Proposal for a EUROPEAN PARLIAMENT AND COUNCIL DECISION ON AN ACTION AT A UNION LEVEL IN THE FIELD OF SATELLITE PERSONAL COMMUNICATIONS SERVICES IN THE EUROPEAN UNION
Date: 1995-11-08
Institutions: European Commission
Subjects: EU financial instrument, European Investment Bank, Gelderland, Structural Funds, aid system, declining industrial region

yfglfpjf-' 

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  08.11.1995 
COM(95)529  final 

95/  0274  (COD) 

Proposal  for a 

EUROPEAN PARLIAMENT  AND  COUNCIL DECISION 

ON AN ACTION AT A UNION LEVEL IN THE FIELD OF SATELLITE 
PERSONAL COMMUNICATIONS SERVICES IN THE EUROPEAN UNION 

jS:-.., 

S3 

(presented by  the  Commission) 

page  2 

PART A:  EXPLANATORY  MEMORANDUM 

C O N T E NT 

SUMMARY 

List  of  acronyms 

1.  INTRODUCTION 

2.  TECHNOLOGY  ISSUES AND  MARKET  DEVELOPMENTS 

2.1  Technology  issues 

2.2  Market  developments 

2.3  Overview  of  proposed  satellite  personal  communications  systems 

3.  REGULATORY  AND  POLICY  ISSUES 

3.1  General  overview 

3.2  The operation  of  the  satellite  systems 

3.2.1 

Frequency  use and  sharing 

3.2.2  Other  regulatory  and  policy  considerations 

3.3  The  provision  of  services 

3.4  Gateway  operations 

3.5  Equipment  issues  including  free  circulation  and use of  handhelds 

4.  PROPOSED ACTION  AT  A  UNION  LEVEL 

4.1  The  need for  action  at a Union  level 

4.2  The  objectives  of  the  action 

4.3  The  modalities  of  the  action. 

4.4  The  publication  of  a  Call-for-lnformation 

4.5  Proposal for  a Council  and  Parliament  Decision 

5.  PROPOSED ACTION  AT  AN  INTERNATIONAL  LEVEL 

5.1  International  Developments 

5.2  Proposed  action  on  international  co-operation 

ANNEX: 

COPY  OF THE CALL-FOR-INFORMATION 

PART  B:  Proposal for  a European  Parliament  and  Council  Decision  on an action  at  a  Union 

level  in the  field  of  satellite  personal  communications  services  in the  European 

Union 

PART C:  Financial  outline 

page  3 

PART A: 

EXPLANATORY  MEMORANDUM 

SUMMARY 

With  the  introduction  of  satellite  personal  communications  services  in  the  near  future,  a 

fundamental  step  will  be  made  towards  the  implementation  of  a  truly  global  information 

infrastructure.  Satellite  systems,  mostly 

in  non-geostationary  orbit,  will  enable  global 

interconnectivity  and  mobility  via  the  use  of  personal,  handheld,  voice  -,  data  -,  and,  in  the 

future,  video  communications  equipment,  often  as  a  complement  to 

terrestrially-based 

mobile  or fixed  systems. 

The  investments  required  for  these  systems  are  in  the  order  of  2  to  4  billion  ECU  for  the 

most  advanced  systems. The  current  projections  foresee  that  voice  services  will  be  priced  at 

0.50  ECU  -  3.00  ECU  per  minute  depending  on  the  system  (and  possibly  the  market 

segment),  while  handheld  equipment 

is  expected 

to  cost  only  marginally  more 

than 

terrestrial  mobile  phones.  Currently,  well  over  fifty  (50)  filings  for  different  satellite  PCS 

systems 

from  all  over 

the  globe  have  been  submitted 

to 

the 

International 

Telecommunications  Union  (ITU)  for  the  purpose  of  technical  frequency  co-ordination. 

The  most  important  goal  is  now  to  work  towards  the  world-wide  acceptance  of  a  selection 

of  competing,  and  economically  viable,  satellite  systems  under  optimum  use  of  a  limited 

frequency  resource  for  the  provision  of  satellite  personal  communications  services  (satellite 

PCS). 

This first  generation  satellite  PCS systems  and  services  will  bring  about  extensive  changes  in 

satellite  communications  and  in  telecommunications  in  general,  as  well  as  in  the  way  of 

regulating  telecommunications  services  at  a  global  level.  The  strategic  implications  of  these 

systems  and  services  are  therefore  considerable  and  of  importance  for  the  European  market 

and  the  European  industry,  particularly  in  view  of  the  world-wide  consequences  of  transfer 

of  technology  from  the  military  to  the  civil  sector  notably  in the  US. 

As  a  consequence,  making  use  of  the  opportunity  for  participation  in  these  programmes  by 

European  industry,  as  well  as  ensuring  effective  and  comparable  access  for  European 

organisations  to  third  country  markets,  is  essential. 

The  issues  raised  by  satellite  PCS  will  also  be  of 

importance 

in  the  context  of 

the 

negotiations  in  the  World  Trade  Organisation  (WTO)  with  a  view  to  ensuring  the  application 

of  the  principle  of  effective  and  comparable  access  in  all  markets. 

page  4 

In  the  past,  the  European  Union  has  already  underlined  the  strategic  importance  of  satellite 

personal  communications  systems  and  services,  not  only 

in 

terms  of  new  service 

introduction,  but  also  in  terms  of  European  industrial  participation  and  benefits,  and  geo 

political  relations1.  The  Union  has  also  stressed  the  desirability  to  develop  a  strategy  which 

allows  the  introduction  of  mobile  satellite  services  via  these  systems  based  on  favourable 

conditions  for  European  industry  and  end-users.  In  particular,  the  Council  recognised,  in  its 

Resolution  on  the  introduction  of  satellite  personal  communications  in  the  Community,  ".. 

the  challenge  for  the  Community  to  develop  a  forward  looking  regulatory  framework  "  and 

invited  the  Commission  " . . to  define,  in  collaboration  with  the  Member  States,  an  effective 

joint  policy  ..". 

In the  context  of  the  development  of  mobile  and  personal  communications  in  the  Union,  the 

Council2  and  European  Parliament3  have  also  come  to  the  conclusion  that  urgent  agreement 

is  required  on  a Union  approach  in the  area  of  satellite  personal  communications  services.  In 

particular,  the  Council  considers  it  to  be  among  its  priority  objectives  "  ..  to  guarantee  by  1 

June  1996  the  definition  of  a  harmonised  approach  for  authorisations  for  mobile  and 

personal  satellite  communications,  after 

study  by 

the  European  Committee  of 

Telecommunications  Regulatory  Authorities  (ECTRA) 

With  the  licensing  of  the  first  of  the  satellite  PCS  networks  in  the  United  States4,  the  US 

licensees  are  expected  to  complete  their  financing  and  seek  licences  in  the  rest  of  the  world 

in  order  to  commence  operations  on  a  -1998-2000  time  scale.  However,  a  considerable 

number  of  other  proponents  of  satellite  PCS systems  have  announced  their plans  for  service 

introduction.  Furthermore,  access to  the  US market  for  non-US  based  initiatives,  is  still  to  be 

achieved. 

It  is  therefore  urgent  and  timely  to  agree  to  a  common  approach  to  selection  and 

authorisation  of  satellite  PCS  in  the  Union,  fully  responding  to  the  goals  and  objectives  set 

out  by  Council  and  Parliament  in  Resolutions,  and  allowing  the  Member  States  to  issue 

relevant  authorisations  for  the  provision  of  satellite  personal  communications  services  on  the 

"Communication  from  the  Commission  on satellite  personal  communications"  COM(93)171  final,  27.04.93 
"Council  Resolution  of  7  December  1993  on the  introduction  of  satellite  personal  communications  in the 
Community",  OJ No.C  339  p.1,  16.12.93 
"Resolution  on  satellite  personal  communication",  European Parliament,  A3-0302/93  of  29.10.93 

2 

3 

4 

Council  Resolution  of  29  June  1995  on  the  further  developments  on  mobile  and  personal  communications  in 
the  European  Union. OJ  No.C  188  p.03  of  22.07.95 

European  Parliament  Resolution  of  19  May  1995  on  Mobile  and  Personal  Communications. 

Iridium,  a  constellation  of  66  satellites  in  low-earth  orbit,  with  Motorola  (US)  as  main  investor;  Odyssey,  a 
constellation  of  12  satellites  in  medium  earth  orbit,  with  TRW  Inc.  (US), as  main  investor;  and  Globalstar,  a 
constellation  of  48  satellites  in  low-earth  orbit  with  Loral/Qualcomm  (US)  and  Vodaphone,  Alcatel,  DASA, 
Alenia  Spazio  (Europe)  as main  investors. 

page  5 

basis  of  co-ordinated  national  regulatory  conditions  and  criteria,  taking  due  account  of  the 

interests  of  European  industry  and  users. 

In this  context,  the  most  compelling  arguments  for  rapid  action  at  European  level are: 

1. 

In  view  of  limited  availability  of  frequency  spectrum  resources  and  the  number  of 

announced  satellite  PCS systems,  there  is  a need to  come  to  a co-ordinated  selection  of 

satellite  PCS  systems  taking  due  account  of  the  economic, 

industrial  and  social 

implications  of  the  proposed  services.  The  need  for  coherency  of  selection  and 

authorisation  decisions  can  be  greatly  assisted  by  action  at  a  Union  level,  aimed  to 

ensure  such  coherency  within  the  Union  and  with  relevant  selection  and  authorisation 

decisions  of  trading  partners. 

2.  There  is  a  need  to  ensure  unrestricted  transborder  provision  of  satellite  personal 

communications  services  throughout  the  EU and the  EEA, taking  due  account  of: 

the  need for  optimal  use and  sharing  of  limited frequency  resources; 

the  need for  co-ordinated  national  regulatory  and  policy  decisions; 

the  international  dimension. 

3.  There  is  a  significant  opportunity  for  European  mobile  and  space  industry  in  both 

equipment  and  services  in  satellite  PCS.  Actual  European  industry  contracts  are  valued 

at  about  500  million  ECU,  while  potential  further  contracts  are  estimated  to  reach  tens 

of  billions  of  ECU,  especially  in  handsets.  Handset  manufacturers  should  be  able  to 

participate  fully  in  the  development  of  satellite  PCS  and  not  be  hindered  by  unduly 

onerous  restrictions  resulting  from  intellectual  property  rights  and  from  the  commercial 

availability  of  the  socalled  "air-interface". 

The  greatest  use  of  satellite  PCS  is  believed  to  be  as  a  complement  to  world-wide 

mobile terrestrial  cellular  networks,  in  particular  GSM. 

4.  There  exists  overwhelming  support  from  industry  for  a  co-ordinated  approach  at  Union 

level to  solve  outstanding  policy  and  regulatory  issues,  in  particular: 

to  ensure  access to  third  markets, 

to  establish  a greater  world-wide  influence  for  European  systems  and  technologies, 

and 

to  prevent  ad-hoc  national  solutions,  which  would 

lead  to  barriers  to  global 

operation. 

5. 

Industry  believes  that  measures  at  a  Union  level  are  a  matter  of  urgency  and  that 

political  agreement  on  the  EU decision  process  and  its  timetable  needs to  be  reached  as 

soon  as  possible. 

page  6 

6.  European  Union  decisions  concerning  regulations  and  policies  for  satellite  PCS  and 

accompanying  proposals 

for 

international  co-operation  are  expected 

to  have  a 

resonance  throughout  the  world  and contribute  to  finding  world-wide  solutions. 

By  the  middle  of  1996  at  the  latest,  political  agreement  needs  to  be  reached  within  the 

Union on the time  schedule  and the  modalities  of  the  regulatory  and  policy  decisions  in  order 

to  facilitate  the  timely  introduction  of  satellite  personal  communications  services,  and  to 

maximise  the  economic  benefits  flowing  from  this  introduction  to  industry  and users. 

The  modalities  of  an action  at  a Union  level  need to  address  three  elements: 

/.  additional 

information 

is  required 

from  potential  market  entrants  wishing 

to  offer 

services  in  the  European  Union.  This  allows  confirmation  whether  or  not  a  selection 

process  is necessary,  for  which  types  of  services,  and in  which  frequency  bands.  It  also 

assists  in the  definition  of  the  scope  and  modalities  of  the  authorisation  process. 

2.  sate/lite  personal  communications  networks  must  be  selected  on  the  basis  of  a 

comparative  bidding  process.  This  will  allow  all  prospective  market  entrants  to  be 

valued  at  their  respective  merits  so  that  a  maximum  of  potentially  viable  concepts  are 

permitted to  use the  limited  spectrum  available. 

3.  all  relevant  aspects  of  satellite  personal  communications  services  must  be  subject 

to 

transparent  and  non-discriminatory  authorisation  procedures.  This  should  include  space 

segment  operators,  providers  of  service  , gateway  operations,  and  equipment. 

Basing  itself,  in  particular,  on the  views  expressed  by  industry  as well  as on the  wishes  from 

Council  and  the  European  Parliament  and  in  order  to  enable  the  Council  and  Parliament  to 

adopt  a position  on  satellite  personal  communications  by  1 June  1996,  the  Commission  has 

come  to  the  conclusion  that  these  three  elements  may  be  addressed  by  means  of  two 

separate  measures: 

O 

the  publication  of  a  Call-for-lnformation  in  the  Official  Journal  in  order  to  obtain 

additional  information  from  potential  market  entrants,  and 

<H1  a Council  and  European  Parliament  Decision  on action  at  a Union  level  on the  selection 

and authorisation  of  satellite  personal  communications  services  in the  European  union. 

The  Commission  proposes  an  action  at  a  Union  level  which  aims  to  ensure  the  viable 

introduction  of  satellite  personal  communications  services  in  the  European  Union,  by  means 

of  co-ordinated  selection  and  authorisation  procedures  based  on  common  and  harmonised 

criteria  and conditions,  taking  full  account  of  the  global  nature  of  these  services.  This  would 

page  7 

include  the  elaboration  of  technical  criteria  by  ECTRA,  ERC  and  ET SI  as  well  as  actual 

authorisation  of  the  satellite  PCS  services  by  the  Member  States  in  accordance  with  the 

provisions of  Directive  94/46/EC. 

The  action  shall  be  based  on a legally  binding  measure  in the  form  of  a  Council  Decision  to 

ensure  full  transparency  of  the  decision  making  process,  thereby  providing  a  maximum  of 

legal certainty to  users, industry,  and trading partners. 

The  establishment  of  global  satellite  personal  communications  services  will  require  the 

definition  of  a  flexible  regulatory  framework,  including  fair  and  effective  procedures  for 

authorisation  and frequency  allocation,  and world-wide  co-operation  with  particular  attention 

to  less  developed  countries.  Furthermore,  efforts  must  address  interconnectsvity  and 

interoperability  of  satellite  PCS services  with  fixed  and terrestrial cellular  services  around the 

world,  and world-wide,  open access  to  the  satellite  personal  communications  networks  and 

services.  The  proposed  action  therefore  includes  concrete  proposals  for  international  co 

operation  with  all  those  countries  interested  in,  or  affected  by,  the  introduction  of  satellite 

personal communications services. 

The  international  co-operative  effort  required  to  establish  global  satellite  personal 

communications services is fully within  the scope of  the common vision  of  the  G-7 partners 

on  the  Global  Information  Society  and  will  be  a  first  major  test  in  the  context  of  the 

implementation  of  Global Information  Infrastructures. 

List  of  a c r o n y ms 

page  8 

CEPT 
Télécommunications 

Conférence 

européenne 

des 

administrations 

des 

Postes 

et 

DCS-1800 

Standard for  microcellular  communications  system 

DECT 

Digital  European  Cordless  Telecommunications 

ERO 

ETO 

ETSI 

FCC 

GSM 

HEO 

European  Radiocommunications  Office 

European Telecommunications  Office 

European Telecommunications  Standards  Institute 

Federal  Communications  Commission  (USA) 

Global  System  for  Mobile  communications 

Highly  Elliptical  Orbit 

ICAO 

International  Civil Aviation  Organisation 

IMO 

IPR 

ITU 

LEO 

MEO 

International  Maritime  Organisation 

Intellectual  Property  Rights 

International  Telecommunications  Union 

Low  Earth  Orbit 

Medium  Earth  Orbit 

S-PCS 

Satellite  Personal  Communications  Services 

UMTS 

Universal  Mobile  Telecommunications  System 

WARC  92 

World  Administrative  Radio  Conference  1992  -  ITU 

WRC 95 

World  Radio  Conference  1995  -  ITU 

WTO 

World  Trade  Organisation 

page  9 

1. 

I N T R O D U C T I ON 

With  the  introduction  of  satellite  personal  communications  services  in  the  next  years,  a 

funda-mental  step  will  be  made  towards  the  implementation  of  a  truly  global  information 

infrastructure. 

The  main  purpose  of  satellite  personal  communications  services  is  to  provide  data  and/or 

voice  (and  in  the  future  also  video)  services  into  a  fixed  or  portable  personal  terminal, 

approximately  the  size  of  today's  terrestrial  cellular  phones,  by  means  of  interconnection  via 

satellite.  Satellite  systems,  including  constellations  in  non-geostationary  orbit,  will  enable 

global  interconnectivity  and  mobility  via  the  use  of  personal  communications  equipment. 

Geographical  areas  which,  for  technical  or  economic  reasons,  are  difficult  to  cover  by 

terrestrial  cellular  systems  can  thus  be  served  adequately  by  means  of  these  satellite 

systems. 

The  development  in  detail  of  the  concepts,  the  planning  of  the  services,  as  well  as  the 

production  of  the  hardware  has  been  started  by  a number  of  industries  from  the  US,  Europe 

and other  regions  of  the  world. 

On  the  regulatory  front,  initial  frequency  bands  have  been  set  aside  at  the  1992  World 

Administrative  Radio  Conference  (WARC-92)  while  the  Federal  Communications  Commission 

(FCC)  in the  US has  issued  orders  licensing  several  data  communications  systems  as  well  as 

three  voice  communications  systems. 

