The World Telecommunications Policy Forum: Globalization, Liberalization, and Privatization in the Provision of Satellite Services

By Hofmann, Elke A. | Law and Policy in International Business, Spring 1997 | Go to article overview

The World Telecommunications Policy Forum: Globalization, Liberalization, and Privatization in the Provision of Satellite Services


Hofmann, Elke A., Law and Policy in International Business


The phenomenal growth in satellite technology will soon allow a

town doctor in a remote village to communicate via a portable phone

with a hospital in the United States, and a company to reach its

traveling employees regardless of where in the world they are located.

The use of satellites in international telecommunications is not new;

presently, satellites in orbit 22,300 miles above the equator provide

broadcast applications throughout the world. These satellites are known

as geostationary satellites, or GEOs, because they move at the same

speed as the rotation of the earth and therefore appear to be stationary

over a fixed location on the surface of the earth. Because of their high

orbit, however, the telecommunications that are possible via GEOs

require suitcase-size user terminals.(1) Yet rapid technological advances

in satellite systems will soon enable satellite networks to provide global

coverage through portable, hand-held phones.

What Is GMPCS?

The new satellite systems are known as LEOs (Low Earth Orbit) and

orbit much closer to the surface of the earth than GEOs -- between 700

and 1500 kilometers (approximately 930 miles) above the earth. In

order to achieve global coverage, a constellation of LEOS will orbit the

earth, picking up signals and transferring them to their destinations

through interconnection with other satellites in the constellation, or by

interconnection to an Earth station and then to the terrestrial network.

The LEOs are divided into two types of systems: Little LEOs and Big

LEOs. Little LEO systems will utilize small satellites to provide mobile

data and messaging services, such as electronic facsimile, two-way paging,

and electronic mail. The larger satellites comprising the Big LEO systems

will provide real-time voice telephony in addition to the data services. It is

these Big LEO systems that will provide global mobile telephone

services via small personal handsets, about the size of a mobile phone.

The introduction of Global Mobile Personal Communications by

Satellites (GMPCS) is expected to revolutionize telecommunications in

the very near future. The first system is expected to be operational in

1998, and most GMPCS providers are scheduled to begin offering

services by the year 2000.(2) The market estimates for GMPCS devices

explode from 5.3 million by 2002, to 15 million by 2004, to 34.9 million

by 2010.(3)

Uncharted Territory for Regulators and Operators: The Need for Early

Discussions

Whether the proposed satellite systems are eventually realized will

depend as much on the ability to raise the capital required for

deployment, as on the ability of the satellite operators to conclude

agreements to provide the services globally. Implementing a GMPCS

system demands a huge capital investment in technology that is far

from proven, and the regulatory environment represents a major

hindrance to capital investment.(4) As the technology progresses, the

focus of attention continues to shift away from financial and technical

issues to those of policy and regulation. Presently, GMPCS operators

must negotiate licenses in every country in which they seek to operate if

they are to offer truly global service. Customs duties levied on the

handsets that communicate with the satellites may hinder the

commercial viability of GMPCS Systems.(5) Obtaining the same spectrum

throughout the world represents another key challenge for the Big LEO

operators.(6)

While telecommunications issues such as technical standards and the

allocation of spectrum are routinely handled by the International

Telecommunications Union (ITU),(7) a specialized agency of the United

Nations, global licensing issues have not been within the organization's

competence. …

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