TORONTO — The U.S. telecommunications regulator is proposing to revamp filing procedures for new satellite systems to cut costs and complexity for satellite operators and reduce their incentive to seek a regulatory home outside the United States.
In a notice of proposed rulemaking issued Sept. 30, the Federal Communications Commission (FCC) proposes to adopt many of the proposals it has heard from satellite operators in the two years since the last regulatory reform was undertaken.
While FCC backers say the agency should be applauded for insisting on strict satellite-registration standards that should be adopted by other nations, others have said this is a lost cause. Hosting satellite regulatory filings has become, in some jurisdictions, such as Bermuda, Cyprus and the Isle of Man, a competitive business.
The FCC wants to make it quicker and easier to file for a new satellite orbital position and related broadcast frequencies without inviting Potemkin village-type proposals that have no purpose other than to warehouse spectrum without using it.
At least one of the FCC proposals will not save money. The agency proposes that the bond put up by prospective satellite operators — $3 million for geostationary-orbiting satellites, $5 million for nongeostationary systems — be adjusted for inflation. It has stood at the current levels for 10 years.
Operators get the bond payments refunded in slices as they pass satellite construction milestones and send the FCC proof of the project’s advance.
How much proof is enough? The FCC will consider dropping its requirement for massive engineering paperwork in favor of a simpler certification attesting to the fact, for example, a satellite construction or launch contract has been signed.
One proposal that should better position the FCC as it vies with other nations as regulatory hosts for satellite systems relates to what is required when an applicant makes its filing.
The FCC signs off on satellite systems and then forwards them to the International Telecommunication Union (ITU), the Geneva-based United Nations affiliate that regulates wireless broadcast frequencies and orbital slots.
The ITU operates on a first-come, first-served basis. When two filings propose to launch satellites near each other using the same frequencies, the one that arrived earlier at the ITU has priority.
In the current practice, the FCC submits filings to the ITU only after the FCC’s own relatively rigorous license-application procedure is completed. The FCC requires more information from a prospective licensee than does the ITU.
Satellite fleet operators have told the FCC that this can put U.S. applicants at a disadvantage. An FCC public regulatory procedure can be spotted by another operator, which then can use a more-lenient regulatory host to file to the ITU, beating the FCC licensee to the table.
U.S. satellite-television provider DirecTV Group of Los Angeles told the FCC that this kind of “claim jumping” happens in the real world and can be reduced if the FCC would accept a streamlined license application and then take that application to the ITU in a hurry.
The U.S. agency, acknowledging that the current rules “may deter interested parties from filing … applications with the Commission,” has agreed to lighten its requirement for satellite filings to permit swift passage to the ITU’s master registry.
The FCC operates on the first-come, first-served basis as well, and the agency does not much like the system. There have been cases when one applicant beats a competitor to the FCC’s electronic-filing registry by only a few minutes.
The problem is that the U.S. Congress has barred the FCC from auctioning orbital slots and frequencies, a practice used in many nations, most recently in Brazil.
But if auctions are off limits, the FCC still wants industry to propose some other system to prioritize applications.
The world’s two largest commercial fleet operators, SES and Intelsat — both headquartered in Luxembourg but with large U.S. operations, and both experienced in using other nations as regulatory hosts — applauded the FCC move.
In an Oct. 2 statement, Intelsat said: “Given the highly competitive global communications marketplace, Intelsat greatly appreciates the Commission’s efforts to ensure that its rules and policies do not place an unnecessary regulatory burden on U.S.-licensed satellite operators.”
SES, in an Oct. 1 statement, said: “SES applauds the Commission’s continuing efforts to streamline its satellite licensing rules. The Commission’s last revision of these rules in 2012 was a good start, but left open a number of satellite industry consensus proposals for a later proceeding. SES is looking forward to the Commission’s consideration of these and other proposals in the Further Notice of Proposed Rulemaking.”
The FCC has set a 45-day deadline from Oct. 1 for comments on its proposals, with responses to comments due 30 days after that.