Regulatory  measures,  including  licensing,  in  other  parts  of  the  world  are  yet  to  be  taken 

although  many  countries  are  evaluating  the  issues  arising  from  the  introduction  of  these 

services.  There  appears  to  exist  a  general  recognition  that  the  issues  are  of  an  unusual 

complexity  and  encompass,  inter  alia,  matters  related  to  frequencies,  equipment  circulation 

and  use,  numbering,  service  authorisation,  market  access,  industrial  participation,  national 

security,  and opportunities  for  assistance  to  developing  countries. 

In  the  European  Union,  the  Commission  has  undertaken  a  number  of  initiatives  which  are 

aimed  to  increase  the  awareness  of  European  users,  industry,  and  regulators,  on  the 

importance  of  these  services  as  well  as  to  assist 

in  coming  to  the  fullest  possible 

understanding  of  the  scope  of  the  issues  which  need  to  be  resolved  in  order  to  facilitate 

service  introduction. 

Following  the  WARC-92,  the  Commission  organised  a hearing  in  September  1992  where  the 

industry  presented  their  plans  to  interested  regulators,  industry  and  users. 

page  10 

In  its  Communication  on  Satellite  Personal  Communications5  of  April  1993,  the  Commission 

underlined  the  strategic 

importance  of  satellite  personal  communications  systems  and 

services,  not  only  in  terms  of  new  service  introduction,  but  also  in  terms  of  European 

industrial  participation  and  benefits,  and  geo-political  relations. 

The  Communication  stressed  the  desirability 

to  develop  a  strategy  which  allows 

the 

introduction  of  mobile  satellite  services  via these  systems  based  on  favourable  conditions  for 

European  industry  and  end-users.  This  strategy  will  also  need  to  take  into  account  the  geo 

political  importance  of  these  systems  as  a first  Global  Information  Infrastructure,  in  line  with 

the  recent  discussions  on the  Information  Society  in the  G-7  Group  of  countries. 

On  the  basis  of  the  Communication,  the  Council  adopted  a  Resolution6  in  which  the 

importance  of  the  planned  use  of  satellite  for  personal  communications  was  recognised,  and 

which  stressed  the  importance  of  developing  a  Community  policy  in  this  area.  The  Council 

invited  the  Commission  to  study  the  significance  of  satellite  personal  communications  and  to 

define,  in  collaboration  with  the  Member  States,  an  effective  joint  policy.  The  Commission 

was  also  asked  to  closely  monitor  international  developments,  and  to  reinforce  co-operation 

with  ETSI,  ERC and  ECTRA  on this  topic. 

In response  to  the  invitation  of  the  Council, the  Commission  has: 

1. 

initiated  a  number  of  important  studies  with  consultants  and  with  ETSI,  ERC  and 

ECTRA, the  results  of  which  are  reported  in the  next  chapter  of  this  Communication; 

2. 

monitored  international  developments  and  held  discussions  with  the  US  authorities, 

the  conclusions  of  which  are  also  summarised  in a subsequent  section; 

3. 

developed  a proposal  for  a policy  at  a  Union  level  for  an  approach  to  the  selection  and 

authorisation  of  satellite  personal  communications  services  in  the  European  Union,  as 

presented  in this  proposal. 

In particular,  the  mentioned  study  work  included  analysis  of: 

1. 

2. 

3. 

5 

6 

the  importance  on trade, telecommunications,  and  industry7; 

standardisation  aspects  (by  ETSI)8; 

frequency  aspects  (by the  European  Radio  Office)9; 

" C o m m u n i c a t i on  f r om  the  Commission  on  satellite  personal  c o m m u n i c a t i o n s"  C O M ( 9 3 ) 1 71  final,  2 7 . 0 4 . 93 

"Council  Resolution  of  7  December  1 9 93  on  the 
C o m m u n i t y ",  OJ  No.C  3 39  p . 1,  1 6 . 1 2 . 93 

introduction  of  satellite  personal  communications 

in 

the 

"Satellite  Personal  Communications  and 
Industry",  KPMG  Peat  M a r w i c k,  M a r ch  1 9 94 

their  consequences 

for  European  Telecommunications,  Trade  and 

"Possible  European  standardisation  of  certain  aspects  of  Satellite  Personal  Communications  N e t w o r ks  (S-
PCN)",  ETSI,  Phase  1  Report  (November  1 9 9 4 ),  and  Phase  2  Report  (February  1 9 9 5 ). 

page  11 

4. 

regulatory  aspects  (by  the  European  Telecommunications  Office)10 

In addition, a consultation  has  been  undertaken  on: 

5. 

industry  views  regarding  the  introduction  of  satellite  PCS in  Europe11. 

With  most  of  the  major  areas  of  study  complete,  and  now  that  the  US  position  has  become 

clearer,  it  is  crucial  that  European  decisions  and  their  related  time  schedule  are  agreed  as 

soon  as  possible.  The  political  decisions  however,  can  only  be  taken  on  the  basis  of  a  full 

understanding  of  the  requirements  of  the  services  and  equipment 

industry  potentially 

participating  in the  satellite  PCS  market. 

Therefore  an  extensive  industry  consultation  has  been  completed  recently  with  the  aim  to 

gain  full  understanding  of  industry's  views  on  possible  policy  actions  and  their  time  scale 

required  in  the  short  term.  This  consultation  showed  that  the  opportunities 

for  European 

industry  in  satellite  PCS are  extremely  good.  Moreover,  there  is  a  large  consensus  on  the 

part  of  industry 

for  the  urgent  formulation  of  a  co-ordinated  Community  approach  to  the 

outstanding  regulatory  and  trade  issues. 

Basing  itself,  in  particular,  on  the  views  expressed  by  industry  and  on  the  wishes  from 

Council  and  the  European  Parliament,  and  in  order  to  enable  the  Council  and  the  Parliament 

to  adopt  a  harmonised  approach  for  satellite  personal  communications  by  1 June  1996,  the 

Commission  hereby  submits  its  proposals. 

The  Commission  has  come  to  the  conclusion  indeed  that,  by  the  middle  of  1996  at  the 

latest,  political  agreement  needs  to  be  reached  on  the  time  schedule  and  the  modalities  of 

regulatory  decision-making  in  order  to  facilitate  the  timely  introduction  of  satellite  personal 

communications  services  in the  Community. 

Political  agreement  shall aim  to: 

1. 

facilitate  the  introduction  of  satellite  PCS services  in a timely  and  constructive  fashion; 

2. 

resolve  regulatory  issues  by  means  of  a  co-ordinated  approach  between  all  players 

involved; 

3.  provide  an  agreed  time  schedule  for  regulatory  decisions  in  order  to  offer  industry  the 

necessary  certainty  against  which  to  plan  investments; 

9 

"Satellite  Personal  Communications  Services  (S-PCS)",  ERO,  final  version.  M ay  1 9 9 5. 

10  Work  still  in  progress,  hence  report  not  yet  available 

11 

"Industry  consultation  on  satellite  PCS",  LOGICA,  February  1 9 94 

page  12 

4.  engage  in  international  co-operation,  complementary  to  the  internal  approach  in  the 

Union. 

This  document  contains  the  Commission's  proposals  for  the  formulation  of  such  a  co 

ordinated  approach  in the  European  Union. 

page  13 

2. 

TECHNOLOGY  ISSUES  AND  MARKET  DEVELOPMENTS. 

2.1 

Technology  issues. 

The  main  purpose  of  satellite  PCS services  is  to  provide  data  and/or  voice  (and  in  the  future 

also  video)  services  into  a  terminal  by  means  of  interconnection  via  satellite.  Although  the 

personal  handheld  unit,  approximately  the  size  of  today's  terrestrial  cellular  phones,  is 

attracting  the  most  attention,  fixed  equipment  or  aeronautical,  maritime,  or  land-based 

mobile  equipment  is  also  foreseen  to  be  utilised.  The  immediate  advantage  of  satellite 

systems  is  the  instantaneous  geographical  coverage  of  the  whole  area  in  its  'footprint'.  In 

this  way,  geographical  areas  which,  for  technical  or  economic  reasons,  are  difficult  to  cover 

by  terrestrial  cellular  systems  can  be served  adequately. 

Constellations  of  satellites  in  low  earth  orbits  (LEO)  and  Medium  Earth  Orbits  (MEO)  and 

Highly  Elliptical  Orbits  (HEO)  have  been  proposed  as  a  new  and  efficient  way 
to 
communicate  with  these  hand-helds12.  However,  concepts  are  also  foreseen  based  on 

conventional  geostationary  satellites. 

The  signals  from  the  handheld  units  are  retransmitted  through  a  satellite  to  a  so-called 

gateway,  a fixed  earth  station  of  considerable  size  which  routes  the  signals  into  the  public 

switched  networks  to  its  final  destination  (or  to  another  handheld).  These  gateways  will 

contain  switching  and  networking  functions  for  the  purpose.  Limited  numbers  of  gateways 

are  foreseen  and  these  numbers  are  different  for  each  system.  On  average,  two  to  three 

gateways  per  system  are  expected  to  be  installed  in  Europe.  The  services  are  offered  to  the 

users  by  providers  of  services  which  retail  satellite  capacity,  register  and  initiate  new  users, 

and  perform  classic  commercialisation  activities. 

The  amount  of  frequency  spectrum  available  for  use  by  such  satellite  systems  is  limited  and 

subject  to  considerable  sharing  constraints.  Spectrum  is  required  for  use  between  handhelds 

and  the  satellites,  and  between  gateways  and  the  satellites13.  The  use  and  sharing  of  the 

spectrum  is  likely  to  require  agreements  at  a  global  scale  in  order  to  ensure  compatibility 

throughout  the  coverage  zones  of  the  satellites. 

Satellites  in  l ow  earth  orbits  are  foreseen  to  operate  at  around  7 0 0 - 1 4 00  km  height  w i th  an  orbiting  t i me  of 
around  1 00  minutes.  Communications  w i th  a  single  orbiting  satellite  is  only  be  possible  for  around  10  minutes, 
after  w h i ch  another  satellite  will  have  to  provide  the  interconnection.  As  a  result,  constellations  of  2 5 - 75 
satellites  are  required  in  order  to  ensure  coverage  at  all  times.  In  m e d i um  earth  orbits  at  around  1 0 , 0 00  k m, 
the  orbiting  time  increases  to  around  6  hours  w i th  a  longer  coverage  of  each  area  by  a  single  satellite  and  thus 
reducing  the  total  amount  of  satellites  in  the  constellation  to  around  1 0 - 1 5.  W i th  highly  elliptical  orbits,  the 
number  of  satellites  can  be  reduced  to  3 - 10  depending  on  the  overall  coverage  requirements.  Geostationary 
satellites  operate  at  a  fixed  distance  of  3 6 , 0 00  km  and  cover  a  particular  area  of  the  globe  at  all  t i m e s. 

' 

In  addition,  spectrum  is  required  for  inter  satellite  links,  and  for  the  operational  control  of  the  satellites. 

page  14 

Due  to  different  designs,  the  proposed  systems  will  not  allow  roaming  of  handheld 

equipment  between  the  different  satellite  systems.  Use  of  a  handheld  is  limited  to  the 

geographical  coverage  of  a  specific  satellite  constellation14,  but  this  is  foreseen  to  be  most 

of  the  earth's  surface. 

The international  aspects  are  an  important  matter,  inherent  in  very  nature  of  sate/lite  PCS 

services  provision  as  a  result  of  the  global  coverage  and  use  of  frequency  resources.  In 

consequence, 

these  services  necessitate  co-ordinated 

technical, 

regulatory  and  policy 

decisions  among  all nations  where  the  services  are intended  to  be  provided. 

These  international  aspects  are  foremost  visible  in  the  spectrum  use  and  sharing  issues  but 

other  important  issues  concern  the  need  for  agreements  on  the  global  circulation  and 

mobility  of  handheld  equipment,  access  of  many  nations  to  the  relatively  few  gateways 

which  are  planned,  interconnection  agreements  with  a  variety  of  other  network  operators, 

implementation  of  global  numbering  schemes,  agreements  on  the  functioning  of  safety  and 

distress  operations,  and  more.  A  detailed  analysis  of  these  international  aspects  can  be 

found  in the  next  chapters. 

2.2.  Market  developments. 

The  market  in  Europe  in  expected  to  be  relatively  small  because  of  the  extensive  terrestrial 

digital  cellular  coverage  which  is  planned.  However,  many  users  from  outside  Europe  having 

access  to  different  cellular  standards  are  expected  to  use  the  satellite  function  of  dual  mode 

phones15  in  Europe.  Nevertheless,  there  remains  a  considerable  primary  market  in  Europe, 

especially  in  central  and  eastern  Europe  and  in  some  of  the  Mediterranean  countries  where 

cellular  coverage  is  much  lower  than  in  the  rest  of  Europe.  However,  the  most  significant 

interest  for  Europe  is  in  the  use  of  handheld  equipment  outside  the  European  territory  by 

European  users,  and  in the  export  opportunity  for  the  European  industry. 

The  estimates  of  the  economic  values  involved  in  this  sector  of  the  telecommunications 

market  are  significant  despite  the  sector's  role  in  a  'niche'  market.  The  investments  in  the 

satellite  systems  alone  are  of  the  order  of  1-3  billion  ECU  for  the  larger  satellite  systems, 

including  the  launches.  In addition  there  is expected  to  be a considerable  market  for  personal 

handheld  equipment  (the strong  point  of  the  European  industry),  and the  services  industry.  It 

is estimated  that  the  services  market,  within  ten  years  of  introduction  of  satellite  PCS,  could 

14 

In  the  case  of  the  use  of  dual-mode  satellite/terrestrial  equipment,  roaming  is  obtained  via  the  terrestrial  cellular 
systems  e.g.  the  G SM  network. 

15  Dual  mode  phones  function  as  a  terrestrial  mobile  phone  (like  G SM  or  DECT)  as  well  as  a  satellite  phone  (with 

Iridium,  Globalstar,  Inmarsat  or  another  system) 

page  15 

reach  some  10-20  billion  ECU per  annum  world-wide.  The  market  for  hand-held equipment  is 

estimated  to  reach  some  20-30  million  subscribers  world-wide  and  may  account  for  around 

2-3  billion  ECU  sales  per  annum  world-wide.  All  these  estimates  however  should  be 

considered  with  some  care,  although  the  latest  indications  are  that  these  estimates  are 

probably  relatively  low  and  the  market  volumes  might  reach  substantially  higher  figures. 

Future  use  of  satellite  personal  communications 

infrastructure 

is  expected 

in  vehicle 

operation  (including  air-  and waterborne-  vehicles). 

The  recent  consultation,  held on  behalf  of  the  Commission  with  the  relevant  industry  sectors 

in  Europe,  revealed  that  Europeans  industry  expects  to  play  a  major  role  in  this  market.  It 

appears  that  there  is  very  important  existing  or  anticipated  participation  of  European  service 

and  equipment  industry 

in  all  aspects  of  sate/lite  PCS,  such  as  satellite  manufacturing, 

launch  services,  handset  and  other  ground  segment  equipment  supply,  software 

development,  networking  equipment,  billing  systems,  financing,  insurance,  service  provision 

etc. 

Table  1 :  Estimated  contract  values  for  European  equipment 

industry  in  the  satellite  PCS  market. 

current  contracts 

potential  additional  contracts 

space  segment 
manufacturing 

200-400  million 
ECU 

500  million  ECU 

ground  segment/handsets 

200  million  ECU 

10-30  billion  ECU 

page  16 

The  industry  has  furthermore  warned  that  the  positive  influence  of  the  development  of 

global  satellite  PCS  networks  on  the  evolution  of  terrestrial  mobile  networks  around  the 

world  should  not  be  underestimated.  Europe's  initiatives  in  terrestrial  cellular  networks, 

especially  GSM,  DECT  and  DCS-1800,  have  enabled  it  to  become  the  world's  market  leader 

and  a  synergetic  development  of  satellite  and  terrestrial  networks  must  be  pursued. 

European  industry  can  gain  competitive  advantage  by  early  development  of  dual  mode 

GSM/satellite  standards  for  handsets  which  can  then  be  migrated  into  a  fully  integrated 

implementation  of  a  Universal  Mobile  Telecommunications  Service  (UMTS)16.  There  is 

therefore  overwhelming  support  for  the  early  commencement  of  satellite  PCS  services  in 

Europe, considered  as complementary  to  terrestrial  digital  cellular  systems. 

In  this  context  it  is  important  to  note  that  the  European  space  industry  will  face  a  much 

more  competitive  US  civil  space  industry  in  the  future  as  a  result  of  the  transfer  of 

technology  from  the  military  to  the  civil  sector  (the  "peace  dividend")  especially  in  the  non-

geostationary  satellite  systems  sector. 

2.3  Overview  of  proposed  satellite  personal communications  systems. 

A  constant  stream  of  new  ideas,  concepts  and  business  ventures  have,  and  continue  to  be, 

announced  in  the  trade  press  with  the  apparent  purpose  of  new  entrants  declaring  their 

interest  in  participating  in  the  satellite  personal  communications  services  market.  It  is  very 

difficult  however  to  qualify  these  concepts  on  a  comparative  basis  in  terms  of  market 

prospects,  technical  feasibility,  financing  ability  and  so  forth.  An  indicative  selection  of 

concepts  as  well  as  an  indicative  table  with  the  systems  which  have  drawn  particular 

interest  in  Europe  is as follows: 

1 6 

UMTS  is  a  technology  for  third  generation  mobile  digital  communications,  currently  under  development  within 
ETSI  and  by  the  RACE/ACTS  programme. 

