Satellite service providers wishing to offer services to or from the United States often are faced with having to figure out what regulations to follow.
The U.S. Federal Communications Commission (FCC) is responsible for authorizing carriers that offer telecommunications services to and from the United States. This authorization is derived from Section 214 of the Communications Act and commonly is referred to as a 214 License.
There are two broad classifications of 214 holders. One, the carrier that resales the telecommunications services of another carrier (the reseller), and two, the carrier that provides telecommunications services using its own facilities (the facilities-base provider). Both of these entities are required to have their own 214 authorizations, and it is important to emphasize that a reseller cannot "ride" or use another carrier’s 214. The reseller must apply and obtain its own 214 license.
Filing and obtaining a 214 authorization is the first regulatory hurdle that a new provider must overcome before entering the international telecommunications market. However, this is not a one-time ordeal. Once a 214 authorization is obtained, existing 214 holders have certain ongoing regulatory duties, including:
- Keep Information Updated. The 214 holder remains responsible for the continuing accuracy of the certifications made in its original application and must notify the FCC of any alteration such as changes in business address, ownership structure and affiliations with dominant carriers. The purpose of this requirement is to maintain an updated file that the public can reference to verify the status of 214 holders.
- File Annual Disclosures. The 214 holder must file annual reports of overseas telecommunications traffic as well as revenue. The type of information depends on whether the holder is classified as a reseller or a facilities-based carrier.
- Submit Copies of Contracts. Certain dominant common carriers are required by the FCC to file, within 30 days of execution, a copy of each contract to which it is a party with respect to the exchange of services and routing of traffic.
The application process and the time it takes to for an application to be granted depends on several factors, which include the applicant’s relationship with other carriers, intended service destinations and foreign ownership. Applications with foreign ownership greater than 10 percent are reviewed by the Executive Branch as well as the FCC. Generally, applications involving any one of the following scenarios are reviewed with greater scrutiny and consequently take longer to grant:
- The applicant is affiliated with a non-U.S. dominant carrier in the market it seeks to serve.
- The applicant is affiliated with a U.S. dominant carrier whose international services it seeks to resell.
- The applicant seeks to provide services to a country the FCC has not authorized.
- The applicant has more than 10 percent non-U.S. ownership.
Applications that do not involve any of these four scenarios can be filed under the FCC’s streamline procedure and generally are granted within a month of the date the application is filed. On the other hand, applications involving any of the four scenarios discussed above, especially when foreign ownership is involved, can take months to grant.
There are specific rules for how carriers are classified as dominant or having market power. A quick way to check whether a carrier is classified as dominant is to inspect the FCC Web site, which lists dominant carriers for various countries.
The 214 is the first regulatory hurdle a new provider must overcome. However, the holder must look ahead so as to not stumble with other hurdles down the road. These include certain required contributions to universal service mechanisms, compliance with law enforcement network provisions, compliance with emergency-ready networks (e.g. 911), compliance with privacy laws and others.
It is important to start your regulatory compliance for satellite services with the right foot. A 214 authorization for services to and from the United States is a good first step and will provide solid ground for subsequent compliance issues.