Main Engine Cut Off - T+165: Caleb Henry on the OneWeb Acquisition, Starlink Antennas, C-Band Drama, and More

Episode Date: July 21, 2020

Caleb Henry of SpaceNews returns to the show to talk about the OneWeb acquisition and related fallout, Starlink antennas, the ongoing C-band drama including the satellite-buying bonanza, and he helps us understand the FCC-GPS-Ligado situation.This episode of Main Engine Cut Off is brought to you by 38 executive producers—Brandon, Matthew, Simon, Lauren, Kris, Pat, Matt, Jorge, Brad, Ryan, Nadim, Donald, Lee, Chris, Warren, Bob, Russell, John, Moritz, Joel, Jan, Grant, David, Joonas, Robb, Tim Dodd (the Everyday Astronaut!), Frank, Julian and Lars from Agile Space, Tommy, Adam, and seven anonymous—and 397 other supporters.TopicsCaleb Henry, SpaceNewsCaleb Henry (@CHenry_SN) / TwitterBritish government and Bharti Global buy OneWeb, plan $1 billion investment to revive company - SpaceNewsBritish military finalizes Skynet-6A contract with Airbus - SpaceNewsWyler claims breakthrough in low-cost antenna for OneWeb, other satellite systems - SpaceNewsNew details and images emerge of SpaceX’s Starlink user antennas and planned beta testing - The VergeSatellite Bonanza: Ten GEO Satellites Ordered in Prep for C-Band Clearing, More Coming - Main Engine Cut OffIntelsat orders four satellites from Maxar, two from Northrop Grumman, for C-band clearing - SpaceNewsBoeing, Northrop Grumman win SES C-band satellite orders - SpaceNewsSES files $1.8 billion claim against Intelsat over splitting C-Band Alliance - SpaceNewsCoalition of GPS user groups joins fight against FCC’s Ligado decision - SpaceNewsThe ShowLike the show? Support the show!Email your thoughts, comments, and questions to [e-mail] @WeHaveMECOListen to MECO HeadlinesJoin the Off-Nominal DiscordSubscribe on Apple Podcasts, Overcast, Pocket Casts, Spotify, Google Play, Stitcher, TuneIn or elsewhereSubscribe to the Main Engine Cut Off NewsletterBuy shirts and Rocket Socks from the Main Engine Cut Off ShopMusic by Max Justus

Hello and welcome to Main Engine Cutoff. I am Anthony Colangelo and we've got a special guest with us today. It's an old friend, Caleb Henry of Space News. He covers all things satellite and telecom over at Space News. He covers all things satellite and telecom over at Space News, and we've had a ton of topics to talk about lately in his department. So I've been just dying to get him back on so I can break down some of these stories. The biggest ones we're going to talk about, we've got OneWeb being purchased by the UK government and Barti Global. We've had continuing C-band wars as the FCC repurposes some spectrum to be used for 5G rollouts. Similarly, we've had another dust-up at the FCC, where they decided to use some Spectrum that's adjacent to GPS for a network called Legato, and that's ruffling feathers all throughout Congress and the Department of Defense. And then, of course, Starlink continues to be deployed.

We've seen some sneak peeks of hardware. So I thought it would be great to get them back on to digest all of this and help us figure out what's going on so without further ado let's give him a call caleb welcome back to the show uh this is like your third appearance here i think so yeah three times unfortunately not in person alas we tried we did sort of try i was we were you were up this way last weekend was like, maybe we could do like a park edition, but I was not around, unfortunately. Speed apart outside somewhere and just shout about space. Yeah, totally.

Well, the parks in Philly are really nice right now. Everyone's picnicking. It's quite ideal, but people might be a little weirded out with the topics we're about to get into here. There's been a ton of news in the last like six months since you've been on and my desire to have you back on the show has been increasing with every single one so i have no idea where we should start should we start with one web that's like the giant news of late yeah we could definitely start with one web i mean what a whirlwind yeah all right were you

surprised so to give everyone the quick rundown the uk government and is it barty global i don't really know what the correct pronunciation is there who's a major telecom in they're based in india but they serve a couple of different countries uh around the world they went in together to acquire one web who was filing for bankruptcy and all this they both put up 500 million us dollars uh to i guess as the initial investment it sounds like it's going to cost a lot more than that to get this thing back up and going but these were that's not who i thought would buy one web out are you surprised or does this seem like something that was maybe not not unexpected from your

perspective i was surprised i i was surprised but i didn't really have an alternative in mind like i didn't it wasn't like oh i expected amazon to buy them or something like some people were speculating yeah i did just because man they got some cash that i guess amazon in a nutshell they're they're using a totally different spectrum so the satellites wouldn't have been worth much to them well there you go i should have looked up more technical details. The prevailing logic is that Amazon, if they bought them, it would have just been to say like,

ha, now no one else can use it. But, um, which is not, not a very, uh, that wouldn't be unexpected for Amazon.

No, I mean, if they wanted to just like all the spectrum stuff, the reason that it's even remotely interesting is because it's usually people bickering over who has rights to what and basically pushing and shoving and trying to get in each other's way or to secure their own lane and make sure that they have everything they need to go forward with an actual business. Spectrum itself, otherwise, is not really interesting.

It's a real estate thing and you're really either bidding over a piece of land or arguing with your neighbor about where your fence goes exactly so um i was surprised yes but when you think about who the investors are it's not a huge surprise like it could be a bigger surprise the uk they left the eu they've been talking about a lot of national programs and even though they um they're gosh what's the guy's name alok i'm blanking on his full name but basically like their point person has been talking about this in parliament has said that the motivation for this was not a sovereign British navigation system, their own Galileo or their own GPS, but they could use it to that end.