Table  2:  Some  indicative  examples  of  systems  which  have  drawn 

interest 

in  Europe. 

system 

services 

EU investors 

EU invest 
in % 

Major EU contracts 

Elekon 

data 

ESD (G) 

100 

ESD 

page  17 

system 
costs in 
millions of 
US$ 

unknown 

Ellipso 

voice,  data 

Cable and Wireless  (UK) 
Arianespace 

unknown 

launch:  Arianespace 

564 

Globalstar 

voice,  data 

Vodafone  (UK),  Alcatel 
(F), France Telecom  (F), 
Aerospatiale  (F), 
Finmeccanica  (I),  DASA 
(G), 

ICO-P 

voice,  data 

Detemobil  (G),  PTT  NL 
(NL),  OTE  (Gr),  Telecom 
Finland  (FL),  Telefonica 
(Sp), CPR Maconi  (P) 

24 

26 

Space  segment:72% 

1,951 

Billing  system: 
Vodafone 

Finance:SG  Warburg 

2,600 

Iridium 

voice,  data 

Vebacom  (G), STET  (I) 

14 

Switches:  Siemens 

4,700 

Back-up  control 
centre:  Telespazio 

Finance:  Dresdner 
Bank 

Mediastar 

DAB*, 
voice,data 

DASA  (G),  others  to  be 
announced 

mostly 

Odyssey 

voice,  data 

expected 

-

expected 

Teledesic 

broadband 
data 

expected 

expected 

unknown 

2,500 

9,000 

For  illustrative  purposes  only,  based  on  pub/iced 

data. 

*DAB  =  Digital  Audio 

Broadcasting 

page  18 

Table  3:  An  illustration 

of  some  of  the  published  satellite  PCS 

concepts 

service  + 
orbit/freq.  band 

concepts 

country 
origin 

European 
part/dp. 

Europ. 
service 

start  of 
service 

costs  in 
mill.  U$ 

No sat 

voice/data 
non-geost. 
1.6/2.4 GHz 

"big-LEO's" 

voice/data 
non-geost. 
1.9/2.2 GHz 

voice/data 
geostationary 
1.9/2.2 GHz 

voice/data 
non-geost. 
1.6/1.5 GHz 

voice/data 
geostationary 
1.6/1.5GHz 

voice/data 
non-geost. 
2.6/2.5  GHz 

voice/data 
non-geo 
19/29  GHz 

data-only 
non-geo 
148/137  MHz 

"little-LEO's" 

Iridium  * 
Globalstar  * 
Odyssey  * 
Ellipsat 
Constellation 
AMSC 
Elekon 
Mediastar 

QuasiGeo 

F-SAT ICO/LEO 
Glonass-M 

l-CO  (Inmarsat) 
QuasiGeo 
F-SAT ICO/LEO 

Celsat 
PCS Corp 

Elekon 
Go nets 
Koskon 
Signal 
QuasiGeo 

Artemis 
Maraphon 

Italsat/EMS 
UKRSAT 
Afri/Asiacom 

Petal ring 

US 
US 
US 
US 
US 
US 
D/Russ 
D 

D 
F 

Russia 

UK 
D 
F 

US 
US 

D/Russ 
Russia 
Russia 
Russia 
D 

ESA 
Russia 
l/ESA  • 
Ukraine 

India 

NL 

3850 
1950 
2500 
1000 
1650 

1998 
1998 
1999 
1997 
1998 

1996 

2000 

2600 

1995 

yes 
yes 
no 
yes 
no 
no 
yes 
yes 
yes 
yes 
yes 

yes 
yes 
yes 

no 

yes 

yes 

yes 

yes 

yes 
yes 
yes 
poss. 
yes 

yes 
yes 
yes 
yes 
yes 

yes 
yes 
yes 

yes 
yes 
yes 
yes 
yes 

yes 
yes 
yes 
yes 

1997 

yes 

yes 

66 
48 
12 
16 
46 
10 
7 

9 

10 
9 

7 

36 

9 

1 

1 

2 

Teledesic 

US 

expected 

yes 

9000 

840 

Orbcomm  * 

Starsys 
Vitasat 
LEO-one 
Final  Analysis 
Gemnet 
S-80  TAOS 
SAFIR 
Courier 
Kircom 
Iris** 

US 
US/F 

US 
US 
US 
US 
F 
D 

Russ 
Aus 
B 

yes 

yes 

yes 
yes 

1995 

1995 

1994 

yes 
yes 
yes 

yes 
yes 

yes 

yes 

320 

200 

36 
12-24 

5 
6 
60 
9 
2 

Based  on  publicly  available  data  and  for  illustrative 

purposes  only.  The  tables  may  not  be 

exhaustive. 

*  Note:  system 

licensed 

in  the  US 

**Note: 

slightly  different 

frequency  bands 

foreseen 

page  19 

3.  REGULATORY  AND  POLICY  ISSUES. 

3.1.  General  overview 

A  variety  of  regulatory  and  policy  issues  emerge  from  the  way  in  which  satellite  PCS 

services  are expected  to  be delivered. These  issues  are  largely  concentrated  around: 

O t he  satellite  systems, 

O t he  provision  of  services, 

O t he  gateway  operations,  and 

O t he  equipment  provision,  circulation,  and  use. 

The  latter  three  issues  also  fall  under  the  scope  of  Directive  94/46/EC.  According  to  this 

Directive  such  services  may  be  provided  in  competition  and  Member  States  must  ensure  free 

access  to  any  authorised  Personal  Communication  Services  systems,  including  for 

the 

provision  of  services  to  the  public.  Such  services  fall  outside  the  definition  of  voice 

telephony  since  the  service  offered  matches  important  needs  which  (normal)  voice  telephony 

does  not  meet,  for  example  as  a  result  of  additional  features  such  as  the  possibility  to  be 

reached  everywhere,  even  when  moving  etc..  This  additional  facility  is  reflected  in  higher 

tariffs,  which  demonstrate  that  the  additional  features  are  decisive  in  prompting  users  to  use 

the  PCS service  instead  of  voice  telephony. 

Member  States  may  nevertheless  submit  the  provision  of  telecommunications  services  to 

licensing,  general  authorisation  or  declaration  procedures  as  far  as  necessary  to  ensure 

compliance  with  essential  requirements.  In  addition,  for  public  mobile  telecommunications 

services,  such  as  GSM,  the  Commission  acknowledged  that  public  service  requirements 

could  be imposed  in the  framework  of  their  licensing. 

The  Commission  does,  however,  not  consider  Satellite  Personal  Communications  as  a  mobile 

service  in  the  traditional  sense.  It  excluded  this  service  from  the  scope  of 

its  draft 

amendment  directive  of  Directive  90/388/EEC  with 

regard 

to  mobile  and  personal 

communications 

because 

of 

its 

specificities.  Consequently,  Satellite 

Personal 

Communications  may  not  be  subjected  to  such  public  service  requirements  but  only  to 

requirements  aiming  at the  essential  requirements  listed  in  Directive  94/46/EC. 

The  further  retail  of  already  authorised  services  by  indépendant  providers  of  services  (the 

provision  of  which  is  likely  to  be  subject  to  conditions  ensuring  compliance  with  essential 

requirements)  may  not justify  the  introduction  of  specific  authorisation  procedures. 

page  20 

Inherent  in  all  these  issues  are  the  international  aspects  which  are  of  particular  significance 

in the  context  of  satellite  PCS. 

3.2  The  operation  of  the  satellite  systems 

The  consortia  operating  the  satellite  systems  provide  space  segment  capacity  which  is 

needed  to  communicate  between  a  hand-held  and  gateway  (and  further  into  the  terrestrial 

networks)  and  between  hand-helds. 

The  operation  of  the  satellite  systems  is  subject  to  two  inter-related  sets  of  issues: 

1.  formal  notification  to  the  ITU for  the  purpose  of  technical  frequency  coordination,  and 

2.  selection  and  authorisation  of  the  systems  in  nations  where  the  space  segment 

capacity  is to  be used. 

Successful  completion  of  the  ITU  frequency  coordination  process  does  not  provide  any 

guarantee  that  the  satellite  system  will  indeed  be  authorised  to  provide  space  segment 

capacity 

for  use  in  a  particular  country. 

It 

is  therefore  required  that  both  the 

ITU 

coordination  is  completed  with  agreement  of  a  particular  country  as  well  as  that  an 

operating  authorisation  is  provided  by  this  country,  possibly  following  a selection  process. 

In  order  to  understand  these  issues  it  is  best  to  analyse  the  frequency  issues  separate  from 

the  other  regulatory  and  policy  considerations. 

3.2.1  Frequency  use  and  sharing 

The  amount  of  frequency  spectrum  available  for  use  by  the  satellite  systems  is  limited  and 

subject  is  of  considerable  sharing  constraints.  Spectrum 

is  required  for  use  between 

handhelds  and  the  satellites,  between  gateways  and  the  satellites,  for  control  of 

the 

satellites  themselves,  and, in  some  cases,  between  satellites. 

Given  a more  limited  market  in  Europe  than  in  other  parts  of  the  world,  there  may  not  need 

to  be  as  much  spectrum  available  in  Europe  for  satellite  PCS.  However,  there  needs  to  be 

compatibility  between  any  European  spectrum  usage  and  usage  in  other  regions  of  the 

world.  The  spectrum  is  to  some  extend  controlled  by  those  who  lay  first  claim  on  the 

spectrum  in the  context  of  the  ITU procedures  and there  is a danger  that,  unless  precautions 

page  21 

are  taken,  systems  capable  of  providing  service  in  Europe  may  be  selected  by  a  process 

outside  European jurisdiction. 

In  its  report,  the  ERO  provides  a  series  of  recommendations  as  concerns  the  allocation  of 

frequency  bands  and the  use of  the  bands  in  Europe. 

1.  A  European  selection  process  shall  be  initiated  as  soon  as  possible  for  the  frequency 

band  in  which  the  US  has  now  licensed  the  three  'big-LEO'  systems17.  All  potential 

Satellite  PCS  space  segment  operators  which  have  filed  advance  publications  with  the 

ITU shall  be  considered.  Selected  operators  should  be  asked  to  propose  a  band  sharing 

plan. 

The  constraints  in  Europe  of  use  and  sharing  of  the  frequency  band  in  which  the  FCC 

has  licensed  three  satellite  PCS  space  segment  operators,  are  different  from  those  in 

the  US  and  must  be  taken  into  account  in  the  establishment  of  selection  and  licensing 

criteria.  Depending  on  the  eventual  selection  of  operators  by  nations  around  the  world, 

compatible  band  sharing  and  usage  plans  might  have to  be negotiated. 

2.  A  European  approach  to  licensing  is  urgently  needed  in  order  to  use  the 

limited 

frequency  resource  most  efficiently  and  to  strengthen  the  combined  European  position 

on  this  matter.  Licences  needs  to  be  considered  for  space  segment,  gateways,  service 

provision,  and  equipment. 

3.  The  ERO considers  that  there  is  no  need  yet  to  allocate  extra  spectrum  at  WRC-95  for 

use  between  hand-helds  and  the  satellite  systems.  Additional  spectrum  could  be  dealt 

with  at  WRC-2001  when  actual  requirements  can  be estimated  more  precisely. 

As  at  the  WARC-92,  substantial  discussions  are  expected  at  the  forthcoming  WRC-95  on 

the  need  for  additional  spectrum  allocations  for  satellite  PCS  services.  The  preparation  of 

European  Common  Positions,  based  on  the  recommendations  of  the  ERO  report,  is  in 

progress.  It  would  appear  that,  from  a  European  perspective,  it  is  too  early  to  decide  on 

additional  spectrum  at  this juncture.  In case  additional  allocations  are agreed, the  principle  of 

'first  come,  first  served'  should  be  re-examined  in  order  to  avoid  an  avalanche  of  paper 

systems  being  notified  to  the  ITU in  order  to  try  and  ensure  market  entrance.  Because  of  the 

need  to  obtain  both  an  operating 

licence  and  a  satisfactorily  concluded 

frequency 

coordination  with  each  country,  it  may  be  more  effective  to  discuss  the  overall  approach  to 

these  matters  before  any  further  steps  are  taken.  In  any  case, the  satellite  PCS systems  will 

still  have to  prove  their  place  in the  market. 

17 

frequency  band  1610  -  1626.5  /  2483.5  -  2500  MHz  uplink/downlink  bands  to/from  satellites 

page  22 

3.2.2 

Other  regulatory  and  policy  considerations 

Apart  from  the  frequency  matters  described  above,  a  considerable  number  of  other 

regulatory  and  policy  considerations  arise  in  the  context  of  the  satellite  systems  to  be 

selected  and  authorised  in the  Union.  Below,  the  most  important  ones  are  briefly  discussed. 

a.  Competition  policy:  structure  of  consortia,  level  of  competition. 

The  Commission  has  already  announced  that  it  is  starting  an  investigation  under  the 

Treaty's  competition  provisions  in  relation  to  the  composition  of  some  of  the  consortia 

likely  to  provide  satellite  PCS  services  in  the  Union18.  In  particular,  aspects  of  vertical 

integration  of  the  consortia  and the  planned  service  and  equipment  distribution  chains  are 

of  interest. 

b.  Regulatory  matters:  satellite 

system  operations, 

introduction  of  new 

systems, 

replacement  of  satellites,  likelihood  of  a single  system  surviving  and 

possible  monopoly  positions,  confidentiality  of  data,  privacy. 

Every  satellite  system  operator  will  locate  satellite  operations  centres  (usually  a  main  and 

a  back-up)  in  a few  countries  around  the  world.  Agreements  are  expected  to  be  needed 

to  ensure  that  the  proper  functioning  of  a  system  over  any  country  is  possible  and  that 

regulatory  mechanisms  of  the  affected  countries  allow  rectifying  action  to  be  undertaken 

from  the  country  in  which  the  control  centre  is  located.  Possible  issues  arising  in  this 

context  are 

the  control  of 

frequency 

interference  hazards, 

liability 

issues, 

lawful 

interception,  national  security  and  others. 

Further  reflections  are  required  on inter  alia: 

O h ow  new  proposals  for  satellite  systems  can  be  facilitated  in  view  of 

limited 

frequency  resources; 

O  whether  or  not  special  conditions  shall  be  placed  on  the  replacement  of  satellites  (as 

new 

features  may  be 

introduced  which 

in  effect  change  an  original 

licence 

application); 

O w h at  criteria  shall  be  used 

to  determine  whether  a  system,  which 

is  not 

economically  viable,  must 

terminate  operations  as 

it 

is  occupying 

frequency 

resources  which  may  be assigned  for  use to  new  or  other  systems;  and 

O  whether  market  development 

leading 

to  de-facto  monopoly 

in  certain  market 

segmentsrequire  ONP-like access  to  capacity  by  providers  of  services; 

18  Press  release  I P / 9 5 / 5 49  of  7  Juni  95  in  which  the  Commission  announces  the  launch  of  investigations  into 

global  mobile  satellite  systems. 

page  23 

The  expected 

implementation  of  a  multitude  of  national  data  privacy  and  data 

confidentiality  provisions  are a further  matter  for  consideration,  possibly  leading  to  a  need 

for  some  harmonisation  at  international  level. 

c.  Technical  matters: 

interoperability  of  services,  safety  and  distress  operations, 

numbering,  compatibility  GSM/DECT/DCS1800, 

Interoperability  of  services  is  recognised  as  one  of  the  pre-requisites  for  world-wide 

provision  of  services.  Specific  discussions  have  commenced  in  fora  concerned  with  this 

matter19.  Numbering  is  furthermore  an  issue  to  be  resolved  urgently.  The  numbering 

requirements 

for  satellite  PCS  systems  are  not  known  precisely  but  are  already 

recognised  as  being  complicated.  Global  agreement  on 

these  arrangements  and 

implementation  in  every  country  around  the  world  will  require  urgent  completion  in  time 

for 

services 

introduction.  Compatibility 

requirements  with 

the  GSM 

family 

(GSM/DECT/DCS1800)  also  needs  detailed  study  and  agreement.  Safety  and  distress 

operations  are  expected  to  be  an  important  feature  of  the  systems.  Its  implementation 

might  be  subject  to 

international  regulations  (IMO, 

ICAO)20  but  may  also  require 

additional  arrangements.  Also  this  needs  verification  and further  study. 

d.  Economical: 

financial  viability; 

The  financial  qualifications  of  the  systems  is  a  matter  for  serious  consideration.  The  fact 

that  a  limited  frequency  resource  will  be  used  in  an  economically  efficient  manner, 

requires  a  reflection  on  the  need  for  financial  qualification  as  a  selection  criteria,  as  well 

as during  the  period  of  the  licence.  The  financial  sector  organisations  consulted  on  behalf 

of  the  Commission  have  indicated  that  financing  is  considered  to  be  the  most  critical 

issue  for  the  first  generation  systems  now  under  consideration.  Financial  institutions  in 

Europe  are  of  the  opinion  that  it  is  important  for  the  Union  to  determine  an  appropriate 

regulatory  framework  and  that,  under  such  a  framework,  requirements  for  financial 

qualifications  are essential. 

e. 

Industrial: 

industrial  participation,  availability  of  the  air-interface  specification 

to  hand-held  manufacturers; 

It  is  expected  that  many  nations  will  insist  that  its  industry  is  offered  an  opportunity  to 

participate  in the  construction,  launch,  operations  and  provision  of  satellite  PCS  services. 

19 

FAMOUS  consulatative  group  b e t w e en  U S,  J a p a n,  and  Europe  on  third  generation  mobile  c o m m u n i c a t i o n s. 

20  The  International  Maritime  Organisation  (IMO)  and  the  International  Civil  Aviation  Organisation  (ICAO)  set  the 
in  respect  of  maritime  shipping  and  civil 

international  standards  related  to  safety  and  distress  operations 
aviation  respectively. 

page  24 

Demands  for  industrial  participation  however,  shall  not  prejudice  free  market  access 

rights  nor  cause  unnecessary  and  costly  changes  to  the  proposed  concepts.  On the  other 

hand,  competition  policies 

require  sufficient  competitive  supply  of  services  and 

equipment,  possibly  beyond  what  is  currently  planned  by  the  consortia.  This  might  thus 

result  in, inter  alia,  provisions  to  ensure  that  the  air-interface  is available  to  manufacturers 

under  reasonable  terms,  the  availability  of  multiple  providers  of  services  in  each  country, 

but  also  that  there  are  reasonable  IPR  licensing  and  patent  arrangements,  including  those 

concerning  the  satellite  systems. 

f.  Others 

availability  of  spare  space  segment  capacity 

for  developing 

countries,  national  security,  lawful  interception. 

