SpaceX launches final two satellites in SES C-band clearing plan

SpaceX launched the last two satellites March 17 that SES needs to claim C-band spectrum clearing proceeds worth nearly $4 billion in total. The operator said it has successfully made contact with SES-18 and SES-19 after they were dropped off in geosynchronous transfer orbit by a Falcon 9, which lifted off 7:38 p.m. Eastern from Cape Canaveral Space Force Station, Florida. The rocket’s first-stage booster also successfully landed on SpaceX’s droneship in the Atlantic Ocean for reuse following its sixth flight. Earlier in the day, a Falcon 9 launching from Vandenberg Space Force Base, California, deployed 52 satellites in low Earth orbit for SpaceX’s Starlink broadband constellation. SES said SES-18 and SES-19, built by Northrop Grumman, are due to start services in June after using onboard hydrazine-fueled propulsion to reach their geostationary orbital slots. SES-18 is set to replace the operator’s aging SES-3 satellite at 103 degrees west. SES-19 is heading to 135 degrees west to join the SES-22 satellite that SpaceX launched last year. SES-22 was the first to launch of six satellites SES ordered to help migrate broadcast customers into a narrower swath of C-band so more frequencies can be used for terrestrial 5G services in the United States. United Launch Alliance launched two other satellites for the operator’s C-band clearing strategy in October on an Atlas 5 rocket: SES-20 and SES-21. The sixth C-band satellite SES ordered under this plan is being used as a ground spare.

A Falcon 9 launches the last two satellites in SES' C-band spectrum clearing plan March 17. Credit: SpaceX

All costs related to the C-band clearing are eligible for reimbursement, using proceeds the Federal Communications Commission raised in 2021 from auctioning off the frequencies to wireless operators.

SES also stands to get $3.97 billion in total incentive payments from the FCC if it can move customers and filter antennas on the ground in time for clearing the frequencies by Dec. 5.

The operator said its C-band clearing activities are currently running ahead of schedule.

Intelsat also holds a sizable chunk of C-band in the United States and has ordered seven satellites for its clearing plan, with none serving as ground spares.

SpaceX is slated to launch Intelsat-37, the final satellite left to launch in this spectrum-clearing strategy, on a dedicated Falcon 9 in June.

Intelsat is in line to get $4.9 billion in total proceeds if it can meet the FCC’s deadline in December, although SES is challenging its share of this windfall.

SES and Intelsat have already unlocked more than $2 billion in combined proceeds by hitting the FCC’s initial incentive payment milestone in 2021.

SES closer to $4 billion payout after ULA launch to near-geostationary orbit

United Launch Alliance launched a pair of satellites for SES Oct. 4 that are vital to the operator’s bid to claim nearly $4 billion in C-band clearing proceeds. SES-20 and SES-21 lifted off 5:36 p.m. Eastern from Cape Canaveral Space Force Station, Florida, and separated from their Atlas 5 rocket around six hours later. The lengthy mission dropped the Boeing-built satellites off at 35,888 kilometers above the equator at 1.9 degrees of inclination, much closer than a typical launch of spacecraft to geostationary transfer orbit. The companies said this will cut several months off the time it will take these satellites to reach their final orbit destinations using onboard electric propulsion. “We didn’t want to wait longer than we absolutely had to to get our hands on the satellites,” SES CEO Steve Collar said in a call with journalists, and SES-20 and SES-21 will “be operational in November, which given that we’re sitting here in October is pretty impressive.” Having already launched SES-22 in June as part of its shift out of C-band, the Oct. 4 mission leaves SES with just two more satellites it plans to deploy by early next year to stay on pace to claim the maximum payout from the Federal Communications Commission. SES is paying for these satellites with proceeds from the FCC’s C-band auction last year, which fetched more than $80 billion from Verizon, AT&T, T-Mobile, and other U.S. wireless carriers who need more spectrum for 5G. In addition to covering costs to vacate C-band for terrestrial 5G, the FCC is offering satellite operators nearly $10 billion in total incentive payments if they can meet the regulator’s spectrum-clearing deadlines.

