Procedures for Authorisation of Satellite Networks

Procedures for Authorisation of Satellite Networks A consultation on procedures for the international notification and coordination of satellite networks Consultation

Contents Section Page 0H1 Summary 1H2 Background 2H3 Ofcom s 3H4 Regulatory 13H1 14H3 proposals 15H7 Impact Assessment 16H16 Annex 4H1 Responding 5H2 Ofcom s 6H3 Consultation 7H4 Consultation 8H5 Glossary to this consultation 17H18 consultation principles 18H20 response cover sheet 19H21 questions 20H23 21H25 Page

Section 1 1 Summary What this consultation covers 1.1 This consultation concerns procedures that Ofcom operates on behalf of the UK in relation to the coordination and notification to the International Telecommunication Union (ITU) of satellite networks registered in the UK and in British Overseas Territories, the Channel Islands and the Isle of Man. It is necessary to review these procedures to take account of the transfer of spectrum management functions from the Radiocommunications Agency (RA) of the Department of Trade and Industry to Ofcom, other amendments made to the relevant legislation by the Communications Act 2003 and changes in the business environment for satellite services. The international framework for satellite networks 1.2 In order to operate a satellite network, it is necessary to obtain access to spectrum for the uplink (earth to satellite) and the return path from the satellite to stations in the service area. The radio spectrum is a finite resource and its use has to be carefully planned in order to prevent interference in excess of accepted criteria. 1.3 It is also necessary to coordinate use of an orbital location for the satellite. The orbital location dictates the area of the earth s surface that the satellite can serve (the service area). Certain orbital locations are in short supply. The majority of satellite networks use locations on the geostationary satellite orbit i.e. at an altitude of around 36,000 km above the equator. Satellites in this orbit rotate around the Earth at the same rate as the rotational speed of the Earth and appear to be stationary to an observer on the ground. Because of the concentration of satellites at locations that offer service to the major land masses, certain parts of the geostationary satellite orbit have become congested. This makes it increasingly difficult to accommodate new satellite networks without causing interference to existing networks. 1.4 Both spectrum and orbital positions are valuable and limited resources. They have to be managed and planned in order to avoid interference and to ensure that adequate separation distances are maintained between satellites. Because of the international nature of satellite services, this coordination takes place within a framework of international rules operated by the ITU, a treaty-based body formed under the auspices of the United Nations. 1.5 The ITU Radio Regulations, which have the force of an international treaty, contain procedures for the notification, coordination and registration of satellite space stations0f1 and networks and place certain rights and obligations on ITU member states. These are designed to ensure that satellite networks operate without interfering with other services and also that orbital positions are efficiently utilised. 1.6 These procedures are operated by national administrations or national regulatory authorities on behalf of such administrations. The UK is the notifying administration for operators registered in the UK, British Overseas Territories, the Channel Islands and the Isle of Man. Prior to 29 December 2003, the RA acted as the UK administration for ITU purposes. Section 22 of the Communications Act 2003 allowed for the transfer of responsibility for international representation on radio 1 The ITU s responsibilities relate to the space station, which is the radio station on board the satellite, rather than the spacecraft. 1

spectrum matters, including the satellite coordination and notification procedures, to Ofcom and provided for Ofcom also to represent the British Overseas Territories, the Channel Islands, and the Isle of Man if requested to do so by the Secretary of State. That section also provides for the Secretary of State to give directions about how Ofcom carries out its representative role. Ofcom s role 1.7 Ofcom represents the UK in the ITU and acts as the UK administration for satellite networks. Ofcom also represents the British Overseas Territories, the Channel Islands, and the Isle of Man under informal arrangements agreed with the government. As part of this role, Ofcom is required to decide whether to submit applications for satellite network filings to the ITU for registration. Relevant to this decision is, amongst other things, whether the applicant can demonstrate the technical, financial and legal credentials to construct, launch and operate the proposed system in conformity with timescales contained in their business plan. When this role was being carried out by the RA, the RA published in February 2000 an information sheet RA301, available electronically at RA301 - Procedures of the United Kingdom Administration in Relation to Satellite Networks which summarised the relevant requirements and process for the submission and progression of UK satellite network filings within the ITU. Issues raised in this consultation 1.8 Ofcom does not propose to change the fundamentals of the procedure set out in RA301, which are largely dictated by international rules and the need to make effective and efficient use of valuable spectrum and orbital resources. However, there are some respects in which Ofcom is considering revisions to make the process more transparent, effective and efficient. This document seeks views on these proposals. 1.9 UK consumers of communications services will be affected by the proposals only insofar as they are customers of a satellite service to the UK. Many of the satellites affected will serve markets outside the UK. For example, the UK is at present the notifying administration for companies providing service to the USA and Asia. 1.10 Particular issues raised in this consultation include: making the filing process more transparent and competitive; whether or not Ofcom should submit technically conflicting filings to the ITU; whether a system of a re-assigning filings should be introduced; the extent to which market mechanisms could play a greater role in the filing process; the responsibilities of Ofcom and operators relating to the coordination process; the possibility of introducing fees and charges. 1.11 The proposals will be of particular interest to operators of satellites and businesses in the UK and territories represented by the UK in the ITU and those that use satellites to provide services. 2

