by Gerald E. Oberst Jr.

Satellite broadband service was the flavor of the month this summer in London. Two separate conferences, organized by IBC and IIR, explored this topic in consecutive weeks. Many thoughts were shared, and many issues were explored, including among them the substantial regulatory issues the industry will face.

Speakers from Brussels, Washington, DC, and Geneva traveled to London to present the latest regulatory perspectives. Among the issues on the table were basic regulatory policies on content, challenges that could come up at the next ITU world radio conference (WRC 2000), paper satellites and access to spectrum in general.

A clear theme from the conferences was that broadband satellite business plans rely heavily on continued growth of Internet traffic and expected new digital services. The implication of this theme, however, is that any roadblocks to this growth-including regulatory problems-could undercut the business case for the new satellite systems. Companies that are building multibillion-dollar systems premised on this growth have to pay close attention to other regulatory issues outside the traditional satellite arena, such as electronic commerce, privacy protection and conflicting national rules for Internet service.

Everyone assumes that growth in the Internet is inexhaustible. If these issues slow the headlong pace of Internet growth, then some satellite business plans will go up in smoke.

Speakers from most of the planned or operating satellite networks were out in force at the events. There was a lot of attention, for instance, on the competitive advantages of satellite for the transmission of broadcast and multicast multimedia content from a variety of companies eager to show they have the best product. There was focus on network architectures; how satellite services will compete with other distribution systems; and technical issues such as latency and rain fade.

Nevertheless, the business case for new networks was a major subject at the conferences, given the fact that the events were being held just as Iridium’s problems were becoming apparent. There was some notable skepticism. Industry expert Roger Rusch, president of Telastra, noted that proposals for multimedia satellites in all available bands comprised almost 1,300 satellites among the different systems. He concluded that "very few of these will go ahead."

Another key theme at both conferences was how new services would be licensed. An FCC representative described how the FCC already has licensed 14 satellite operators to provide service in the Ka-band, and has begun to process a second round of Ka-band applicants. Many of these systems propose to provide bandwidth-on-demand, interactive multimedia digital communications services, including high-speed Internet access. The focus in the United States, according to the FCC speaker, is to set "minimum rules" for prevention of interference, in order to give licensees the maximum flexibility to respond to market demands. Although the FCC primarily addresses U.S.-based issues, the FCC recognizes that with more and more sharing between satellite and terrestrial systems, these issues must be taken in a global context.

One of the key global challenges for licensing will be how to license the many small terminals that new systems propose in their business case. New services will depend on minimized coordination requirements and blanket or class licenses, rather than individual licenses that lead to big regulatory burdens.

This issue has been taken up by the satellite industry in both Europe and the United States, where companies are arguing for simple licensing structures. This new licensing approach will be a regulatory change for the industry and a move away from the traditional license for each terminal.

On other global regulatory topics, a satellite coordination expert from the ITU pointed out the increasing difficulty of coordinating global networks, and the burden that the ITU staff faces in trying to meet coordination deadlines.

The European perspective was provided by this author, who described at both events the positions taken recently by the satellite industry in Europe on spectrum and regulatory issues. Among other matters, the inherently wide coverage of satellite services means the satellite industry needs access to spectrum in a harmonized manner. Satellite networks will need efficient and balanced spectrum management, including, in some cases, allocating specific spectrum to satellite services.

The two satellite broadband conferences pointed to increasing interest in how satellites will fit into the new service packages, whether the economics work, and how governments will approach the complex regulatory issues that will come at a fast pace.

The regulatory issues for satellite broadband service may be even more complex than all that has gone before-just as the Internet is so much more complicated than traditional communications. New licensing approaches are needed, and continued growth in global communications is a must for new satellite networks to become a reality.

Gerry Oberst is a partner in the Brussels office of the Hogan & Hartson law firm. His email address is [email protected].