The U.S. Federal Communications Commission announced Thursday a plan that would provide $9.7 billion in compensation to Intelsat,
“It’s only fair that every single reasonable cost should be covered,” FCC Chairman
At stake is what portion of auction proceeds, projected to reach tens of billions of dollars, should go to satellite providers including Intelsat and SES, both based in Luxembourg, and
The satellite companies have proposed giving up part of the airwaves they use to beam TV and radio programs to stations, and to continue serving customers on airwaves they retain. The swath at issue is known as the C-band, and regulators are eager to free it to carry traffic for fast new 5G networks.
Mobile providers such as
Pai collected support from both other FCC Republicans, giving him the majority needed to carry a vote set for the commission’s Feb. 28 meeting. Pai said the auction of the airwaves swath, known as the C-band, is to begin Dec. 8.
The C-band airwaves presents an “enormous opportunity,” Pai said. A public auction is the “best approach” and the “best bet to ensure fairness,” he added. Satellite providers earlier lobbied to sell the airwaves privately, but were rebuffed by Pai.
Wall Street had been fretting that a plan unsatisfactory to satellite operators would prompt them to walk out of the negotiations.
Intelsat soared the most ever in intraday trading, rising as much as 61% before paring gains and trading up 3.8% to $3.86 at 3:22 p.m. in New York. Intelsat bonds led high-yield gains Thursday with its 9.5% notes due 2023 rising 13 cents on the dollar to 66 cents, the most on record. Its 8.125% bonds due 2023 jumped 11.6 cents on the dollar to 54 cents.
Satellite providers agreed to the payments plan in private talks with the FCC, two people familiar with the matter said.
Intelsat had hired bankruptcy experts at
The C-Band Alliance lobbying group that includes Intelsat, SES and
“The CBA is pleased with Chairman Pai’s statement,” the alliance said in a statement posted online. “The CBA looks forward to reviewing the draft order.”
Kennedy is among sponsors of a bill that would allow $6 billion for satellite providers, and otherwise use money from the auction for deficit reduction, advanced 911 emergency calling services and rural broadband service.
Pai’s announcement shows the need for legislation, House Democratic leaders said in a statement.
“Without congressional action, this auction will not fund critical public safety infrastructure or bridge the digital divide” that leaves some people with inadequate internet access, Pallone and Doyle said.
(Updates with FCC majority support starting in fifth paragraph)
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