The global satellite industry has been working for more than a year to develop guidelines to present to the International Telecommunication Union (ITU) for passage next month in Geneva. If passage occurs, the guidelines would become an official ITU report, offering a template for administrations around the world. The report also would be a powerful tool to make satellite-based communications more readily available across the globe.

As background, the World Telecommunications Development Conference (Istanbul, 2002) adopted ITU-D Question 17/1, “Satellite Regulation in Developing Countries,” to explore the various regulatory approaches governments take toward satellite providers, operators and end users. The Istanbul meeting also recommended practices based on its findings. The following passage on “Open Skies” is an excerpt from the draft global satellite regulatory guidelines that have been developed through the ITU-D program. International support for the initiative will be sought next month during a study group meeting at ITU headquarters in Geneva.

In the past, some governments developed policies to protect their countries’ satellite systems. These “Closed Skies” policies required service providers to use only locally owned satellite capacity when providing satellite services. Originally, such satellite operators as Intelsat, Eutelsat and Inmarsat were inter-governmental organizations owned by the PTTs and telcos around the world. Consequently, space segment could only be bought via the incumbent PTT or telco.

In the long run, governments are realizing that tremendous demand for Internet, data, voice, video and other essential services is best addressed by policies that permit open and direct access to all satellite communications resources, assuming that they have been coordinated properly through the ITU. The footprint of a satellite does not match national borders, making it necessary to regulate this matter through international agreements developed by the ITU-R.

The ITU-D Satellite Regulatory Survey shows that this approach, referred to as “Open Skies,” now is being adopted by some administrations. While the policies being implemented today are not completely open, they all involve permitting increased access to orbital resources, regardless of the satellite operators’ country of origin.

The “Open Skies” policy will require satellite operators to compete for customers interested in obtaining capacity in the 4 GHz-6 GHz -band, the 10 GHz-20 GHz band and 20 GHz- 30 GHz-band. It is expected that this competition can result in more options for local customers, with a significant boost in quality and lower prices.

Strategic Liberalization/Competition

Open Skies initiatives are part of a continuing trend in the growth of competition worldwide in satellite services and applications. The ITU-D Satellite Regulatory Survey results have shown that, perhaps inevitably, respondents differ to some extent in the way in which they categorize degrees of competition. Nonetheless, the survey confirmed that satellite operators are increasingly engaged in offering bandwidth into partially or completely liberalized markets.

The survey asked respondents to list the satellite operators having market access or having service providers with market access. Of nine African administrations that answered the question, four described competitive satellite markets. Of nine Americas respondents, eight reported competitive satellite markets. Of eight Arab respondents, four reported competitive satellite markets. Of six Asia-Pacific respondents, five reported competitive satellite markets. And of 16 European respondents, 14 reported competitive satellite markets.

These results underscore the administrations’ commitment to opening markets to satellite services in a manner wholly consistent with national policy objectives, which could be achieved through strengthened access to business, consumer and government communications.

South Asia: A Case in Point

“Market opening works: try it.” This was a key conclusion of the “ITU Asia-Pacific Telecommunication Indicators” as far back as 2000. At that time, the importance of strategic liberalization – the selective opening of a market, sector by sector, to help an administration achieve targeted policy objectives – was underscored. According to the ITU Indicators, ultimately — even in countries that choose to retain a monopoly — there are opportunities to open parts of those networks or services to competition and private- sector participation.

In Nepal, for instance, where Nepal Telecommunications Corporation had a monopoly on all international connectivity, the simple step of allowing others to provide international data connectivity had a transforming effect on the local Internet market. Nepal’s international interconnectivity rose five-fold in a few months after the VSAT market was liberalized.

Since then, a similar experience with strategic liberalization was recorded in Bangladesh, where the administration – once again, in an effort to quickly expand local access to telecommunications – partially deregulated the VSAT sector. A representative of the regulatory agency reported an eight-fold increase in connectivity as a result.

And in India, a series of partial reforms of the VSAT sector also have resulted in measurable gains in access to and use of communications solutions. The first major step was taken in 1998. At that time, India’s regulation required any VSAT operator to use capacity derived from the indigenous INSAT constellation of satellites. However, at the time, there was effectively no capacity available on the INSAT satellites, nor had there been for more than a year. This was partly attributable to failures of India’s INSAT 2A and 2D satellites.

By the first quarter of 1998, there was a capacity crisis in India. As a result, a meeting was held that included representative from the international satellite industry as well from as the Department of Telecommunications (DoT), the Telecommunications Regulatory Authority of India (TRAI), the Indian Space Research Organisation (ISRO) and selected end users of satellite services.

During the one-day meeting, a new regulation was drafted that would permit any ISP with an international gateway license to use any properly coordinated satellite in orbit to provide VSAT services. Eighteen months later, the regulation was implemented, and millions of dollars worth of contracts for services immediately began to be signed.

During the next year, the international satellite industry – again, in coordination with DoT and TRAI – urged implementation of needed reforms, this time including:

• Removal of a 64 Kbps ceiling on VSAT data rates;
• Reducing VSAT licensing fees; and
• Permitting interconnection of VSAT networks with all other types of network.

In mid-2002, the Indian administration again agreed to address each of the above regulations and implemented reforms, which had a discernable positive effect on access to satellite-based services. Growth in the use of VSATs increased more than 30 percent during the period. Perhaps the most telling indicator in this regard is that the number of Indian Internet subscribers increased to 3 million in 2001, compared with 250,000 in 1998. While not all of this growth can be attributed to satellite regulatory reforms, a large share is due to permitting ISP direct access to competitive satellite bandwidth.

The unmistakable conclusion is that competition works.

David Hartshorn is rapporteur for ITU-D Question 17-1 and Secretary General of the Global VSAT Forum (GVF), the global non-profit association of the satellite industry. He can be contacted at david. [email protected].