Section 2 2 Background Introduction 2.1 Since 29 December 2003, when Ofcom assumed its powers and functions under the Communications Act 2003, Ofcom has been responsible for representing the UK in bodies concerned with the management of the radio spectrum. This includes responsibility for operating procedures under the Radio Regulations (RR) of the International Telecommunication Union (ITU) for the coordination, notification, and registration of frequencies used by satellite networks. 2.2 The UK is currently responsible for 145 active satellite network filings, including networks operating in the fixed satellite, mobile satellite and broadcasting satellite services. Of these filings, 55 have been notified to the ITU-BR as having been brought into use. During 2004, Ofcom submitted to the BR, 31 advance publication notices, 22 requests for coordination and 3 submissions in accordance with Appendix 30 (Broadcasting satellite service). Procedures for satellite notification and registration 2.3 The Radio Regulations procedures are intended to ensure efficient use of two finite and valuable resources: the radio spectrum and satellite orbits. Radio spectrum 2.4 The need to plan and manage the use of the radio spectrum is dictated by the risk of unacceptable interference if transmitters are inadequately separated in frequency or distance. Radio waves do not respect national boundaries and satellite networks generally have international coverage that extends across national borders. There is therefore a need for an international framework to coordinate frequency use in order to minimise the risk of interference between radio networks and to have procedures for dealing with interference if it does arise. Orbital locations 2.5 The position in space occupied by a satellite determines the area of the earth that its signals can reach and its height will determine whether it remains over the same area as the earth rotates. For certain applications, such as broadcasting, a geosynchronous (or geostationary ) orbit is highly desirable, i.e. one where the rotational period of the satellite is the same as that for the Earth. Satellites using similar frequencies need a minimum orbital separation in order that their signals do not cause interference to neighbouring satellite networks. That separation depends, amongst other factors, on the frequency on which the satellite operates and size of the receiver dish: the smaller the dish, the higher the risk of interference. 2.6 Other applications for satellite networks use orbits at lower altitudes and hence these do not appear stationary to an observer on the ground. Similar procedures for coordination are also provided for these networks. 3

2.7 Because frequencies can be re-used at different orbital locations, the scarcity of orbital locations can in practice be more of a constraint than spectrum scarcity in bands allocated to satellite services, especially for those, such as the broadcasting satellite service, that have limited allocations. 2.8 Satellite networks require substantial investment and have a considerable lead time because of the need to build and launch the satellite and the associated ground infrastructure. It is necessary in order to raise the finance for a prospective operator to be certain that a suitable orbital location will be available consistent with the service area objectives of the operator. The system of advance publication, coordination and notification under the ITU Radio Regulations is intended to provide the means to identify and reserve orbital locations and frequencies. Each administration is responsible for the publication, coordination and notification of satellite networks registered on behalf of operators within its territory. The UK is the notifying administration for the UK and also for the British Overseas Territories, the Channel Islands and the Isle of Man. Note that, under the present arrangements, an operator for which the UK administration is responsible need not offer service in the UK as long as the Satellite Control Centre is located in the UK or one of the territories that the UK represents. ITU notification 2.9 ITU Resolution 49 requires administrations to impose certain administrative due diligence requirements on satellite networks for which they act as the notifying administration, including specific information relating to the contractual status of the satellite and launch vehicle. These due diligence procedures are intended to minimise the number of speculative filings (known as paper satellites) that became a feature of the 1980 s and 1990 s. Paper satellites not only impose significant burdens on the ITU and national administrations but also block orbital slots resulting in underutilisation of valuable orbital resource to the detriment of operators and consumers. 2.10 Before registering a prospective system with the Radiocommunications Bureau (BR) of the ITU, it is incumbent on an administration to satisfy itself that there is a realistic likelihood that the satellite will in fact be launched and will not block a valuable orbital location and associated frequency assignment. It is also incumbent on the administration to monitor progress against pre-specified milestones for the deployment of the satellite network. 2.11 In undertaking its role as notifying administration for satellite networks, Ofcom submits information concerning proposed satellite networks to the Radiocommunications Bureau (BR) of the International Telecommunication Union (ITU) and facilitates frequency coordination with satellite networks of other administrations. 2.12 The present procedure for notifying satellite networks to the ITU, often referred to as filing, comprises two stages: 1 Advance publication, which involves submission to the BR of basic information relating to the technical characteristics of the planned satellite network. Upon receipt of complete information, the BR assigns a date of receipt to the application which serves as an indication of the date priority of the filing with respect to other filings. This information is analysed by the BR and if found to be consistent with the relevant Articles and procedures of the RR, the information is published in the BR International Frequency Information Circular (BR IFIC). The time for such processing of the submitted data has been as much as two years 4