And the UK has already talked about OneWeb as a geopolitical tool that they could use. It could basically be a really powerful system one day if you have a global network that can provide internet everywhere they also talked about moving manufacturing they've they've suggested that they want more manufacturing to go to the uk and because the uk has this goal of being home to 10 of global space revenues by 2030, it stands to reason that they need a lot of business to be in the UK for that to happen. So OneWeb could basically be a catalyst for that kind of work.

And then Bharti was a previous investor. I think it was a different division, Bharti Enterprises. And I'm not overly familiar with every division of Bharti, but they're huge. If memory serves me right, I mean, they serve India, so it's like Verizon would be a small player. Yeah, totally. I think I saw, it might have been your article,

it said second largest telecom provider in the world by number of customers. They're huge. I think they've got, I shouldn't be spitballing numbers, but I want to say it's like 250 ish million customers like nearly an entire u.s population basically yeah they already have that so like they're massive and um that would be another huge win actually for one web if that streamlined their process of getting into the Indian market, that's been really difficult for satellite operators. And like Hughes has been the most dedicated to actually just trying to crack

that market and provide broadband there. But India has basically done everything through Israel and only in the past month or so have they started to really push for like a liberalization of their space economy but it's been it's been notoriously difficult to do space you know as as an outside company to do business in india so having a stake with a company like barty could definitely open up use a lot of regulatory barriers and help them get a lot of customers yeah and certainly a lot of the countries they work in other than india are in africa in various locations which like these kind of satellite systems will be are perfect for getting to rural areas that don't have a lot of infrastructure

built out already in terms of telecommunications uh so that's why you know the u.s has been interested in it for rural people here in the u.s that live far away from deployments of actual wires. But obviously, there's plenty of other areas in the world where that would be really useful. And the pairing also makes sense because they're in different geographic regions, so you're not going to be taxing the satellites at the same time. So you've kind of already got this little bit of a dispersed customer base. The one thing I'm interested, you said it could be a useful geopolitical tool for the UK.

My thing that I can't get out of my head is that they would really like, they being the UK, would really like to hold a gigantic launch contract over the rest of Europe when it comes to the fact that they have like 19 Arianespace launches still booked, I guess, as part of the OneWeb launch contract that was signed with Aryan Space. And UK being a little bit bitter towards the European space industry in recent months. That probably doesn't, it's probably not the worst thing that could happen

is to have this gigantic deal over their head. You know, I, so the impression that I get right now is that things for, and this is me speculating, but I think that there's so much in place for the gen one system of one web that that will likely largely continue as is like those will use rockets are pretty much already built a lot of them are already at spaceports in baikunor and vasachny there is unless the russians

have moved them back around but yeah last check they were last check like i've been there but last time i saw anything in the russian news about this that the rockets were still there and they were just waiting for whatever the situation with one of the bus to pan out. And the UK doesn't have a domestic launch capability yet. So they could, if they wanted to play hardball with it, they would just sit and wait for their startups to have been termed in waiting for the UK to actually decide on the space ports to do like it,

it would, it would actually, I think that would love up in their face. That's also a terrible phrase, talking about rockets, but there's, like, they would hold it over their heads to what end? To not launch the satellites? I think just to be kind

of, just to be kind of mean to them. It's like, hey, look, there's a lot of rockets that we gotta launch, and it'd be a real shame if something happened there with those 19 Soyuz that you've already bought and paid for. No, the interesting thing to me is that OneWeb, and this is even before they were going bankrupt, OneWeb was already talking about their Gen 2 system ahead of completing or barely even launching their Gen 1 system. And some people took that as an indication of a lack of faith in the original

network i think you saw over the years a lot of highly well the buzzword is flexible but satellites that instead of just beaming the same pattern all over their coverage area or footprint they can like steer power and capacity to hotpots where there's demand. And the sense I got was that the Gen 1 architecture doesn't have that same degree of flexibility, certainly nothing like what new satellites being ordered today can do. So there was some work being done, and ESA was helping fund it to prepare that Gen 2 system, which means there are already connections in Europe on creating an advanced new architecture for OneWeb. And now that you have the UK involved

and all of these stated priorities of UK prowess and space, you can see this even with the Skynet program, how the latest satellite, they want it to be built exclusively in the UK. So Airbus is building it, and then they're going to use a laboratory from RAL space to test it. I think you've seen a number of Airbus satellites where they are built in the UK and in France. This will not happen that way. It's going to be all UK. And so I think you see a lot of that going on now one web is only going to fall into that that sort of national priority yeah and it's

obviously a gigantic business so like you're talking about they want growth in the space sector not only from the manufacturing side but just pure growth in any way possible this is a huge chunk of business yet to be, you know, played out really to some extent. I'm curious though, you had this article back in April that I remember reading, this was right after they filed for bankruptcy. I'm going to read you a paragraph from it because when you, when I read this, I was like, holy crap, that is a perfectly put paragraph that I would like to introspect on a little bit. So you have, uh, OneWeb's primary spectrum filings cover KU band frequencies for downlinks and KA band for uplinks

for a constellation of 720 satellites in low earth orbit. The company brought that spectrum into use with the International Telecommunication Union and passed the agency's 10% milestone last month when it launched 34 satellites on a Soyuz days before filing for bankruptcy. The timing on that makes it seem like they were kind of just gunning for that moment. And then they were like, oh, that's it. We're bankrupt. Somebody please dump some money into us. Was it was the timing super accidental or not accidental at all? Or what's going on with that?

