The International Telecommunications Satellite Organization (ITSO) has launched an initiative to bring broadband via satellite to less developed regions of the globe. ITSO was formed during the privatization of Intelsat to carry on the public service obligations that the former intergovernmental organization had provided.

The broadband initiative, which ITSO plans to present to the World Summit on Information Society to be held in Geneva this December, is taking a “carrot approach” to encourage industry to participate along with governments in offering services to underserved areas. The incentives actually involve three carrots that satellite companies might find tempting. These carrots are included in a broadband memorandum of understanding (MOU) that would ease the process for satellite operators to gain access to spectrum and markets.

The first is around a 1 GHz block of spectrum in the C- and Ku-bands that would be made available worldwide through the International Telecommunication Union. Once the MOU is adopted, the ITU would become the lead organization in its implementation.

The second is a global standard for terminal equipment. Ahmed Toumi, ITSO director general and CEO, told SATELLITE NEWS during a briefing at our Potomac, Md., headquarters that the broadband initiative would not seek to subsidize the cost of terminals to make them more affordable for poorer regions of the world. Instead, he predicted that having global standards would lower manufacturing costs, cut retail prices and spur expansion to less developed countries.

“The experience we learned from telecommunications is that when we have economies of scale, the price goes down,” Toumi said. “If the satellite broadband market becomes much bigger because of the global standards, then we will have economies of scale.”

Toumi cited the cellular market as an example. He said that in the late 1980s, cellular handsets cost thousands of dollars each. But now, they are often provided free of charge to encourage spending on airtime. There now are more cellular subscribers than fixed telephone subscribers worldwide, he said. “When we have a worldwide market for satellite terminal equipment, there is certainty that the price will come down,” Toumi explained.

The third carrot is a pro-competitive and a harmonized regulatory framework in countries that participate in the initiative. The MOU would allow national service providers to be granted licenses based on minimum common licensing requirements. Combined with universal technical standards for equipment in all countries participating in the initiative, this should provide a stable and secure regulatory framework for investment.

The existing regulatory system discourages investment in new services, particularly in less developed regions of the world, Toumi said.

“We need a global approach in terms of providing services, standards and regulation,” he said. “Now, the satellite operator must negotiate 189 different licenses around the world. It’s difficult to negotiate 189 different kinds of licenses. It is very important to have this common and global approach and a regulatory principle applied everywhere.”

In return for these carrots, private industry would agree to build out broadband infrastructure in these regions by financing the construction and deployment of satellites and equipment, Toumi said. Satellite operators would agree to use spectrum and orbital slots designated for the initiative, use equipment that complies with the global standard, and provide interconnection of their satellite networks with those of other operators participating in the initiative.

“We are not proposing regulating prices for the broadband service to less developed countries, but the initiative will create the market conditions in order to lower the price for broadband that is affordable to users everywhere.”

Toumi said that this initiative, which he would like to have in place by 2010, is designed to close the “digital divide” between the global haves and have-nots. “Developing countries need broadband as much as – if not more than – the developed ones do,” Toumi said.

–Fred Donovan

(Ahmed Toumi, ITSO, tel: 202-243-5092, email [email protected])