It  may  be possible  to  make  excess  space  segment  capacity  or  certain  services  available  to 

developing  countries  under  special  arrangements  in  order  to  assist  in  their  economic 

development.  However,  in  order  to  ensure  that  the  level-playing  field  remains  balanced  in 

other  markets,  study  will  be  needed  to  clarify  the  exact  scope  for  offering  assistance  to 

these  countries. 

Also,  the  question  of  lawful  interception  and  national  security  is  giving  rise  to  the  need 

for  special  arrangements.  Early  indications  of  the  requirements  are  needed  from  the 

responsible  agencies  in  order  to  avoid  costly  redesign  of  the  satellite  PCS  concepts  at  a 

late  stage  (as is currently  experienced  in  some  countries  in  respect  of  GSM). 

3.3 

The  provision  of  services 

Providers  of  services  are  the  resellers  of  space  segment  capacity  for  the  use  by  end-users, 

and  manage  the  registration  of  new  users,  initiation  of  users  on  the  systems,  billing, 

interconnection  agreements  etc.  Currently,  the  providers  of  services  appear  to  be  consortia 

members  with  commercial,  mostly  exclusive,  franchise  arrangements  from  the  consortia. 

Therefore  the  issues  are  related  to  those  discussed  above  and  concern:  consortia  structure, 

level  of  competition,  numbering,  interconnection  agreements,  access  to  gateway  facilities, 

ability  to  switch  off  users,  billing  arrangements,  privacy,  national  security. 

3. 

Gateway  operations 

Gateway  operations  concerns  the  provision  of  the  fixed  ground  station  infrastructure  to 

which  handheld  connect  via  the  satellites  and  which  connect  the  communications  further  to 

the  terrestrial  networks.  Limited  numbers  of  gateways  are  foreseen  and  these  numbers  are 

different  for  each  system.  On  average,  about  two-three  gateways  per  system  are  expected 

4) 

page  25 

to  be  installed  in  Europe.  Although  this  number  could  increase  if  countries  desire  so,  it 

would  increase  system  costs. 

The  availability  of  such  a  limited  number  of  gateways  will  require  that  there  is  access  from 

many  countries  to  each  of  them.  Although  the  frequency  authorisation  for  the  gateway 

station  is  a  matter  to  be  dealt  with  by  the  national  administration  on  which  territory  the 

station 

is  based, 

there 

is  a  variety  of 

interconnection  scenarios  possible.  These 

interconnection  scenarios  are  dependent  on the  way  in  which  numbering  schemes  will  be set 

up,  in  what  way  legal  interception  of  signals  is  made  possible  for  countries  other  than  the 

one  on  whose  territory  the  gateway  is  based,  the  way  is  which  national  security  issues  are 

required  to  be  dealt  with,  and  the  way  is  which  traffic  routing  and  billing  arrangements  are 

set  up. 

In  conclusion,  although  based  in  a  single  country,  gateway  operations  require  regulatory 

controls  by  other  countries  and  it  is thus  a matter  which  needs  coordination  at  a Union level. 

3.5  Equipment  issues,  including  free  circulation  and  use  of  hand-
helds. 

Last  but  not  least  there  is  the  equipment  used  by  end-users  to  communicate  through  the 

satellite  systems. 

The  consortia  are  proposing  systems  which  will  not  allow  roaming  of  handheld  equipment. 

Use of  a handheld  is  limited  to  the  circulation  which  a particular  satellite  constellation  allows 

through  its  coverage,  but  this  is  intended  to  be  most  of  the  earth's  surface.  The  fact  that 

there  are  no  roaming  capabilities  between  systems  is  due  to  their  technical  incompatibilities 

caused  by  different  philosophies  for  end-to-end  system  design/optimalisation,  proprietary  to 

each system. 

The  use  of  single  and  dual-mode  (cellular/satellite)  equipment  is  foreseen.  This  will  allow  a 

user  to  access,  for  example,  a  GSM  terrestrial  network  in  Europe  while  using  a  satellite 

network  in  a country  outside  Europe  where  there  is  no  terrrestrial  coverage.  Facilitating  the 

free  circulation  and  use  of  hand-held  equipment  throughout  the  world  is  expected  to  be  one 

of  the  more  important  challenges.  Current  regulatory  mechanisms  are  noi  sufficiently 

developed  to  accommodate  this  easily. 

At  a  Union  level,  the  Mutual  Recognition  Directives  (91/263/EEC  and  93/97/EEC)  will 

facilitate  the  free  circulation.  Within  its  member  countries,  an  appropriate  CEPT  Decision,  if 

implemented,  is  expected  to  deal  with  the  matter  in  an  equally  satisfactory  fashion.  At  the 

page  26 

level  of  other  regions  or  at  a global  level,  the  matter  requires  detailed  study  and  bi-lateral  or 

multi-lateral  agreement.  It  can  be expected  that  the  basic  standards,  necessary  as a basis  for 

type-approval  and  licensing,  can  be  developed  within  the  ITU.  However,  considerable  work 

will  need  to  be  undertaken  to  complement  this  work  with  the  necessary 

international 

agreements  for  mutual  recognition  of  type-approval  as  well  as for  free  circulation  and  use  of 

equipment  at  a  world-wide  scale,  thereby  aiming  at  maximum  mobility.  In  this  context  it  is 

necessary  that  Member  States  notify  to  the  Commission  proposed  technical  regulations  for 

satellite  PCS terminal  equipment  in  accordance  with  Directive  83/189/EEC. 

From  the  ETSI  study  report  it  becomes  evident  that  there  is,  as  expected,  a  significant 

international  dimension  involved  in  the  standardisation  and  equipment  type-approval  matters 

if  the  world-wide  operation  and  use  of  satellite  PCS services  are exploited  as intended  by  the 

industry's  concepts. 

ETSI  recommends: 

1.  Application  of  the  principle  of  freedom  of  circulation  for  satellite  PCS  handsets  without 

additional  licensing  procedures. 

2.  Every  effort  should  be  made  to  extend  this  principle  to  the  whole  world  and  not  only 

Europe. 

3.  Cooperation  with  standardisation  bodies  in  the  rest  of  the  world  should  result  in  global 

approval  regimes  for  handsets  based  only  on  essential  requirements21. 

4.  Gateway  earth  stations  shall  only  be  subject  to  national  approvals  and  licensing  in  the 

country  of  location. 

5.  There  should  be no  requirement  for  the  handset  interface  protocols; 

6.  The development  of  addressing  and  numbering  requirements  shall  be given  due  attention. 

The  approval  regime  for  multi-mode  handsets  is  likely  to  have  a  major  impact  on  world-wide 

operation  and  use  of  satellite  PCS.  With  ETSI  now  being  in  an  advantaged  position  in  the 

international  arena  because  of  the  significant  knowledge  base  which  it  has  accumulated, 

Europe  can  take  a  lead  in  the  international  community  in  developing  the  standards  and 

technical  basis  for  type-approval  regulations  in  a timely  fashion. 

The  commercial  availability  of  the  air-interface  to  hand-held  manufacturers  and  the  related 

intellectual  property  rights  issues  warrant  particular  attention,  in  view  of  the  competition 

aspects  which  may  ensue.  Numbering  and  compatibility  with  the  GSM  family  (GSM,  DECT, 

DCS1800)  are  issues  which  are  still  subject  to  a  determination  of  a  strategic  orientation  in 

the  Union  and  may  therefore  require  consideration  in this  context. 

21  For  example: user  health  and safety,  effective  use  of  spectrum, legal interception,  and, if  required,  interworking 

with  the  public  networks. 

page  27 

4. 

PROPOSED  ACTION  AT  A  UNION  LEVEL 

4.1 

The  need  for  action  at  a  Union  level. 

Satellite  PCS  raises  novel  policy  challenges  in  that  regulators  will  have  to  find  a  fair  and 

equitable  way  for  the  global  community  to  benefit  from  the  opportunities  of  satellite  PCS  as 

quickly  as  technology  and  finance  will  allow.  Equally,  the  technology  raises  challenges  to 

European  industry  through  the  economies  of  scale  and  scope  it  demands. 

In  the  telecommunications  sector, 

the  European  Union 

is  uniquely  advanced 

in  having 

established  a  regime  of  close  co-operation  and  harmonisation  between  many  countries. 

Building  on  this  experience  the  Union  is  therefore  in  a  good  position  to  lay  new  foundations 

to  solve  issues  such  as  those  raised  by  satellite  PCS. 

The  most  compelling  arguments  for  such  an  approach  at  a  Union  level  are  the  following: 

1. 

In  view  of 

limited  availability  of 

frequency  spectrum  resources  and  the  number  of 

announced  satellite  PCS  systems,  there  is  a  need  to  come  to  a  co-ordinated  selection  of 

satellite  PCS  systems 

taking  due  account  of 

the  economic, 

industrial  and  social 

implications  of 

the  proposed  services.  The  need 

for  coherency  of  selection  and 

authorisation  decisions  can  be  greatly  assisted  by  action  at  a  Union  level,  aimed  to 

ensure  such  coherency  within  the  Union  and  w i th  relevant  selection  and  authorisation 

decisions  of  trading  partners. 

2.  There 

is  a  need 

to  ensure  unrestricted 

transborder  provision  of  satellite  personal 

communications  services  throughout  the  EU  and  the  EEA,  taking  due  account  of: 

the  need  for  optimal  use  and  sharing  of  limited  frequency  resources; 

the  need  for  co-ordinated  national  regulatory  and  policy  decisions; 

the  international  dimension. 

3.  There 

is  a  significant  opportunity 

for  European  mobile  and  space 

industry 

in  both 

equipment  and  services  in  satellite  PCS.  Actual  European  industry  contracts  are  valued 

at  about  5 00  million  ECU,  while  potential  further  contracts  are  estimated  to  reach  tens 

of  billions  of  ECU,  especially  in  handsets.  The  greatest  use  of  satellite  PCS  is  believed 

to  be  as  an  augmentation  to  world-wide  mobile  terrestrial  cellular  networks,  in  particular 

GSM. 

4.  There  exists  overwhelming  support  f r om  industry  for  a  co-ordinated  approach  at  Union 

level  to  solve  outstanding  policy  and  regulatory  issues,  in  particular: 

to  ensure  access  to  third  markets, 

page  28 

to  establish  a  greater  world-wide  influence  for  European  systems  and  technologies, 

and 

to  prevent  ad-hoc  national  solutions,  which  would 

lead 

to  barriers 

to  global 

operation. 

5. 

Industry  believes  that  measures  at  a  Union  level  are  a  matter  of  urgency  and 

that 

political  agreement  on  the  EU  decision  process  and  its  timetable  needs  to  be  reached  as 

soon  as  possible. 

6.  European  Union  decisions  concerning  regulations  and  policies  for  satellite  PCS  and 

accompanying  proposals 

for 

international  co-operation  are  expected 

to  have  a 

resonance  throughout  the  world  and  contribute  to  finding  world-wide  solutions. 

4.2.  The  objectives  of  the  action 

Co-ordinated  action  at  a  Union  level  is  required  in  order  to  ensure  that  the  introduction  of 

satellite-based  personal  communications  services 

is  realised  smoothly, 

thereby  creating 

significant  economic  and  social  benefits  to  industry  and  users. 

Regulatory  and  policy  decisions  will  have  to  be  taken  urgently,  in  a  flexible  manner  and 

according  to  an  agreed  time  schedule.  The  industry  will  be  served  w i th  such  an  agreed  and 

transparent 

time  schedule 

in  order  optimise 

their  planning  and 

in  order 

to  allow 

the 

necessary 

technology  development 

to 

take  place 

in  agreement  w i th 

the 

regulatory 

requirements. 

A  co-ordinated  approach  at  a  Union  level  furthermore  necessitates  legally  binding  measures 

for 

those 

issues  where  divergent  national  decision-making  would  result 

in 

incompatible 

regulatory  conditions.  Divergent  national  decision-making  would  not  only 

increase 

the 

regulatory  overheads  for  system  operators,  but  could  also  lead  to  the  creation  of  barriers  to 

the  provision  of  pan-European  systems  and  services. 

Moreover,  the  transborder  nature  of  the  services,  without  requiring  movement  of  service 

provider  or  user,  calls  for  a  balanced  approach  between  relevant  measures  at  Union  level 

and  a  maximum  of  co-ordinated  national  regulatory  and  policy  decisions  by  the  Member 

States  under  the  principle  of  subsidiarity.  Given  the  inherently  international  nature  of  the 

issues,  due  consideration  must  be  given  to  the  achievement  of  maximum  synergy  between 

internal  Union  decisions  and  bilateral  and/or  multilateral  external  agreements  and 

understandings  in  this  area. 

page  29 

Based on  views  of  industry  and analysis  in  previous  chapters,  an  action  at  a European  Union 

level  shall therefore  support  the  following  objectives: 

1.  To  ensure  the  unrestricted  provision  of  transborder  satellite  personal  communications 

services  throughout  the  European  Union  and  the  EEA. 

2.  To  augment  the  world-wide  mobile  terrestrial  cellular  networks  and  their  evolution,  in 

particular  GSM,  by  means  of  satellite  PCS.  A  strategy  should  be  determined  which 

considers  the  complementary  use  of  these  terrestrial  cellular  networks  with  satellite 

PCS,  leading  to  a  completely  integrated  UMTS  service  at  the  beginning  of  the  next 

century. 

3.  To  work  towards  an urgent  solution  to  ensure  world-wide  circulation  and mobility  of  the 

satellite  PCS  hand-sets,  making  use  of  the  Union's  standardisation  and  type-approval 

mechanisms.  Particular  attention  shall  be  paid  to  the  use  of  dual  mode  terrestrial 

cellular/satellite  handsets. 

4.  To  ensure  that  the  European  mobile  and  space  industry  is  in  a  position  to  benefit  from 

the  significant  opportunity  in the  supply  of  both  satellite  PCS equipment  and  services. 

4.3.  The  modalities  of  the  action 

The  most  fundamental  question  in  the  context  of  Europe's  involvement  in  satellite  PCS 

arising  at  this juncture  is  that  of  the  selection  of  satellite  personal  communications  networks 

and services  suitable  for  the  European  environment. 

As  with  most  areas  of  radio  communications,  the  ever  increasing  number  of  services  and 

users  is  creating  severe  frequency  shortages  for  most  radio  services  and  an  increasing 

number  of  complex  trade-offs  is  required  to  enable  sharing  of  the  available  frequency 

spectrum  among  these  services. 

Given that  the  technology  for  a particular  service  usually  prescribes  the  use of  certain  ranges 

of  frequencies,  trade-offs  will  have  to  be  made  on  possibilities  for  sharing  with  existing 

services  in  these  frequency  bands,  eventual  migration  of  some  services  with  the  associated 

costs,  and  the  introduction  of  new  services  of  which  the  market  value  can  often  only  be 

subject  of  speculation. 

The  frequency  spectrum  set  aside  for  satellite  personal  communications  services  (or  mobile 

satellite  services  as  it  is  called  in  a  more  generic  term)  is  very  limited  and  result  of  a  hard 

fought  compromise  during  the  WARC-92  conference  where  differences  of  opinion  as  to  the 

viability  and  market  value  of  these  services  was  the  subject  to  much  speculation.  Now  that 

page  30 

substantial  market  studies  are  available  and  the  first  serious  financing  efforts  are  underway, 

it  can  be  assumed  that  further  spectrum  might  become  available  if  the  commercial  success 

of  first  generation  systems  is attracting  further  systems  to  enter  the  market. 

In  the  case  of  satellite  PCS,  frequency  constraints  appear  to  exist  and  indications  are  that 

there  is technical  limit  of  4  to  5  systems  in the  currently  allocated  frequency  band. 

There  are other  frequency  bands  under  consideration  but  their  availability  and  sharing  criteria 

are  still  subject  to  international  negotiations  within  the  context  of  the  forthcoming  World 

Radio  Conferences.  Furthermore,  the  estimates  for  the  market  potential  carry  two  very 

difficult  problems:  firstly  these  estimates  address  mature  market  potential  after  a  shake-out 

has taken  place  (and thus  the  frequency  spectrum  would  have to  be  shared  initially  by  more 

market  entrants),  and  secondly,  there  is  a  certain  risk  that  the  market  might  under  certain 

circumstances  be  subject  to  de  facto  monopoly  provision  for  certain  or  all  parts  of  the 

services. 

Furthermore,  limited  markets  in  Europe  for  satellite  PCS  as  well  as  extensive  developments 

in  terrestrial  mobile  cellular  communications,  mean  that  a  balanced  European  frequency 

spectrum  policy  is  required  whereby,  although  leaving  sufficient  space  for  competition,  a 

limit  may  emerge  on  the  spectrum  available  for  satellite  PCS  in  Europe  in  order  to  retain 

sufficient  spectrum for  terrestrial  cellular  systems. 

In  view  of  the  above,  and  for 

those  categories 

for  which 

there  is  limited 

frequency 

spectrum,  a  Union  level  selection  of  satellite  systems  for  the  provision  satellite  personal 

communications  services  appears 

to  be 

the  only  way 

forward  before  any  national 

authorisation  decisions  are  taken.  This  selection  will  have  to  be  fair,  non-discriminatory  and 

transparent  to  all contenders  for  spectrum. 

A  number  of  options  for  selection  may  be considered. 

1. 

2. 

3. 

4. 

5. 

6. 

Selection  on the  basis  of  first  come,  first  serve. 

Selection  of  those  already  licensed  in  the  US by  the  FCC. 

Selection  of  those  systems  which  pass  the  ITU frequency  co-ordination. 

Selection  on the  basis  of  frequency  auctions; 

Selection  on the  basis  of  a comparative  bidding  process  ('beauty  contest'). 

Relying  on  a 'natural'  selection  process. 

