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15 November 2022

FCC formally recognizes arrival of satellite into the telecoms mainstream

By Luc Braun

The USA’s  telecoms regulator, the Federal Communications Commission (FCC), last week announced plans to split its International Bureau into two new divisions, the Space Bureau and the Office of International Affairs. This recognized the growing importance of satellite services within mainstream telecoms. Space affairs had previously been handled within its own sub-division of its International Bureau.

FCC chair Jessica Rosenworcel made the announcement on November 3, citing the explosive growth of the satellite industry, and resulting workloads, exemplified by operating licence applications for an additional 64 000 satellites over the past two years.

Rosenworcel also emphasizedthe need to streamline resource allocation to fulfill “statutory obligations and better support the satellite industry.

More broadly, the creation of the Space Bureau signals a marked shift in the regulator’s perception of satellite operators. his is related to the transformation sweeping the satellite industry as a result of the development of relatively affordable low earth orbit (LEO) satellites, which has seen this orbit accessible to commercial ventures for the first time. Up until this point, only medium earth orbit (MEO) and –  making up the lion’s share of commercial satellites- geostationary earth orbit (GEO) were open to commercialization.

MEO and GEO, however – being further from the earth’s surface than LEO – both come with greater inherent latency, which severely restricts connectivity use cases, mainly to mobile connectivity for very remote areas and point-to-multipoint broadcasting such as live broadcasts and TV services.

In the past, GEO was favored because, at around 40,000 kilometers above sea level, fewer satellites are needed to provide coverage over the same surface area than from lower orbital planes. It is possible to offer coverage of most of Earth’s surface, except for the polar regions, with only three satellites.

In contrast, for commercial services in LEO, many more satellites are required to maintain seamless connectivity, with constellations numbering in the hundreds and thousands, rather than in the single digits. The dogma for these constellations is quantity over quality, whereas it was the opposite in previous decades.

The single most important factor enabling the exploitation of LEO, then, has been the dramatic reduction in payload cost over the past decade. Launch costs had previously proved prohibitive but now, thanks to the likes of SpaceX, the deployment of so-called mega-constellations is feasible.

LEO constellations suffer far less than EO, and most MEO, services from latency issues. This means providers can offer a wider range of services than on GEO satellites, such as real-time Internet connectivity, potentially in direct competition with terrestrial networks. Previously, GEO and terrestrial networks only competed in television broadcasting. Now satellite players could achieve the latency required to offer broadband services and move into the traditional network operators’ ancestral turf.

However, there are still performance advantages for terrestrial broadband where it is practical to lay fiber, so the , almost uncontested niche for LEO satellite operators is still rural connectivity Here, they find themselves neither in competition with the traditional terrestrial players or with GEO players, both of which have imperfect business cases in ultra-rural areas (increasingly including potentially high-value IoT applications that need full coverage).

The opportunity stems from the combination of challenging geography and small customer bases, which have made the case to deploy high-quality broadband and mobile services very challenging. Rural connectivity is likely to serve as the LEO industry’s core business, from which it will expand outwards into other markets such as in-flight and on-ship connectivity and some IoT services.

It is this dynamic that the FCC recognizes in its creation of the Satellite Bureau. Combining this with growing confidence in the capabilities of LEO broadband providers, the move signals the FCC’s readiness to employ LEO services to fulfill domestic broadband policy goals.

This stands in stark contrast to an FCC decision, championed by Rosenworcel earlier this summer, when it was decided once again to strike down Starlink’s potential $850m contract under the USA’s Rural Digital Opportunity Fund (RDOF), which aims to fund expansion of broadband services in underserved areas. Ongoing appeals and counter-appeals have also seen fellow satellite operator Inmarsat, currently in the process of merging with UK-based Viasat, get involved to try and deny Starlink access, arguing Starlink’s LEO technology was not proven to the minimum quality of service requirements set out by the FCC for contract awards.

SpaceX, on the other hand, argued its technology was still evolving and improving, and that in any case, RDOF quality of service, in particular speed, requirements would not take effect for three years.

Earlier, in 2021, concerns over deployment strategy were raised by the National Rural Electric Cooperative Association (NRECA), which said SpaceX was looking to snap up subsidies for locations it would have planned to expand into anyway, RDOF or not.

It should be noted, however, that the NRECA is a body representing the interests of traditional rural Internet service providers and is in direct competition with LEO satellite operators for government subsidies, seeing as rural broadband offers a very limited commercial case for fiber roll-out. . Inmarsat, on the other hand, stands to benefit from any delay to SpaceX’s successful monetization of its Starlink constellation, as it plans, through its soon-to-be subsidiary Viasat, on launching a LEO constellation soon.

Against the backdrop of these disputes, the wording of the FCC decision to separate international affairs from the satellite industry seems to imply a shift in thinking at the top of the FCC. The announcement says: “By establishing a standalone Space Bureau the agency aims to better fulfil its statutory obligations and elevate the significance of satellite programs and policy within the agency to a level that reflects the importance of the emerging space economy. By separating satellite policy from the International Bureau, the agency acknowledges the role of satellite communications in advancing domestic communications policy and achieving US. broadband goals.”

