Intelsat and SES: C-band calm hides a brutal legal storm

In their recent meetings with FCC staff, executives from SES and Intelsat offered nothing but sunshine and rainbows in discussing their efforts to clear out their respective operations from recently auctioned C-band spectrum.

“SES and Intelsat are creating jobs and paying billions of dollars to small and large businesses throughout the United States,” wrote Christophe De Hauwer, Petra Vorwig and Steve Corda of SES and Peter Davidson and Tom McNamara of Intelsat, of their recent meeting with FCC officials in Washington, DC. “SES and Intelsat … are on track to satisfy their clearing obligations by the commission’s accelerated relocation deadlines.”

The situation is a bit different 100 miles away, in the US Bankruptcy Court for the Eastern District of Virginia.

According to claims tucked into a new document SES filed into Intelsat’s ongoing bankruptcy proceeding, Intelsat executives have engaged in a “disturbing pattern of deceit” and “at every turn, have lied to and deprived SES.”

Even more tantalizing, according to Advanced Television and other publications, SES believes it has a figurative “smoking gun” that allegedly proves Intelsat’s deception. SES pointed to heavily redacted messages from Intelsat’s CFO David Tolley and general counsel Michelle Bryan to other Intelsat employees, as well as a text message from Intelsat CEO Steve Spengler to SES CEO Steve Collar seemingly indicating Spengler acknowledged he was stabbing Collar in the back.

From allies to enemies

The animosity of SES’s filing seems a far cry from the geniality the companies expressed in 2018 when they formed the C-band Alliance with other users of the spectrum band. The alliance proposed to conduct its own private auction of a portion of the band for 5G.

That proposal didn’t sit well with certain US lawmakers, who argued that foreign companies should not profit from the sale of spectrum in the US to domestic 5G operators. In response, former FCC Chairman Ajit Pai proposed the FCC conduct the auction, but also dangled the potential for around $10 billion in “incentive” payments by winning bidders to incumbents like Intelsat and SES to encourage them to quickly vacate the band.

Shortly after the FCC’s approval of Pai’s plan, Intelsat filed for bankruptcy and SES filed a lawsuit against the company, claiming it was due $1.8 billion from Intelsat under their C-band Alliance agreements.

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