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GMPCS REGULATIONS IN THE US AND THAILAM) Snomnart Metheekul A thesis submitted to the Facuity of Graduate Shidies and Research in partial fulnllment of the requirements of the degree of MASERS OF LAWS Lnstitute of Air and Space Law McGiil University, Montreal October, 1997 Copyright 6 Snornnart Metheekul
Transcript of GMPCS REGULATIONS IN THE THAILAM) - Library … REGULATIONS IN THE US AND THAILAM) Snomnart...
GMPCS REGULATIONS IN THE US AND THAILAM)
Snomnart Metheekul
A thesis submitted to the Facuity of Graduate Shidies and Research in partial fulnllment of the requirements of the degree of
MASERS OF LAWS
Lnstitute of Air and Space Law McGiil University, Montreal
October, 1997
Copyright 6 Snornnart Metheekul
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ABSTRACT
This thesis will examine the utilkation of the Low Earth Orbit (LEO) regime by
Global Mobile Personal- Communications by Satellite Systems (GMPCS) operators and
the requirements that governments must tùifill in order to aquire orbit/spectcum
resources f+om the International Telecommunication Union for the purpose of
deploying GMPCS. ln addition, it will study the administrative obligations to consult
and noti& the International Satellite Organizations (ISOs) of the proposed LEO-based
satellite systems so as to prevent technical incompatibility and economic harm to exking
ISO systems. The regulations of three ISOs, narnel y the International Satellite
Organization (INTELS AT), the International Maritime Satellite Organization
(INMARSAT) and the European Telecornmunications Satellite Organization
(EUTELSAT) will be examineci in this context. Also included is an examination of
United States regulations (as exemplar of regulations in a developed country) and
regdatory recommendations for GMPCS consumer countries, in particular, less
developed countries (LDCs), such as Thailand.
1 wish to thank, first and foremost, the Royal Thai Govenunent, and particularly the Division of Aviation, which gave me the opportunity and honor to study at McGill University. It is to Thailand, my home, that 1 dedicate this thesis.
1 am forever gratefiil to Pmfessor Ram Jakhu, my thesis advisor, for his inspiration, patience and kind assistance in the preparation of this thesis. It was as a student in his classroom that 1 first became interesteci in the area of his expertise. His enthusiasm was contagious.
1 especially wish to thank Prof Dr. Michael Milde, Director of the Institute of Air and Space Law, who demanded of his students the highest standards o f scholarship and professionalism, which 1 shail always strive to achieve.
1 wis h to thank Melissa Knociq an assistant editor of the Anmls of Air and Spce Lmu, who edited my thesis. Her advice, assistance, patience and encouragement were indispensable to me.
The quality of this thesis would not have been possible without the assistance of my dear fkiend David H Eu, who helped me to better understand and express the scientific and technical aspects of my thesis and who encouraged me, day after day, to produce the best work 1 could. 1 also wish to thank JeamFrançois Touchette, my best friend in Montreal and a cornputer wizard, who helped me with French-English translation and the formatting of this thesis. Jean-François always made me feel welcome in a country so far fiom my farnily and my home.
Finally, 1 wish to thank my farnily who always supported and encouraged me in my studies at McGill and in my decisions in life.
Snomnart Metheelcul Montreal November 3, 1997
Dans, cette thèse nous nous pencherons sur l'utilisation que le opérateurs de
systèmes de satellites font des orbites terrestes à basse altitude (LEO: Low Earth Orbit)
pour les Senrices de Communication Personnefle Mobile Globale (SCPMG) et sur les
besoins que les gouvernements doivent rencontrer pour obtenir des allocations de
ressources d'orbite et spectre auprès de l'Union tnternationale des Télécommunications
(üIT) dans le but de déployer des SCPMG. En plus, nous y examinerons les obligations
administratives à consulter et à notifier les organisations internationales des satellites
(OIS) au sujet des systèmes de satellites LE0 dans le but d'éviter les incompati'bilités
techniques et les dommages économiques envers l a systèmes OIS existants. Les
règlements des trois OIS, soient, INTELSAT (International Satellite Organization),
I N M A R S AT (Internatioiial Maritime Satellite Organization) et EUTELS AT (European
Telecommunications Satellite Organization), seront examinés dans ce contexte. En plus,
nous examinerons la réglementation des États-UNS d'Amérique (comme un exemple de
réglementation dans un pays développe) et les recommendation de réglementation pour les
pays consommateurs de SCPMG, en particulier, les pays moins développés, telle que la
Thailande.
TABLE OF CONTENTS
INTRODUCnON .................................................................................................. 1
. Scope of this didon ..........-........ . ,..., ., 2
CHAPTER l...mmmmm.m........~.. ...w...........~..................mm..............m.......m......m..............m 3
2. LOW EARTH ORBIT SATELLITE S Y S T E M S m m . . . . m m m m ~ œ - - m m œ ~ œ - œ ~ œ œ - r m ~ m o m m m m w m 5 .......................................................................................................... 2.1 Little LE0 Consteilaiions 5
............................................................................................................. 2.2 Big LE0 Constellations 6
................................... 3. TECHNICAL ASPECTS OF MOBILE TELEPHONY..... 8
................... 4 . TECHNOLOGICAL ASPECTS OF LE0 CONSTELLATIONS .... 10
.......................................................... 1 . PLAYERS IN LEO-BASED SYSTEMS 13
1.1 Little LEOs .................o...o......o.............................................~.....................o..........M..M....o... 13 ............................................................. 1.1.1 Orbital Communications Corporation (ORBCOMM) 13
1.1.2 STARSYS Global Positioniag, hc . (STARSYS) ................................................................. 13 1.1.3 Volunteer in Technical Assistance (VITA) ............................................................................ 14
1.2 Big LEOs ........... .., ....... ~..........................................o.................................................oo....o... 14 1 .2.1 GLOBALSTAR .................................................................................................................... 15 1.2.2 IRIDIUM .............................................................................................................................. 19 1.2.3 ODYSSEY ........................................................................................................................... 22 1.2.4 -AT-P (ICO) ............................................................................................................ 25
f . LEGAL REQUIREMENTS OF SATELLITE TELECOMMUNICATIONS ........ 29
2.1 International Tekcommunication Union (ITU) .................... ...............H.......................... 31 2.1.1 F i Corne. First Served Principle ......................................................................................... 33
....................................................................................... 2.1.2 F i Corne. Fust Sened Procedure 34 .................................................................................................................. 2.13 A O g 37
2.1.4 The Radio Conferences ......................................................................................................... 39 2.1.5 WARC-92 ............................................................................................................................ 40
................................................................................................... 2.1.5.1 Frequency Auocatioas 40 ................................................................................................................ 2 1 5 2 O & 41
2.1.5 -3 Resolution 70 ...................................................................................................... 4 2 2.1.6 WC-95 ............................................................................................................................... 43
3 . INTERNATIONAL SATELLITE ORGANEAllONS ................................m..... .44
........................................................... . 3.1 MTELSAT ..A....-.....-rnrr.rw..r...o 45
CHAPTER IV ....................mm................................................................................ 51
1 . TELECOMMUNICATIONS INDUSTRIES AND THElR REGULATIONS IN THE UNITED STATES ...............................................................m....................... 51
1.1 The Telecommunications Act of 1996 o......,... ........n.o....o.o.....orn . w ~ ~ SI 1.1.1 Teleçommunications market pnor to the advent of the Telecommuaications Act of 19% ....... 52 1.1.2 The Modined Fiaal Judgement (MFJ) and its influence in the domestic telecorn market ......... 53 1.1.3 The MFJ Regdatory Consequences: Two-tier Regdatory Status ........................................... 55
...................................................... 1.2 The Consequencis of tbe Tekcommunications Act of 1996 S8 ............................................................................................................................. 1.2.1 Telephoay 58
1.2.2 Biennial Review of Regulation .............................................................................................. 61 * . ...................................................................................................... 1.2.3 Satellite Comm~i~lcations 61
........................................................................................................................ 1.2.4 Disco 1 and II 62 1.2.5 LE0 SateUtes ...................................................................................................................... 63
................................................................................................ 1.2.6 Speciai Provision on GMPCS 63
CHAPTER V ....................................................................................................... 68
1 . THE US REGULATORY BODIES AND THElR ROLES IN IMPLEMENTING THE USE OF LE0 .............................................................................m............... 6 8
............... 1.1 The Federai Communications Commissioa @CC) , ... .". .......................................... 68 .................... .......... 1.2 The Department of State @oS) ., ............................................................. 72
1.3 The Natiooai ~d&ornmuiications and Inlamation Adainidration (NTU) .......................... 73
.......................................................................................... . 2 LEX AMERICANA 73
CHAPTER VI .................................................................................m.................... 76
1.1 Regdatory ~UI I I IU IWI~ . . . . . . ~ .C .U I I I I I I . ~ . . ~~ . . . .C . ..... 76 1.1-1 Space Segment LicenSng ............ .,.... .................................................................................. 79
................................................................................................ 1.1.2 Gateway Licensuig Problems 83 1.1.3 S e ~ œ Liceushg issues ..................................................................................................... 85
................................................................ 1.1.3.1 Some Questions Reiated to Service Liœnsing 85 1.1.4 Issues regarding Handsets .................................................................................................. 89
CHAPTER VI1 ..................................................................................................... 95
1 . TELECOMMUNlCAlWN IN THAILAND AND RECOMMENDATlONS FOR .................. THE LDCS REGARDMG THE INTRODUCflON OF THE GllllPCS 95
1.1 Sateilite Communicrtioas in Tbaiirnd: The Intnidgctioa........... .......- .. 95 ............................................................................................................... 1.1.1 LNTELSAT System %
1.1.2 PALAPA System ................... ..-. .......................................................................................... 97
2 . TELECOMMUNICATIONS OEVELOPMENT IN THAILAND m........m............... 98
2.2 Cellular Telepboay w a t i o a s ...............UH....~...H....œ....H......H................................................ 99 2.2.1 Condilions for the proposeci projects ............................ .. 100
........................................................................................................... 2.2.2 Operation Milestone 100
3 . GMPCS IN THAILAND ................................................................................. 103
3.1 Regulatory Recommcndations for Tbriilrnd and the LDCs .....~..........*.......................................... 103
CONCLUSION. ................................................................................................. 109
INTRODUCTION
In the last half decade, the telecommunications world has witnessed the
develo pment of the LEO-based satellite systems to offer Global Mobile Personal
Communications by Satellite Systems (GMPCS). The fundamental concept of the GMPCS
is to offer the user, on a global basis, broad band telecornmunications that provide access
to voice, data and images as well as text transmission in a single mobile unit. LEO-based
satellite systems Vary fkom one system to another in the number of satellites, the services
offered, the financial. overhead and the business strategies that operators employ to b ~ g
their systems to market in consumer c o d e s .
Communications between dierent mobile technologies has encountered many
problems due to the diverse radiotec hnologies utilized in various countries. Because
GMPCS is global and uses the inter-satellite communications networks, it provides viable
solutions to these problems. Aithough initiaiiy targeted to serve business travelers, the
systerns are now also designed to provide regular communications services in underserved
areas. Consumer countries are able to enjoy the advanced technologies of the GMPCS
without the need to consmict independent national telecommunications hhstructures.
Scope of this discussion
Due to the global scope of the GMPCS, several legal issues conceming both
international and national regulations rnust be taken into consideration. In this thesis, we
will study the utirization of GMPCS, its characteristics and the existing regulations
imposed by the International Telecommunication Union and other
Intergovemental Satellite Organizations (ISOs). Since the US has been a major player in
bringing GMPCS into exktence, we will also analyze US telecommunications regulatory
regïmes and their recent developments. in addition, we will review several questions
conceming regulatory issues for GMPCS, namely, space segment ücensing, gateway
licensing, service Licensing and mobile terminal iicensing. In the conclusion, we will
propose recommendations for regulations in counuies other than the Licensing countries.
The scope of this thesis excludes:
Regdatory regimes governhg Little LE0 systems such as ORBCOMM and
STARSYS;
Regional geo-stationary systems in the Mobile Satellite Service (MSS), for
example, that of the Arnerican Mobile Satellite Corporation (AMSC);
The proposed wide-coverage global satellite systems, such as Teledesic and
Hughes' Spaceway, which wiil be operational in frequency bands appropriate for h e d
rat her t han mobile service.
In this chapter, we wüi explore the various types of space utiiization by
communication satefites. The purpose of this exploration is to introduce and examine the
applications of Low Earth Orbit satellite constellations. In order to understand how the
sateüite ftnctions, the study ofgeo-stationary satellites, the iïrst generation of sateUtes for
the use of commercial purposes, is carried out.
1. Geo-stationary Orbit Satellite Systems and Their Characteristics
A sateüite launched into a geo-stationary satellite orbit (GSO) beyond the earth's
atmosphere achieves rotation about the earth when the earth's gravitational forces are
sufficiently counteracted by station-keeping systems on board the satellite. The rotational
speed of the satellite is equal to that of the carth. Consequently, the satellite appears to
remain fixed at one point above the earth's surface. Its orbital circle Lies in the plane of the
earth's equator. It should be noted that the term "geo-stationary orbit" is not as meaningful
as "geo-stationary satellite orbit": without the deployment of a satellite in such an orbit,
the orbit would be of no practical use.'
' See R Jakhu, "Some important Elements of the Geostationary Orbit" in kgal Regime of the Geostationary Orbit @.CL, Thesis, Montreai: Institute of Air and Space Law, 1983) at 1-2.
1.1 Technical Characteristics
The GSO maintains an approximate altitude of 36,000 km above the earth's
sufice, executing a path paralle1 to the plane of the equator. This path is not a line but
rather a ~g that is 30 km wide and ranges in length to 150 km. The geo-stationary
satellite completes one revolution in 23 hours, 56 minutes and 4 seconds, approhating
the earth's revolution tirne of 24 hours. This synchronicity can be attrïbuted to the earth's
gravitational force, its oblateness, the equator's elliptic shape, lunar and solar gravitational
forces and solar radiation pressure. It is not natural phenomena alone, however, tliat keeps
the geo-stationary satellite aloft in space. Station keeping systems on board the sateliite
help to compensate for the natural forces iduencing the movement of the satellite. As a
result, the satellite remains in the required position during orbit.*
Because of this synchronous revolution, the satellite is able to "seeu the earth 24
hours a day. in other words, it has constant visibility of the earth. Furthemore, it is
possible for the earth stationsf antennae to remah fixed in position whiie transmitting and
receiving radio signals. in addition, only a three-satellite consteUation is required to
establish a "footprint" that covers most of the earth's sudiace am.' Nevertheless, to obtah
better coverage this number is usudy increased.
' See ibid. See ibid. at 12.
2. Low Earth orbit Satellite Systems
A Low Earth Orbit (LEO) satekte maintains an altitude of 1,000 to 2,000 km
above the earth's surface- in comp~son with satellites in the GSO, satellites utilinng the
LE0 rotate at a faster velocity in order to maintain their low altitude. This is required due
to the stronger centrifiigal forces involveci. This space segment plays an important role in
modem telecommunications because of its new application: Global Mobile Personal
Communications by Satellite Systems (GMPCS). SateIlites in LE0 can be categorized into
two types based on the services they provide and the frequency bands used by the systems.
2.1 Little L E 0 Constellations
Little LE0 satellite systems operate below the fiequencies of 1 GHz. They provide
the tracking and recovery services commonly used to find stoten cars, as weU as position
detemination to detect hikers, hunters and other outdoor enthusiasts. The services
provided are two-way messaging and ot her non-voice communications. The UHiWHF
bands are used for two-way messaging, low rate data transmission, vehicle tracking and
recovery.'
' See I.P. Schulz, "Little .LEOS and Their Launchers" (1995) 3 Corn L. Conspectus 185 at 1%.
2.2 Big L E 0 ConsteUations
In addition to the seMces provided by Little LE0 satellite systems, the Big LE0
consteliations offer Loice seMces at tiequencies of one to three GEk. They play a
significant role in telecornmunications by enhancing rd-time voice communications and
facsirnile between compact mobile terminais. The data links are 9.6 Kbits or faster. In
addition, their geographicai coverage is significantly greater then the conventional geo-
stationary system's range. 'This gives GMPCS the capability to provide concurrent service
connections to arbitraq locations on the earth's surface. The capacity of the system is
significantly high: in any one given senice a m its capacity is adequate to d o w for at
least 20,000 simultaneous communication links.
GMPCS is still in its infancy and further development is requüed to deploy the
system more effkctively and with lower costs. The s e ~ c e charges estunated by several
system operators are relatively high compareci to fies charged by existing cellular
providers. At this early stage, the LEO-based system is expected to serve "niche
markets'? An example of such a market is the business sector, in which there is a high
number of fiequent travelers. Taking into consideration the comparatively hi& cost of the
handsets and seMce charges, system operators have sought the collaboration of cellular
providers. The result is the "dual-mode" handset which employs both cellular and GMPCS
S e ITU. Report of the Third Regulatoy Colloquiunr, The Changing Role of Govemment in An Ero of Telecom Deregula tion: Global Mobile Personal Communications Systems (GWCS) (Geneva: W, 1 9 9 5 ) [unpublis hed] at 15 Dereinafter Regdatory Colluquium] . Ibid. at 22.
technology. Dual-mode technology is promising and beneficial for both parties because the
LE0 space segment is resewed for t r a c that requires the connedion with the space
segment. This means that cellular technology is enhanced by the depioyment of an LEO-
based system and simultaneously, LEO-based technology benefits from cellular
technology. The ultimate result is that consumers of both systems pay less for
communication services of superior performance.
This relationship between cellular providers and GMPCS operators cannot be
properly considered without taking into account other contributhg elements. Due to the
global coverage and international elements of GMPCS, international and national policies
must also be considered when deploying such technology.
It has been estimated that within the Limiteci spectnun ailocated for the GMPCS,
the planned systems altogether would serve approximately 5-10 million subscnbers as
early as the b e m g of the next century. As for cellular services, the estirnated figure is
around 200 million subscribers for the same penod of tirne.'
When estimating the expected revenue of GMPCS operators, it is appropriate to
use US celhlar companies as an illustrative model. The total sales in the US wireless
phone market for 1996 was $25 billion. in the same year, telecornmunications giants Wre
Sprint eamed a dividend of $14.04 billion, AT&T grossed $52.18 billion and newcomers
Nextel and Omnipoint gained $332.9 million and $50 million respectively.' The market is-
See ibid at 21-22. * See J. Greenwaid "CeIl Phones: Wid, Wild Wireless, nices plunge in the œU-phone fight But who knows what to buy?" T h e Magazine (26 May 1993) at 34.
not yet saturated and will probably continue to grow as a resuit of the deregdation
engendered by the Telecommunicatio~t~ Act of 1996, which mates a "tiee-for-aii" market.
