FCC Eyes Satellite Industry Warehousing Allegations In NOI
A circulating FCC International Bureau notice of inquiry addresses the concerns raised by satellite integrators against Intelsat, commission officials said. The proposed NOI looks at issues related to warehousing and vertical foreclosure in the satellite space segment, officials said. There were allegations in fixed satellite that Intelsat was warehousing spectrum, an agency official said. The NOI follows up on those allegations and asks questions about it, the official said.
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In the 11th Open Market Reorganization for the Betterment of International Telecommunications (ORBIT) Act report to Congress in 2010, the commission said Artel, CapRock, Globecomm and Spacenet alleged anticompetitive behavior from Intelsat (http://fcc.us/10brMKt). The companies argued that Intelsat’s privatization “coupled with increased industry consolidation has dramatically affected the FSS [fixed satellite service] industry,” it said. The FCC submits the report each year assessing the state of competition following the privatization of Intelsat and Inmarsat. It said in its 13th report last year that it planned to investigate the allegations (CD July 5 p16).
For more than a decade, Intelsat has “marketed our services in a highly competitive environment that includes the world’s leading satellite and telecommunications company,” the company said in an email. “We have always believed that competition is good for the customer and drives innovation in our sector. ... We look forward to reading the report when it is available."
In a February public notice, the International Bureau sought comment from the industry and consumers on the impact of satellite manufacturing and launch privatization on U.S. industry, jobs and industry access to the global marketplace (http://bit.ly/10qmPKO). The alleging companies didn’t comment in docket 13-13. Since 2010, CapRock was acquired by Harris (CD May 24/10 p14) and Artel was bought by Torch Hill Investment Partners and TPG Growth. Harris, Spacenet and Artel declined comment.
Intelsat is monopolizing the valuable orbital slots over the Atlantic and Pacific ocean regions, said a satellite industry attorney aligned with those concerned with the company. In the C- and Ku-bands, which are the principal bands for satellite communications, “you can’t launch a new satellite into one of those orbital positions,” the lawyer said. “Intelsat is sitting and squatting on all of them.” Some of Intelsat’s satellites are about 20 years old, and “preserving the right to use that position without really providing a good platform to communicate with,” said the industry official.
Intelsat, once an inter-governmental organization, has become more vertically integrated since privatization in 2001, said the lawyer. Now, the company is competing with former resellers “who can’t launch a new satellite even if they wanted to because Intelsat’s hogging the geostationary orbital arc,” the attorney said. “It means Intelsat can charge whatever it wants for certain services, because you really have no alternative option,” he claimed.