due to a severe backlog in applications that occurred in the 1980 s and 1990 s. This delay has since been reduced to approximately six months. Upon receipt of complete information, the BR assigns a date of receipt to the application which serves as an indication of the date priority of the filing with respect to other filings. The BR publishes the information in the BR IFIC (published on a bi-weekly basis) and notifies those administrations that it identifies as being potentially affected by the proposed network based on filings that have already been received by the BR. The potentially affected administrations are then able to initiate discussions with the notifying administration of the most recently published network with a view to identifying the extent of any incompatibility of the networks and its possible resolution. 2 Request for coordination, which involves the notifying administration of the proposed new satellite network initiating a request for coordination by submitting information on the proposed network to the BR. Administrations of potentially affected networks must inform the BR that they require their network(s) to be included in the list with which the proposed satellite network must achieve frequency coordination. This process places the burden on the new entrant to ensure that any interference is kept to within internationally agreed levels. The procedure is often referred to as first come, first served in that the effect is that the network operator that filed first has precedence over subsequent entrants. The roles of Ofcom and the Secretary of State 2.13 Prior to 29 December 2003, the RA acted as the responsible UK administration for satellite notifications under the ITU procedure. The Communications Act 2003 transferred the RA s spectrum management functions and responsibilities to Ofcom, including the ability for Ofcom to provide international representation on behalf of the UK within the ITU and, by extension, satellite filing. Provisions of the Act relevant to international functions such as satellite filings include the following. 2.14 Section 5 gives the Secretary of State power to give directions to Ofcom for the purpose of securing compliance with international obligations, as well as for other specified purposes such as in the interests of national security. 2.15 Section 22 imposed a duty on Ofcom to do such things as it is required to do by the Secretary of State to represent the UK internationally on communications matters. The Secretary of State has required Ofcom to carry out various international representation functions in relation to radio spectrum, including making satellite filings. Section 22 also provides for Ofcom to represent the Channel Islands, Isle of Man and British overseas territories if requested to do so by the Secretary of State. However, the Secretary of State cannot compel Ofcom to take on that role. A formal request to this effect was sent to Ofcom by the Secretary of State on 1 February 2005. 2.16 As well as giving general directions, the Secretary of State may direct Ofcom on how specifically to carry out its international representation functions under section 22. 2.17 Section 152 confers spectrum management functions on Ofcom, including the provision of advice and services and the maintenance of records inside and outside the UK. The Secretary of State may require Ofcom to exercise these functions for the purpose of complying with international obligations. 5

The need for review 2.18 The RA published, in February 2000, an information document, RA301, that described the way in which it handled applications for advance publication, coordination and notification of UK satellite networks in accordance with the requirements of the ITU Radio Regulations (RR). The procedures relate to the provisions of RR Article 9 and, by extension, to those of Appendix 30 for broadcasting satellite service networks and Appendix 30B for the fixed satellite service. RA301 is available electronically at RA301 - Procedures of the United Kingdom Administration in Relation to Satellite Networks. 2.19 Ofcom considers that it is timely, following preliminary discussion with main stakeholders, to review RA301 in the light of the transfer of spectrum management functions to Ofcom, other amendments made to the relevant legislation by the Communications Act 2003 and changes in the business environment for satellite communications industry since the RA document was last revised in February 2000. The following section sets out Ofcom s proposals and discusses some issues Ofcom has considered in reviewing RA301. 6

