clarify how space station operators will meet the deadlines for accelerated relocation payments, including by making it clear that they won’t be penalized for delays caused by earth station operators, SES said.

“One of the keys to a successful auction of C-band spectrum will be clarity for potential bidders on how spectrum will be cleared, by whom, and when,” T-Mobile US, Inc. said in another filing. “T-Mobile urges the Commission to ensure that the clearing obligations are well established. For example, the Commission may wish to specify additional details that must be included in satellite operator Transition Plans, including the identity of every earth station a satellite operator believes is associated with its space stations. The Commission should also address outcomes when a registered earth station is not reflected in the Transition Plan of any satellite operator and when a satellite operator’s Transition Plan lists earth stations that it does intend to modify. And while T-Mobile agrees with the Commission’s proposal to provide earth station operators an opportunity to receive a lump sum payment in lieu of participating in a satellite operator’s transition plan, Intelsat recently correctly observed that the lump sum election may be better positioned before the deadline for satellite operators submitting Transition Plans. This will permit Transition Plans to more accurately account for the efforts that satellite operators will be required to undertake.”

CTIA asked the FCC to “promote contiguous spectrum blocks in the C-band.”

The trade group also said the Commission must “provide as much clarity as possible regarding the transition process to ensure that stakeholders’ rights and responsibilities are understood. For example, the Commission should make clear that earth station operators that elect to transition to fiber rather than maintaining satellite reception must complete their transition by the relevant accelerated relocation deadline. This modest clarification will provide earth station operators, bidders, and the administrator of the Relocation Payment Clearinghouse with added certainty regarding the relocation process, thereby better enabling a smooth post-auction transition.”

In addition, “the Commission should clarify that 3.7 GHz Service licensees do not have an obligation to protect any new FSS earth stations within CONUS in the 4.0-4.2 GHz band,” CTIA said.

In another filing, NCTA proposed “modifications to the draft to provide further clarity regarding reimbursement and ensure that earth station operators are made whole[.]”

For example, although it said it “supports the Commission’s proposal to offer the option of a lump sum payment based on average costs, that average must acknowledge that different categories of earth stations are likely to incur different costs.” NCTA also said the FCC should “allow earth station operators to elect to show actual reimbursable costs for some earth stations that will continue to use C-band spectrum, but elect a lump sum payment based on average cost to transition for other earth stations. This should be in addition to, not in lieu of, an option to seek a total lump sum payment for all earth stations.”

CenturyLink, Inc., said that (1) “it is important for earth station operators to have a clear understanding of what their respective satellite provider intends for it”; (2) it agrees that “the diversity of existing earth stations suggests that the Commission should distinguish between different classes of earth stations, providing different lump sum payments for different classes as appropriate”; and (3) it “encourages the Commission to ensure that earth station operators have a sufficient amount of time, after the Wireless Telecommunications Bureau announces the lump sum payments available pursuant to paragraph 201 of the Draft Order, to carefully consider what alternatives such an amount would make feasible before they are required to make their election.”

Google LLC, Microsoft Corp., the New America Foundation’s Open Technology Institute, and the Wireless Internet Service Providers Association expressed “disappointment that the Draft Report and Order does not include a Further Notice of Proposed Rulemaking to further consider P2MP [point-to-multipoint] sharing. We pointed out that the draft’s assertion that shared use ‘would undermine the continued use of the [4000-4200 MHz] band by FSS licensees after the transition’ is not supported by the evidence in the record.” —Paul Kirby, [email protected]

MainStory: FCC FederalNews SpectrumAllocation WirelessDeployment

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