Because that was suspect to me. I think it is suspect. If you were fearing for the worst and you wanted to hedge your bets and you knew that your most valuable asset was your spectrum, which was what they were leading with during the initial phase of the bankruptcy,

it makes sense to clear that milestone early on. And that way you can say look this much is already done the spectrum is safe and now we can move on so one web I had done an interview with them in February and they spoke about needing to redesign or introduce a redesigned element on the spacecraft and so that's why they would be standing down launches in april obviously they had a different reason for standing down launches but it they had described it as a planned pause after that and i think you know if you look at the chronology of one web satellites their joint venture with airbus

it's clear that that took a longer time than expected to get up and running um i think that i mean they're what they're doing for for all the the flack that you give one web bankrupt and burning billions of dollars they they really did set up a manufacturing facility like they've done something that nobody else has done before they have a factory that can build two satellites a day essentially maybe more and like put 10 gigabits assuming that the old metric still holds like 10 gigabits of capacity like to put it in the perspective the there's a satellite that um an indonesian satellite that failed do you remember this like april i think um chinese rocket long march 3d failed that you could see like there's video footage of it coming back that geostationary satellite like a few thousand kilograms that had 10 gigabytes of like a one web satellite was about the same

you know it just like the magic and that took a couple years to build yeah was gonna cover a wider area because it was geo but like the what they've done and like shrinking that satellite that it is really incredible but took them a long time. The cost was higher than they expected. When you're trying to do something really ambitious, even if you've accomplished a lot, you've got to cross the finish line to really prove that it was worth it.

I think the space industry has a lot of really cool tech and not a ton of financial models to always back up those tech investments. So that was the scary thing there. I feel like I've been rambling and I don't know if I answered your original question.

No, you totally did. The thing that now I'm curious about though is, you know, they were clearly going for this milestone to hit the bring into use milestone. And now they're looking for more investment that they originally were thinking maybe from softbank who originally was their big investor uh turned out that didn't work out so they went this alternative route to have somebody acquire them the initial acquisition is a billion dollars which i assume is just enough to keep the lights on for the next couple of months as they sort out exactly what the path from here to a fully deployed Constellation is.

I've seen some estimates in the $7 to $10 billion range in terms of how much money it's going to cost to get up to the full deployment. What's the path forward for UK government and for Barty to make these huge investments? Is it going to be that they have enough money behind them, considering one's a gigantic organization, one is a government, and are they going to push on with the current plan for OneWeb? Or do you think we're going to see a big divergence from what was the plan previously to what eventually would be the plan for OneWeb? Right, so a lot of things um do i think the original plan will go forward i think that a similar plan will go forward so i guess maybe it might be easier to look at the variables

at play or at least the ones that i think are at play so we've already talked about the navigation one. If the UK wanted to try and introduce navigation, hosted payloads on one web satellites or, or do something to that effect, they could try and tweak this, the constellation to use that. There's also the Skynet program that I mentioned earlier, which is the UK's military satellite constellation that they use for all their troops and things.

The UK has spent years trying to figure out what they're going to do next. They've more or less been, like I think paralyzed is a fair term to use here because they were, they've been talking about that. Like the contract that they awarded to Airbus for an interim Skynet satellite that I mentioned earlier. That was originally supposed to be awarded in 2017, but they only fully funded it a couple days ago.

And that's supposed to go up in 2025 and provide continuity of service. Long story short, the UK was looking at these advances in geostationary satellites, which are getting increasingly powerful regardless of their location. There's a lot of advocates for geo that say it's still really powerful, still really a great vantage point, and the technology is advancing so much that they'll be able to do tons of really useful services, notwithstanding the latency.

And then you have all these mega constellations. And so the UK didn't really know what the best tech was to invest in. I think now that they have OneWeb, and Airbus already operates the Skynet network for the UK, there's a lot of pieces at play there that all could align to make one web part of Skynet at some point. Um, I don't know what that would look like still no clue on if it'll look like, um,

if one will end up looking like their previous architecture, which even though their filing was for 720 is baseline, they've really described it as a 650 satellite system. That's one where numbers are kind of a little up and down. They're always all over the place. I can never keep track of how many we're actually supposed to be in that constellation.

It is a pain. It's 650 or it's 720 or it's 900 or... Yeah, or it's 48,000. It's like totally made up at some point. But, um... Okay, I think that was your last question. What was your first question again?

How much money do you think they're going to need to dump into OneWeb? I guess a lot of that depends on which route they go, right? If it's the former route, maybe it's something on the order of $7-10 billion. If it's some other route, like you're explaining with Skynet and navigation, it could be whoever, who the hell knows how much money. So the highest estimate I had seen was $7.5 billion. It wouldn't surprise me if they added on additional things like what we were just discussing to see that amount go higher. One web had raised $3.4 billion before going bankrupt.

