Bridging the generation gap. Will LEOs provide what GEOs couldn't?

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Telecommunications Policy, Vol. 21, No. 4, pp. 277-282, 1997 © 1997 Elsevier Science Ltd. All rights reserved

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Bridging the generation gap

Will LEOs provide what GEOs couldn't?

A C Arroio

New wireless telecommunication services provided by low earth orbit satellites offer many opportunities and challenges for national operators. But will they provide interconnection to the PSTN in underserved and rural areas? Thirty years ago, geostationary telecommunication satellites also prom- ised increased access but they have been unsuccessful in fully meeting demand in developing countries. This article identifies some of the key regulatory and policy Issues raised by LEOs and also examines the attempt to reach a common multilateral understanding at the WTPF-96. © 1997 Elsevier Science Ltd

A C Arroio can be contacted at the Univer- sity of Sussex, SPRU, Mantell Building, Falmer, E. Sussex, BN1 9RF (Tel: 44 1273 687 165; Fax: 44 1273 685 865; Email: A.C.M.ARROIO @ sussex.ac.uk).

The research on which this article is based was supported by the Brazilian National Research Council, CNPq and the Science Policy Research Unit (SPRU), University of Sussex. The author was a participant at WTPF-96, held in Geneva, Switzerland, October 21-23. The author gratefully

continued on page 278

Studying and promoting the connection between technological innovation and the diffusion of telecommunication services has become of central concern to policy makers everywhere. In ad- dition, for most developing countries, there is the issue of public access and universal service. Thus, regulators and national operators face many challenges both from unmet domestic requirements and from international service providers while at the same time having to learn to deal in an increasingly sophisticated environment.

Nationally, demand for business networks and advanced information services is allied to requirements for extension of the public network to unserved areas, accessibility for low- income users and interconnection. Ex- ternally, regulators are aware of the need to prepare for the introduction of new Low Earth Orbit Satellite systems (LEOs) which promise to provide both voice and advanced communication services at low cost. These systems are enticing: they offer to bridge the gap in

the pro-vision of services between developed and developing countries without "any significant investment by developing countries".] They are also expected to stimulate technological leapfrogging, providing "instant infrastructure" and enabling countries to pass over wireline network extension. 2 Last, but certainly not least, there is the seductive appeal of global interconnection.

Proponents of LEOs emphasize that, in contrast to the geostationary systems, they will provide service only as required, there will be no "planning for services that are politically expedient but may never be implemented for lack of resources". 3

Establishing communication infrastructure is "as simple as distributing the telephones that will be served by these systems". Transmissions using low or medium orbit satellites are thus quite independent of the wiretine network, many of the systems propose "fixed terminals" for public or private installed use (eg Ellipso ~ and Odyssey~).

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Table 1. System comparison by orbit (collated from Leite, F., 1996 and Noll, A. 1996. 4

GEO MEO LEO System Overview

Spectrum Resources Satellites 3 (for global coverage) Altitude 35.680 (km) Global Roaming not available (intemonnection ground stations (possible via

and satellites) interconnection PSTN Frequency Coordination medium (Complexity)

Telecommunication Antennas large multibeam Hand-held no Call Handover none Coverage huge (footprint) Transmission Delay noticeable to user (msec)

Estimated Costs Space Segment min/US$ -0.20 Ground Segment low Operational Cost and Complexity low

10--12 48-840

2000-10000 400-1401

yes yes

medium high

small small yes yes infrequent frequent large small

imperceptible imperceptible

-0.40 -1.00 med ium high-medium medium high

continued from page 277 acknowledges comments by Professor Robin Mansell. The views are those of the author and not of any organization or institution.

1Iridium Today, Fall 1994, 1(1), 10. 2Wright D and Taylor S A policy and regulatory framework for the mobile satellite services. Telecommunications Policy 1996 208 549-555. SMobile satellite systems operating in non- geostationary orbits using frequencies below 1GHz have become popularly known as 'Big Leos', even though not all of them use satellites in low orbits. Thai Satellite Telecommunications Company Limited, Exploring the Benefits--Bringing Global Communications Access to the Developing World. Journal of the Asia Pacific Telecommunity, 1996, 8(4), 44-47. 4Leite, F Global Mobile Personal Com- munications. Radiocommunication Bur- eau, International Telecommunications Union, March, 1996, 4; NolI, A M, The extraterrestrials are coming. Telecom- munications Policy, 1996, 20(2), 79-82. "Ackroyd, B, MEOs Versus LEOs...the Race for Mobility. Middle East Communi- cations, 1996, 13-18.