Selection  on  the  basis  of  first  come,  first  serve  can  only  function  properly  if  sufficient 

frequency  spectrum  allows  all  entrants  to  be  authorised.  The  moment  that  multiple  entrants 

request  authorisations  a  more  sophisticated  selection  is  required.  To  authorise  solely  on  the 

basis  of  first  come,  first  serve  would  furthermore  encourage  so-called  'paper'  systems  to  be 

page  31 

put  forward.  This  is  an  undesirable  situation  and  would  deny  the  market  the  emergence  of 

commercially  viable  systems. 

Given  existing  European  industry  participation,  selection  of  those  systems  already  licensed 

by  the  FCC  may  deserve  priority.  The  question  arises  however,  whether  the  US  selection 

criteria  are  acceptable  to  the  Union  and  moreover,  whether  the  mere  acceptance  of  such  a 

selection  could  be defended  by  any  due  diligence  criteria  under  applicable  law. 

Moreover,  subject  to  formal  confirmation  by  potential  market  entrants,  there  are  currently 

more  concepts  for  consideration  than  at  the  time  of  the  commencement  of  the  US  selection 

and  licensing  process,  and  all  these  concepts  deserve  an  evaluation  within  the  Union  on 

their  respective  merits. 

Unless  regulated  otherwise  by  the  Radio  Regulations,  the  ITU frequency  registration  and  co 

ordination  process  functions  on  the  basis  of  first  come,  first  serve.  Acceptance  of  such  a 

principle  as  the  sole  selection  criteria  would  not  only  lead  to  an  increase  in  'paper*  systems 

in the  future  as it  would  be the  safest  way  of  ensuring  market  entrance  but  would  also  deny 

the  consideration  of  relevant  economic  and financial  criteria. 

Some  believe,  and  part  of  the  industry  consulted  is  among  those,  that  there 

is  no 

requirement  for  a  selection  at  all.  The  selection  process  would  be  a  'natural'  one  whereby 

concepts  under  development  are  terminated  because  of,  for  example,  lack  of  financing, 

technological  problems,  overly  optimistic  business  cases,  or  other  reasons.  There  is  also 

some  belief  that  sufficient  frequency  spectrum  will  be  available  in  due  time  for  all  those 

systems  which  will  actually  be  in  a  position  to  enter  the  market.  If  this  would  be  the  case, 

then  obviously  little  action  would  be required  in terms  of  selection  and  only  the  authorisation 

criteria  would  have  to  be  developed.  However,  should  the 

'natural'  selection  process 

nevertheless  result  in  more  than  anticipated,  initial,  market  entrants  while  unsolved  technical 

sharing  arrangements  of  the  limited  frequency  resource  remain  outstanding,  then  some 

systems  might  have to  be refused  entry  to  the  market. 

Selection  on  the  basis  of  an  auction  of  the  available  frequency  resources  has  particular 

disadvantages  in  the  case  of  satellite  PCS  as  a  result  of  its  inherently  global  nature,  namely 

the  need  to  ensure  compatability  of  the  results  of  such  auctions,  as  well  as  the  need  for 

technical  compatibility  between  the  selected  systems.  Frequency  auctions  would 

thus 

become  a  very  complex  matter,  independent  of  the  question  of  the  consequences  of  the 

resulting  financial  implications  for  such  a process  at  a Union level. 

In conclusion,  it  would  seem  that  there  is  good  reason  to  argue  that  a selection  on  the  basis 

of  a  comparative  bidding  process  is  required. 

It  is  nevertheless  necessary  to  establish 

page  32 

exactly 

in  which 

frequency  bands  and  for  which  services 

there  are  potential  market 

entrants 

as  well  as  what 

the  prospects  are  for  new  entrants  over  time.  The  study  work  undertaken 

for  the  Commission  has  revealed  the  generic  issues  in  the  context  of 

satellite  PCS,  but 

additional 

information 

is  n ow  urgently  required  on  the  number  and  scope  of  potential 

satellite  systems. 

In  addition  to  the  selection  and  authorisation  of  satellite  systems  for  the  provision  of  satellite 

personal  communications  services,  ,  harmonisation  of  the  conditions  for  the  provision  of  S-

PCS  services,  gateway  operations,  and  equipment  including  hand-held  sets,  In  chapter  3 

details  have  been  presented  on  the  issues  related  to  the  authorisation  of  these  elements.  At 

this  juncture,  it  is  virtually  impossible  to  take  position  on  all  these  matters  due  to 

the 

complexity  and  their  inter-relationships.  Work  needs  to  commence  urgently  to  resolve  these 

outstanding  regulatory  and  policy  questions  in  detail. 

Some  of  the  frequency  issues  are  already  addressed  by  the  ERO,  while  ETSI  has  build  up 

sufficient  knowledge  to  advance  rapidly  on  standardisation  matters.  The  harmonisation  of 

authorisation  conditions  is  being  studied  by  ETO  and  carried  out  within  the  framework  of  co 

operation  between  the  Commission  and  ECTRA.  However, 

following  a  period  of  mainly 

study  and  evaluation,  efforts  n ow  need  to  be  pursued  within  an  overall  framework  in  order 

to  ensure  the  availability  of  results  at  the  appropriate  moments  in  time  for  consideration 

under  deliberations  of  regulatory  and  policy  decisions. 

There  is  considerable  merit  in  having  as  much  w o rk  as  possible  performed  by  the  competent 

technical  bodies  w i th  the  widest  European  membership,  namely  ECTRA,  ERC  and  ETSI.  In 

this  w a y,  the  ground  is  prepared  for  any  decisions  in  the  Union  to  be  matched  w i th  co 

ordinated  decisions  in  other  European  countries.  The  work  of  these  bodies  shall  encompass 

technical  w o rk  preparing  for  the  adoption  of  selection  criteria  and  authorisation  conditions, 

type-approval,  frequency  use  and  sharing  etc.  Both  ERO  and  ETO  have  gathered  substantial 

technical  expertise,  gathered  in  the  course  of  the  studywork  performed  for  the  Commission. 

In  conclusion,  action  at  a  Union  level  needs  to  address  three  elements: 

/. 

additional 

information 

is  required 

from  potential  market  entrants  wishing 

to  offer 

services 

in  the  European  Union.  This  allows  confirmation  whether  or  not  a  selection 

process  is  necessary,  for  which  types  of  services,  and  in  which  frequency  bands.  It  also 

assists  in  the  definition  of  the  scope  and  modalities  of  the  authorisation  process. 

2. 

sate/lite  personal  communications 

networks 

are  selected  on  the  basis  of  a 

comparative 

bidding  process.  This  allows  all  prospective  market  entrants 

to  be  valued  at 

their 

page  33 

respective  merits  so  that  a maximum  of  potentially  viable  concepts  are  permitted  to  use 

the  limited  spectrum  available. 

3.  all  relevant  aspects  of  satellite  personal  communications  services  are  authorised.  This 

would  include  space  segment  operators,  providers  of  services,  gateway  operations,  and 

equipment. 

The  Commission  has  come  to  the  conclusion  that  these  three  elements  may  be  adressed  by 

means  of  two  separate  measures: 

O 

the  publication  of  a  Call-for-lnformation  in  the  Official  Journal 

in  order  to  obtain 

additional  information  from  potential  market  entrants,  and 

O  a Council  and  European  Parliament  Decision  on  action  at  a  Union  level  on the  selection 

and authorisation  of  satellite  personal  communications  services  in the  European  union. 

4.4  Publication  of  a  Call-for-lnformation. 

The  Commission  has  decided  to  publish  a  Call-for-lnformation 

in  the  Official  Journal, 

addressed  to  prospective  consortia  and  other  relevant  industry  planning  to  provide  satellite 

personal  communications  services  and/or  equipment  in  the  European  Union.  Through  this 

Call-for-lnformation,  the  Commission  seeks  detailed  information  of  all  relevant  matters  which 

may  assist  the  definition  of  the  scope  and  modalities  of  a  selection  and  authorisation 

process,  including  suitable  criteria  for  selection  and  conditions  for  authorisation. 

Without  prejudice 

to  any 

formal  Council  and  Parliament  Decision  on  selection  and 

authorisation  of  satellite  PCS  services,  the  Call-for-lnformation  aims  to  assist  the  Union  in 

elaborating  the  exact  modalities  of  the  selection  and  authorisation  process.  In  view  of  the 

urgency  of  the  need  for  selection  and  authorisation  decisions,  the  Information  shall  enable 

significant  progress  in the  period  immediately  following  the  adoption  of  a Decision. 

The  industry  is  thus  urged  to  respond  to  the  Call-for-lnformation  with  as  much  detail  as  it 

has  at  its  disposal  and  with  submission  of  options  aimed  to  solve  the  questions  raised  by 

the  various  studies  undertaken  and  reported  in  this  Explanatory  Memorandum. 

A  copy  of  the  Call-for-lnformation  is  attached  in Annex  to  this  Explanatory  Memorandum. 

page  34 

4.5 

Proposal  for  a  Council  and  European  Parliament  Decision. 

The  need  for  Community  action  on  satellite  personal  communications  services  has  been 

recognised  by  the  Council  in  several  Resolutions;  it  has  been  acknowledged  that  action  can 

be  better  achieved  at  a  Union  level  and  that,  in  addition,  action  needs  to  be  taken  at 

international  level. 

The  Council  stressed  in  its  Resolution22  of  7  December  1993  the  importance  of  developing 

a Community  policy  in  satellite  personal  communications  services,  recognising  "the  challenge 

for  the  Community  to  develop  a  forward-looking 

regulatory 

framework  which  allows 

the 

introduction  of  satellite  personal  communications  services,  taking  full  account  of  the  global 

nature  of  these  systems,  and  the  desirability  of  co-ordinated  action", 

invited  the  "Member 

States 

to  make  efforts 

towards  developing  as  soon  as  possible  a  Community  policy 

concerning  satellite  personal  communications  services  and  a  co-ordinated  position, 

in 

particular  within 

the  context  of 

international  organisations,  such  as  the 

International 

Telecommunications  Union  (ITU),  and  in  relation 

to 

third  countries"  and 

invited 

the 

Commission  to 

investigate 

the  significance  of  Satellite  PCS,  to  monitor 

international 

developments  and  "..to  define,  in  collaboration  with  the  Member  States,  an effective  policy" 

and  "..to  propose  appropriate  measures  and/or  actions". 

The  Council  further  considered  in  its  Resolution23  of  29  June  1995  on  mobile  and  personal 

communications,  as  a  priority  objective  for  the  development  of  the  mobile  and  personal 

communications  sector,  "to  ensure  within  the  Union  the  definition  by  1 June  1996  of  an 

harmonised  licensing  approach  for  sate/lite  mobile  and personal  communications,  after  study 

by  ECTRA ".  The  Commission  is  thus  invited  to  propose,  in  a  timely  manner,  measures 

necessary  to  the  achievement  of  this  priority  objective. 

A  specific  action  in  respect  of  satellite  PCS  is  necessary  to  complement  other  measures 

planned  at  a  Union  level, in  particular  the  adoption  of  a common  framework  at  a  Union  level 

for  authorisation  regimes  for  the  telecommunications  sector.  The  satellite  PCS  industry 

however,  cannot  wait  for  this  new  regulatory  framework.  Urgent  action  is  needed now  if  the 

Union  is  to  provide  an  adequate  response  to  the  licensing  of  satellite  PCS  services  in  the 

United  States  of  America  and to  allow  selection  and  authorisation  of  satellite  PCS services  in 

the  timeframe  1996-1997  at  the  latest. 

22  O J.  No. C.339  p.1  of  16.12.93 

23  O J.  No. C  188  p.3  of  22.07.95 

page  35 

Community  measures  have  a  distinct  role  to  play  to  complement  national  measures  in 

particular  where  co-ordinated  and  coherent  national  decisions  are  required,  and  where 

measures  have  to  be  implemented  simultaneously  in  order  to  allow  the  service  provision  to 

commence  in  due  time. 

Action  concerning  satellite  personal  communications  services  has  to  be  taken  at  Union  level 

in  order  to  achieve  the  objectives  of  the  internal  market  for  such  systems,  services  and 

equipment  (article  7a  of  the  Treaty).  Such  action  will  facilitate  the  introduction  of  satellite 

personal  communications  services  throughout  the  Union  in  a  coherent  manner.  It  will  also 

ensure  fair  and  undistorted  competition  and  overcome  barriers  to  the  introduction  of  this 

new  type  of  service  which  would  result  from  uncoordinated  national  authorisation,  based  on 

different  dates  for  entry  into  service  and  subject  to  different,  and  possibly  incompatible, 

conditions  depending  on the  country  concerned. 

Uniformity  of  selection  and  of  authorisation  conditions  and  immediately  binding  measures 

such  as stand-still  obligations  on  Member  States  are  essential  for  the  introduction  of  satellite 

personal  communications  services  in the  Union. 

The  option  of  taking  no  action  at  a  Union  level  is  likely  to  cause  delays,  distort  competition 

and  result  in  a multitude  of  incompatible  national  authorisation  and  policy  decisions,  as  well 

as  numerous  and  diverging  bilateral  international  agreements.  The  implementation  of  satellite 

personal  communications  services  under  such  circumstances  would  be  difficult  and  costly 

and  would  not  allow  Europe  to  capitalise  on  its  technological  lead  in  mobile  and  personal 

communications,  or  to  build  on  the  evolutionary  strategy  set  out  in  the  Green  Paper  on 

Mobile  and  Personal  Communications. 

At  a global  level,  in  the  absence  of  Community  action,  the  strategic  position  of  the  European 

industry,  as  well  as the  political  position  of  the  Union  and  Member  States,  would  be  greatly 

weakened  to  the  detriment  of  both  the  European  equipment  and  services  industry  involved 

directly  in  the  provision  of  satellite  personal  communications  services,  and  of  Europe's 

leadership  in  mobile  personal  communications. 

Therefore,  by  reason  of  the  scale  and  the  effects  of  the  proposed  policy,  the  objectives  of 

the  proposed  action  as  well  as  the  adoption  of  a  selection  process  and  of  common  and 

harmonised  authorisation  conditions  will  best  be achieved  at  Union  level. 

On the basis  of  the  above,  the  Commission  proposes  an action  at  Union  level  which  aims  to 

ensure  the  viable  introduction  of  satellite  personal  communications  services  in  the  Union,  by 

means  of  co-ordinated  selection  and  authorisation  procedures, 

taking  full  account  of  the 

page  36 

global  nature  of  these  services, 

in  support  of  the  relevant  European 

industry  elements, 

based 

on  the  elaboration  of  technical  criteria  by  ECTRA,  ERC  and  ETSI. 

The  action  shall  be  based  on  a  legally  binding  measure 

to  ensure 

full 

transparency 

of 

the 

decision  making  process  and  thereby  providing  a  maximum  of  confidence 

to  users, 

industry, 

and  trading  partners  on  the  approach  within 

the  European  Union. 

In  consequence, 

the  Commission  proposes 

that  the  European  Parliament  and  Council  adopt  a 

Decision  on  action  at  a  Union 

level  in  the  field  of  satellite  personal  communications 

in 

the 

European  Union. 

In  conformity  w i th  the  request  of  the  Council,  close  co-operation  w i th  the  Member  States  is 

central  to  the  proposed  approach.  Community  action  will  not  cover  all  aspects  of 

the 

introduction  of  satellite  personal  communications  services  in  the  Union.  In  accordance  w i th 

the  common  and  harmonised  conditions  being  adopted  and  pursuant  to  the  selection  made 

at  Union  level,  national  regulatory  agencies  w o u ld  be  expected 

• 

• 

• 

• 

to  authorise  the  selected  space  segment  operators, 

to  authorise  the  providers  of  services  and  any  gateway  operations  on  their  territory  in 

conformity  w i th  the  provisions  of  Directive  94/46/EC 

to  set  up  type-approval  procedures  and, 

if  required,  to  licence  equipment  including  hand-held  sets. 

The  Member  States  will  take  all  appropriate 

implementation  measures  and  will  be 

fully 

involved  in  the  complementary  Community  process  through  their  participation  in  a  Advisory 

Committee  for: 

• 

• 

the  establishment  of  a  selection  process  for  space  segment  operators, 

the  adoption  of  common  criteria  for  the  selection  of  space  segment  operators. 

• 

the  adoption  of  harmonised  conditions  for  authorisations  for  all  aspects  of  satellite  PCS, 

and 

Member  States  will  be  participating  through  a  Regulatory  Committee  in  the  decision  to  select 

satellite  personal  communications  space  segment  operators. 

In  accordance  w i th  the  Council  Resolution24  of  August  1 9 90  on  the  strengthening  of  the 

Europe-wide  co-operation  on  radio  frequencies,  in  particular  w i th  regard  to  services  w i th  a 

pan-European  dimension,  the  Community  will  also  draw  upon  the  technical  expertise  of  the 

24  O J.  No. C  166  of  07.07.90 

European  standardisation  bodies  such  as  ETSI  and  Cen/Cenelec  and  of  the  ERC  and  ECTRA 

for  the  development  of  harmonised  technical  criteria  and  conditions  for  satellite  personal 

communications  services  via  work  requirements  placed  by  the  Commission. 

page  37 

The  timetable  for  decisions  is  an  important  element  of  the  action  at  Union  level.  The 

timetable  shall  be  as  concrete  as  possible  but  nevertheless  leave  sufficient  flexibility  for 

changes  as they  appear  necessary  over  time. 

Proposed  time  schedule  for  measures  at  a  Union  level. 

Dec.  95 

Publication  of  a Call-for-lnformation  in the  Official  Journal; 

Sep.  96 

Establishment  of  categories  of  satellite  personal  communications  services 

for  which  a selection  of  satellite  systems  is required; 

Publication  of  a Call-for-Declaration  of  Interest  in the  Official  Journal; 

Oct.  96 

Adoption  of  criteria  for  the  selection  of  satellite  systems  and the  principles 
for  the  authorisations  for  these  systems; 

Dec.  96 

Based  on  a  comparative  bidding  process  and  subsequent  evaluation, 

selection  of  satellite  systems  used  for  the  provision  of  categories  of 

satellite  PCS services; 

Adoption  of  common  conditions  for  the  authorisation  of  the  selected 

systems; 

Mar.97 

Adoption  of  harmonised  conditions  for  the  authorisation  of  all  aspects  of 

satellite  personal  communications  as  they  concern,  inter  alia,  service 

provision,  equipment  ,  interconnection,  numbering,  and gateway  access; 

page  38 

5. 

