February 2011

February 2011 The Leader in Global Communications Coverage

www.viasatellite.com

PCI COMPLIANCE REQUIREMENTS

PUT BURDEN ON SECTOR

SATELLITE EXECUTIVEOF THE YEAR 2010:

THE NOMINEES ARE …

VIEW FROM THE TOP:Jack Waters, XipLink

BROADCASTERS CORNER:Bruce Churchill, DirecTV Latin America

WRC-12


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4 FEBRUARY 2011 V IA SATELL ITE MAGAZINE WWW.SATELL ITETODAY.COM

TABLE OF CONTENTS

Follow us on Twitter: Get up-to-the satellite communications news and analysis delivered to your Twitter account on your mobile device or computer by following us onTwitter.com/Via_Satellite and Twitter.com/SatelliteTODAY.

February/11 Vol. XXVI Number 02

CO

VE

R S

TO

RY

Features18 | Full Agenda Of Spectrum Issues at WRC-12 »GIOVANNI VERL IN I At the World Radiocommunication Council 2012 (WRC-12), experts will

review the allocation of radiofrequency spectrum and orbital resources.

A positive outcome for the satellite industry will be crucial to its future.

22 | Satellite Executive of the Year 2010: The Nominees Are... »JASON BATES , JEFF H ILL , MARK HOLMES While not considered a banner year for the satellite communications sector,

2010 was not as down as some might have forecasted. Many executives

navigated their companies successfully through a tough economic

environment, and the following five nominees stood out.

26 | PCI Compliance Requirements Put Burden on Satellite Sector »GREG BERLOCHER The ability to transport large numbers of credit card transactions fueled the early

growth of the VSAT industry, making satellite technology the de facto network

standard in the retail segment, but big changes have occurred within the payment

card industry that are having major ramifications.

OnlineWebinars On Demand

Satellite Broadband on Airplanes:A New Era Set To Begin

After the World Cup: Early Lessons in Sports 3-D TV

Remote Asset Management: Identifying End User Needs in the Expanding Enterprise Market

The U.S. Air Force: The $41 Billion Question

For more information on upcoming and on-demand webinars, visit www.SatelliteTODAY.com/webinars

E-Letters

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com/mailinglist/

To view our recent e-letters, visit www.satellitetoday.com.

Online Resources

Career Center: Find a job / Look for talent at jobs.SatelliteTODAY.com

SatelliteTODAY.tv: view exclusive interviews and industry events cov-erage at www.SatelliteTODAY.tv

© 2011. Via Satellite (ISSN 1041-0643) is published monthly by Access Intelligence, LLC, 4 Choke Cherry Rd., 2nd Floor, Rockville, MD 20850. Subscriptions: Free to qualified individuals directly involved in the

satellite industry. All other subscriptions, U.S.: one year $99; two years $188. Canada: one year $129; two years $228. Foreign: one year $149; two years $278. Contents February not be reproduced without per-

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Cover: This month, Via Satellite talks about the agenda and implications of the upcoming WRC-12. Design: Vince Lim.

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26

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Celebrating 30 Years

TABLE OF CONTENTS


Britain’s youngest member of Parliament, Pamela Nash, (Labour), reads Via Satel-

lite in Kourou, French Guiana, following the November launch of the Hylas-1 and Intelsat 17 satellites. Nash is a member of the House of Commons Science and

Technology Committee.

DepartmentsEditor’s Insight 8

View From The Top 10

Jack Waters, XipLink

Industry Events 12

Broadcasters Corner 30

Bruce Churchill, DirecTV Latin America

Industry At Large 32

The Marketplace 35

Advertiser Index 35

Web Directory 36

Columns

14 | Global Regulations A Closer Look at the ITU’s Radio Regulations Board

GERRY OBERST

The Radio Regulations Board is a relatively recent body, created in 1994 as a

replacement for the earlier International Frequency Registration Board. Find

out more about the role of this board.

16 | Satellite Policies FCC Auction

RAUL MAGALLANES

Since 1994, the U.S. Federal Communications Commission has used online auctions to

license rights to parts of the electromagnetic spectrum. Bidders can place bids from

the comfort of their homes or offices. Find out how auctions work.

17 | Satellite Gets Personal The Success of Satellite Radio

MAX ENGEL

Satellite radio suffered from high startup costs and no initial subscriber base.

As recently as the first quarter of 2009, Sirius XM looked set to fail, but it now

seems that 2010 will be the year the satellite radio will become profitable.

38 | Dollars and Sense Net Neutrality Update

OWEN KURT IN

In December, Julius Genachowski, chairman of the U.S. Federal Communications

Commission, announced that the agency would pursue enactment of rules to ensure

Net Neutrality — unblocked, non-discriminatory access to the Internet. The rules

have been released and will be debated for a long time.

WHO READS

Editorial 301/354-2000JASON BATES, Editor, ext. 1807

MARK HOLMES, Associate Editor

JULIE BLONDEAU SAMUEL, Managing Editor and Online Producer, ext. 1770

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JENNIFER NEWMAN, Copyeditor

Contributing Writers

OWEN KURTIN

GERALD E. OBERST, JR.

RAUL MAGALLANES

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EDITOR’S NOTE

Our discussions on potential Satellite Executive

of the Year nominees always include suggestions that

pique one’s interest but don’t quite meet the criteria

for inclusion.

Our first rule for determining potential nominees,

is that we focus on accomplishments during the year,

and that we identify a mix of innovation and business.

For 2010, there were a few nominees that easily met

the innovation component, but were too early in their

efforts to really provide any business success. While

those officials did not quite rise to the level of nominee,

their efforts are too fascinating not to discuss — and

we make sure to pay close attention to how they build

on their work in 2011.

One example of this kind of situation is Greg Pelton,

general manager of Cisco’s Internet Router in Space

(IRIS) program, who led the company’s efforts to trans-

form space-based communications. Cisco placed IRIS

in orbit in November 2009 aboard the Intelsat-14 satel-

lite as part of a joint effort between Cisco, Intelsat and

the U.S. military. Cisco says the program will extend

Internet protocol-based technology to space, and IRIS

already passed a U.S. Department of Defense test for

use of next-generation satellite-based IP services and

communications from space.

Cisco now is working full-time on commercial opera-

tions and demonstrations with IRIS, with Pelton respon-

sible for creating a suite of space-ready products and

developing the business plans and market strategies

for IRIS.

In October, Cisco and Astrium demonstrated IRIS ser-

vices such as multicasting, which enables the delivery of

information to a group of destination computers simul-

taneously in a single transmission. In December, Cisco

completed a VoIP call using IRIS and also made the first

software upgrade of an IP router aboard a commercial

satellite while in orbit.

Another hot topic in 2010 was 3-D TV, and while the

business case remains far from certain, Chuck Pagano,

ESPN’s executive vice president, technology, is respon-

sible for the sports network being recognized as one

of the 3-D technology leaders.

ESPN launched its 3-D efforts with the World Cup

in June, and received praise for its production and

delivery of the event.

While ESPN executives have called their 3-D efforts

to date “a science experiment,” from which the company

is still learning,” the network is on pace to produce

nearly 100 3-D events in its first 12 months of opera-

tions. Along with developing the 3-D efforts, Pagano and

his technical team also have oversight of 19 networks,

52,000 annual transmission feeds and ingest about 200

to 300 hours of video content daily.

And while analysts remain cautious about the busi-

ness growth of 3-D TV, ESPN is ramping up efforts for

its 3-D TV platform, with plans to begin airing content

24 hours a day beginning in February.