Section 3 3 Ofcom s proposals Introduction 3.1 Ofcom wishes to obtain the views of stakeholders on whether and how to revise the procedure set out in RA301. Any revisions would need to be consistent with the ITU Radio Regulations and the UK s international obligations. It is a general principle of the Radio Regulations that a network with an earlier filing date cannot be obliged to accept levels of interference higher than those specified in the Radio Regulations from a network with a later date, and Ofcom s proposals set out in this document should be viewed in this context. Policy objectives 3.2 Ofcom has statutory duties under the Communications Act 2003 to further the interests of citizen-consumers in relation to communications matters and to further the interests of consumers in relevant markets, where appropriate by promoting competition, and to secure optimal use of the radio spectrum. As described in the previous section, Ofcom is also required to comply with directions from the Secretary of State in respect of relevant international obligations. 3.3 The proposals in this document are intended to enhance the efficient management and use of the radio spectrum by maximising the number of satellite networks that can operate without interference. Ofcom is equally concerned to minimise the number of orbital locations that are unused. Shortage of orbital locations can act as a significant barrier to entry to the satellite market. Reducing this barrier by making more efficient use of the available locations can be expected to give entrepreneurs increased opportunities to introduce a wider choice of satellite services and technologies and to use satellite systems for innovative applications. This will benefit consumers by stimulating innovation and promoting competition. Market mechanisms 3.4 Ofcom s spectrum vision, articulated in the Spectrum Framework Review, which was published for consultation on 23 November 2004 and is available electronically at Ofcom Website Spectrum Framework Review, is to move towards making greater use of market mechanisms to manage the radio spectrum and to reduce the extent to which the regulator prescribes how spectrum should be used. However, the Review acknowledges that the need for international harmonisation of satellite services somewhat limits the extent to which market mechanisms can be applied and the scope for allowing change of use of allocation in the UK. 3.5 As discussed above, ITU Resolution 49 requires the UK to impose administrative due diligence requirements on operators. Before registering a prospective system with the BR, it is incumbent on Ofcom to satisfy itself that there is a realistic likelihood that the satellite will in fact be launched and will not block a valuable orbital slot or frequency assignment because it subsequently fails to be commercially developed. It is also incumbent on Ofcom to monitor progress against pre-specified milestones for the deployment of the satellite network. 3.6 Ofcom s overall aim is to ensure that scarce spectrum and orbital resources are placed in the hands of those who can deliver the greatest benefit. Ofcom believes 7

that, in general, market mechanisms are more effective than regulation at achieving that objective. 3.7 In principle, market mechanisms could be applied by auctioning orbital slots for which the UK administration had received frequency coordination so that they are assigned to those that value them most and are most likely to deliver the greatest benefit. However, current legislation only allows Ofcom to auction wireless telegraphy licences or recognised spectrum access (RSA), a new spectrum management tool that has not yet been introduced. There seems little alternative, therefore, to continuing to rely on administrative scrutiny and assessment of applicants business plans in order to determine whether to submit a filing to the ITU. However, as discussed in following paragraphs, there are ways in which the process might be made more open and competitive. There may also be possibilities for secondary trading. Making the process more transparent and competitive 3.8 At present, Ofcom operates a first come, first served system. An operator applies to Ofcom for registration, Ofcom assesses the proposal for technical compatibility and against the due diligence criteria and, if satisfied, submits the application. 3.9 This process is not transparent in that other potential applicants have no opportunity to indicate their interest in the orbital position and frequency in question at the time of the initial application to Ofcom. This runs the risk that a higher value, but later, application might be blocked by the first filing or achieves a later filing date simply because of timing. It may be argued that this is unlikely to promote optimal use of the spectrum and orbital resource. 3.10 The process could be made more transparent and competitive by triggering a comparative selection process when an application is received for submission to the ITU. Ofcom would publish details of applications that had been received together with sufficient detail to enable other operators to decide whether they wished to declare an interest in a competing registration. If any did, this would trigger a competitive process. 3.11 This would enable Ofcom to make an informed decision based on its assessment of the competing applications on which is more likely to generate the greatest benefit and so should receive priority. 3.12 The FCC, the communications regulator for the USA, takes a similar approach in respect of proposed broadcasting satellite networks by initiating a competitive bidding process on receipt of competing applications for satellite slots1f2. 3.13 A possible downside is the additional time taken to process applications while Ofcom carried out a comparative assessment. This and the need to publish details of applications might deter applications to Ofcom. The FCC approach has been quoted as one of the reasons why companies choose to apply to the UK. If such an approach were adopted in the UK, it would be necessary to take into account the need to protect commercial confidentiality and national security in publishing information about proposed satellite networks. 2 Further information on the relevant FCC processes can be found in the US Code of Federal Regulations, Title 47 Part 25 (Satellite Communications), section 25.148(d). 8

