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Winning the Next Space Race

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Winning the Next Space Race

April 6, 2023

Technical innovation in the delivery of the Internet by satellite has the potential to close the digital divide and improve Internet services for customers in the United States and around the world. With China planning to launch its own “megaconstellation” of internet-providing satellites into low Earth orbit (LEO), the race to build internet infrastructure may be a new space race. As the Federal Communications Commission (FCC) considers new rules governing spectrum sharing, the United States should recognize the need to encourage competition and coordination among providers to help the nation compete with China and continue to lead the world in satellite internet.

Next-generation LEO satellite systems can provide much higher throughput broadband across the United States, granting those without Internet access another option for cost-effective high speed internet. Satellite broadband could bring many Americans online who would otherwise remain stuck on the other side of the digital divide, especially in rural areas that are difficult to serve with traditional fixed network infrastructure.

A major downside to satellite internet is that it is incredibly costly to construct. Because it takes thousands of satellites working together as part of a “constellation,” building a satellite network has an enormous up-front expense. SpaceX’s Starlink, for example, currently has about 4,100 satellites in orbit, with the cost per satellite sitting somewhere north of $500,000—and that doesn’t include the cost to get them into orbit.

While American companies are working to keep costs manageable and their services profitable in a free market, the Chinese Communist Party (CCP) is dedicated to building its own “megaconstellation.” Known as “Guowang,” the new state-owned project could put more than 13,000 satellites into LEO over the next few years.

While China is certainly building its own satellite internet network in part to provide service to some of its more rural areas, the greater threat is the extension of the CCP’s Belt and Road Initiative. Using infrastructure projects and financing as a series of carrots and sticks, the CCP has rapidly expanded its sphere of influence in developing areas. One important piece of China’s exercise in sharp power has been telecommunications networks. According to one report in Foreign Policy, Huawei—a CCP-backed telecom conglomerate that was banned in the United States for national security risks—has built 70 percent of Africa’s mobile networks.

In areas of Africa and Latin America that lag behind in broadband penetration, satellite internet is rapidly becoming the best option. The danger is that China will use state backing to deploy networks in these areas and then use their newfound control over these developing countries to further expand its sphere of influence and control.

Fortunately, American companies are investing heavily in building out their own networks. These companies are perfectly positioned to counter this potential malign influence of the CCP. After all, while Huawei and the CCP continue to provide internet equipment and services to Russia, it was Starlink that came to the aid of Ukraine after its invasion.

The competitive environment in the U.S. has driven innovation in space at a pace not seen anywhere else in the world. But with more companies coming online and beginning to launch new constellations, coordination will only become more important to the success of American industry and innovation in the rivalry with China. One agency is already taking this issue seriously and beginning to promote this emerging technology: the Federal Communications Commission.

As the primary telecommunications regulator, the FCC has jurisdiction over issues related to spectrum use and coordination of this limited resource. With so many satellites being launched and emitting signal, the FCC has an interest in ensuring a sustainable future for the industry. Most recently, the Commission announced an agenda item for its April open meeting on spectrum sharing rules for non-geostationary orbit, fixed-satellite service systems (NGSO FSS).

In summarizing the Report and Order, the Commission wrote:

In this Report and Order, we revise Commission rules governing spectrum sharing among a new generation of broadband satellite constellations to promote market entry, regulatory certainty, and spectrum efficiency through good-faith coordination. Specifically, we adopt rules clarifying protection obligations between non-geostationary satellite orbit, fixed-satellite service (NGSO FSS) systems authorized through different processing rounds by using a degraded throughput methodology, and subject those protections to a sunset period. After the sunset period, new entrants authorized in later processing rounds will share spectrum on an equal basis with earlier-round incumbents. We also clarify that all NGSO FSS operators licensed or granted market access in the United States must coordinate with each other in good faith, regardless of their processing round status, and we explain our expectations for information sharing during this good-faith coordination.

The Commission further explained that the Report and Order would, among other actions:

  • "Limit the default spectrum-splitting procedure to NGSO FSS systems approved in the same processing round, before sunsetting.
  • Require NGSO FSS systems approved in a later processing round to coordinate with, or demonstrate they will protect, earlier-round systems.
  • Require all NGSO FSS grantees to coordinate with each other in good faith.
  • Address conflicting views concerning 'good faith' coordination and information sharing as part of good-faith coordination.
  • Apply the rule changes adopted in this Report and Order to all current NGSO FSS licensees and market access grantees, as well as pending and future applicants and petitioners."

In other words, the FCC is proposing an order that would clarify how operators must share spectrum between existing and future satellite internet providers, establish rules for companies to coordinate as they build out infrastructure to provide satellite internet services, and elucidate what the Commission means when it requires companies to act in good faith to address discrepancies.

Given that the FCC is currently balanced with two Democrat and two Republican commissioners, it is very likely that this proposal will be passed unanimously. While none of the current commissioners have spoken publicly about this specific order, Chairwoman Jessica Rosenworcel’s comments on the original Notice of Proposed Rulemaking on spectrum sharing rules for NGSO FSS systems is indicative of the Commission’s thoughts on this issue.

Now a new space age beckons. It means more satellites, more possibilities for exploration, and more opportunities for entrepreneurial activity in our skies. Already we are seeing rockets for space tourism and new constellations that can expand broadband to the furthest reaches of the globe. To help usher in this new era, the Federal Communications Commission will need to make changes. … We want to make sure they create a level playing field for new competitors.

Domestic competition is essential to ensuring the primacy of American companies in this new industry. But domestic coordination is just as important. Space may be big, but low-Earth orbit is surprisingly small and growing more crowded by the day. To forestall issues, it is crucial that the United States create clear rules of the road so that we do not get in our own way. It is heartening to see the FCC take a strong lead toward promoting both competition and coordination, but much remains to be done. Other agencies should take note and consider the ways that their licensing regimes and other procedures could promote American supremacy in satellite internet.

If the first Space Race was a race for the Moon, then the second one is a race for low-Earth orbit. To win a second race, the United States will need a robust and competitive satellite internet market in which all participants are willing to coordinate on areas such as spectrum sharing. With the right approach, as satellite internet constellations continue to grow and more players enter the market, the United States will remain the leader in good-faith cooperation just as it is the leader in competitive innovation.

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