Regulatory and Legal Notes – Quarterly Review

Foreign Satellites in Russia

Russia is gradually seeking to liberalize its space industry as the issue of admitting and using foreign satellites systems in the country is becoming increasingly important for capacity reasons.

The Russian Ministry of Telecommunications and Mass Media (Minkomsvyaz) has drafted a new law to amend the Federal Law on Communication.

The draft law, passed in the first reading on May 24, 2013, is likely to be enacted this year and it concerns the allocation of authority for foreign satellite regulation to the Russian Government. Under the current law, the Frequency Commission (GKRCH), which does not form part of the executive, acts as the principal regulator. When the draft law is enacted, Minkomsvyaz is expected to become the competent regulatory authority. As the GKRCH is deemed to be very conservative in its approach, it is generally expected that the appointment of Minkomsvyaz will lead to some liberalization of the market. The detailed provisions will be finalized in the Decree of the Government, which is expected to be adopted in late 2013, so it is difficult to make accurate predictions at this time as to the effect on the market.

The draft law will also repeal the two main acts governing the use of foreign satellite systems (Resolutions of the Russian Government No. 1016 dated September 2, 1998 and No. 88 dated February 1, 2000).

International UN Committee on the Peaceful Uses of Outer Space – Legal Subcommittee 2013

The topics and discussions at the United Nations are growing in interest for the space industry, as what was the realm of public institutions is increasingly becoming one of private commercial players. Matters of interest included the intention of several states – particularly the developing countries – to sign the controversial UNIDROIT Space Assets Protocol and the ITU’s interest in becoming the Supervisory Authority to it. On entry into force, the protocol will establish a separate international registry of security rights in space assets. Four states: Germany, Burkina Faso, Saudi Arabia and Zimbabwe, have now signed the protocol, with more likely to follow this year.

The protocol’s entry into force will be triggered by 10 ratifications or accessions and the appointment of the Supervisory Authority, which is responsible for setting up the international registry. The ITU has expressed an interest in assuming the role of Supervisory Authority and the ITU Council is expected to provide more information in this regard later this year.

Satellite industry groups continue to oppose the protocol, saying that it will create an additional layer of supra-national law that will increase the costs of satellite financing with little or no benefit to the industry. Satellite trade organizations are also concerned that the ITU’s appointment as Supervisory Authority would add a founding of credibility to the protocol – the industry would be wise to monitor these activities.

Other topics discussed at the UN Legal Subcommittee included: issues of security and sustainability of space activities (a proposal for a binding regime governing the mitigation of space debris); national space legislation and licensing procedures; the issue of sub-orbital flights; the transfer of satellites between entities; and the registration of satellites by launching states.

The latter issue drew much attention and provoked discussion. The United States, Mexico, Germany, France and the European Space Agency (ESA), all encouraged the prompt registration of satellites by launching states. The United States noted that they had recently identified more than 100 unregistered objects, which they considered to be under their jurisdiction and control, and that they would seek to register around 80 in the next few years. It was clear that this statement was intended to set a strong precedent for other countries to do the same.

The registration of a space object, in a national registry and the UN register, is an international obligation on the country launching a space object. The state then bears international liability for damage that may be caused by the objects on its registry. This is of increasing importance in relation to liability for damage caused by possible collisions, space debris, etc. It can also be of significant commercial importance for satellite operators; an operator that has objects registered on the UN register by its launching state may face fewer hurdles to obtain licenses and consents in other jurisdictions. For example, the U.S. FCC, in particular, seeks to ensure that the launch of satellites (where the launching state is not the United States) has been licensed and registered on the UN register before they grant U.S. licenses.

Europe

EU Space Industrial Policy

The European Council has encouraged the European Commission to finalize its assessment of the market potential of suborbital spaceflights in order to determine whether the development of a European regulatory approach is warranted. This statement was one of the conclusions on the “EU Space Industrial Policy – releasing the potential for economic growth in the space sector” created at the Council meeting on May 29 and 30.

The Council also invited the Commission to assess the need for the development of a space legislative framework, in the context of ensuring the proper functioning of the internal market. This invitation will be of interest to ESA and the European space industry, which will be keen to at least ensure that the principles of subsidiarity and proportionality in relation to any new legislation in this area are maintained. This industry would be well advised to monitor the implementation of these proposals.

European-Wide Space Surveillance and Tracking (SST) System

Issues of space debris, and the need for active debris removal, are back in the media recently after the “intersection” of Ecuador’s first nano-satellite Pegasus with space debris from a Soviet rocket a few months ago. Although the issue of space debris is gradually amassing greater interest, the funding for active debris removal remains a distant wish at the moment, not helped by the international legal constraints.

The European Commission has proposed a new program to help EU Member States combine their space surveillance capabilities to reduce the risk of collision with space debris. In a report recently commissioned it was found that the economic losses suffered by European satellite operators total approximately €140 million ($183.92 million) per year with the potential to increase to €210 million ($275.89 million) per year within the next decade. The Commission report found that up to 600,000 objects larger than 1cm were estimated to be orbiting the Earth, with at least 16,000 objects larger than 10cm having the potential to destroy a satellite in a collision.

Space Planes

There has been some discussion as to how the United Kingdom and indeed Europe, can best position itself to take advantage of the envisaged space plane activities. The U.K. Government and the kingdom’s Civil Aviation Authority are currently considering a regulatory regime covering the licensing of space planes and sub-orbital flights, particularly in support of companies such as Reaction Engines. The initial outcome of this work is expected soon.

The current regulatory framework prohibits such vehicles from using U.K. and European airspace. Therefore, a clear enabling regulatory regime for reusable space vehicles is needed even if simply to attract finance in the short term. There is already a study being undertaken which covers the business case for a U.K. spaceport and launch infrastructure.

It will be an interesting 12 months in this regard and I would hope to provide a detailed update in further editions in relation to the regulations covering this game-changing technology. VS

Joanne Wheeler  is a partner in the Technology, Media and Telecommunications team for CMS Cameron McKenna LLP. She specializes in communications, satellite and space regulatory and policy matters, commercial contracts and PPPs.