Question 1: Do you think it would be beneficial or not to introduce a procedure whereby Ofcom publishes details of applications for registration to give others an opportunity to register an interest and then selects which to submit to the ITU? If so, do you have suggestions for the criteria Ofcom should use in making the selection? Later technically incompatible filings 3.14 The first come, first served system currently operated by Ofcom does not necessarily require it to refuse to file any application which is technically incompatible with an application which has been filed previously. If an administration were to submit a filing that was technically incompatible with an earlier filing it had made, it would be the responsibility of that administration to determine how to resolve the conflict. The ITU would not intervene since both networks would be the responsibility of the same administration. RA301 does not explicitly address the situation where a new proposal for a UK satellite network is technically incompatible with a prior UK satellite network filing. 3.15 There are thus two options that might be considered for the future. One option would be for Ofcom to decline to submit the later filing unless the conflict has been resolved to the satisfaction of the first applicant. 3.16 Another option would be for Ofcom to submit all filings that satisfy the due diligence test, even if they are incompatible with earlier UK filings. Assessment of options 3.17 The first option has the advantage that it keeps down the number of satellite filings and nugatory applications that may be prevented from proceeding because of technical incompatibility. However, it also has drawbacks. Automatic application of first come, first served may not necessarily give priority to the most beneficial application. (This drawback could be mitigated by introducing a more competitive process prior to filing or by introducing arrangements for filings to be transferred between operators, as discussed in this document.) It increases the barriers to entry relative to the second option. Later operators are likely to find it more difficult to raise finance without a clear place in the ITU queue. This is unlikely to be entirely mitigated even where filings may be transferred in the event that the earlier application is not progressed, given that the position on priority with the ITU may be uncertain if technical details relevant to the earlier filing had to be amended because the later proposal was not identical. A blanket policy of not submitting applications that are technically incompatible is disproportionate. In some cases of incompatibility, the degree of compatibility is relatively small and capable of being resolved in the subsequent coordination process. A later filing that is not submitted even if there is only a partial conflict with an earlier filing may be considerably disadvantaged. Assessing the degree of incompatibility in advance is often not straightforward. 3.18 The second approach has the advantage of lessening the degree of Ofcom s regulatory intervention in line with Ofcom s regulatory principles; and the existence of more than one filing makes it more likely that orbital locations at the UK s disposal will be developed for UK-represented networks. The later filing would still have to 9

coordinate with the earlier; but, if the earlier network failed to proceed, the second network would have established its place in the ITU queue. 3.19 However, there are also drawbacks to this option. This approach might lead to a perception that the UK was not committed to weeding out paper satellites. 3.20 It would have to be clearly understood that the UK remained committed to rigorous application of due diligence. A UK filing that conflicted with an earlier would not be able to proceed unless either it was possible to secure the agreement of the earlier operator or the earlier application did not proceed to commercial development. Later conflicting UK filings would, in that sense, be provisional and would have to be regarded as such by the operators concerned and their financial backers. The second applicant would still need to demonstrate compliance with Ofcom s legal and financial requirements before its filing was submitted. It might encourage other administrations to adopt a similar policy. If they did, this might increase the overload on the international processes and complicate coordination between networks as more filings would be made and each would need to coordinate with a greater number of prior filings. It would not be in the UK s interest to increase the backlog for dealing with notifications as this would increase delay and prolong uncertainty. It would also increase Ofcom s workload and costs and could lead to a delay in submitting applications to the ITU. 3.21 Any such risk would be reduced if the backlog was cleared and the ITU machinery became able to cope with a greater number of filings. The backlog has been reduced from around 2 years to 6 months. Moreover, rigorous application of due diligence can be expected to limit the number of additional filings. 3.22 In summary, Ofcom believes that there are strong arguments in favour of letting all applications that meet due diligence to go forward even if they conflict technically with an earlier UK filing. This represents a less intrusive regulatory policy, is more proportionate, reduces barriers to entry and seems more likely to achieve optimal use of the orbital slots at the UK s disposal. However, it could lead to an increase in Ofcom s workload and increase delays in the ITU system. This could ultimately disadvantage UK-represented operators and their customers. 3.23 A middle option, whereby Ofcom would submit applications only if the technical incompatibility was below some threshold, does not seem workable and could be inequitable in practice. It would involve a complex a priori assessment of the precise degree of technical incompatibility, and the threshold would inevitably be somewhat arbitrary. 3.24 Ofcom acknowledges the risks associated with submitting conflicting applications. However, the progress made in reducing the backlog and the fact that speculative applications will continue to be deterred by rigorous application of due diligence by national administrations leads Ofcom to propose that it should be prepared to submit applications that conflict with pre-exiting UK filings provided that due diligence requirements are satisfied. This policy will be reviewed in 2 years in case the backlog starts building up again. 3.25 Ofcom invites views on this proposal. Whatever policy Ofcom adopts is subject to the important caveat that the Secretary of State may direct Ofcom how to discharge its functions in representing the UK or other territories. The policy adopted by Ofcom is therefore subject to any directions from the Secretary of State. 10

