By Gerry Oberst

A conceit of some regulatory bodies, especially in the more heavily-congested European countries, is that satellite services are, somehow, just for rural areas. This line of thinking shows up, from time to time, among regulators who conclude that they have nothing to gain from allocating additional spectrum to satellite services.

Satellite companies face this perspective in Europe more often than in the United States. For example, a report from the European Radiocommunications Office (ERO) earlier this year, in preparation for WRC-2000, attempted to contrast support for satellite services in Europe with those in the United States, based on relative population densities. It said that “Europe is very densely populated with many national borders and differences. Terrestrial solutions are easier to realize in this environment.”

This, of course, is nonsense…

Yes, on average, population density in Western Europe is roughly twice that of the United States. But the ERO is supposed to speak for all countries across Europe, a number of which have population densities lower than the U.S. average. In addition, from Spain to Sweden, and in many other European countries, there are large regions without substantial terrestrial telecoms facilities.

And the many national borders in Europe are actually a reason for satellite services to thrive, rather than suffer, in comparison to terrestrial solutions. European leased lines that cross national boundaries are usually more expensive than lines of similar length in the United States.

This terrestrial bias was most recently shown by the U.K. competition and telecoms regulators, OFT and OFTEL. In an April 2000 paper on competition in e-commerce, those agencies jointly issued an unnecessarily limited assessment of the availability of satellite technology for higher bandwidth access. The paper referred to various technologies, including cable systems and DSL using copper terrestrial lines. Their assessment was that satellite services with data rates similar to DSL are “not yet widely available” and that their likely use is for “rural residential and businesses.”

You would think that these worthy regulators have not noticed the enormous population of digital satellite services already provided to U.K. consumers.

The satellite industry was not going to take that assessment lying down. The European Satellite Action Plan Regulatory Working Group (SAP RWG) submitted a quick paper noting that satellite providers will offer broadband services within the same timeframes as the other technologies described in the consultation. Those other technologies also are “not yet widely available.” Moreover, those other technologies may have even longer timeframes for rollout to substantial market populations than satellite-based applications.

Satellite companies already are providing advanced services, including high speed Internet connectivity, not necessarily just in the future. New systems, such as Ka-band satellites, are on the horizon, but a variety of advanced services can and are being offered by today’s fleets.

In particular, argued the SAP RWG, it is incorrect to say that satellite services are useful mainly for rural applications. Across Europe, the penetration of satellite services in TV households in metropolitan areas remains substantial. There are modestly lower penetration rates in the largest cities, but still significant levels of service in the central cities, and very significant penetration in the towns and villages outside those cities. Anyone who has seen the sprouting of satellite rooftop antennas in even the most densely populated European cities would beg to differ with the view that satellite is mainly for “rural areas.”

On the other side of the Atlantic, recently released figures show that 60 percent of all U.S. satellite direct broadcast subscribers have terrestrial cable available to their household. This is ready proof that satellite services are used even in densely populated areas in competition with terrestrial infrastructure.

The vast majority of digital TV today, in Europe, is provided by satellite. Digital service that is provided by terrestrial services depends on satellite-based distribution and backhaul channels. Even as digital cable and other terrestrial services expand, satellite-based services are an important part of the mix.

The same role for satellite service is being seen for Internet applications. Satellite operators are in the forefront of providing distribution capacity, caching services, links to ISPs and other key elements of the Internet service chain. On several continents, satellite interactive links are being developed.

Satellite based interactive networks and services will offer substantial advantages in all parts of the world–regardless of population densities. Even if it were true that their main advantage is in rural areas, this would be a substantial reason to foster the development of satellite services as a tool to ensure that the benefits of e-commerce are available to all. Satellites provide the same level of service to “rural areas” as in the cities at no incremental cost disadvantage, thanks to their relatively large geographical coverage. The comment was made at a satellite broadband conference in Paris earlier this year that “satellite services are not only for niche applications, since their footprints cover all of Europe; to the contrary, it is terrestrial services that are patchy.”

Those regulators who say that satellite service is for rural areas should take another look. Satellites are also for the cities!

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