FCC Shuts Down Proceeding on Vertical Foreclosure in Satellite Space
The FCC closed the proceeding on allegations that large satellite operators are warehousing spectrum. The proceeding is closed “given the limits of the record and information on this issue,” the International Bureau said Tuesday in an order (http://bit.ly/1eLmvxK). The allegations of anti-competitive behavior against Intelsat arose in the 2010 11th Open Market Reorganization for the Betterment of International Telecommunications (ORBIT) Act report to Congress. The allegations led to an FCC Notice of Inquiry on the issues of warehousing and vertical foreclosure in the satellite space segment (CD May 9 p3). Some satellite operators said the commission’s action is a result of the competition that exists in the satellite marketplace.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The record about vertical foreclosure was sparse “and came only from two commonly situated stakeholders, satellite operators Intelsat and SES,” the order said. Intelsat and SES said further action by the commission on vertical foreclosure is unwarranted, it said. No integrator “or other potentially affected party filed comments on this issue,” it said.
The alleging companies, CapRock, Artel, Globecomm and Spacenet didn’t respond to the NOI. CapRock was acquired by Harris and Spacenet was bought by SageNet. EchoStar, Intelsat, SES and the Satellite Industry Association urged the commission to dismiss the claims of warehousing and to terminate the proceeding (CD Aug 21 p23). These companies generally agree that the warehousing questions assume a non-competitive industry “and that codifying rules in this area would greatly restrict operator flexibility,” the order said.
The closed proceeding and the limited comments submitted underscores that satellite operators do business in a competitive market, operators said. The order further demonstrates the competitive nature of the satellite service marketplace, said Jennifer Manner, regulatory affairs vice president at EchoStar, parent company of Hughes. “It also demonstrates that the FCC can best promote full and efficient use of satellite spectrum by ensuring that licensees have flexibility to manage their fleets and implement their systems in response to market demand, rather than imposing regulations that limit flexibility and impose unnecessary burdens,” she said.
Intelsat again said the environment in which fixed satellite service providers operate is highly competitive, Michelle Bryan, Intelsat general counsel said in a statement. Intelsat continues “to invest in its satellite fleet, make progressive new technology available to our global customers, and ensure that we make efficient use of the spectrum for the benefit of the customers we serve,” she said. “As a result, it is not surprising that the Commission properly concluded that no action is required with respect to this inquiry.” Intelsat also said the goals of the ORBIT Act have been fully achieved and that the legislation is an unnecessary burden (CD March 14 p18).