FCC to Probe FSS Competitive Practices

Washington, D.C.,  June 11, 2013 — The Federal Communications Commission is initiating an inquiry into the competitive practices of the Fixed Satellite Services (FSS) industry because of allegations that some operators are “warehousing” satellite orbital locations and frequency assignments and are barring competitors from purchasing capacity on their satellites.

In a Notice of Inquiry released on Friday, FCC said the inquiry will address the question of whether satellite operators unfairly “warehouse” orbital locations through the use of — gaps in service, substituting older replacement satellites, license extensions, and underutilized satellites.

Although, offhand, the FCC has concluded that there was not enough information on its records to evaluate these allegations, it stated that it would open a separate proceeding to assess potential “anticompetitive behaviour” and to ascertain whether “incumbent satellite operators are operating in ways that inhibit competition.”

The inquiry was initiated after the release in June 2010 of the Orbit Act Eleventh Report, which mentioned the privatization of Intelsat and Inmarsat. The report was filed by FCC in pursuant to the Orbit Act of 2000.

Although these annual reports are ostensibly filed for the purpose of “assessing the status of competition in domestic and international satellite communications services,” they have also sometimes served as a launching pad for disgruntled competitors or partners to throw accusations, as in this case, against Intelsat.

In the Eleventh Report, FCC mentioned four partners who lodged a protest against Intelsat in April 2010. Three of the protestors—CapRock, Artel, and Globecomm—had just recently lost a $500+ million U.S. Navy contract bid (CBSP program) to Intelsat’s wholly-owned government services subsidiary, Intelsat General.

Despite these protests, the Government Accountability Office (GAO) eventually upheld the Navy’s CBSP contract award to Intelsat, and in August 2012 Intelsat was selected as one of eight participants on the FCSA Custom SATCOM Solutions (CS2) contract vehicle.

But according to the Eleventh Orbit Act Report, Caprock alleged that satellite operators are warehousing scarce spectrum resources.

FCC said the inquiry would seek information that would be useful in addressing: gaps in service; older “replacement” satellites, license extensions; and underutilized space stations. The agency said it was now seeking information from satellite operators on: when to de-orbit or relocate an in-orbit satellite; when to launch a new satellite and what technology to incorporate into the new satellite; and when to relocate an existing in-orbit satellite to serve as a replacement.