The Cisco IRIS program and ESPN’s 3-D efforts got

off to promising starts in 2010 that generated great

attention — as well as more than a few questions about

future potential. If either executive can build on these

promising starts throughout 2011, they become strong

contenders for future award consideration.

Technology Pushes Launched

in 2010 Could Pay Off in 2011

www.arianespace.com

OCTOBER 28

Six Globalstar second-generation satellites

OCTOBER 19

MAY 21

DELIVERED IN 2010

W3B

BSAT-3b

NOVEMBER 26

Intelsat 17

HYLAS 1

DECEMBER 29

Hispasat 1E

KOREASAT 6

ASTRA 3B

JUNE 26

Arabsat-5A

COMS

AUGUST 04

RASCOM-QAF1R

NILESAT 201

Ariane 5 Ariane 5

Ariane 5 Ariane 5

Ariane 5 Ariane 5

Soyuz

The f lexibi l i ty of Arianespace’s

s e r v i c e & s o l u t i o n s o f f e r w a s

c o n f i r m e d o n c e a g a i n w i t h

the s i x dua l -pay load A r iane 5

f l i g h t s a n d o n e m e d i u m - l i f t

Soyuz mission performed during

2010. These on-target launches

lof ted a total of 18 spacecraft .

COMSATBw-2


VIEW FROM THE TOP

Jack WatersPresident and CEO, XipLink

Jack Waters was named CEO of

XipLink in 2007 when Montreal-based

Xiphos, an aerospace company, looked

to spin-off its XipLink acceleration

division. Waters was tasked with

moving the company from traditional

TCP acceleration over satellite toward

a broader wireless link optimization

system that included advanced stream

compression techniques, Internet

optimization, VPN acceleration and

other value-added functions.

XipLink already was focused on

the satellite sector due to kernel-

based development of the SCPS

standard (Space Communications

Protocol Specification) and proj-

ects for CSA, PolarSat, MDA, Geo-

Eye, iDirect and others, but XipLink

wanted to expand within the satel-

lite and adjacent markets. “The idea

was to create a new product culture

since, prior to 2007, XipLink was pri-

marily project-based, with specific

development requirements on a cus-

tomer by customer basis. Our push

since 2007 has been product-line ori-

ented and market focused.”

Waters discusses his efforts to raise

XipLink’s profile and further enhance

technology and products.

VIA SATELLITE: What changes have

you seen in the market?

WATERS: The customer demand has

moved from basic TCP acceleration to a

broader protocol optimization system,

resulting in a significant market change

over the last three years. Fortunately,

we knew that was coming by watch-

ing wireline and other related markets.

XipLink anticipated the market change

with proper price points for satellite,

algorithms for unique satellite topolo-

gies and the right distribution model for

satcom. We focused on VSAT first and

then added MSS to our plate about a

year ago. Most of our competitors began

with wireline customers and are now

moving into satellite.

VIA SATELLITE: Is it hard for wireline

players to enter the satellite sector?

WATERS: Satellite is a much more dif-

ficult environment than wire-line. When

a satellite system is deployed there is

more complexity with logistics, person-

nel, packaging, training and testing than

with other markets. For instance, wire-

line optimization products typically have

many moving parts, take up several RU’s

in rack mount configurations or are just

physically too large for a mobile satcom

deployment, so XipLink offers handheld

optimizers, single board implementa-

tions or actually embedding our soft-

ware into co-located modems, routers

or remote terminals. One of the key les-

sons learned in satcom is that ease of

deployment is equally important to the

product function, thus XipLink launched

our Hub Optimizations (XHO) product

a year ago, which allowed operators to

deploy an appliance at their teleport or

data center without having to put an

optimization device in the field.

VIA SATELLITE: How do customers

influence your offerings?

WATERS: The customers expressed

their requirements in different ways,

mostly by stating they do not typically

have trained personnel at remote sites

and the cost for travel to a remote site

exceeded the benefit of higher through-

put. So they greatly influenced us by

avoiding optimization technology until

a good trade-off could be found, thus,

we tested the XHO concept with sev-

eral key customers, and they loved the

idea of using standard browser tech-

nology to decompress the traffic even

if that is less effective than bracketing

the connection with an appliance at the

remote end.

VIA SATELLITE: What opportunities

like this have you taken advantage of?

WATERS: One key event during our

spin-off from Xiphos was Mentat’s sale

to Packeteer, which was subsequently

sold to Blue Coat Systems. They decid-

ed not to maintain the SkyX (Mentat)

product, which was satellite-specific.

XipLink viewed this opportunity to

become the de facto accelerator for

the satellite world. The second mar-

ket opportunity was military sponsor-

ship of the SCPS standard. There are

two predominant companies in our

market that built SCPS acceleration

software technology from inception,

and XipLink is one of them. The mili-

tary sponsorship has led to market

acceptance of SCPS as an important

Executive Q&A

View From The Top


technology that can withstand the test

of time and scale much more broadly

than proprietary methods.

VIA SATELLITE: How do you explain to

customers the difference between band-

width acceleration and optimization?

WATERS: Acceleration and optimi-

zation are now overused terms, but

I am not sure who officially declares

they are abused. In the satellite sec-

tor at the physical (RF) layer, most

of the efficiencies have been accom-

plished with LDPC/DVB-S2 encoding

and added techniques like echo can-

cellation, frequency re-use and other

options. Since those benefits are essen-

tially complete, it’s time to move to the

network layer for more capacity.

We classify these network layer opti-

mizers in three categories. First, basic

(traditional) protocol acceleration uses

known techniques such as Fast Start,

Acknowledgement Frequency Reduc-

tion and a few other known methods to

minimize the effects of latency on TCP-

IP traffic. Second, in order to optimize

TCP/IP protocol traffic over the WAN

to a much higher efficiency, companies

like XipLink have moved to transparent

link optimization by adding advanced

TCP streaming compression, Web opti-

mizations, UDP packet optimizations

and integrated class-based queuing to

achieve the best network layer perfor-

mance possible without spoofing the

application directly.

The third class of optimizers, layer

7 or application optimization, is direct-

ly spoofing application protocols to

improve performance. Prices are very

much aligned along this hierarchy with

traditional acceleration essentially free

to the VSAT buyer since it is embedded,

transparent link optimization at a rea-

sonable capital cost and then application

optimization at a significant premium.

VIA SATELLITE: How do these work

together?

WATERS: We feel by moving from

traditional acceleration to wireless link

optimization, the customer typically

gets payback in bandwidth efficiency

almost immediately, like within a few

months at a reasonable capital cost.

The additional capacity typically

improves application performance

considerably. Customers go to layer

7 optimization when the application

performance is extremely critical and

price is not a factor. Some examples

would be financial trading using Citrix

when time is the enemy or a large cruise

ship generating tens of thousands of

dollars in telecom/datacom revenue

needs the increased responsiveness

to maintain customer attention.

VIA SATELLITE: Will budget cuts have an

impact on your military business?

WATERS: There are two aspects that

will mitigate the impact of military budget

cuts to XipLink — the move to mobility

and smaller teams. On the mobility side,

our embedded optimizer and lightweight

handhelds will replace the rack mount-

able accelerators at the older but larg-

er field operating bases. Smaller teams

mean more devices sold by an appliance

and licensing entity like XipLink.

VIA SATELLITE: What advancements

have you made in the MSS market?

WATERS: We have entered MSS mostly

in the BGAN arena, and the key question

is how to package and price the solution

for this market. Specifically for mobile

services, we designed lightweight pock-

et optimizers that you can easily travel

with for land mobile applications. The

XipStick is half the size and weight of

an iPhone, so the military uses these

for both MSS and mobile VSAT appli-

cations. The aeronautical business uses

XipLink’s XE embedded system to run

in pre-certified aircraft routers running

on Swift broadband networks to mini-

mize form factor but also to eliminate

any FAA-style certifications required for

hardware appliances on aircraft. In the

Fleet Broadband arena, we have teamed

with distribution partners and service

providers to address the maritime market

with XHO at the distribution point gate-

way for outbound Web optimization.

