EC in row over first ever award of satellite licences award

The European Commission is expected to hand exclusive new bandwidth licences to two satellite operators tomorrow, but the regulator has come under fire from some parts of the industry over the deal.

The Commission is scheduled to announce the successful applicants to transmit signals into Europe over the "S band" spectrum, which is reserved for satellite systems.

Two senior industry sources said the licences will be won by European operators Inmarsat and Solaris, which is a joint venture between Eutelsat and SES Astra. This leaves the other two bidders, ICO-Global and TerreStar, out in the cold.

The "S band" is a new frequency bandwidth and is yet to be used for consumer services in Europe. The successful companies are expected to develop new technologies to transmit over the frequency.

Among the ideas for the little-used spectrum included potential communication tools for the emergency services, according to one satellite executive. This could involve setting up communications infrastructure at a disaster site or providing data to police or firemen.

It could also be used to provide mobile television services, such as those pioneered in Asia, to passengers in a moving car.

The spectrum can even transmit information to mobile phones, although that would need significant support infrastructure on the ground, the executive said.

The EC ruled that it would hand out licences for the "S band" for an 18-year period last July, the first time the Commission has controlled which satellites companies could send signals in Europe.

Previously the role has been carried out by the International Telecoms Union (ITU).

Industry figures, who did not wish to be named, yesterday slammed the Commission's decision to hand out licences to a limited number of operators as anti-competitive.

"The general view is that two will be selected, creating a duopoly for 18 years. This is in light of the fact that you could fit up to 10 operators on the bandwidth with the proper co-ordination," one said.

The source argued that it could be vital for transmitting new technology developed by companies other than those that hold the licences in the coming decades. "This could be extremely damaging to European citizens who may not get the benefit of new technologies that may appear within the 18-year cycle," he said.

There have also been complaints over the Commission's taking control from the ITU, as well as questions raised over the selection process for the successful applicants.

"The EC has not highlighted who will be judging the applications submitted by satellite operators, nor have they highlighted how the judges will be selected," one source said.

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