After going bankrupt, it was revealed that a lot of their last round was debt. And so I don't know offhand how much of that was debt. Um, I, and so of the billion dollars that they got from Barty in the UK, I think that the estimate is around 600 ish, 600 ish million will be left once the bankruptcy is done. So let them move forward that like pays off the, their interim financers during the bankruptcy and administrative costs and other things. interim financers during the bankruptcy and administrative costs and other things so that's enough money to like to get some things going if they wanted they could pay the entire unsecured credit that is owed to ariane's boss that was like around 240 million dollars get all of those launched um there was already a line of financing that was set aside for one web satellites to keep building the spacecraft but i mean one web was never really forthcoming about how much their

costs were growing i think originally they were talking around two billion dollars and then three billion dollars and then weiler said before congress it was four billion dollars and then three billion dollars and then weiler said before congress it was four billion dollars and then you might remember a fairly dubious press release when steckle became ceo that he was going to lead a six billion dollar enterprise which was later redacted um and then there's uh telastra's estimate $7.5 billion. So that number is... I've only seen it go up. And for the UK and Barty, of course, they are getting the bargain deal, but it's still not nearly the same as Iridium and Motorola,

where... Gosh, I wish I remembered those figures. But it was also, what, maybe $3 billion? And then they bought it for, was it $25 or million? Yeah. It's like an insane drop off. Yeah. The Iridium deal was better, but this is obviously a different system. So that's my long winded way of saying, don't know how much it's going to cost, but a lot, I would not be surprised. Yeah. Minim. Yeah. Minimum $2 billion. Easily more than that if you want to add new features, bells and whistles, GNSS, military, who knows.

It's weird how it's always going to cost just about a billion dollars more than we have right now. So if you know anyone with a checkbook, please give them our number. It's weird how that happens. The other huge portion of all this that we should touch on real quick to finish out our mega constellation portion of the show is the actual antenna hardware. Boy, I don't remember how long ago this was, but I feel like Greg Weiler tweeted a photo

of something a long time ago of, hey, here's the phased array antenna. Did anything ever come of that on the one web front? Do you know what kind of user terminals exist today to talk to the satellites that are up there or what the plan was before bankruptcy and, you know, what we might see going forward on that front? I wish I did. The antennas, the antenna question is still a huge one. I think that it's telling to see how difficult it's been for every antenna player to try and make anything. One of the things that was interesting to me was seeing Phaser when they went through administration, which is like the UK equivalent to bankruptcy. phaser when they went through administration which is like the uk equivalent to bankruptcy their administration filing said that they ran into some serious tech issues like two years ago

which is right when they were planning to release their product and the result is a product that was never released and then they were bought out of administration by a company in south korea never released and then they were bought out of administration by a company in south korea um chimera's antennas were starting around 40 grand and i assume they brought the price down some from there but like that's nowhere even remotely close to an affordable consumer no antenna um and it's like you know anywhere i turn to do research on these things i i only see delays i've yet to see somebody actually execute on a plan to have one of these on the with a time schedule and a price that actually um meets their previous statements. And so I haven't heard anything about Wafer,

which was Greg Weiler's company that was doing this. I haven't looked at Weiler's... Oh, yeah, it was like an offshoot company, right? Yeah, and I wonder how many of those he has, because there was so many... Seems like a lot. There's some shady stuff in his storyline along the ways. Well, after OneWeb went bankrupt, he changed his Twitter

bio to something about what's that other company that he's involved in that Hughes invested in? It's like a wireless terrestrial company. Alright, now I want to look it up. Yeah, we're going to do our research portion to figure out what that storyline was back

in the day. Because I remember this. Yeah, we'll do it live. We'll do it live. We'll edit it all in post. Tarana. Okay. So maybe it's changed again.

The URL he has is Tarana Wireless. Then there's OneWeb. And then there's Wafer, our mystery antenna company. So there's three. Also Father of Five and Hosing the Digital Divide. A lot of that going on. It's a curious order

there. Tarana, then OneWeb, then Wafer. I guess you can leave that to easy speculation as to what his priorities are. Also, no tweets since march just about yeah there you go so was the wafer is that the one that he tweeted a photo of years ago and do you think that was like because i gotta find the actual tweet and put in the show notes because i i

believe it was like check out our hardware coming soon it's 200 or whatever um was it was it just a prototype hardware did it ever actually exist is this something that maybe there should be some court looking into at some point or is this like what was going on with that you know any and everybody who's related to one web has been really quiet these days. So normally I would be doing interviews and trying to find answers to these things. As soon as people start picking up the phones again, I will be happy to dig into all of these questions. Because right now I have a list that probably rivals yours. So I found your article from January 2019 and the photo is in there.

And it says the antenna module, he claimed, cost $15, which would pave the way for a user terminal between $200 and $300. So this is just non-existent at this point. I haven't heard anything since then. I think that says a lot then and then of course we've got the leaked photos of starlink antennas yes perfect segue let's get

into that so people like just were scavenging the site that was up at starlink.com and found some photos maybe promotional photos i don't really know exactly uh what what the situation is there um that shows the hardware and then there was like an nda that was leaked as well and who knows if it was leaked or and or officially leaked so as to create buzz um what what did you draw from that whole incident oh the photos so the article that i was reading about it was some guy who drove by with like a tele lens telescope lens uh camera and just took some really high res pictures and drove off which given the whole crowd of people at boca chica that are walking like spacex every move down there with with starship it wouldn't really surprise me to see

people also like scurrying around the edges of their starlink facilities and trying to see what they could see um the design so the first thing that i noticed obviously elena already described this like a ufo on a stick um nobody else who's designing flat panel antennas has put them on a stick. And so I'm wondering why. And just because SpaceX has a habit of doing things differently, I am reluctant to scoff at it because they might do something that I don't. The initial thought that I had was, well, maybe it's going to swivel and like follow satellites around the sky. But then you run into the whole reason that we're doing phased arrays in the first place,

have moving parts because if you have to have an antenna that's tracking and swiveling with satellites all the time, you have wear and tear and then they break and it's expensive. And that drives a constant too. And so there's all these things that you're supposed to avoid. So like a mechanically steered phased array antenna, I mean, they do exist, things that you're supposed to avoid. So like a mechanically steered phase array antenna. I mean,

