Deciding whether to build a satellite-based network in the UK is not easy. The biggest shake up in satellite service provision occurred on August 2 when Trade & Industry Secretary Peter Lilley put his signature to a new class licence that allowed anyone in the UK to run two-way services. The legislation gives anyone (except for the British Broadcasting Corp) the right to build point-to-point private networks using Very Small Aperture Terminals. Except of course that it is virtually impossible to know how much such a network will cost. Buying the receiving and transmitting dishes is simple enough, but connection to the satellite itself – provision of the space segment – is complicated by the fact that all dealings with the satellite companys are handled by British Telecommunications Plc’s Signatory Affairs Office. The SAO treats space segment costs as confidential. Just to confuse things further, the charges levied by the Telecom body are themselves under review. Currently the Office levies a charge equal to 7% of the space segment charge as an administrative cost for organising things, but in the face of the new class licence it wants to increase this in order to claw back more costs. The Signatory Affairs Office has its roots in the bad old days of the British Telecom monopoly. When the Intelsat, Inmarsat and Eutelsat consortia were originally set up, each country nominated a body to sign the agreements and handle satellite traffic adminstration. In the UK, British Telecom was that body. Following the de-regulation of UK telecommunications the privatised company set up the semi-autonomous Signatory Affairs Office to handle its satellite commitments. As by far the largest user of satellite capacity in the UK, BT has continued to pay the charges that the satellite consortia levy against their member states. These include an insurance payment against damage to the satellite by the operators and a payment against the UK’s equity share in the satellite organisation and hardware – a usage based cost, in addition to the space segment provision charges. British Telecom argues that hitherto the amount of traffic and usage generated by the specialised satellite service operators has been so small that it was easier simply to charge operators the flat-rate 7% and pay the insurance and equity charges itself. But with the new licence British Telecom and the Office want to draw up a new agreement that passes the costs on directly to the operators. Not surprisingly, the existing specialised satellite operators are less than enthusiastic and the proposals are being studied by the Office of Telecommunications, which says it will make a decision in a month or two, until when the existing agreement will remain. The Telecommunications Managers Association has come out strongly against the new licence, likening it to the recent access deficit wrangle where British Telecom wanted to make competing telephone companies pay towards the historical development of its local loop. We take serious issue with the BT stance and we cannot support any system in which a new operator would be required to pay up front a significant capital sum representing some notional share of BT’s historic investment in the space segment. Oftel eventually got British Telecom to back down over access charges, but the satellite issue is different in that whereas BT was trying to get its competitors to contribute towards past costs in the local loop disagreement, the satellite charges involve payments that BT is still making to Intelsat, Inmarsat and Eutelsat. The watchdog’s decision will have an influence on whether the UK develops a thriving culture of satellite network usage or whether the current, rather lack-lustre situation continues. But even once the current dispute is settled it is still going to be difficult for interested organisations to discover whether building a satellite network makes commercial sense because of the secrecy which surrounds the cost of the space segment. The Statutary Affairs Office says tariffs are arranged so that in theory both small
and large organisations can benefit. – Chris Rose