The objective of the Act is "to promote cornpetition and reduce regulation in order to
secure Iower prices and higher quality services for Amencan telecommunications
consumen and to encourage the rapid deployment of new communications technologies" .g
3. Technical Aspects of Mobiie Telephony
Wireless telecommunication or mobile telephony is a mode of two-way voice
communication by radio that travels via a ceU network.1° The network consists of a group
of adjoirüng hexagonal-fonned "ce~s".'~ Each ceU contains a radio transmitter/receiver
that is capable of sending and receiving signals within a twenty-de radius. This range is
dependent on the arnount of wireless t d c the network carries. For example, if the
cellular network is operated in a densely populated are* the cells must become
comparatively smaüer. Consequently, each ceil may have a radius of less than a mile. In
contrat, in sparsely populated areas, the network tends to operate at its tllll capacity of
twenty miles. in other words, the smder the ceU becomes, the larger the number of
people that wiil be able to use ceUular phones of the sarne network. This increase in
capacity arises because as the dimension of the ceUs decrease, the network's capacity to
reuse available frequencies in nonadjacent cells in the network increases. This phenornenon
can be fùrther explained by the FC'Cs statement that:
9 Telecommunications Act of1996. Pub. L. No. 104-104. 110 Stat 56. ' O See RB. Friedrich Note. "Regdatory and Antitrust Implications of Emerging Cornpetition in Local Access Telecommun.ications: How Congress and the FCC Can Encourage Cornpetition and Technological Progress in Telecommunicationsw (1995) 80 Comeii- L. Rev. 646 at 662-663. ' l This word is emphasized by author Friedrich.
[the c d isJ divided into discrete chanaelsU which are assigned in groups to small geographical ceUs covering a defined senice area. The key to the ceUdar system's high capacity is its ability to shrink the s k of those cells while holding the total amount of spectrum used by the system constant. What results is a multiple re-use of channels throughout a given geograp hicai area 13
Each receiver in a cellular network is connecteci to a mobile telephone switchhg
office (MTSO) by wire or rnicrowave transmission. The MTSO's fùnction is to coordinate
the ceU sites within the network and in turn, interconnect the network with the local
wired-telephone network- In addition, it also relocates a cal1 via the new c e U receiver
when a mobile unit tnivels 6om one cell to another. This fùnction protects the
transmission from being discomected while the mobile unit is roarning. It changes to a
fiequency dBerent from the one that it was ushg when the cal1 was fint c o ~ e c t e d . ~ ~
The cellular phone transmission is implemented as follow S. Analog technology
employed in most modem ceiiular networks trançfoms human voice into an electrical
signal which is later transmitted through fiequency. When this transmission reaches the
end user within the originating celi, it is transferred to the MTSO and subsequently to the
local wired- telephone network?
" The terms "channels" and "fiequenciesn are interchangeable. l 3 An Inquiry Relative to The Future Use ofthe Frequency Band 806-960 Mnz, 46 F.C.C.2d 752 at 753 (1994). 14 See P. McGuigan et al., "Cellular Mobile Radio Telecommunications: Regulathg an Emerging Industry" (1983) B-Y.U. L. Rev. 305 at 3 I l . '' See Friedrich, supra note 10 at 663.
4. Technological Aspects of L E 0 Constellations
Technological advancements in rnicroslectronics have allowed LE0 system
handsets to develop a f ~ r e set comparable to that of a satellite earth station. As a result,
LE0 system handsets are simpler to use when compared to ceUular systems and wired-
telephone systems because the communication t d i c ody requires two entities which are
the mobile unit or the handset and the satellite system.16 Two people using two mobile
units can cornmunicate via sateliite if they are in the same footprht. l7
In a case where the cder and the receiver are not both in the footprim of the sarne
satellite, the LE0 satellite system phone operates dinerently. The signals emitted €iom the
cder's handset are sent to a satellite that retransrnits the signals to a gateway earth station.
At this stage, the gateway, which comprises switching and networking fiinctions, relays
the signals to the public switched telephone network (PSTN) and f?om there the signds
are routed to the target wired telephone or handset." A gateway is essentiaiiy a large
signal switchboard that is capable of rediiecting communication Links to other local
networks.
To make the systems economically viable, the number of gateway earth stations
must be carefuUy controlied. This is required because they are complex infrastructures
16 See R Shaw, Satellite-Based Global Persona1 Communicution Svstemx An Anaiysis From Telecom 95 (Geneva: ITU. 1995) [un'published] at 4. 17 See S. Gold, "Satellite TechnoIo= Cornes Down to Earth" Syuhey Moming Herald (6 September 1994) at 36. '' See KPMG Pea* Marwick, Satellite Personal Communicutions and lïteir Comequencesfir E u m p e ~ Telecommunications, Trade and lndustty. Doc. XW165194-EN: 1 (1994) at 156 [hereinafter KPMQ.
which carry high financial overheadLg For example, an Iridium gateway system costs
approximately S 15 million? Therefore, when deploying the gateway systems
geographicaliy, two opposing variables must be balanceci in the economic equation. The
number of gateway systems must be minimized but at the same the , the total global
coverage must be mrwmized. This means that system providen are unable to fumish each
country with its own gateway. Instead, a group of neighboring countries share a common
gateway. For instance, Indium's first gateway, estabfished in ~hailaa<i'~ will serve Bunna,
Laos, Vietnam, Malaysia, Cambodia, Singapore and f ha il and? One possible hindrance
that might be encountered by a gateway that serves severai countries is that each country
may have its own telecommunications system.
LE0 satellite systems comprise satellites and gateways. We wiii first discuss the
role of the gateways. National or regional operaton provide gateway firnctions for the
systern operators. This means that an LE0 system wi l make use of the available
inf?astructure of regional or national operators who, in many cases, are the govemment
departrnents of Post Telephone and Telegraph (PTT) of the countries involved. The
benefits reaped by the~e user countries are the international communication services
obtained, the fee of service entry paid by the proposed s e ~ c e providers and the option to
l9 See "Proposal for a Eumpean Parliament and Couacil Decision on an Action at a Union Level in the Field of Sateliite Personai Communications Services in the European Unionn (8 November 1995) 529 final at 13. " See A. Ashayagachat. "Thai Satellite Communications in Deal with Telekom Malaysia on Satellite Link" Bangkok Post (10 February 1995) at 19. '' See ibid. - See C. Nivatpumin. ''Iridium Roject Ahead of Scbeduie* Bmgkok Post (7 August 1995) at 19.
invest and own a portion of the system." The topic of investment and ownership in the
system wiii be addressed in a subsequent chapter. In addition to the traditionai
infiastructure(s) that national openiton currently provide, the operators mua estabüsh the
cross connection of Personal Communications Network (PCN) and the network
termination point so as to intercomect trafnc between Merent networks. Since a gateway
system is able to serve several countries, it is possible for Personal Communications
SeMces (PCS) to be operationai in a given countqr even ifthere is no estabiished satellite
ifiastructure in that country.24
The requuements for the proper operation of a sateUite are the upli* the dow* the
satellite itseif and the earth stations that are equipped wîth earth-based satellite control
systems. Unlike the gateway functions, the seMces of the satellite are executed by the
system ~ ~ e r a t o r s . ~
~3 See Regulotory Coffoquium, supra note 5 at 29. ' 4 See KPMG. supra note 18 at 156. See ibid.
CHAPTER II
1. Players in LEO-Based Systems
1.1 Little LEOs
In the previous chapter, we disaissed the utilization of the Littie LE0
constellations. We wiii now examine the implementatioa of the space segment. There are
three major corporations hvolved in the deployment of Little LEOs. They are: Orbital
C ommunîcations Corporation (ORBCOMM); STARSY S Global Positioning Inc.
(STARSYS); and Volunteer in Technicd Assistance (VITA).
1.1.1 Orbitai Communications Corporation (ORBCOMM)
Located in Dulles, Virginia, ORBCOMM is completely owned by the US Company
Orbital Sciences Corporation. The fint proposal for the project detailed a 26-satellite-
constellation system-with a near polar orbit altitude of 425 km. The corporation later
increased the sue of the constellation to 36 satellites and the orbital altitude to 775 km-
ORBCOMM is authorized by the FCC to operate in the 137-138 MHz bands and to
provide data message and location-6nding services."
1.1.2 STARSYS Global Positioning, Inc. (STARSYS)
STARSYS is located in Lanham, Maryland and plans to offer location
determination and low rate data transmission seMces in Canada and the US using a
' 6 See C. Lardier. "Definition Acbevee des Globalair" 127 Jan- 1995) Air & CosmodAv. ht'l at 38.
constellation of 24 satellites stationed at an altitude of 1,300 km. Nmety-five percent of
the Company shares ire held by a Company d e d Stargos, S.A, which is partly owned by
the French Space Agency CNES and its representatives. The FCC authorized STARSYS
to function in the 148450 MHz bands. Code Division Multiple Access technology will be
used to provide commercial two-way messaging and position finding?
The VITA Corporation is based in Arlington, Vuginia Its initial objective was to
provide a non-profit medical information service. This s e ~ c e entailed the dissemination of
information, including preventive masures and procedures in the case of an emergency.
The information would be transmitted Born two LE0 satellites to various and possibly
distant areas around the worid. Later, the proposal was amended when VITA finalized the
construction contract with Rockville CTA Space ~~sterns.~' VITA has been authorized to
function in the 400-401 M H i bands. It utilues both Frequency Division Multiple Access
(FDMA) and CDMA technology in its operations.
1.2 Big LEOs
The FCC awarded licenses to three ventures in Januaiy 1995, namely the Loral-
led Globalstar, the TRW-led Odyssey and the Motorola-led ~ridiurn." It rejected proposais
by Mobile Communications Holdings (EUipso) and Constellation Communication (Aries)
'' See T. Stevens, "Regdation and Licmsing of Low Earth Orbits Satellites" (1994) 10 Computer & High Tech. L. J. at 422. '8 See Schuiz, supra note 4 at 187-188. m See J-C. Alemo. "Big LE0 Cornpetiton Raçiag Toward LaunchR [17 July 19951 Av. Wk. & Sp. Tech. 61.
on the grounds that both corporations fded to meet the hanciai requirements stipulateci
by the ~ommission.~~ Two of the three ticensees, Globalstar and Iridium, d operate in
LEOs. The Odyssey system and another cded ICO, which is authorized by the UK on
behalf of ZNMARSAT, will be in service in Medium Earth Orbit (MEO). We will disniss
the technicd as well as the economic aspects of each system.
1.2.1 GLOBALSTAR
Globalstar's proposeci system comprises 48 satellites orbiting on 8 planes. The
system reserves 8 satellites in case one or more of the operating satellites maifiinction.
Globalstar is developed by Space Systems/Loral and Quaicornm. In this system, a cal1
made by a Globalstar user will be transmitted to a sateiiite that will relay the radio signal
to the closest terresirial station within its f o o t p ~ t . The eanh station will connect and
transfer the signai to a PSTN, which d cany out the transmission to the end user with
traditional terrestriai links. Uniike the Iridium system, Globalstar does not use cross-links
(inter-satellite communication). Consequently, the satellite segment is simpler. On the
other hand the earth station is required to be more complex and powefil in order to
manage the communication between the cder and the end-user. It has been estirnateci that
approximately 240 terrestrial stations are required to realize the Globalstar project.
Globalstar wiii provide CDMA-based voice communication for which the
bandwidth wiii be approximately 28,000 synchronous telephone circuits for each sateiiite
30 Ssg "FCC Backs Bureau's RejeCLion of Big LE0 Applicanîs" [l Iuiy 19961 Telecornm. Rep. 29 [hereinafter "FCC Backs Bureau"].
in the con~tellation.~~ The system will also provide fiicsimile, electronicaiail and position
determination seMces in pocket-sized handsets?
hterconnection between Globalstar's network and other systems is achieved
through dual-mode handsets which are able to employ either a l o d cellular system or the
Globalstar system. The normal mode of operation involves c o ~ e c t i o n to the local cellular
system. However, when the mobile unit roarns out of the local cellular range, the dual-
mode handsets are capable of connecting to the Globalstar network. This r eco~ec t ion is
transparent to the end user.
The handset manufacturer for Globalstar is Orbite1 Mobile CommunÏcations. The
handset will be equipped with GSM (Global System for Mobile Communication)
technology. The design of this dual-mode handset wiii resdt fiom the marriage of this
technology with Quaicomm's CDMA technology. The handset wüi, therefore, be capable
of operating under both radio protocols.33
As stated earlier, Globalstar does not use inter-satellite communication. Hence, its
satellite system is less complicated than that of the Iridium system. Furthemore, the
Globalstar service costs are lower than Iridium's. The rate charged by Globalstar for
service providers wili be approximately $0.35 to $0.53 per minute. Globalstar has
speculated that the resale rate wili be less than $1 per minute. Globalstar has investment,
s e ~ c e and industrial partnen in more than 73 countries to guarantee economic viabiiity.
31 See Lardier. supra note 26 at 38. " See W.J. Cook " 1997 A New Space ûdysseyn [3 March 1997 U.S. News & World Rep. 48. " See "Orbitel to Enter Satellite-Bwd Phone Marketn [24 January 19%1 Electronics Wekly 2.
These partnerships also retieve Globalstar of the responsibility for the billing and
the collection of s e ~ c e fees. Globalstar has speculated that the only successfbi route to
economic viability is through global partnership. The local operators, who are in most
cases also the investors, will be responsible for the construction of earth stations as weU as
customer invoicing."
The remainder of the investment capitd for Globalstar has been obtained from
business alliances, inter aiia, Space Systems Lord Lod, Qualcomm, Alcatel
Aerospatiale, Aixtouch Communications, Alenia Spazio, Daimler-Benz Aerospace,
Dacom, Finmeccanica, France Telccom, Hyundai and Vodafone. The construction of the
satellites will be done in cooperation with Lod, Aerospatiale, Alcatel, Alenia, Dasa and
Hyundai -
The estirnateci cost of the Globalstar project is $2.5 billion. As of March 1996,
Globaistar has raised approximately $1.8 billion, which constitutes more than 70% of the
required fùnding. Delta-2 of McDomel Douglas will launch four of the constellation
satellites while Zenith of Ukraine and LM-2E/TS of China will each be responsible for
launching twelve ~atellites.~' The system will enter partial operation in the fd of 1998 and
wiii become fuliy functional in 1999.)~
- -
34 See RA LaCroix "Developments in International Satellite Communications in the International Space Year" (1993) 1 Corn, L. Coaspechis 99 at 105. 35 See "Globalstar Lines Up 8û% of Needed F'icing" [25 March 1996) Telecornm. Rep. 28. 36 See Cook, supru note 32 at 48.
GLOBALSTAR
Orbital planes
Orbital Inclination
1 Earth stations
Mobile ünk
Emission
Reception
Feeder ünks
Fuii service
Estimated cost
Current equity
Service cost
1 Cost of Earth station
approx. 240
2.483 - 2.500 GHz
5-09 1 - 5.250 GHz
1997
1999
$2.5 billion
approx. $0.35 - 0.53 to service provider $5 - 6 million
Hand-held dual-mode phones, fixeci ordinary phones,
pag-ng low-speed data
1.2.2 IRIDIUM
Indium's system deploys 66 satellites on 6 orbital planes at 780 km above the
earth's surface. It is the most technically compiicated of ail the systems because it makes
use of inter-satellite connections." The technological advantage of this system is that
handsets are no longer dependent on terrestriai networks. Signals fiom a calling handset
d l be transmitted directly to a satellite which will track and send the signais to another
satellite whose footprint covers the receiving handset.
The service offered to customers wiU be a dual-mode communication- This means
that the handset wïl switch between the local ceilular system and Iridium system whenever
required. This switching is simiiar to that of the switching operation used by Cilobaistar as
described above. The Iridium ~etwork utfies both FDMA and TDMA (Tirne Division
Multiple Access) based voice and data protocol (up to 2400 bps) in addition to the GSM
protoco1.
Iridium's applications are hand-held dual-mode phones, paging, low speed data,
and fa~simile.~* The system aims to provide services for members of the international
business cornmunity. The cost of the handset hardware is $2500 and the senice charge is
$3 per minute.3g The rate is apparently the most expensive among al1 service providers but
this is largely due to the high globai and spatial interconnestivity involved with this method
of communication. Niety cents of every $3 fee goes to the s e ~ c e provider at the
3' See "FCC Backs Bureau". supra note 30 at 29. See Cook supra note 32 at 48.
39 See ibid.
gateway station." Furthemore, because the technology used in the system may require
the relaying of signals through a network of sateüïtest there is additional overhead in cost.
On the other hand, this form of communication avoids the long distance fees incurred
when using PSTNS."
The estimated wst for the Iridium system is $5 billion. The financing of the project
appears to be probable since Chase Securities and BZW, which is the investment division
of Barclays Bank Plc., have agreed to approve a joint $2-4 billion loan for the ~roject"
Partners involved in the Iridium project are Motorola, which retains about 20% of
the capital, Lockheed Martin, Raytheon, STET (the Italian state holding company which
possesses a majority share of Telecom Italia), Sprint, Thai Satellite Telecommunications
Co. Ltd., Vebacom (a subsidiary of the German telecom corporation Veba AG), Pacific
Electric Wue & Cable Co. Ltd., China Great Wall industry Corporation, Korea Mobile
Telecom Krunichev State Researc h and Production S pace Center, Iridium Afiïca
Corporation, Iridium Canada, Inc., Iridium india Telecom Private Ltd., Iridium Middle
East Corporation, Iridium Sud America Corporation and Nippon Iridium Corporation.
The Iridium project also provides for an agreement in which the last gateway s e ~ c e
temtoty will be sold to a financier group consisting of Vebacom GmbH, a joint venture of
Veba Ag and Cable & Wieless Plc., Nippon iridium Corp. and Pacific Communication
" See K.P. Corbley. "Accessing Satellite and Cellular Syscms: Duai-Mode Handsets Provide the Option" [Februaq 19961 Via Satellite 76 at 80. 4 1 See ibid at 82. '" See W.B. Sm& "Iridium on Track for Summr Launch" [ 13 May 19961 Av. Wk. & Sp. Te&. 27 at 30.
Co. Ltd. of ~aiwan.'~ This territory includes Australia, New Zealand and the neighboring
archipelagos.
I IRIDIUM
1 Orbital Altitude 1 780 km (LEO)
1 Orbital Planes 16
1 ~ a r t h stations 1 25 plus inter-satellite links
Lifespan
1 Mobile Link 1
5 - 8 years
1 1.616 - 1.626 GHz
1 Reception 1 1 Feeder Links 1 19.3 - 19.6 GHz
1 First Launch 1 1996
1 EstUnated Cost 1 $5 billion
Current Equity
Handset Cost
$2 billion
$2500
Service Cost
Cost of Earth station
43 See "Thwarted in its Attempt at a Bond Issue, iridium Passes Hat Round Again" [22 Feb- 19961 Cornputergram 6.
$3 per minute to the user
$256 miHion
Applications Hand-held dual-mode phones, fax,
P W ~ W low-speed data
1.2.3 ODYSSEY
Odyssey Telecommunications International (OTI) is incorporateci by TRW Inc.
and TeleglobeEanada. The Odyssey constellation, like that of Inmarsat-P, will be in the
MEO. It will comprise 12 satellites with 37 beams and d l employ CDMA technology.
