(Bloomberg) — Intelsat SA and other satellite providers have reached a deal with federal regulators on compensation for giving up airwaves in an auction, said two people familiar with matter.The companies are seeking payment for freeing airwaves U.S. regulators want to reallocate for mobile users. Wall Street had been fretting that a plan unsatisfactory to satellite operators would prompt them to walk out of the negotiations. An accord between the two sides presumably would blunt that risk.U.S. Federal Communications Commission chairman Ajit Pai is to reveal a proposal later Thursday for a vote at the commission’s Feb. 28 meeting.Intelsat soared the most ever in intraday trading, with a gain of as much as 61%. Intelsat bonds were among the top high-yield gainers. Its 8.125% notes due June 2023 gained the most in about three years, soaring 12.6 cents on the dollar to 55 cents.Most of the stock rally evaporated after Reuters reported that Pai’s plan would be in the “single-digit billions” range.Tina Pelkey, an FCC spokeswoman, declined to comment as did Dianne VanBeber, a spokeswoman for the C-Band Alliance lobbying group that includes Intelsat and fellow satellite provider SES SA.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.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.FCC Commissioner Jessica Rosenworcel, the commission’s senior Democrat, said in a statement Thursday that she is concerned that Pai is ignoring Congress and “putting the future of 5G service on shaky legal ground.”“By doing this on its own the FCC is denying the American public what could be extraordinary benefits from the auction of public airwaves,” Rosenworcel said. “Working with Congress we can use the billions of revenues raised in this auction to do the very infrastructure projects this country so desperately needs — from deploying broadband in rural areas to updating 911 systems nationwide to solving the homework gap by expanding internet access to students across the country.”(Updates)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, Michael ShepardFor 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.