Washington Power Shift Adds Twist for Satellite Legislation

The congressional power shift from Tuesday’s elections is expected to have several effects on national satellite policies, said industry executives and lawyers. They pointed to export control overhaul, mobile satellite services spectrum and the role of satellite broadband as the most obvious and immediate areas where changes could take place.

The Republican gains in Congress could further politicize revamping export controls, said some in the satellite industry. The industry has long urged Congress to loosen rules that heavily regulate movement and launches of American satellite technology, but the efforts have been derailed by security concerns. The Obama administration’s attempt to change the rules could serve as a “possible angle to attack the administration as purportedly weakening national security,” said John Ordway, a partner at Berliner, Corcoran who has worked on the issue.

Ordway said he fears that a “stronger GOP presence on the Hill could lead to greater push-back in general from national security hawks on the Hill against export control reform.” Overall, “I don’t see any upside to export reform from Republican gains of any size,” he said. Ordway said he expects a measure to be introduced in the next Congress to allow the executive branch to decide whether commercial satellites and related parts and components should continue to be treated as munitions, as they mostly are now. The success of that effort will largely depend on the broader legislation that such a provision would be part of, said Ordway.

Intelsat doesn’t expect a major effect on its businesses in terms of export controls or increased launch access, an issue the company has lobbied on heavily. On those issues, “the focus is on national security, national competitiveness and jobs -- all objectives that are priorities for both political parties,” said Phil Spector, general counsel of Intelsat. So “we do not see the changes made in the Congress as a result of the 2010 elections having any significant impact on our business."

If the FCC moves forward on incentive auctions for MSS spectrum, which would require congressional approval, increased Republican influence may mean fewer restrictions on access to the spectrum, said Tim Farrar, president of TMF Associates. The commission has sought to limit which companies can use the MSS spectrum in the past, but Republicans may avoid restrictions considered burdensome, he said. In approving Harbinger Capital Partner’s acquisition of SkyTerra, for instance, the FCC required the buyer to seek the commission’s approval to lease the spectrum to either of the top two wireless companies, currently Verizon and AT&T. Those carriers objected to the restriction as unnecessary. Such limitations on the S-band, the spectrum largely being considered for incentive auction, may also be seen as limiting the value of the spectrum, he said.

The decline in the number of Democrats from rural areas on the House Communications Subcommittee could mean a change in opinion about satellite broadband, said executives in that business. The satellite broadband industry has been frustrated over lack of recognition as a reasonable, less expensive alternative to terrestrial broadband in government programs, particularly in legislation introduced by outgoing House Communications Subcommittee Chairman Rick Boucher, D-Va., on universal service overhaul. Efforts to rein in spending may increase the status of satellite broadband, said a satellite industry executive. Republicans on the subcommittee, including Ranking Member Rep. Cliff Stearns of Florida, and Rep. John Shimkus of Illinois have voiced some support for the technology, the executive said. Simply putting Boucher’s bill at risk is largely good for the satellite broadband industry, the executive said.

Hughes Network Systems, which has said it hopes satellite broadband isn’t included in a future universal service fund, either as a contributor or a beneficiary, hopes the technology is included in other policy decisions as a result of the elections. “With a renewed emphasis on controlling spending and making sure the government is getting the most bang for its buck, satellite broadband has an excellent story to tell,” said Dean Manson, Hughes’ general counsel. “While covering the entire country at a fraction of the cost of terrestrial service,” and with improved speeds and capabilities, “satellite is clearly the most cost-effective way of providing high speed services to hard to reach areas.”