โ Scribed by Douglas Goldschmidt
No coin nor oath required. For personal study only.
This article addresses policy issues raised by the introduction of competition in the international satellite industry. The monopoly/monopsony interests of INTELSAT and its members are discussed, and strategies IN-TELSAT has used to protect its market are analyzed. Differences in regulatory and legal structures between the domestic and international telecommunications environment pose problems for new entrants. The author outlines a series of policy actions that the U.S. government could take to create a "level playing field" for international satellite competition. The probable entry of new satellite companies into the international transmission market has raised a series of concerns, largely by the entrants, about entry barriers and fair competition. Given the substantial market power held by INTELSAT and its signatories, it is doubtful that a competitive market will blossom until several systems are in place and operational. While public policy cannot guarantee successful competition, it can help create the necessary conditions to allow market entry during the transition from monopoly to competition.
The overall context for this policy analysis must be noted. The international satellite transmission market, formerly a quiet area of felicitous international agreements and enormous profits, is undergoing major transformation. Aside from the particular issues raised by the new satellite entrants, major changes are occurring in cable technologies which affect the market. The formerly distinct specialties of cables and satellites, particularly in video, are fading with the introduction of fiber optic cables on the heavily trafficked Atlantic routes. The introduction of private fiber optic systems in the Atlantic will soon vastly increase capacity, while also providing diverse routings. Fiber optic and multiple cable systems may also affect the loading of satellite systems if the EC.C. loosens the regulations on AT&T's allocation of traffic between cable and satellite systems. These changes have caused uncertainty about the future, particularly for INTELSAT.
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