The regulatory challenge of LEO satellites

Sep 10, 2023 | Work Projects

Incyte Consulting has been working in many jurisdictions to help regulators address the regulatory challenges of low earth orbit (LEO) satellites. With Incyte’s assistance NICTA, the regulator in Papua New Guinea, has recently launched a public consultation to open up some of the issues associated with licensing and regulation, particularly the potentially disruptive impact on existing markets and on legacy regulation such as universal service funding. Incyte has also been working with the governments of Ascension Island and the Falkland Islands to develop licensing frameworks appropriate to their particular situations.

LEOs offer the tantalising prospect of advanced broadband services being available everywhere and without the need for massive investment in traditional fixed line infrastructure. But there are regulatory challenges. For one thing, LEOs are not regulated and therefore make neither discernible commitment nor financial contribution to national electronic communications objectives. They could change or withdraw service or increase prices at any time without any regulatory constraints or consequences. This makes users vulnerable unless LEOs fit within a carefully constructed national licensing regime.

There are two other fundamental concerns. The first is relevant to low and middle-income nations, where the primary focus is on achieving affordable broadband. The UN’s Broadband Commission has set an affordability target of 2% of monthly gross national income (GNI) by 2025. However, Starlink’s cheapest package costs $90 per month which is nearly 40% of the monthly GNI of Papua New Guinea.

The second issue is relevant to small and remote territories, particularly to island economies and especially those that are not served by submarine fibre cables. Here LEOs may be attractive because they offer the possibility of enhanced broadband services at prices far below the costs of traditional fixed line infrastructure. However, the migration of users to LEOs can undermine the fragile economics of terrestrial networks in these locations, potentially leading to the loss of other services such as mobile, fixed line and emergency services. On Ascension Island, for example, the introduction of Starlink services (even when using its $200pm roaming tariff) has led to a mass migration of users away from the broadband services of the island’s only terrestrial communications provider, Sure South Atlantic, putting the future of that company and the island’s other communications services in jeopardy.

Each country, and potentially different regions within a country, faces different challenges. It is critical that the national regulatory framework is designed holistically to harness the power of LEOs to meet these challenges and also to ensure that LEOs do not undermine other technologies that are or could also be part of the solution.