By Roger Rusch

At one time elementary students were warned about upsetting the balance of nature. We were told about foolish people who introduced alien species to remove a pestilence. For example, 60 aggressive starlings were imported to Central Park in New York City from the British Isles in 1890. They multiplied. Millions now live in the United States. While starlings eat large numbers of harmful insects, they also eat copious quantities of fruits and berries. They usurp small owl nests in Arizona. There are numerous examples of natural strategies that have caused unexpected damages. Sometimes people who are trying to solve one problem cause another.

Today we excuse defective telecommunications policies by explaining that there are almost always unintended consequences. We are told that such side effects must be tolerated to achieve the greater good. Here are some examples:

#1 Some early cellular applicants were awarded Federal Communications Commission licenses and then profited by selling them. Auctions were designed to siphon some of that wealth into the U.S. government treasury. An unexpected consequence of this process was extravagant bids that force many license winners into bankrutpcy. Huge auction payments were one of the root causes of the telecommunications collapse. Now the FCC would like to use spectrum auctions as a way to resolve satellite frequency allocation disputes. This could be a financial disaster for already struggling satellite service firms.

#2 Many companies have attempted to use regulatory processes to gain business advantage. Both startup and established companies deserve fair and equal treatment. Therefore, the FCC has established an orderly process for full public disclosure with a heavy emphasis on negotiated agreements. The unintended consequence is that the FCC often takes years to grant licenses. Some have argued that this causes the satellite industry to be late to market.

#3 A few years ago satellite manufacturers used launchers provided by foreign governments to boost their birds into orbit at lower prices. The public was outraged these U.S. companies would assist foreign governments in the construction of long-range missiles. Therefore, the U.S. government imposed a more stringent export control process on satellite manufacturers. The unintended consequence was delivery delays, lost business and unhappy customers. U.S. manufacturers argue that delays and denials have stifled satellite sales abroad. In fact, some customers have added conditions to their requests for proposals that preclude the use of U.S. parts.

#4 The U.S. government created the Internet, which is supposed to improve productivity and transform the world. The Internet offers free information. But this “free” information is often copyrighted, and media and music companies are losing revenue as a result of this “free” distribution.

Should we blame the government?

There is a great temptation to assign the blame for industry problems to the government. At the same time, there is strong evidence that the government is attempting to be more equitable to all parties affected by its decisions and rules. It is certainly appropriate for the government to reexamine policies and make adjustments. In the next few months, I will suggest alternatives that could improve government and industrial policies that affect the satellite industry.

Roger Rusch is the president of TelAstra, Inc. You can contact him at 310-373-1925 or via e-mail at [email protected]