Proposed Legal Structure for the SilkSat Satellite Consortium: A Regional Intergovernmental Organization to Improve Telecommunications Infrastructure in Central Asia and the Trans-Caucasus Region

By Berger, Lee F. | Law and Policy in International Business, Fall 2001 | Go to article overview

Proposed Legal Structure for the SilkSat Satellite Consortium: A Regional Intergovernmental Organization to Improve Telecommunications Infrastructure in Central Asia and the Trans-Caucasus Region


Berger, Lee F., Law and Policy in International Business


I. INTRODUCTION: BRINGING TELECOMMUNICATIONS INFRASTRUCTURE TO THE SILK ROAD REGION

The Trans-Caucasus and Central Asian region is an often-overlooked area of the developing world. These states of the former Soviet Union, which include Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan, have made great strides toward capitalism and democracy in the decade since their independence. Yet, these countries still lag far behind the political and economic achievements of Western nations. Per capita GNP in the region is a meager US$490, (1) with its continually deteriorating infrastructure partially to blame for a slow rate of development.

To solve these problems, nations of the region have initiated the Great Silk Road Project, named for the ancient silk trade routes that extended through the region from Europe to China. The Great Silk Road Project aims to enhance the economy and security of these nations through developmental cooperation. (2) Programs in progress include the installation of regional oil pipelines, (3) a unified front against religious extremism, terrorism, and narcotics trafficking, (4) the promotion of partnerships between local and foreign investors, (5) and the construction of a transcontinental railway and highway. (6)

As part of the Great Silk Road Project, U.S. Senator Sam Brownback and Professor Roland Sagdeev, director of the East-West Space Science Center (EWSSC), launched SilkSat, a planned satellite telecommunications system that would serve the needs of the region. (7) Following the United Nations Millennium Summit, Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyz Republic, Moldova, Romania, Ukraine, and Uzbekistan affirmed their support of the SilkSat proposal. (8)

The physicists at the EWSSC have expertly designed the technical aspects of SilkSat, proposing an inexpensive yet effective satellite telecommunications system for the region. The legal structure of this international satellite organization (ISO), (9) however, remains unclear. The private corporate structure has captured the attention of the telecommunications industry, as one giant satellite consortium after another relinquishes its privileged intergovernmental status and enters the competitive market as a private corporation. Nevertheless, privatization is not a panacea: the private structure is often unsuited for curing the ills of the developing world, where there is currently no competition because there is neither affordable satellite services nor fully functioning telecommunications infrastructure. Therefore, to best serve the needs of the Silk Road region, SilkSat should not be a private corporation, but an intergovernmental organization.

This article proposes the most effective legal structure for SilkSat and the supporting provisions of the SilkSat Agreement. Part II explores the current telecommunications situation in the Silk Road region and the SilkSat proposal. Part III compares the structures of various ISOs, featuring both private entities and intergovernmental organizations. Part IV recommends appropriate legal and structural provisions of the SilkSat Agreement based on an analysis of the needs of the Silk Road region and experiences of existing ISOs. Part V concludes.

II. THE SILKSAT PROPOSAL

A. Existing Telecommunications Networks in the Silk Road Region

Since the dissolution of the U.S.S.R. and consequent end of Russian economic support, the Silk Road region's telecommunications infrastructure has rapidly deteriorated. (10) At the time of their independence, the small republics inherited failing ground wire and cable systems, while Russia retained control over all former Soviet satellites. (11) Today, the Silk Road states generally have low teledensity (the ratio of telephone lines to population), averaging about ten mainlines per one hundred inhabitants. (12)

When considering teledensity along the Silk Road, two additional considerations are relevant: the dilapidation of the current infrastructure and the near-complete lack of rural access.

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