Canada Revamps Satellite Regulations To Make Industry More Competitive

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LONDON — Canadian regulators on Nov. 5 acceded to satellite operators’ and users’ requests that the government reduce fees and ease coverage restrictions for satellite licensees and go to bat for them in seeking orbital slots outside Canada’s orbital arc.

In a ruling that followed a monthslong consultation with satellite fleet owners and major domestic users of satellite capacity, Industry Canada said the revamped regulations should enhance the competitiveness of Canada’s satellite sector.

One rule change for operators of fixed and broadcast satellite services would apply a stricter first-come, first-served rule to determine who has rights to a given orbital slot and the associated broadcast frequencies.

Up to now, Industry Canada has accepted the license request and permitted the licensee to maintain its place in the queue even if the application was incomplete or otherwise defective. Industry Canada then would work with the applicant to improve the filing, all the while maintaining its place ahead of others.

That will now end. Defective applications will be accorded the first-come, first-served preference but subsequently will be sent to the back of the queue.

A second reform relates to the fees imposed on licensees to permit Industry Canada to recoup its processing costs, and to reduce the number of spurious applications.

The new fee structure will impose financial charges of 120 Canadian dollars ($118) per megahertz of spectrum captured by the license. The fee will be payable in increments over three years.

Similar to rules imposed by the U.S. Federal Communications Commission, Industry Canada will require that the licensees meet development milestones to keep their licenses. For example, a license holder must demonstrate that it has signed a satellite construction contract within two years of receipt of the license. The satellite in question must be in operation within five years of license approval.

A third regulation change relates to the public service obligation of satellite license holders. Up to now, satellite operators have been obligated to spend 2 percent of the adjusted gross income of a Canadian-licensed satellite on research and development. Industry Canada said the policy “places Canadian operators at a competitive disadvantage” to foreign operators whose governments impose no such requirement. The new policy reduces the research and development spending to 0.5 percent of the adjusted gross revenue attributed to the Canadian-licensed satellite.

In addition, the requirement that Canadian satellites cover the whole of Canadian territory and reserve 50 percent of their capacity for Canadian users has been relaxed. The new rule requires that the 50 percent reserve be maintained only for the first six months of a satellite’s operational life. If after a good-faith effort no Canadian markets turn up for the capacity, the Canadian coverage requirement and the 50 percent capacity reserve will both be dropped.

Finally, Industry Canada accepted a proposal by Telesat, Canada’s biggest fleet operator, that Industry Canada agree to act as licensing authority for satellites to be operated outside the Canadian orbital arc of between 70 degrees west and 130 degrees west longitude in geostationary orbit.

The International Telecommunication Union, a Geneva-based United Nations affiliate, is the global regulator of satellite orbital slots and frequencies, and receives license requests not from individual companies but from nations that have agreed to act as home licensing authority.

Industry Canada said it will nonetheless require that operators seeking Canadian licenses of orbital slots outside the Canadian arc maintain at least one satellite in operation covering Canada.

The decisions by Industry Canada follow recommendations of an Aerospace Review report that Canadian government authorities do more to promote space-based commercial activity, in particular by favoring Canadian-registered satellites in geostationary orbit.

Telesat applauded the government’s decision.

“The decisions represent a clear statement that the government of Canada wants to ensure that Canadian operators are not placed at a competitive disadvantage in relation to operators licensed in other jurisdictions,” Telesat Chief Executive Daniel S. Goldberg said in a statement.