   

An Atlas 5 launches the SES-20 and SES-21 C-band replacement satellites to orbit Oct. 4. Credit: ULA

SES and Intelsat hold the majority of C-band in the United States and are in line for a maximum of $3.97 billion and $4.9 billion, respectively, if they can fully vacate the lower 300 MHz slice of C-band by Dec. 5, 2023, by moving broadcast customers to the upper 200 MHz of the band.

They unlocked more than $2 billion in combined proceeds from the FCC last year after meeting the regulator’s first major C-band clearing deadline, however, hitting the regulator’s final deadline will require new satellites in orbit.

SES loses C-band battle against Intelsat

SES lost its bid Sept. 30 to convince a court overseeing Intelsat’s recent bankruptcy that it was owed $1.8 billion over a broken agreement to equally share C-band clearing proceeds.

SES brought the claim to the U.S. Bankruptcy Court for the Eastern District of Virginia two months after Intelsat filed for Chapter 11 in May 2020, and was one of its largest creditors.

The operator made the claim to cover damages resulting from Intelsat’s departure from a pact to equally share the compensation they would get from the FCC.

Intelsat argued the agreement was nullified once the FCC decided to reallocate satellite C-band spectrum to 5G cellular network carriers via a public auction, rather than a private process run by the satellite operators.

After more than two years of legal action, the court decided Oct. 30 to sustain Intelsat’s objection and disallow the claims from SES.

In a Memorandum Opinion, Judge Keith Phillips wrote that SES could have objected to the FCC’s draft order if it thought its split was unfair.

The satellite operator could have also “refused to participate in the accelerated clearing; it did neither,” he added.

“In short, the Court does not see anything ‘unjust’ about allowing the split of accelerated relocation payments set by the FCC based on objective criteria to determine the amounts available to SES and Intelsat.”

SES spokesperson Suzanne One said it is “disappointed with the ruling,” and “is reviewing with outside counsel its options to appeal.”

Intelsat, which emerged from bankruptcy in February and is looking to use C-band proceeds to pay off more debt and fuel its return to growth, “is pleased to have resolved this matter with a ruling in our favor based on the clear and convincing evidence presented,” Intelsat spokesperson Clay McConnell said.

Merger implications

The court’s decision likely lessens the need to rush any merger talks between the two satellite operators.

The Financial Times reported Aug. 4. that SES and Intelsat were in active talks about combining their companies amid consolidation deals elsewhere in the industry.

While SES and Intelsat have not explicitly commented on the rumor, they have each touted the benefits of satellite operator consolidation to help rationalize the industry.

“If the opportunity of consolidation is there, and it makes sense for our shareholders, we’ll grab it and execute hard,” SES CEO Steve Collar in a Sept. 14 SpaceNews interview during World Satellite Business Week in Paris.

“If not, we’ve got a fantastic plan … using the cash flows that we’re generating from video to invest meaningfully in” SES’ data-focused networks business.

More replacement satellites needed

SES and Intelsat have ordered 13 C-band replacement satellites between them to clear the spectrum for mobile operators.

SpaceX is slated to launch two more for SES on Falcon 9 rocket toward the end of the year.

Collar said in the media call that “we may end up pushing into early next year depending on the manifest,” but the satellites are essentially “more or less ready to go.”

The operator’s remaining work to vacate C-band following this launch will be on the ground as the operator moves customers and filters antennas across the United States.

SES ordered six C-band replacement satellites in total, and the sixth will be used as a ground spare.

Intelsat has ordered seven satellites for its C-band clearing plan, with none of them intended as ground spares, and has lined up Arianespace and SpaceX for launches starting Oct. 6.

SpaceX is slated to launch Galaxy 33 and Galaxy 34 on a Falcon 9 from Cape Canaveral, Florida, at 7:07 p.m. Eastern.