Furthermore, it is argued that due to the high orbit of geostationary satellites (GEO) a variety of restrictions and inconveniences occur such as echo and propagation time delays which degrade and confuse normal two-way voice communications. As the power required to send a signal the distance of 36.500 km is high, large terminals are necessary. Although advances in technology have reduced the size of a receiver to that of a small laptop, see for example the Inmarsat-M proposal, hand-held portability is almost impos- sible. LEO providers also argue that (GEO) communication equipment is much more complex in terms of flow control and routing and these systems cannot deliver "directly person to person and everywhere to everywhere personal communications services". 5 Table 1 illustrates some of the differences in the systems' architectures.

However, several countries have expressed apprehensions. These range from concern over issues of sovereign control of information flows and roaming, frequency spectrum management and reallocation, issues of access costs, hand-held terminal circulation, gateway authorization and the crucial question of internal network bypass. Guidelines for effective licensing are limited to a few established agreements

and regulatory models are practically non-existent. Considering the global nature of these systems and the sweep of policy concerns, the desirability of an international middle-ground for articulation is evident.

The mediator

Since the 1992 World Administrative Radio Conference, the International Telecommunication Union (ITU) has played a central role in relation to the spectrum and standards applicable to the low orbit telecommunication satellites. This involvement is especially important in relation to questions concerning frequency allocation and coordination, the establishment of interface standards, and handset stand- ardization. From a regulatory point of view, however, ITU initiatives were limited to a few regional meetings such as those held this year in Dakar, Brasilia and Singapore, and the organization of a privately financed Regu- latory Colloquium with some high pro- file but meagre industry and public operator participation.

Departing from traditional ITU conference procedure, whereby only delegates from member countries par- ticipate in formal plenary discussions,

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Table 2. International regulation (collated from Wright, D. and Taylor, S and ITU). e

Space Segment

Service Provision

GEO orbital position/frequency optimized first come-first served International/regional and domestic systems. Accounting authorities

Non-GEO frequency coordination/sharing/ limited allocations private provision of global services

Table 3. Domestic licensing (collated from Wright, D. and Taylor, S and ITU). 9

GEO Space S e g m e n t PTO/Signatories

Interconnection PTO

Gateway Stations PTO (feeder links)

User terminals not as relevant Communication services PTO/private

Non-GEO spillover of satellite footprint]licensing by one country may imply global licence negotiations with the PSTN operator or regulator. monopoly or competitive Telecom provision? Will satellite system use gateway in the country? approval of terminals and right to use them. exclusive relation between service providers space segment operator and local service provider? One stop shop service?

8Wright, D and Taylor, S 'A policy and refulatory framework for the mobile satellite services' Telecommunications Policy 1996 20(8) 549-555; International Tele- communications Union, The Changing Role of Government in an Era of Telecom Deregulation. Trade Agreements on Tele- communications: Regulatory Implications. 1995. Regulatory Colloquium, No. 5. ~Report of the Third Regulatory Collo- quium, The Changing Role of Government in an Era of Telecom Deregulation. Global Mobile Personal Communications Sys- tems (GMPCS). International Telecom- munication Union, Geneva, Switzerland 9-11 November 1994. 8Policy and Regulatory Issues Raised by the Introduction of Global Mobile Personal Communications by Satellite (GMPCS). Revised Report by the Chairman, Geneva, ITU, 23 October 1996. 9Wright, D and Taylor, S, op cff Ref 6; International Telecommunication Union, Regulatory Colloquium, op. cit Ref 6.

the organization recently co-ordinated a platform for multilateral dialogue between administrations and low earth orbit satellites service operators. The first World Telecommunications Policy Forum (WTPF), held in Geneva from 21 to 23 October, was attended by delegations from 129 member states and 70 industry sector members. The purpose of the forum was to discuss and exchange views and information on policy and regulatory issues raised by the introduction of mobile satellite systems.

Global Mobile Personal Communi- cations by Satellite (GMPCS) is the general heading encompassing both real-time voice and data coverage by satellite transmission (fixed and mobile, global and regional). Discussion, therefore, also bears upon service provision by geostationary satellite telecommunication where applicable. However, it is important to realize that LEOs have three distinguishing charac- teristics namely, global availability, mobility and private ownership which imply unique regulatory considerations and practice. 7 These differences are relevant to developing countries as they suggest that providers will need a highly competitive approach, empha- sizing different services and geographic areas, in contrast to previous wireless systems. Before looking at the topics covered at the WTPF, it is useful to

examine Tables 2 and 3 as these provide a brief comparison and review of the major policy issues and differences.