FEBRUARY

8-10 CASBAA MENA

Dubai, UAE

(Conference information:

www.cabsat.com)

28-1 Mobile Deployable

Communications 2011

Prague, Czech Republic


www.smi-online.co.uk)

MARCH

1-5 CeBIT 2011

Hanover, Germany


www.cebit.de)

14-17 SATELLITE 2011

Washington, DC


www.Satellite2011.com)

APRIL

9-14 NAB 2011

Las Vegas, Nevada


www.nabshow.com)

11-14 National Space

Symposium

Colorado Springs, Colorado


www.nationalspacesympo-

sium.org)

MAY

23-24 MilSatCom Asia

Singapore


www.milsatcomasia.com)

30-2 SatCom Africa 2011

Johannesburg, South Africa


www.terrapinn.com/2011/

satcomza/)

JUNE

21-24 CommunicAsia 2011

Singapore


www.communicasia.com)

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Brussels office.


GLOBAL REGULATIONS

The Radio Regulat ions of the International

Telecommunication Union (ITU), at last count, include

nearly 2,200 pages covering more than 40 radio services,

such as the FSS. The Radiocommunication Bureau (BR —

an acronym based on the French language version) within

the ITU employs the full-time officials who administer the

Radio Regulations, for instance, by processing applications

for satellite orbital slots and associated frequencies to be

registered internationally. The body that interprets these

rules and mediates conflicts between member countries

does not operate full time, however, but instead is made up

of part-time experts elected by the ITU members to serve

on the Radio Regulations Board, the RRB.

The RRB is a relatively recent body, created in 1994

as a replacement for the earlier International Frequency

Registration Board, itself dating back to an ITU Pleni-

potentiary Conference held in 1947 in Atlantic City. The

story of these bodies and their responsibilities has been

described by former RRB Member Wladyslaw Moron,

who collected the background in a concise statement

updated in November.

The 1994 changes resulted in a split between the Radio

Regulations administrative duties, which were moved

into the new BR, and the interpretation of the rules, a

task given to the new RRB. The board is not a perma-

nent secretariat, however, because its members stay in

their home countries, and as Moron says, “They come

to Geneva only for short meetings a few times a year.”

There are 12 RRB members, elected from five regions

every four years to create a geographic balance.

The RRB’s short meetings last at least a week and

can require an intensive amount of work. The RRB

has held 55 such meetings in its history, with the most

recent ending in early December. For its first meeting

in February 1995, the RRB had a relatively sedate agen-

da to consider only five brief documents. By contrast,

the 55th meeting considered 14 documents, some very

lengthy, covering numerous and often controversial

issues. The agenda items ranged

from conflicts between France and

Iran over a satellite slot; cancella-

tion of numerous frequency assign-

ments of non-operational satellite

networks for Tonga and other countries; harmful inter-

ference or Radio Regulations infringements by Italy

to neighboring Slovenian broadcast stations; and an

interminable series of complaints by Cuba over alleged

U.S. interference.

The RRB mediates between member states in these

disputes — Moron calls the board a “kind of watchdog to

monitor compliance.” Its decisions only can be changed

by a subsequent world radiocommunication conference,

such as WRC-12 coming up in less than a year. The RRB

typically is reluctant, however, to decide the conflicting

claims of countries. In the author’s experience, the RRB

rarely challenges factual assertions by a member state,

even when the claims are obviously a stretch. The RRB

will insist, over the course of several meetings, that the

member states try to work out their difficulties before

forcing a decision.

Another major duty of the RRB is to interpret the Radio

Regulations and issue rules of procedure for how they

should be applied. In this process, the RRB works with

possible inaccuracies or inconsistencies in the regula-

tions that arise due to the pressure at radio conferences

to adopt complex rules in a short space of time. Mistakes

arise, and the RRB has to deal with them.

A further challenging matter for the RRB was given to

it by WRC-97, which adopted Resolution 80 on due dili-

gence in applying ITU constitutional provisions. Among

other matters, that resolution calls on the RRB and other

ITU institutions to look into possible ways to realize

principles of equitable access to satellite frequencies

and orbital slots.

Both the BR and the RRB continue work on this topic,

and it remains on the agenda of the next radio confer-

ence as item 8.1.3. It is not a item that will be resolved

quickly, because pressure on the geostationary orbit

continues to mount, as shown by the controversies the

RRB faces at each meeting. In his concluding remarks,

Moron notes that this problem is “difficult and delicate.”

The RRB becomes a pressure point for interpreting the

rules — a pressure that is only going to increase.

More background on the ITU radiocommunication

sector can be found in the recent ITU History portal at

http://www.itu.int/en/history/Pages/default.aspx.

A Closer Look at the ITU’s Radio Regulations Board

Gerry Oberst is

a partner in the

Hogan Lovells

Brussels office.

By Ger r y Obers t


SATELLITE POLICIESBy Rau l Maga l lanes

“Do I hear $3 billion for 20MHz? Going once, going

twice …”

As amusing as it might be to imagine a bunch of stressed

telecom CEOs judiciously raising their hands in a crowded

auction room, in point of fact, the U.S. Federal Communi-

cations Commission (FCC) regularly conducts auctions

anonymously over the Internet. Since 1994, the FCC has

used online auctions to license rights to parts of the electro-

magnetic spectrum. Bidders can place bids from the comfort

of their homes or offices. Also, anyone with Internet access

can follow the auction progress, even non-bidders.

How FCC Auctions Work

The FCC uses an auction format called simultaneous

multi-round to grant spectrum rights. With this structure,

licenses in different geographic regions are auctioned

simultaneously, however, bidders can choose to bid several

licenses at the same time using what the FCC calls package

bidding.

FCC auctions have multiple rounds with rest periods in

between. Bidders are required to bid each round, although

they can choose to waive bidding a round up to three times

during the course of the auction. The auction ends when all

waivers are exhausted and no bidders remain, a process that

can take days or weeks. At the start of an auction, rounds

may last an hour each, but rounds eventually are cut to 30

or 15 minutes to accelerate the end of the auction.

How Bidders Qualify for an Auction

Given certain foreign ownership limits, any person or entity

can qualify to bid in an FCC auction. Application is a two-

step process in which applicants must first complete a

short form with basic information.

Second, applicants make a monetary

deposit that varies based on the

number of licenses sought. The FCC

initially assigns bidding units to each

license. Each bidding unit typically

corresponds to a dollar.

Accordingly, if the FCC assigns

10,000 bidding units to a given license,

applicants must deposit $10,000 to

qualify to bid on that license. Depos-

its are made to an FCC-designated holding bank account.

As the auction progresses, participants bid an increasing

number of bidding units for a given license, however, bid-

ders are not required to deposit any additional money. At

the conclusion of the auction, winning bidders have 30

days to pay the difference of the winning amount over

and above the initial deposit. Losing bidders are refunded

their initial deposit.

Limitations in an Auction

There is significant transparency before, during and after

an auction. The identity of the bidders is public knowledge;

so is the value in bidding units for each license after each

round. What is not public is who has bid for what license.

At any given time during an auction, anyone can determine

the current value of each license, but they will not know

which of the bidders holds that winning bid. To prevent

collusion, bidders are not allowed to communicate during

the course of the auction.

