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Europe’s Regulatory Landscape Shifts

By | January 1, 2010

      Two important changes to the European legal landscape occurred in November with implications that will spill forward into the satellite field for years to come.

      First, steps to ratify the European Treaty of Lisbon were completed. The treaty, signed in Lisbon in December 2007,was ratified when the Czech Republic in November became the last of the 27 European Union member states to sign off on the treaty. The main effect on satellites is that, effective Dec. 1, the European Union (EU) shares competence with the European countries over space policy.

      The treaty expands the role of the European Parliament and allegedly streamlines political decision-making. Up to now, only the individual member states and their national space agencies had a role in combination with the European Space Agency (ESA). The Commission got involved in many aspects of this but without clear-cut authority. In fact, it may be difficult to see how the treaty will change the momentum that the Commission already had built up for major programs and cooperation with ESA. But the treaty provisions could give new confidence for further progress in this area.

      The second big change is that the European Parliament and Council finally agreed to amendments to the electronic communications regulatory framework, which governs the entire regulatory structure. Adoption of this amended framework had suffered a Perils-of-Pauline ride due to differences between the European Parliament and Council over protecting Internet access. They managed to agree and to smooth over their differences in a “conciliation committee” meeting that lasted until the early hours of Nov. 5, after which the two bodies signed the amendments, leading to the formal publication (which was scheduled for mid-December when this article was written). Once published, the EU member states have 18 months to change their own national rules, but some changes come into effect promptly.

      For instance, one element of the package is immediate creation of a new regulatory body, the Body of European Regulators for Electronic Communications — or BEREC, an acronym we must get used to using. Many of the powers the Commission originally wanted to give this supranational body were whittled away by the Council and Parliament. The regulation that establishes BEREC defines its role as mainly delivering opinions and being a sounding board, to collect information, and disseminate best practices.

      Other changes will take longer to work their way through national procedures. A full assessment of how the changes affect the satellite sector remains to be prepared, but some of the impact will come from expanded provisions on managing radio frequencies, including a European-wide requirement for EU countries to assess whether spectrum licenses are technology and service neutral.

      Member states can apply restrictions to avoid harmful interference or ensure technical quality of service, among other goals, which may help protect satellite systems from threats to their continued use of frequencies. Nevertheless, this requirement could initiate a period of uncertainty, especially as member states need to review all licenses after five years to make sure that they meet the new requirements.

      These changes for spectrum matters at the European level will have an impact on the satellite sector. To help preserve the international regulatory structure, however, the satellite industry worked to preserve references to encouraging implementation of standards of the International Telecommunication Union, due to satellite dependence on such international rules.

      On other changes, new, tighter requirements for network security will apply to all networks, including satellite systems, under the amended rules. Further, rules on data breach notification could require satellite companies that serve customers directly to set up new procedures and protect consumer data more rigorously.

      Operators also will have transparency and notice requirements for any end-user services, including the obligation to give consumers information on any limitations of their service. Moreover, providers must give the customers information on their quality of service and the European regulators can set the parameters of such service standards. Commission officials in recent months have stated these provisions can be used to guarantee a suitable level of network neutrality.

      The dust settled on these big changes in November last year. Now we get to see how they apply to the satellite industry.

      Gerry Oberst is a partner in the Hogan & Hartson Brussels office.

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