Space Regulatory Fee Proposal Sees Clashes Over ISAM, NGSO Vs. GSO Ratio

The satellite industry is divided over an FCC proposal to assess FY 2024 regulatory fees on authorized but not-yet operational satellites and to put a bigger portion of the satellite regulatory fee burden on the shoulders of non-geostationary orbit operators. Comments filed in dockets 24-85 and 24-86 also show pushback regarding regulatory fees specifically for in-orbit servicing, assembly and manufacturing (ISAM) operations. Comments were due Friday on an NPRM adopted in March regarding regulatory fee changes for satellite and earth stations due to the agency reorganization that replaced the International Bureau with the Space Bureau and the Office of International Affairs (see 2403140060).

Fees on authorized satellites could create “unintended downstream effects” that disincentivize operations from seeking timely authorization, Blue Origin said. If all licensees benefit from the allocation of FCC resources toward reviewing applications or petitions regardless of operational status, it might make more sense to focus on application fees paired with a decreased amount of regulatory fees for monitoring and overseeing operational systems, rather than consistent annual regulatory fees for all authorized satellites, Kepler Communications said.

Backing the authorized systems fee approach, SpaceX said that assessing regulatory fees on all licensees "would appropriately account for the fact that all satellite applications require [full-time equivalent] time, including premature and speculative applications from operators that have obtained orbital and spectrum rights but have not yet deployed." Also backing the authorized system approach, the Commercial Smallsat Spectrum Management Association (CSSMA) said the commission also should consider whether the regulatory burden associated with regulating authorized users changes over time.

Astro Digital called for fees that recognize situations where functional satellites are deorbiting and not being replaced and not providing any commercial service. Those cases aren't benefiting from any FCC regulatory activities, and should be treated as non-operational for annual fee purposes, it said.

Making NGSOs carry a larger portion of the regulatory fee burden on satellites -- 40% to geostationary orbit (GSO) satellites' 60% --- ignores that many NGSO service providers are startup companies preparing to launch new services, while GSO operators “are part of a mature industry with regular revenue streams,” Kineis said. SpaceX backed keeping the current 80/20 GSO/NGSO split, saying it “would appropriately recognize the extent to which certain GSO operators have significantly contributed to staff processing time in NGSO applications and rulemaking proceedings through hundreds of pages of filings designed to slow their competitors.” It said the FCC can cut the number of applications staff have to review through allowing operators to modify their systems more easily without prior approval. CSSMA said changing the 80/20 allocation could unfairly burden operators of small- and medium-sized NGSO constellations, since a few NGSO mega constellations are likely driving the need for more resources.

Changing the GSO/NGSO fee ratio isn't needed, as NGSO regulatory activity is declining now that the agency has adopted service and technical rules for larger NGSO systems and implemented processing rounds for Ku-, Ka- and V-band NGSO systems, Telesat said. It backed assessing regulatory fees on authorized earth stations and satellites, as a lot of the regulatory work regarding them happens before they become operational.

Rather than 40%, NGSOs should have to pick up 50% of the costs associated with satellites, SES/O3b said. It also said the proposed hike on earth station licensees to correct "historical underpayment" should be even steeper than the FCC proposes. Intelsat supported the changed ratio, saying a 60/40 split “better reflects the division in the benefit of the Commission’s regulatory efforts.”

To help advance U.S. ISAM leadership, rendezvous and proximity operations (RPO) and on-orbit servicing (OOS) licensees shouldn’t be assessed regulatory fees, Varda Space Industries said. Given that the Space Bureau has received few applications for such operations, the record is insufficient to justify a new regulatory fee for those licensees, it said. If a fee must be charged, do so on an interim basis using the small satellite fee category, as RPO and OOS operators “are at a critical stage of development” and need to focus their limited resources on R&D, Varda Space said. Astroscale backed assessing fees for all ISAM satellites using the small satellite fee category on an interim basis. ISAM operations “do not present the same numerous and complex considerations” as GSO and NGSO operations do, Astroscale said. Blue Origin urged the FCC to use the small satellite fee schedule as the baseline for allocating fees to such novel activities as RPO and OOS “until there is stable and convincing evidence indicating an distinct category and related fee structure is necessary.”

Numerous operators pushed for a several-year phase-in of regulatory fee hikes the FCC is proposing in some categories. Much of the increased regulatory activity at the FCC comes from NGSO mega constellations, not small and medium-sized NGSO smallsat operators, CSSMA said. It urged that the commission phase in new fees associated with the creation of the Space Bureau over multiple years and cap the per-year increases “to avoid fee shock.” With the fees due in September unlikely to be set until late summer, those increases "can be a hardship for operators, especially smaller operators, thereby harming the growth of the satellite industry and undermining the necessary predictability in the US regulatory regime," Eutelsat/OneWeb said. At the very least, defer most fee increases expected in the NPRM to the FY 2025 regulatory fee cycle to give operators more time to prepare their budgets, it said. The overall big jump in satellite and earth station regulatory fees being proposed could jeopardize U.S. leadership in commercial space, Intelsat said. Instead of a 40% jump, there should be a several-year phase-in, with a 5% hike the first year and 7.5% increases in subsequent years, it said.

SpaceX suggested an overhaul of how regulatory fees are calculated, based on system risk. That approach “would tie the Commission’s fee framework more closely to the time it should take staff to assess and create rules for the system,” it said. Apportioning NGSO fees based on number of satellites or units of spectrum an operator uses creates a disincentive for providing better coverage, it said. Regulation of a single large constellation is equivalent to the regulatory burden of many small constellations, Myriota said, urging that the agency "retool its proposal to reflect the actual work required to regulate large constellations that require near constant changes to the rules."

Continue not to assess regulatory fees on receive-only earth stations, NCTA urged, adding that any increase in earth station regulatory fees should be phased in over three years.