FCC’s streamlined licensing rules seen as boon for smallsat industry

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WASHINGTON — The U.S. Federal Communications Commission’s streamlined licensing rules for small satellites sailed through a vote Aug. 1, establishing a path for companies to secure spectrum rights much faster and cheaper than current regulations allow. 

Under the optional licensing regime, which stands to take effect this year, smallsat operators with spacecraft that meet certain criteria will be able to obtain a spectrum license about twice as fast and pay only $30,000 instead of nearly $500,000. A maximum of 10 satellites at a time can be licensed under the streamline process.

For the past few years, smallsat companies in remote sensing, asset tracking and telecommunications have been making rounds among federal regulators in Washington expressing a “measure of frustration” about how difficult regulations make it to deploy a low-cost system in space, said Dara Panahy, head of Milbank’s transportation and space group. 

The new licensing adopted Aug. 1 means smallsat operators won’t have to weigh those regulatory cons when deciding on the U.S. as a home country or seeking market access. 

Christian Zur, council executive for the Chamber of Commerce’s Procurement and Space Industry Council, said the licensing should be implemented quickly, but noted the FCC has a statutory 90-day congressional notice and wait period for changes to fee schedules. 

Operators will be able to use the streamlined licensing for satellites that weigh 180 kilograms or less, operate below 600 kilometers (or have propulsion) and will deorbit within six years, among other criteria.

“The FCC put a very clear box around the type of assets that this will cover, and by doing that it made the licensing process quite cheap, quite easy and hopefully quite quick,” Panahy said. 

The biggest burden, he and others said, has been the $472,000 fee to obtain a spectrum license. 

“I have talked to some of the companies that have filed outside of the United States and they have noted that the fees and cost of filing in other jurisdictions is a factor to go ahead and incorporate elsewhere,” said Satellite Industry Association President Tom Stroup. 

Experts said reducing the fee to $30,000 will encourage startups to stay in the U.S. 

How long streamlined licenses would take to process is not yet known, but the expectation is that it will be much shorter than a traditional 47 CFR Part 25 license used for non-geosynchronous satellite systems. Those can take a year or more, said SmallSat Alliance President Steve Nixon, which can be especially burdensome for startups relying on outside investment, rather than revenue, to fund operations. 

Milbank associate Lafayette Greenfield said he expects streamlined licenses could take six months or less because of their reduced oversight.

Swarm, the smallsat operator that was fined last year for launching four satellites without an FCC license, has said the slowness and complexity of the FCC’s process was partly to blame. Swarm’s hockey puck-sized spacecraft, however, are too small to qualify for a streamlined license since the new rules require satellites to measure at least 10 centimeters on their smallest side.

Why so expensive?

Before Ajit Pai became chairman of the FCC in 2017, he was on the record for wanting simpler satellite regulations. As a commissioner during the Obama administration, Pai called the FCC’s satellite licensing rules a relic from the 1960s, long overdue for modernization. 

But the level of scrutiny the FCC gives traditional applications — from evaluating potential signal interference to gauging the risk of creating orbital debris — incurs costs that the FCC passes on to applicants, experts said. 

“When it comes to regulatory regimes, the U.S. tends to be the most sophisticated and stringent, and that includes the FCC,” Greenfield said. 

Other countries, according to Panahy, often lack the FCC’s engineering acumen, and can’t vet satellite operators as diligently. By creating a separate regime for smallsat licenses that don’t require as much due diligence, the FCC won’t have to do as much work, and can lower its fees accordingly, he said. 

“There’s tremendous value in what the FCC does,” added Nixon. “I’m glad they made what seems to be a real attempt to improve their application fees and try to  accommodate the differences with small satellites.”