they do exist, but like, it just doesn't seem like it solves anything on the consumer end. But then I kind of realized that I guess you could put it on the stick and try to angle it around buildings or wherever, like you could maybe try to point it at wherever they're going to be the most number of satellites crossing. I guess it comes down to the fact that like weiler even though he talked about it and then stopped talking about it he gave some details about the antenna spacex has not released anything but aesthetics as far as i'm aware

so it would be really nice to know um you know what the price of the starlink user terminal is going to be how many satellites it can link to at once because my guess is that that dish that's pointing or the ufo or whatever that's pointing to space can probably link to multiple starlink satellites at the same time and not have to move and so they'll just sort of like go across the antenna surface and allow them to keep a continuous connection but

there's just there's so many questions I mean phased arrays have never ever been cheap so how do you figure out how to make it cheap the way that this was explained to me, and I don't build antennas any more than I build rockets, so this is all stuff that I've just heard from interviewing people,

but basically phased arrays are made of these little antennae. They call them elements. And so it's like you have these little radiany elements, and they help steer the beam across the flat surface. And that's why the flat surface itself doesn't move. It's like these little cells that are all steering the beam together underneath it. So you need thousands of these antenna elements to connect with the satellite and make a beam, and nobody's ever been able to drive the cost of those low enough.

So it's like even if you get the cost of a single antenna element down to $1, great, you need 1,000 of them for your antenna. You're still at $1,000. And that was the barrier that I was told was the issue. So whenever SpaceX and Starlink have done, I'm really curious if it solves that issue or if it just threw the book out and did a completely different approach. Whatever it is, I would like to know the price.

I would like to know how it works. And then I would like to know its performance characteristics. So until I have those, it's just kind of a pretty picture. Yeah, there's a part of me that is like, is this a phased array antenna as we're thinking of it or as is known or is this a phased array antenna as we're thinking of it or as is known, or is this something different? I would not be shocked if the ultimate goal is to have a nice flat panel phased array antenna that could be bought for very cheap.

But Starlink in general has had some stuff punted to later revisions where originally they were all going to have inter-satellite links. Now that's put off for a little while. I don't know exactly what batch that's coming in the satellites that they're deploying. So it wouldn't shock me to see them have some sort of technical roadmap for the antenna piece in the same way they do for the satellite that delays certain things. Or yeah, maybe they've thought of something different. And the fact that they are using an approach of having a ridiculous number of satellites in orbit, maybe that changes what they actually need out of the antenna enough to make it more affordable. It looks sweet.

I don't know how it works. I don't know. I assume that it works fine enough. And we do know, I mean, there was maybe last year or something they did that test with, I believe it was a C-130. And I think that was a third party phased array antenna on that as a test to see how they could connect to military aircraft. And that went well. So, you know, we know everything works out if you've got the antenna. Yeah, that wouldn't surprise me.

Only it doesn't. So the military has been like the only user of phased array antennas, and if they can make it work with the military, that's great, but if their target market is unconnected Americans and people around the world, they really have to show that they've actually moved the ball. So I guess it's still a waiting game spacex sort of reveals things only when they want to or when they have to or when it's been revealed and they don't like

the narrative exactly yeah those are the things so it's like it's like finding if they end up having to disclose the the characteristics to some regulator somewhere, that might be the way you end up finding details about it. Yeah, for sure. Somebody is going to find some FCC document with a full breakdown and tear out a bunch of redacted pages and we'll figure it out from that.

Let's get to some of the FCC drama so that I can get you back to your day so that you can write more new stories for me to talk about. There's been a lot of fcc drama the c-band stuff we've talked about a couple of times in the show so for those out there listening that might not be up on this go listen to those other shows that we did first and then come back i guess and you'll have the full storyline throughout time um there's two things that happened recently one was the bonanza of geosatellite purchasing. That is a knock-on effect of clearing the spectrum

that the FCC wants to repurpose to 5G deployments. There were, I think, 10 orders placed so far and a couple more on their way. So what did you make of that whole situation? That was definitely a shot in the arm for all the manufacturers who have been itching for orders the past couple of years and have not seen that many so it was good for them i think the really interesting part of this too is um the satellite operators are there's five that have

proven to the fcc that they have c-band customers in the u.s and that they need to migrate those customers to a smaller portion of the spectrum and in order to do that they will need more satellites i've had this described to me using a metaphor about apartments where it was like say you have a 10-story apartment building and then the fcc says going forward you cannot build apartments more than four stories but you still have the same number of tenants that you need to house so now you have to go and build a bunch of four-story apartment buildings and that is your life now so um that's what these satellite operators are doing they need to find new places to house off their customers and the result for the biggest players um intel sat scs and util sat as they say they will need replacement stylers for the cpan spectrum so uh intel sat

bought six scs bought four um there's four more orders that are expected one from util sat two more from scs and then one more from intel sat um those operators a lot of this has been influenced by, I think, Senator John Kennedy, who, at least it's the sense that I get, is that he has really not been a fan of the FCC giving any money to the satellite operators, because you might remember they were pushing for a private C-band auction where they could have gotten,

where Intelsat, SES, Utilsat, and Telesat could have gotten uh where intel set scs util set and telesat could have collectively scored like around 60 billion dollars maybe more maybe less and congress got wind of that and said absolutely not but they did say it was okay for um like the auction process to include a way to finance the moving cost for the satellite operators and then there's now accelerated clearing payments on top of that for them to try and like move them out faster but um i think yeah basically what's interesting to me is the fact that the satellite operators are getting really wound up around like the particulars of what they can and should order so when they were the c-band alliance, they said that they would,

if they got their private auction, they would buy their replacement satellites all from American manufacturers. And then they didn't get that. And then the C-band alliance essentially broke up. And then the amount of spectrum went up from 200 megahertz to 300 megahertz. So they needed even more satellites.