This presentation does not do justice to the variety of policy alternatives within each segment or to the implications of the linkages between the different options. The different cate- gories of licences are shown here merely to provide a framework for the discussions which took place at the ITU. No prescriptive or binding regulatory outcomes were intended as a result of the forum, nor did any voting on opinions take place. However, the Revised Report by the Chairman rep- resents a consensual agreement which must be taken into account when introducing the systems and therefore, to a certain extent, binds administrations and service operators to the principles agreed therein. 8

The WTPF

Five Opinions emerged from the meetings:

(1) Opinion No. 1--The role of GMPCS in the globalization of telecommunications: use of the systems by developing countries is endorsed, utilization cost is to be set at a level that will make the service widely available. However,

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l°lbid, p. 15. 11/bid~ p. 17.

this 'level' is not specified, leaving the Opinion open to interpretation. The systems should complement existing telecommunication infra- structures and technology transfer is also mentioned.

(2) Opinion No. 2--The shared vision and principles for GMPCS: this Opinion compromises a set of 10 'voluntary principles' dealing with items ranging from unauthorized use to universal access and interconnection. The most controver- sial, due to the range of policy and economic issues involved, refers to "user terminal and free circulation" (Principle 7). The idea is to facilitate the transborder use of terminals, through regional, class licences or blanket approvals, in order to achieve unrestricted international circulation of terminals and encourage global roaming. The issue is of first-order impor- tance to all LEOs as global mobility is being offered as a main attribute of the systems. Develop- ing countries expressed concern at surrendering national regulatory authority. See also Opinion No. 4.

(3) Opinion No. 3--Essential studies by the ITU to facilitate the introduction of GMPCS, to be developed by all three ITU Sectors concerning: compatibility between GMPCS and other radiocom- munications services (ITU-R); common standards for different systems (ITU-T) and assistance for developing countries in deciding on the appropriate measures to intro- duce GMPCS to the domestic public network (BDT). l°

(4) Opinion No. 4~Establishment of a memorandum of understanding to facilitate the free circulation of GMPCS user terminals (GMPCS- MoU). The MoU was the crux of the forum pitting the necessity of removing geographical con- straints, that is, national customs and duties applied to the circulation of mobile satellite terminals, against the sovereign right to regu- late and authorize the provision of telecommunication services. The document is intended to provide a framework for arrangements

concerning terminal circulation and would be regularly revised and up- dated. According to delegates from industrialized countries the MoU is a very good means to ensure that the same terminals can be used any- where in the world. Japan, France, the United Kingdom and the United States agreed there was no question of national sovereignty, the MoU should be signed in order that further studies could be carried out. Developing countries, mainly from Southeast Asia, Africa and the Middle East, questioned whether the document should be signed in the absence of any understanding of the full implications of GMPCS. Due in large measure to the unwill- ingness of these countries, but also to the necessity of consulting other government departments, such as customs administrations, signature of the MoU was postponed until the first quarter of 1997.

(5) Opinion No. 5--Implementation of GMPCS in developing countries affirms that the systems offer significant benefits to the public in developing countries, that GMPCS has the potential of narrowing the gap in the provision of telecommunications services between developed and developing countries and promises a checklist of factors which administrations should take into account when introducing these services. Particular attention is to be paid to issues related to tariffs and interconnection.~ i

As the conference progressed, it became apparent that while some of the most sensitive concerns expressed by the developing countries' contin- gent were being touched upon, mainly voiced through the African group (represented by Senegal), Southeast Asia, China and Cuba, much of the discussion was being overtaken by simple editorial corrections and suggestions on the draft of the Opinions. The delegate from the United Kingdom objected to the in- clusion of the term "transit tariffs" while Indonesia wanted to insert the expression "regional" whenever the term "global" appeared, and so forth.

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laTeledesic Conference material. 13Mansell, R and Hawkins, R Mobile communication systems: issues and prospects in Sharing spectrum in the digital age -WARC-92. Communication Manual Pub- lished by the IIC and the Friedrich-Ebert- Stiftung. 1991, p. 22.

Undoubtedly some of the modifi- cations represented a real improvement over the draft version, for example the African delegation proposed the re- moval of the phrase "and operate inde- pendently from the ITU" in relation to the operation of the MoU on free circulation. This provides developing countries with an alternative multilateral forum in which to discuss trade in telecommunication equipment. Indeed, all developing countries agreed on the necessity for further studies within the framework of the organization. Saudi Arabia also proposed that the ITU should play a larger part in discussions revolving around international trade in services and equipment within the World Trade Organization. For developing countries, which often lack the technical expertise and information to tackle these issues, increasing reliance on the ITU to provide a balance between commercial and national interests is apparent.

Substantive issues

Service operators, on the other hand, emphasized the need for transparent, non-discriminatory and streamlined procedures. According to one represen- tative, "the technology is inherently egalitarian and licences should not be used to discriminate against competing technology"J 2 As seen in Table 3, five different types of permit are relevant for GMPCS: space segment, gateway, licensing to end-users, that is service providers, interconnection and that of user terminals. During the WTPF, discussions centred on licensing of portable terminals and four possible scenarios concerning arrangements for type approval were envisaged:

(1)

(2)

national licenees to be awarded on a country by country basis, to individual systems; blanket approval (class licences) where recognition is extended not to the licensing decisions of other governments, but only to type- approval decisions made by the GMPCS operators themselves. This 'delegative approach' is currently in use in the US;

Comment

(3) mutual recognition such as the re- gime operating for the GSM digital cellular systems according to which a terminal type approved in one EU country is automatically con- sidered to be licensed in every EU country;

(4) no customs or other undue formali- ties, that is the unconditional, free international circulation of user terminals based on international type approval and/or registration.

