Sat-ND Special: WTO Agreement
Date: Mon, 17 Feb 1997 01:50:26 +0100
From firstname.lastname@example.org Sun Feb 16 20: 08:17 1997
Sat-ND Special: WTO Agreement
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ANOTHER U.S. VICTORY?
The World Trade Organisation (WTO) on Saturday finally reached what was
described as a "landmark pact opening up most of the world's $600 billion
telecommunications market and hailed as offering a major boost to the
international economy." More than 60 countries, accounting for over half the
world's population, made commitments to improve access to their markets for
telecommunications services. The agreement encompasses over 99% of the
telecommunications revenues generated by WTO member countries, and well over
90% of overall global telecommunications revenues.
Under the accord, signatory states will open up long-protected government or
private national monopolies to competition from both foreign and domestic firms
based on commitments subject to WTO rules.
Probably the simplest and cheapest way to create a telecommunications
infrastructure in new territories is to use satellites, especially those that
will work in the Ka-band (see below.)
It is quite interesting to watch the reactions. While U.S. Trade
Representative-designate Charlene Barshefsky said the pact would create up to a
million new U.S. jobs, EU Trade Commissioner Leon Brittan expected just a
massive bounce to firms around the globe producing high-technology telecoms
equipment. What about Europe then, Mr Brittan?
The U.S. industry was, interestingly, more enthusiastic. "We commend the WTO
for its work in getting us an international trade agreement that opens markets
and increases foreign investment," the Global Information Infrastructure
Commission, a U.S. telecoms industry coalition, said in a statement.
COMPLETE DEREGULATION? NO WAY
Most countries have more or less committed themselves to open markets for
essentially all telecommunications services by 2003 or earlier. Some exceptions
-- USA: no issue of radio licences to operators with more than 20 percent
direct foreign ownership
-- France: 20 percent foreign equity limit on radio-based services
-- Portugal: 25 percent foreign equity limit on all services
-- Japan: 20 percent foreign equity limit for the major companies NTT and KDD
-- Canada: existing foreign equity limits will be raised to the 46.7 percent
ceiling by October 1998
-- Singapore: foreign equity limited to 49 percent in most firms
ODYSSEY AND THE CHINESE CONNECTION
U.S. company officials seem to be beaming with joy, and the backers of the
Odyssey global mobile satellite phone system apparently do so, too. They hailed
the WTO telecommunication agreement as a major step toward ensuring a broad,
mass market for its services.
"Mobile satellite systems such as Odyssey are inherently global and benefit
from international agreements that promote telecom. This WTO agreement is a
huge step forward," said Bruce Gerding, managing director of Odyssey
Telecommunications International Inc. "The fact that so many countries made
their offers 'technology neutral' mean that satellites will enjoy at least the
same level of access afforded traditional telephone services."
Odyssey, which has U.S. company TRW Inc. and Teleglobe Inc. of Canada as
founders, plans to use a constellation of twelve satellites to provide
world-wide phone, fax and digital data services.
In addition to the countries covered by the WTO agreement, Odyssey announced in
January that it had signed an agreement with ChinaSat, a branch of China's
Ministry of Post and Telecommunications, granting ChinaSat exclusive rights to
distribute Odyssey in China.
Odyssey's satellites will operate in medium-Earth orbit (MEO) at an altitude of
10,354 kilometres. TRW will build the system under contract to Odyssey
Telecommunications International Inc.
"This agreement helps pave the way for introduction of a wide array of new and
exciting services for consumers, including those offered by the mobile
satellite industry. Coupled with the momentum of the World Telecommunications
Policy Forum sponsored by the International Telecommunication Union, this WTO
agreement greatly facilitates access to markets worldwide for Iridium LLC and
other providers of global telecommunications services.
"This important step toward full market access could not have been achieved
without the good faith efforts of each negotiating delegation and the
leadership of Ambassador Barshefsky, Chairman Hundt of the FCC, and the entire
United States Trade Representative and interagency negotiating team, as well as
other administrations. All should be heartily congratulated for achieving this
Robert W. Kinzie, Iridium LLC Chairman
ORION THANKS U.S. GOVERNMENT FOR SUPPORT
"Orion is pleased with the results of the WTO talks and the resulting
agreement. It allows companies, such as Orion, to more effectively compete in
the international satellite services marketplace. In particular, Orion recently
closed a public bond offering of $710 million dollars which will enable it to
fulfill its long term capital requirements for the launch and operation of a
powerful 3-satellite global communications system covering 85% of the world's
population. Orion thus welcomes this WTO multilateral agreement as a means to
obtain entry for its satellite system to serve those markets.
"The US Government has also shown its support for the US satellite services
industry to be able to compete globally on a level playing field with the
intergovernmental satellite organizations.
"Orion is pleased to have received assurance from USTR that the US Government
still retains its ability to protect competition in the US market, and that
such ability may include the denial of market access to a privatized affiliate
or other spin-off of Intelsat if any anti-competitive result would otherwise
"Orion applauds the US Government for its initiative and hard work in
successfully concluding these negotiations."