The purpose of the system d be to complement rather than to replace the &sting
networks in the US that are non-cellular based as weU as networks in other countries
where telephone systems are underdeveloped. The procedure for communication
comection will be identical to that of the Globalstar system. The Odyssey systern will also
make use of dual-mode handsets-
Odyssey purports that a ME0 is more favorable than an LE0 because the
deployed satellites remah more alofk in space and, as a result, they cover a greater
terrestrial area for a longer period of the . Consequently, the Odyssey system requires
fewer satellites in its constellation than non-ME0 systems. Furthemore, it takes only one
to two hours for a satellite to traverse the horizon, resulting in a diminished need for signal
handoffs or relays. This also means that most calls can be canied out by a single satellite
which, in tum, reduces the risk of losing communication due to accidental disconnection
during the hand-off period.u
Odyssey wïii do business with the local operators rather than directly with the
customers. SeMces offered by the Odyssey system will be sold to the local operaton who
44 See Shaw. supra note 16 at 4.
will then resell the seMces to theu locaî client base through their own PSTNS.~' Thus,
customers wiii access the Odyssey system through the national or regional gateways.
The estimated cost of the system is $3.2 billion'6 but so far only $300 million has
been raised; this investment constitutes oniy 100/o of the required capital. The cost of the
handset wiii be approxirnately $700, which is the cheapest among di cornpetitors. It has
been speculated that the system d be operational in 2001. The estirnateci retail s e ~ c e
rate will average less than $1 per minute and a monthly service operator rate as weu as
the usual long distance charges shall apply.
The launching wüi be carrieci out by Ariane 5 or Proton, Soyous of Russia or Long
March of China.
45 See Corbley, supra note 40 at W. jS See Cook supra note 32 at 48.
I ODYSSEY
1 Number of Satellites
1 Orbital Altitude
1 Orbital Planes
Orbital Inclination
Lifèspan
Earth Stations
Mobile Link
Reception
Feeder Links
Fust Launch
1 Operationai Year -. --- -
Estimated Cost
Current Equity
Handset Cost
1 Senice Coa
1 C m of Earth station
IO years
7
1,610 - 1,626 GHz 2,483 - 2.500 GHz
29.1 - 29.4 GHz
$3 -2 biltion
$300 million
$1 per minute to user -
to be deterrnined
Hand-held dual-mode phones, other personal communications seMces mainly in developing countries
1.2.4 INMARSAT-P (ICO)
Intermediate-Circular Orbits (ICO) is a project established by the divestiture of the
International Maritime Satellite Organization (INMARSAT). The system, whose
technology is being developed by INMARSAT, wüi employ 10 satellites in the MEO. The
constellation will be established on two orbital planes consisting of five satellites each,
with one spare satellite available for each plane. Each satellite d l have the capacity to
handle 4,500 simultaneous connections. As for the ground station, a P-Net network will
connect the control center and access stations (SAN) with terrestrial networks of ceiiular
systems and PSTNS." The satellites will be used to bounce the radio signals down to the
nearest earth station and the communication comection wili be completed by the gateways
of traditional ground networks. The system WU operate in dual-mode by using a
combination of satellite and cellular telephony networks.
The markets targeted by ICO include those for hand-held dual-mode mobile
phones, phones for cars, ships, aircrafl and fixed telephony in developing areas." The ICO
system will utilize TDMA-based technology and a dual-mode or satellite-oniy haradset.
The satellites in the ICO constellation will operate using 163 multiple beams. Compared to
other systems, only a small number of ground stations will be required (12). As in the
Odyssey system, the fact that the ICO system wiii use the M E 0 means that satellites will
have greater coverage and, as a result, delays in comection wiil be reduced.
" See P. Langereux "ïnmarsat dans la Telephonie Mobile Mondiale" [27 Ianuary 19951 Air & Cosmos/Av. Int'l 15. 48 See Cook mprn note 32 at 48.
INMAMAT plans to use the 2 GHz band speztrum but this band will not be
available for mobile service until 2OOS. Nevertheless, at the World Radiocornmunications
Conference 1995 (WRC-95) in Geneva, a decision was taken to make the spectrum
available in 2000. INMARSAT anticipates that the ICO system wiii be ready for operation
by this the . INMARSAT also expects to open the 517 GHz fiequencies for the
feederlinks used by Mobile Satellite SeMce (MSS) in the same year.4g
ICO is a promising system but it will ody be available two years after the
introduction of the competing Iridium and Globalstar systems. The financial suite of the
project, however, is very strong. INMARSAT, the major shareholder, has brought on
board over sixty national signatories. The addition of this large number of indirect
shareholders provides more financial support for the project. Out of the estimateci cost of
$3.7 biiiion, the ICO project has raised more than 50% of its cost and its strategic
financiers are willing to invest a fiirther $600 million.s0 ICO has 47 telecommunications
investors fiom countries around the world including COMSAT, Hughes (contributing $94
million), Bahrain Telecomrnunications Company, Beijing Marine Communications and
Navigation Company, Bureau of Maritime -airs (Liberia), Cornpanhia Portuguesa Radio
Marconi Sa, COMSAT Argentina SA, CS Communications Company Ltd. (Thailand), PT
N O S A T (Indonesia), Kuwait Investment Authority, Morsviazsputnik (Russia), Telecom
Finland, OTE, PTT Telecom BV (the Netherlands), Singapore Telecommunications Ltd.,
Swiss Telecom PTT, Telefonica de Espana SA (Spain), Telstra (Australia) and Detemobil
(German GSM operator).
49 See Corbley, supra note 40 at 88. so The declaration made by ICO's CEO, Olof Lundberg.
ICO predicts that its dual-mode handset will cost around 51000-$1500 which is
more expensive than those required for the Globaistar and Odyssey systems but cheaper
than that of the Iridium system Regarding service faeg ICO anticipates a Bat rate of $2
per minute for both long distance and international interconnections. This rate already
includes surcharges and average long distance costs."
The launchhg will be performed by the s p a c e d s Atlas-2a (the US), Delta-3 (the
US), Proton (Russia) and Zenith (Ukrainian sea launcher)." The satellite manufiacturing
contract was awarded to Hughes Space and Communications International in
Octoberl995.
5 1 See Corbley, supra note 40 at 88. '' See C. Lardier, "ICO-Hughes Font l'Impasse sur Ariane" [22 December 19951 Air & CosmodAv. ht'l 32.
10
10,300 km (MEO)
2
4s0
Number of Satellites
Orbital Altitude
Orbital Planes
Orbital Inchation
Earth Stations
Mobiie Link
Emission
Reception
1 Feeder Links 6-700 - 7.075 GHz
1398
1 Full Service
1 Estirnated Cost $3 -7 billion
- --
Handset Cost
Service Cost
Cost of Earth Station
S 1 - 2 per minute
$3 5 0 million - - -
Hand-held dual-mode phones that cornmunicate duectly with sateüites and cellular systems; phones for cars, ships and aircraft; fixeci phones in deveioping countries
CHAPTER III
1. Legal Requiremeats of Satellite Telecommunications
Prior to launching and operating a satellite, there are some legal prerequisites that
must be satisfied at both the national and international levels. In this chapter, we will study
the regdations required by national law, international organizations and international law.
1.1 General Characteristics of Satellite Telecommunications
Space activities must be considered in the context of space applications that are
carried out on earth. The purposes of such space applications are namely the accumulation
of terrestrial data (remote sensing) and the transmission of idormation between terrestrial
sitess3 We wiü examine only the latter space application which is telecommunication via
satektes.
In order to achieve the objectives of a space project, appropriate radio-
communications are essential. Al1 radiocornmunications have to be interference-fiee
because any interference in radiolinks can do damage to the project and could possibly
result in the loss of astronauts. Interference can also cause telecommunication satellites to
malfùnction. In addition to the technological reasons for requiring interference-free
satellites, there are other legal issues that make interference-fiee communication
indispensable. Since sateiiites and other space objects are launched into outer space and
53 See M u , supra note 1 at 20 1.
surpass national tenitoies, the task of guaranteeing interference-hee communication must
be achieved in the international arena"
Both international and national legal aspects apply to space-based
telecommunications. international law generaüy does not d i l y govem non-
governmental or private entities. These entities are subject to the national regdations
imposed by their respective adnüni~trations.~' According to intenational law, States accept
international responsibilities and they govem their national space adVities independently
yet in conformity with the international law? in other words, international law
predetermines general policies while national law executes it.
International and national laws play vital roles in the implementation of space-
based telecommunications Erom the design phase to the actual construction, launchhg and
final operation of satellites. When establishing a telecommunication satellite system, the
system must be licensed by a national administrative body whose policies are in conformity
with the general principles of international law and other specific international space laws.
The ITU provisions, especi-&y the Radio Reg~lations,~ impose requirements for technicd
standards and the coordination process. An administration that licenses a
See ibid at 202 55 See J. Rzymanek. "Some Legai Spaces of Commercialization of Outer Space" (1987) 3 0 Coiioq. L. Outer Sp. 246 at 248-49.
56 See H. Qithi. "Legal Aspects of Commerciaiization of Space Activiâes" (1990) 33 CoUoq. L. Outer Sp. 58 at 59. 57 ïTü. Radiocommunication Bureau, Radio Replations (Geneva: ITU. 1992) art 11, 13 [hereinafter Radio Regularions 1.
teIecornmunication system is subject to the regulations imposed by the international
satellite telecomrnunications operating organktion of which it is a member. Examples of
such organizations are INTELSAT, INMARSAT and EUTELSAT.
2. International Law
2.1 International Telecommuaication Union (ITU)
The International Telecommunications Union was founded in 1865 to establish a
standard for international telegraph ~~erat ions. '~ Upon its inception, it carrieci a name of
the International Telegraph Union. However, in January 1934, it becarne a specialized
agency of the UN and changed this name to that currently used. Since then it has been
responsible for aii forms of communications by wire, radio, optical systems and other
electromagnetic systems. The p r i m q objectives of the ITU are to:
(a) maintain and extend international cooperation between adl Members of the Union for the improvement and rational use of telecomrnunications of aii kinds; - . . (c) promote the deveIopment of techicai facilities and their most efficient operation with a view to hproving the efficiency of telecommunication services, hcreashg their usefiihess and m a k g the- so far as possible, generaiiy avdable to the public;. . .
(f) harmonize the actions of mernbers in the attainment of those ends. 59
58 See J. Smits, "Legal Aspects of hplementiog international Telecommunication Link: Institution Regdations and Lnstniments" (1991) 33 CoUoq- L. Outer Sp. 2 17 at 223. 59 ITII, Constitution ofthe International Telecommunication Union, (Geneva: ITU, 1992) at 1, ch. 1, art. 1 [hereinafter ITU Consfifution],
The ITU attains these goals through international agreements in the form of ITU
Conventions and Radio Regulations with which State Members comply on the basis of
self-interest and reciprocity. There are no masures or provisions to sanction Members
that faii to respect the obligations outlined in these international agreements. However, the
Prearnble of the ITU Convention states that it is in the best interest of every ITU Member
country to respect the international agreements. This is because the agreements enable the
Members' telecommunkation services to CO-exist in a cooperative and efficient state while
still "fuily recognUing the sovereign right of each country to regulate its
telecommunications". In order to accomplish the above objectives, the ITU adheres to
three findamental principles of outer space law: the fieedom to use outer space, the
common interest principle and the principle of non-appropriation.'
The main role of the ITU in international communications is the allocation of radio
fiequencies to difEerent services through World Radiocommunication Conferences. The
principal purpose of this allocation is to prevent hannfiil interference between users. The
ITU maintains an international registry of users and their fiequencies for aii projects. The
users who have registered their fiequencies in the Master Register are assured that they
have been assigneci muencies that are fiee fiom any interference by other users6'
The ITU's provisions comprise the Constitution, which includes the milestone
provisions that are not amendable on a regular basis and the Convention, which is a
compilation of provisions and amendments made at intervals.
" See M. Smith, "The Role of the iTü in the Development of Spaœ Lawn (1992) XW:I AM. AU & Sp. L. 157 at 163.
See Jakhy supra note 1 at 204,
The ITU controls the exploitation of outer space by regula~g orbital positions
and the accompanying radio fiequencies. The procedures for accessing the spectrum and
orbit are based on two principles: (1) "first corne, first served"; and (2) a pnwi planning
which is embodied by the concepts of equitable access and the right to use the
orbit/spectrum efficiently and econornicaiiy -
2.1.1 First Corne, Fint Served Pnnciple
First come, est served is the general mle for the registration and coordination of
moa fiequencies. Six to two years prior to the launching of a communications satellite, a
State is obligated to no t e the Radio Regdation Board (the RRB)" of the planned project
and seMces to be provided, the frequencies to be employed and the proposed location of
the spaceship. Article 45 of the IW Constitution provides, in part, that "d stations,
whatever their purpose, must be established and operated in such a manner as not to cause
harmfiil interference to the radio communications of other c~untries".~~ Article 45 is
supplemented by Article 6 (No. 341) of the Radio Regulations which specifies the
obligation of Member countrïes to disallow the assignment of fiequencies that have
already been registered in the Master Register." Respecthg this obligation guarantees that
no harmfùl interference will be caused to any existing stems.^* Hence, this method of
" Under the 1990 regdations the international Frquency Registration Bovd (IFRB) was the body responsible for receiving the notifications. " ITU. Constitution ojihe International Telecommunicufion Union (Geaeva: ITU. 1992) an 45 [hreinafter iTU Convention]. 64 See Radio Regulations. supra note 57, art 6. " It should be recognized tbat "allocation" is an act canied out by ïïü io bring the sateilite system iato king by providing spectnim/orbit while "assignment" is attahed in nationai tevel by administraiive body of the State desiring to offer commuaications services.
first corne, &st served facilitates the ITUIs main purpose of assuring intefierencefke
communication.
2.1.2 Fint Corne, Fint S t n d Procedure
The procedure by which members of the ITU must abide in order to obtain a
portion of the orbit/spectrum is imposed by Articles 1 1 and 13 of the ITU Radio
Reg~la t ions .~~
The raison d' être of the advance information procedure of Article 1 1 of the Radio
Regulations is "to bring to light, in the very early stages of planning, any major system
incompatibilities utilizing relatively simple methods of circulation".
The Article requires that Members n o t e the RRB of aU detailed technical
information regarding their projects according to the standards set forth in Appendix 29 of
the Radio Regulations (RRs)." A Member must subrnit the advanced publication to the
REU3 within a period of six to two years before bringing the proposed system into
operation. Upon subrnission, the RRB reviews the project's confonnity with respect to the
technical standards set forth in the RRs. If the document is acceptable. the RRB pubîishes
the document in the Weekly Circular. In the event that no other Members raise objections
to the proposed project, the Board then proceeds to examine the conformity of the system
according to Article 13 of the Radio Regulations.
66 See Radio Regulations. supra note 57. art, 1 1. 13. 67 See Radio Regulations. supra note 57, app. 29.
Article 13 of the RRs stipulates in detail the proper procedure that Members must
foUow for notification and registration of assigned orbital positions and fiequencies. In a
case where a country wishes to operate its system in a new orbit/spectrum or make
changes to an existing project that is currently recorded in the Master Register, the
country is required to submit a written notification to the Board, if
(a) it desires to obtain international protection against harmfùl interference; or
@) the assigned tiequency and the associateci orbital position are going to be used for international setvices; or
(c) the use of the frequency/position concerned is likely to cause harmful interference to any service of another country."
This notification must contain information concerning the general characteristics as
detailed in Appendix 3 of the RRS." The Board wili examine the proposed project
according to:
(a) iis confonnity with the ITU Convention and Radio Regulations;
(b) its conformity with the provisions reiating to pre-notification coordination; and
(c) the probabitity of hannful interference when the coordination has not been successfully effê~ted.'~
If the proposed system meets ali of the documented requirements. the Board will
record the notified orbital position&equency in the Master Register. Ultimately, the
system wüi receive international protection against harmfii1 interference by late-corners.
See ibid. art. 13(1). 69 Ibid., art. 13(4) & app.3. 'O Ibid.. art, 13(8).
In a case where there are objections fiom other administrations because the
proposed system will or may cause harmflll interference to one or more systems currently
in existence, Chapter III, Article 1 1(2)(1047) of the RRs aüows for the foUowing iterative
procedure:
I$ afler studying the information published under No. 1044, any administration is of the opinion that interference which may be unacceptable may be caused to assignrnents of its e x k ~ g or planned satellite networks, it shd, within four months afker the date of the weeldy cirdar containhg the complete infionnation listed in Appendk 4, send the administration concemed its comments on the particulan of the interference to its existhg or planned satellite systems. A copy of these comments shaü also be sent to the Board. If no such comments are received fiom an administration within the period mention& above, it may be assumeci that the administration has no basic objections to the planned satellite network(s) of that system on which details have been pubiîshed.''
The Board settles such contücts through bilateral negotiation between any
concemed parties. However, a satellite system that is already registered in the Master
International Frequency Register ( ' ) is not obliged to undertake any coordination
procedures with the chailenging administration(s). in other words, the burden of
coordination is completely laid on the unregistered party or parties. When the negotiation
is concluded, the Board wiii reexamine the compatibiüties and other characteristics of the
system and then record the spectrum/orbit in question in the Master Register.
" Ibid.. ch. m, arc. 11(2)(1047).
Under the 1992 Convention, the Diector of the
must:
in accordance with the relevant provisions of the
37
Radiocommunication Bureau
Radio Regulations, effect an orderly recording and registration of fiequency assignments and, where appropriate, the associated orbital characteristics, and keep up to date the Master International Frequency Register, review entries in that Register with a view to amending or e h a t i n g , as appropriate, those which do not reflect actual fkequency usage, in agreement with the administration concerned?
2.1.3 A Priori Planning
The first come, first served procedure was the only method for regulatiog
orbit/spectrum used by the ITU until the 1970's. There was great concem expressed by
Less-Developed Countries (LDCs) that the fkst come, first served principle benefited only
those countries with more sophisticated technology. The tirst-corners tended to
monopoiize the most favorable orbital positions and their associated fkquencies. As a
result, the fïrst-corners were able to choose positions that could be maintained with
simpler technoiogy. Moreover, the LDCs opposed this allocation methodology because by
the time they would be ready to launch their own communication satellites, there would be
little place for them. Furthemore, the cost of supporting any available and remaining
positions rnight be so high as to prohibit the success of any proposed projects. At the 1973
Plenipotentiary Conference, the LDCs emphasized that the ITU "should be given the
means of ensuring the fair distribution of such limiteci resources as the frequency spectrum
or the geo-stationary orbit, to avoid a situation in which the first-corners rich countries
'' See Radio Regufations. supra note 57. ait 5B(2)(e) l16AH.
would monopolite the best scrvices? The situation escalated in 1976 when eight
equatorial nations, headed by Colombia, claimed their territories over part of the GSO's
curve in the Bogota Declaration.