But I think everyone got so scared that Congress would look down on them for this program if they went and bought abroad that they stuck with this original pledge and have only bought satellites from Boeing, Maxar, and Northrop Grumman. Lockheed has been left out in the cold on this one. Not getting any awards here. Yeah, and your theory holds because all of those orders were announced a day or two before a hearing in the Senate when Senator Kennedy was going on a rant for too long of a time period, but senators love doing that. Yeah. but senators love doing that yeah so it definitely had that feel of we're announcing this now so that when our when the fcc and whoever else goes in front of senate tomorrow they can hold up this piece of paper that says look at all these american satellites launching on american rockets from american soil i didn't say that but they should uh as a as a political play to say like

please continue to give us the money if we do this fast enough and it's worth noting that last year like airbus and talismania space really swept as far as geo orders like i think they each got roughly six out of like 15 total something to that effect they're co-building two of them for spain but it was like american manufacturers got beat pretty badly on that that scene if you're doing a year by year tally and so for all of these orders to suddenly swing to u.s manufacturers definitely gives them a boost and um i think that you'll see well it gives them a chance to invest in new technologies it gives them a chance to see ben's not like overly complicated but the satellite operators not operators manufacturers talk about the need for a continuous pipeline of spacecraft in order

to preserve that ability you have to have satellites in the factory to maintain the knowledge to build them and then to grow on that so the fact that they've had this helps preserve all of their business lines during a time that has been very challenging remember that maxar had considered shutting down their geostationary satellite manufacturing line and ultimately decided not to in part because they were urged by satellite operators themselves who feared a reduction in market options but it's i don't know if i have more to say than that other than it's something that i'm sure europeans really wish that they had a better chance to compete for these because they are commercial contracts uh and the fcc has said ajit pai has said himself that there's

no rule from the fcc stipulating they have to buy american but i mean pai was saying that to senator kennedy right who was just explicitly asking why there was not a rule so i think the moment that anybody went and said they were going to buy elsewhere, they'd probably get into trouble. Yeah, and a lot of it was Ajit Pai saying, we literally can't say that. We're not legally allowed to make that demand. So there was a lot of bickering over whether that was appropriate

to impress upon these providers. You mentioned the private auction. It seems like now the former C-Band Alliance, they are in their breakup. They're having a very messy breakup. And now the FCC or SES is suing Intelsat for a couple of billion because they said originally they would split whatever funds they got out of these. This auction. Now they're not. Is this going to be like the messiest thing that's not that interesting, but is very messy for the next couple of years? Or do you think this is going to get tied up as some of these pieces come into place and aren't things we're arguing about in Congress, but might actually start to harden into an actual program? Is it going to get easier from here or is it still going to be a bunch of lawsuits?

So the road looks very difficult. I think I guess one one clarification, it is a claim. So I originally thought that it was a suit as well but it's a claim that's filed with intel set's bankruptcy court ah oh right because intel set's gone bankrupt yes intel set has gone bankrupt uh because of the pandemic because everyone um they they filed it there scs was like piping mad when Intelsat went to the FCC and said, hey, the C-band alliance is dead. Oh, and by the way, can you please give us a billion more of the accelerated clearing payments,

which unless the FCC expanded the amount, and there was no indication they would do so, that meant taking money from SCS. So they basically stopped being friends at that point and um ses made statements that indicated they were going to retaliate and i think they said they were going to hold intel set responsible for the the agreements that they had made and that seemed to me like the language that would precede a legal dispute. It may be convenient that they've gone bankrupt, and they could just

file this as a claim in the bankruptcy court, instead of doing an actual lawsuit. But really, as soon as the FCC announced the accelerated clearing payments, so that's $9.7 billion, of which half IntelSAT is eligible to win. I think SES is eligible for about 41%, and then the 9% is split between Utilsat, Telesat, and Embratel Star 1, or Claro of Brazil. As soon as that happened, the bickering began, particularly amongst the biggest players and it doesn't look like it's going to be um friendly anytime soon actually the company

that's been maybe causing the most headaches for for that whole operation is actually utilsat because they've been the ones that have said, they've told the FCC the replacement satellites should only be C-band. That's the only spectrum they should have on it. And the FCC should not fund any free backup satellites

because that's something that big operators do as well. They'll have mandatory backups. And Utilsat has done this too. Utilsat has done this too. Eutelsat has three hotbird satellites. I'm pretty sure one of them is a backup. But it's a common thing. Those aren't over the US.

It's a common thing for operators with massive fluids, so over 20 or 30 satellites, to start backing up their spacecraft because they have these redundant contracts so that if any one of their spacecraft were to fail, another one would be in place utilsat says that the fcc's auction like what they're charging the bidders in addition to the auction to finance these replacement satellites none of it should go to those spares and none of it should go to fund um any excess capacity and they've gotten hughes and Inmarsat on their side,

which those are two big operators that do not have any C-band satellites, but they have also agreed with Eutelsat that this auction could be so big and the policies around it so influential that they really make SES and Intelsat just bigger than they already are. They're already the two biggest geostationary fleet operators.

