SES filed a $1.8 billion claim against Intelsat, arguing that it should get a bigger share of the satellite company's expected revenues from the upcoming C-band spectrum auction.
The claim represents yet another hiccup in the long-running C-band saga, which is being carefully watched by the likes of Verizon and AT&T. The C-band covers an enormous amount of valuable midband spectrum that Verizon, AT&T and others want to put into their 5G networks. Satellite companies like SES and Intelsat are currently using the spectrum to deliver radio and TV services to millions of Americans all over the country.
At the heart of SES's claim – initially reported by the likes of Communications Daily and Advanced Television – is the partnership between SES and Intelsat under the auspices of the C-band Alliance (CBA).
Intelsat, SES, Telesat and Eutelsat – four of the biggest incumbent users of C-band spectrum – formed the CBA in 2018 in order to reallocate a portion of the C-band for 5G, and to profit off the sale of that spectrum to 5G providers. However, the FCC – the US government agency charged with managing the nation's spectrum resources – rejected the CBA's proposal, instead opting to handle that reallocation effort itself.
The CBA largely collapsed after the FCC's decision.
The FCC proposed an "accelerated clearing" program that would funnel roughly $10 billion to Intelsat, SES, Telesat and Eutelsat in order to encourage them to quickly release C-band spectrum for 5G. Based on the amount of C-band spectrum each company uses, the FCC proposed giving Intelsat around $4.9 billion and SES around $4 billion.
And that financial split is what's driving SES' claim against Intelsat. SES argued that, as members of the CBA, Intelsat and SES agreed to split any C-band auction proceeds evenly. SES said that Intelsat, by giving up on the CBA, "repudiated its obligations" under the terms of the CBA partnership.
As a result, SES is looking for $1.8 billion in compensation, punitive damages, attorney fees and other expenses.
Intelsat, which recently filed for bankruptcy, declined to provide a response to SES's claim directly but noted that it uses more than 60% of the C-band spectrum in the continental US and therefore ought to score a greater share of the FCC's incentive money.
Both companies have agreed to participate in the FCC's "accelerated clearing" program, and it's unclear how SES's claim might affect the FCC's overall C-band effort. The agency has said it plans to auction C-band spectrum for 5G starting in December. Verizon is widely expected to bid heavily for C-band spectrum licenses.
— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano
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