Regulatory Review: Changing European Laws Affect Satellite Endeavors

by Gerry Oberst

The clock is now ticking for European Union (EU) member states to change their existing telecoms laws into electronic communications laws. This change is required by the EU’s package of new electronic communications directives, which govern almost all aspects of the industry under a new and broader definition. These directives include a framework for all regulation and standards for how countries can authorize networks and services. The package gives member states until July 24, 2003, to bring their national laws and regulations into compliance.

Some, however, will not make it. It is well known that some EU member states almost always miss deadlines. (Did someone mention Italy or Greece?) The more complicated or controversial the directive, the more likely that European countries will simply fail to meet deadlines. For example, fewer than half of the member states met the January 2002 deadline to adopt the so-called “e-Commerce” directive, which is important because it exempts Internet Service Providers and network facility providers, including satellite operators, from liability for the content of messages they have had no hand in producing.

The European Commission excused this failure at a recent meeting in Brussels by noting that the implementation period was a short 18 months and the issues raised are complex. Try telling that to the judge if you break the law.

But some member states are already working to implement the electronic communications package, in ways that could have a big impact on the satellite industry. In a recent consultation, France asked whether it is desirable to maintain a specific regime for satellite broadcasting frequencies. The entire shape of how France will draft its law is not certain at this time.

In the United Kingdom, however, the process to change the law is well underway. The United Kingdom seeks to overhaul its entire set of telecoms and broadcast laws, not just those elements that would be changed by the EU directives. Along the way, there are many provisions that will affect the satellite industry in fundamental ways.

The entire communications industry had the opportunity to comment on these proposals in August of this year. Among the more than 320 comments filed were numerous submissions from different parts of the satellite industry, as well as other sectors of the telecom world.

Some parties want the entire communications bill redrafted. A common argument was that the bill could result in more regulation, not less, contrary to what the U.K. government said it is trying to do. Many commenting parties noted there needs to be more checks and balances in the U.K. bill on the often vaguely and open ended powers that the bill would grant to a new regulator, to be named OFCOM (Office of Communications). In addition, a major telecoms operator noted the bill repeals parts of the already complicated telecoms, wireless telegraphy and broadcasting laws, but keeps other parts with widespread amendments, which makes the entire package virtually incomprehensible.

One concept that was on the table proposed to charge satellite companies for the use of receive-only spectrum. We wrote in this year’s July issue of Via Satellite about the notion of a “recognized spectrum access” (RSA) charge. Nobody supported the RSA notion in the comments that the United Kingdom received late that same month.

Satellite companies unanimously opposed this gambit to charge more for satellite service. One of the major satellite service providers in the United Kingdom said the proposal “is not aimed at any clearly identified problem and is disproportionate.” A satellite and cable broadcaster’s group noted it was “fundamentally opposed to the introduction of charging for the use by satellite and cable broadcasters of internationally allocated spectrum.” The Satellite Action Plan Regulatory Group, joined by the European Satellite Operators Association and backed by the Global VSAT Forum, said the RSA approach was just a veiled attempt to introduce licensing of receive-only service, possibly contrary to EU law, with no efficiency gains and likely harmful effects on the satellite industry as a whole.

Even a predominantly cable company agreed in comments that “satellite broadcasting is among the economically efficient uses of spectrum and there is no evidence that a charging regime is likely to lead to any efficiency gains.” And the major telecom operators in the United Kingdom said the current RSA drafting raises unwelcome “uncertainty,” could give rise to regulatory “double accounting,” and if combined with competitive pricing schemes would have no coherent place in the regulatory system.

Another concept that was included relatively late in the draft bill is to create a new regulatory category of “satellite packagers,” which commenting parties said would only add another layer of bureaucracy. Likewise, there is a confusing range of “must carry” and “must offer” obligations that raised many objections from both cable and satellite interests.

All this is to show that the industry should pay a high level of attention to the efforts of the EU countries to adopt their laws to the new regime. Sooner or later those changes are going to affect the satellite community as much as the European Community.

Gerry Oberst is a partner in the Brussels office of the Hogan & Hartson law firm. His email address is [email protected].