If they get a bunch of free satellites, notwithstanding the difficulty of having to move all of their customers into these smaller satellites, it's still going to reshape the landscape in a way that the market would not have done otherwise. And so you've got Intelsat and SES in this claim for $1.8 billion. That would be really costly to Intelsat at a time where they're trying to cut down their $15 billion debt already and finance their C-band uh c-band acceleration program or just my words uh

they're trying to like move out of c-band and claim these accelerated clearing payments because they have to move all their customers out by like early december 2023 so it takes about two years to build a satellite which means they've got to get them built now, got to get them launched. Like, there's just not a lot of wiggle room. And a lot of those satellites are still under order. The question I have right now, actually, is whether or not the two remaining satellites that SES said they were going to order but have not yet. replacement satellites or in-orbit spares. And now maybe they're concerned that the FCC will lend its ear to Utilsat, Hughes and Inmarsat and say,

you know what? No, we won't fund those. Or maybe they won't buy those too. That makes sense. Yeah. Cause I mean, all this stuff,

you know, it's, it sounds like, Oh, you could get $10 billion, but it's, you got to spend a ton of money to be in the running to get that money. So it's a little bit of a tricky game where these companies are betting a certain amount of money that they will be able to get a payment at a later date, all of which is subject to congressional arguing.

congressional arguing. And that's the part that I'm really trying to figure out is, are there more congressional hurdles to get over? Or is the funding that the FCC has already set aside as those incentive payments, is that secured? Or is there going to be decisions down the line that could erase that entirely and make this whole thing even more messy than it already is or is that money you know there for sure so the plan which is kind of complicated because the as a public auction the funds are required to go to the u.s treasury treasury unless legislation directs elsewhere um the fcc has arranged the auction the auction such that winning bidders for the spectrum, so like I said, Verizon, T-Mobile, whoever else bids for the spectrum and wins it, they have to pay the satellite operators these funds to reimburse them for their replacement satellites and for the accelerated clearing payments

on top of their auction price. So the FCC, my understanding is they've tried to delineate between those two and say, no, no, no, it's not proceeds that are going to the operators anymore because we can't do that. The bidders just have to pay them directly. Congrats. You have won the opportunity to pay Intel set $5 billion. Exactly.

Cheers. I guess that gets around a lot of messiness in the u.s treasury though um you know it it sets it up so those incentive payments are there as long as the auction goes on it it should but it's still i mean kennedy is still watching this closely other senators have been very involved in this given all the twists and turns of this saga over the past couple of years um to see a legislative change especially if there was something that really rocked the boat like buying i don't know european in orbit spares or something i could see that um maybe triggering legislation I mean Ajit Pai has

already between C-Band and Legato and other things has gotten a lot of attention in Congress for making decisions and standing by them even when you have members of Congress that are very

that are very like leery uh, that are very like weary of them, uh, or just straight up opposed to them. Um, he's really stuck with his gut over these things and gone with his convictions, but that's not to say that, uh, as a government agency,

they couldn't be legislatively ordered to do something that they are not. Yeah. Or they are not yeah or they are subject to the executive branch which is about to go on under an election here so that too there's a lot more messiness ahead on that front okay you mentioned legato do you have like three minutes more before you get back to work because i haven't mentioned this at all on the show but this has been i've been reading uh you you and Sandra Irwin have been writing articles about this for what feels like months now. Essentially, Legato is a company that is trying to provide 5G terrestrial service. And they've been given, is it L-band spectrum, I think it is?

Yes. That is right up next to the GPS spectrum that we use today. the GPS spectrum that we use today. The Department of Defense and people in Congress that are tightly associated with the Department of Defense have been very angry about this, saying that it will impact GPS signals and cause all sorts of problems for not only private users, but military and government users as well. What is the long and short of this? Should we be worried about it? Should we not be worried about it? Please tell me how to feel. I don't know if I can tell you how to feel, but I can tell you. So the legato order, it has met a lot of congressional resistance.

And because of concerns that it will affect GPS, And because of concerns that it will affect GPS, there are a lot of precautions that are being put in the way to prevent legato from interfering with GPS. That being said, it seems like everybody has a study and one study says one thing and one study says another thing. So I guess depending on your study, you can say that it's going to be the end of GPS as we know it, or it's going to be non-existent. And why are we making so much fuss about this in the first place? I think that the end of GPS as we know it is really extreme. I've seen some figures about this costing billions of dollars. And I am, again, no engineer, but I think that's fairly ridiculous. And the, the reasoning that

I'll give is, um, the, so three of the protections that I'm aware of, the first is a 20 megahertz guard band, or it might be 23 megahertz. I think it's 23 megahertz that separates Legato from GPS. So we were just talking about C-band. There is a 20 megahertz band prepared to protect satellite signals in C-band from future 5G ones in C-band. Those are going to be far, far noisier than anything Legato does

because Verizon 5G in C-bandband it's going to be a lot of users legato is talking about the internet of things in l-band which l-band is a much narrower spectrum like iridium's top service goes up to like iridium service was projected to go up to 1.4 megabytes a second um like your phone is going to be way just like blistering faster than that um so like there's no way they can even reach close to the threshold as far as noise is concerned or interference as regular 5g um they're just but they have the same level of protection as satellite operators do like g GPS is about as protected as far as a distance thing from Legato as C-band satellites will be from the rest of the world using 5G.