(Orion Network Systems President & CEO W. Neil Bauer)
[Orion has reserved 6 orbital slots for Ka-band services. -- Ed.]
U.S. COMPANIES AGREE ON KA-BAND USE
But now for something completely different that isn't completely different at
all but in fact the technical side of the business matters discussed so far.
Fifteen U.S. companies have reached an agreement on Ka-band slot assignments a
few days ago which will in effect relieve the U.S. Federal Communications
Commission (FCC) of assigning the slots. ''Having achieved this important
consensus, the applicants now seek a speedy conclusion of the Ka-band
proceeding and near-term licensing of the satellites in the current Ka-band
processing round,'' the companies said in a letter to the FCC's International
''The orbital assignment plan enables the FCC to move forward with licensing
and thus ensure that these new satellite communications services reach
consumers as rapidly as possible,'' replied FCC Chairman Reed Hundt in a
The agreement was signed by companies such as AT&T Corp., Loral Space &
Communications Ltd., EchoStar Communications Corp., GE American Communications
Inc., Hughes Communications Inc.'s Galaxy unit, Orion Network Systems Inc., and
Lockheed Martin Corp.
WHAT IS THE KA-BAND?
You probably do not have to observe the satellite scene very closely to know
what the Ka-band is and to know that there are some plans surrounding it. But
from now on, you won't be able to escape the hype that will undoubtedly
accompany the development of a completely new satellite generation using the
Ka-band which by the way ranges from approx. 18 to 31 GHz. Some parts of this
spectrum will be available for satellite-based telecommunication purposes.
A brand new study released by DTT Consulting lists no less than 55 Ka-band
projects involving the launch of nearly 1,300 satellites. (That number
includes, however, the 840 satellites of the Teledesic project.) Surprisingly,
most of the suggested systems use geostationary Earth orbit (GEO) satellites;
apart from Teledesic, only a few others use different orbits.
These satellites will not even deliver television channels. What's so special
about them, then? It's not the higher frequency -- the Ka-band just happens to
be almost unoccupied because it requires a different technology than the C- or
Ku-band. Besides, it offers around three times the bandwidth of the Ka-band.
According to the report's author Roger Stanyard, the planned Ka-band satellites
offer fundamentally different services from conventional communications
satellites. Each of them carries a kindof switchboard-in-the-sky, allowing
point-to-point circuits not (only) for telephone but for a wide variety of
services. New technologies that will be applied also include multiple spotbeams
(48 or even more per satellite) and inter-satellite communication.
IMPACT ON THE INDUSTRY
The introduction of Ka-band satellites may have an enormous impact on almost
every branch of the aerospace and telecommunications industry, and the first
companies to notice will be satellite manufacturers and operators. DTT's
Ka-band Report draws "robust conclusions" about the broadband Ka-band satellite
systems and their role in the global information infrastructure of the 21st
century. The reports even predicts a "fundamental restructuring of the world's
satellite communication industry" and the "development of global satellite
operators with integrated L-, C-, Ku- and Ka-band systems." This view is
strongly supported by a glance at the slot allocation charts available from the
International Telecommunications Union (ITU.)
For example, both major European players SES/ASTRA and Eutelsat have reserved
some 20 Ka-band slots each almost all around the globe. But the satellites will
come from the USA, the report predicts. The general development will also see a
reinforced dominance of the U.S. in the provision of space and ground
infrastructure, technology and services: "The United States is arm twisting the
rest of the world to open up the global telecommunications market place to
allow Ka-band satellite operators to compete with local telecoms and satellite
Apart from that, what can users expect? The VSAT (Very Small Aperture Terminal)
technology may finally hit homes all over the world, with just a 60 cm dish
sufficient not only to receive but also transmit signals to a satellite.
As usual, it is not yet clearly defined what will be offered, but maybe -- just
as with the Internet -- the technology will finally create its own contents.
Speaking of the Internet, it will be offered in the Ka-band, no doubt. The
difference to today's Ka-band Internet access providers will be that they can
offer truly bi-directional operation (although that is no real advantage on a
technical level as most of the Internet traffic is in fact almost
I know, I wrote this a hundred times before: Internet users shouldn't expect
too much from satellite based services. While ATM (Asynchronous Transfer Mode)
technology is definitely capable of boosting transmission rates on terrestrial
lines, the report states that "Geostationary Ka-band satellites will be
ineffective in providing a platform for ATM services because of the time delay
in a signal being transmitted from one ground station."
DTT Consulting's Ka-band Report is available for the stately sum of US$952 or
£595 from DTT consulting in Winchester, UK (fax +44 1962 877850, email:
email@example.com.) Its author is the well-known satellite
communications expert Roger Stanyard.
Copyright 1997 by Peter C. Klanowski, pck@LyNet.De. All rights reserved.
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