TAMPA, Fla. — Canada’s decision to hold a public auction of C-band spectrum means it is unlikely to be a major funding source for Telesat’s $5 billion Lightspeed satellite constellation.
Telesat had proposed running the auction itself, much like satellite operators did for selling similar frequencies in the United States — before the Federal Communications Commission also opted for a publicly run process.
The Canadian government said May 21 that it will hold an auction for the 3800 MHz band in early 2023 and not Telesat.
It is unclear whether Telesat will be compensated for satellites, gateways and other infrastructure it loses as it relocates broadcast services to other parts of the band.
C-band holders in the U.S. are getting billions of dollars from the FCC’s auction for reimbursements and incentive payments to expedite the clearing process.
However, Canada has a history of revoking spectrum and not providing compensation to incumbent users.
The 600 MHz band auctioned off in 2019 and the 3.5 GHz band due to be sold this June are other recent instances of spectrum repurposing in Canada for wireless use.
But while U.S. operators are racing to clear the spectrum for 5G before a deadline at the end of 2023, Telesat has until the end of March 2025.
The longer timeline means Telesat might not need to buy geostationary orbit (GEO) replacement satellites — which spurred a spacecraft ordering bonanza in the U.S. — if enough non-broadcast services are migrated to the low Earth orbit (LEO) Lightspeed broadband network it aims to start launching next year.
Canada’s government said satellite services will be mostly limited to the 4000-4200 MHz portion of the 500 MHz C-band by 2025, when auction bidders will start using the frequencies for 5G wireless broadband services in urban areas. Wireless broadband service licensees in rural areas will have until 2027 to transition to the band.
Notably, Canada’s Ministry of Innovation, Science and Economic Development (ISED) also said the full 500 MHz of C-band will remain available for satellite operations in remote communities, far north of the country.
Funding Lightspeed
Telesat said it had laid the groundwork to run the auction itself, during its May 14 financial results call, to help fund a Lightspeed constellation it aims to bring into service in 2023.
“While the Government of Canada did not adopt Telesat’s proposal, we were pleased that the decision acknowledged the important role LEO constellations can play in bridging the Digital Divide and, to this end, that the Government is in discussions with Telesat to support funding of the Lightspeed program,” Stephen Hampton, Telesat’s manager of public policy and government affairs, said in an emailed statement.
Telesat has already secured about 1 billion Canadian dollars to support Lightspeed from Canada’s federal government and Quebec’s provincial government.
Hampton added that Telesat is still evaluating ISED’s C-band decision.
Buried in ISED’s 87-page decision is another potential funding avenue for the Canadian company.
The ISED said certain C-band auction winners with “flexible use licensees’ ‘ might be able to deploy sooner than March 31, 2025, and “may come to a voluntary commercial arrangement” with fixed-satellite service (FSS) Earth station operators.
“Should flexible use licensees wish to deploy sooner, they could negotiate a voluntary commercial arrangement with affected FSS operators,” it said.
That might prove to be a fruitful scenario for Telesat in Toronto and other large Canadian cities.
Dan Goldberg, Telesat’s CEO, said on the May 14 results call that the operator is in “very advanced discussions” with export credit agencies to support Lightspeed’s funding.
The company raised $500 million in debt in April to help fund the project’s cost. It is planning to list shares on the public markets in the third quarter of this year.
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