WASHINGTON — Only one of the four regional satellite operators authorized to provide C-band services in the United States, Embratel Star One of Brazil, will be eligible to receive payments as part of a spectrum clearing plan by the Federal Communications Commission.
FCC Chairman Ajit Pai said Feb. 6 the commission would allow up to $9.7 billion in incentive payments to satellite operators who could help clear 280 megahertz of C-band spectrum for 5G cellular networks faster than the commission could by itself.
In a 185-page “Report and Order” released Feb. 7, the FCC said eight satellite operators are authorized to provide C-band communications services in the United States, but only five — Intelsat, SES, Telesat, Eutelsat and Star One — proved they have customers using their satellites for service in the United States.
“We do not expect any other incumbent space station operators to need to incur any relocation costs, and thus we do not expect them to be eligible for relocation payments,” the FCC said.
The remaining three — Bermuda-based ABS, Argentine operator ARSAT and Spanish operator Hispasat — were rejected due to their inability to prove they had any customers using their U.S. C-band coverage.
Star One informed the FCC it has a broadcast customer using Star One C1, a satellite that mainly covers Brazil but reaches all of Florida and parts of adjacent states.
Star One, ABS and Hispasat had banded together in late 2018 to lobby the FCC against focusing solely on “the big four” operators Intelsat, SES, Eutelsat and Telesat. The regional operators all have some U.S. coverage in C-band, and argued they should be compensated for any spectrum loss.
ARSAT, which operates two satellites focused mainly on Latin America, did not respond to a May 2019 FCC deadline to show it had any C-band customers registered with the commission.
While Star One is eligible for spectrum clearing payments, the company has the smallest amount to win. The company can gain up to $13.7 million — $3.4 million for clearing 100 megahertz of the C-band spectrum it uses by Sept. 30, 2021, and another $10.3 million for clearing a cumulative 280 megahertz by Sept. 30, 2023.
Intelsat, by contrast, has the most to win: $4.85 billion, with $1.2 billion available for the first 100 megahertz, and $3.65 billion for the full 280 megahertz.
The FCC believes that without accelerated clearing payments, it could take until 2025 to repack current C-band users into the remaining 200 megahertz of spectrum left for satellite operators.
The FCC also plans to ensure satellite operator transition costs are covered, including new satellites, signal filters and compression technology, so operators can continue service with less spectrum. The commission estimates those baseline clearing costs will range from $3.3 billion to $5.2 billion, according to its Report and Order document.
Satellite operators left out of the incentive payments could receive compensation for “reasonable relocation costs should they demonstrate that those costs were truly required,” the FCC said. Such costs would have to be “a direct result of the transition of existing C-band services provided to one or more incumbent earth stations in the contiguous United States.”
The FCC said 5G network bidders will be responsible for providing the collective $9.7 billion in accelerated clearing payments as well as billions in baseline clearing costs.
The commission cautioned that its the $3.3 billion to $5.2 billion estimate of the baseline clearing costs are “estimates only.”
“We make clear that overlay licensees will be responsible for the entire allowed costs of relocation — even to the extent that those costs exceed the estimated range of costs,” the FCC said.
The C-Band Alliance, comprised of Intelsat, SES and Telesat, estimates those clearing costs will amount to $3.3 billion. Eutelsat, which split from the C-Band Alliance last year, projects a slightly higher cost of $3.5 billion.
The C-Band Alliance estimates the auction will generate $43 billion and $77 billion.