Ln response to the LDCs' concems, Article 44(2) of the ITU Constitution was
adopted- This Article' provides that:
In using tiequency bands for radio services Members shali bear in mind that radio fiequencies and the geo-stationaxy satellite orbit are lunited natural resources, that they must be used rationally, efficiently and economidy, in conformity with the provisions of the Radio Regulations, so that countries or groups of countries may have equitable access to both, taking into account the special needs of the developing countnes and the geographical situation of partïcular co~ntries.'~
This Article introduced the concept of "equitable access" and accentuated the
importance of using the orbit/spectmm resource "efficiently" and "economicaily" but
offered no definitions for such terms. Therefore, these terms should be interpreted
accordïng to the Convention and the RRs. These two milestone provisions characterize
"equitable access" as being the procedure by which orbital and spectral resources are
accessed in conformit. with the RRs. This definition includes special consideration for the
needs of the LDCs and the geographid location of certain countries. As for the terms
"efficiently" and "econornically", these definitions remain at the discretion of each ITW
Member.
73 Proposalsfir the Work of the Conjeence. (State of h e l ) . 1973 Plenipotentiary Coofecence Doc. No. 49-E (1973). 7 4 See ITU Constitution, supra note 59, art. 44(2).
39
The hdamentd notion of a *on' planning is to provide aü national
administrations with specific orbit/spectnim resources- In other words, certain fkequencies
are intended to be utiiized in particular bands. As a result, this method of aiiocation
guarantees fair access to orbithpectmm resources to ail ITU Members. The acquisition of
orbit/spectrum resources using this procedure is less complicated than the first corne, first
served procedure. AU that is required is a notification and a subsequent examination of the
confonnity of the system by the ITU. So fir, the provision has been Vnplemented only in
the case of the BSS funaioning in the 12 GHz band and the FSS operating in the 614 GHz
and the 14/11 GHz bands.75
2.1.4 The Radio Conferences
Radio Conferences are the means by which the ITU hplements the allocation of
radio fkequencies. The awarding of fiequencies is made either on a global or a regional
bais and dl records of allocation are added to the "Table of Frequency Allocations" in the
RRS." The radio services are classified in the Table in three categories. These categories
are the primary, secondary and the pennitted." Each fkquency band is docated to one or
more seMces and may possibly be granted unique rights. This study will focus on the
WARC-92 and the WRC-95, two conferences that concem the Mobile Satellite Service
( M S S ) . ~ ~
'' See Jakhu. supra note 1 at 114. '' Global aiiocation is dMded into 3 regions: Region 1 is Europe, Afnca and Russia; Region 2 consists of Amenca and Greenland; and Region 3 covers Iran Chuia and the rest of Asia 77 See F. Lyall, Law andSpace Tefecommunicafions, Dartmouth: Aiciershot (1989) at 353. 78 See Radio Regulations. supra note 66. art. 8.
2.1.5 WARC-92
The participants were divided into two groups: the US and ~ u r o ~ e ? The US
campaigned for an aiiocation scheme that favored the satellite-bd mobile system
(MSS), while the Eumpeans championed the land-based systems or the Future Public
Land Mobile Telecommunication System (FPLMTS).
The WARC-92 was the ûrst conference at which an agreement was reached
conceming fiequency docations and the coordination procedure for non-GSO systerns
operating on a global basis. The agreement came into force 1 January 1996 for the US and
wiii be in effect worldwide on 1 January 2005.
2.1.5.1 Fmquency Allocations
Allocations granted at the WARC-92 conference were either on a global or a
regional basis. The two available categories of senice were prirnary and secondary. The
conference saw the aiiocation of fiequencies in the spectmms 16 10 - l626.5/2483 -5 -
2500 MHz, 1980 - 2010/2170 - 2200 MHz and 2500 - 2520/2670 - 2690 MHz. These
ranges of low fiequencies are the most sought after by national administrationsg0 because
current technology allows low frequencies to be more compatible with cellular systems
than high fiequencies. in addition, the use of low freguencies results in a cornparatively
low manufacturing cost for dual-mode handsets8'
See L. Sung, "WARC-92: Setting the Agenâa For the Future" (1992) 16 Telecom Policy 624. 80 See European Radiocommunications Office, &tellire Personal Telecommunication Srvices (S-PCS): Final Report, (1995) at 11 [hereinafter FÏnal Report of the ERO). '' See LaCrni. supra note 34 at LOS.
According to procedures established at conferences which preceded WARC-92,
non-GSO networks could not clairn protection from or cause interference to any existing
or proposed GSO systems. In other words, non-GSO networks were categorired as a
secondary service. Resolution 46 revised these niles with the introduction of the Eirst
corne, &st served procedure in the case of non-GSO systems. The generai procedure of
coordination and notification was adopted and modified to recognize the equal nghts of
GSO and non-GSO systems for the MSS band and other particular bands?
According to Resolution 46, ifa government proposes a network that is to operate
in bands that have already been docated and included in the "Table of Frequency
Allocations", it is obiiged to adhere to the coordination and notification procedures which
cIosely resemble those of GSO systems.
Resolution 46 also introduces a provision to recognize the sovereign right of
countries in which GMPCS services are iicensed, S-PCN operators that offer national or
international telecommunication seMces in temtories belonging to Member States of the
ITU are subject to the respective national laws that govem financial and regdatory
prerequisites." The sovereign right to detemllne the ternis and conditions of access to
systems fiom national territories is derived fiom Article 24 of the RRs.
The WARC'92 regime for introducing S-PCNs recognizes the right of each country to decide the extent and ternis of its participation in such systeins, as weU as a need to make such systems accessible on a global basis, and on equitable and standard ternis. Each country must
" See J. Christensea 'WRC-95: Resuits Relatai to Satellite Communications" [Febnury 19961 Va Satellite 28 at 34-35.
See ibid.
take into account, based on its own interests, the impacts of prospective global MSS systems operathg in the highiy scarce and highly versatile ~ a n d s ?
Resolution 70 acknowledges that the fiequency spe- is a finite natural
resource and that, consequentidiy, only a Iimited number of LE0 satellites may be
deployed ushg the same given frequency band. To address this physicai limitation,
Resolution 70 requires the ITU:
To carry out, as a matter of priority, technical, regdatory and operational studies to permit the establishment of standards governing the operation of low-earth orbit satellite systems so as to ensure equitable and standard conditions of access for aii countries and to guarantee proper worldwide protection for existing seMces and ~ysterns.~'
The procedure of coordination provided by Resolution 46 was introduced on 4
March 1992 and the allocations of the MSS bands granted at WARC-92 came hto fU
effect on 12 October 1993. The diierence of 18 months between these two dates dowed
any administration petitioning the allocation of MSS fiequency bands ample t h e to submit
the required advance publication for the proposed networks6
The US was the £ira nation to subrnit its proposal to the Radiocomrnunication
Bureau. The date of their submission was 13 October 1992. The proposed project was the
Iridium system. Upon receipt of the proposal, the Radiocomrnunication Bureau registered
81 Resolution 16, Final Report ofthe ERO. supra note 81 at 85. ITU. Worià Administrative Radiocommunication Conference. (Geueva: TTU. 1992) res. 70.
86 See fi/PG. supra notë 18 at 2 10.
the Iridium project under the code name HIBLEO-2. The proposal satidied al of the
requirements of the advance publication procedure and was accepted for regïstration. The
process of advance publication followed by the US was adopted as the standard procedure
applicable to al1 future MSS system proposais."
The main goal88 of the 1995 IW World Radiocommunication ~onférrnce* was to
further address the procedures for the deployment of mobile satellites as set out by the
WARC-92.
The key accomplishrnents of the Conference were:
(a) the allocation of additional speanims to irnplementations of the space segment
using Little LEOs. The docated fiequency bands were below 1 GHz;
(b) the moving fonvard of the operation entry date of new Big LE0 systems using the
2 GHz band to 1 Januaxy 2000. This was done in order to fùifïil the new operaton'
desire to implement the technology as well as to commercialize it as soon as
possible;
(c) the allocation of 400 MHz of spectnim to MSS feederluiks which provideci the
uplinks to satellite services. This newly allocated spehim was to be shared by the
MSS and FSS. In order to regulate the sharing of this spectmm feirly, an agreement
was reached that gave NGSO and GSO systems qua1 priority, and
g7 See ibid. at 208-210. 98 See Christensen. supra note 83 at 30. 89 The name was changed h m World Administrative Radiocommunication Conference (WARC) to World Radiocommunication Conference (WRC) in 1993 by the ITU.
(d) the allocation of 400 MHz spectnim in the 19 GHz and 29 GHz bands to sati*
the implementation of the Teledesic project.*
3. International Satellite OrganizPtions
3.1 INTELSAT
International Telecornmunications Satellite (TNTELSAT) is an institution Uitended
to provide global international telecommunications. Onginally, nineteen countries invested
in the interim KNTELSAT with the goal of establishing a network of satellites to pedorm
international te le communication^.^^ The initial purpose of INTELSAT was to create one
global monopoly for international telecornmunications.* Nevertheless, a tme monopoly
has never been realized because there are other operators utilinng the fiber optic cable
mode on various routes. Moreover, INTELSAT has encountered other cornpetitive
international networks: for instance, INTERSPUTNTK and EUTELSAT."
The nineteen nations that made investments in INTELSAT sought to protect their
interests by restricting INTELSAT Members 6 0 m establishing their own independent
networks. The INTELSAT Agreement specifies d e s and obligations for Members that
choose to introduce separate systems. Such Members must idionn INTELSAT's Board of
Governors of any proposed system so that it rnay be properly reviewed by the Board for
iTU, World Radiocornmunicatiun Confireme, (Geneva: ITU, 1995). 91 See Lyall, supra note 78 at 82.
See M. Potter, "Intemationai Satellite Organizations: From Monopoly to Cartel" (1992) 35 Colloq. Outer Sp. 120 at 122. 93 See R Colino. "The Possi'ble introduction of Separate Satellite Systems: International Satellite Communications at the Crossroad" (1985) 24 Colwn, I. Transnat'l L. 13 at 16.
technical compatiiility. The proposed system must also not cause "significant economic
h m " to any existing systems of INTELSAT.
Article W ( c ) and (e) requires that Memben inform the Board of technical
compatibiiity of aii proposed systems for both domestic and special service satellite
systems. Article XXV(c) and (e) provides:
(c) To the extent that any P w or Signatory or person within the jurisdiction of a Party intends to estabtish, acquire or utilize space segment facilities separate fkom the INTELSAT space segment faciiities to meet its dornestic public telecommunications service requirements, such Party or Signatory, prior to the establishment, acquisition or utilization of such facilities, shaii consult the Board of Governors, which s h d express, in the form of rezommendations, iis findings regarding the technical compatibility of such faciiities and their operation with the use of the radio m u e n c y specûmm and orbit space by the exïsting or planned INTELSAT space segment.
(e) To the extent any Party or Signatory o r person within the jurisdiction of a party intends to estabtish, acquire or utilize space segment faciiities separate fiom the iNTELSAT space segment facilities to meet its specialited telecommunications services requirements, domestic or international, such Party or Signatory, prior to the establishment, acquisition or utilkation of such facilities, shall fùmish afi relevant uiformation to the Assembly of Parties, taking into account the advice ofthe Board of Govemors, shaii express, in the form of recommendations, its findings regarding the t echnical compatibility of such facilities and their operation with the use of the radio fiequency spectrum and orbital space by the existing or planned INTELSAT space segment?
The technical coordination requirements imposed by NïELSAT are similar but
more s t ~ g e n t than those of the ITU.
9.1 Agreement Reluring ro the Internarional Telecommunications &ellire Organization "INTELSA T" (1971) 10 LL.M. 909.23 U.S.T. 3813, T.I.A.S. 7532 IhereinafterINTELSATJ.
As far as ecanomic matters are concerned, the Mernbers are required to abide by
Article XIV(d), which states that Members are obligated to submit to economic
coordination. The Article provides that:
To the extent that any Party or Signatory or person within the jurisdiction of a Party intends individually or joùitly to establish, acquire or utilize space segment facilities to meet its international public telecommunications services requirement s, such Party or Signatory, prior to the establishment, acquisition or utiiization of such facilities, shail fiiniish al relevant information to and shaii consult with the Assembly of Parties, through the Board of Governors, to ensure technical cornpatiibility of such facilities and their operation with the use of the radio specmim and orbital space by the existing or planned INTELSAT space segment and to avoid significant economic hann to the global systern of INTELSAT. Upon such consultation, the Assembly of Parties, taking into account the advice of the Board of Govemors, shall express, in the fom of recornmendations, its finding regardhg the considerations set out in this paragraph, and further regarding the assurance that the provision or utiiïzation of such facilities shall not prejudice the establishment of direct telecommunications Links through the INTELSAT space segment arnong al1 the participants.gs
It should be noted that the coordination process is to be carried out by national
administrations and not by the service providers? An administrative body has an
obligation to make available to INTELSAT's Board of Governors aU technical
information., including the intended fiequencies and positions of satellites. M e r examuiing
the information, the Board announces its resolution in the forrn of recommendations.
These recommendations are not legally binding" because there are no provisions in the
Agreement that require States to abide by the recommendations. Nevertheless, State
95 Ibfd. % See P. Meredith, "Implementing a Teiecommunications Sateiiite Business Concept" (19PO) 33 Co-. L. Outer Sp. 42 at 44. '' Sce "Pioneers or Pirates in Orûit? Private Internationai C~mm~cations Satellite Systems and Article XIV(d) of the [NTELSAT Agreement" (1986) IX Boston Col. ht'l L, & Comp. Rev. 25 1 at 231-256.
Members are bound by international law; specincdy, Article 18 of the Vienna-
Convention which stipulates that the parties and signatories of a Treav have an obligation
to "refrain tiom acts which would defeat the object and purpose o fa T ~ W ' - ~
To rule on whether the LEO-based sateilite systems are subject to the requirements
set forth in Article XTV(d), NIELSATs definition of public tekcommunications should
be analyzed. INTELS AT defines pubüc telecommunications as:
fixed or mobile telecommunications services which can be provided by sateliite and which are avdable for use by satellite and which are available for use by public, such as telephony, telegraphy, telex, facsimile, data transmission, transmission of radio and television prograrns between approved earth stations having access to the INTELSAT space segment for fiirther trmsmission to the public, and leased circuits for any of these purposes; but excludhg those mobile seMces of a type not provided under the Interün Agreement and the Special Agreement prior to the opening for signature of this Agreement, which are provided through mobile stations operating directly to a satellite which is designed, in whole or in part, to provide s e ~ c e relating to the d e t y or flight control of aircraft or aviation or maritime radio navigation?
According to the definition given by INTELSAT, it can be concluded that separate
LEO-based sateliite systems plans should be presented before the Assembly of Parties to
rule out whether the systems will cause "significant economic hami" and will be,
technically, using the sarne operatkg systems as those of INTELSAT. However, such
interactions between INTELSAT and the state providing LEO-based PCS be
scrutinized in the next chapter on US law.
98 Vienna Convention on the Law of Treaties, 23 May 1969, 1155 U.N.T.S. 33 1. art 18. 99 IhrTELSA T, supra note 95. art. I(k).
The International Maritime Satellite Organization was established in 1982 to
operate sateilite communication infiastructures for the global shipping and maritime
industries. Like INTELSAT, it is fùnded by its Member States and has the objective of
earrüng profits from the sales of its services. INMARSAT dso has nmilar provisions to
evaluate the economic aspects and technical cornpatr'bility of proposed qstems. The
provision imposed by INMARSAT to regulate the introduction of independent systems by
its Member States is not as controversial as its INTELSAT counterpart. This provision,
Article 8 of the IBMARSAT Agreement, stipulates that:
(1) A Party shalI no* the Organization in the event that it or any person within its jurisdiction intends to make provision for, or initiate the use of, individualiy or jointly, separate space segment facilities to meet any or aii of the maritime purposes of the CNMARSAT space segment, to ensure technical compatiiility and to avoid significant economic harm to the INMARSAT system.
(2) The Council shall express its views in the f o m of a recommendation of a non-binding nature with respect to technical compatibility and shaii provide its views to the Assembly with respect to ewnornic harm.
(3) The Assembly shall express its views in the fom of recommendations of a non-binding nature within a penod of nine months from the date of commencing the procedures provided for in this Article. An extraordinary meeting of the Assembly may be convened for this purpose. '"
lm Convention on the international Maritime Satellite Organization (ZWXR&îïJ, 3 September L976 as amendai on 16 October 1985. art, 8.
The services requiring INMARSAT notification are limiteci to oniy the MMSS.
The LMSS and the A M S S are not required to no* INMARSAT because they are not
included in the line of services provideci by INMARSAT. R is generally agreed that these
services do not engender economic harm or technical incompatibility to the networks of
INMARSAT. A current topic of discussion is whether the LEO-based PCN should be
bound by the requirement of notification. One argument in fâvor of the imposition of the
notification requirement is that the LEO-based PCN systems h c t i o n on board ships at
sea and that they provide communication between vessels and worldwide sites. In this
manner, the systems could be considered as cornpetitors of INMARSAT and thus
construed as able to cause economic hami to INMARSAT. FoUowing this h e of
argument, it is appropriate for PCS service providers to n o t e INMARSAT before
bnnging systems into existence. As in Article XIV(d) of the INTELSAT Agreement, the
recomrnendation reached by the INMARSAT Assembly has no binding force upon its
State Members,
3.3 EUTELSAT
EUTELSAT, the European Satellite Telecornmunications Organization, was
established with the objectives of developing and operating European satellite
communication systems. The EUTELS AT Agreement adopted provisions fiom both
INTELSAT and INMARSAT. Consequently, EUTELSAT has sunilar notification poticies
for the enforcement of technical compatibility and the maintaining of economic viability.
As in INTELSAT and INMARSAT, this notification procedure is non-binding but is
respected by nations a d h e ~ g to the international principle of law pcta sunt senwmh
The EUTELSAT Convention provides that:
(a) Any Party or Signatory which intends, or becomes aware that any person within the jurisdiction of that Party intends, individudy or j ointly, to establish, acquire or utiiize space segment equipment separate fiom the EUTELSAT Space Segment in order to meet the requirements of international public telecornmunications services within the EUTELSAT Space Segment semice area as defined in paragraphs (a) and (b) of Article III o f the Convention shalî, before such establishment, acquisition or utilization, fùmish ail relevant information to the Assembly of Parties through the Board of Signatories which shail establish whether there is W<ely to be any significant economic harm to EUTELSAT. The Board of Signatories shaii subrnit its report and conclusion to the Assembly of Parties.
