Regulatory Review: European Broadband: The Satellite Story

By | December 1, 2001 | Via Satellite

by Gerry Oberst

The satellite industry needs to be more aggressive in describing how it can contribute to broadband services, certainly in Europe. That is the implicit, although unintended, message from a report released in early October by the European Commission, which had chosen a group of British consultants to prepare a study on broadband access platforms in Europe.

The report reveals a deep misunderstanding of the satellite industry, and a huge knowledge gap on regulatory issues. But more than that, it shows that the industry has to step up its efforts to convince policymakers that satellite facilities can contribute substantially to the development of new services in the “broadband revolution.”

The recent report was commissioned to describe the development of broadband access platforms across the European Union, focusing on platforms most suited to the residential and small and medium enterprise markets–in its words, “mass-market access platforms.” Among other matters, the report was supposed to assess the evolution of all feasible platforms, including ISDN, DSL, digital satellite and cable, fiber optic and fixed wireless systems. As a near-term projection, it estimated how these platforms would contribute to broadband access by 2003.

Some central problems with the report, however, are that it does not contain a coherent definition of what it assumes broadband to be and it is based on outdated and unverified sources.

Various definitions of “broadband” surface in the report, but a theme that runs throughout is that broadband service should be symmetrical, and that satellite cannot provide that type of service. Thus, an important chart in the paper says that satellites will provide no access to broadband service in Europe before 2004, and then will be only 1 percent of the market, rising to 2 percent by 2010. Yet, in total contradiction to this assessment, the report claims that “plain old telephone” networks will represent 58 percent of that market in 2003, even though by the report’s own definition the POTS platform is not broadband. The report claims that the timing for their estimates might be “half as long or twice as long depending on economic conditions and the speed of cultural acceptance of new technologies.” That is to say, the ten-year forecast contained in the report has a margin of error that makes it essentially meaningless.

Close examination of the data sources shows that the report, dated August 2001, is based largely on trade press articles from 1999 to estimate satellite subscriptions in Europe. And most of the few other citations on satellite service come from press clippings dated around October 2000–articles from a year ago in a fast changing market are hardly reliable sources for a purportedly major policy study.

Methodology aside, the report collapses in its description of technical and regulatory issues facing the satellite industry. On technology, it contains such howlers as claiming that geostationary satellites are “typically used for meteorology,” although there are projects to provide digital television and broadband access. On regulatory issues, the report inaccurately claims there are “no significant regulations affecting the roll-out of broadband satellite in Europe.” On the whole, the report lacks credibility, but is sitting out there for the entire world to see.

By contrast, the Satellite Industry Association (SIA) in Washington, DC, submitted comments to the FCC in October that support satellite’s contribution to broadband. The SIA noted that satellites offer the best hope of eliminating the digital divide between “information rich and information poor” in delivery of broadband services.

The SIA challenged the ability of terrestrial wireline and terrestrial wireless companies to provide service. It said that terrestrial companies had “disappointingly fallen short” in providing service and that satellite systems presented the “only practical near-term alternative” because of nationwide coverage and ubiquitous service.

It is important for the industry to make efforts such as the one supported by the SIA, in order to inform policymakers and ensure that government programs aimed at stimulating broadband services do not distort the market.

For instance, policymakers who read the European report might assume that satellite services will be a negligible part of future broadband applications. They might see that the recommendations of the report focus solely on other platforms, and determine that regulatory reforms for satellite are just a waste of time. And they might focus on the report’s half-baked recommendation to encourage competition between ADSL, cable and fixed wireless, to conclude that satellite is not part of the mix.

The satellite industry’s job is cut out for it. The satellite broadband story must be told.

Gerry Oberst is a partner in the Brussels office of the Hogan & Hartson law firm. His email address is geoberst@hhlaw.com.


Live chat by BoldChat