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INSIGHT: The European Union + MSS
by Hartley Lesser

European satellite services without the need for numerous approvals — that’s the aim of the European Union (EU) and their latest decision to provide satellite operators with a single authorization to offer their technologies to customers. The Executive Commission of the EU believes creating a single permission process will create services that can extend to the most remote areas, as well as assist in ensuring the viability of such services, which would include high-speed data and mobile TV throughout Europe. With 27 member EU states, the number of approvals by satellite operators to bring their product to customers within bloc member nations was time consuming, costly and, many times, frustrating.

Directly from the European Union Commission’s QA, here is their information on how the selection process will work. This article will close with a look at some of the QA developed by the EU regarding this procedure.

In The Beginning

This new procedure for mobile satellite services was entered into force in July. Mobile satellite systems use radio spectrum to provide services between a mobile earth station and one or more stations either in space or on the ground at fixed locations. They have the capability to cover a large territory and reach areas where such services were economically unviable before. The new European selection procedure could allow companies to offer innovative wireless services throughout Europe over a specifically reserved spectrum as of 2009.

“Mobile satellite services have the tremendous advantage of being able to cover most of the EU’s territory, thereby reaching millions of EU citizens across borders. They represent an unprecedented opportunity for all Europeans to access new communication services, and this not only in metropolitan areas, but also in rural and less populated regions,” said EU Telecoms Commissioner Viviane Reding. “However, these satellite services depend on substantial investment and therefore need simple and swift procedures as well as long-term legal certainty. This is why the Commission, in close cooperation with the European Parliament and the Council of Ministers, set up, in a record time of only ten months, a single EU procedure for selecting interested operators of mobile satellite services. There is now one market, not 27, in Europe for mobile satellite services. Henceforth, the ball is in the camp of the industry. I expect intense competition among operators offering satellite-based communication services reaching consumers from the North of Sweden to the South of Spain. This could pave the way for first satellite launches already in the course of 2009.”

The competition among satellite operators launched by the European Commission is a first, as it takes place under a single European selection procedure. Until now, in spite of the clear cross-border dimension of satellite services, existing national rules obstructed the creation of a single market for mobile satellite services by leaving the selection of operators to each Member State. The result was a divergence in national approaches that created a patchwork of procedures, legal uncertainty, and a substantial competitive disadvantage for the satellite industry in Europe.

To remove these obstacles, the Commission proposed on August 22, 2007, based on its single market competences, a new EU decision under which a single selection procedure for mobile satellite services can be organized at European level (IP/07/1243). This decision was adopted by the European Parliament and the Council and entered into force on July 5, 2008. It establishes common EU rules for the use of the 2 Ghz bands by mobile satellite services. This will not only simplify and speed up licensing procedures for operators‚ ”encouraging investment and the roll out of mobile satellite services‚” but at the same time make sure that these services cover at least 60 percent of the EU’s territory‚ an important step towards gradually achieving coverage of all EU Member States.

Interested companies have until October 7, 2008 to present their applications to the European Commission. During the first phase of the selection process, technical and commercial ability of the candidates to launch their systems in time will be assessed.

The criteria in the second selection phase include, among other things: the speed at which all Member States will be covered; the range of services, including in rural areas, and the number of end-users to be served and the capacity of the system to fulfill public policy objectives and spectrum efficiency.

All Member States must ensure that selected candidates have the right to operate in their country. Depending on the number of candidates, the Commission expects that the selection procedure can be completed in the first part of 2009. First satellite launches could take place in 2009.

The full text of the call organized by the Commission and further background information are published at this link. The new EU Mobile Satellite Services Decision is available at this link.

Making The Grade
This selection process is comprised of two phases. During the first phase, technical and commercial ability of the candidates to launch their systems in time will be assessed using five pre-defined milestones. If more candidates pass the first phase than could be accommodated within the spectrum available, they shall be assessed in the second selection phase against the following four selection criteria:
  • Consumer and competitive benefits provided (20 percent weighting)
  • Spectrum efficiency (20 percent weighting)
  • Pan-EU geographic coverage (40 percent weighting)
  • And, the extent to which public policy objectives, not dealt with by the other criteria, are achieved (20 percent weighting)
The credibility of applicants and the viability of the proposed mobile satellite systems will be taken into account throughout the process. A Commission Decision selecting the successful candidates will conclude the procedure. All Member States will have to make certain selected candidates have the right to operate in their country.

Why do satellite operators need legal certainty from the EU to launch mobile satellite services? The costs of producing and launching a satellite can run to hundreds of millions of euro — satellite operators have to pay those costs before any revenue can be generated from the use of the satellite in question. Investment on such a large scale can only be undertaken by relying on a stable, legal environment, making sure that satellite operators will be able to offer mobile satellite services across Europe throughout the life-time of the satellite.

Any mobile satellite services operator established in the EU can apply by the deadline date to be included in this process. Services have to cover at least 60 percent of the EU’s territory as of the date the services commence. Coverage of all Member States is required, at the latest, seven years after the selection decision. In addition, the geographical coverage is one of the criteria that will be assessed in the selection process. It is obviously in the operator’s interest to reach as many potential customers as achievable by serving an area as wide as possible.

The number of services to be provided by the selected systems is not determined as of this writing. Many industry players are seriously interested in being selected to provide a number of services over the 30 MHz available for uplink and downlink, but the eventual number of selected systems will partly depend on the frequency capacity they require.

However, the selected systems themselves are generally expected to be capable of carrying a variety of mobile satellite services depending on spectrum efficiency options and business models. For instance, emergency communications and mobile television services can potentially sit on the same system. In addition to the number of services, the potential number of users is expected to be important, as satellite systems typically have a much wider geographical coverage area than other types of communication networks.

Will the selected candidates receive a “European license” and pay a “European license fee”? And the answer to that question is a definitive “No”. Only the selection of the operators of systems of mobile satellite services will be made at European level. Operators will be “licensed” or “authorized” by each Member State, subject to a number of harmonized authorization conditions.

In other words, there is now a “European template” for decisions that continue to require implementation at national level. If there are fees, these will be determined nationally. Any fee must be justified, transparent, non-discriminatory, and proportionate to the intended purpose.

Operators will benefit directly from economies of scale which will result from consistent national authorizations across the EU. This process will encourage investment in the sector, thanks to the transparency and legal certainty offered by this consistent EU approach.
Businesses and citizens will also benefit from the high-speed services that will be offered by operators such as: high-speed internet access, mobile TV services,.emergency services, and so on.

Mobile satellite systems also open up new geographical areas to services that were once considered too expensive to reach. This in turn, should energize local economies and help close the digital divide.