Tag Archive for: FCC

The most recent satellite required by Intelsat to complete its C-band spectrum clearing and secure almost $5 billion in proceeds is performing well following its launch on August 3rd by a Falcon 9 rocket. Maxar Technologies, the manufacturer of the satellite named Galaxy-37/Horizons-4, reported that the satellite has successfully initiated communication with ground teams and efficiently deployed its solar arrays after separating from the rocket. The launch took place at 1:00 a.m. Eastern from Cape Canaveral Space Force Station in Florida.

It is projected that the chemically powered spacecraft will take approximately three weeks to reach its designated orbital position at 127 degrees West. Jean-Luc Froeliger, Intelsat’s Senior Vice President of Space Systems, revealed that the satellite, weighing five metric tons, is expected to commence operational service by the end of September. This timeline accounts for final health assessments once the satellite reaches its designated geostationary orbit.

The satellite serves two primary purposes. The Galaxy-37 payload operates in C-band and caters to Intelsat’s broadcast clients across the continental United States. Meanwhile, the Horizons-4 payload is a joint venture with Japan’s JSAT International, providing Ku-band connectivity services over the Pacific Ocean and the United States.

Froeliger affirmed that the other six satellites launched by Intelsat within the past ten months, all aimed at transitioning broadcast clients to a narrower section of the C-band spectrum, are now in position and functioning smoothly. This transition facilitates the allocation of more frequencies for terrestrial 5G services across the United States.

With the successful deployment of Galaxy 37, Intelsat is making significant progress towards receiving a total of $4.9 billion from the Federal Communications Commission (FCC) as part of the C-band spectrum clearing process. This progress puts Intelsat on track to vacate the frequencies by December 5th.

In contrast, competitor SES has already completed all the necessary tasks for C-band clearing, aided by the launch of its final two replacement spacecraft by SpaceX in March. SES is expected to receive nearly $4 billion in spectrum-clearing proceeds from the FCC. However, a legal dispute persists between SES and Intelsat regarding the distribution of these funds.

To achieve its C-band clearing strategy, SES acquired a total of six satellites, including a ground spare. The expenses for these replacement satellites and associated costs are being reimbursed by the FCC. The FCC generated over $80 billion through the auctioning of the C-band spectrum to telecommunications companies like Verizon, AT&T, and T-Mobile.

Unlike Intelsat’s previous replacement C-band satellites, Galaxy-37 was launched individually. As a result, SpaceX was able to position the satellite in a high-energy orbit, reducing the amount of fuel it needs to reach its intended orbit.

Jean-Luc Froeliger explained that this unique orbiting position should grant Galaxy-37 an additional three years of operational life compared to the 15-year design life assigned to the other C-band replacement satellites. It’s worth noting that many satellites often continue to function well beyond their initial design life. For instance, Galaxy-13, the satellite that Galaxy-37 is set to replace, was designed for a 15-year life span but has been operational for 20 years.

Notably, Galaxy-13, initially developed by Boeing, marked Intelsat’s first partnership involving a C-band/Ku-band hybrid satellite with JSAT, which contributed a payload named Horizon-1 to the spacecraft.

Additionally, the launch date of Galaxy-37 coincided with the 40th anniversary of Galaxy-1, which was ordered by a company that later merged with Intelsat.

Intelsat employs the Galaxy label for its satellites operating over North America, which primarily cater to media clients. Presently, the company possesses a fleet of over 50 satellites, of which 18 are under the Galaxy brand.

In the span of the last 10 months, Intelsat has successfully launched eight geostationary satellites, including the IS-40e communications satellite launched in April. This achievement is deemed a new milestone in the commercial satellite industry. Notably, the majority of these launches were facilitated by Falcon 9 rockets from SpaceX, highlighting the prominence of SpaceX’s Falcon 9 as a go-to choice for satellite launches.

Jean-Luc Froeliger highlighted that in 1997, Intelsat launched 10 satellites, a feat achieved six years before SpaceX initiated its first launch. However, during that period, Intelsat utilized a broader range of rockets, including Arianespace’s Ariane 4, Lockheed Martin’s Atlas 2, and Russia’s Proton. This historical context emphasizes the evolution of satellite launch technologies and providers over time.

The FCC has proposed a $200 million program to support health care providers’ use of telehealth services during the COVID-19 pandemic, the Commission announced March 30. Congress appropriated the $200 million to the FCC in the CARES Act. FCC Debuts $200M Telehealth Program 

If the program is adopted by the Commission, it will immediately help eligible health care providers purchase telecommunications, broadband connectivity, and devices necessary for providing telehealth services, and provide selected applicants with full funding. 