PROPOSED  ACTION  AT  AN  INTERNATIONAL  LEVEL. 

5.1 

International  developments 

Most  of  the  regulatory  and  policy  developments  in  satellite  PCS  outside  the  Union  have 

taken  place  in the  United  States  and  at the  level  of  the  ITU. 

In  the  United  States,  the  Federal  Communications  Commission  (FCC)  has  considered  six 

applications  (Ellipso,  Iridium, Globalstar,  Odyssey,  Constellation,  and  AMSC),  some  of  which 

now  include  substantial  European  investment.  The limited  amount  of  frequency  spectrum  led 

to  the  FCC's  decision  to  ask  the  six  applicants  to  try  and  reach  an  agreement  on  frequency 

sharing  and  to  work  out  other  technical  arrangements.  Since  such  an  agreement  could  not 

be  reached,  the  FCC  released  a  Notice  of  Proposed  Rule  Making  (NPRM)  in  February  1993 

which  proposed  a procedure  for  selection  and  licensing  of  up  to  five  satellite  PCS  networks, 

and initiated  a public  consultation  process. 

In  the  light  of  the  Commission's  concern  that  unilateral  selection  and  authorisation  of 

satellite  personal  communications  systems  by  the  US  might  pre-empt  decisions  in  the 

Community  and  might 

jeopardise 

the  viable 

introduction  of  global  satellite  personal 

communications  services,  opportunity  was  taken  to  offer  comments  on  the  FCC  Notice, 

through  a  'note  verbale'  to  the  US  Department  of  State25.  In  particular,  the  Commission  is 

of  the  view  that  the  inherently  global  nature  of  the  services  in  question  requires  international 

consultations  in  order  to  seek  mutually  acceptable  solutions.  The  note  expressed  a  concern 

that  uncoordinated  national  licensing  could  lead  to  denial  of  access  to  world  markets  by 

virtue  of,  for  example,  frequency  scarcity.  The  note  furthermore  mentioned  in  detail  specific 

areas  of  concern  and  ended  with  a  request  for  further  consultations  in  order  to  review  the 

issues raised. 

After  taking  into  account  comments  that  had  been  submitted,  the  FCC  released  its  Report 

and  Order  in  October  1994,  in  which  many  of  the  concerns  expressed  by  the  Commission 

not  taken  into  account,  but  which  confirmed  the  earlier  selection  and  licensing  proposals  and 

in  early  1995  the  FCC  issued  orders  selecting  and  licensing  three  of  the  proposed  concepts 

for  global  service  provision,  namely  Globalstar,  Iridium, and  Odyssey26. 

On  12  June  1995,  the  Commission  received  a  formal  response  of  the  Department  of  State 

to  the  'note  verbale',  in  which  the  domestic  nature  of  the  FCC's  decisions  were  underlined. 

2^ 

" N o te  verbale'  submitted  on  1  June  1 9 94  to  the  US  Department  of  State  by  the  Washington  Delegation  of  the 
European  Communities. 

26  The  FCC  has  n ow  c o m m e n c ed  w i th  the  rule  m a k i ng  procedures  in  relation  to  the  future  licensing  of  satellite 
PCS  services  in  the  2  GHz  b a n d.  Also  in  respect  of  the  use  of  these  bands,  the  European  Commission  would 
raise  similar  considerations  as  it  has  done  in  its  ' n o te  verbale'  on  the  first  round  of  the  US  licensing  process. 

page  39 

In  its  response,  the  US  Government  offered  to  find  mutually  acceptable  ways  to  bring  this 

emerging  technology  to  the  international  marketplace. 

In  summary, 

the  first  round  of  selection  and  licensing  of  satellite  PCS  systems 

in  the  United 

States 

is  now  completed. 

The  licensees  are  expected 

to  complete 

their 

financing 

and 

commence 

to  seek  licenses 

in  the  rest  of  the  world,  and  to  implement  systems  on  a  1998  -

2000 

time  scale. 

The  International  Telecommunication  Union  (ITU)  has  also  underlined  the  complexity  of  the 

issues27  and  the  fact  that  governments  and  telecommunications  regulators  around  the  world 

raise  questions  concerning  new  regulatory  and  operational  issues  arising  from  satellite  PCS 

deployment.  The  ITU  considers  that  the  introduction  of  satellite  PCS  raises  a  new  range  of 

complex  issues  which  can  only  be  resolved  by  more  analysis  and  study,  and  through  co 

operation  of  industry  and  regulators.  The  forthcoming,  first,  ITU  World  Policy  Forum  to  be 

held  in  October  1996  will  focus  on  satellite  personal  communications. 

Subsequent  to  the  frequency  allocations  for  satellite  PCS  at  the  1 9 92  World  Administrative 

Radio  Conference  (WARC-92),  the  w o rk  undertaken  by  the  ITU  mostly  concerns  studies  in 

which  sharing  between  satellite  PCS  services  and  other  radiocommunications  services  is 

analysed  and  which  is  largely  technical  in  nature. 

Most  of  this  work  is  progressing  in  preparation  of  the  next  World  Radio  Conference  to  be 

held  in  November  1995  in  Geneva  (WRC-95).  At  that  conference,  the  allocation  of  so-called 

'feeder  links'  --  the  communications  links  between  the  gateway  stations  and  the  satellites  --

will  have  to  be  agreed  as  there  is  no  frequency  allocation  yet  foreseen.  Furthermore,  this 

forthcoming  Conference 

is  expected 

to  deal  w i th  other 

important  matters  concerning 

satellite  PCS  such  as  a  review  of 

the  dates  of  entry 

into 

force  of  use  of 

frequency 

allocations  for  satellite  PCS,  and  a  review  of  the  technical  sharing  constraints  of  the  relevant 

frequency  bands. 

The  on-going  work 

in  the 

ITU 

is  of  considerable 

importance 

in 

trying 

to  solve 

technical 

issues  at  world 

level.  The  WRC-95  will  offer  European  nations  an  opportunity 

to  advance 

its 

position 

in  frequency  and  standardisation  matters 

related 

to  sate/lite  PCS,  in  order  to  prepare 

for  globally  acceptable  solutions,  and  to  the  advantage  of  European 

industry  and  users.  The 

ITU  World  Policy  Forum  will  offer  an  opportunity 

to  discuss  matters  at  a  global 

level. 

"Global  Mobile  Personal  Communications  S y s t e ms  -  Report  of  the  third  regulatory  c o l l o q u i u m ",  ITU  publication, 
1 9 9 5. 

page  40 

5.2 

Proposed  action  on  international  co-operation 

The  subject  of  international  co-operation  merits  special  attention  given  the  complexity  of  the 

issues  involved  in  the  regulation  of  satellite  PCS  services  and  their 

inherently  global 

dimension.  As  recognised  by  Council  in  its  earlier  Resolution28  on  the  introduction  of  these 

services  in  the  Community,  there  is  a  "challenge  for  the  Community  to  develop  a  forward 

looking  regulatory  framework  .  .  . taking  full  account  of  the  global  nature  of  these  systems  . 

.  ".  The  Council  also  noted  "that  any  policy  in  this  area  may  concern  all  of  the  [..]  CEPT 

authorities,  including  those  of  central  and  eastern  Europe". 

Any  internal  Union  decisions  will  have  to  be  compatible  with  other  international  regimes 

being  established  in  order  to  allow  industry  to  launch  their  satellite  systems  and  design 

services  and handsets  for  availability  at  global  level. 

The  establishment  of  global  satellite  personal  communications  services  will  require  the 

definition  of  a  flexible  regulatory  framework,  including  fair  and  effective  procedures  for 

authorisation  and frequency  allocation,  and  world-wide  co-operation  with  particular  attention 

to 

less  developed  countries.  Furthermore,  efforts  must  address 

interconnectivity  and 

interoperability  of  satellite  PCS services  with  fixed  and terrestrial  cellular  services  around  the 

world,  and  world-wide,  open  access  to  the  satellite  personal  communications  networks  and 

services. 

The 

international 

co-operative  effort 

required 

to  establish  global  satellite  personal 

communications  services  is  fully  within  the  scope  of  the  common  vision  of  the  G-7  partners 

on  the  Global  Information  Society  and  will  be  a  first  major  test  in  the  context  of  the 

implementation  of  Global  Information 

Infrastructures,  as  recently  discussed  during  the  G-7 

Ministerial  meeting  in  Brussels. 

The  international  aspects  are  foremost  visible  in  the  spectrum  use  and  sharing  issues  but 

other  important  issues  concern, inter  alia: 

* 

the  need for  agreements  on the  global  circulation  of  hand-held  equipment  (global  mutual 

recognition  of  type-approval), 

access  of  nations  to  the  relatively  few  gateways  which  are planned, 

interconnection  agreements  with  a whole  variety  of  other  network  providers, 

"Council  Resolution  of  7  December  1 9 93  on  the  introduction  of  satellite  personal  communications 
Community",  OJ  No.C  3 39  p . 1,  1 6 . 1 2 . 93 

in  the 

* 

* 

Op 
° 

page  41 

* 

* 

* 

implementation  of  global  numbering  schemes, 

agreements  on the  functioning  of  safety  and  distress  operations, 

agreements  on  the  functioning  of  the  very  few  satellite  system  control  centres  to 

control  the  operation  of  the  satellite  systems  over  nations, 

*  market  access, 

* 

compatibility  with  GSM,  DECT,  and  DCS1800  and other  terrestrial  cellular  systems 

It  can  be  expected  that  the  ITU  and  the  WTO  may  contribute  to  solve  a  number  of  the 

issues,  in  particular  on the  technical  aspects  of  frequency  use  and  sharing,  numbering,  hand 

held  standardisation,  as  well  as  on  general  market  access  rules  and  availability  of  services 

respectively. 

At  regional  level  in  Europe,  the  CEPT,  ETSI  and  the  Union  shall  contribute  under  their 

respective  competences.  In  other  parts  of  the  world,  the  situation  however  is  less  clear, 

although  some  forms  of  regional  co-operation  may  be called  upon. 

The  Commission  considers  that  it  is  urgent  for  nations  around  the  globe  to  co-ordinate  the 

timely  evaluation  of  all  relevant  issues  in  the  context  of  satellite  PCS  so  that  they  can  be 

referred  to  the  appropriate  international  fora,  or  be  addressed  on  the  basis  of  ad-hoc 

understandings  and/or  agreements  on  a multi-  or  bi-lateral basis. 

A  dialogue  with  countries  which  would  like  to  associate  themselves  more  directly  with  the 

work  undertaken  in  the  Union  should  commence  immediately  in  order  to  review  any 

possibilities  for  co-operation  as  well  as  for  co-ordination  of  positions  in  existing  fora.  This 

should  apply  in  particular  to  non-EU  European  countries,  especially  those  who  are  candidates 

for  either  full  or  associate  membership  of  the  Union. 

In  its  Resolution  of  7  December  1993  on  satellite  PCS,  the  Council  invited  the  Commission 

to  consult  with  non-Community  countries  on  the  co-ordinated,  global,  introduction  of 

satellite  personal  communications  services.  The  Commission 

intends  to  continue,  and 

broaden  indeed,  the  consultations  it  has  commenced  as  a  consequence  of  the  Council's 

request.  In  cases  where  either  the  Member  States  report  on  difficulties  of  Community 

organisation  with  the  introduction  of  satellite  PCS  in  third  countries,  or  where  the  results  of 

the  consultations  of  the  Commission  with  third  countries  lead  to  a  need,  the  Commission 

may  recommend  to  Council  that  it  negotiates,  on  behalf  of  the  Community,  multi-lateral  and 

bi-lateral  agreements  on  particular  aspects  of  satellite  personal  communications  services. 

Given the  complexity  of  the  matters,  it  is  furthermore  desirable  that  industry  is  invited  to  co 

operate  and  to  propose  solutions  to  issues  raised  by  regulators.  The  Commission  intends  to 

set  up  an  industry  consultative  platform  to  provide  input  to  the  process  of  selection  and 

authorisation  in the  Union. 

page  42 

ANNEX  to  Part  A: 

copy  of  Call-for-lnformation 

page  43 

Call  for  Information  concerning 
the  introduction  of  satellite  personal  c o m m u n i c a t i o ns  services  (S-PCS) 
in  the  European  Union  and  the  European  Economic  Area 

1 9 93  on 

Following  a  request  f r om  Council,  pursuant  to  its  Resolution  of  7 
December 
introduction  of  satellite  personal 
communications  services  in  the  C o m m u n i ty  (O.J.  No  C  3 39  p.1 
of  1 6 . 1 2 . 9 3 ), 
is  seeking  detailed 
information  w i th 
to  satellite  personal  c o m m u n i c a t i o ns 
services. 

the  European  Commission 

regard 

the 

3 .2 
3.3 
3 .4 
3 .5 
3 .6 

ability  to  s w i t ch  off  user  equipment, 
billing  arrangements, 
privacy  and  data  protection, 
national  security  and  legal  interception 
others. 

4.  Authorisation 

conditions 

for  S-PCS  Gateway 

operations 

is 

in 

for 

this  Call 

Information 

the  definition  of 

The  goal  of 
to  obtain  detailed 
information  w h i ch  m ay  assist  the  C o m m u n i ty  and  its  M e m b er 
the  scope  and  modalities  of  a 
States 
selection  and  authorisation  process  w i th 
these 
services.  The  call  is  addressed  to  any  entity  (including  non-EU), 
and  in  particular  space  segment  providers,  providers  of  services, 
and  mobile 
equipment  manufacturers, 
services  providers,  users,  and  consumers  groups,  interested  i n, 
or 
personal 
provision 
the 
communications  services  in  the  European  Union. 

operators 

affected 

n e t w o rk 

satellite 

regard 

by, 

to 

of 

In  parallel  to  its  decision  to  publish  this  Call  for  Information,  the 
Commission  adopted  a  Proposal  for  a  European  Parliament  and 
Council  Decision  on  an  action  at  a  Union  level  in  the  field  of 
satellite  personal  communications  services 
the  European 
Union 
final  of  8  November  1 9 9 5 ],  a  c o py  of 
w h i ch  is  available  upon  request. 

[ C O M ( 9 5 ) 5 29 

in 

For  ease  of  analysis,  the  Information  corresponding  to  specific 
items  shall  be  provided  and  numbered  in  accordance  w i th 
the 
headings  on 
commercially-in-
confidence  information  m ay  be  provided  in  an  annex,  separately 
bound  and  clearly  marked  accordingly. 

list  b e l o w. 

If  desired, 

the 

requested 

Information  shall  concern 

The 
t he 
responding  entity  on  the  items  listed  below  in  relation  to  any 
selection  and/or  authorisation  process, 
f o r m at  of 
w h i ch  is  still  to  be  decided  by  Council  and  European  Parliament 
f o l l o w i ng  the  mentioned  proposal  of  the  C o m m i s s i o n. 

the  v i e ws  of 

the  exact 

Detailed 
headings,  as  applicable: 

Information  shall  be  provided  under 

the 

f o l l o w i ng  " 

1. 

Information 

concerning 

the  responding 

entity 

1.1  Name/address  and  other  c o n t a ct  details 
1.2  Entities'  background  and  interest  in  S-PCS 
1.3  Detailed  description  of  equipment/services 

intended 

to 

be  provided,  including  relevant  time  schedules 

2.  Provision  of  S-PCS  space  segment  capacity 

in  the  EU 

2.1  Criteria  for  selection  of  S-PCS  space  segment  providers 

2.1.1 frequency 

use 
introduction  of  n ew  s y s t e m s, 

and 

sharing 

issues, 

including 

2 . 1 . 2 t e c h n i c al  qualifications  such  as  compatibility  w i th 
G S M / D E C T / D C S 1 8 0 0,  interoperability  of  services, 

2 . 1 . 3 f i n a n c i al  qualifications, 
2 . 1 . 4 o t h er  qualifications 

2.2  Conditions 

for  authorisation  of  S-PCS  space  segment 

providers 
2.2.1  frequency 

use 

including 
introduction  of  n ew  systems,  and  compatibility  w i th 
frequency  plans  of  other  nations, 

sharing 

issues, 

and 

2 . 2 . 2 o t h er  regulatory  conditions, 
such 
2.2.3  technical 

conditions 

G S M / D E C T / D C S 1 8 0 0 / U M T S, 
services, 

as 

compatibility 
interoperability 

w i th 
of 

2 . 2 . 4 f i n a n c i al  qualifications  and  viability, 

2.3 
2.4 
2.5 
2.6 
2.7 

2.8 

satellite  systems  operations, 
national  security  and  legal  interception, 
safety  and  distress  operations 
replacement  of  satellites, 
availability 
spare 
developing  countries, 
other  relevant  issues 

space 

of 

segment 

capacity 

for 

3.  Authorisation 

conditions 

3.1 

interconnection 
facilities, 

for  provision  of  S-PCS  services 
access 

agreements, 

to 

g a t e w ay 

4 .1 
4 .2 
4 .3 
4 .4 

4 .5 
4 .6 
4 .7 

access  to  g a t e w a y s,  interconnection  to  n e t w o r k s, 
regulatory  control  over  gateways  in  other  countries, 
frequency  use  and  sharing, 
ability 
to 
functions, 
privacy, 
national  security  and  legal  interception, 
others 

handhelds 

satellite 

control 

and 

system 

5.  S-PCS  Equipment 

issues 

5.1 
5.2 

5.3 
5 .4 
5.5 
5.6 
5.7 
5.8 
5.9 

thereof 

standardisation 
type-approval  and  mutual  recognition 
countries, 
free  circulation 
authorisation  for  use, 
interoperability, 
aspects  of  frequency  use  and  sharing, 
privacy  and  data  protection  issues, 
national  security  and  legal  interception 
compatibility  G S M / D E C T / D C S 1 8 00  and  other 
mobile  systems, 

in  other 

terrestrial 

5 . 10  health/safety. 
5 . 11  others 

6. 