The Assembly of Parties shdl give its views within six months fiom the start of the foregoing Procedure. An extraordinary meeting of the Assembly of Parties may be convened for this purpose.
(b) The Board of Signatories shall dr& and submit to the Assembly of Parties, as a matter of priority, the guidelines to be considered by any Party or Signatory which intends, or becomes aware that any person within the jurisdiction of the Party intends, individually or jointly, t o establish space segment equipment separate fkom the EUTELSAT Space Segment in order to meet its requüements for domestic or international public or specialized telecommunications services, to ensure technical compatibility of aich separate equipment and its operation with the use of the radio fiequency spectrwn and orbital space by an existing or planned EUTELSAT Space Segment. 'O1
' O' Convention Esroblishing the European Telecommunication &teIlite OOgozation "EKCEELZ Tm, L 5 M y 1982. art, XVI (Other Space Segments),
CHAPTER IV
1. Telecommunications Industries and Their Regdations in the US
In this chapter, we will examine the Telecommunicatro~t~ Act of 1996 which
embodies recent US teleîornmuaications regu~ations.'~~ The new Act introduces major
changes for the US domestic and internationai telecommunications industries. We d
consider the main consequences of the Act on two important telephone providers: AT&T
and the Regionai Bell Operating Companies (RBOCs). We shall also analyze the
provisions of the Act that concem satellite telecomrnunications.
The Telecommunications Act of 1996
In February 1996, the US Congress enacted Telecommunicatzom Act of 1996. The
Act is the first inclusive amendment to telecomrnunications laws since the enactment of the
first Telecommunications Act of 1934. It makes signifiant regulatory attempts towards
the Liberaiization of the domestic telecom market and extends the concept of deregulation
to ailow the communications industries of other countries to enter the US telecom market-
To establish the proper context for the study of the Act, it is appropriate to first examine
the evolution of the US regulatory regime leading to the passage of the Act as well as the
motivation behind this comprehensive amendment and the influences of the Act on
telecommunications as a whole. We shall restrict Our discussion to telephony.
'" Telecommunications Act of1996. supra note 9.
1.1.1 Telecommunicatioas m e t pnor to the passage of the Telecommunicadions Act of 1996
Before 1984, the Bell system, which was operated by AT&T, dotninated the US
telephone market. This monopoly was reaiïzed through the controle of the rnanufhcturing,
long distance and locai wmmW1ications rnarketdo3
The Beil system abused its monopolistic control of the long distance market by
rnaking access to the locai network tremendously hconvenient for cornpetkg carriers. For
example, when accessïng the Bell network, customers of nonoBeil systems were required
to dia1 more numbers than AT&T customers. AT&T also refùsed to provide a number of
specialized local s e ~ c e s to its cornpetitors. To fùrther irnpede the market entry of
competiton, AT&T cross-subsidized its local access operations with its long distance
revenue. 'O4
With regard to the equipment manufacturing ïndustry, AT&T repeiied cornpetition
by creating "monopoly-based incent i~es" '~~es i~ned to deter users tiom purchasing the
equipment of cornpetitors. For instance, AT&T imposed stringent telephone çonnection
restrictions under the pretext of protecting its systems fiom faulty or substandard
equipment. The restrictions proscribeci all competing equipment fiom comecting with
Bell's nehuorks except via a protective connecting arrangement (PcA). 'O6
1 03 See Friedrich. supra note IO at 657-660. See ibid
' O5 Ib id. 1 0 6 See ibid
1.1.2 Tht Modified Final Judgemtnt (MFJ) and i b influence in the domestic teltcom market
In 1974, the Department of Justice invoked an antitrust litigation against AT&T
with charges of monopohg and conspiring "to restrain triade in the manufacture,
distribution, sale and installation of telephones, telephone apparatus, equipment, materials,
and supplies, in violation of sections 1, 2 and 3 of the S k m m ~ c t . " ' ~ ' As a result of the
Litigation, the Modifieci Fiaal Judgement (MFJ) entered hto force in 1984. The MFJ
mandated structural reorganization of AT&T and this reorganization brought about the
divestiture of AT&T into the Bell Operating Companies (BOCs).
The MFJ sought a complete divestiture of AT&T1s twenty-two Beli Operating
Companies (BOCs). The BOCs were integrated into seven local operating companies: Bell
South, Bell Atlantic, NYNEX, Pacific Telesis, US West, Southem BeU Corporation and
Amentech. These spin-off companies are generaiiy known as the Regional Beli Operating
Companies (RBOCs). The RE3OCs provide services for separate local networks or local
access and transport k a s (LATAs). The LATAs were determined to be "large enough to
comprehend contiguous areas having conunon social and economic characteristics but not
so large as to defeat the intent of the decree to separate the provision of inter-city seMces
f?om the provision of local exchange s e ~ c e s . " ' ~ ~ After the divestiture, AT&T no longer
controiied access to the local operating networks; the key element for maintaining anti-
cornpetitive conduct.
'O7 United States v. AT&T, 552 F. Supp. 13 1. 151-152 & a85 @D.C. 1982). u ~ m b nom; Maryland v. United States, 460 US. LOO 1 (1983). ' " A T&T. 552 F. Supp. 13 9. a 18: Cornpetitive Impact Statement, 47 Fed. Reg 7 170 (1982).
The 1984 MFJ achieved two major objectives. F i it prevented ATâT corn
rnonopolizing the long distance market. Second, it prohiiited the RBOCs fkom creating
vertical monopolies by restricting them tiom entering into equipment manufacturing and
long distance communications markets. The ultimate achievement of the MFJ was to
dismantle AT&T and thus prevent it fiom cross-subsidking its businesses with revenue
from other communications modes.
The drawbacks of the MFJ were that it created local monopolies in local
communications networks and that it rendered end users dependent on the RBOCs for
connections to long distance communications. The only way for the end user to access
long distance networks was through a comection with the local network (the RBOCs).
Thus the RBOCs becarne bottlenecks in the communications networks as they were key
co~ection points for both local and long distance communications. The MFJ
arrangement, therefore, merely displaced the problem of vertical monopoüzation in the
telecom industries to the local communications network~."'~
The MFJ irnposed line-of-business restrictions on the RBOCs to prevent the
creation of vertical monopoties. The RBOCs were restricted from entering any market
other than local exchange telecommunications. This made it impossible for RBOCs to
provide long distance communications services and atnliate themselves with long distance
carriers. They were du, unable to merge their telephone operations with cable television
operations under a single business entity or to operate in the development, manufacture or
sale of telephone apparatus.""
'* See Friedrich, supra note 10 at 659. ' I o See ibid.
1.13 The MFJ Regulrtoy Consequenca: Two-tier Regdato y S t a t u
The MFJ liberated the telecornmunications market through the dividing of the
telecornmunication industries into severai separate entities. This objective involveci the
separation of the long distance, equipment manufaauring and local communication
markets and was attained by means of a two-tier regulatory scheme. in this scheme,
AT&T and the RBOCs were subject to FCC regdations as weU as the supervision of the
District Court of the District of Columbia
The hWJ granted the District Court of the District of Columbia the authority to
determine whether the business activities of AT&T and the RBOCs were in violation of
MFJ antitrust restrictions. in this capacity, the District Court acted as a de facto
regulatory body. This created a conflict, however, since the FCC continuai to operate as
the official regulatory body. The coexistence of the two regulatory bodies resulted in a
tangled regulatory regime because regulatory procedures engaged both the District Court
and the FCC."' The FCC and the District Court had different mandates and their agendas
led them to interfere with one another.
AIthough the MFJ provided solutions to many problems at the tirne of its
inception, it possessed many inherent drawbacks that eventudy led to its annulment. The
primary objective of'dividing the telecommunications market into separate markets, each
of which was served by different carriers, undennineci the growth of the industries.
"' See ibid.
Today, telecommunications is one of the most lucrative industries and it has spawned very
active merger and acquisition activitie~.''~ Taking this fkct into account, it is evident that
growth in the telecommunications sector has been severely stunted by the MFJ because
carriers have been restricted f?om becoming broad band telecommunications providersa ' ''
The foremost reason why the MFJ fided was that it underestimated the advanced
Pace at which the telecommunications industries would evolve. With the same
assurnptions, the Act of 1934 undenvent a similas process of antiquation albeit the rate at
which technology evolved at that t h e was not as exponential as it is today. The Act of
1931, which was derived tiom the Interstate Comnerce Act, adhered to the premise that
the wired communications industries were natural monopolies. The telephone and
telegraph industries, therefore, were considered to be public utilities that should be
regulated as common carriers. The shortcomings of the MFJ and the Act of 1934
necessitated the passage of the new Act of 1996. These shortcomings are exemplified with
the following.
By the end of 1995, television carriers were prohibited fiom operating local cable
networks w hile cable operators were aliowed to broadcast television transmissions.
Telephone carriers could not provide cable television s e ~ c e s and vice versa. These
operations were disailowed even though both systems used the same electronic wiring to
carry their respective commu~cations to the same household. Local telephone companies
" ' See E.M. Reilly. "The Telecommunications Indusîry in 1993: The Year of the Merger* (1994) 2 Comm. L. Conspectus 95 at 103. "' See Friedrich, supra note 10 at 660.
were excluded fiom long distance services and equipment mandichuhg markets but were
permitted to seli such equiprnent. Local carriers were p r o s c n i fiom providùig cable
television programfning although they did have the right to patronize or own televised
programs. Il4
The examples given above demonstrate the intentions of the regulators, at the tirne
of the judgement, to balkanize the industry into various sectors. The rationale behind this
movement was to prevent particular Carriers fiom abusing monopolistic positions in
telecom industries. With time, however, the needs of consumers and the technological and
commercial endeavors of telecornmunications carriers advanced to the point at which it
became obvious that the telecom industry should be driven by market forces. Indeed,
whether telephony, radio and television should form particular kinds of alliances is an
option that should be lefi open to interested commercial parties. The regulatory
institutions should only retain the responsibilities of maintaining safeguarding measures
and monitor the market to enforce entry regirnes. The role of regulators should not
interfere with the startup and market entry of carriers. To address regulatory issues
conceming exïsting carriers, the entry restrictions should be minunized while certain
regirnes should be legahed to prevent monopolistic condua. These ideas form the basis
for the rationale of the new Act that has nuUified the regulations that formerly maintained
barriers between local and long distance communications. According to the new Act,
-
1 I - i See T.G- Krattenmaker, "Commentary: The Telecommunications Act of 19%" val1 19%),29 Conn. L. Rev. L27.
See ibid
telecornmunications carriers are dso not restricted to the business practice restndons
imposed b y the 1934 Act and the MFJ. Consequently, they can provide universal services.
1.2 The Consequences of the TeIecollultuniCrrtion3'Act of 1996
In order to address the problems incurred by the baikanization of the telecom
industries and facilitate advancements in telecornmunications, the FCC, the Department of
Justice, Congres and the federal courts installeci a new regulatory regime by enacting
Telecornmunications Act of 1996.
Teleconrmunicatiom Act of 1996 was a compilation of amendrnents and additions
to the FCC's fûndamental statute, the Communicatrbm Act of 1934- The new Act
introduced significant regulatory amendments governing the broadcasting of radio and
television, cable, telephony and satellite communication^.^'^ The s a p e of this study shall
cover only the developments in telephony and satellite communications.
1.2.1 Telephony
The line-of-business restrictions that were imposed on the RBOCs thwarted their
cornpetitive activities in local exchange networks. While the RBOCs were heavily
regulated, cable television companies, their local loop cornpetitors, were allowed to utilize
cable television as broadband local exchange networks. Il7 The RBOCs were also restricted
fiom providing video programming within their respective areas of coverage. This
prohibition was hp&d by the Cabfe Communications Policy Act of ï98d18
Il6 See ibid at 123. l" See Frieàrich, supra note 10 at 651. 'IR See ibid See also 47 U.S.C. S. 521-559 (1988).
59
In August of 1993, AT&T annound its acquisition of McCaw Cellular
Communications, the most influentid US d d a r provider. This merger had a profound
affect on the RBOCs because it made it possible for AT&T to comect its long distance
networks directly to the newly acquired McCaw system. This meant that t d c to and
ffom LATAS would no longer have to be processeci through wired local networks.
To accommodate the RBOCs, the new Act dowed them to enter inter-local access
and transport area (interLATA) services as weli as the cable television markets. Long
distance carriers al& benefited âom the lifting of restrictions as they were permitteci to
seii their services in local networks. The new Act also regulates local telephone companies
other than the spun-off iU3OCn Due to the extensiveness of the new Act, the state of the
regime imposed has been described by an observerug with the phrase "everyone h o
LECs" . 120
To accomplish the objective of opening the LECs, the FCC approved the
intercomection order to be applicable for every competitor in local telephone network~. '~~
The intercomection .order, which is given by Section 251 of the new Act, requires that
every telecommunications carrier and local exchange carrier provide nondiscriminatory
access to their networks. The carriers are also obligated to install network facilities in
confonnity with guidelines and standards set out in Sections 255 and 256 of the new
~ c t . ' ~ The constraints stipulate that aü carriers in the local loop must interco~ect the
--
"' The term is used by Krattecunaker. "O LECs stands for Local Exchange Carriers. IL' 47 U.S.C. S. 251(a). '" See J.E. Canis & E.C. Sariano. "The Telecommunications Act of 19%: A Global Analysis" wïnter 19961 Comm L. CO& 4 at 147.
network elements of wmpetitors, either directly or incüredy, to their own networks at
wholesale rates. These obligations open the market, in partidar, to new companies that
typically have high startup overhead because local exchange carriers must d o w access to
theu network facilities at reasonable rates and on a nondisc;'iminatory basis.
The new Act also amends Title II of the 1934 Act by adding a new Part ïiI called
" S pecial Provisions Conceming Bell Operating ~om~anies". u3 Section 27 1 abo lishes
restrictions on the RBOCs goveming their entry into long distance markets. Furthennore,
Section 273 dows the RBOCs to manufacture telephone equipment.L24
Section 271 of the new Act sets forth conditions that the RBOCs must satisfil
before entering long distance markets. This Section contains a fourteen-item critenon
govemhg the open local network regime. The fourteen conditions are:
2) Local loop transmission fkom central offices to custorner premises;
3) Local transport from the tmnk side of any switches;
4) Access to network elements;
5) Access to poles, conduits, and the rights-oGway;
6) Use of switches unbundied fiom any other transport or services;
7) Access to 9 1 1, directory assistance, and other core services;
8) White pages directory listings for customers of competitive carriers;
--
'= See Telecommunications Act 0fl996, supra note 9, s, 15 1(a). "' See Krattenmaker. supra note 1 15 at 110.
9) Nondiscriminatory access to telephone nurnbers;
10) Nondiscrimllutory acass to databases and signaling necessary for call routing;
1 1) Interim number portabiliw,
12) Access to resources necessary for local dialing pariv,
13 ) Reciprocal compensation; and
14) R e d e of telecommunications services. "
1.2.2 Biennid Review of Rtgulrtion
Section 11 of Title 1 of the new Act requires the FCC to reexamine its regulations
every two years, beginnuig in 1998. This Section authorires the Commission to reconsider
the regulations imposeci on services as weii as telecommunications carriers.
in the biennial review, the Commission determines whether regulations continue to
serve the public interest. Changes in the cornpetitive clirnate of the telecommunications
market can antiquate certain regulations and diminish their signincance or applicabiiity to
current technologicai and commercial trends. Such regulations are duly eliminated.'26
1.2.3 Satellite Communications
in 1996, notable developments in satellite communications were the FCC's
Domestic and International Satellite Consolidation Order (Disco) 1 and II and its attempt
to fùrther ticense LE0 satefites.
' Telecommunications Act of 1996. supra note 9, S. 27 1. '% See Canis & Sonano. supra note 123 at 123.
1.2.4 Disco I and II
Before January 1996, the US satellitclicensing regime was divided into two
categories: 1) iicensing for domestic services; and 2) iicensing for international services.
The two licensing senices were subjezt to different regdations and neither one was able
to provide the services offered by its iicensing counterpart. In Di- I, the FCC eliminated
the regdation that distinguishes between the two kinds of Licemes and combines them
together under the same regdatory regirne. The FCC sets out a new standard that allows:
ail US-ticensed fked satellite services (FSS) systems, mobile satellite service (MSS) systems, and direct broadcast satellite service @BS) systems to offer both domestic and international service?
As a result of this Order, satellites that are licensed domestically are not required
to obtain FCC approval to provide international services. However, such satellite
operators are stid required to complete the consultation procedure required by Article
XIV(d) of the INTELSAT Agreement before the introduction of such systems.
Disco U supplernents the objectives of Disco 1 by promotïng US-based satellite
communications beyond US temtory. This is achieved by dowing foreign satellites to
transmit signals to, fiom and within the US on a condition of re~iprocity.'~ This condition
of reciprocity stipulates that foreign carriers wishing to offer their seMces in the US must
be based in nations whose home markets are also open to US carriers. The granthg of
'." Amendment of the Commission "s Regulatory Paficies Governing Fixed &telfites and Separate International Satellite Systems. Report and Order. 61 Fed Reg. 9946 (19%). 1 tS See P.L. Spector & S.E. Ryan, "Internationai Communications" [Siimmer 199fl Int'l Lawyer 3 1 No. 2 at 270.
Iicenses also includes a test that is designed to determine whether foreign markets present
effective cornpetitive opportunities (ECO test) for US-licensed satellites.
Ln 1996, the FCC took progressive steps in its attempt to fkther license LE0
satellites. It released a Notice of Proposal Rulemahg to govem its Little LE0
assignments. The goal of tbis rulemaking was to a s s i the avdable spednun to at least
three licensees. Since the rulemaking is still pendimg, the FCC might elea to assign the
spectrum for the Little LE0 on an auctioning basis.
As for the three licensed Big LE0 service providers (Iridium, Globalstar and
Odyssey), al1 players have agreed to participate in a spectnim-sharing plan. Furthemore,
they plan to work together in the event that there are problems concerning Licensing and
regdatory issues on the international Ie~e1. '~~
1.2.6 Special Provision on GMPCS
As do most nations, the US proscribes foreign ownership in its telecommunications
industry to liniit foreign influence in domestic telecornmunications. Restrictions on foreign
investments apply to "cornmon carriers". This group of carriers is comprised of US radio
and television broadcasters and telecommunications providers that employ wired and
wireless telecomrnunications. The 1934 Cornntmi~om Act dehed a "common carrier"
as "any person engaged as a common carrier for hire, in interstate or foreign-
communication by wire or radio."w The FCC regdations red&ed a "communications
common carrier" as "[alny person engaged in rendering communications service for hire to
public." The notion of common carrier was aiready weli estabLished in cornmon law prior
to the definition given by the Commission. A common c h e r was considered to be any
cmier that holds itseif out to the public for hire on general terms."' This dennition is
aven in Sections 201 to 203 of the Communicutio~ Act and these sections ïnclude
obligations for comrnon carriers to provide se^-ces on dernand at faù and reasonabie tadF
rates without any discrimination or undue preference- 13*
Section 3 IO@) of the 1934 Telecornmuni~~o~t~ Act govemïng foreign ownership
restrictions was amended by the new Act of 1996. The amended section of the new Act
States:
Section 3 10. License ownership restrictions
@) Grant to or holding by alien or representative, foreign corporation, etc.
