RP-008 — Policy Framework for the Provision of Fixed Satellite Services

1. Introduction

This policy framework will permit the orderly development and expansion of fixed satellite services in the Canadian market via satellite telecommunications networks which may be Canadian or foreign owned and authorized. It is the next step in the evolution of the existing Canadian satellite policies and it implements Canada's commitments to the liberalization of fixed satellite services delivery which were made as part of the General Agreement on Trade in Services (GATS) under the auspices of the World Trade Organization (WTO). The policy framework takes into account the public comments received as a result of the publication in March 1998 of a Policy Consultation Paper Respecting the Authorization of Earth and Space Stations for Fixed Satellite Services following the Coming into Force of the GATS Agreement on Basic Telecommunications. Other considerations include deregulation of international telecommunications services (CRTC Telecom Decision 98-17) and public consultation¹ on changes to the Radiocommunication Regulations to exempt earth stations exemption from Canadian ownership and control.

The policy consultation paper seeking public comments provided a general background on the development of Canadian satellite network policy in recent years and a brief summary of the pertinent earth station licensing policies in effect at the time of publication. The paper, then outlined Canada's commitments to the GATS as it pertains to the fixed satellite services and presented a series of questions. These questions were intended to solicit comments on all aspects of the earth station and satellite station licensing, in particular the effectiveness of the authorization regime in place and the focus which these policies should adopt for the future. Sixteen replies were received from interested parties and provided an important contribution to the adoption of a competitive policy framework for fixed satellite services.

2. Background

2.1 General

The existing fixed satellite services policy structure has evolved over a number of years, through incremental changes in the authorization of earth stations for the use of domestic and international satellite systems. Different criteria have been used to assess the various domestic and international satellite networks but the fundamental element of Canadian policy which has been applied to all satellite networks has been the requirement that, in general, Canadian facilities must be utilized for services directed to Canadians. Industry Canada has considered the availability of fixed satellite services in all regions of Canada to be a priority concern and has, in the past, imposed specific coverage conditions and requirements on Canadian authorized satellite stations.

A list of terms and definitions used in this policy document is included as Annex A for greater clarity.

2.2 Licensing Authority

Licences for earth and satellite stations within Canada are issued by Industry Canada under the authority of the Radiocommunication Act (the Act). Subsection 4(1) of the Act stipulates that no person shall install, operate or possess radio apparatus, except under and in accordance with a radio authorization, or where radio apparatus has been specifically exempted from licensing by the Act or by regulations made pursuant to the Act. Also, under the Act, licence eligibility criteria can be established (subsection 6(1)(b)) and terms and conditions can be imposed as a condition of licensing (subsection 5(1)(a)). Modifications to the Radiocommunication Regulations, which would expand the eligibility criteria of radiocommunication carriers, are presently being considered. It is proposed to exempt fixed and mobile satellite earth stations from the requirement of Canadian ownership and control as per the recent amendments to the Telecommunications Act.

2.3 Policies Under Consideration

Prior to the issuance of this policy framework, the Canadian policy for the authorization of earth stations and satellite stations has been based upon supporting and administering two telecommunications monopolies. As well, specific intergovernmental arrangements (Exchanges of Diplomatic Letters) were established regarding the use of Canadian and American satellite stations to provide fixed satellite services between Canada and the United States. In general, these policy provisions are summarized in Annex B and will remain in force until specifically superceded by the policy provisions in Section 4 of this document.

2.4 General Agreement on Trade in Services - Agreement on Basic Telecommunications

On February 15, 1997 at the WTO meeting, Canada and 68 other countries concluded a protocol to the multilateral GATS agreement to liberalize trade in telecommunications services. In the Agreement on Basic Telecommunications (ABT), Canada committed to liberalize several aspects of the current policy on the provision of communication satellite services. Specific commitments made with regard to the fixed satellite service are:

1. to terminate the Teleglobe Canada Inc. (Teleglobe) monopoly as the sole authorized facilities-based telecommunications service provider for international services, effective October 1, 1998;
2. to terminate the Telesat Canada Inc. (Telesat) monopoly as the sole authorized Canadian operator of fixed satellite facilities to provide domestic (Canada-Canada) and cross-border (Canada-US) telecommunications services, effective March 1, 2000;
3. to remove all telecommunications traffic routing restrictions, except on domestic (Canada-Canada) and cross-border (Canada-US) fixed satellite services, effective December 31, 1999;
4. to allow the use of foreign owned and controlled satellite stations to provide international (except Canada-US traffic) fixed satellite services, effective December 31, 1999;
5. to remove all telecommunications traffic routing restrictions on domestic (Canada-Canada) and cross-border (Canada-US) fixed satellite services, effective March 1, 2000; and
6. to allow the use of any Canadian and foreign satellite stations to provide domestic (Canada-Canada) and cross-border (Canada-US) fixed satellite services, effective March 1, 2000.

As part of the legislative changes already enacted to give effect to its GATS-ABT commitments, Canada has made further amendments to the Telecommunications Act to exempt earth stations operated by telecommunications carriers with communication satellite stations from the Canadian ownership and control provisions.

2.5 Regulatory Regime for International Telecommunications Services

On October 1, 1998, the CRTC established a Regulatory Regime for the Provision of International Telecommunications Services (Telecom Decision CRTC 98-17) which, among other things, eliminated all traffic routing restrictions for Canadian telecommunications traffic on terrestrial facilities. This decision allows carriers to route telecommunications traffic through the United States for Canada-Canada calls and for Canada-overseas calls. The CRTC noted in the Decision, however, that the WTO-ABT commitment only requires that "as of 31 December 1999, all international services will be unrestricted, except for fixed satellite services between Canada and points in the United States (with the latter to be unrestricted as of 1 March 2000)".

3. Purpose and Limitations

Canadians in all geographic regions of the country must be provided with access to a broad range of reliable, high quality telecommunications services. In this regard, Canadians should be able to benefit fully from all existing and planned fixed satellite systems. This policy framework has been developed for the guidance of potential providers of fixed satellite services to the Canadian domestic and international markets and to facilitate the orderly transition of these services to a market-based regime which is open and allows full participation and competition.

Canadian entities proposing to offer services between or among countries other than Canada are not restricted by Canadian policies, but would be subject to the regulatory structure of the country or countries to be served. However, under the auspices of the WTO, many countries have opened access to their respective markets to permit the use of foreign satellite networks and facilities.

This policy framework deals with earth stations and satellite stations which use spectrum and orbital resources allocated for fixed satellite services by the International Telecommunication Union (ITU) Radio Regulations. In particular, the policy framework does not apply to mobile satellite services² or to Direct-to-Home (DTH) broadcasting services whether these use fixed satellites (FSS) or direct broadcasting satellites (DBS).

In general, the GATS Agreement on Basic Telecommunications excludes broadcast services. Canada has explicitly excluded broadcasting services in its schedule of specific commitments. The government policy concerning the use of fixed satellite facilities for the transport of broadcasting services is outlined in Annex C.

Industry Canada, in reviewing and modifying its policies, continues to have regard to the objectives set out in Section 7 of the Telecommunications Act. As well, the Department will continue to have regard for these objectives in dealing with licence applications under the Radiocommunication Act.

¹ Canada Gazette Part I, dated October 10, 1998, Regulations Amending the Radiocommunication Regulations.

² The development of mobile satellite service and its associated feeder links is guided by the Policy Framework for the Provision of Mobile Satellite Services via Regional and Global Satellite Systems in the Canadian Market (RP-007, February 1998).