Question 2: Do you consider that Ofcom should be prepared to submit conflicting filings to the ITU? It would be helpful if you could give the reasons for your view and suggest what conditions should be imposed on later UK applications that are not technically compatible with earlier UK filings and how the risks that have been identified might be mitigated. Re-assignment of UK satellite filings to other UK operators 3.26 Applications submitted by Ofcom to the ITU-BR are made in the name of the UK administration, with an indication of the network operator. In the event that an operator decides not to proceed with the construction and operation of its proposed satellite network or, if the operator does not comply with its commitments under the due diligence requirements, the filing would normally be withdrawn from the ITU. In some cases, the operator and Ofcom may have devoted significant resources to obtain coordination agreements with administrations responsible for other satellite networks. To withdraw such an application may be giving up a resource that might otherwise be used to bring communications services to citizen-consumers in the UK or to provide other UK satellite operators the opportunity to provide services elsewhere in the world. 3.27 Moreover, a system that allowed filings to change hands could reduce barriers to entry and allow filings to transfer to higher value networks. Any such transfer would require Ofcom s consent and would have to be subject to satisfying due diligence requirements. 3.28 It should be emphasised that Ofcom would expect to re-assign a filing only if: Due diligence indicated that the criteria that had been set were not being met or that the original network no longer seemed likely to enter commercial service on the timescale envisaged; or The original filing was voluntarily relinquished. 3.29 If a system of re-assignment were introduced, transfers might be facilitated by publication by Ofcom of information relating to filings it had submitted to the ITU. This would make it easier for operators interested in assuming the benefits and obligations of existing filings to become aware of the possibilities. There are certain parallels with the Wireless Telegraphy Register established by Ofcom to facilitate spectrum trading. See Ofcom Website Spectrum Trading and the Wireless Telegraphy Register for details of the register. 3.30 Ofcom would be interested to hear of suggestions as to how a satellite filing that would otherwise be withdrawn from the ITU might be made available to other interested UK parties. Question 3: Do you agree that if the operator of a satellite network is not in a position to proceed with its filing, that filing should be offered to other UK satellite operators. If so, on what basis should the re-assignment of the filing be made? Would it be helpful for Ofcom to publish information about filings to facilitate re-assignment and what should this contain? 11

Responsibilities of Ofcom and operators relating to coordination of UK satellite networks 3.31 The procedure for processing applications for satellite filings involves specific actions and schedules both for Ofcom and the satellite network operator. The operator must provide technical information to Ofcom in a format that is prescribed by the relevant ITU procedures. Ofcom then reviews the information to ensure accuracy and consistency with the procedures and submits the validated information to the ITU in order to obtain the important filing date which establishes the date of precedence with respect to subsequent filings. 3.32 Informal consultation with UK satellite network operators has indicated a desire for a more formal commitment by both parties in terms of the relative responsibilities and agreed timetables for completion of the various steps in the process. 3.33 The Australian Communications Authority (ACA) has implemented a procedure whereby the ACA and the satellite network operator commit, through a Deed of Agreement, to undertake specific actions necessary to achieve the relevant approvals and agreements for operation of the proposed satellite network. The Deed addresses a wide range of matters including ownership and control of the satellite network, provision of the relevant technical information by the applicant and the process to obtain agreement with other potentially affected satellite networks. The extent of any liability of the ACA and the level of fees that it charges for services provided are also identified in the Deed. Individual Deeds of Agreement are established between each applicant and the ACA. It is not clear to what extent this could be replicated in the UK but Ofcom could issue guidance on the procedure for satellite filings including clear performance targets on its part for determining applications. 3.34 In the US, the FCC procedures for the handling of applications for satellite networks are contained within the Code of Federal Regulations, Title 47, Part 25. This provides guidance on the General Application Filing Requirements ( 25.110-25.219), Earth Stations ( 25.130-139) and Space Stations ( 25.140-149). The section on Processing of Applications ( 25.150-159) documents the treatment of applications received by the FCC including the publication of data relating to requests for new applications for stations as well as significant amendments to existing applications. 3.35 The FCC regulations address conditions relating to all applications for satellite networks as well as specific provisions for some classes of orbit or use of particular frequency bands e.g. stations operating in the 1.6/2.4 GHz and 2 GHz Mobile- Satellite Service bands. 3.36 Ofcom would like to ensure that the procedure for consideration of applications for authorisation of satellite networks and their subsequent coordination is both transparent and provides to both parties (Ofcom and the applicant) a clear description of how the procedures will be implemented. Question 4: Would it be helpful to have a more formal statement of the roles and responsibilities of each party in a satellite filing and establish performance targets? If so, do you have suggestions for what such a statement and targets might encompass? 12

