Wireless: Regulations Student Papers: Spooner - California Western
Wireless: Regulations Student Papers: Spooner

United States Position Paper:

In Search of MEOís LEOís & GEOís Regulatory Structures for Satellite Technology

by Edward Spooner

       With a little luck and allot of compromise, the world will soon be truly interconnected for the first time. As low-earth orbiting (LEO) and medium-earth orbiting (MEO) satellite systems begin to offer services to every major city and remote location alike, tremendous opportunities will become realizable in areas such as telemedicine, improved education, control of global health problems, emergency communications, and many other forms of commerce. Poor nations will have a means to jump into the 21st century while richer nations can expand and diversify their markets and services. Unfortunately, great strides in human advancement do not usually happen without hurdles to overcome. In particular, countries have voiced social, political, and cultural concerns regarding the possible domestic effects they would incur with world interconnection of such great proportions.Additionally, implementation of LEO and MEO satellite services will necessitate one central and crucial element to effectuate its realization - - money.

       Accordingly, this paper briefly focuses on the legal, economic, political and policy concerns of the United States as they apply to the emergence of LEO and MEO applications in the international areas of (1) licensing and privatization, (2) incentives and challenges in deployment and space debris, (3) the future role of the International Telecommunications Union (ITU), COMSAT and Intelsat, and (4) protections and procedures for dispute resolution.

Licensing and Privatization

       The primary objective of U.S. satellite policy is to expand and foster the greatest amount of availability and diverse services to domestic telecommunication users.The House of Representatives has stated as a goal in H.R.1872, "to encourage competition and privatization of international satellite organizations."In fact, promoting competition through the privatization of service providers has historically resulted in lower prices, higher quality, and more innovative methods in providing service within the United States.Additionally, privatization has played a crucial financial role in the implementation of satellite systems.

       LEO and MEO systems consequently depend on the dynamic, innovative and financial resources of private industry. Privately run programs such as Iridium and Globalstar are just two of many examples where private industry giants like COMSAT, Motorola, AT&T, and Hughes are leading the way.As a result of this reality, the ITU strategic plan for 1999-2003 is steeped with implementation and procedural processes to promote open competition in the telecommunications arena.For instance, on December 1, 1998, "New Skies" marked the beginning of partial privatization for intergovernmental treaty organizations. Headquartered in the Netherlands, New Skies is a spin-off of Intelsat. COMSAT applauded the announcement stating that "the privatization process is driven by market realities, and accomplished through cooperative efforts between owners".Following suit, Inmarsatís council announced its intent to fully privatize by April 1999, and to go public by 2001.

       Though privatization appears to be the way of the future, several key factors must be addressed in order to maintain pro-competitive growth. Countries should strive to eliminate, 

(1) unnecessary obstacles such as electromagnetic interference of allocated spectrum use, 

(2) failed recognition of standardized public network safety standards, 

(3) participation in discriminatory treatment of foreign applicants by way of non-transparent assessment procedures used by their administrations, and 

(4) where governments allow for monopolies in their telecom networks, those monopolies must be prevented from engaging in anti-competitive behavior that negatively affects outside parties.

        Another area needing attention is the first-come-first-serve slot reservation process currently used by the ITU for geo-orbits. This system has resulted in "slot hoarding" by nations large and small.While this problem also pertains to the U.S., it should be noted that although the U.S. has the most slots on reserve, it also has the highest percentage implementation rate (orbital efficiency) of any other country.Though the ITU is addressing this problem in "Resolution 18", several inherent proposals are improperly focused. One such proposition is the notion of "financial due diligence" as recommended in the final report. Placing monetary enforcement in the hands of an intergovernmental body is not generally preferred by most member states of any international organization. While it is true that applying administrations may internalize the costs of their filings, this will unlikely retard the current hoarding situation, which is principally driven by separate issues related to market factors. The Special Committee tasked with presenting a workable solution should not only consider deterrent policies to prevent hoarding, but, rather, it should also consider a reward-based system for those applicants who achieve high orbital efficiency. The objective should not be overlooked in that maximum orbital efficiency is the goal; not punishing applicants.

Incentives and Challenges in Deployment and Space Debris

       With increased privatization and subsequent competition, market share has become a growing concern for service providers. Systems such as Iridium, Globalstar, Odessey and others will need to find niche markets in order to avoid competing directly against each other.While individual satellite systems are inherently limited by physical constraints, providers will nevertheless need to be as flexible as possible in tailoring their services to meet specific customer needs. Political and economic concerns will need to be addressed by providers as they relate to operational issues such as earth stations, gateways, and PSTN interconnection. Social and cultural concerns regarding material content and data security will also require diplomacy and understanding if open market access is to be achieved. In order to best understand these issues, all private service providers need to attend intergovernmental forums where established rules of protocol and mutual respect allow for differing nations to openly express their views and concerns in allowing open-market access. Only by fostering trust between parties can compromise and substantive agreements truly be made.

