Jackson: “I Don’t Know How We Got Into This Position”

 

Via Satellite: How likely is it that satellite players are going to lose some of this C-band capacity?

Jackson: A real issue has been the way governments now allocate frequency to the terrestrial operators. The main objective for a government in providing infrastructure services is to ensure they are provided to the public at the highest quality and at the lowest possible cost. When monopolies existed, governments would limit the return an operator could make and set quality levels. However, these did not prove to be as effective as competition and thus a method of evaluating operators who were competing for licences had to be found. There were two real alternatives, either set operating criteria that would ensure a high investment or have a simple cash auction for the licence and rely on market forces to force the operator to invest in the infrastructure in order to get a return. 

The concept of governments being able to make very large sums of money at auctions proved irresistible, and it had the advantage of being simple for the various regulators to administrator. In fact governments do not really wish to take money out of the infrastructure pot and very high licence fees could, if the operator has overestimated the income from the service, have the result of limiting the expenditure being made. 3G could well be an example of this in many countries.

Economists argue that market forces will eventually sort out the problem, as it will, but in the meantime, the country may not be getting the best possible infrastructure. As satellites compete for frequency internationally it is impossible for a national entity to auction frequency so it is excluded from the process. This obviously puts pressure on the regulator to allocate it to services they can license and sell so they will be looking at every hertz of the frequency spectrum. In Europe you can see why the regulators who saw C-band with very limited satellite use as the low hanging fruit and changed its allocation.
 

Via Satellite: If satellite players were to lose C-band spectrum, what would be the consequences for the industry and for developing countries who are more reliant on satellite to provide various applications?

Jackson: C Band has been an essential part of the Asian satellite industry for the last 30 years, contributing a considerable percentage of its revenue. AsiaSat, like most Asian satellite operators, would be significantly negatively affected if the C-band frequency became unusable. Satellites are currently built to last 15 years, and we have no ability to change the frequency once they are launched. So if the frequency was reallocated the industry would end up with billions of dollars worth of equipment in the air not producing revenue.

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