International 

aspects 

sharing  plans, 

standardisation, 

6.1 
6 .2 

6.3 

6 .4 
6.5 
6 .6 
6.7 
6.8 
6.9 

frequency  use  and 

such 

access  to  third  markets 
compatibility  of 
frequency  interference  hazards 
equipment 
as 
issues 
circulation  and  use,  type-approval 
numbering 
access  to  g a t e w a y s, 
billing  and  accounting 
national  security  and  legal  interception 
intellectual  property  rights,  copyrights 
others 

7.  O th er  rele van t 

issues 

7.1 

competition  aspects 

7 . 1 .1 structure  of  the  consortia, 
7 . 1 . 2 l e v el  of  competition  at  various  levels  of  provision, 
specifications 
7 . 1 .3 availability 

air-interface 

of 
manufacturers, 

7 . 1 .4  others 

7 .2 
7.3 
7 .4 

timetables  of  selection  and  authorisation  procedures 
completeness  of  existing  EU/national  legislation 
others 

free 

to 

The  Commission  m ay  make  available  to  the  national  regulatory 
authorities  of  the  Member  States  of  the  European  Union  and  the 
EEA,  copies  of  the  information  provided  in  the  course  of 
this 
Call  for  Information.  Confidential  treatment  shall  be  guaranteed 
of 
the 
purpose  by  the  respondent. 

Information  w h i ch  are  marked 

those  parts  of 

the 

for 

Neither  the  fact  whether  or  not  an  interested  entity  responds, 
nor  the  contents  of  any  response,  will  prejudice  the  position  of, 
or  give  any  rights  t o,  the  entity  in  any  formal  selection  and/or 
authorisation  process  in  the  European  Union  and/or  its  Member 
States. 

Responses  to  this  Call  for  Information  m u st  reach  the  European 
Commission  offices  three  (3)  m o n t hs  after  the  publication  date 
in  the  Official  Journal  of  the  European  C o m m u n i t i e s. 

All  correspondence  concerning  this  Call  for  Information  should 
be  sent  t o: 

European  Commission 
DGXIII-A1/Call-for-lnformation  on  Satellite  PCS 
BU  9 - 4 / 1 9 1,  2 00  Rue  de  la  Loi, 
B-1049  Brussels,  Belgium 

telephone: 
facsimile: 
E-mail  via  internet: 
Preferred  f o r m a t s:  W 4W  version  2 .0  or  WP  version  5.1 
The  use  of  electronic  mail  is  recommended.  A c k n o w l e d g e m e n ts 
of  receipt  will  be  issued. 

+ 3 2 . 2 . 2 96  8 6 09 
+ 3 2 . 2 . 2 96  8 3 95 
s p c s@ d g 1 3 . c e c . be 

page  44 

page  45 

PART B: 

Proposal  for  a 

European  Parliament  and  Council  Decision 

on  an action  at  a Union  level  in the  field  of 

satellite  personal  communications  services  in the  European  Union 

THE  EUROPEAN  PARLIAMENT  AND  THE  COUNCIL  OF THE  EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community  and  in  particular  Articles 

57,  66  and  100a  , 

Having  regard to  the  proposal  of  the  Commission, 

Having  regard to  the  opinion  of  the  Economic  and  Social  Committee, 

Having  regard to  the  opinion  of  the  Committee  of  the  Regions, 

1.  Whereas  on  7  December  1993  the  Council  adopted  a  Resolution  on  the  introduction  of 

satellite  personal  communications  services 

in  the  Community1;  whereas 

in 

that 

Resolution  the  Council  stressed  the  importance  of  co-ordinated  action  required  to  allow 

the  introduction  of  satellite  personal  communications  services  in the  Community,  taking 

full  account  of  the  global  nature  of  these  services;  whereas  the  Council  underlined  the 

need for  the  development  of  an effective  policy  and asked  the  Commission  to  study  the 

matter,  monitor  international  developments  and  propose  appropriate  measures  and/or 

actions; 

Whereas  on  19  May  1995,  the  European  Parliament  adopted  a  Resolution  on  Mobile 

and  Personal  communications  in the  European  Union2  in  which  it  considers  as  a  priority 

objective  to  establish,  before  1 January  1996,  a harmonised  authorisation  approach  for 

satellite  based  mobile  and  personal  communications  and,  on 

that  basis, 

the 

implementation  of  procedures  for  the  provision  of  licences  of  those  systems  at  an  early 

stage;  whereas  this  approach  must  be  implemented  by  1 January  1996  in  order  to  take 

account  of  the  rapid  development  of  these  services  at  a global  level  and their  social  and 

commercial  potential; 

O.J.  No. C 339/1,  16.12.93 

O J.  No. C  , to  be  published 

page  46 

Whereas  on  29  June  1995 

the  Council  adopted  a  Resolution  on 

the 

further 

development  of  mobile  and  personal  communications  in  the  European  Union3  in  which 

it  considers  as  a  priority  objective  to  ensure,  prior  to  1 June  1 996,  the  definition  of  a 

harmonised  authorisation  approach 

for 

satellite  based  mobile  and  personal 

communications,  after  study  by  ECTRA; 

Whereas  satellite  personal  communications  systems  have  a  role  to  play  in  assuring  the 

delivery  of  universal  service  to  remote  parts  of  the  Union,  thereby  strengthening  social 

and economic  cohesion; 

Whereas,  having  considered  the  telecommunications,  trade  and  industry  aspects  as 

well  as the  frequency  and  standardisation  aspects  of  satellite  personal  communications, 

and  after  consultation  of 

the  relevant 

industry, 

the  Commission  has  submitted 

proposals  for  decision-making  and  the  related  time  schedule  with  the  aim  to  come  to 

selection  and  authorisation  of  satellite  personal  communications  services  on  the  basis 

of  a common  approach; 

Whereas,  market  entry  for  satellite  PCS space  segment  operators  can  only  be  restricted 

on  the  basis  of  objective,  transparent,  proportionate  and  non-discriminatory  selection 

criteria  relating  to  the  availability  of  scarce  resources,  and  award  procedures  shall  be 

objective,  transparent  and  non-discriminatory;  whereas  within  the  limited  common 

spectrum  a  harmonised  selection  is  required  at  a  Union  level;  whereas  the  common 

conditions  for  authorisations  for  satellite  PCS  services  shall  be  based  on  the  principles 

of  objectivity,  transparancy,  non-discrimination,  and  proportionality; 

Whereas,  since  satellite  personal  communications  by  nature  addresses  foremost  the 

needs  of  mobile  users  travelling  between  Member  States  and  outside  the  Union, 

diverging  national  legislations,  regulations,  and  administrative  measures  would  hinder 

or  even  prevent  the  provision  of  Union-wide  satellite  personal  communications  services, 

the  free  movement  of  related  equipment  and,  as  a  consequence,  the  successful 

introduction  of  satellite  PCS on  the  internal  market; 

Whereas  the  free  provision  of  satellite  personal  communications  services  and  the  free 

movement  of  related  equipment  on  the  internal  market  can  only  be  achieved  if  an 

approximation  of  national  regulations  and  administrative  measures  is  achieved  on  the 

basis  of  harmonised  conditions  for  authorisations  for  providers  of  services  and  gateway 

operators  and, if  required, for  equipment; 

O.J.  No. C  188/2  ,22.7.95 

page  47 

6.  Whereas 

the  European  Parliament  and  the  Council  are  examining  measures  on 

authorisations  and  individual  licences  in  the  field  of  telecommunications  in  the  Union; 

whereas,  given  the  urgency  of  the  matter  and  in  the  absence  of  adoption  and 

implementation  of  such  Union  authorisation  measures,  the  area  of  satellite  personal 

communications  services  therefore  requires  an  action  at  a  Union  level,  as  specified  in 

this  Decision;  whereas  the  action  shall  be of  limited duration; 

7.  Whereas,  given 

the 

foreseen 

implementation 

timeschedule 

for  satellite  personal 

communications  systems,  the  action  aims  to  ensure  that,  within  its  limited  duration, 

appropriate  regulatory  and  policy  measures  are  taken  in  the  Union  on the  selection  and 

authorisation  of  satellite  personal  communications, 

taking  due  account  of 

the 

international  dimension  and  its  ensuing  requirements; 

8.  Whereas,  in  view  of  limited  availability  of  the  frequency  resources,  categories  of 

satellite  personal  communications  services  shall  be determined  for  which  a  comparative 

bidding  process  is  required  to  come  to  a selection  of  satellite  systems;  whereas  a  single 

Union-level  selection  process  shall  avoid 

incompatible  national  decisions  on 

the 

selection  of  satellite  systems;  whereas 

the  procedures  by  means  of  which 

the 

comparative  bidding  process  will  be  undertaken  will  have to  be determined  in detail; 

9.  Whereas  potential  applicants  shall  be  informed  of  the  procedures  of  the  comparative 

bidding  process,  and  of  the  criteria  which  have  been  determined  for  selection,  and  of 

the  principles  which  will  be  used  for  the  establishment  of  the  common  conditions  to  be 

attached  to  authorisations  for  satellite  PCS space  segment  operators 

10.  Whereas 

the  determination  of  common  conditions 

for  selected  space  segment 

operators,  and  of  harmonised  conditions  for  authorisations  for  providers  of  services, 

gateway  operators  and,  if  required,  circulation  and  use  of  equipment  will  permit 

Member  States 

to  provide  authorisations  under  applicable  national 

regimes 

in 

accordance  with 

the  provisions  of  Directive  94/46/EC,  and 

thereby  avoiding 

uncoordinated  and  incompatible  national  regulatory  decisions; 

11.  Whereas  measures  adopted  by  the  European  Radiocommunications  Committee  (ERC) 

and  the  European  Committee  for  Telecommunications  Regulatory  Affairs  (ECTRA),  if 

consistent  with  the  Union's  interest,  may  be  a  basis  for  the  use  of  the  relevant 

frequencies  by,  and  for  the  elaboration  of  the  authorisation  criteria  of,  satellite  personal 

communications  services; 

page  48 

Whereas 

the 

European 

standardisation 

bodies 

such 

as 

the 

European 

Telecommunications  Standards  Institute  (ETSI)  and  Cen/Cenelec  may  be  engaged  in  a 

timely  fashion  to  elaborate  the  necessary  standards  which  are  relevant  in this  area; 

12.  Whereas  the  global  dimension  of  satellite  personal  communications  systems  and 

services,  as  well  as  the  related  global  regulatory  structure  under  which  they  are 

provided  play  an  important  role  in  the  considerations  of  the  Union;  whereas  this  action 

at  a Union  level  shall  permit  the  Union  and  its  Member  States  to  exert  greater  influence 

on the  world-wide  development  of  mobile  and  personal  communications; 

Whereas  the  inherent  global  nature  of  satellite  personal  communications  services  may 

require  the  adoption  of  a  substantial  number  of  agreements  with  third  countries  on, 

inter  alia,  interconnection,  free  circulation  and  use  of  equipment,  satellite  system  and 

satellite  control  centers  operations, 

frequency  band  usage  and  sharing  plans, 

numbering,  safety  and  distress  operations,  access  to  gateway  stations  and  access  to 

third  markets;  whereas 

these  agreements  are  closely 

related 

to  market  access 

arrangements;  whereas  therefore  the  Commission  may  start  multi-lateral  and/or  bi 

lateral  negotiations  on these  aspects  of  satellite  personal  communications.; 

13.  Whereas  the  results  of  international  discussions  and/or  other  warranted  changes  of 

circumstances  may  require  that  decisions  taken  under  this  action  be  amended  or  other 

appropriate  action  be  undertaken  by  the  Commission  in  close  co-operation  with  the 

Member  States; 

14.  Whereas  Member  States  shall  take  all  appropriate  action  to  implement  this  action  and 

its  resulting  decisions  in  a  timely  fashion  and  communicate  national  implementation 

measures  to  the  Commission; 

15.  Whereas  the  relevant  industry  should  be  requested  to  co-operate  closely  with  the 

Commission  and  the  national  regulatory  authorities  in  order  to  achieve  solutions  for 

issues 

raised  during 

the 

selection  and  authorisation  of 

satellite  personal 

communications  services;  whereas  this  co-operation  may  be  extended  to  address  the 

issues  in an  international  context; 

Whereas  the  Commission  may  wish  to  seek  assistance  from  an  ad-hoc  panel  of  experts 

in  the  elaboration  of  the  detailed  work  required  under  the  tasks  assigned  to  it  by  this 

Decision;  whereas  the  ad-hoc  panel  of  experts  should  be  made  up,  in  as  far  as 

available,  of  relevant  experts  from  industry  augmented,  as  necessary,  by  experts  from 

national  ministries,  representatives  of  relevant  bodies  such  as, inter  alia,  ETSI,  ECTRA, 

ERC, and  other  relevant  governmental  bodies; 

Whereas  the  nature  of  the  information  provided  by  applicants  and  other  relevant 

industry  may  be  of  a commercially-in-confidence  nature;  whereas  the  utmost  discretion 

shall  be  undertaken  in  respect  of  this  information;  whereas  however  this  shall  not 

prevent  publication  of  information  relevant  for  a selection  and authorisation  process; 

page  49 

HAVE ADOPTED THIS  DECISION: 

Article  1 

Tfte establishment  of  an action  at  a  Union  level 

This  Decision  shall  apply  to  the  introduction  of  satellite  personal  communications  services  in 

the  Union  by  means  of  co-ordinated  action  at  a  Union  level  between  the  national  regulatory 

authorities  for  telecommunications. 

This  action  is  limited  to  a period  of  three  years  from  the  date  of  publication  of  this  Decision 

in  the  Official  Journal.  The  Commission  shall  keep  developments  in  the  satellite  personal 

communications  area  under  review,  report  on  the  effectiveness  of  action  taken  under  this 

Decision  after  two  years  and, if  required,  propose  a prolongation  of  action  in this  area to  the 

European  Parliament  and the  Council. 

Article  2 

Objectives 

The  objectives  of  action  in  satellite  personal  communications  shall  be  to  ensure,  within  the 

period  set  out  in Article  1 : 

(i) 

the  selection  of  satellite  PCS space  segment  operators; 

(ii) 

the  adoption  of  common  conditions  to  be  attached  to  authorisations  for  satellite  PCS 

space  segment  operators; 

(iii)  harmonisation  of  conditions  for  authorisations,  established  in  accordance  with  the 

provisions  of  Directive  94/46/EC,  for  providers  of  S-PCS  services  and  gateway 

operators,  and, if  required, appropriate  measures  for  equipment  circulation  and  use; 

(iv)  the  establishment  of  a  dialogue  and,  where  appropriate,  negotiations  between  the 

European  Union  and  third  countries  with  the  aim  of  establishing  international  co 

operation  in  order  to  promote  the  development  of  satellite  personal  communications 

services  and  remove  the  obstacles  to  their  development. 

page  50 

Article  3 

Definitions 

For the  purposes  of  this  decision: 

authorisation  of  a space  segment  operator:  the  permission  allowing  an  undertaking  to 

establish  and operate  space  segment  capacity  for  the  provision  of  S-PCS  services  and 

to  be  granted  the  right  to  use  the  relevant  frequency  spectrum  under  specified 

conditions; 

provider  of  S-PCS  services:  any  undertaking  providing  satellite  communications 

services  as  defined  in  Directive  94/46/EC  and  making  use  of  space  segment  capacity 

provided  by  the  selected  space  segment  operators;  this  does  not  cover  resellers  of 

authorised  services; 

gateway  operator:  any  undertaking  providing  satellite  network  services  as  defined  in 

Directive  94/46/EC  and  making  use  of  the  space  segment  capacity  provided  by  the 

selected  space  segment  operators. 

Establishment  of  selection  process  for  space segment  operators 

Article  4 

The  Commission  shall,  in  close  co-operation  with  the  national  regulatory  authorities  of  the 

Member  States  in  accordance  with  the  procedure  laid  down  in Article  7: 

(i)  establish  categories  of  satellite  personal  communications  services,  and  determine, 

where  appropriate,  the  need  for  selection  of  satellite  personal  communications  space 

segment  operators; 

(ii)  adopt,  for  the  relevant  categories,  criteria  for  the  common  selection  of  satellite  personal 

communications  space  segment  operators  to  be  authorised  to  provide  their  services  in 

the  Union; 

(iii)  adopt  the  procedures  by  which  a comparative  bidding  process  may  be undertaken; 

(iv)  adopt,  for  all  categories  of  services,  principles  for  the  common  conditions  to  be 

attached 

to  authorisations 

for  selected  satellite  personal  communications  space 

segment  operators; 

page  51 

Article  5 

Selection  of  space  segment  operators 

A  Call  for  Declaration  of  Interest  shall  be  published  in  the  Official  Journal  within  six 

months  after  adoption  of  this  Decision. 

(i)  The  Call for  Declaration  of  Interest  shall  set  out the  criteria  for  the  common  selection 

for  each  category  of  service  established  pursuant  to  Article  4  par.(ii),  the  procedures  to 

be  followed  in  the  selection  established  pursuant  to  Article  4  par. (iii)  and  the  principles 

of  the  common  conditions  to  be  attached  to  authorisations  established  pursuant  to 

Article  4  par.(iv). 

(ii) The  Call for  Declaration  of  Interest  shall  invite  declarations  from  any  person  or  entity 

wishing 

to  operate  a  system 

for 

the  purpose  of  providing  satellite  personal 

communications  services  in the  European  Union. 

A  Decision  selecting  satellite  personal  communications  space  segment  operators  for  the 

relevant  categories  of  services  shall  be  adopted  in  accordance  with  the  procedure  laid 

down  in Article  9. 

Article  6 

Adoption  of  common  and  harmonised  conditions  for  authorisations 

The following  shall  be  adopted  by  a  Decision  in  accordance  with  the  procedure  laid  down  in 

Article  8: 

(i) 

common  conditions  to  be  attached  to  the  authorisations  of  the  selected  satellite 

personal  communications  space  segment  operators; 

(ii)  harmonised  conditions 

for 

the  authorisation  of  providers  of  satellite  personal 

communications  services  ,  gateway  operators,  and,  if  required,  for  the  circulation  and 

use  of  equipment; 

(iii)  any  other  measures  aimed  at 

facilitating 

the  development  of  satellite  personal 

communications  services. 