No broadcast or common carrier or aeronautical en route or aeronautical fixed radio station license shail be granteci to or held by -
(1) any alien or the representative of any alien;
(2) any corporation organized under the iaws of any foreign governrnent;
(3) any corporation of which more than one-fifth of the capital stock is owned of record or voted by aüens or their representatives or by a foreign government or representative thereof or by any corporation organized under the laws of a foreign country;
(4) any corporation diuectly or indïirectly controiied by any other corporation of which more than one-fourth of the capital stock is owned of record or voted by aliens, their representatives, or by a
130 Telecommunications Act of 1996, supra note 9, s. 5 l3(h), 131 E.g., see United States v. Cali/ornia, 297 US. 175 at 182 (1936); Washington ex ref. Stimson Lumber Co. V. Kuykendalf, 275 US. 207 at 21 1 (1927); New Jersey S t em Nmigation Co. v. Merchants' Bank, 17 U.S.343 at 381-383 (1848). 13' Telecommunication~ Act of 1996, supra note 9. s.20 1-203.
foreign government or representative thereoc or by any corporation organized under the laws of a foreign country, it the Commission h d s that the public interest wül be serveci by refusal or revocation of such iicense. '33
Because the modem communications arena is clearly on an international level, a
carrier can maintain economic viabiiity and progress in a fsrst-changing telecom industry
ody with the cooperation of international telecommunications networks. As the W is
aware of its own national interests, the FCC has aeated a regdatory scheme to provide
Amencan carriers .overseas expansion opportunities through partnerships, direct
investments and cooperative agreements. This scheme, however, is based on reciprocity
whereby the US is willing to open its telecom market to foreign carriers provided that the
home markets of such carriers offer equal opportunities to US carriers. This scheme is
cded the Effective Cornpetitive Opportunities (ECO) test. The FCC announceci that the
ECO test was designed to accompiish three objectives:
(1) to promote efféctive competition in the US telecommunications services markets;
(2) to prevent anti-cornpetitive conduct in the provision of international services or
facilities;
(3) to encourage foreign governent to open their telecommunications markets to
US companies. L34
13' Communications Act of 193.4. P.L. 416,73d Cong.. c. 652.48 S U 1064.47 U.S.C. S. 3 10 as amended by Telecommunications Act of 1 996 [hereinafter Communications Act of 1934).
See FCC Adops New Rules on Foreign Carrier EWry 1 . US. Marke& Rep. No. DC 95-137, IB Docket No. 95-22 (1995).
The ECO test constitutes four criteria in daermining whether a foreign market is
open:
(1) the presence-of legal barriers to market entry by entities foreign to that market;
(2) whether the co~ection is permitted under "rûisonable and non-discriminatory
charges, tenns and conditions";
(3) the presence of competitive deguards (Le., niles agaùist cross-subsidization);
and
(4) the existence of a regulatory agency to protect the cornpetitors. *'
Aithough the FCC has recognized the importance of allowuig foreign carriers to
enter an open and competitive US telecornmunications market, it has also realized that
foreign investment restrictions should not be unilateraüy eliminated. The US stiiI maintains
such restrictions as an incentive for other countries to open their markets to US carriers.
The FCC considers the petitions of foreign carriers according to the measure of
reciprocity and this is done in conjunction with the ECO test. In summary, the FCC
removes foreign ownership restrictions on a selective and reciprocd basis.
With respect to LEO-based projects, the FCC does not consider GMPCS
operators as common carriers or operators of "Commercial Mobile Radio Senice"
(CMRS). Accordhgly, GMPCS wiil be minimally regulated and wül not be restricted
under the foreign ownership Limitations of Section 3 10 of the C o m ~ c u t i o n s Act. The
result is that there are no proscriptions governing foreign ownership or investment.
GMPCS operaton are therefore aiiowed to raise foreign capital without restriction and
13' See ibid
foreign entities wishïng to invest in the GMPCS are not subject to the ECO test and the
measure of reciprocity.
CHAPTER V
1. US Regdatory Bodies and tbeir Roles in Implementing the Use of L E 0
The new global communication satellite network possesses unique characteristics,
inter alia, the majority of GMPCS telecornmunication operators are incorporateci in the
US and ail American GMPCS operators are privately-owned corporations. Therefore,
proposed systerns are subject to the authorization procedures of the FCC and other
regdatory bodies, - specincaüy the Department of State and the National
Telecommunications and Information Administration.
1.1 The Federa1 Communications Commission (FCC)
The FCC, the US federai body established by the Communications Act of 1 934,136
oversees communication affairs ranging fiom wire, radio, television, satellite and cable for
both the domestic and international arenas. The FCC is responsible for the ailocation of
frequencies for aii non-federal governent activities. Its influence of power encompasses
not only private entities but also state and local govenunent operations.'" For a system to
be aliowed hto existence, proper authorization fiom the FCC is required in al1 procedures
ranging fiom construction and launching to operation.
136 See CommunÏcatiorrs Act of 1934 supra note 135, S. 15 1- 609. 137 P. Hanagan. "Personai Communications SeMces: The Long Road Ahead" mruary 1996) Telecomrnunications, (American edition) 130.
There are five methods by which the FCC grants ticenses. These methods are:
a) Corngiarative hearin~s: When the FCC decides to assign fiequencies for a particular
form of telecommunication, it arranges a hearing at which every appticant in
question must be present. This provides the Commission with expedient access to
information should it be chaüenged that public interest, convenience and necessity
will not be attained with the t icenhg of a proposed application.
b) Ne~otiated rulemakin~s: This is a procedure whereby the FCC and all applicants
negotiate d u ~ g the granting of a license.
c) Lotteries: in this approach, the applications which contain detaiied e n g i n e e ~ g
information and warranties that the Commission's financial requirements will be
satisfied, must be fïled by an arranged date. Applications are subsequently selected
on the ba i s of chance.
d) Pioneer's preference: This procedure provides speciai treatment for projects the
development of unprecedented comrnu~cation services.
e) Com~etitive biddinq: The FCC grants the license in an auctioning forum.
For domestic satellite communication, the applicant must demonstrate that a public
need for the seMce in question exists and that it is capable of providing the proposed
s e ~ c e . ' ~ ' With respect to international services, the auction method of authorkation is
employed and a gan t carries with it the condition that the appticant demonstrates that the
proposed international service will serve the national interests of the
13* See Telecommunications Act of 1996. supra note 9, S. 30 L et seq. See ibid., S. 701.
When an assignrnent is granted, the LE0 systern operator is obligated to fokw the
FCC's license quaiifjing procedures and must await FCC authorization before building,
launching and invoking the operation of its constellation. The iicenr procedure demands
that the operator submit PU relevant project LIformation. This uiforrnation includes the
system features, the nationaiity of the applicant and a financial plan to support the
construction, launching and the operation of the proposed network Ultimately, the
applicant must also prove that the proposed plan is technicaüy viable.'&
The FCC issues two classes of satellite communication system Licenses: radio
fiequency spectrum iicenses and ticenses for the operation of satellite systems.
Private corporations can participate in the formaiization process of the FCC niles
that govem the assignment of tkquencies. The FCC includes companies in this process
through severai "notice-and-comment" periods. Any corporation may petition the
introduction, amendment or repeal of a rule or regulation. The FCC pubtishes a petition in
a "Public Notice" and this publication gives any other interested parties the oppominity to
support or oppose the petition. Aii comments in response to the notice must be med
within fifteen days of the petition's publication date. The FCC evduates the petition and
any comments fiom interested parties. If the petition satisfactorily argues in support of the
requested action, the FCC then proceeds to issue a "Notice of Proposed Rulemaking".
This notice, issued in the Federai Register, indicates time limits for the receipt of
supporthg or opposing comments fkom any interested parties. Mer a second round of
evaluation, the FCC publishes its final decision in a "Report and Order" doc~rnent.'~'
''O See T. Stevens, "Regdation a d Licensuig of Low Earth Orbits Satellites" (1994) 10 Cornputer & High Tech, L. J. 408. '" See ibid. at 407.
Foilowing the docations granted to satellite-based mobile systems (MSS) at
WARC-92, the FCC began, in October 1994, to authorize its own nationals with global
PCS Licenses. Five applications were subrnitted to the Commission and three of them were
granted authorization under conditional ternis in January 1995. The three ticenseci systems
were Motorola's Iridium, Loral's Globalstar and TRWs Odyssey.
The iicenses awarded to the Big LE0 projects Le., Iridium, Globalstar and
Odyssey, were granted via the negotiated demaking procedure which encompasses the
FCC's procedures of "Report and Order" in "Docket CC 92-166". The said documents set
out rules and policies for the projects. '" They are:
a) Financial aualincations: The FCC stipulates that an applicant's balance sheet must
demonstrate that the sum of current assets and committed outside assets is adequate
to buiid and operate the system for at lest one year.
b) Technical aualifications: An applicant is required to maintain "global coverage"
tiom 70° North Latitude to 55' South Latitude for a minimum period of 75% of 24
hours. Furthemore, the proposed network must maintain £ÙU coverage of the US at
aii tirnes.
classification of operators: LE0 service providers are not categorized as
common carriers. As a result, they are not restriaed by the foreign ownership
limitations that apply to cornmon carriers.
d) Construction milestones: Once the aforementioned procedures have been
completed, the licensees will obtain an "Order" fiom the Commission to commence
the construction of satellites within a certain thefiame.
'" See Final Report ofthe ERO. supra note 81 at 105.
The FCC supe~ses every step of the process by which a network cornes into
existence. It also oversees the operation of the boosters, gateway stations and mobile
termïnals in order to ensure that the utibation of the assigned fiequenàes is in conformity
with the respective networks.'"
In addition to maintaining the technical and economic viability of the proposeci
systems, the authorization process also serves as a vehicie by which the US Unplements its
international obligations, in partîcuiar, the Outer Space Treaty which is the constitution of
space law. Article W of the Outer Space Treaty provides that "activaies of non-
govemental entities in outer space, ... shd require authorization and continuhg
supervision by the appropriate State Party to the ~reaty" . '~
1.2 The Department of State @OS)
The DOS is responsible for US foreip &airs. It, in cooperation with the FCC and
the National Telecornmunications and Information Administration, appoints
representatives to partake in the ITU conferences and other speciaiized meetings. The
representatives demonstrated an outstanding lobbying power at WRC'95 where they
successfuily petitioned the allocation of particular radio ûequencies that were not officially
part of the conference agenda 14'
"" See M Paetsch. Tlie Evolution ofMobile Communications in the US. and Europe: Regulation, Technology, and Markers (Landon: Artech House, 1993) at 257, 144 Treaty on Principles Goveming the Activities of States in the fiploralion and Use of Outer Space. Including the Moon und Olher Celestiai Bodies, 27 Januiuy 1%7,18 U.S.T. 2410, T-LAS- No. 6347,610 U.N.T.S. 205 (enterai into force IO October 1967). art. W Pereinafter Outer Space TreatyJ. 145 See Flanagaa, supra note 139 at 128.
1.3 The National Telecommunications and Information Administration (NTIN
The NTIA s u p e ~ s e s all federal government space applications. including military
appiications. In addition to cooperating with the DOS and the FCC in the appointment of
US delegates for conferences, the NTIA shares with the FCC the task of assigning radio
fkequency bands to both governmental and non-governmentd operaton?
3. Lex Americana
Virtuaüy aii LE0 system service providers are based in the US and the Personal
Communications SeMces (PCS) is a new technology developed primarily in the US.
International law governing this technology is in its infancy. The US, &facto, is weli
positioned to introduce legislation governing LE0 satellite communications. This
legislation has ofken been referred to as ex ~ m e r i ~ ~ l ~ t ~ ~ ~ L47
Rothblatt has reasoned that "[ulnder the Lex Americana. the first country to notitjl
the International Telecommunication Union of its intention to launch one or more LE0
systems, and to subsequently hplement that intention, has a qualified exclusive nght to
the frequency bands those LE0 systems employ. " la
This perspective argues that the first-mover country is entitled to deploy systems in
the LE0 simply because it presumably already possesses the necessary technology to do
so. The L E 0 and fiequency specmim, however, are natural resources and the unavoidable
question that surfaces is whether nations possessing technological prowess should be
'j6 Ibid. lJ7 See M Rothblatt, "Lex Ameriana: The New internatioaai Legal Regime for Low Earth Orbit Satellite Communications Systems" (1995) 23 J. Sp. L. 123 at 127.
pemiitted to eeely consume these resources, to the disadvantrige of lesser developed
nations. This wntroversial point was ignored for the GSO with the initial implementation
of the fkst come, fim served allocation proamire. The histoty of disagreement over
allocation for the GSO reveals that a more equitable access to the natual resources for
less powerttl nations is necessary. We maintain that in order for a fiir aüocation process
to exist, a new legd regime that compensates for the lesser developed technologies of
non-first mover countries must be adopted. The ITU and the US, in particular, must be
made aware of the potential for international dissension with the monopolizing of the LE0
by first-mover nations. Current ITU regdatory policy goveming the use of the LE0
supports the Lex Amerfcana- This support has led the ITU to adopt the "first come, first
served" prlliciple. Onder this current legal regime, the US used WARC-92 to clairn for
itselfail of the available frequency bands in the Little LE0 ~ ~ e c t n i r n . ~ ~ ~
Arguments in favor of ûee access by fkst-rnovers stress that so long as first-
movers Sat ie al1 the d e s of the aiiocation procedure they are fùiIy entitled to the
resources for which they petition:
It is for a state, in exercise of its sovereign power, to assign the use of a fiequency to a particular.. . station. In so doing, the state should have regbd to the Table of Ailocations and the existing assignments which have been reported to the IFRB,''~ the organ of the ITU which has that fiinction . . . The Radio Regulations (and occasionaüy other World and Regional Plans adopted by the ITU and mod@ing the basic Regulations) provide a framework within which the proposed assignment must fit if it is to receive protection fiom harmfùl interference fiom other stations and, mutatis m u t d s , is not itself to cause interférence- l5
14' See ibià. at 129, ' ~ 0 The organ is now called the Radio Regdations Baird (RRB). "' See Lyall. supra note 78 at 356-357.
This view fùrther ernphasizes the need for new intemationai Iegislation if equitable access
to the LE0 is to be established-
US domination of the LE0 is again evident when considering the FCC's request
for the whole available segment of the Big LE0 fiequency bands that are designatecl for
the Geostar radiodetemination satellite service (RDSS). The FCC apportioned it into four
sub-segments and plans to gant ticenses to its system operators on the basis of a~ction."~
We can conctude that under current conditions, virtuaiiy aU of the useM
fiequencies allocated for the GMPCS will be occupied by iicensees of a select few
administrations. These administrations will be those that are first in submitting a
notification for a proposed system. It is crucial to consider whether this docation scheme
should be aiiowed to become the de facto global orbithpectmm plan for GMPCS. Wdl
other administrations object? If so, what will be the available mechanisms to contest the
biased use of fiequencies?
15' See Rothblatt, supra note 149 at 13 1-132.
CHAPTER VI
1. The GMPCS, Its Characteristics and Related Regulatory Issues
ùi 1990, the FCC definecl PCS as systems "encompassing a broad range of radio
communications senices that f?ee individuals fkom the constraints of the wue-lined public
switched-telephone network and enable them to communicate when they are away 6om
their home or office telephone*.'"
PCS are a new generation of communication systems that employ person to person
communication rather than the station to station communication prevalent in conventional
ceilular systems. PCS make it possible for the user to be in co~ect ion with the network at
al1 times under a single telephone number- Furthemore, no matter where the handset is
located, the communication connection remains intact, thereby providing the user global
mobility. PCS handsets fùnction as smd earth stations and for this reason, they are
technicdy independent of PSTNs. However, the systems do not operate as intended due
to international political pressure stemming fiom the concern that the systems would
bypass the traditional wire-hed and cellular systems of consumer countries.
1.1 Regulatory Issues
When considering regulatory issues, the important question is whether or not the
GMPCS has unique characteristics that distinguish it from other wireless communication
systems. Should GMPCS dweii on the sarne regulatory policies as other cellular systems
or cal1 for an alternative regime?
Is3 FCC, Notice oflnquiry, Gen. Docket 90-314.5 FCC Rcd 3995 (1990) at 1.
GMPCS are in fact unique in that they:
(a) have the ability to provide global communication networks;
This global communication technology is very kely to be extended to have more complex
and greater capabilities for fûture generations of global communication systems.
(b) possess portability attniutes; and
GMPCS handsets are dual-mode and use both cellular and LEO-based technology- This
gives users the fieedorn to cross international borders all the while maintaining their
communication connections.
(c) are privately-owned corporations.
The oniy other systems that are global or near global in range are the INTELSAT and
INMARSAT systems. Both systems, however, are O perated by intergovernmental
organizations. Also, INlMARSAT is the only other system providing mobile satellite
communication networks. Is4
GMPCS constitute a breakthrough in telecommunications as they are the only
systems that possess ail of the above three characteristics.
The proposed GMPCS projects are worldwide in scope and therefore, are costly to
implement and upgrade. As such, financial support for a project by a sole nation is not
dways h i b l e . As stated in Chapter 2, the costs of the GMPCS projects range fiom $1 -
billion to $3 -5 billion.'55 Hence, the projects depend substantiaily on international funding.
1 54 Sec Regdatory Colloquium, supra note 5 at 54-56. ''* See ibid
The fbnding of a project is possible only through an international consortium estabiished
to address international financial and operating control issues. The most favorable
conditions exist when the consortium is not overly intluend by a single member
administration.
Another advantage of international consortia concems the quantity of radio
spectrum docated to GMPCS. The radio speîtnim is finite and has been granted to a
smaii number of system providers of a few admini~trations.'~ An intemationai consortium
allows for a fair and balanced distribution of fiequency resources among the mernbers of
the consortium.
Yet, another reason for establishing consortia is that the system operators provide
seMces via mobile handsets which, by design, can be easily carried across international
borders while in use. Consortia facilitate the acquisition of licenses Erom ail interested
national administrations.'"
Consortia are also required because ail nations to be s e ~ c e d by a system must
authorize the system provisions through licensing. The extent of this authorization
encompasses mobile units as weU. For example, consider a system iicensed by a State A
For the system to be rendered operational in State B's territory, the issuance of any
licenses for the system in State A is inadequate. State B must also approve the
consumption of the system s e ~ c e s . hie to the mobiiity f ~ r e of the systems involveâ,
State B's approval would also be required for the use of the handsets in its own temtory.
Is6 The US, on behaîfof Iridium, Globalstar and Odyssey systems and the UK on behaifof INMARSAT-P system. Brazilian and Russian-baseû systems are king developed '" See Regdatory Colfoquium. supra note 5 at 56-70.