A senior FCC official said in a media call on Monday that it will be up to health care providers to decide what kind of connectivity they want to purchase, whether it be wired or wireless, for example, or a connected medical device. Also, the official said this program is not only for rural health care providers, but for all eligible providers across the U.S., including in urban areas. FCC Debuts $200M Telehealth Program 

In a news release, FCC Chairman Ajit Pai called on his colleagues to adopt his draft order on the COVID-19 Telehealth program. FCC Debuts $200M Telehealth Program

“As we self-isolate and engage in social distancing during the COVID-19 pandemic, telehealth will continue to become more and more important across the country. Our nation’s health care providers are under incredible, and still increasing, strain as they fight the pandemic. My plan for the COVID-19 Telehealth Program is a critical tool to address this national emergency,” Chairman Pai said. 

In addition, Pai shared his plans for a longer-term Connected Care Pilot Program, which would make up to $100 million of universal service support available over three years to help defray eligible health care providers’ costs of providing telehealth services to patients at their homes or mobile locations, with an emphasis on providing services to low-income Americans and veterans. FCC Debuts $200M Telehealth Program

SES offices with antennas. Photo: SES

Berenberg Satellite Equity Analyst Sarah Simon released a comprehensive report on SES and went into detail on how she sees the C-band situation in the United States directly impacting the company’s prospects. While it might be driving the share price right now, Simon takes a more cautious approach when analyzing what might happen. She believes there are multiple reasons, in Berenberg view, as to why the satellite operators are unlikely to walk away with a significant bounty. “Moreover, it will be several years before any monetization is actually realized. The market is currently pricing in around $6.93 (6 euros) per share of value for SES for C-band, on our estimates, which already seems optimistic, in our view,” she added. “While we, therefore, think that there could be some risk to this assumption, until the spectrum repacking is complete, the stock should benefit from the dangling carrot effect, and is likely to be well supported. We reiterate our ‘Hold’ rating, but increase our price target to 23.11 (20 euros).”

Simon brought up a number of pertinent points about the C-band issue and raises a number of questions. She asked, for example, whether the Trump administration would allow a cash windfall to go to Luxembourg-domiciled countries. She also asked what the U.S. Federal Communications Commission (FCC) will charge for mobile spectrum rights (versus satellite rights), and whether the tax will be payable. She also questions how strong the demand will be, given possible industry consolidation and other sources of mid-band spectrum. “We will not have more concrete information until Quarter Two (Q2) 2019, but in the meantime, the C-band spectrum windfall carrot should sustain the shares,” she added.

The political standpoint is an interesting one. Simon said that given President Trump’s general aversion for money to leave America and benefit non-American jurisdictions, she thinks it is politically unlikely that there will be a huge windfall granted to two companies that are Luxembourg-domiciled, a French group, and a Canadian one. “It is not as if SES and Intelsat — the two main beneficiaries — can argue that the proceeds will be reinvested in the U.S. economy: demand for satellite capacity for video in the U.S. is falling, by both companies’ admission, and data is largely delivered using fiber. So, there is not an obvious reinvestment opportunity in the domestic United States. At the very least, we assume U.S. taxes would be levied on any money received by the satellite operators, although Intelsat has huge tax losses so it would likely pay no tax at all,” she said.

She believes it is unlikely that the FCC will forego the opportunity to generate money that can go to the federal deficit. “The FCC’s authority to run auctions is enshrined in a number of budget acts, and the revenue raised from auctions is clearly seen as an important point by the FCC, as indicated in the annual spectrum auction reports submitted by the commission, which confirm that the money raised from spectrum auctions is used for ‘broader government use and deficit reduction’. Given that the U.S. budget deficit is now just under $900 billion and forecast to be $985 billion for fiscal 2019, it seems likely that receipts from spectrum auctions would be welcomed by the U.S. government. We note recent comments by Chairman Pai that ‘the auctions to come will … raise billions of dollars of non-tax revenue for our nation,” she said.

While satellite operators have proposed that 100 Megahertz should be made available in C-band, that is unlikely to be enough for the FCC and wireless players, who will want more. Simon “The FCC is looking for considerably more than this — Commissioner Michael O’Rielly has suggested that 200-300 MHz would be required, while the wireless industry association says that the FCC should free up the bulk of the spectrum, while Ericsson says at least 100MHz per carrier is required, i.e. 400 MHz,” she added. “In this regard, we note that SES management has said that it does not believe it would be possible to re-farm any more than 200 MHz, while Eutelsat has said that going beyond 100MHz simply is not viable. More recently, Intelsat management has noted that, whereas clearly, 100 MHz would not require a major ‘re-architecting of the band,’ relinquishing more capacity would create more difficulties in serving TV broadcasters and other customers.”

