The Federal Communications Commission wants to offer a public auction of C-Band airwaves, taking away control from Intelsat SA and SES SA, which had planned a private auction that could have earned them billions of dollars. FCC chair Ajit Pai said the airwaves would be freed for 5G wireless use and generate revenue for the U.S. government. The plan could be voted on in early 2020. The satellite companies protested, saying they would work to create an alternative plan and calling Pai’s plan “a significant departure.”

Bloomberg reports JPMorgan noted that although “the private auction process is officially dead … there is still no consensus of how to get to a public auction.” C-Band airwaves are in the 3.7 gigahertz-to-4.2 gigahertz area of the spectrum.

Currently dominated by Intelsat and SES, this spectrum is considered “well suited” for 5G uses. On November 15, the C-Band Alliance group, which consists of Intelsat and SES (both based in Luxembourg) and Telesat (in Ottawa, Canada) “offered to voluntarily pay the U.S. Treasury 30 percent to 75 percent of the billions of dollars they could reap if they’re allowed to sell airwaves in a private auction.”

According to Bloomberg Intelligence, “Intelsat wants to use proceeds to reduce some of its $14 billion debt load, otherwise its leverage could rise to a potentially unbearable level by the end of this year.” It added, “Intelsat lost the most since it became a public company in 2013 and reached its lowest price since April 2013,” with shares plummeting 40 percent to $8.03 in trading of 55 million shares, 14 times the three-month daily average.

“Intelsat is significantly over-leveraged, they need a major spectrum windfall to right-size their balance sheet and end up with a capital structure that’s tenable,” said Bloomberg Intelligence telecom analyst Stephen Flynn.

U.S. regulators, however, are opposed to European companies “profiting from the sale of U.S. airwaves,” with John Kennedy (R-Louisiana) raising the alarm with President Trump, who discussed the issue with Pai. Leading Republicans also “introduced legislation requiring a C-band sale to begin by the end of next year, with taxpayers getting at least 50 percent of the airwaves’ market value.”

Kennedy opposes the bill, saying he “wants taxpayers to harvest a higher percentage,” although he didn’t offer a figure. The FCC did not reveal “what portion of sales the satellite companies might get under a public auction.” The C-Band Alliance stated that “its proposal would be quicker than an FCC-run auction … [and that] the full cooperation of the satellite operators will be required to ensure the successful clearing of the C-band while protecting the incumbent broadcast services enjoyed by millions of U.S. households.”