To level the competitive field, the FCC offers discounts

to small businesses should they win a license. For instance,

an entity with reported three-year revenues below a given

threshold might receive a 25 percent discount on the win-

ning bid. However, any partnerships or contracts must be

disclosed prior to auction start. This prevents an entity

from participating in an auction as a small business when it

has arranged for large financial backing “should it win the

license.” Essentially, revenues for the participating entity

and the investing entity are then combined to determine

eligibility for discounts, if any.

Conclusion

Since 1994, the FCC has conducted nearly 100 auctions.

This now seems to be the prevailing method of granting

spectrum rights, largely replacing comparative hearings

and lotteries. Other methods still remain, such as straight-

forward applications for Earth station licenses and first-

come, first-serve for space station licenses. Auctions have

proven not only to be a lucrative endeavor for the FCC but

also an efficient and expeditious way to assign spectrum

rights. Next time there is an online FCC auction, make

sure to sit by the computer with your favorite soft drink

and some popcorn by your side.

FCC Auctions

Raul Magallanes

runs a Houston-

based law firm

focusing on tele-

communications

law. He may be

reached at +1 (281)

317-1397 or by

email at raul@

rmtelecomlaw.com.

WWW.SATELL ITETODAY.COM VIA SATELL ITE MAGAZINE FEBRUARY 2011 17

SATELLITE GETS PERSONAL

Max Engel is an

experienced satel-

lite industry and

telecom industry

analyst and found-

er of The North

Star Consultancy.

He can be reached

at maxnorthstar@

gmail.com.

By Max Enge l

The Success of Satellite Radio

Satellite radio (specifically Sirius and XM) was created with the idea that such a service could

offer more specialized programming than conventional

terrestrial radio. A broader range of more specialized

content would gain a profitable audience by aggregating

demand from a continental landmass. No ordinary radio

station could afford to offer the sort of programming

satellite radio could offer, because terrestrial stations

could not focus their programming as tightly as an

individual satellite radio channel could — and there

would be many channels. With the additional benefit of

continental signal coverage, this high level of choice,

coupled with higher quality sound, was expected to

convince people to pay for usually free radio.

This same dynamic was successful in the cable and

satellite TV (DTH) business, but it took years for DTH

to become profitable. Satellite radio suffered from the

same problems as DTH — high startup costs and no ini-

tial subscriber base. While the DTH business had cable

as an example that people would pay for TV, there was

no such evidence for satellite radio. As recently as the

first quarter of 2009, Sirius XM lost 400,000 subscrib-

ers and looked set to fail, and it was widely held that

satellite radio had been made irrelevant by the iPod

and the Internet.

Now it appears that those sages will have to eat their

words. In the second quarter of 2010, Sirius XM reported

net income of $15.27 million, rebounding from a loss of

$159.64 million in the 2009 second quarter. In the third

quarter of 2010, Sirius XM announced a $67.6 million

profit. Finally, on Nov. 30, Sirius XM announced that it

had passed 20 million subscribers. Results for the full

year had not yet been released as

of this writing, but it seems certain

that 2010 will be the year the satellite

radio will become profitable.

So what does this tell us? Noth-

ing for certain; but it suggests that

the Internet is not the satellite killer

that some have suggested.

First, satellite-based services

generally are not limited by loca-

tion. While satellite radio does have

a terrestrial repeater network, it is in no way as com-

plex or expensive as the sort of wireless network that

would be required to provide similar coverage to Inter-

net-based programming. I just drove from Texas to Cali-

fornia, and as my wife pointed out, there were quite a

few long stretches of low cell phone connectivity, where

the system could not provide 3G or 4G connectivity, just

generic voice. We are a long way from providing mobile

access to a large body of entertainment via wireless

access to the Internet.

Second, the recent results for Sirius XM also sug-

gests that the use of new car sales channels as the major

distribution method for satellite radio has been a suc-

cess. This approach has made satellite radio more easily

accessible to a broader audience than Internet broadcast

audio. While the generation that has grown up with the

Internet may find it less intimidating than their prede-

cessors do, it is still more complicated than terrestrial

or satellite radio. By making satellite radio a one-to-one

replacement for the very familiar radio in your car, Sirius

XM has opened markets that remain largely closed to

the Internet as a distribution channel.

Similar factors have influenced the growth of video

distribution by Internet. As services such as Netflix have

developed simple user interfaces, they have appealed to

more users. Likewise, DirecTV’s DVRs can be hooked

directly to the Internet so that the user is unaware of

whether the content received is coming over the satel-

lite or Internet connection. Audio over the Internet also

has grown quite sophisticated (iTunes is an example),

but it is not mobile.

There is no question that the existence of a broadly

available wireless Internet would be a strong competitor

for satellite radio (if the cost was competitive), but such

a network is not likely to appear any time soon. Satellite

radio offers a combination of broad geographical cover-

age, low cost (compared to 4G) and a wide selection of

programming (compared to terrestrial radio) that should

keep it in the game for quite some time.

The real question was whether it could turn a profit.

The only remaining question will be its ability to replace

its satellites and that question will remain unanswered

for some years to come.

COVER STORY

BY GIOVANNI VERLINI

WRC-1218 FEBRUARY 2011 V IA SATELL ITE MAGAZINE WWW.SATELL ITETODAY.COM

Full Agenda of Spectrum Issues at


At the World Radiocommunication Council 2012 (WRC-

12), experts will review the allocation of radiofrequency

spectrum and orbital resources. A positive outcome

for the satellite industry will be crucial to its future.

M Many satellite players enter 2011 with

a sense of optimism, having largely performed

well during difficult economic times. However,

while an optimistic mood prevails, an International

Telecommunication Union (ITU) Conference that

could have a major impact on the satellite sector is

coming into focus, and once again, satellite players

will have to battle wireless and telecom interests

seeking to acquire the spectrum the satellite sector

needs. The hard work starts now, and 2011 will be

a critical year in preparation for WRC-12, which

will take place in Geneva, Switzerland, from Jan.

23 through Feb. 17.

During the three-week event, experts are due

to revise the Radio Regulations, i.e., the intergov-

ernmental treaty governing the use of the radiof-

requency spectrum as well as the geostationary

and non-geostationary satellite orbits. Such revi-

sions are of paramount importance to the future

of satellite services. While in the case of orbit

resources, the satellite industry only will be fac-

ing what could be defined as internal issues, in the

case of the radiofrequency spectrum, it will not

be alone. Industry bodies and lobby groups from

the wider telecoms sector will vie for influence

within the council. The allocation of resources,

i.e., frequency bands, to different radio services

will be the battleground. The airwaves are getting

crowded and competition will be fierce as the

stakes for all parties involved are high. WRC-12,

in other words, promises to be a busy event.

Busy AgendaIt is the Radiocommunication Sector’s (ITU-R)

mission to ensure rational, equitable, efficient and

economical use of the radiofrequency spectrum

by all radiocommunication services, including

those using satellite orbits, and to carry out studies

and adopt recommendations and standards on

radiocommunication matters. “The ITU-R mission

emphasizes its major role as custodian of the

radio frequency spectrum,” says Yvon Henry, who

heads the space services department at the ITU

Radiocommunication Bureau (BR). “This can be

achieved through effective international spectrum

management, linked with standardization activities

associated with the various radio services and

systems concerned.”

The agenda for WRC-12 already has been

shaped, in collaboration with state authorities,

by the ITU, and the issues on the table at WRC-

12 affecting the satellite industry are many. They

include the convergence between radiocommu-

nication services (agenda item 1.2); the use of

spectrum for control links of unmanned aircraft

systems (UAS) (agenda item 1.3); and from the use

of the band 21.4-22.0 GHz for broadcasting satel-

lite service (BSS) in Europe, Africa and Asia, also

known as ITU Regions 1 and 3 (agenda item 1.13);

and the possible identification of spectrum for

gateway links for high-altitude platforms (HAPs)

in the range 5,850-7,075 MHz (agenda item 1.20).

