European Satellite Industry Faces Big Issues In 2008

By | January 1, 2008 | Via Satellite

The big topic on the regulatory front in Europe for 2008 will be the proposals the European Commission released in mid-November to amend the electronic communications regulatory framework. The package is jammed full of controversial issues, many of which will affect the satellite industry. 
The proposals consist of three legislative reforms and a recommendation on market definitions. The Commission released reams of paper with the package, including impact assessments, fact sheets and a report on the overall set of proposals.

Among the changes that impact the satellite industry the most are proposals to set up a new European Electronic Communications Market Authority (ECMA) and the amendments to the directives on the regulatory framework, authorizations and access.

The creation of the ECMA would establish a centralized regulator, or essentially a European version of the U.S. Federal Communications Commission. Among its duties, the ECMA would “play a key role” in setting harmonized conditions for rights of spectrum use and assist in selecting providers of cross-border services. Satellite services are given as the prime example of such users and providers. The ECMA also would help define transnational markets, and again satellite-based services are identified as an example.

This proposal is the most controversial, because the Commission would sidestep the national regulators for various tasks. The new ECMA also would levy fees and divvy up proceeds among the European Union (EU) member states — after taking its cut of the money for administrative expenses. The Commission proposes that heads of the regulatory agencies will be pulled into the ECMA and forbidden to take instructions from their national governments on the decisions they take by majority votes rather than consensus.

National regulators are not amused. The heads of the French, German and U.K. regulatory bodies already have vocally opposed this idea. One regulatory head said the proposal was “totally unhelpful.” Another wrote the Commission favors “a significant increase in its own powers to determine national regulatory remedies, supported by a new EU-funded super-regulator.  However, a centralization of power to Brussels, plus a new European bureaucracy, is not the answer.”  And this was before the proposals were even made public.

Anticipating these attacks, the Commission says that current methods of obtaining consensus and harmonizing licensing across the European Union are “difficult and slow to achieve,” “sub-optimal” and “cannot be considered credible.” 

This slugfest between the Commission and the national regulators clearly will be big in 2008.

In its proposal to change the directives, the Commission says its objectives are to move toward more efficient spectrum management, make regulation more efficient and simpler, and step toward consistency in applying EU rules for the entire market.

As part of these objectives, the Commission wants greater authority to help companies gain access to spectrum. Again, the only example given is of the satellite field. Proposed changes, however, would permit the Commission to try and harmonize regulatory conditions that apply to virtually any licenses for any services in Europe that depend on spectrum use, so this is by no means limited to the satellite industry. 

The proposals would implement binding concepts of technology neutrality (the freedom to use any technology in a spectrum band), service neutrality (the freedom to use spectrum to offer any service) and spectrum tradability.  New rules would require national regulators to review existing licenses after five years to make sure all comply with the new principles, creating vast upheaval in the licensing situation. The changes would be a two-edged sword for the satellite industry, because while they might make access to spectrum more efficient, the changes may also open the door further for the never-satisfied terrestrial industry.

Additional changes would permit the Commission to set up a selection process for applicants to use spectrum.  This ties back to the regulation creating the ECMA, which would participate in the process.

The enormous regulatory package contains many other technical changes that affect the entire communications industry. But one gets the sense that the satellite industry is used as the justification for a lot of proposed changes that will affect the entire communications sector. The Commission anticipates that debate on this package will take all of 2008 and well into 2009.

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