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Indian Space Industry Unites Against Spectrum Auction, Advocates for Administrative Allocation

Several industry bodies as well as space based communication companies have responded to TRAI, positioning themselves against the auctioning of spectrum.

“Exclusive assignment of satellite spectrum through an auction mechanism is technically impractical, difficult to implement, and likely to lead to fewer new satellite services and technologies being available in India and a less competitive industry overall,” the Satcom Industry Association (SIA) said in its response to the Telecom Regulatory Authority of India (TRAI)’s consultation on space-based communications. “There is simply no good policy reason to put satellite spectrum into the hands of limited players when that spectrum is technically capable of being used by multiple players under well-established principles of international law,” it argues further. 

Space-based communication companies in India and industry associations are unanimously against the auctioning of spectrum which is the process currently used to allocate spectrum to telecom companies. Instead, they suggest that an administrative allocation process should be used for satellite communication services. Here are the key arguments made by three industry bodies—SatCom Industry Association (SIA) India, Indian Space Association (ISpA), and Global Satellite Operators Association (GSOA) and Indian aerospace startups— Dhruva Space and Xovian Aerospace.

No need for exclusive assignment of spectrum:

[Note: TRAI asked this in reference to higher frequency bands such as C, Ku, and Ka spectrum bands.]

According to Dhruva Space, none of the frequency bands should be assigned exclusively. “There is adequately established precedence that multiple satellite systems can co-exist in the same frequency band in a coordinated manner, as per the [International Telecommunication Union’s] Radio Regulations,” the company says. Dhruva Space argues that the principle governing spectrum management is fair and equitable use of spectrum by all. This, it argues, is fundamentally opposed to the idea of giving “exclusive” rights of spectrum to any single or group of operators. Further, it points out that exclusive allocation promotes a “monopolistic or at best a cartel-based approach by service providers as they have exclusive rights to a certain spectrum band.” 

Other players such as Xovian Aerospace, SatCom Industry Association (SIA) India and Indian Space Association (ISpA) also stand firmly against exclusive allocation of spectrum. Of these, SIA India highlights that granting exclusive access to spectrum is incompatible with international practice since no other country pursues exclusive assignment of spectrum. It says that TRAI itself has acknowledged that three countries have tried a form of competitive allocation in connection with some satellite orbital resources (Brazil, Mexico, and the United States) but all three have abandoned it in favor of administrative allocation.

Similarly, IsPA notably points out that any attempt to create exclusivity by dividing the satellite spectrum will render it virtually unusable for the operators. It says that in case spectrum is exclusively allocated (auctioned), any enterprise willing to provide services in India would be, “uncertain about its investments since it could never get assurance whether it could acquire the same spectrum as required by its satellites.”  

No need to distinguish space-based communication services into different classes:

All the companies/ associations were largely against the categorization of space-based services. SIA India mentioned that satellite spectrum allocations are inherently flexible. The same spectrum can be used for Direct-to-Home (DTH) on one satellite and for internet access or mobile backhaul on another satellite, the actual application of a satellite at any given time depends on customer demand. As such, it would be artificial to categorize satellite spectrum for different classes of service. 

Xovian Aerospace adds that if the need for the categorization of the services arises the categorization of the services could be done based on the application which the industry plater is targeting eg: internet connectivity, earth observation, broadcasting Etc.

Eligibility for gaining access to satellite spectrum:

Xovian Aerospace argues that the spectrum for satellite communication should be assigned through an administrative allocation approach.  A robust mechanism should be in place to provide all the industry players an equal and fair chance of participation in the administrative allocation process irrespective of the availability of any existing license. 

Global Satellite Operators Association (GSOA) mentions that there is a need for some minimum eligibility criteria for administrative assignment” to deter speculative application. (Note: speculative applications could refer to instances where entities obtain or seek to acquire spectrum licenses to hold or trade them for financial gain, rather than immediately deploying services or infrastructure.) It suggests that the applicant should hold a unified license (UL) and should be able to demonstrate its compliance with the ITU [International Telecommunication Union] Radio Regulations.

 Practical limits to how many satellite systems can operate in the same frequency range:

[Note: TRAI asked this with specific mention of  Non-Geo Stationary Orbit (NGSO) satellite systems. NGSO refers to a type of orbit used by satellites in which the satellite is not stationary relative to the surface of the Earth.]