It will be interesting to see how this situation plays out despite the fact that Simon views the consortium’s proposal as an attempt to be on the front foot rather than waiting for the FCC to propose potentially more “draconian measures which may come at a financial penalty.” Simon pointed out that it should not be forgotten that prior to this, the question of C-band spectrum, or rather whether the satellite industry should be allowed to keep it all, has been a perennial issue in U.S. telecommunications. She added that mobile operators have been lobbying for shared access to the C-band for years, and in the run-up to WRC-15, she talked of a “palpable nervousness” in the satellite industry that their interests might be sacrificed in favor of the mobile operators — for the C-band spectrum is not owned by the satellite operators, but licensed by the FCC, on finite agreements (many of which expire in the mid-2020s). “At the end of those license periods, it could be possible for the satellite operators to lose all of the C-band spectrum, without any compensation. While it is generally agreed that the C-band spectrum is wanted earlier than this, and that this would not be the optimal approach, the fact that the satellite operators were so worried suggests that the threat of losing those rights in space was very real,” she concluded.


FCC Chairman Ajit Pai.

The U.S. Federal Communications Commission (FCC) is set to vote on a critical and contentious proposal this week that could prevent city governments from charging access fees for 5G infrastructure construction and installation, and force cities to approve or deny carrier applications within as little as 60 days or as many as 90 days. The vote puts the agency at odds with city governments that have already partnered with carriers to deploy 5G small cells and other infrastructure networks.

The proposal’s supporters, including the FCC’s Republican majority, claim that the new rules would accelerate the pace of 5G rollout while saving carriers billions of dollars in fees and expenses. The savings, the agency said, could then be re-invested by carriers in connecting rural and underserved communities. Telecommunications companies in the United States are eager to invest in and deploy 5G infrastructure to stay ahead of nations like China, which have far fewer regulatory hurdles. FCC Chairman Ajit Pai admitted that striking a balance between leading the world in 5G innovation and adhering to free-market economics would be a major challenge for the U.S. He had stated publicly that the telecom industry is relying on his commission to speed up infrastructure rollout and 5G service deployment by cutting the red tape and eliminating regulatory hurdles.

The FCC proposes that cities adhere to a ‘reasonable’ standardized application fee structure — a one-time $100 fee to apply, and $270 per year to maintain each small cell installation. This follows another order from March 2018, in which the FCC voted to exclude small cells from the same category of federal review procedures required for 200-foot cellphone towers — making small cell deployment much easier and faster for carriers.

“Our action would eliminate around $2 billion in unnecessary costs, which would stimulate around $2.5 billion of additional buildouts,” Pai and other Republican commissioners wrote in the proposal. “And that new service would be deployed where it is needed most — 97 percent of new deployments would be in rural and suburban communities that otherwise would be on the wrong side of the digital divide.”

Municipal governments argue that it is their right to charge fair market rate fees to carriers wanting to install small cells or other physical elements on public infrastructure. Some state governments also feel that the FCC proposal would steamroll legislation that some have already put into place to facilitate 5G small-cell deployment.

The FCC acknowledged that many states (currently more than 20) and localities have “acted to update and modernize their approaches to small cell deployments. They are working to promote deployment and balance the needs of their communities. At the same time, the record shows that problems remain,” The FCC’s proposal also stated that “many state and local officials have urged the FCC to continue our efforts in this proceeding and adopt additional reforms. Indeed, we have heard from a number of local officials that the excessive fees or other costs associated with deploying small scale wireless infrastructure in large or otherwise ‘must serve’ cities are materially inhibiting the buildout of wireless services in their own communities.”

Despite the pitch to rural governments, not all of the beneficiaries here are on board with the FCC’s plan. Last week, Paul Smith, Vice President of Governmental Affairs for the Rural County Representatives of California (RCRC), wrote a letter to the FCC expressing the organization’s concerns with the language of the proposal. Smith wrote that while the RCRC supports policies that close the digital divide, the organization believes that “the proposed language set forth in the Order would actually incentivize increased deployment in already-served, historically high-cost markets.”

Smith pointed to certain elements of the proposal to support his claim. “The FCC’s proposed new collocation ‘shot clock’ category is too extreme. The proposal designates any preexisting structure, regardless of its design or suitability for attaching wireless equipment, as eligible for this new expedited 60-day shot clock,” he wrote. “The FCC’s proposed recurring fee structure is an unreasonable overreach that will harm local policy innovation. We disagree with the FCC’s interpretation of ‘fair and reasonable compensation’ as meaning approximately $270 per small cell site … The FCC’s decision to prohibit a municipalities’ ability to require ‘in-kind’ conditions on installation agreements is in direct conflict with the FCC’s stated intent of this Order and further constrains local governments in deploying wireless services to historically underserved areas.”

The FCC said it drafted the order based on feedback from multiple cities and state governments, as well as carriers and investors. FCC Chairman Pai and his colleagues said that they are seeking a fair, yet realistic path to 5G rollout in the United States. “We have reached a balanced, commonsense approach, rather than adopting a one-size-fits-all regime. This ensures that state and local elected officials will continue to play a key role in reviewing and promoting the deployment of wireless infrastructure in their communities,” the agency wrote in its proposal.