The issues also include possible changes to the

advance publication, coordination, notification

and recording procedures for satellite networks

(agenda item 7), an issue affecting only the sat-

ellite sector.

The satellite industry’s stance in respect to

these issues varies on a case-by-case basis, though

it has often been described as defensive. “The

satellite industry has been taking a defensive and

offensive position depending on the specific agen-

da item,” says Kalpak Gude, vice president and

deputy general counsel, Intelsat. “With respect to

WRC-12


the convergence between services (agenda item 1.2) and the

identification of spectrum for HAPs gateway links (agenda

item 1.20), the position had to be more defensive.”

For agenda item 1.2, Intelsat’s position is that any change

to the definition of radiocommunication services to take

into account the convergence between satellite services,

i.e., FSS, MSS and BSS, would have potential advantages

but also would be too difficult to implement. “Also, possible

changes in the radiocommunication definitions to accom-

modate the convergence between terrestrial services, i.e.,

fixed service (FS) and mobile service (MS), could have the

negative effect of allowing MS operation in frequencies allo-

cated on a primary basis to FS only,” says Gude. “Therefore,

an NOC (i.e., No Change) is preferable, which can be seen

as defensive.” Similarly, in agenda item 1.20, Intelsat’s posi-

tion is that there is no justification to identify additional

spectrum for HAPs since the spectrum currently identified

for these systems has not been put to use. “In this case too,

NOC is preferable,” he says.

Not all activity on the satellite sector’s part can objectively

be classified as defensive, though, as some of it is proactive

too. For example, the satellite industry is expected to bring

to WRC-12 proposals to include an item in the agenda of

the next WRC to identify new uplink Ku-band frequencies

(approximately between 10 and 15 GHz) in order to elimi-

nate the imbalance between uplink and downlink frequen-

cies in the Americas and in Asia (ITU Regions 2 and 3). In

addition, many would not agree at all with the opinion that

the satellite sector is preparing to be largely on the defen-

sive at WRC 2012.

“With several agenda items asking for more satellite spec-

trum, e.g., BSS, FSS, MSS and Aeronautical Mobile Satellite

(Route) Service [AMS(R)S], the satellite industry is certainly

not on the defensive,” says Astrium’s Jean-Claude Domien,

who is responsible for ITU matters at the European Satel-

lite Operators Association (ESOA). “But since most of the

spectrum is already allocated to other radio services, the

satellite industry has to prove that we are able to co-exist

to get more spectrum allocated to satellite services. This is

certainly a problem since satellite services by nature are

regional and therefore more dependent on spectrum har-

monization.”

ESOA has prepared common positions on the satellite

agenda items for WRC-12, which have been shared with other

operator groups like the Asia-Pacific Satellite Communication

Council (APSCC) and the Satellite Informal Group (SIG).

At a European level, these positions have been used by

each operator to lobby their national regulators, thus result-

ing in a draft European Common Positions reflecting most

of ESOA’s original positions. “This pressure will continue

until February 17, 2012, the date of the end of WRC-12,” says

Domien. “ESOA also invites all its members to take part in

their national preparations to be able to discuss the differ-

ent issues with their authorities to make them aware of the

importance of the satellite issues at the next WRC.”

What Can Be Expected?The question hanging over the satellite industry in relation to

WRC-12, of course, is what outcome can be expected from the

council. The mood among ITU experts seems to be positive

by and large. “It is expected that WRC-12 will take positive

decisions for the satellite industry with regard to spectrum

requirements and regulatory procedures associated with

the FSS, BSS, MSS, RDSS and MetSat,” say Nelson Malaguti

and Philippe Aubineau, Counselors for ITU-R Study Group

4 and Study Group 1, respectively.

Yet, negative outcomes in agenda items 1.2 and 1.20 repre-

sent a potential risk for the satellite industry. Also in agenda

item 1.13 (non-planned BSS band 21.4-22.0 GHz), there are

proposals that deviate from the “first-come-first-served” prin-

ciple. “In a non-planned band, such deviation would repre-

sent a dangerous precedent, especially in view of the risk

of possible future proposals to utilize the same approach in

other non-planned bands,” says Gude.

But there are clear opportunities, too. One such oppor-

tunity is in agenda item 1.3, where the possibility of using

FSS spectrum for unmanned aircraft system control links

would increase efficiencies, as the communication payloads

of unmanned aircraft likely will extensively use FSS frequen-

cies. Use of FSS frequencies for control links raises some

concerns from those believing that these links should be

operated on the AMS(R)S, however, with appropriate redun-

dancy, FSS links can provide the availability values required

by the unmanned aircraft control links.

Another important opportunity for satellites is in agen-

da item 1.25, which offers the possibility of allocating new

spectrum to the MSS sector. “Further, the consideration of

new FSS allocations for Ku-band uplinks will be proposed

as an agenda item to the next WRC and offers an excellent

opportunity for new satellite spectrum,” says Gude.

These views are largely shared within the industry. ESOA

is confident the conference will not implement any form of

a prior planning in the BSS bands and will confirm the exist-

ing interim provisions, including the ‘super-primary’ status

of BSS with regard to terrestrial services.

A similar positive mood informs ESOA’s position on dif-

ferent agenda items. “Following intensive studies done in

the last two years resulting in shortening the list of potential

frequency bands, ESOA is convinced that the bands 15.43-

15.63 GHz (uplink) as well as 5150-5250 MHz, 10.5-10.6 GHz

and 13.25-13.40 GHz (for downlink) provide an excellent

opportunity for the introduction of new MSS allocations,”

says Domien. ESOA also supports the allocation of the band

24.65 – 25.25 GHz for feeder links in Regions 1 and 3.

An All-Satellite BusinessThe satellite industry has been quite active in all ITU and

regional meetings addressing preparations for WRC-12.


It fully supported the workshops on the efficient use of

the orbit and spectrum resources promoted by the ITU

Radiocommunication Bureau and held in Wroclaw, Poland

(June 2008), in Geneva (May 2009) and in Singapore (June

2010). In particular, these workshops raised several issues

that will be addressed under agenda item 7 at WRC-12. Among

these topics, the mismatch between satellite networks

recorded in the ITU’s Master International Frequency

Register (MIFR) and satell ites

actually in orbit should be highlighted.

Eliminating these “virtual satellites”

would contribute significantly to the

efficient use of the orbit and spectrum

resources. Several proposals in this

connection will be discussed at WRC-

12. These include the establishment

of a definitive list of networks with

which GSO-GSO coordination has

to be effected, the reduction of the

coordination arc and the elimination of

unnecessary mandatory letters during

the coordination process. In addition,

it would help clarify the status of

frequency assignments provisionally

recorded and prevent their suppression

without due process.

“But above all, it would help clarify

the definition of ‘bringing into use’ and

potentially modify the due diligence

requirements aiming at more transpar-

ency and possible elimination, or at

least reduction, of so-called ‘virtual

satellites’,” says Gude.

2012 around the CornerThe preparation for WRC-12 continues,

as ITU BR has been organizing a series

of meetings on the issue. The second

such meeting took place in November.

“Based on the presentation of the draft

Conference Preparatory Meeting

(CPM) report and on information

regarding the bureau and regional

preparations for WRC-12, this meeting

provided participants the opportunity

to exchange views and have a better

understanding of the preliminary

draft common proposals and positions of the concerned

entities,” says Henry. ITU-R Working Parties are finalizing the

technical information included in ITU-R recommendations

and reports as appropriate. The second session of the 2011

CPM (CPM11-2) will take place from Feb. 14-25 to finalize

the CPM Report to WRC-12.

