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Commission liberalizes satellite communications markets

The European Commission has adopted a Directive liberalizing satellite telecommunications equipment and services throughout the European Union. Liberalization of satellite markets has been strongly supported by the European Parliament as well as by the Council which has marked...

The European Commission has adopted a Directive liberalizing satellite telecommunications equipment and services throughout the European Union. Liberalization of satellite markets has been strongly supported by the European Parliament as well as by the Council which has marked the introduction of competition into satellite markets as a major goal for EU telecoms policy. The Directive liberalizes both the establishment and operation of satellite networks, as well as associated satellite dishes across the Union. It covers in particular the establishment of the new-advanced so- called VSAT (very small aperture satellite terminals) as well as larger satellite dishes used for news gathering and other forms of satellite business and is of particular relevance in the context of satellite and mobile communications. The major users are expected to be in the retailing, distribution and financial sectors. Many similar potential users in the EU have pan-European requirements and few suppliers can offer credible, fully supported pan-European services in the present environment. Satellite communications networks are expected to be a major means of implementing trans-European networks in these areas. This initiative is a completely new development for the European satellite market. Due to liberalization, a ten-fold increase in the volume of satellite communications before the year 2000 can be expected. Studies estimate that as many as 80,000 VSAT satellite dishes may be deployed across the Union by that time. Regulatory restraints to date were restrictive for users and service providers alike, contrary to the situation in the United States where an "open skies" policy greatly stimulated the satellite market since the early 1980s. The state of liberalization is the most important determinant of the size and the nature of the satellite telecoms market in Europe and the rapid deployment of trans-European networks. As such, the new Directive is also a vital step on the way to establishing the European Information Society, as defined in the Commission's response to the report established on the issue by leading industrialists under the chairmanship of Commissioner Bangemann. The benefits which the new satellite Directive will bring to this market include: - Reduction of costs of deploying and operating satellite networks which will be translated into lower prices for the consumer. Competition and liberalization will mean lower charges for licensing terminal type-approvals (which will become "one networks. The harmonized regulatory environment will facilitate the establishment of pan-European satellite networks which has been frequently recognized as a key requirement for market growth. This will be critical in the development of trans-European communications networks; - The rapid deployment, especially in less developed or remote areas, of multimedia applications and access to the developing superhighways of the information society; - Removal of prohibitions on services and interconnection; - Simplification of operations such as licensing equipment registration and installation; - Increased confidence of users, operators and investors in satellite solutions for Europe. The Directive amends the 1990 Directive on the introduction of competition in the telecommunications services market and has been issued by the Commission under Article 90 Treaty. The Article provides for application of competition rules to secwhere Member States allocate exclusive or special rights. "Use of Directives based on Article 90 is an efficient tool for the application of competition law to such sectors, providing investment certainty to market agents and cutting red tape" states Commissioner Van Miert. "However, this instrument must be used with care and in clearly circumscribed circumstances". The provisions of the Directive are immediately applicable. Member States have nine months following publication of the Directive to communicate the measures taken to comply. However, the Commission will also take into account the situation of those Member States in which the terrestrial network is not yet sufficiently developed and which could justify deferment of full application of the Directive until 1 January 1996. The satellite Directive is issued by the Commission in the context of the follow-up to the Council resolution on the liberalization of satellite services. Before issuing the Directivawaited confirmation of its approach to competition in the telecommunications services markets by the European Court of Justice in autumn 1992. Together with an already adopted Directive on satellite equipment, and a proposal for a Directive on satellite service licences currently in discussion in Council and Parliament, the new Directive completes a package of measures intended to rapidly develop the European satellite sector.