Opening Up is Hard to Do

In March 1997, members of a U.S. satellite industry advisory panel to the U.S. Government celebrated passage of the World Trade Organization's Basic Telecommunications Agreement (WTO Agreement), both with relief and in anticipation of new opportunities. Almost 50 countries had made specific, market-opening commitments regarding satellite services. At the same time at the International Telecommunication Union (ITU), agreement had been reached on the Global Mobile for Personal Communications Services Memorandum of Understanding (GMPCS MoU). Since then, American satellite operators, most notably the GMPCS systems, have continued deployment and negotiation of access agreements. For foreign systems seeking access to the U.S., the progress has been less clear. WTO Agreement The WTO Agreement went into effect on February 5, 1998. To its credit, as early as April 1997, the Federal Communications Commission (FCC) issued a public notice outlining the information that foreign satellite systems would have to submit. That was followed by a rapid rule-making proceeding, and issuance of final rules (called the DISCO II Rules) on November 26, 1997.

The DISCO II rules set out how foreign (fixed and mobile) satellite systems, whether planned or in service, could gain access to the U.S. market. In short, foreign systems could file a "letter of intent" (LOI). Alternatively, a U.S. or foreign company could file an Earth station application to access the foreign satellites. The FCC has used a processing round procedure for anyone interested in providing a certain service over a particular set of frequency bands. All applications must be filed by a particular date in order to compare similar satellite projects. A processing round, from filing to final licensing, typically takes 3-5 years.

The advantage of the processing round procedure is that the FCC has an opportunity to sort out ostensibly similar proposals and, in recent years, can encourage the filers to negotiate orbit and spectrum sharing arrangements among themselves. The disadvantage is that the filing "windows" are seen as make-or-break deadlines, so that anyone who even thinks they might have a business plan for a given frequency band and service must submit an application by the deadline.

With that backdrop, let's examine what has happened since February 1997? So far, no foreign filer has been granted authority to provide service to the United States - while some certainly are trying. In addition, the U.S. has signed an orbit sharing agreement with Argentina, similar to agreements it has had for decades with Canada and Mexico. The agreement is a prelude, no doubt, to Nahuelsat seeking access to the U.S.

As for processing rounds, ICO Global Communications filed in the 2 GHz processing round that closed in late September 1997. So did geostationary mobile satellite provider TMI of Canada and seven other U.S. applicants. To get through to final licensing, the FCC must sort out the serious filers from the speculators; decide: whether to stage an auction among the participants, how to move terrestrial users out of the uplink and downlink bands and feederlink bands, and whether Congress really wants it to auction off portions of the frequency band into which it had planned to move existing users. All the while, the European Commission is holding the FCC's feet to the fire, reminding it of its obligations under the WTO Agreement.

The filing window for second round Ka-band systems closed in December 1997, with only one foreign filer, Pacific Century Group of Hong Kong. Ironically, it is seeking access to the U.S. from two attractive orbital locations, over which it has priority in the ITU coordination process. Yet, the FCC has licensed systems on top of those locations in its first Ka-band round. What to do? The new Ka-band processing round has not even moved to the public notice stage yet, so the public debate cannot begin.

Equally troubling to the FCC staff is that LOIs have arrived that do not neatly fit into the two tracks it set out in DISCO II. Telesat Canada is seeking to be included in the list of approved satellite destinations for U.S. Earth station operators. No filing window or Earth station application needed. KITComm, an Australian data-only L-band satellite system, filed a LOI in late January 1998, stating that its transmission would be so low-powered that it would not interfere with any other operator in the band. Therefore, a processing round was not necessary. The public notice for the KITComm LOI was finally issued in July.

In addition to these peculiar problems, the FCC staff handling satellite matters are weighted down with several other processing rounds, understaffing, and, along with the rest of the FCC, may have to move to another building in the dead of the coming winter. The bottom line While the United States has shown no sign that it does not intend to fulfill its obligations under the satellite portion of the WTO Agreement, it may be some time before authorizations to any foreign system are granted. And, the FCC still hasn't decided what to call whatever it is they will issue to foreign systems. It won't be a license, though.

Foreign Satellite Systems Filing Letters of Intent to Serve U.S.A.

*PN: The FCC issues public notices which invite interested parties to file comments or Petitions to Deny (authorization) within a specified time period, usually 30 days. Filers then have opportunity to respond and commenters can file replies. Only then does FCC staff review begin in earnest.