Additional due diligence issues Information requirements 3.37 As previously discussed, Ofcom is required under ITU Resolution 49 to subject proposed satellite network applications to a due diligence process. The current version of RA301, which is available electronically at RA301 - Procedures of the United Kingdom Administration in Relation to Satellite Networks, calls for information to be provided under two headings: commercial and technical. 3.38 The purpose of due diligence is to ensure that filings are only submitted to the ITU where there is a reasonable prospect that the proposed network will be brought into operation within the relevant time period. Information required under the existing procedures includes demonstrating that the applicant has the required technical, financial and legal credentials to construct, launch and operate the proposed satellite system in conformity with the timescales within their business plan. The nature of the information required depends on particular stage of the application e.g. advance publication, request for coordination or notification. 3.39 Some of this information is needed to ensure compliance with specific requirements of the relevant procedures of the ITU Radio Regulations. In addition, Ofcom needs a certain amount of commercial information for the purposes of due diligence to assess the likelihood that a proposed satellite network has an adequate level of commercial and financial backing and that there is a reasonable probability that the network will be brought into service. 3.40 Ofcom proposes to maintain the current level of information identified under Management Products including, in particular, that related to the business plan, contractual commitments and construction, launch and operation milestones. Ofcom does not currently prescribe a format for this information however some UK operators have indicated that this would be useful and ensure consistency while reducing the likelihood of requests for additional information. 3.41 Ofcom would welcome views on whether the amount of information and detail currently required in accordance with RA301 is proportionate or whether it imposes an undue burden on operators. Question 5: Are Ofcom s current information requirements proportionate and reasonable? Would it be helpful for Ofcom to provide a template for the submission of the technical and management information required at the appropriate stages of submission of satellite filings? Eligibility for UK filing 3.42 One specific requirement of due diligence is that the operator must be able to demonstrate that it has established a Satellite Control Centre (SCC) in the UK (or an Overseas Territory, the Channel Islands or the Isle of Man) in order to be able to be able to take appropriate action in the event of interference to another satellite network. The Tracking, Telemetry and Command (TT&C) stations used to transmit the relevant commands to the satellite are currently not required to be located in the UK. However, Ofcom is concerned that unless these stations are located in a territory where Ofcom has regulatory jurisdiction it may not be able to exercise its statutory requirements in respect of eliminating interference. 13

Question 6: Do you agree that, to qualify for UK filing, a network should have SCC and TT&C facilities located in the territory of the UK, an Overseas Territory, the Channel Islands or the Isle of Man? If not, what alternative criterion would you suggest? Fees and charges 3.43 In accordance with Section 28 of the Communications Act 2003, Ofcom may provide a service to any person on such terms as they may determine in advance or as may be agreed between that person and Ofcom. Services provided to UK satellite network operators in regard to the filing, registration and coordination of applications with the ITU are considered to be included within this provision. Accordingly, Ofcom intends to implement an appropriate charging mechanism to recover the costs incurred in carrying out this function. 3.44 The RA and, since 29 December 2003, Ofcom has sought to recover its costs related to participation in frequency coordination meetings only in as far as seeking reimbursement from operators for any travel and subsistence incurred in attending meetings held overseas. Operators have been invoiced on the basis of the issues considered at each such meeting, and these costs have been recovered accordingly. 3.45 Looking to the future, Ofcom proposes to recover the overall costs associated with providing the range of services involved in submitting satellite network filings and the subsequent frequency coordination activities. The intention would be recover the full cost of Ofcom activities including processing of applications for submission to the ITU and related frequency coordination efforts. Ofcom intends to consult on charging proposals in due course. 3.46 Ofcom has initially identified two alternative approaches for cost recovery. The ACA levies on its operators a non-refundable initial charge and thereafter it charges an hourly rate for all services provided. The FCC, on the other hand, has established a schedule of fixed charges based on the nature of the service provided. Ofcom recognises that any introduction of a cost recovery mechanism would need to be subject to further detailed consultation with the industry and therefore at this stage is seeking simply to gather initial feedback on high level principles. Question 7: What are your views on the principle that Ofcom should aim to recover the overall costs it incurs in providing the range of services involved in submitting satellite network filings and the subsequent frequency coordination activities? What basis would you suggest Ofcom adopts to calculate fees to recover the costs of satellite filings: a tariff of fixed charges, a variable cost charged on an hourly rate or some other basis? Additional considerations in reviewing RA301 3.47 RA301 indicates that a licence issued under the Outer Space Act may be required for the launch and operation of a satellite network. Such authorisations will continue to be the responsibility of the British National Space Centre. 3.48 RA301 also indicates that a licence under the Telecommunications Act 1984 would be required for an SCC facility established in the UK. Following repeal of the Telecommunications Act by the Communications Act 2003, this requirement has become obsolete. 14

Other suggestions 3.49 We would welcome views on other proposals to make the process more effective and efficient in terms of achieving optimal use of orbital slots at the UK s disposal and, in particular, suggestions for making greater use of market mechanisms. Question 8: Do you have other suggestions for improving the satellite filing process and, in particular, for making greater use of market mechanisms in registration of satellite networks? Next steps 3.50 Ofcom will consider the responses to this document and aims to make a statement with its conclusions in the latter part of March 2005. 15

