[Satellite TODAY 06-18-13] The U.S. Federal Communications Commission (FCC) recently launched an inquiry into allegations that multiple satellite fleet operators, including Intelsat, have been purportedly abusing their market position.
 

    Concerned with overall fixed-satellite services (FSS) market competition, the inquiry “seeks to address the question of whether satellite operators unfairly warehouse orbital locations through the use of: (1) gaps in service, (2) substituting older replacement satellites, (3) license extensions, and (4) underutilized satellites,” according to Chris Quilty, senior vice president with Raymond James in a recently issued report.
 

      A few years ago when the bidding process for military Commercial Broadband Satellite Program (CBSP) changed, more satellite operators were provided with an opportunity to bid, which of course heated up industry competition. As a result, according to Quilty, the inquiry was initially prompted by disgruntled channel partners who lost a large U.S. Navy contract to Intelsat more than three years ago.
 

       “The inquiry was initiated in direct response to comments made in the Orbit Act, Eleventh Report, released in June 2010, which is an annual report filed by the FCC pursuant to the Orbit Act of 2000 that privatized both Intelsat and Inmarsat,” Quilty said.
 

     While the purpose of the Orbit Act reports are to determine the status of competition for domestic and international satellite communications services, Quilty notes that sometimes they have served as a sounding board for disgruntled competitors.
 

     “Such is the case with the current inquiry, which was initiated in response to Orbit Act protests lodged by four of Intelsat’s partners in April 2010. Three of these protestors, Harris CapRock, Artel, and Globecomm, had just recently lost a more than $500 million U.S. Navy contract bid [CBSP program] to Intelsat’s wholly-owned government services subsidiary, Intelsat General,” Quilty said.
 

     Ironically, Intelsat’s decision to sell end-to-end solutions ultimately resulted in increased competition with its own customer base. The decision was a competitive surprise, because it marked a change in Intelsat’s policy to aggressively pursue end-to-end solutions, according to a source familiar with the inquiry.
 

    Harris Caprock declined to comment on the allegation that their comments to the FCC were retaliatory for losing a contract, but said the company takes notes of the time frame of the FCC inquiry. 
 

      “More than three years have passed since [our] comments were filed with the FCC. We are now part of Harris Corporation and are focused on other business matters. Harris CapRock supports level playing fields in all the markets we serve, and believes that competition benefits customers by driving innovative, cost-effective solutions,” Harris Caprock said in a written statement.
 

      Globecomm could not be reached for comment prior to publication.
 

     SatelliteTODAY.com reached out to FCC officials multiple times citing the ongoing inquiry from June 8 to June 18 but the FCC declined to comment.
 

     In the meantime, Intelsat contends it has promoted healthy market competition and has been fully cooperating with the FCC inquiry. “There is no shortage of evidence supporting our view that the satellite industry is fully competitive, including the number of new entrants launching satellites into orbital locations over the past several years,” Intelsat officials said in a written statement noting that they will “provide comments under the NOI [notice of inquiry] in due course.”
 

     Intelsat also contends that their decisions regarding the deployment of satellite assets are based upon a competitive environment, but said that the time has come to change American regulations. “It is time for Congress to consider repealing the Orbit Act’s obsolete reporting requirement,” the statement said.
 

     But according to the FCC, the very purpose of the Orbit Act is to “promote a competitive global market for satellite communication services for the benefit of consumers and providers of satellite services.” The act requires the filling of an annual report to U.S. Congress on the status of satellite market competition.
 

     While Intelsat and the FCC exchange words, Qulity went one step further and made allegations of his own, claiming the FCC inquiry was also timed to influence the bidding process for a 10-year, $5 billion dollar contract regarding a future comsat services acquisition, announced back in August 2009 as a joint effort between the GSA and DISA.
 

     According to a FCC report to Congress in 2010, Intelsat privatized and became a U.S. licensee back in 2001 when it transferred its assets to a commercial corporation. In 2006, the FCC approved the merger of Intelsat Holdings with PanAmSat Holding Corporation, granting applications for the transfer of control to Intelsat. With the support of the U.S. State Department in 2008, the FCC released an order modifying certain space station licenses held by Intelsat after consultation with NTIA. And since June 15, 2009, Intelsat has filed a number of requests for license authorizations and modifications.  
 

     Meanwhile, according to the June 2013 inquiry, “CapRock has expressed concern that failing to replace retired satellites on a timely basis does not reflect current technology. This could preclude new or existing satellite operators from building and launching new spacecraft that can offer the benefits of competition and advanced technology,” the inquiry states.
 

      Regardless of the reason or alleged politics behind the inquiry, the FCC is asking the satellite industry for help, providing input on proposed regulations.
 

      “We seek information that would be useful in addressing: (a) gaps in service; (b) older replacement satellites; (c) license extensions; and (d) underutilized space stations. In this regard, we ask for a description of the factors that satellite operators consider in managing their satellite fleets, including: (i) when to de-orbit or relocate an in-orbit satellite; (ii) when to launch a new satellite and what technology to incorporate into the new satellite; and (iii) when to relocate an existing in-orbit satellite to serve as a replacement. We also request commenters to provide examples of the role that these factors play in the decision-making process,” the inquiry states.
 

     The FCC is asking if they should propose new regulations, including rules that would allow the commission to expedite consideration of requests for emergency replacement satellites. The FCC has compiled a full list of issues it is currently considering. [Click HERE to view the complete list/full copy of FCC inquiry]
 

     “We invite comment from space station licensees, customers and other interested parties on the various proposals addressing the vertical foreclosure and warehousing issues raised in this notice. Commenting parties are asked to explain their position in detail. Commenters are also invited to recommend alternatives,” the FCC said. Comments may be filed electronically. [Click HERE to file comments.]