       As for the United States, key issues should center around ensuring fair competition and geographically secure gateway locations. The United States, in an FCC "Notice of proposed rule making", voiced concerns regarding competition and policy determinations in allowing non-U.S.-licensed space stations to provide international service in the United States.One such anti-competitive concern is the effect of allowing unrestricted domestic access to non-U.S. systems. As an example, the FCC stated, "[I]f a non-U.S. satellite can provide service on international routes that cannot be served by U.S. satellites, then the non-U.S. satellite will have a competitive advantage over its U.S. counterparts on all routes because it will be able to offer its customers a wider range of [services]".Thus, the U.S. needs to examine competitive practices in the domestic market as they relate to non-U.S. satellite services and all licensed routes those systems use to provide international service.

       As gateways are expected to service multiple countries, the U.S. should strongly recommend that their geographical placement be within defensible boundaries of countries willing to enter multilateral agreements with all concerned countries using that gateway. Additionally, countries petitioning for gateways within their boarders should have good current and historical standing with organizations such as the United Nations so that international consensus on adverse gateway management has an immediate forum for international resolution.

       Issues concerning space debris are inherently problematic. While the Outer Space Treaty requires registry and retained jurisdiction over objects launched into outer space, those very requirements create limitations to effectuate greater responsibility on spacefaring nations.The central problem is three fold. First, there is no general consensus as to the definition of space debris.Second, only a small percentage of the thousands of objects currently being tracked can be identified to an owner.And third, liability cannot legitimately be asserted without an identified responsible party. Even if ownership is known, however, providers should be able to mitigate liability caused by debris with all those benefiting from the utility sought. To hold one party liable for an object that services many countries and thousands of people strains common principles of equity. Rather, under these circumstances, problems associated with space debris should be handled in terms of passive satellite construction. NASA guidelines should therefore be made a mandatory, which requires the depletion of on-board energy sources, limited orbit life after mission completion, use of disposal orbits, and altered design criteria to mitigate unexpected impacts.

Role of the ITU, COMSAT and INTELSAT

       In 1997, the ITU held the first World Telecom Policy Forum (WTPF) specifically directed at global mobile personal communications (GMPCS). As a result of the WTPF, sixty-seven signatories (including all major U.S. telecom organizations) agreed to a GMPCS memorandum of understanding (MOU). The MOU framework includes arrangements for mutual recognition of Type Approvals for GMPCS terminals, simplified licensing, common methods to identify GMPCS terminals, and access to traffic data by authorized national authorities.Accordingly, the United States should fully support ITU integration of GMPCS policies into the emerging LEO and MEO management systems.

       The privatization of Intelsat must proceed cautiously when viewed in terms of fair and open competition. One major concern is to what degree new spin-off private entities are actually government backed, and, as a related matter, to what degree are newly formed private subsidiaries owned by Intelsat or other nations under the Intelsat treaty.While the U.S. strongly supports private industry participation (e.g. COMSAT, Motorola, etc.), quasi-private enterprises must be carefully evaluated to ensure that a structure of fair open-market competition is maintained.

Protections and Procedures for Dispute Resolution

       As outer space does not readily allow for territorial claims, the extension of U.S. intellectual property (IP) law into this area is highly improbable. While one step towards solving IP rights in outer space is the Patents in Space Act, other forms of IP such as trade secrets may prove to be more important.An agreed upon forum for dispute settlement is therefore quintessential in promoting research and development as applied to LEO and MEO systems.

       Perhaps the greatest individual contribution to the stability of global economy is the World Trade Organizationís (WTO) Dispute Settlement system. In conjunction with input from the Uruguay Round agreements, stressing even more structured processes and defined procedures, the WTO focuses itís dispute resolution system around fundamental principles of equity, speed, effectiveness, and mutual acceptance.Accordingly, the WTO Agreement on Basic Telecommunications came into force in 1998, which helped to solidify an official working relationship between the WTO and ITU bodies. Agreement in favor of the relationship appears widespread within the ITU and has strong support by the Director-General of the WTO.As such, the United States should support continued efforts by the ITU and WTO in working together to establish the fundamental principles of dispute resolution at an intergovernmental level.


       Recognizing the need to create market expansion and diversity in LEO and MEO services, the United States should support all efficient, uniform, and transparent practices that support effective and fair competition. Factors to be carefully watched are: regulation, conformity assessment, privatization, pricing, monopolies, tariffs, unnecessary obstacles to users, environment, and dispute resolution. Only through open-markets can the world efficiently move towards expanded availability and services, which benefits everyone.