by Gerald E. Oberst Jr.

In mid-November of last year, the European Commission adopted a wide-ranging review of the entire regulatory framework for electronic communications in Europe. This "1999 Review" covers all EU directives and other legal decisions in the telecommunications field, with the aim of shrinking a package of 20 such "laws" down to six. This ambitious program will have substantial implications for the satellite industry, as a defining moment in the status of European regulation of the entire communication industry.

The core document released in November is the Review itself. Further, the Commission adopted a communication on the results of its earlier consultation on spectrum as well as a report on implementation of existing EU laws. This last item is the fifth in the series, and it takes to task those countries that are lagging behind even with the current regulatory platform.

The Review also recognizes these problems. For instance, it notes the wide variation in licensing schemes across Europe causes difficulties for pan-European operators, "especially in the satellite sector."

One part of the Review is worth quoting at length. It says that it is "essential to recognize the merits of pan-European licensing and possibly of radio spectrum assignment advocated by the satellite sector, further efforts are therefore required to facilitate the smooth introduction of such services which can instantaneously cover a large part of the Community territory."

The Review also has a useful perspective on the goals of regulation, arguing that "regulation should be kept to the minimum necessary to meet…policy objectives." A key sentence says, "An unduly restrictive regulatory system risks acting as a brake on investment or may fail to stimulate sustainable investment."

Translated into the licensing field, this perspective in the Review emphasizes that Europe should minimize the need for specific licenses, but should instead rely on general authorizations that do not require explicit authorization by a regulator before the operator starts to provide services.

Alas, the Review still argues that specific authorizations are needed for the use of radio spectrum and numbering resources. It is the job of the satellite industry now to convince the Commission that not all satellite spectrum users need individual licenses. There is enough experience with class licenses and similar regulatory tools to argue convincingly against a bias toward individual licensing for satellite spectrum in all situations. To be sure, individual licenses may be needed when spectrum must be coordinated, but when there is dedicated spectrum or no need for coordination, then there is no need for individual licensing.

A very important recommendation in the Review is to set up a Spectrum Policy Expert Group to ensure, in the Commission’s words,"that political and not just technical considerations drive Community policy in this area." This so-called "SPEG" (a name that only Brussels could dream up), will be designed to help balance all relevant economic, social, cultural and other factors. It would be made up of regulatory authorities and representatives from radio spectrum user communities. Thus, it can be another avenue for the satellite industry to advise the Commission on market, technical and other relevant developments and in particular on the need for harmonization.

The Review pays careful attention to convergence between different services and changing patterns of communications. It says "the race to develop new systems offering global mobility has given new impetus to the growth of the satellite sector, with the development both of narrowband personal communications services and ‘Internet in the sky’ (broadband multimedia communications)." These are important recognitions of the benefits that the satellite industry can provide.

The industry needs to be cautious about some other conclusions of the Review. As already noted, the Commission wants to consolidate many existing laws into a smaller package. It will be important to ensure that the most significant elements of the existing laws, for example, the 1996 Satellite Directive or Satellite Personal Communications Service (S-PCS) Decision, are maintained in the new consolidated laws.

The industry also should be wary of the Commission’s theorizing about "spectrum valuation," which can include spectrum auctions. The Review says there is a "general recognition that spectrum valuation is a necessary step." There also is a general recognition, however, that spectrum auctions could be the kiss of death for services that cross national boundaries, particularly for international satellite networks.

On the positive side, the Review and other documents the Commission adopted in November offer substantial opportunities for the entrepreneurial satellite industry to support harmonized and minimal regulatory burdens.

The Commission has invited comments on the Review by February 15. It also has set up a web site tailored to this proceeding, at http://www.ispo.cec.be/infosoc/telecompolicy/review99/. This proceeding is an opportunity the industry should not miss to improve the regulatory approach to satellite communications.

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