Section 4 4 Regulatory Impact Assessment Introduction 4.1 The analysis presented in this section, when read in conjunction with the rest of this document, represents a Regulatory Impact Assessment (RIA), as defined by section 7 of the Communications Act 2003. You should send any comments on this RIA to us by the closing date for this consultation. We will consider all comments before deciding whether to implement our proposals. 4.2 RIAs provide a valuable way of assessing different options for regulation and showing why the preferred option was chosen. They form part of best practice policymaking and are commonly used by other regulators. This is reflected in section 7 of the Act, which means that generally we have to carry out RIAs where our proposals would be likely to have a significant effect on businesses or the general public, or when there is a major change in Ofcom s activities. In accordance with section 7 of the Act, in producing the RIA in this document Ofcom has had regard to such general guidance as it considers appropriate, including related Cabinet Office guidance. Proposal, purpose and intended effect 4.3 Ofcom s objective is to exercise its functions in relation to satellite filings in a way that complies with international obligations and makes optimal use for the UK and territories the UK represents of the orbital positions and spectrum associated with them. Policy objective 4.4 Ofcom s overall aim is to maximise the value created by use of the radio spectrum while avoiding unacceptable interference. Value will in general be maximised by allowing spectrum and orbital positions to be placed in the hands of the most economically beneficial use, by encouraging innovation, by removing barriers to entry for new companies or technologies and by minimising the time for which spectrum and orbital positions remain unused. 4.5 In line with its regulatory principles, Ofcom aims to seek the least intrusive regulatory mechanism to achieve its policy objectives. In the case of satellite filings, Ofcom also has to comply with the requirements of the ITU Radio Regulations and any relevant direction of the Secretary of State. Options and assessment 4.6 The procedures that Ofcom operates in relation to satellite filings are largely dictated by the international framework. However, Ofcom has identified a number of aspects where there are policy options. These are discussed in the previous section. The table below summarises the option assessments. Option Benefits Costs/Risks Mitigation Re-assignment of UK satellite filings Retains use of slots for UK or UKrepresented Filing may pass to business that does not intend to develop Rigorous application of due diligence 16

operators where a UK-filed network fails to develop network Places them in hands of those who can better use them where transfers take place by agreement between operators Reduces barriers to entry Submission of conflicting filings Greater opportunities for operators Reduced risk that operators with filings can block entry by competitors Consumers benefit if competition increases as a result of reduced barriers to entry Less intrusive regulation Growth in number of filings increases backlog and delays determination of filings Operators and financiers may still deterred because of uncertainty over project proceeding Perception that UK commitment against paper filings is diminished Rigorous application of due diligence Work to enhance ITU machinery and to reduce backlog Policy of not submitting technically incompatible filings Keeps down number of filings Maintains perception of commitment against paper satellites Potentially beneficial UK filings do not proceed Inefficient as those that value slots may be denied access Allowing reassignment of filings partially offsets the disadvantages Disproportionate and intrusive regulation Notification of applications received Greater transparency Higher value operators can express their interest with resulting potential improvements in economic efficiency Process takes longer Possible disclosure of commercially sensitive information Ofcom may find it difficult to judge which application is highest value in absence of auction Use best endeavours to streamline process Protect commercially sensitive information Secondary trading provides mechanism to correct 17

Annex 1 1 Responding to this consultation How to respond Ofcom invites written views and comments on the issues raised in this document, to be made by 5pm on Monday 7 March 20057 March 2005 Ofcom strongly prefers to receive responses as e-mail attachments, in Microsoft Word format, as this helps us to process the responses quickly and efficiently. We would also be grateful if you could assist us by completing a response cover sheet (see Annex 2), among other things to indicate whether or not there are confidentiality issues. The cover sheet can be downloaded from the Consultations section of our website. Please can you send your response to first.@ofcom.org.uk. Responses may alternatively be posted or faxed to the address below, marked with the title of the consultation. Bob Phillips Ofcom Riverside House 2A Southwark Bridge Road London SE1 9HA Fax: 020 7981 3061 Note that we do not need a hard copy in addition to an electronic version. Also note that Ofcom will not routinely acknowledge receipt of responses. It would be helpful if your response could include direct answers to the questions asked in this document, which are listed together at Annex 3. It would also help if you can explain why you hold your views, and how Ofcom s proposals would impact on you. Further information If you have any want to discuss the issues and questions raised in this consultation, or need advice on the appropriate form of response, please contact Bob Phillips on 020 7981 3119. Confidentiality Ofcom thinks it is important for everyone interested in an issue to see the views expressed by consultation respondents. We will therefore usually publish all responses on our website, 9Hwww.ofcom.org.uk, ideally on receipt (when respondents confirm on their response cover sheer that this is acceptable). All comments will be treated as non-confidential unless respondents specify that part or all of the response is confidential and should not be disclosed. Please place any confidential parts of a response in a separate annex, so that non-confidential parts may be published along with the respondent s identity. 18