In their recent meetings with FCC staff, executives from SES and Intelsat offered nothing but sunshine and rainbows in discussing their efforts to clear out their respective operations from recently auctioned C-band spectrum.

"SES and Intelsat are creating jobs and paying billions of dollars to small and large businesses throughout the United States," wrote Christophe De Hauwer, Petra Vorwig and Steve Corda of SES and Peter Davidson and Tom McNamara of Intelsat, of their recent meeting with FCC officials in Washington, DC. "SES and Intelsat ... are on track to satisfy their clearing obligations by the commission's accelerated relocation deadlines."

The situation is a bit different 100 miles away, in the US Bankruptcy Court for the Eastern District of Virginia.

According to claims tucked into a new document SES filed into Intelsat's ongoing bankruptcy proceeding, Intelsat executives have engaged in a "disturbing pattern of deceit" and "at every turn, have lied to and deprived SES."

Even more tantalizing, according to Advanced Television and other publications, SES believes it has a figurative "smoking gun" that allegedly proves Intelsat's deception. SES pointed to heavily redacted messages from Intelsat's CFO David Tolley and general counsel Michelle Bryan to other Intelsat employees, as well as a text message from Intelsat CEO Steve Spengler to SES CEO Steve Collar seemingly indicating Spengler acknowledged he was stabbing Collar in the back.

From allies to enemies

The animosity of SES's filing seems a far cry from the geniality the companies expressed in 2018 when they formed the C-band Alliance with other users of the spectrum band. The alliance proposed to conduct its own private auction of a portion of the band for 5G.

That proposal didn't sit well with certain US lawmakers, who argued that foreign companies should not profit from the sale of spectrum in the US to domestic 5G operators. In response, former FCC Chairman Ajit Pai proposed the FCC conduct the auction, but also dangled the potential for around $10 billion in "incentive" payments by winning bidders to incumbents like Intelsat and SES to encourage them to quickly vacate the band.

Shortly after the FCC's approval of Pai's plan, Intelsat filed for bankruptcy and SES filed a lawsuit against the company, claiming it was due $1.8 billion from Intelsat under their C-band Alliance agreements.

Clearing the way... for the lawyers

SES and Intelsat told the FCC this week that they're "on track to clear 120MHz of spectrum for the deployment of 5G in high-demand areas by 5 Dec 2021 and 300MHz throughout CONUS [continental United States] by 5 Dec 2023. All regulatory milestones have been met to date," they wrote in a joint presentation.

Importantly, the companies added that they have already committed over $3 billion to the relocation of their satellite operations, and that around 80% of that spending is heading toward US-based companies.

In the coming months, the companies said they next plan to launch new satellites, move those satellites to their final orbital locations and then migrate services from their old satellites to their new ones.

Meantime, the companies' lawyers are preparing for a fierce legal battle in Virginia in the months to come. Intelsat, for its part, recently announced a financial restructuring to cut its debt from nearly $15 billion to $7 billion in order to exit bankruptcy.

But SES isn't having it. The company described Intelsat's bankruptcy exit plan as "unconfirmable" and argued the company is playing a financial "shell game" designed to prevent SES from "receiving its contractually agreed-upon share" of the C-band windfall.

So goes the world

The behind-the-scenes fighting between SES and Intelsat took on significantly more weight throughout the past few months, as the C-band auction generated bids far above even the most aggressive forecasts. The event ended at $81 billion, with Verizon, AT&T and T-Mobile walking away with the vast majority of the licenses up for grabs.

Verizon itself will pay almost $8 billion in total clearing costs to SES, Intelsat and other companies currently using the C-band.

That's music to the ears of Steve Collar, SES's CEO.

"2020 was a year in which we crystallized the repurposing of C-band for 5G in the US, with $4 billion in accelerated clearing payments due to SES upon successful clearing and the first milestone less than a year away," he said last week during SES's quarterly earnings conference call, according to a Seeking Alpha transcript. "The proceeds from C-band clearing will add to the substantially expanding free cash flow generation from 2023 onwards."

And that might just be the start.

Collar hinted that SES will look at ways to "deliver more value to the carriers" by clearing the C-band more quickly than FCC requirements. "That's something that I expect us to work on pretty hard over the course of the next ... few months as that progresses," he said.

Further, he hinted SES might engage in similar efforts in other countries where it operates in C-band spectrum, such as Canada and Brazil.

"The momentum that's been created in the US gives us additional opportunities, both within the US and indeed outside the US," he said.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano