Satellite Competition is Hurt by Concentration, Unfair Trade, Commenters Tell FCC

Consolidation in the wholesale satellite capacity market has made it less competitive than other satellite markets, said Spacenet, in comments to the FCC. The company was responding to the International Bureau’s public notice requesting information for the annual satellite competition report. The wholesale market is “dominated” by Intelsat and SES World Skies, which “now control some 83 percent of the data network services transponders serving the U.S.,” said Spacenet, which buys wholesale capacity from operators. New entrants to the market are unlikely since Intelsat and SES World Skies already control or have rights to 2/3 of the 31 orbital slots able to provide service to the U.S., they said. The agency shouldn’t treat all satellite capacity as “fungible” since a change in satellite providers is a difficult process, requiring major adjustments to terminals and earth stations, Spacenet said.

The FCC should begin proceedings to address problems in the provision of international space segment capacity, CapRock Communications said. Near-term competitive concerns could be helped by preventing operators from selling satellite capacity of other satellite operators and stopping any further consolidation in the satellite industry, it said. Also, satellite operators shouldn’t be able to sell capacity in pre-determined bundles, it said, repeating several points it made during the Open-Market Reorganization for the Betterment of International Telecommunications Act proceeding (CD April 12 p6).

Satellite operators remain concerned about having “very limited options for choosing a launch provider,” said EchoStar, Intelsat, SES World Skies and Telesat Canada in joint comments. U.S. launch services aren’t seen as reliable access to space since many launches are often specifically tailored to the government’s timing needs and aren’t easily changed for commercial launches, they said. American launchers also lack scheduling reliability due to government launches receiving priority, sometimes pushing commercial launches out of launch slots, they said. U.S. policies prevent access to many international launchers, leaving Arianespace and International Launch Services as the only “near-term” options for U.S. operators who want to launch satellites, they said.

As demand for mobile satellite service grows, the FCC should ensure that Big Low Earth Orbiting (LEO) L-band spectrum allocated for MSS remains primarily for MSS use, said Iridium. The FCC recently began an inquiry on how to increase terrestrial broadband use in spectrum allocated for the MSS/ancillary terrestrial component (CD July 16 p1). Given Iridium’s ability to meet “rapidly expanding demand” with its next generation of satellites, the agency should keep terrestrial use of Big LEO L-band spectrum ancillary to MSS, it said. Altering the status quo “would risk harming the important MSS that Iridium currently offers and would curb future advancements,” it said. Meanwhile Globalstar said the FCC should find that there is “effective competition” for satellite services, the company said.

Commercial satellite providers face foreign competitors that are owned or heavily financed by their governments while foreign regulatory requirements favor domestic providers, the Satellite Industry Association said. Government support can facilitate greater risk-taking by businesses and relieve some of the pressures of finding financing, said SIA. The Office of the U.S. Trade Representative said that China, India, Russia, and others are using government regulations as barriers for foreign service providers, the association said.