What will remain to be done then, is to tackle these issues

at WRC-12.

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22 February 2011 V ia Satell ite magazine WWW.Satell itetODay.COm

As a regional operator working in both Europe and Latin America, Hispasat Chairwoman Petra Mateos-Aparicio provides a textbook example on how a smaller satellite operator can expand its reach and build a business.

Hispasat will once again see growth in both revenues and profits for fiscal year 2010, continuing a trend of strong increases in all key financial metrics

over the past several years. In 2009, the operator saw profits increase by 50 percent compared to 2008, and the regional player’s profits doubled between 2007 and 2009.

Hispasat’s growth has been based, in part, on making great strides in Latin America, securing good transponder fill rates for both its Amazonas-1 and Amazonas-2 satellites. The operator signed contracts for capacity in Latin America with companies

such as Spain-based Telefonica, which provides services in Spain and Latin America, and Brazil’s Petrobras. The majority of the capacity on the Amazonas-2 satellite, placed in orbit in October 2009, already has been sold, giving Hispasat an even stronger position in markets such as the United States and Mexico. At the end of 2009, more than 30 percent of Hispasat’s overall revenues were derived from the Americas.

The company ended the year with the launch of its Hispasat 1E satellite, the second of five spacecraft that form the basis of Hispasat’s latest growth plan

Hispasat also was selected in 2010 by NASA to participate in the hurricane research mission, Genesis and Rapid Intensi-fication Processes, intended to better understand how tropical storms form and then develop into hurricanes.

Due to Mateos’s astute leadership, Hispasat’s growth curve shows no signs of slowing, and with strong positions in both Latin America and Europe, it is an operator on the rise.

Petra Mateos-Aparicio, Chairwoman, Hispasat

While not considered a banner year for the satellite communications sector, 2010 was not as down as some might have forecasted.

Many executives navigated their companies successfully through a tough economic environment, and the following five nominees stood out.

09_VS_020111_SatExec_p22_25.indd 22 1/26/11 1:26:39 PM


Matt Desch, CEO, Iridium

Under CEO Matt

Desch, Iridium’s

total revenue

improved in all

four quarters of

2010, and the

MSS company

reported full-

year revenue

of $353 million,

up from $319 million in 2009. In

addition, Iridium grew its total billable

subscriber base by 25 percent during

the year to nearly 450,000 users and

strengthened each of its business

sectors. Government service revenues

grew by 10.7 percent, commercial

services by 14.7 percent and subscriber

equipment by 9 percent. Iridium’s total

sales grew 10.6 percent on average.

Besides boosting revenues, strength-

ening its global partnership networks

and rolling out a slew of new products,

Desch’s main objective and challenge

in 2010 was to plan for the operator’s

next-generation offering — Iridium Next

— at a time when financing ambitious

projects was difficult. Because of the

economic climate, some analysts wrote

off Iridium Next as unrealistic and too

expensive, but the satellite operator

secured and closed a $1.8 billion financ-

ing facility with a consortium of inter-

national investors led by credit export

agency Coface. The deal put Iridium’s

full-scale system development contract

with Thales Alenia Space and a launch

contract with SpaceX into effect and

opened the door for two long-term

agreements that designate Boeing as

Iridium’s sole operations and mainte-

nance provider for the current constella-

tion as well as granted Boeing exclusive

operations and maintenance rights for

the Iridium Next constellation.

Desch also led efforts to set up Irid-

ium South Africa, an entity that will

allow Iridium to operate, provide and

sell mobile services in the country,

where Iridium anticipates opportuni-

ties for more than 200 global distribution

partners to form partnerships to deliver

services in the South Africa.

The company also won three contracts

from the U.S. Department of Defense’s

Defense Information Systems Agency

to upgrade the Enhanced Mobile Satel-

lite Service Gateway in Hawaii. With the

upgrades, Iridium is building in enhance-

ments that support migration toward

Iridium Next.

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Neil Gaydon, CEO, Pace

Elon Musk, CEO, CTO, SpaceX

Pace has emerged over the last few

years as the new force within the

set-top box market, and Neil Gaydon,

who became CEO in 2006, is the man

behind the company’s surge.

Pace works with cable, IPTV and

terrestrial pay-TV operators but is

particularly strong in the satellite

field, working with operators such as

BSkyB (United Kingdom), DirecTV

(United States), Sky Deutschland (Germany), Astro (Malay-

sia) and Viasat (Nordics). In 2010, Pace also secured con-

tracts with MultiChoice (Africa), among others, to cement

its position in the satellite market.

In the first half of 2010, Pace saw profits before tax

grow 40 percent compared to the same period in 2009, with

revenues growing more than 20 percent to $989.5 million.

Pace shipped nearly 10 million set-top boxes in this peri-

od, another double-digit percentage increase compared

to the previous year.

Much of this growth can be attributed to Pace’s suc-

cess in cracking the U.S. market, always a major test for

an aspiring European technology company. At the end of

June, Pace derived $357.6 million in revenues from the

North American market due to its relationship with opera-

tors such as DirecTV and Comcast.

Pace also aims to be at the forefront in bringing cut-

ting-edge technologies to the set-top box market. In June,

the company became a member of the Wi-Fi Alliance, as

Pace looks to incorporate Wi-Fi technology into select

set-top boxes.

Pace also has expanded its offerings in 2010 through

acquisitions. In North America, Pace acquired 2Wire, add-

ing services such as residential gateways, multi-service

media platforms, remote management systems, value-add-

ed services, customer support and end-to-end integration

and professional services. In Europe, Pace announced it

would acquire French company Bewan Systems. Bewan’s

residential gateway capabilities — including expertise in

xDSL and cable DOCSIS 3.0 IP connectivity technologies

— will combine with Pace’s existing gateway business,

enabling Pace to offer converged gateway and digital TV

solutions to pay-TV customers.

Pace is seen as one of the U.K’s finest technology com-

panies and in April, the company won a Queens Award

for international trade as recognition for Pace’s success

in international markets, the third year in a row that Pace

had won such an award.

Along with performing two key test

launches of the Falcon 9 heavy-lift

launch vehicle, SpaceX CEO and

CTO Elon Musk added $2.5 billion

in business to the company’s launch

manifest during 2010, raising the

fledgling launch provider’s total

manifest from 25 to more than

40 missions. Among those orders

was a commercial launch deal with

Iridium that SpaceX claims is the

largest in history.

In June, SpaceX performed the first test launch of its

Falcon 9 rocket from Space Launch Complex 40 at Cape

Canaveral. SpaceX’s accomplishment boosted NASA’s con-

fidence in the vehicle and put the company a step closer to

providing cargo services to the International Space Station

under the multibillion-dollar Commercial Orbital Trans-

portation Services (COTS) contract.

In December, SpaceX became the first commercial

operation in history to re-enter a spacecraft from Earth

orbit, lofting its Dragon spacecraft into orbit atop a Fal-

con 9 rocket and then returning the vehicle and landing

it less than a mile from the center of the targeted land-

ing zone in the Pacific Ocean, bringing national atten-

tion to the future of the U.S. space program that could

rely more heavily on commercially provided services.

Previously, recovering a spacecraft that had re-entered

from low-Earth orbit had been performed by only the

United States, Russia, China, Japan, India and the Euro-

pean Space Agency.

The highlight of SpaceX’s commercial launch wins in

2010 was a $492 million contract with Iridium to place part

of satellite operator’s Iridium Next constellation in orbit

via multiple Falcon 9 missions scheduled to take place

between 2015 and 2017. SpaceX also added commercial

contracts to perform missions for Israel’s Space Commu-

nication Ltd., Space Systems/Loral and Taiwan’s National

Space Organization.