Perhaps Rosenworcel was convinced by some of SpaceX’s arguments, brought forward during the most recent appeal of the FCC’s August decision against Starlink, or perhaps the FCC is readying its operations for the onslaught of additional satellite-related bureaucratic and regulatory work. An explicit mention of the satellite industry in relation to domestic broadband policy could be seen as a subtle hint towards SpaceX’s, and others’, future consideration for government programs such as the RDOF.

On the other hand, the industry’s expected growth is sure to come with additional strain on the agency’s resources and might be better managed in this way. Additional workloads seem to be on the horizon.Just a day prior to the Space Bureau announcement, on November 2, the US Government Accountability Office (GAO) released a report calling on the FCC to overhaul its satellite launch proposal review process.

Currently, all federal agencies, like the FCC, under the National Environmental Policy Act (NEPA), are obligated to prepare an environmental assessment or an environmental impact statement, or both, unless a categorical exclusion applies. Categorical exclusions may apply when the relevant agency has already performed environmental impact assessments for similar projects, and the results are transferable. For projects where a categorical exclusion applies, only certain extraordinary circumstances, or edge cases, have to be evaluated instead of a full review.

The GAO report found that the FCC had not documented its decision-making surrounding the licensing of large satellite constellations sufficiently, and, in practice, the FCC has been found, ever since a 1986 decision, to categorically apply categorical exclusions to large satellite projects, with extraordinary circumstances only related to impacts on the earth’s surface. For example, projects could not see the construction of ground facilities in officially designated wildlife preserves.

The reasoning behind the blanket application has not been reviewed since 1986, and all the while the potential impacts of satellite projects have proliferated. One example named in the report concerns the effect of exhaust emissions from more frequent rocket launches which can both contribute to climate change through greenhouse gas emissions and degrade the still-recovering ozone layer.

Another example concerns the crippling of ground-based astronomy, both in optical and radio frequency bands. Satellites, especially in LEO, already pose a challenge to astronomical observations. While software and carefully chosen observation time slots can mitigate some of the impact of bright satellite streaks crisscrossing through scientific images, the expected explosion in LEO satellite numbers would be too much to cope with. In addition to the issues in the optical range, satellite communications will severely impact telescopes in the RF range, one of the most important frequency bands for astronomy and astrophysics.

Perhaps more impactful for the satellite industry is the growing concern about debris in LEO. Past spacefaring activity, from government to commercial projects, has left a considerable amount of space junk in this orbit. At the relative speeds common in orbit around celestial bodies, even small pieces of debris such as screws, not to mention full-sized retired satellites and rocket parts, can turn into deadly shrapnel for other satellites and spacecraft. The fear is now that collisions, whether between small pieces of debris – or between a derelict Russian military satellite and an active communications satellite, as happened in 2009 – multiply the number of satellite-killing projectiles in orbit, thereby increasing the chance of future collision.

Collisional cascading, or the Kessler Syndrome, is the name given to a runaway effect, whereby, given a critical mass/ number of objects and debris in LEO, collision-causing debris would be introduced faster than it is removed through atmospheric drag. The explosion of satellite numbers and the introduction of a massive number of new, inexperienced satellite players, and little regulatory incentive so far, but also a limited capability to detect dangerous objects below certain sizes, pose an imminent threat to any and all human activity in space.

Recommendations from the GAO report – which the FCC accepted and is in the process of implementing – include an immediate review of the decision to apply categorical exclusions to satellite constellations, the establishment of a process for future periodical reviews, and the publication of the decision-making process around extraordinary circumstances.

In this vein, it seems the FCC has finally decided to take a more active approach to regulate space activity. Recently, at the end of September, the FCC updated its guidelines, mandating that satellites be de-orbited at five years after their retirement. Before, this timeframe was 25 years.

The commercial exploitation of LEO has driven the growth of the satellite industry over the past years. It has reached a critical size, where the previous lax approach to regulation is no longer sustainable and can in turn seriously cripple the long-term economic health of the market, not to speak of the dangers to science and the climate.

Similarly, the growth has also led to the development of new technologies opening up new commercial applications and use cases. The most prominent example, and perhaps the most significant for the wireless communications market, is the provision of low-latency satellite Internet services. While this technology is not yet fully proven, improvements thanks to feedback from active deployments, will be made, which will put satellite communication services firmly on the map.

Terrestrial service providers should brace for the arrival of space invaders into their traditional turfs, while consumers, especially in rural areas, should, for one, welcome their new alien service providers. Satellite Internet is a cost-effective solution to the digital divide, though it remains to be seen if it can keep pace with technological innovation on the ground. Of particular concern would be remote-control and low-latency applications, which will be very difficult to provide due to satellite networks’ latency floor.

In the future, the issue of rural connectivity might have to be revisited, though for now, while many rural areas are still largely excluded from the most basic benefits of the Internet and connectivity, LEO satellite networks are an important tool for rural broadband, one which the FCC has indicated it is willing to seriously consider for domestic projects.

In any case, the FCC’s restructuring comes at a pivotal time for the space industry, and it should be viewed both as an acknowledgment of the industry’s potential for good, and also a recognition of the gravity of the situation, which could see the space industry come crashing down if not handled carefully.