In  view  of 

the  adoption  of  common  and  harmonised  authorisation  conditions, 

the 

Commission  may  decide,  where  it  deems  appropriate,  to  consult  representatives  of  selected 

space  segment  operators. 

page  52 

Article  7 

Co-operation  with  CEPT and  European standardisation  bodies 

In  order  to  assist  the  adoption  of  common  and  harmonised  criteria  and  conditions  and  with 

due  regard  to  the  time  schedule  established  in  Annex,  the  Commission  may  ask  the 

European  standardisation  bodies  such  as  the  European  Telecommunications  Standards 

Institute  (ETSI)  and  Cen/Cenelec,  as  well  as  the  European  Radio  Committee  (ERC),  and  the 

European  Committee 

for  Telecommunications  Regulatory  Affairs 

(ECTRA),  via  work 

requirements  under  the  relevant  existing  framework  agreements  with  those  organisations, 

to  study  the  necessary  technical  criteria  and  conditions. 

Article  8 

The advisory  Committee 

The  Commission  shall  be assisted  in  the  implementation  of  this  Decision  by  an  advisory 

Committee,  made  up  of  representatives  of  the  national  regulatory  authorities  of  the 

Member  States  and chaired  by  a representative  of  the  Commission. 

The  representative  of  the  Commission  shall  submit  to  the  Committee  a  draft  of  the 

measures  to  be taken. The  Committee  shall  deliver  its  opinion  on the  draft  within  a time 

limit  to  be  determined  by  the  Chairman  according  to  the  urgency  of  the  matter  and, 

where  necessary,  by  taking  a vote. 

The  opinion  shall  be  recorded  in  the  minutes.  Furthermore,  each  Member  State  shall 

have the  right  to  request  that  its  position  be included  in the  minutes. 

The  Commission  shall  take  the  utmost  account  of  the  opinion  delivered  by  the 

Committee  and  shall  inform  the  Committee  of  the  manner  in  which  its  opinion  has  been 

taken  into  account. 

Article  9 

The regulatory  Committee 

By  way  of  exception  to  the  provisions  of  Article  8,  the  following  procedure  shall  apply 

in  respect  of  the  matters  covered  by  Article  5  (2). 

The  representative  of  the  Commission  shall  submit  to  the  Committee  a  draft  of  the 

measures  to  be taken. The  Committee  shall  deliver  its  opinion  on  the  draft  within  a time 

limit  which  the  chairman  may  lay  down  according  to  the  urgency  of  the  matter.  The 

page  53 

opinion  shall  be  delivered  by  the  majority  laid  down  in  Article  148(2)  of  the  Treaty  in 

the  case  of  decisions  which  the  Council  is  required  to  adopt  on  a  proposal  from  the 

Commission.  The  votes  of  the  representatives  of  the  Member  States  within 

the 

committee  shall  be  weighted  in  the  manner  set  out  in'that  Article.  The  chairman  shall 

not  vote. 

3.  The  Commission  shall  adopt  the  measures  envisaged  if  they  are  in  accordance  with  the 

opinion  of  the  committee. 

4. 

If  the  measures  envisaged  are  not  in  accordance  with  the  opinion  of  the  committee,  or 

if  no  opinion  is  delivered,  the  Commission  shall,  without  delay,  submit  to  the  Council  a 

proposal  relating  to  the  measures  to  be  taken.  The  Council  shall  act  by  a  qualified 

majority. 

If,  on  the  expiry  of  a  period  of  three  months  from  the  date  of  referral  to  the  Council, 

the  Council  has  not  acted, the  proposed  measures  shall  be adopted  by the  Commission. 

Article  10 

International  aspects 

1.  The  Commission  monitors  developments,  particularly 

in 

respect  of 

regulatory 

proceedings,  outside  the  Community  and,  if  appropriate,  consults  with  third  countries 

on the  coordinated  introduction  of  satellite  personal communications  at a global level. 

2.  The  Member  States  shall  inform  the  Commission  of  any  difficulties  encountered,  de  jure 

or  de  facto,  by  Community  organisations  in  the  introduction  of  satellite  personal 

communications  in third  countries; 

3.  Whenever  the  Commission  establishes  that  the  action  undertaken  under  this  Decision, 

in  particular  with  regard to  the  information  received  further  to  paragraphs  1 and  2,  may 

require  negotiations  with  the  aim  to  facilitate  the  introduction  of  satellite  personal 

communications  in the  Union  and  remove  obstacles  thereto,  the  Commission  will  start, 

where  appropriate,  negotiations  in  view  of  these  aims. 

The  principle  of  Community  action  will  be  aimed  at  ensuring  effective  and  comparable 

access  for  Community  organisations  to  the  markets  in these  third  countries; 

4.  Measures  taken  pursuant  to  this  Article  shall  be  without  prejudice  to  the  Community's 

and  Member  States'  obligations  under  relevant  international  agreements. 

page  54 

Article  11 

Amendment  of  Decisions 

In  order  to  take  into  account  the  results  of  discussions  in  international  fora  and  /or  with 

third  countries  or  as a result  of  measures  taken  in  accordance  with  the  provisions  of  Article 

10,  as  well  as  any  warranted  change  of  circumstances,  the  Commission  shall  adopt,  in 

close  co-operation  with 

the  national  regulatory  authorities  of 

the  Member  States 

in 

accordance  with  the  procedure  laid  down  in  Article  8,  all  appropriate  measures  as  deemed 

necessary,  including  amending  its  decisions. 

Article  12 

Implementation 

1.  Member  States  shall  take  all  necessary  measures  by  law  or  administrative  action  to 

enable  implementation  of  the  measures  agreed  in or  pursuant  to  this  Decision; 

2.  Member  States  shall  supply  the  Commission,  not  later  than  6  months  after  adoption  of 

this  Decision,  with  such  information  as  may  be  required  by  the  Commission  to  verify 

the  implementation  of  this  Decision. 

3.  Member  States  shall  supply  the  Commission,  not  later  than  3  months  after  adoption  of 

the  decisions  taken  pursuant  to  this  Decision  and  in  accordance  with  the  time  schedule 

in  Annex,  with  such  information  which  will  allow  the  Commission  to  verify 

the 

compliance  with  such  decisions. 

Article  13 

Confidentiality 

1.  Without  prejudice  to  the  provisions  of  this  Decision,  the  Commission  and  the  national 

regulatory  authorities,  their  officials  and  other  servants,  and  experts  consulted  shall  not 

disclose  any  information  acquired  by  them  as  a  result  of  the  implementation  of  this 

Decision  and of  the  kind  covered  by  the  obligation  of  professional  secrecy. 

2.  The  provisions  of  paragraph  1  shall  not  prevent  publication  of  information  on  selection 

criteria  and  authorisation  conditions  which  does  not 

include 

information  of  a 

confidential  nature. 

page  55 

This  Decision  is addressed  to  the  Member  States. 

Article  14 

Done at  Brussels, 

For the  European  Parliament 

The  President 

For the  Council 

The  President 

page  56 

Annex 

to a European  Parliament  and Council Decision of  . . 

on an action at  a Union level in the field of 

satellite personal communications  services in the  European Union 

Time schedule for measures 

Sep.  96 

Establishment  of  categories  of  satellite  personal  communications  services 

for which a selection of  satellite  systems is required; 

Publication of a Call-for-Declaration of  Interest  in the Official Journal; 

Oct.  96 

Adoption  of  criteria  for  the  selection  of  satellite  systems  and  the 
principles for the authorisations  for these systems; 

Dec. 96 

Based  on  a  comparative  bidding  process  and  subsequent  evaluation, 

selection  of  satellite  systems  used  for  the  provision  of  categories  of 

satellite  PCS services; 

Adoption  of  common  conditions  for  the  authorisation  of  the  selected 

systems; 

Mar.  97 

Adoption  of  harmonised  conditions  for  the  authorisation  of  all  aspects  of 

satellite  personal  communications  as  they  concern,  inter  alia,  service 

provision, equipment,  interconnection, numbering, and gateway access; 

page  57 

PART  C: 

F I N A N C I AL  O U T L I NE 

1.  Title  of  Action 

European  Parliament  and  Council  Decision  on  an  action  at  a  Union  level  in  the  field  of 
satellite  personal  communications  services  in the  European  Union. 

2.  Budget  Line 

B-5  401 :  Telecommunications  and  Postal  Policy 

3.  Legal Basis 

European  Union Treaty.  Articles  57,  66  et  100a. 

Communication  to  the  Council  on  satellite  personal  communications  COM(93  171 
final)  of  27  April  1993. 

Council  Resolution  of  7  December  1993  on  the  introduction  of  satellite  personal 
communications  services  in  the  European  Community.  OJ  No  C  339,  16.12.93, 
p.1. 

4.  Description 

4.1  General  Objectives  of  the  Action. 

This  action  aims  for  the  establishment  of  a  common  market  for  satellite  personal 

communications  services,  through  implementation  of  an  action  at  a  Union  level  which 

foresees  selection  and  authorisation  on  the  basis  of  common  and  harmonised  criteria 

and  conditions. 

The  action  has  a  very  strong  impact  on  the  introduction  and  development  of  satellite 

personal  communications  services  in  the  Community  and  the  rest  of  Europe  and  its 

justification  lies  in  the  necessity  of  establishing  a  Community-wide  approach  for 

services  which  are inherently  international,  even  global, in  nature  . 

4.2  Duration  and renewal. 

The  proposed  action  is  limited  to  three  years,  after  which  a  Council  and  European 

Parliament  Decision  is  required to  allow  a further  extension  of  two  years  maximum. 

5.  Classifications 

Non-obligatory  expenditure 

Dissociated  credits 

page  58 

6.  Nature  of  operational  Spending 

The  Community's  financial  contribution  shall,  depending  on  the  nature  of  the  work, 

vary  between  50%  and  100%  of  the  resources  invested.  It  will  be  needed  for  contracts 

for  study  of  certain  technical,  legal,  economic  or  other  aspects,  and  for  subventions 

given  to  ECTRA/ETO,  ERC/ERO  and  ETSI  for  the  elaboration  of  harmonised  technical 

criteria  and  related  tasks  by  means  of  work  requirements  established  under  existing 

framework  contracts  between 

the  Commission  and  each  of 

the  mentioned 

organisations. 

Financial  implication 

7.1  Total  costs  of  the  action 

The  Community  resources  will  be  required  to  cover  the  spending  described  under  point 

6. 

Indicative  timetable  see  below  (assumption:  Decision  adopted  mid  1996  -  for  a  period 

of  3  years  thus  until  mid  1999,  with  financial  engagements  spread  out  over  4  fiscal 

years  1996-1999) 

(B5-401  under  Chapter  B5-40  -  Actions  in the  telecommunications  and  Posts, 

standardisation  and automatic  translation  sectors) 

7.2  Itemised  elements  of  the  action 

The following  table  presents  the  itemised  costs  of  each element  of  the  action  in  ECU's. 

item 

1996 

1997 

1998 

1999 

total 

studies  by  consultants 
subventions  ETSI/ETO/ERO 

100.000 
150.000 

300.000 
200.000 

200.000 
300.000 

100.000 
150.000 

700.000 
800.000 

total 

250.000 

500.000 

500.000 

250.000 

1.500.00 
0 

page  59 

7.3  Appropriations 

The  following  table  sets  out  the  estimated  payment  engagements  against  the  credit 
engagements  for  the  duration  of  the  action 

credit  engagement 
payment  engagement 
1996 
1997 
1998 
1999 
total 

1996 
250.000 

1997 
500.000 

1998 
500.000 

1999 
250.000 

total 
1.500.000 

50.000 
200.000 

200.000 
300.000 

250.000 

500.000 

200.000 
300.000 
500.000 

250.000 
250.000 

50.000 
400.000 
500.000 
550.000 
1.500.000 

8.  Anti-fraud  provisions 

The  control  of  payments  of  any  services,  preparatory,  feasibility  or  evaluation  studies 

requested  is  carried  out  by  the  Commission  prior  to  payment  taking  into  account  any 

contractual  obligations,  economic  principles  and  good  financial  or  other  management 

practice.  Anti-fraud  provisions 

(supervision,  reporting 

requirements  etc.)  will  be 

included  in  all  agreements  and  contracts  made  between  the  Commission  and  the 

recipients  of  any  payments. 

9.  Elements of cost-efficiencv  analysis 

9.1.  Objectives  and coherence  with  the  financial  programmation. 

The  proposed  action  aims  at  the  establishment  of  a  common  market  for  satellite 

personal  communications  services,  through  implementation  of  an  action  at  a  Union 

level  which 

foresees  selection  and  authorisation  on  the  basis  of  common  and 

harmonised  criteria. 

The  action  is  provided  for  in  the  financial  programmation  of  the  DG.  The  objective  of 

the  proposed  action  corresponds  to  the  general  objective  of  the  "establishment  of  an 

internal  market  for 

telecommunications  equipment  and  services",  defined 

in 

the 

financial  programmation  of  the  DG. 

The  action  directly  concerns  the  telecommunications,  satellite,  and  mobile  equipment 

and services  industry  in the  Union. 

page  60 

9.2  Justification  of  the  Action 

The  proposed  Decision  is  a  legislative  measure  necessary  for  the  establishment  of  an 

internal  market  in  the  satellite  communications  sector  and  more  particularly  a  common 

market  for  satellite  personal  communications  services. 

Satellite  personal  communications  services  will  be introduced  in the  very  near  future,  as 

a step  towards  the  implementation  of  a truly  global  information  infrastructure.  It  is  now 

urgent  to  agree  to  a  co-ordinated  approach  in  the  Union  which  allows  the  Member 

States  to  issue  relevant  licences  for  the  provision  of  satellite  personal  communications 

services  on  the  basis  of  co-ordinated  national  regulatory  conditions  and  criteria.  The 

proposed  decision  therefore  provides  for  the  adoption  of  an  action  at  European  Union 

level  in  order  to  ensure  the  viable  introduction  of  S-PCS  in  the  Union  by  means  of  co 

ordinated  selection  and authorisation  procedures,  taking  account  of  the  global  nature  of 

these  services.  The  proposed  action  is  fully  in  line  with  the  principle  of  subsidiarity  as 

the  inherent  transborder  nature  of  the  provision  of  S-PCS,  which  will  not  require 

movement  of  providers  of  services  or  users,  necessitates  the  adoption  of  Community 

measures  which  enable  the  implementation  of  co-ordinated  national  measures  in  the 

Member  States,  thereby  promoting  the  development  of  telecommunications  services  in 

the  Community,  as  well  as  completing  the  single  market  for  these  services.  The 

objective  can therefore  better  be achieved  by  an action  at  Community  level. 

9.3  Follow-up  and evaluation  of  the  action. 

The  proposed  Decision  sets  out  a  procedure  which,  on  the  basis  of  a  Commission 

evaluation  and  request,  requires  a further  Council  and  European  Parliament  Decision  to 

prolong  the  action  by  a period  of  two  years. 

10.  Administrative  expenses. 

The  actual  utilisation  of  the  required  administrative  resources  will  be  the  result  of  an  annual 

decision  by  the  Commission  on  the  allocation  of  resources,  taking  due  account  of  the 

manpower  and  additional  budget  which  have  been  allocated  by  the  budgetary  authorities. 

10.1  Impact  on  employment. 

Employment  type 

Affected  manpower 

of  which 

duration 

page  61 

Permanent 

Temporary 

existing 

additional 

resources 

resources 

1 

1 

3  years 

Fonctionnaires 
or  Temporary 
Agents 

A 
B 
C 

Other  resources 

Total 

1 

1 

3  years 

10.2  Global financial  impact  on  additional  human  resources. 

None 

10.3  Increase  of  other  costs  resulting  from  the  action. 

none 

The  required  budget  of  416,000  ECU  annually  for  a  period  of  3  years,  totalling  1,248,000 

ECU  (as  outlined  below),  will  be  covered 

through  redeployment  of  existing 

financial 

resources  and  no  additional  budget  is  expected  to  be required: 

a.  Staff  costs:  100.000  ECU per year,  (budget  title  A 1, A2,  A5) 

b.  The  specific  requirements  for  Committee  meetings  can  be  estimated  to  be  about  6 

meetings  per  year  of  a  Committee  with  30  members,  specifically  constituted  for  the 

purposes  of  this  directive.  This  covers  two  Committee's  as created  by  articles  9  and  10 

of  the  Proposed  Decision. 

The  total  of  the  Committee  meetings  of  the  two  Committees  combined  will  cost  about 

144,000  ECU (=  6  x  24,000)  per  year  to  be covered  by  budget  line  A-2510. 

c.  Six  expert  panel  meetings  will  also  be  held  in  view  of  the  preparation  of  these 

Committee  meetings.  Expert  panel  meetings  could  involve  6  experts  from  organisations 

such  as  CEPT,  ERO, ECTRA,  ETSI,  together  with  14  private  experts.  The  cost  for  such 

six  preparatory  meetings  will  amount  to  112,000  ECU per  year  ( 29,484  ECU  (6  x  14  x 

3  days  x  117  ECU)  +  92,400  ECU  (6  x  20  x  770  ECU))  covering  travel  and 

accommodation  expenses  without  professional  fees.  This  will  be  covered  by  budget 

line  A-250. 

d.  Further  mission 

costs 

of 

60,000 

ECU 

annually  will 

be 

related 

to 

discussions/negotiations  with 

international  community 

in  view  of 

international 

agreements  and  /or  understandings.  This  will  be covered  by  budget  line  A-130. 

page  62 

ISSN 0254-1475 

COM(95) 529  final 

DOCUMENTS 

EN 

15 

Catalogue number  : CB-CO-95-591-EN-C 

ISBN 92-77-95903-7 

Office for Official Publications of the European Communities 

L-2985 Luxembourg