 According to Dhruva Space, there is no practical limit on the number of NGSO satellite systems in low earth orbit that can work in a coordinated manner on an equitable basis using the same frequency range. Except for certain instances wherein different satellite networks/systems have the same coverage area simultaneously, which could lead to interference issues. It says that Article 9 of the Radio Regulations provides adequate measures for coordinating the use of NGSO satellite systems in the same frequency bands. Similarly, Xovian Aerospace mentioned that the ITU (International Telecommunication Union) Radiocommunications Bureau has started an online process to facilitate application requests and interference reporting. The exact implications of this situation are not yet fully analyzed on a large scale. 

ISpA, on the other hand, suggests exact limit on the number of NGSO systems that can operate on the same frequency range will depend on factors such as— the frequency bands used, the satellite orbits, the power levels, the antenna beam widths, and the degree of frequency coordination among the various systems, among others.

Terms and conditions for assignment of spectrum for user and gateway links: 

Discussing the rollout period for satcom services, Dhruva Aerospace pointed out that emerging enterprises may require a longer period to build and establish space assets after having clarity on the assignment of spectrum. Hence, roll-out obligations should be such that within 3 years of spectrum assignment, if services are not rolled out, the spectrum should revert back to the Department of Telecommunication (DoT). 

ISpA on the other hand, suggested that there should be a condition that the satellite service provider start commercial service in the country with its satellite constellation within a year of the assignment of spectrum, failing which its spectrum should automatically revert back to the Wireless Planning & Coordination (WPC) Wing of the DoT. It also suggests a minimum license period of 10-15 years, with the possibility of annual renewal.

Rollout obligations may create unnecessary burdens for satcom providers:

GSOA believes that rollout obligations (like the ones asked for by Dhruva Space and ISpA) are a regulatory measure typically used to address the shortcomings of terrestrial operators, who tend to focus their network deployment in revenue-generating areas. It argues that satellite services aim to fill the gaps left by terrestrial networks and says that imposing roll-out obligations on satellite service providers, “may create unnecessary burdens and obstruct the efficient deployment of satellite networks.” 

Instead of rollout obligations, GSOA suggests that a flexible regulatory framework should be established for satellite services focusing on facilitating deployment to address coverage gaps and enhance connectivity for unserved or underserved areas.

Charging mechanism under administrative allocation:

ISpA suggests the following factors that should be considered when creating a charging mechanism— 

  • Cost of managing and regulating the spectrum
  • How the fee will affect costs for end users: Higher fees would drive up costs for the average person and adversely affect connectivity. 

GSOA on the other hand,  suggests that the government should solely focus on covering administrative costs while for the latter, it should charge 1% of the adjusted gross revenue (AGR) as a fee or waive it “since this spectrum is used primarily for connecting the unconnected.”

Using international spectrum charges as a benchmark for administrative allocation:

SIA India thinks that India can draw from the experiences of other jurisdictions to decide how to charge for satellite spectrum. It explains in other parts of the world some (the United States and the United Kingdom) have chosen a cost recovery model whereas others (Canada and Australia) have implemented charges that vary by the amount of spectrum allocated to an entity. SIA says that all these countries have lowered the fees charged for satellite services in recent years for a range of factors including “benchmarking their costs against their international peers.”

It says that India should bear in mind that its gross domestic product (GDP) per capita is lower than the countries mentioned above and should ensure that spectrum fee is, “ reasonable, invites investment, and is not disproportional to the revenues that service providers can ultimately expect from end users.” SIA says that it would not be unreasonable to adopt TRAI’s recommendation of charging 1% AGR as a spectrum fee for satellite services.

All associations don’t agree with SIA India’s suggestion, ISpA and GSOA think that India needs to create its own benchmarks. GSOA says that while India should consider international benchmarks, it is essential to “carefully select the data points, considering markets with similar needs and stages of development.” It believes that comparing India’s spectrum pricing to markets with comparable demand and progress will provide a more accurate and relevant benchmark for spectrum pricing.

Using auction prices for IMT (international mobile telecommunication)/5G services as the basis for valuing spectrum for space-based services

Dhruva Space: The company argues that telecom service providers using terrestrial spectrum can afford auction models economically as the revenue generation and existing user base is very large. It explains that satellite services only earn 0.2% of the mobile operators’ revenue. Using IMT/5G services as a benchmark for auction prices would be like, “treating unequals on the same footing, which is a violation of the fundamental right to equitable treatment,” it says.

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