It appeared that while most delegations expressed some good-will towards mutual recognition of type approval, there was no consensus on the subject of customs duties and free circulation, a crucial concern for systems operators. The sensitive nature of the topic, involving as it does different sectors of national policy-making, points to the probability of a country- by-country approach being agreed in most developing countries rather than by international arrangement.

Closely related to this issue is that of standards and open versus proprietary specifications. As the Korean delegate stated "mutual recognition is meaning- less if it just means accepting uni- laterally standards imposed by the developed countries". Others, such as China, Germany, France and Brazil, emphasized the need for "harmonised open standards for world-wide com- petition in non-discriminatory con- ditions". Still others argued that any discussion of terminals should not be held within the framework of the ITU but left to industrial fora.

Whatever the venue, it is important to observe that "developing countries clearly have a user stake in a standard- ized environment for mobile services in order to prevent their investment being "locked-in" to the products of a single foreign supplier ''~3. Moreover, inter- operability among manufacturers' equipment is essential for interconnection to different land mobile system although the vision of a single global standard for roaming between dis- tinct constellations is. according to operators, "a long way off".

A final issue which provoked con- troversy at the WTPF concerns the obligation of service operators in the originating country to provide both

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14de Selding, P ITU's endorsement of systems pleases global mobile industry. Space News, 1996, 7(42), 1, 32. lSFor a careful review of the pros and cons of international spectrum allocation and management, specifically as it concerns developing countries see Wijkman, P M Managing the global commons, Inter- national Organization, 1982, 36(3), 511- 536; Also, Smythe, D, The orbital parking slot: syndrome and radio frequency management. Quarterly Review of Economics and Business, Summer 1972, 7-17. 16Don MacLean, Head of the Strategic Planning Unit, ITU. Interview granted on the 25 October, 1996. ~TUNESCO, 1972. For the common bottle- necks in harnessing the technologies potential, see Hudson, H, Communi- cations Satellites, their Development and Impact. The Free Press, New York (1990).

authorized and non-authorized traffic data upon demand. The African group, backed by the Arab nations, Pakistan, Bangladesh, Russia and China re- quested that an Opinion be inserted specifying an obligation to provide information concerning traffic levels for national fiscal reasons. They emphasized that it is only the volume of traffic they need, not the information itself. Most industrialized countries followed the United Kingdom's lead, arguing strongly against this measure as it would involve "commercially sensitive information". A compromise was fi- nally reached in the form of an ad- dition to the memorandum stating that LEOs providers should supply the "best available traffic data" to local authorities who ask for it and agree to keep the information confidential. ~4

Conclusion The question posed in the title of this article does not seem to have any ready-made answers. Tables 2 and 3 point to the fact that the level of uncer- tainty in the usage of geostationary satellites, both technically and politically, is almost insignificant. Inter- national decision making is entrenched in over 20 years of radio-coordination, and service provision does not usually raise any national sovereignty contro- versy, t5 Technologically these systems are proven and can enjoy the benefits of state-of-the art technology. LEOs, on the other hand, are as yet untested, market size and scope is unknown, the technology uncertain and, as could be glimpsed through the review of the

discussion at the WTPF, the regulatory risks are high. The concrete potential and implications of the systems are not yet clear but according to the Head of the Strategic Unit at the ITU, Don MacLean, the LEOs systems should be seen as "a symbol of the way things are going", and therefore mobility is the upshot. 16

What has not yet emerged con- clusively is the link between universal access and low orbit telecommunication provision. There is considerable historical and empirical evidence that geostationary satellites have been unsuccessful in fully meeting public demand in developing countries. Over 20years after a UNESCO Report stated that "there are some development goals that can be served in this way and in some cases in no other way", the vast majority of the world's population still has no access to a telephone line.~7 Thus, LEOs operators are courting the developing world promising wireless integration into the global information highway and universal access in exchange for licensing agreements.

The outcome of national licensing processes necessarily involves a strategic balancing of priorities. However telecommunication coverage will only be extended as widely as possible if explicit regulatory policies are formu- lated and implemented. Attention to the extension of the public network, a pragmatic and careful trade-off between technological innovation, industrial policy and public equity, are probably steps in the right direction towards bridging the generation gap.

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Bridging the generation gap. Will LEOs provide what GEOs couldn't?