Navigating Through the Regulatory Channels: A To-Do List for Satellite Service Operators and End Users

For a multinational company interested in expanding its portfolio, the patchwork regulatory landscape can be intimidating. Industry actors must comb through national and regional licensing processes and fee regulation before offering their services. What should you consider when you’re planning on providing satellite services?

If you’re thinking about providing satellite services, you should consider at least the following before commencing operations:

  • Are there any restrictions on the use of satellites?
  • What are the licensing requirements to provide telecom services and use frequencies?
  • What are the equipment type approval requirements?

For a multinational company interested in expanding its portfolio, the patchwork regulatory landscape can be intimidating. Industry actors must comb through national and regional licensing processes and fee regulation before offering their services. While some regions have created an encouraging process (such as Europe), countries in Latin America, Africa, and Asia have a burdensome approach where companies are often confronted with regulatory barriers.

Europe’s “friendly” approach to market access recognises the economic, technical, and wider societal benefits brought about by increasing regulatory harmonisation. Friendly regulation benefits consumers who enjoy a wide access to satellite services and companies who benefit economically with lower market access costs.

For example, the Electronic Communications Committee (ECC) of the European Conference of Postal and Telecommunications (CEPT) allows harmonised use, exemption from individual licensing, and free circulation of Earth Stations in-Motion (ESIMs) in the Ku-band. The ECC decisions are voluntary: individual states need to adopt them for them to be applicable and national regulators have the discretion to deviate from the text and impose additional requirements.

Nevertheless, Europe’s tendency to champion harmonised free markets isn’t limited to the CEPT, major steps were taken in 2002 with the adoption of several telecommunication directives.

  • Directive 2002/77/EC led to the abolition of satellite landing rights in the European Union.
  • Directive 2002/02/EC brought about changes in authorising the provision of communication networks and services, whereby individual licences are no longer required and undertakings merely need to obtain a general authorisation by notifying the authorities, who cannot reject any notifications should minimum requirements be met.
  • Directive 2014/53/EU provides the conditions for type approval of radio equipment and its placing on the market, facilitating access to markets.

Europe has gone further than any region to harmonise the use of frequency spectrum and remove regulatory obstacles to access markets. In contrast, satellite service operators and end users must sometimes face laborious regulatory barriers in Africa, Latin America, and Asia.

Countries in the latter regions have stricter regulation in regard to licensing. Satellites must be authorised before radiating signals over their territories, and in several cases, particularly in China, obtaining such an authorisation can be challenging, since authorities strongly prefer their own country’s satellite systems to foreign ones.

Similarly, the provision of satellite services and use of frequency spectrum generally require individual licences from national regulatory authorities. Obtaining such licences can be laborious and may require local company registration and the installation of local gateway. These additional efforts result in higher expenses for companies.

Obtaining authorisation is critical to avoid penalties and contrary to popular belief, end users are as responsible for obtaining licences as service providers are. While satellite operators are likely to be held liable for transmitting satellite signals without an authorisation, end users are likely to be liable for operating radio equipment and using radio frequency spectrum without an authorisation.

The penalties for these vary tremendously around the world. For example:

  • In the UK, the use of wireless stations for broadcasting without a licence is subject to imprisonment of up to two years or a fine, or both.
  • In Peru, the use of radio frequency spectrum without the corresponding authorisation is subject to a fine of up to PEN 207 500 (USD 63 000).
  • In Kenya, operations of radio communication stations without a licence would be subject to a fine of up to five million shillings (USD 50 000), imprisonment of three years, or both.
  • In UAE, the establishment and use of wireless transmission stations without a licence is subject to imprisonment of not more than one year and a fine of up to AED 1 000 000 (USD 272 300), or both.

In addition to the abovementioned penalties companies can expect that their equipment will likely to be seized by the national authorities.

Satellite service operators and end users face a three-tier process for frequency authorisation. First, firms must comply with regional requirements which tend to be strict outside of Europe. Second, foreign companies may face additional barriers in countries limiting satellite use to local organisations. Third, once licences have been granted, providers and users must also examine the regulatory requirements for lawful intercept, data protection, type approval, and financial reporting obligations in order to ensure full compliance.

If you’re looking to provide services, here is what you must do:

  • Examine the regulatory environment and market access requirements of each region.
  • Complete licence requirements for each jurisdiction where you seek market access.
  • Carry out due diligence throughout the entire chain.

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