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11 September 2019

Eutelsat quits C-Band Alliance, adding further turmoil to US midband

The letter C in C-Band could stand for any one of Chaos, Calamity or Confusion, with many companies battling for the best ideas of how to reallocate the lucrative slice of US wireless midband spectrum. Eventually, it has all proved too much for satellite fleet operator Eutelsat, which this week threw in its C-Band Alliance membership towel.

The issue is crucial to the future of US 5G services as the country, unlike most of the world, has limited availability of the midband spectrum which is ideal for capacity-oriented 5G and less difficult than millimeter wave. Sprint owns most of the 2.5 GHz airwaves, while most of the 3.5 GHz bands are in federal or satellite hands. The CBRS scheme will open up a limited amount of the government spectrum to licensed or unlicensed providers, but the MNOs also have their eyes on ways to access or share the satellite players’ C-Band.

The C-Band Alliance was formed in October 2018 by satellite companies SES, Eutelsat, Intelsat and Telesat. This coming together of fleet operators was a twist in itself, arriving not long after a spat which saw SES brand Intelsat a traitor for floating the idea of selling precious spectrum to 5G players and therefore turning its back on satellite TV.

Now the situation has essentially come full circle. Without providing a precise reason for quitting, Eutelsat declared its intention to continue taking an active role in the discussions on C-band clearing and repurposing. Eutelsat has left behind a splintered satellite group – so hoping that the remaining trio would continue giving Eutelsat a voice is an optimistic outlook to say the least.

The three remaining fleet operators responded with the following statement. “The CBA remains committed to delivering its expeditious, market-based proposal and the departure of Eutelsat does not impact the CBA’s ability to do so. The remaining members of the CBA, which represent approximately 95% of the affected revenues of the US C-band market, are aligned and committed to the process of engaging with the FCC on the proposal of rapidly clearing C-band spectrum to support the deployment of 5G services in the US.”

However, a Eutelsat spokesperson told SpaceNews that the company was “not aligned with the overall members of the C-Band Alliance leadership team on certain matters”.

What Eutelsat may be afraid to say is that the technology powerhouses driving the reallocation of spectrum for 5G are too powerful and its own influence too inferior to matter, so jumping ship is in the best interests of the company and its investors. Eutelsat will therefore receive approximately 5% of proceeds from the auction, equating to around $439m, valuing the remaining aggregate value for the 200 MHz set to be cleared to support 5G wireless deployments at €8bn ($8.8bn), according to financial services firm Jefferies.

The exact portion of spectrum affected varies by geography but in the US, the FCC has been considering transfer of part or all of the C-band in the 3.7 GHz to 4.2 GHz range to impending 5G networks. The proposal from the C-Band Alliance to the FCC, established a year ago in September 2018, is to act as facilitator for clearing and repurposing that spectrum to accelerate deployment of next generation 5G services while protecting incumbent users and their content distribution networks in the US from potential interference.

As well as its own members, the C-Band Alliance has come under fire from Google, the World Broadcasting Union and others preaching that closing the digital divide is a priority over profiteering. Google and the Broadband Access Coalition criticized the Alliance’s plans to reallocate 100 MHz of spectrum for not being directly applicable to point-to-multipoint (P2MP) coexistence and therefore missing an opportunity to bring gigabit-class broadband toms of Americans.

Interference to existing satellite services from mobile networks operating in adjacent spectrum is indeed one of the main concerns of broadcasters, while much of the value in the midrange band stems from strength of signals capable of penetrating cloud and rain.

The FCC has also received calls from the National Association of Broadcasters to reevaluate the importance of C-band spectrum for OTT services and MVPDs, as well as TV and radio stations. It warns of degrading satellite services by allowing shared use in the non-reallocated portion. “If live sports, entertainment and news cannot be reliably distributed, the fastest 5G network in the world will have far less value and the prize for winning will be a participation trophy instead of a substantial economic boost,” said the NAB filing from last year.

Eutelsat’s view is that it supports reallocation of some spectrum to 5G deployments but is against the government heading up the reallocation.