With Federal Communications Commission Chairman Ajit Pai expected to announce his plans today for the auction of C Band spectrum, an additional complication looms over the already contentious process: satellite provider Intelsat is reportedly considering filing for bankruptcy if U.S. regulators don’t sweeten the compensation it (and other satellite providers) would be paid to give up some of the C-Band for terrestrial wireless use.
Bloomberg cited an anonymous source familiar with the matter as saying that Intelsat has hired bankruptcy experts ahead of a possible Chapter 11 filing, if it doesn’t think the FCC’s plan results in sufficient compensation—which could delay any plans to move forward with an auction, because Intelsat’s spectrum assets would be tied up in court proceedings.
Analyst firm New Street Research also said this week that there’s a significant chance the C-Band Alliance “walks out of the process” if the FCC opts for a fixed payment auction that gives them less than $16 billion.
Intelsat’s stock has been volatile this week, with a pause in trading triggered yesterday as the stock slumped nearly 30% on the news of a potential bankruptcy.
Pai will be speaking at an event today at the Information Technology and Innovation Foundation that is billed as an announcement of his C Band auction plans.
The C-Band is considered one of the primary bands of focus for the U.S. to make available for terrestrial use to support mid-band 5G deployments. The spectrum at issue consists of 500 megahertz between 3.7-4.2 GHz. The FCC has been exploring the potential repurposing of the C Band in recent years. The agency issued a notice of proposed rulemaking to gather information on the possibility of transitioning all or part of the C Band to terrestrial wireless broadband use, possibly under the auspices of an auction. A previous proposed rulemaking in 2017 had sought information about whether the spectrum could be opened up for flexible use.
The commission has made opening up additional mid-band spectrum a priority (along with the auction of millimeter wave spectrum) in its efforts to support U.S. deployments of 5G.
Major satellite operators proposed a private auction of a portion of the spectrum, but Pai dashed those hopes late last year; in a letter to Congress, he wrote that the C Band auction will be public and conducted by the FCC.
In his letter, Pai outlined the four principals that the FCC should be guided by in the C Band decision: free up significant spectrum for 5G; do it quickly; generate revenue for the federal government; and “protect the services that are currently delivered using the C-band so they can continue to be delivered to the American people.”