Note that consortia aUow for indepaident iicensing by States. For example, State C could
issue different iicenses than those issued for the same system by State B.
We have seen how GMPCS are technologicaiiy advanced compared to other
communication systems. As weU, there are many commercial and international approaches
and policies that have been introduced to support the successnil entry of GMPCS. Current
international legislation was intended to apply to systems with inferior technical features
and does not take into account the unique international arrangements and circumstances
that apply to and surround GMPCS. This thesis submits that a more efficient
implementation of GMPCS and hproved regulation of the operation of these systerns
would be achieved with the introduction of specific legal amendments. The recomrnended
Iegal modifications involve:
1. Licensing points concerning the space segment;
2. Licensing points regarding gateways;
3. Licensing policy of services; and
4. Licensing approaches for handsets.
1.1.1 Space Segment Licensing
There are two major differences between non-GSO GMPCS and geo-stationary
sateüite systems. Fust, satellite consteHations deployed in LE0 are significantly larger in
number than those launched into GSO.
Second, the Iifé span of LE0 satelîites is relativeiy shorter than that of geo-
stationary sateliites; five to seven years compared to ten to meen y e a ~ . ' ~ The
discrepancy in the expected life span is largely due to the harsher conditions of the LE0
(e-g., the presence of orbital debris). Maintenance of LE0 systems nonnaiiy requires
regular and penodic launchings of new satellites to replace damaged or f-g satellites.
Satellites of geo-stationary systems are granted iicenses de f i 0 for their entire Me
spans. When a GSO system is granted orôithpectrum rights, these nghts are also
perpetual.'5g The term "perpetual" qualities the nght as one by which the iicensed
administration is entitled to utilize the aiiocated orbital positions and the associated radio
spectrum indefinitely. The oniy constraïnt is that the technical specifications of the
satellites deployed in the GSO mua remain as indicated in the original fiequency
assignments. Any technical changes must be approved through the re-invocation of the
notification procedure.'60 When a satellite is replaced, however, the perpetuai rïght
persists so long as the succeeding satellite possesses the exact technical specifications of
the original satellite.
Although the acquisition methodology for orbit/spectrum of the GSO and LE0 are
similar, national administrations iicensing GMPCS do not enforce the perpetuai nght to
replace dehc t sateliites. This action is carried out in order to address the concems
expressed by non-£kt mover countries that the successive replacements rnight result in the
IS8 See ibid. at 90. '" See Jakhu, supra note 1 at 288.
See ibid. at 289.
permanent occupation of the spectnim by a srnall number of administrations or, even, the
commercialization of outer space by a few mega-corporations. The administration's
approach to this issue shown by the US action against the FCC provision of Licensing
poiicy, wiiI be stated later in this chapter.
In general, the tirne required for the development and deployment of a LEO-based
syaem is greater than that required for a GSO system. To cuxtail privatization of the space
segment by a select group of GMPCS operators, the FCC amended the Report and Order
in 1994 with the addition of a iicensing policy which obiigates system operators to
implement their systems within six years after the granting of a ticense. Should a system
operator fail to meet its obligations within the aiiotted timet'rame, the FCC may decide to
revoke the granted license. The Report and Order document also specses that iicenses for
the operation of GMPCS are to be granted for a period of ten yean. Upon expiration of
an operating license, the ternis and conditions of the License may be modifieci at the tirne of
the iicense renewai. In order to tiinher minimize the wasting of orbit/specmtm resources,
we shall now examine other possible courses of action that could be taken by national and
international bodied6'
We have already discussed several provisions intmduced by the ITU to regulate
the utilkation of obit/spectrum resources. These provisions provide allocated 6equencies
with protection fkorn harmfùl communication interference. The Radio Regulations
provision authorizes the Radiocornmunication Bureau to terminate the protection of any
161 See Regulatoty Colloquium, supra note 5 at 113.
muencies registered to systems that are not brought into existence within a @od of
nine years after the date of advane publication. Since the space segment is a naturd and
finite resource and the LE0 is an element of the space segment, it could be recommended
that this provision include the LEO.
In the national arena, a license can be tenninated in the event that a licensee fails to
implement its proposed system in the requked tirnehmee The FCC's Notice of Proposed
Rulemaking (NPRM)'~' and the Joint Proposal and Settlement ~ p e m e n t ' " both apply a
concept of "national re-assignment" of spectrum. That is, when a ücense granted for
spectrum in the US assignment expires, the spectrum in question "could be made available
to [another US] ticensee upon a showing of need".16*
Operatïng Licenses granted to system operaton by an administration also apply to
the assignment of upluik and do- fiequencies. They do not, however, authorize
system operators to establish gateways, interconnect their networks with the PSTN of
consumer countries or automaticdy d o w operaton to provide senices to end-users in
other countries. Permission to put into place these system components must be obtained
by each consumer nation. This authorization is left to the discretion of the administrations
involved and depends on national policies goveming the usage and treatment of such
systems.
' " See Notice of Proposed Rulemaking. In the Matter O fArnenhent of the Commission's Rules to a t a b lish Rules and Policies Pertaining to a Mobile &teIlite Swice in the 161 O-i626.5/2483.5-.XOO MHz Frequency Bands, CC Docket 92-166, released 18 Febniary 1994 (hereioafter N P W . 1 63 See Joint Proposal and Settlement Agreement among Constelfation Communications Inc.. Mobile Communications Holdings Inc-, Moto fora and ïR W. (1994). 164 N P M , supra note 164, para 24.
1.1.2 Gateway Licensing Pmbkms
A gateway wnsists of a processing b c t i o n software and a PSTN intercomection
finction. Its purpose is to connect the GMPCS space segment with the PSTN. The
number of gateways normaliy varies fiom system to systern-
Authorization hom national regulaton is required in order to establish a gateway
and its feeder links.'" W e a gateway is estabüshed at a singie location, feeder Iinks
interconnect nations and, therefore, gateway iicensing also requires international Licensing.
High system performance is achieved with the proper selection of gateway
locations. The choice of locations mua address technologicai and econornic concems.
Because a single gateway can serve a vast region, it is a technological problern to
determine the number of gateways required for a group of neighboring countries. Due to
the obvious overhead incurred by the establishment of a gateway, there is also a financial
aspect involved in that the number of gateways mua be minimized but must stiii allow
satisfactory communication coverage. In most LEO-based systems the solution is to
strategically position a relatively small number of gateways arnong the consumer
Countnes that possess a gateway maintain control over the operation of the
GMPCS system for the territories covered by the gateway. Countnes that are served by a
gateway located in another countqr must rely on the cooperation of the gateway country.
lb5 Feeder Links requires higher hquency bands than tbe assigneci uplinlrs and downlinks transmitted to and from handsets. The preferable frecluency bands for gateway are in the 20/30 GHz bands also known as "Ka-band".
See Cook. supra note 32 at 46.
In practice, some GMPCS operaton rnay also grant investing corporations the
right to establish and control gateways. This gives investors the exclusive right to
designate the locations of one or more gateways in severai countries. An uivestor who
controls a gateway can a h become a service provider for countries within the gateway's
coverage by providùig trafEc through the international PSTN or other modes such as
leased-line resale?' -
The issue of Limiteci gateway ticensing is not a new concem for regdaton because
other existing systems such as INTELSAT, for exarnple, also have a limited nurnber of
gateways. GMPCS system gateways are not a new concept either. They enable a mode of
trafnc cmiage that is currently used by international systems. Therefore, it can be
expected that Lirnited gateway licensing will be successfiliy applied to GMPCS.'68
The disadvantages of countries that have no gateways can be alleviated through
natural economic cornpetition whereby system operators will seek to establish new
gateways in different countries. Nevertheless, the rights of a "non-gateway country"
should be recognized so as to guarantee its fail access to system gateways in other
countries on equitable terms.
167 See Regdatory Colloquium, supra note 5 at 112-1 15. 168 See ibid.
1.1.3 Service Lieensing Issues
A system operator must obtain a service liceme tiom each non-first-mover CO-
covered by its GMPCS system- Operating a GMPCS system in a country without such a
ticense constitutes unauthorized use of the GMPCS space segment. In addition to granting
seMce licenses, non-first-mover countries must also authorize the use of handsets in their
territories. The authorization of handsets wiil be discussed below.
It has been reasoned by a number of obsewefs that it wül be difficult to prevent the
unauthorized use of the GMPCS space segment. The technology is such that handsets can
finction normaliy even in countries that have not granted service ticenses- Given the
compactness and the mobility of the handsets, it is almost impossible to regulate their
illegai usage.16' GMPCS operators, however, are actually able to "switch-off theu
seMces in those wuntries that have not granted s e ~ c e licenses. GMPCS operators are
inclined to take such action, as failure to do so would violate the Iaws of these countries.
Ln fact, potential operators have expressed their intention to provide services only in
countnes whose national administrations have granted the proper authorization.
1.1.3.1 Some Questions Related to Scrvice Lictnsing
Due to the global coverage and the mobiiity features of the GMPCS systems, both
operators and consumers want to see the services offered in the telecom market. The
system operators have proposed business strategies to make the systems viable.
'" See ibid.
For example, they wish to create strategic alliances with the consuma countries' PTTs
with the goal of hamessing exïsting idbtructures. Any strategy, however, cannot
circumvent the requirements of the national iaws of the consuma countries. The system
operators must still obtain ticenses before m a h g their systems adable in the territories
govemed by the consumer countries. National regulators, who represent the consumers
and act in their interests, are duty bound to keep abreast of leading edge technology and
maintain an administration capable of takiog effective and efaicient decisions regard'ing the
commercialization of the systems' seNices and mobile units. AU decision-making processes
are lefi to the discretion of each administration and Vary depending on national interests
and policies. When discussing the comrnercialization of the GMPCS in non-first-mover
countnes, two main elernents need to be taken hto account:
1. national policy; and
2. business strategies that Vary fkom one system to another.
There are two national poticies that apply to this commerciaiization. The
regulatov body may permit a GMPCS operator to seii its services directiy to the end
users. It may altematively set the condition that a license c m be granted only if the
GMPCS operator provides its seMces through local wire-lined or cellular s e ~ c e
providers. In the latter case, the regulator may detennine how and which service providers
will be selected.
''O See ibid at 122.
Currently, most GMPCS operators have business affiliations with many Secvice
providers around the wodd. In some cases, the service providers are alsa the PTTs of the
consumer countries. This leaves open the possibility that when dealing with regulatory
issues, regulators may tend be biased and therefore, more lenient towards systems fùnded
by their own nationals, This causes concern for consumer w e k e because GMPCS shuuld
be available to the consumer on the least regulated bais possible.
National regulations imposed on GMPCS should be moderate so that the systems
may be accessible to the largest number of users in consumer wuntries possible. This
position should also be taken because the orbit/spectmm resources available for this
technology are nnite. Another reason for moderate national regulations is that, to date,
there are only a few GMPCS operators worldwide. If each administration were to gant a
service license to a particular system provider then, because of this small number of
operators, there would potentidy exist de facto monopolies in certain domestic LEO-
based markets. This is certainly not in customers' best interest. Additionaiiy, GMPCS are
aiii in their infàncy and have the potentiai to be developed fiirther. By removing
constraining regulations, market forces are aiiowed to govern the telecom market and this
makes the market more attractive to both consumers and operators. The consumer will
enjoy the high quality communication seMces offered at cornpetitive pnces which result
6om open competition. Operators wiil benefit Erom a 6ee market as weii since the
standard for the quality of services wili be raised and through their efforts to suMve in the
fiee-for-al1 market. they will push the envelope of existing technologies. Operators with
technological and marketing prowess wili survive and these operaton wiii earn profits.
This, in tum, will provide further benefits to the consumer and will complete the growth
cycle."'
Ka country grants a service Iicense to an operator with whorn it has invested, then
a concem for ethics may be r a i d on grounds that "Nemo sibi actione expen'tur, et hoc
non sine breve sive Libella conventiom~i" or "No man ought to be his own judge, or to
administer justice in cases where his relations are concemed".'"
Because of the business alliances surrounding most LEO-based systems, the
system operators will naturally select their own f i a t e s to be service providers.
Nevertheless, service providers are still subject to the supe~sion process of national
regulators. The regulators will impose certain regdations on their own national service
providers.
in some countnes where national poiicies are comparatively rigid, the regulator
may be involved in the selection of the seMce providers. The choice of service providers
is made prior to the granting of a Iicense to a system operator. A licensed system operator
is bound to make its services available through the selected service providers. Service
providers are selected on the basis of qualitications stipulateci by the regulator. They may
altematively be selected through a bidding pr~cess.''~
Another possible approach for regulation is that of open-rnarket entry whereby the
market is aiiowed to be driven by competitive forces. With such a method of regulation,
the regulator may stipulate particular qualitative and quantitative "thresholds" for senices
171 See ibid '" See HC. Black Bfack's Lmv Dicfionq, 6th ed ( S t Paul. Mina: West Riblishing Co.. 1990). '73 See Regulatoty Colfoquium, supra note 5 at 134,
that system operators rnust satisfjr in order to be permitted to provide and maintain
services.
Another question to be posed when discussing seMce licensing is whether the
PSTN should be permïtted to be a seMce provider. As weil, should cellular operators be
encouraged to act as senice providers for GMPCS operators?
Particular GMPCS operators, such as Globalstar and Iridium, expect to utilize the
existing PSTN and ceilular networks in the consumer countries to rninimize the overall
cost incurred when depioying and developing projects. From a regulatory standpoint, tbis
arrangement will enhance the prospective services that the service providers can provide.
As a result, it would encourage cornpetition as well as d o w greater open access.
If a cellular operator is authorized by a regdatory authority to enhance coverage
or offer global roaming via dual-mode communications, then subscribers are able to use
both cellular and LEO-based technology in the same mobile unit. This arrangement
between GMPCS operators and cellular providers results in a mutuaiiy beneficial
relationship between regulaton and LEO-based operators. This symbiosis exists because a
regulatory authority Licenses a system in its own jurisdiction yet the system operates on a
global cale.''^
1.1.4 Issues regarding Handsets
GMPCS handsets fiinaion as earth stations. With regard to the uplink
communication operation, handsets used in a given temtory are subject to the national
174 See ibid
licensing proces of the ITU Member Administration that maintains jurisdiction-"' There
are two types of handset authorkation:
a) the authorization granted directly to the individual subscriber, and
b) the generic or blanket approval for a specific type of terminai.
Without proper handset authorkation, it is impossible to render GMPCS
technology globally accessible. Handset licensing plays an integrai part in the deployrnent
of LEOs and MEOs. Therefore, measures supporthg the unrestricted movernent of
handsets as weU as measures to promote a cornpetitive market for handset manufacture
should be promulgated.
Authorization to individual users will prove to be diicult to regdate as license
verification will need to be performed for each handset at national borders. Due to the
high mobility of the handsets, the best alternative is to establish a licensing scheme that
favors the blanket approach and avoids excessive regulatory limitations. The FCC, in its
Report and Order, States that "rather than requiring mobile transceivers to be licensed
individuaiiy, we propose a blanket licensing appr~ach.""~
The FCC also proposes that GMPCS operators should be accorded the authority
of blanket approval: " m e propose to require an end-user to obtain the authorization of
the space station operator."
For US territones, the FCC's recommendation promotes the international mobility
of GMPCS handsets by providing that handsets in use in other countries be aliowed into
175 See Radio Regulations, mpra note 57, No. 2020. 176 See Regulatory Colloquium. supra note 5 at 104. 177 NPRM, supra note 158, paras. 88-89.
the US on the condition that t h y have been approved by the US-ticenseci GMPCS
operators. "*
With the objective of irnplementing the blanket appmval of handset licenses, we
examine three potentiai rneasures: L79
A. The regulatory body may recognat the type appmvaî griotcd by the regulatory bureau of another administration.
This approach demands that one or more wmmon standards for the type approvai
for handsets be established. Such standards could be introduced as officiai international
standards or could exist as de facto standards that result fiom cornmon practices that are
developed and accepteci by manufacturers and Iater approved by regdators.
A favorable standard should take into consideration and accommodate
international concems. An example of such a concem is the avoidance of harmful
interference to other radiocommunications. The standard should also confonn with and
abide by the conunon policies of ail involved administrations. Such poiicies concem the
security of communication and the health and safety of the citizens of each participating
country.
The common standard(s) can be achieved through the "mutuai recognition of
licen~es".'~~ Such mutual recognition is realized when aii countrk in an established union
178 See ibid., para 89. Regulatory Cofloquium, supra note 5 at 104.
180 See ibid.
agree to recognize type approvals issued by other member countries. The reciprocity also
extends to authorizations that are compatible to those of achowledging uwintries. This
type of arrangement exists arnong the European Union and the European Economic Area
counties. The arrangement allows for umestrained roaming for GSM digital cellular
service subscribers. This creates an open and cornpetitive climate for the handset and
hardware component manufachulng industries of the EU and EEA1*'
B. GMPCS operators maintain dtvelaping standards with no ngulatory supervision.
The outcome of this approach may result in the monopolization of handset markets
if GMPCS operators are associated with particular handset manufàcturers- in the event of
monopolization, some handset manufacturers wiU be excluded fiom the GMPCS
manufacturing markets.
One recommended solution is that the regulatory authority stipulates that the
standards accepted by system operators must be propagated in writing to the public. The
publication of standards gives any regional manufacturer the opportunisr to enter into
normal commercial contracts with the GMPCS operator. Such contracts should grant the
manufacturer non-exclusive use of GMPCS intellectual property and also guarantee to the
syaem operators inteliectual property rights and the option to determine the
manufacturer's quality control measUres.'=
IS1 See ibid. at 107-1 IO. Is2 see ibid
C. Type rpprovd stamdirds i r e establisbai and tach rdminutrrtioa sdects specific type(s) to be in force in i ts temtory.
To reaiize this approach, GMPCS system providers produce specific types of
handsets accordmg to the guidelines and regdations of different corntries. Each country,
at its own discretion, selects and recognizes the pariicular handset approvals that suit theu
own tenninds.
An international organization such as the ITU should bear the responsiiiiity of
gathering and maintaining di type approvals and should serve as a "ceneal registry". This
concept has been supported in an uiformai paper by Stephen Cheston of Iridium I~C.~"
Mr. Cheston has proposed that the ITU should act as a centrai registry administration.
According to this recornmendation, the types of handset authorkations fkom different
administrations should be deposited to the ITU and other participating administrations
should act on their own accord to "associate themselves" with such Licenses.
Consequently, the handsets will be approved under each country's regulatory regime.
It should be noted that such approval is not a mutual recognition regime. For
example, if Country A approves a type of handset and Country B, of its own accord,
"associates" itself with the redting license, this does not obligate Countty A to recognize
country Bfs handset approval. In other words, the arrangements are multiiateral but not
necessarily reciprocal.
