Satellite Firms Decry Market Barriers Abroad, at Home

The SIA gave the FCC market access reports for WTO member and WTO candidate countries. Brazil, China, India, Israel, Mexico, the Russian Federation, Saudi Arabia, South Africa, Thailand and several other nations need to rework their rules to open satellite communication markets, SIA said. Common foreign hurdles include requiring satellite operators to set up a local company branch in a country to be licensed there. Other frequent barriers include requiring, then stalling, ITU coordination or granting monopoly status to incumbent national telecom operators or satellite systems, SIA said.

Stratos, a distributor of Inmarsat, Iridium, Globalstar and other satellite services, claimed “direct experience with restrictive legal and regulatory practices in many countries.” Congress should “take appropriate steps, where possible, to correct [restrictions], certainly before permitting carriers from these countries to enter the U.S. market,” Stratos said. Barriers to market entry for mobile satellite services (MSS) “are present in many, if not a majority, of the world’s countries,” Stratos said.

As for Inmarsat services, Stratos said many countries bar sale of Inmarsat MSS by anyone other than the country’s former signatory Inmarsat member, though Inmarsat privatized in 1999 and no longer has national “signatories.” For other services, “exorbitant licensing fees and/or prohibitive local ownership requirements” make market entry “all but impossible,” Stratos said. Many countries require existence of a complete network within the country, a ground station in-country, and/or impose impossible legal intercept requirements. Stratos, with hq in Bethesda, Md., didn’t name offenders, calling a country-by-country list “beyond the scope” of its comments.

EchoStar urged the Commission to leave DTH video services out of its satellite competition report, but used the query to note “legal and regulatory barriers” in Canada. Canada has imposed numerous barriers to entry into the Canadian satellite television market, EchoStar said. These include: foreign ownership curbs, restrictions on carriage of U.S. content by Canadian satellites, strictures on distributing U.S. content to Canadian consumers and a requirement to carry certain Canadian content on Canadian satellites. Canada’s changing political environment “might make this an appropriate time to negotiate new conditions for delivery of U.S. satellite services to Canada,” EchoStar said.

A DBS chapter in the satellite competition report might be a waste of time, serving merely to duplicate the annual FCC video competition report, EchoStar and DirecTV both said. But that report doesn’t gauge impact of DBS spectrum constraints on video competition, the DBS operators noted. Along those lines, EchoStar urged the Commission to: (1) Okay more U.S. service from foreign DBS orbital slots. (2) Open the Cable TV Relay Service (CARS) frequency band to satellite downlinks. (3) Drop curbs on extended Ku-band frequencies. (4) Write service rules for the “reverse DBS band.” (5) Open non-geostationary Ka-band frequencies to geostationary satellites.

DirecTV’s satellite capacity is being stretched to the limit by HD signals, local and regional programming, it said. “DirecTV will eventually have to increase by several times its national and local capacity,” it said, despite having already spent “billions of dollars” on 4 Ka-band satellites. At the moment, DirecTV can’t provide “all HD local broadcast signals in all 210 markets,” nor can it send broadcasters’ multicast signals “in any local market without jeopardizing service in other local markets,” it said. Terrestrial operators are more easily able to upgrade coaxial and fiber platforms than DBS can find extra spectrum, DirecTV said. Congress should “look for additional spectrum for DTH services,” it said. An FCC DBS spectrum allocation from 2000, for example, still lacks licensing and service rules, DirecTV said. And multicasting shouldn’t be mandatory, even to Alaska and Hawaii, it said.

The FCC report should not compare only EchoStar and DirecTV, DirecTV warned. “If the Commission takes nothing else away from these comments, it should recognize that DTH satellite operators do not compete only against one another,” DirecTV said. They also compete against cable, the Internet and now telcos, DirecTV said. DirecTV noted recent IPTV developments in the satellite industry, “which may make it even easier for non-satellite operators to enter the MVPD markets.” IPTV offerings by SES Americom, Intelsat, PanAmSat, Eagle Broadband and GlobeCast will are making it much easier for telcos and other terrestrial distributors to tap high-end digital video programming for resale, DirecTV said.