SpaceX also raised $50 million in additional funding

from investors and, in September, unveiled a commercial

agreement with Astrium to provide dedicated launch ser-

vices to the European institutional small satellite market

using the Falcon 1 rocket.


Thales Alenia Space

posted a strong

2010 under CEO

Reynald Seznec,

winning 12 satellite

manufacturing

contracts along

with adding to its

capabilities via

acquisitions.

Thales reported 1.13 billion euros

($1.46 billion) in orders in 2010, a

39 percent increase over the same

period in 2009. Thales captured four

commercial geostationary commu-

nications spacecraft orders — W6A

and W3D from Eutelsat, Apstar 7B

for APT Satellite Holding and Arsat

2 for Argentina’s Arsat. The four

contracts trailed only Boeing and

Space Systems/Loral, which cap-

tured five contracts apiece. Thal-

es also captured contracts for the

Jason-3, Athena-Fidus, Meteosat

Third Generation (with partner OHB

Technology) and Sicral 2 contracts

from various government entities as

well as awards to develop payloads

for the U.S. Navy’s Geosat Follow-

On 2 satellite and for three RSCC

communications satellites.

Where Thales has taken a com-

manding lead on its competitors is

in the low-Earth orbit sector. Dur-

ing 2010, the company completed

and delivered the first six of the 48

Globalstar second-generation sat-

ellites it is manufacturing and also

finalized its $2.2 billion contract

with Iridium to design and build 81

Iridium Next spacecraft.

Thales received a Galileo System

Support contract from the European

Commission, one of six contracts

for the Galileo system. Under the

agreement, Thales Alenia Space

Italia will perform overall system

design, system security design, sys-

tem integration, verification and in-

orbit validation for Europe’s satellite

navigation system.

Thales also boosted its capabilities

via acquisitions, including the purchase

of SESO, a precision-optics manufac-

turer, that augmented Thales’ ability to

produce satellite optical sensors.

Through the first three quarters of

2010, Thales recorded revenue of 3.72

billion euros ($4.79 billion), a 7 per-

cent increase from the same period

in 2009.

Reynald Seznec, CEO, Thales Alenia Space

7671 North San Fernando RoadBurbank, CA 91505 USA

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PCI

How will these changes affect retailers

who rely on VSAT technology and how will the changes

affect satellite service providers?

The Birth of PCICredit card companies always have been security conscious, but

all of the major card brands had similar but disparate security

standards. In September 2006, Visa, Master Card, American

Express, Discover, and Japan Credit Bureau (JCB) officially

created the Payment Card Industry Security Standards Council

and threw their collective weight behind a single common

security standard for payment card data, which is known

as the PCI Data Security Standard (PCI DSS). PCI DSS is a

set of requirements designed to safeguard credit card data,

and the standard applies to anyone who transmits, stores or

processes payment card data. The PCI Data Security Council

oversees and administers the PCI Data Security Standard

and believes that data security is everyone’s business. The

council is doing its best to create a global sense of community

for those associated with the payment card industry, and the

number of participating organizations is up to 622. The council

is broken down into different groups and, as the need arises,

Special Interest Groups (SIG) are created to tackle specific

technological challenges and provide input to the PCI Working

Group. Satellite technology is included in the Wireless SIG,

along with Wi-Fi and Bluetooth technologies.

Payment cards are the life blood of

the modern retail industry. The ability

to quickly and reliably transport large

numbers of credit card transactions

fueled the early growth of the VSAT

industry, making satellite technology

the de facto network standard in the

retail segment, but big changes have

occurred within the payment card

industry that are having major ramifications.

ComplianceRequirements

B Y G R E G B E R L O C H E R

Put Burden on

Satellite Sector


There are 12 guidelines that apply to every company that

stores, transmits or processes payment card data. PCI compli-

ance is mandatory, and conformity to the requirements is not

trivial or cheap. Failure to meet the requirements can be severe,

ranging anywhere from fines — up to and including electronic

excommunication — by the major card processors.

PCI Compliance: A View from Outer Space“It isn’t enough just to provide a bit pipe anymore,” says Tim

Tang, marketing director of the Business Solutions Group

at Hughes. “In the beginning, Hughes provided customers

connectivity. Later, we optimized their networks. Now

satellite service providers must be PCI complaint. If you aren’t

compliant, retailers can’t use your network. The requirements

are extremely burdensome, and it is imperative that we do

more than just transmit data.” Hughes’ client base includes

a large number of enterprise customers that send payment

card data over their networks. At last count, the company

serves more than 50,000 gas stations, 40,000 retailers and 17,000

restaurants, with the number of credit cards transactions

averaging somewhere between 5 million and 6 million per day.

In addition, as a PCI compliant “merchant,” Hughes processes

payment card transactions for more than 500,000 users of the

HughesNet service in the consumer and SME segment.

The PCI Data Security Standard is updated on a three-year

cycle. “Whenever new regulations come out, there are deadlines

for enforcement,” says Tang. “PCI-DSS Version 2.0 was recently

released, and there is a big push to get everyone upgraded, but

there is a practical reality to the challenge. System upgrades can

be very costly and, combined with a bad economy, many retail-

ers were falling behind on their schedules. When confronted

with the challenges, the council softened their deadline a bit,

allowing companies who weren’t going to be compliant by this

coming July to have an upgrade plan in place, but they have to

stick to the plan and make the required upgrades.”

The Council categorizes merchants by size and has differ-

ent requirements for compliance accordingly. Level 1 includes

merchants who process more than 6 million credit card trans-

actions per year. A typical convenience store chain can reach

that number with just 20 locations. Level 1 merchants also face

an annual on-site audit by a security firm certified by the coun-

cil. Merchants classified as levels 2-4 handle fewer numbers of

transactions each year and must complete an annual self assess-

ment. In addition, all merchants must have quarterly network

scans performed by a PCI Approved Scanning Vendor.

Audit TrailSatellite service providers must meet the same PCI requirements

as a payment gateway, which is an entity that acts as a front

end to a card brand. “Although we technically aren’t a payment

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gateway, we are treated as one by PCI and fall under the same

scrutiny when it comes to security,” says Scott Hutchinson,

director of application engineering at Spacenet. Network

security has become much more important to network operators

and their customers as satellite networks intermingled with the

Internet. PCI requirements take security requirements to a new

level, forcing satellite service providers to take on new duties,

including log management. Credit card terminals communicate

with central servers, and logs of every transaction are kept as an

audit trail. Intrusion detection systems and intrusion prevention

systems monitor transactions and filter out anomalies from

routine network traffic. Every irregularity, which might be a

hacker attempting to penetrate security, must be screened by a

human to ensure there is not a vulnerability. Logs are required

for evaluation should a security breech occur.

LogRhythm specializes in log management and security

information event management (SIEM) and sells tools to col-

lect and monitor logs required by PCI. Recent changes in PCI

guidelines were significant regarding central log tracking, and

many service providers understand that it is demanding and

costly to develop and maintain their own in-house log moni-

toring tools. “The primary regulation of concern to applica-

tion monitoring is the new regulation PCI PA-DSS 4.4, which

states that payment applications must facilitate centralized

logging,” says Eric Knight, knowledge engineer at LogRhythm.

“Although this is a seemingly small change, there are some big

issues which must be addressed. This means that many envi-

ronments were not logging their applications before. It also

means custom collection and rules for log repositories and

SIEM technologies are likely to be required. These types of

changes make it much more challenging for companies with

home grown logging systems to be complaint,” he says.

