(Bloomberg) — Intelsat SA and other satellite providers would share as much as $14.9 billion under a proposal from federal regulators to compensate them for giving up airwaves in an auction to wireless companies.The U.S. Federal Communications Commission announced Thursday a plan that would provide $9.7 billion in compensation to Intelsat, SES SA and other companies if they hit deadlines for leaving the airwaves quickly, and another $3.3 billion to $5.2 billion to pay for costs of making the switch.“It’s only fair that every single reasonable cost should be covered,” FCC Chairman Ajit Pai said Thursday.At stake is what portion of auction proceeds, projected to reach tens of billions of dollars, should go to satellite providers including Intelsat and SES, both based in Luxembourg, and Eutelsat SA.The satellite companies have proposed giving up part of the airwaves they use to beam TV and radio programs to stations, and to continue serving customers on airwaves they retain. The swath at issue is known as the C-band, and regulators are eager to free it to carry traffic for fast new 5G networks.Mobile providers such as Verizon Communications Inc. and T-Mobile US Inc. are expected to bid for the freed frequencies for the 5G networks that will underpin a variety of uses from autonomous vehicles to remote surgery. The largest U.S. mobile providers Verizon, T-Mobile and AT&T Inc. all issued statements lauding Pai’s proposal.Pai collected support from both other FCC Republicans, giving him the majority needed to carry a vote set for the commission’s Feb. 28 meeting. Pai said the auction of the airwaves swath, known as the C-band, is to begin Dec. 8.The C-band airwaves presents an “enormous opportunity,” Pai said. A public auction is the “best approach” and the “best bet to ensure fairness,” he added. Satellite providers earlier lobbied to sell the airwaves privately, but were rebuffed by Pai.Wall Street had been fretting that a plan unsatisfactory to satellite operators would prompt them to walk out of the negotiations.Intelsat soared the most ever in intraday trading, rising as much as 61% before paring gains and trading up 3.8% to $3.86 at 3:22 p.m. in New York. Intelsat bonds led high-yield gains Thursday with its 9.5% notes due 2023 rising 13 cents on the dollar to 66 cents, the most on record. Its 8.125% bonds due 2023 jumped 11.6 cents on the dollar to 54 cents.Satellite providers agreed to the payments plan in private talks with the FCC, two people familiar with the matter said.FCC Commissioner Michael O’Rielly said he was “pleased that an agreement was reached that should allow them to fully and voluntarily participate in this transition.” Commissioner Brendan Carr called it “the right decision.”Intelsat CEO Stephen Spengler in a statement called Pai’s action “a significant milestone” and said the company looks forward to reviewing the proposed FCC order that is to be released Friday.Intelsat had hired bankruptcy experts at Kirkland & Ellis LLP to prepare for possible restructuring in the event it wasn’t able to increase the amount the FCC had discussed, one person, who spoke on condition of anonymity because the matter isn’t public, said Wednesday.The C-Band Alliance lobbying group that includes Intelsat, SES and Telesat Canada, called the plan “a significant development.”“The CBA is pleased with Chairman Pai’s statement,” the alliance said in a statement posted online. “The CBA looks forward to reviewing the draft order.”FCC Commissioner Jessica Rosenworcel, the agency’s senior Democrat, said in a statement Thursday that she is concerned that Pai is “putting the future of 5G service on shaky legal ground” by ignoring Congress.Senator John Kennedy, a Louisiana Republican who has opposed a big payout for satellite providers, said in a statement that “the sum Chairman Pai suggested giving to foreign satellite companies is much too high.”Kennedy is among sponsors of a bill that would allow $6 billion for satellite providers, and otherwise use money from the auction for deficit reduction, advanced 911 emergency calling services and rural broadband service.Pai’s announcement shows the need for legislation, House Democratic leaders said in a statement. Frank Pallone, of New Jersey, chairman of the Energy and Commerce Committee and Mike Doyle, of Pennsylvania, chairman of the House technology subcommittee, said the plan is vulnerable to litigation.“Without congressional action, this auction will not fund critical public safety infrastructure or bridge the digital divide” that leaves some people with inadequate internet access, Pallone and Doyle said.(Updates with FCC majority support starting in fifth paragraph)–With assistance from Scott Moritz and Allison McNeely.To contact the reporter on this story: Todd Shields in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: Jon Morgan at email@example.com, Elizabeth WassermanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.