When the European Union amended its electronic communications regulatory framework in late 2009, it gave the EU member states 18 months to implement the new rules. That time is almost up. By May, all countries in the EU are supposed to have set up rules on spectrum management and competition that may have some big impacts on all parts of the telecoms field, including in the satellite sector.

One of the biggest impacts could be for spectrum management. The original rules adopted in 2002 already required member state national regulatory authorities (NRAs) to promote competition in their decisions on spectrum regulation. The 2009 revisions place a new and higher emphasis on competition. The revisions add a requirement that member states must review all existing licenses for radio spectrum and take measures to promote fair competition beginning from the May deadline.

New provisions in the amended EU Framework Directive on management of radio frequencies provide that all spectrum authorizations must be technology and service neutral. In other words, the NRAs are not supposed to specify the technology that operators use or the services they provide. These rules also start from the deadline.

The Framework Directive gives the NRAs updated authority to review when operators are not using their entire assigned spectrum, in order to ensure competitive use of spectrum. Article 9 includes a new provision against spectrum “hoarding.” It permits NRAs to set out strict deadlines for the effective exploitation of the rights of use and to apply penalties, including fines or even withdrawing licenses if operators do not comply.

Another new article in the EU Authorisation Directive requires NRAs to “ensure competition is not distorted by any transfer or accumulation of rights of use of radio frequencies.” This provision permits NRAs to take “appropriate measures” such as ordering a spectrum user to sell or lease radio frequencies. This authority is extremely broad.

These rules apply to all spectrum users, with no special focus on satellites. The major focus seems to be on terrestrial mobile operations, and there already are examples of the NRAs applying the competition concepts in that sector. Nevertheless, to the extent the rules cover all fields, yet give limited guidance outside the mobile sector, we have a period of uncertainty ahead as the EU member states apply the concepts to satellite operations.

Another new element in the Framework Directive calls on the European Commission to set up a multi-annual radio spectrum policy program or RSPP. Efforts are underway in Brussels to adopt the first of these programs, which may be in the final stretch of the legislative process by May.

The RSPP as currently drafted contains a number of provisions that affect the satellite sector. The document says that “affordable satellite broadband access could be a fast and feasible solution.” One provision specifically says that, if necessary, the commission is supposed to ensure availability of more spectrum for satellite services to provide broadband Internet access. Another provision would require EU countries and the commission to make sure there is sufficient spectrum for “monitoring the Earth’s atmosphere and surface, allowing the development and exploitation of space applications and improving transport systems, in particular for the global civil navigation satellite system Galileo.”

A background paper to the RSPP shows additional thinking on how it could affect the satellite communications field. A commission impact assessment published for the RSPP says that “suitable spectrum bands” for any further satellite industry expansion needs to be identified. The paper suggests that studies could be made of how satellite offerings could ensure coverage of “even the most remote areas of Europe with a broadband offering to access the Internet at a comparable price to terrestrial offerings.”

Numerous other provisions of the regulatory framework beyond spectrum rules will kick in by May. For example, there are new rules on consumer contracts, on data breach notices and measures for disabled end users. The European Commission already is warning member states that they need to get all the rules in place by the May deadline. The countdown has started, and all operators within Europe should keep an eye on how these rules are applied.

Gerry Oberst is a partner in the Hogan Lovells Brussels office.