USTR Criticizes Closed International Satellite Services Markets

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PARIS — The office of the U.S. Trade Representative (USTR) has singled out China, India and Mexico as nations not meeting international commitments to open their domestic satellite services markets and maintain coherent regulatory regimes.

In its annual report on how nations that have signed World Trade Organization and other agreements that liberalize trade in telecommunications hardware and services have met their commitments, USTR elected not to mention regulatory barriers to foreign-owned satellite services in Egypt, Israel and Venezuela.

These three nations, along with China, India and Mexico, were cited by the U.S. Satellite Industry Association in the association’s comments to USTR.

The USTR’s 2010 “Review of Telecommunications Trade Agreements,” dated April, notes that India’s satellite services regulations have been an ongoing concern for the United States, which has pressed Indian authorities in the past to open their market to non-Indian satellite fleet operators.

Aside from making their concerns known through satellite associations in the United States and Europe, the satellite fleet operators themselves generally have elected not to raise their voices on India’s restricted market, in part out of concern that protests would backfire.

Several satellite fleet operators have been able to enter India in recent years because of that nation’s exploding direct-broadcast television market, whose growth has outstripped India’s Insat satellite fleet’s capacity.

In these cases — when demand cannot be met by India’s own satellites — India has authorized the entry into the market of foreign satellites. But the market access occurs only through the owner of the Insat system, the Indian Space Research Organisation (ISRO), which may add its own cost to the service. ISRO also has on occasion reserved the right to terminate the foreign operator’s contract once domestic ISRO-provided satellite capacity is available.

USTR says in its report that Indian regulations ostensibly “mandate non-discriminatory, reasonable access” to cable landing stations in India, but that Indian regulations continue to be difficult to understand and subject to change.

China operates in a similar way, with China DBSat, a satellite operator, assigned the role of gatekeeper to the Chinese market. With the exception of AsiaSat and APT Satellite Holdings, both of Hong Kong, non-Chinese satellite operators are not allowed to offer services directly to Chinese end-users.

Regulatory confusion is a problem in China as in India. “A lack of transparency in the rules governing the provision of satellite capacity in these countries is … a concern,” USTR says. “USTR will continue to raise” the issue with its Indian and Chinese counterparts, the report says.

The problem in Mexico, according to USTR, is the government’s insistence that a foreign satellite service provider create a local presence in Mexico before being granted an operating license. Mexico has maintained this requirement despite signing the World Trade Organization’s General Agreement on Trade in Services treaty. That treaty includes no requirement for a local presence in return for providing cross-border telecommunications services.

Mexico and India also require operators of mobile satellite services to install gateway Earth stations on their territories in exchange for landing rights, a requirement that USTR also says is contrary to international trade agreements.

The Satellite Industry Association had called USTR’s attention to the fact that Egypt, which has its own domestic satellite provider, Nilesat, apparently has no established regulatory regime for satellite services, making it difficult for foreign providers to operate. Israel’s foreign-ownership limits and the requirement of a local presence are contrary to international trade agreements, the association says, while Venezuela, which now has its own domestic satellite system, is favoring that satellite in its market-access regulations.