So there's that. The second is there was a massive power reduction requirement stipulated on Legato. So it's like 99 fainter their signals than they were under a previous design and then the third and i don't know this one as well but legato is going to have to um like they're required to address any interference very quickly they may even be like required to replace infrastructure that they ruin um all of that doesn't bode well for them setting up a successful business if they had to keep paying out of pocket for

infrastructure that they damage which um also incentivizes them to play well with their neighbors so there are all of those things to uh to consider I have heard that maybe the highest precision GPS gear, which would be in military sensors, might be more sensitive to legato. Again, I don't know. I haven't followed the military side of legato as much, so I don't know how true that is. I think an interesting detail is Iridium says

that their spectrum spectrum so they're a commercial operator that also uses lband uh they say that they have only one megahertz separation between them and legato and that seems very very close so they have voiced concern about interference um i keep bringing up metaphors i'm assuming you've heard the frat house metaphor for this one. I don't think I have. Okay. So the people who don't like legato compare the noise that legato will create. Basically, they're in the spectrum nearby, and they say that having legato next to whoever, say Iridium or GPS, is like putting a frat house next to a library. It would create so much noise that you wouldn't be able to get anything done and that's that's the interference we're talking

about it's you have a ton of signals you have all this 5g stuff even if it's internet of things iot it's still there it's close we don't want to hear it we don't want to deal with it and so that's that's the metaphor that keeps getting thrown around um iridium's concern is that because they are so much closer they'll get so much more noise that it would drown out their signals and um matt dash i would have to dig up his tweet he tweets a lot more than wyler So I think it would take a while to find this, but we put out a fairly, um,

fairly bold statement. What's the word I'm looking for? Aggressive. Maybe like Matt Dash isn't really an aggressive person, but he was, he's got a couple of rippers in his tweet, in his tweet. And so,

you know, he basically like says that like legato he basically calls legato like a fake business at one point and I do remember that I don't remember how long ago I think it was right before they got their FCC approval but he

didn't believe that they were even really I think there's some speculation that legato might just be trying to make a spectrum play where they would like set up the spectrum, reuse, and then hopefully get it bought or get bought, something like that. We will have to see that one because the Legato issue has gotten so much more attention from Congress.

I wouldn't be surprised to see a legislative answer or something that forces the FCC to change its mind. The FCC had been talking about Legato for, I think it was 17 years is how long this has been before them. Yeah, Jesus. So, and that is part of why Pai and the FCC leadership, when they voted on this, why they've stuck to their guns over it, because they say basically in a nutshell, we've been studying this for so, so long that yes, we did get it right.

This decision can drive a car now in many states. Exactly. It could almost vote for itself. It could be appointed to be the FCC chairman at some point in the next year. So that's the that's Legato in a nutshell. I feel vindicated for having not brought this up on the show until this point, because it's just it feels it feels like the noise around it is outsized for the impact like i there's something that has been curious to me is just like why is this still so loud and so noisy and a thing that everyone's arguing about and it it's still confusing to me so i will continue to watch but probably not really talk about it on the show to be honest yeah it's huge it's messy you have a lot of very

polarizing opinions over it um we'll see what happens i i uh again i think that i mean hopefully it wouldn't take until like legato turning on service to see but there have been i guess the number of studies that have been done like the fact that there are so many studies and people going back and forth over what study meant what and all these things, it makes for a very confusing situation. But at the end of the day, Legato has a geostationary satellite in orbit

capable of doing L-band services over the Earth. As long as it's up there, I'm sure they're going to try and find a way to use it. It's a thing to argue about until that. Well, Caleb, thank you so much for coming on. I feel much smarter about all these situations that we're talking about here. So where can everyone follow you and follow along with what you're writing if they haven't read your wonderful words yet? Thanks.

Well, you can find me at Spaces.com, writing there. You can also find me on Twitter at Chenry underscore SN, where I will tweet a various number of launch things and satellite things and mega constellation things. He tweets more than Wyler, less than Desh. Exactly. Perfect. Well, Caleb, thanks again. I miss you. I hope to see you soon. And I'm sure you'll be back on in not too distant future with how much is going on here.

And congrats on your upcoming kid. I think you guys are having fun. Thank you so much. Yeah, I talked about that last episode. So we're about a month out from that. So it should be a good time. Very cool. I always love having Caleb on the show.

He helps me sort out a bunch of thoughts on topics that are really dense and very unique. And he is quite an expert on. So I'm always a fan when we can have him on. And I always love chatting with him because he's just the best. So thanks again to Caleb for joining me today. And I can only do these shows with the help of all of you out there listening. This is an entirely listener-supported show. I don't take any funding from anyone else.

I don't have any advertising. It's literally just you out there. If you like what you're listening to, head over to mainenginecutoff.com support to join the group of 435 of you that are doing that every single month. I'm so thankful for your support. And this episode was produced by 38 executive producers. Thanks to Brandon, Matthew, Simon, Lauren, Chris, Pat, Matt, George, Brad, Ryan, Nadeem, Donald, Lee, Chris, Warren, Bob, Russell, John, Moritz, Joel, Jan, Grant, David, Eunice, Rob, Tim Dodd, The Everyday Astronaut, Frank, Julian and Lars from Agile Space, Tommy, Adam, and seven anonymous executive producers. As we talked about last time on the show, if you head over there and give $3 or more a month, you get access to Headlines, which is

a special RSS feed where I do a full podcast every single weekend for you, running through the stories of the week, giving some thoughts on things that might not make it here on the main show. So it's a great way to stay up on any and all space news happening in the industry. So it's a great way to get a little extra content in your life and help support what I'm doing here. So head over there if you want to check that out. And as always, you can email me Anthony at mainenginecutoff.com or hit me up on Twitter at WeHaveMiko. But until next time, thanks for listening and I will talk to you soon. Bye.