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Legal Analysis: The Connected Continent

By | December 17, 2013

      On Sept. 11, 2013 the European Commission announced the adoption of what it described as the “most ambitious plan in 26 years of telecoms market reform.” The “Connected Continent” legislative package aims to establish a single European market for electronic communications, in which companies providing electronic communications networks and services can operate and provide services wherever they are established or their customers are located within the EU. This should benefit satellite operators since, by nature, satellite is a cross-border technology that does not follow geographical boundaries.

      These notes provide some comments from the perspective of the satellite industry on the Connected Continent legislative package and why the Commission needs to understand the business model of the satellite industry in order to draft effective legislation.

      On Oct. 17, 2013, during a speech at an ESOA event, Neelie Kroes, vice president of the European Commission responsible for the digital agenda, commented on her pride with Europe’s position in satellite communications. “Measures like a single authorization regime will ensure that the right to operate in one Member State gives the right to operate in all,” she said. “With a common framework and collaborative governance, there should be no need to have to deal with multiple separate bureaucracies.”

      The satellite industry already benefits from such an approach in relation to audiovisual media services. Media service providers are subject only to the rules applicable in their own country, which allows legal certainty and facilitates the development of cross-border business models. However, this is not currently the case for satellite broadband. Operators seeking to provide satellite broadband services in several Member States must currently be authorized in each state.

      The proposal for a regulation of the European Parliament and of the Council laying down measures concerning the European single market for electronic communications and to achieve a Connected Continent (2013/0309) suggests a single EU authorization (Chapter II) based on one notification to the national regulatory authority in the Member State of the main establishment of the company, including a list of the host Member States where services and networks are provided or intended to be provided. The BEREC office will maintain a publicly accessible registry of notifications made in each Member State. It is intended that the single European authorization will reduce the administrative burden for European operators.

      National Implementation of Regulation
      This should be a welcome development for satellite operators. One of the most valuable features of satellite technology is its wide, even hemispheric, coverage over many states. The need to make multiple applications according to the differing national policies of the Member States (including different charging frameworks) the satellite covers creates inconsistencies and fragmentation, hampering the rollout of pan-European services. This offers little regulatory certainty and makes it difficult to establish viable business plans.

      We have seen this recently in the varying approaches that the EU Member States have taken toward the authorization of the mobile satellite services (MSS) and complementary ground components (CGC) in the S-band, and the huge variations in the type and amount of the MSS and CGC fees being charged. The administration required to obtain and maintain the various licenses, even where all the license conditions have been defined, is huge. The differing approaches taken by the various Member States as to whether the CGCs should be treated as repeater only or can be used for two-way services under the network control of the MSS satellite component has led to much uncertainty. In relation to fees, a recent study, based on cases where fee calculations were available, estimated that the gross level of the CGC fees would be more than 40 million euros ($54.25 million) in the 22 Member States. Some Member States also require the operator to meet a further hurdle: set up an establishment.

      The Next Steps
      The Commission must now seek approval for the proposals from the European Parliament and the Member States. It is hoped that the value of satellite services and the business models for such services will be considered. A single, clear, certain and stable authorization regime should be welcome by the satellite industry and provide clear benefits to consumers.

      Thanks to the pan-European coverage offered by satellite, the European Commission has already achieved its 2013 target of “Broadband for All.” VS

      Joanne Wheeler is a partner in the Technology, Media and Telecommunications team at international law firm CMS.

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