See ibid,
To make GMPCS accessiile to the g e n d consumer group, systern providers
should take progressive steps to support the extensive distribution of high performance
handsets at low pries. This can be achieved by making technical data and designs readii
available to handset producers. Communication of uifonnation regarding air interface
would especidy promote GMPCS technology in commercial venues. The collaboration of
system providen would benefit ail the parties involved in the estabhhment and operation
of GMPCS. This includes local handset manufacturers and component parts manufacturers
as well as the GMPCS operators themsdves.
The general availability of technical information d s for some form of protection
for inteiiectual property The regulator can provide such protection by requinng that
manufacturers obtain permission to employ handset-manufacturing technology. The
technology should be protected by inteiiectual property rights (Ph) and manufacturers
should be obiigated to follow particular procedures in order to demonstrate the econornic
viability of their proposed handset manufacturing methodologies. Fees for the use of IPRs
should be kept af5ordable for general commercial Uistitution~.'~
CHAPTER VI1
1. Telecommunication in Tbailand and Recommendatioas for the LDCs regarding the Introduction of GMPCS
Telecommunication services in Thailand have been and remain, aithough to a lesser
extent, provided primarily by stateswned and operating entities. The seMces were
heady regulated because regdators in many countries. incIuding Thailand, considered
that they "constitute one of the four essential modes of channels that permit trade and
discourse among members of a society, the other tivee being transportation, energy
utilities, and the system of currency exchange or money."'" This notion is stiil prevalent
arnong many countries, partinilady developing countries, and is manifested through
stringent regulations imposed by regulatory authorities in the four exchange channels
described above. Telecommunications in Thailand are provided by the Thai PTT, a d-
independent and state-owned enterprise, under the supervision of the Ministry of
Transport ation and Telecommunication-
1.1 Satellite Communications in Thailand: The Introduction
Satellite telecommunications in Thailand formerly depended on two international
systems: ïNTELSAT and PALAPA for both international and domestic trafic.
-
'" See RB. Horwitz, The Irony of Regdafion Refonn. Oxford University Press (1989) at 11.
1.1.1 INTELSAT System
Before 1966, high fiequency 0 telecommunications was the only mode of
international telecornmunications utilized by Thailand. HF telecommunications was not
always reliable because the quality was affe*ed by the degree of ionization in the
ionosphere. The ionosphere is an electrically wnducting set of layers in the earth's
atmosphere, extending fiom altitudes of approximately 50 km to more than 400 km,
caused by ionkation of rarefied atmospheric gases by incident solar radiation. Wth more
sunlight, there is a greater number of ions in the atmosphere and this facilitates the
transmission of radio waves- Thus, the quality of the HF communications varied fiom
season to season and even over the course of a day. In order to address this problem and
improve the quality of radiocommunications to meet increasing domestic and international
demand, the Thai government elected to participate in INTELSAT in 1966 under the
INTELSAT Interim Agreement- It originaliy made an investment of 0.0 1%, which was
later increased to 0.485%.'%6
In 1 966, INTELS AT introduced INTELS AT-2 systems to support international
trafnc and, upon the request of the Thai government, assigneci ten transponders to
Thailand. Subsequently, the govemment of Thailand leased the transponders to the US'
COMSAT, which utilized them for rnilitary purposes. The agreement between the Thai
govemment and COMSAT stipulated that the two parties were to share and jointiy
Ig6 See K Upoh, Sutelfite Telecommunications and Development in Thaihnd (U.M Thesis, Bangkok: National Defense Coiiege. 199 1) at 52.
operate the aforementioned transponders. The Thai PTT international services offered via
INTELSAT-2 included international calls telex, facsimile and data transmission. *"
With regard' to domestic te1ecommunications the Thai PTT leased from
INTELSAT the spare space segment capacity of the Indian Ocean Region Satellite to
serve transitional quarter global bearn transponders from 1982 to 1983. The system's
coverage was augmented between 1982 and 1987 with quarter hemispheric beam
transponders. The prirnary communication industries targeted by the INTELSAT
technology were television and radio broadcasting.
1.1.2 f ALAPA System
The PALAPA system covers the territories of the ASEAN (Association of South
East Asia Nations) State Members. The original ASEAN Members compriseci the
Philippines, Malaysia, Singapore, Thailand and uidone~ia-~~' The Thai PTT leased one
transponder fiom Indonesia to serve domestic radio and television broadcasting after a
feasibility study demonstrated that greater profits could be reaped nom radio and
television broadcasting than fkom voice telecommunications. in addition to serving the
Thai radio and television communication sectors, the PALAPA system plays an important
rote in national secunty deployment. The Thai m*tary has been leasing PALAPA's
transponders for rnilitary purposes since 1981 and has established twelve gateways
reserved for rnilitary purposes throughout the Kingdom.
'*' See ibid. 188 At present there are four additionai Member munuies in the association. They are B m i , Cambodiâ Vietnam and Busma.
The PALAPA systern has also been deployed for private use. Two private Thai
corporations leased PALAPA transponders for the purpose of data transmission via srnail
earth stations and very small earth stations (VSAT). The two companies are ComputeNet
Corporation Lirnited and Sarnart Telecom Limited. CornputeNa has leased one-fourth of
a transponder while Samart Telecom has leased one transponder.'"
2. Telecommuaications Development in Thriland
in the past, the Telephone Organitation of Thailand (TOT) maintaineci a dominant
position in the provisions of both s e ~ c e and supply of equipment. in more recent years,
the demand for telephone setvices has increased exponentially. However, the TOT was
limited by foreign loan restrictions. Consequently, during the 7th National Development
Plan (1 992- 1 W6), the TOT turned to private telecommunications providers to establish
three rniliion telephone lines in the Bangkok Metropolitan and provincial areas. The
Telecom Asia Incorporation Co., Ltd. was authorized to make invesmients for two million
lines in Bangkok while the niai Telephone and Communication Co., Ltd. established the
other one million L e s in areas outside the capital. The contracts drawn up during the 7th
National Development Plan stipulated that the revenue fiom the new services should be
distributed among the TOT and the licen~ees.'~ The market shifis to the private sectors
have led to the establishment of relatively lenient telecommunications regulations in
Thailand. Present day regulations enable pnvate corporations to enjoy more opportunities
in telecommunications markets, particularly the mobile telecommunications market.
Ig9 See Upoh, supra note 182 at 5640. See B. Buranadilok "Latroduction" in A Stuc@ of Private Secfor's Participation in Tefephone Services
(LLM Thesis, Bangkok: ïnstitute of Social Technology. 1994) at 1-2.
2.1 Cellular. Systems in Thailand
There are six systems in Thdand that are available for serving mobile
communications. T h e of which utilize analog systems while the other two employ digital
systems.
The analog systems are:
M 470 and AMPS 800 operated by the Telephone Organization of Thailand
World Phone 800 or AMPS 800B provided by Total Access Communication Co.,
Ltd. (TAC) -
NMT 900 operated by Advance M o S e ~ c e Co., Ltd. (AIS)
The digital systems are:
PCN 1800 operated by Total Access Communication Co., Ltd.
PCN 1800 operated by TAC, which has granted fianchise privileges to Wireless
Communication Service Co., Ltd.
There is another digital system that is ready to begin operation. It is caiied PDC
1500 Mhz. It will be operated by the TOT.'^'
''' See "Mobiie Phone in its Prospemus Emn Mmager Magazine (19 June 1997) at 36 [hereinaf€er "Mobile Phone"].
2.2 Cellular Telephony Regulations
The Ministry of Transportation and Communication ove- every mode of
communications in nailand. h the last five years, it has adapted its regulations to
facilitate the authorization process. The Ministry is currentiy in the process of pnvatizuig
several telecornmunications businesses, espea*ally the cellular phone market. In
conjunction with the TOT, the Ministry has decreed that qualif;yuig cellular contractor
applicants must be corporations that:
1. have been established under Thai law;
2. have a current equity of no l es than 1,000 million bahts; and
3. must not, at the tirne of application, be a contractor already authorized by the PTT
or the TOT.
2.2.1 Conditions for the proposed projects
The Ministry and the TOT have also stipulated several conditions that must be met
by proposed projects:
The contractor has the responsibility to estabiish the hfhstructure necessary to
provide the cellular system including the base station. The contractor and the TOT
shdl share equal ownership in the infiastructure but the duty to provide the
services belongs to the system operator; and
The system must achieve the coverage required by the TOT.
The contractor has an obligation to tiillill the requirements of the opration
destone. This milestone sets conditions on the number of handset units to be served as
weii as the number of earth stations that must be established within a specific period of
tirne. Furthemore, the contractor must provide the senices accordhg to a standard set
out by the TOT. Services must offer:
1. A grade of s e ~ c e (Gd) for the fked network trunk exceeding 3%;
2. A drop c d rate lower than 3%; and
3. Base stations with a capacity to support more than twenty-five subscriben per
channel.
The TOT and the PTT reserve the right to hspect the system to ver@ that it satisfies aii
the outiiied standards. The TOT and the PTT also regulate s e ~ c e charges and
investment restrictions for ceiiular telephony?
Research carried out by Suan Dusit University in Thailand indicates that the
market share of ceilular telephony in Thailand is divided as fo~ows:~*
'% See ibid at 37. Ig3 See "Special Reportu Watajuk Dai& (18 June 1997). vol. 3764 at 5.
Lenemi: AIS Advance Mo SeMœ Co., Ltd 48-02 % TAC Total Access Communication Co., Ltd 46.4 % TOT Telephone Orgaaization of Thailand 3.5 % WCS WVeless Communication Service Co., Ltd 2.08 %
According to'the research, subscnbers tend to favor the private s e ~ c e s provided
by AIS and TAC (94.42% of total market share). This indicotes positive potential for
privatization and dereplation in the mobile telecornmunications market. The mobile
communications market continues to grow. It has been estirnated that by 2000, the
number of cellular subscribers will represent 5% of the population (approximately three
million) and that by 2013, this number will increase to 16 million.1w The Personal
Communications Network (PCN) has been well received in Thai telecommunications
markets. Currently, the number of cellular subscribers is 350 million worldwide, with 40%
in Asia These numbers suggest that the market has not yet reached the saturation point
and that an alternative mode of communication can successfùliy w e x i a with cellular
telephony in the Asian market.
Ig4 See "Mobile Phone". supra note 187 at 36.
3. GMPCS in Thailand
Thailand is an active player in space telecornmunïcations. This is proven by
Thailand's fiinding of new GMPCS operators. The Thai Satellite Telecornmunication Co.
Ltd. has invested $70 million in the Iridium system This investment represents 5% of the
total fundimg of the Iridium system The corporation will also a a as Iridium's service
provider and wiU operate the gateway station in niailand that has been constructed in
collaboration with Iridium. In addition, the Company will participate in the selection of
service providers in neighboring non-gateway wuntries, Le., Bunna, Malaysia, Laos,
Vietnam and Singapore. Another key player in the Thai telecom is CS Communications
Co. Ltd., which made investrnents in LNMARSAT-P, also known as IC0.'95
3.1 Regdatory Recommendations for Thailand and the LDCs
Rapid growth in the Asian telecommunications market and a global shift towards
privatization necessitates that Thai regulators take progressive steps to regulate the
telecom business so as to be in conformity with countries with which Thailand has fomed
telecornmunication partnerships. In order to create an effective regulatory regime, the
govemment should take into consideration the wncerns and interests of other countries
regarding the privatization of GMPCS. in Mew of this, the regulatory questions and
recorrimendations posed and offered in this section are not only intendeci for the Thai
government but also for other LDCs.
195 See ibid
a) Should regdators wnsider GMPCS as a threat to national telecommunications
and thus regulate the systems heavïiy or should they instead Mew the new technology as a
fiscal opportunity?
Heavy regulations imposed by regulators tend to resuit in higher financial overhead
for systern operaton. Higher system development and operative costs in tum result in
higher unit costs for calls. These costs are passeci on to consumers and, hence, LDCs will
not fully benefit from GMPCS technology at e f f d v e market pnces. In contrast,
deregulation tends to lead to lower unit costs. Since the majority of consumer demand
originates fiom LDCs a fkee market would aliow system operators to address the
communication needs of the largest consumer groups with cornpetitive pricing. Heavy
regulations might also entirely discourage GMPCS operators from including a particular
country in its coverage. This would necessitate that the country irnplement its own
telecommunications infiastructure and the coas incurred would force the resulting unit
cost to greatly exceed the GMPCS unit cost, even when the costs of handsets, fees for the
usage of national networks and other comection costs are uICluded-'%
The motivation to protect national telecommunications with restrictive regdations
arises in part fiom the nature of the communication link between mobile units. With such a
communication connection., it is possible to completely bypass the local PSTN. The infiwc
of mobile handsets, however, should not mean a decrease in PSTN tra6c. The handsets
'% See Cmiq mpm nok 32 at 36.
do not usuaüy replace traditional telephones and it stands to reason that many
communication links would be established between cellular and regular telephones. The
convenience of mobile phones should then actually increase the communication t r a c on
local PSTNs. Nevertheles, should such concerns for national interests materialize, one
should recall that system providers are able to switch off signols in counnies where a
ticense to operate is not granted.lW
b) How can national regulators ensure that the introduction of GMPCS will allow
national business and industry to participate in the systems?
Space segment Licensing by an administration, even with the inclusion of uplink and
downlink fiequency assignments, does not automatically entitle a GMPCS operator to
provide full operation services. System operators must seek national authorizations f5om
targeted consumer countries in order to establish gateway earth stations, intercomect to
the local PSTNs and provide seMces to end-users. National regulators should wield their
regulatory power in such a manner as to dictate tems for system irnplementation and
operation that best suit their own nationals.
The number of administrations that govem the systern operators of a GMPCS is
very small compared. to the total number of countnes covered by the GMPCS. Therefore,
nations with no system operators are normaiiy in the majority and would thus be in a
position to exert a fair amount of influence over the operation of GMPCS if they were to
consolidate their powers. These nations should cooperate in such a fashion so as to
represent the interests of the generai consumer. If uniteci, they should be able to guarantee
197 See Regulatory Colloquium, supra note 5 at 1 12.
that the licenshg administrations maintain their cornmitment to create GMPCS to be
globdy accessible on an equitable basis? An exampk of such international cooperation
can be seen with the consolidation of the European countnes through the Commission's
Expressed Consent on the Issue ofthe US Licensuig P r o e e s ~ . ~ ~ ~ From the EC's standpoint,
the US licensing process, despite its confonnity with the RRs, constitutes a cIe facto
appropriation of outer space. The Commission has supporteci this c l ah by citing the
WARC-92 and the WRC-95 as two separate instances Ïn which the US has sought and
obtained dominion over ail important fiequency bands available for Little and Big LEOs.
The European Commission fonnally announceci this opposition in the foiiowing
Diplomatic Note that was addressed to the US:
In view of the global nature of the sateiiite personal communications services proposed, the European Commission considers that it would be inappropriate for the FCC to proceed to license all or some of the proposed operators prior to an international agreement as to the principal conditions of operation of s e ~ c e s . ~
National regdators can ais0 take appropriate actions with respect to K M C ~
provision licensing. We will examine various successfiil strategies already utilized by
several countries.
The market for the provision of services should be deregutated so as to create a
more open and competitive market. Such a market would benefit consumers as they would
See ibid. Ig9 See ibid. at 117. 200 See Note Verbalej?om the Delqation of the C o m m i ~ o n of the Eumpean Communities to the US Department of State (Washington. DC: Ewopean Commission, 1994).
obviously have more available options since cornpetitors could fieely enter the market If
some form of nationai control is mandated, then another option is to open the market
under specific conditions. This strategy has been used by several administrations to License
cellular systerns in France, Germany, and t i e UK. In these countries, a cellular operator
that petitions for a service license must agree to d o w the resale of a portion of airtime
through natioiial resders (sewice providers). In the UK, cellular operators are required to
seli their seMces exclusively through reseller~.~'
Another strategy that should be considered is the condition for iicensing stipulateci
by the Canadian government in 1994. This condition requues that Canada's hvestment in a
GMPCS be proportional to the volume of senices consurned in Canada.2m This condition
exploits the FCC's classification of GMPCS operators as non-common carriers.
in order to facilitate national participation in GMPCS, an administration should
introduce conditions for the granting of s e ~ c e provision Licenses. Such conditions should
include a requirement that systern operators deliver unrestricted GMPCS space segment
access to national s e ~ c e providers. This means that once a systern operator is authorîzed
to provide GMPCS technology in a given country, it must aiiow any domesticaiiy
authorized s e ~ c e providers to reseii GMPCS services in that This
arrangement should be achieved by way of normal commercial contract. 'This strategy is
currently employed by the EU. EU cornpetition policy favors an open network in which
ml See Regdatory Colloquium, supra note 5 at 107-1 11. 'O1 See ibid. 'O3 See ibid.
several s e ~ c e providers obtain the rights to resell the capacity of the public Mastructure,
in this case, the GMPCS space segment.lu
SeMce reselling policies are not readiiy embraced by GMPCS operators. System
operators wish to reserve exclusive operaîing and marketing rights as well as the nght to
gant permission to resell the GMPCS technolog- to local companies through commercial
negotiations. Such strategic alliances between system operators and service providers tend
to place a disproportionate hancial burden on the service providen and this generates
concem that the space segment may becorne privatized. On the other hand, such hancial
arrangements enable' system operators to reduce costly overhead incurred through the
development, operation and enhancement of their systerns.
It is dïfEcult for national regdators to prevent the establishment of strategic
alliances. Fust, strategic alliances are cornmonplace in the telecommunications industry.
Second, because systerns require constant development and maintenance, the costs for
GMPCS implementations are great and c m only be realistically absorbed through the
creat io n of alliances. Regulators may, therefore, be relegated to take other approaches
after ailowing the formation of corporate alliances. One possible strategy is to htroduce a
local participation clause. For exarnple, it could be required that handsetq aux*ary
equipment and GMPCS handset component parts be manufactured by national^.^^^
'O4 See ibid. 'Os See ibid.
Conclusion
The Unplementation and operation of a GMPCS requires cooperation fiom
international organizations as weU as the regulatory authorities of consumer countries.
Because the orbit/spectmm available for GMPCS is Iimited and the system implementation
overheads are high, ody a few systms that offer both advanced technology and economic
viabiiïty can wexist in the market.
While the virtues of the GMPCS are obvious, existing national reguiations
goveming market entry of this new system should not be readii abandoned. National
regulations should be preserved to the extent at which the monopolization of the
telecommunications markets can be avoided. Regulations should not create greater
barriers against foreign investment but rather assist in ensuring that GMPCS achieve the
objective of providing high quality telecornmunications seMces to the largest majority of
consumers, while guaranteeing national regional participation. In this manner, national
regdators can assume the role of technologicai and commercial supervisors with respect
to the new GMPCS technology. Ideal regulations would not obsûuct the natural evolution
of the telecommunications industry that is affected by constant changes in technology and
commerce.
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