Spectrum reallocation risk

Spectrum reallocation risk refers to a satellite operator's exposure to a regulatory decision that withdraws or reassigns to another use the frequencies its business model depends on, with no technical failure of its satellites involved. Radio spectrum is a scarce resource shared between terrestrial and space uses, and its allocation shifts with the priorities of national regulators and international coordination bodies. An operator can see all or part of its frequencies repurposed for a use deemed a higher priority, typically terrestrial mobile networks, in exchange for compensation whose amount and timing may not match the present value of the cash flows it would otherwise have earned. This risk affects the value of the space asset without involving a physical loss: a perfectly functional satellite can lose most of its economic value if the frequencies it operates on are taken away. For space insurance and project finance, this regulatory peril is analyzed separately from technical risk, and is handled more through contractual negotiation with the regulator than through a conventional insurance policy.

In 2020, the US regulator ran a C-band reallocation auction for terrestrial 5G, paying satellite operators roughly $9.7 billion to clear and migrate their services into a narrower slice of the spectrum.

spectrum clearing risk, réallocation de fréquences, spectrum reallocation, clearing du spectre