Point-of-sale terminals run the gamut from simple card-

swipe systems to stand-alone computers. A good example

of a complex point-of-sale terminal is a new-generation gas

pump, which offers more services but increases the potential

of a security breech. Scoping, or segmenting the local area

network at a retail location in order to minimize the scope

of a PCI audit is a hot topic. “The biggest challenge to a PCI

audit is at the store level,” Hutchinson says. “A good example

is a LAN-connected card reader in a store. The C-store owner

may want to add another PC to the LAN to provide back-office

functionality, but that is a security risk. The goal is to limit the

card holder data environment. Spacenet’s Prysm Pro incorpo-

rates a router and firewall and provides logical and physical

LAN segmentation. This approach ensures that the credit card

data is isolated and protected.”

VSAT networks previously were considered to be secure,

and credit card data traversing them was not required to be

encrypted, but that has changed. PCI now considers data that

is sent over the air “not secure,” and due to the change, credit

card data transactions now must be encrypted over a satellite

network. “The PCI Council doesn’t specify a specific encryp-

tion algorithm,” Hutchinson says. “The language in the latest

requirement states only that a ‘strong cryptographic algorithm’

must be used.’ Whenever you add data encryption to payload

data it adds overhead, which, in turn, requires more space

segment and drives the prices up for end users.”

Satellite networks are not the only wireless devices affected

by the new requirements. Wireless LANs also have come under

scrutiny. “Many retailers use wireless access points inside their

stores to simplify wiring, and many allow customers to access

the Internet through the wireless infrastructure,” says Tang.

“Hackers may sometimes set up rogue wireless access points

on the retailer’s store network and then sit in their cars in the

parking lot and steal credit card information. To meet the PCI

requirements on a quarterly basis, someone from the retailer

would physically have to go on site with a wireless scanner to

check for rogue wireless access points. The original wording

was very ambiguous and the requirements were extremely

burdensome. The retailer either had to send a technician to

the store, or ship a wireless analyzer and then scan for rogue

devices. Last October, the council changed the language which

allows some options. Hughes now provides PCI Wireles Scan-

ning Services which automates this process. An access point is

installed at all locations that continuously monitors for wire-

less devices. Rogue devices are automatically identified and

blocked. We can even send a technician to the remote location

to remove the unauthorized device.”

The U.S. Federal Trade Commission estimates that 9 mil-

lion Americans are affected by identify theft every year. While

it is hard to place an exact figure on the financial losses of

merchants and financial institutions, but the number is over-

whelming. As a direct result, the payment card industry is mov-

ing to make sure companies community provide the highest

level of security for card holder data. “The importance of PCI

compliance is growing. Changes in PCI requirements happen

quickly and are often significant, making them a challenge to

meet by the specified deadline,” Tang says.

While helping to ensure the security of card holder data, PCI

requirements effectively have become a stiff barrier to entry for

new satellite service providers. No longer can a satellite service

provider buy an uplink, equip it with baseband hardware and

offer data transmission services to retail clients. A provider’s

entire operation must now be PCI compliant, or else the credit

card processors will not do business with them. As the require-

ments to be PCI compliant become even more stringent, look

for existing VSAT providers to offer even more value-added

services to their core transport services and the number of

competitors serving the retail segment to shrink.

Greg Berlocher has been active in the satellite

industry for twenty five years and is the

President of Transcendent Global Networks LLC.

+1 480 333 [email protected]

www.comtechefdata.com

Multi-LayerOptimization

Comtech EF Data is the recognized leader in satellite bandwidth effi ciency and link optimization.Our technologies provide value by reducing OPEX / CAPEX and increasing throughput. The patented RAN optimization by our subsidiary, Memotec, is our most recent value-added capability for mobile backhaul applications. By optimizing RAN traffi c, required bandwidth to support deployed capacity can be reduced by up to 50%. Memotec’s RAN optimization layered on our other core technologies, such as VersaFEC® and DoubleTalk® Carrier-in-Carrier®, is now an integral part of our mobile backhaul solutions. RAN optimization is available in the stand-alone Memotec products or integrated into our market-leading modems. Whether you need to backhaul just a few TRXs, E1s, E3s and/or IP, you can have confi dence when you select solutions from the leaders in satellite-based mobile backhaul.

Contact us to learn more about the value that our multi-layer optimization can provide for your network.

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BROADCASTERS CORNER

Executive Q&A

Bruce Churchill, CEO, DirecTV Latin AmericaDirecTV Latin America has become a

pay-TV giant in the region with more than

8.2 million subscribers. The operator

now is embarking on a new strategy

targeting emerging middle classes in the

region. CEO Bruce Churchill discusses

the 2010 performance, the next phase

of growth and why Colombia could be

an exciting market for pay-TV.

VIA SATELLITE: How have you built your subscriber base?

CHURCHILL: We have three platforms, one we call Pan-

Americana, which is Spanish-speaking South America. We

pretty much operate throughout the Spanish-speaking part

of Latin America, except for Bolivia. The big territories are

Venezuela, Argentina and Colombia. That is a wholly owned

subsidiary of DirecTV. There, we have 3.2 million subscrib-

ers. In Brazil, we own 74 percent of the operating company,

and there, we have 2.3 million subscribers. In Mexico, where

we are the minority shareholder, we have a percent share,

we have 2.8 million subscribers.

VIA SATELLITE: How has the economy affected operations?

CHURCHILL: The Latin American economies, with the pos-

sible exception of Mexico, are not so really tied to the United

States but are more tied to countries in the emerging world,

specifically China. So even though there was worldwide

concern at the end of 2008 in Latin America, Latin America

bounced back much more quickly. The reality is they were

not as affected. Those economies do not have huge consumer

credit issues. You didn’t have a credit bubble or anything like

that. The fundamentals, in fact, were always quite strong.

In hindsight, there really wasn’t even a reason for a stall-

ing in Latin America, but I think it was more psychologi-

cal than real. Even 2009 was pretty strong for us. 2010 was

particularly strong for us, and that could be explained due

to the World Cup. As you know, in Latin America, there are

three main sports, football, football and football. The World

Cup generated a lot of excitement, encouraged people to

buy TVs for the first time or upgrade their televisions to

HD. That created a lot of excitement. We rode the wave of

that excitement.

VIA SATELLITE: How important are the addition of HD channels

in your business plan?

CHURCHILL: I don’t necessarily think we will see a huge

ramp-up in the number of HD channels we offer customers.

In Brazil, for example, we offer 35 HD channels in our top

package. If you look at our competition, they may have 23

HD channels. This is a cable operator, so we are the clear

leader in Brazil offering HD services. In Mexico, we have 25

HD channels, which is ahead of the cable competition. Pan-

Americana varies country by country, but we have roughly

around 15 HD channels and we are on a par with everyone

else. There is still a lot of growth there to be had, but there

is still huge potential for HD growth.

VIA SATELLITE: Are local broadcasters producing HD?

CHURCHILL: The initial HD product came from interna-

tional broadcasters, as they were already producing HD for

other markets, so there has been more international than

local content available. Local broadcasters have really only

been gearing up to get into HD. When that happens, you will

see us reach 50 channels, but, at the moment, there are still

several countries in Latin America that have still not defined

what their HD or broadcast standard is going to be, so that

is going to limit FTA HD broadcasts.

VIA SATELLITE: Are you still accepting new SD channels?

CHURCHILL: We still have a very broad and robust SD chan-

nel offering. Most new channels that still come in the market

today are still SD.

VIA SATELLITE: What are your demands for satellite capacity?

CHURCHILL: I think we are fine in the near term. We have

actually launched several new satellites. We had a new satel-

lite for our Brazil business. It came online around two years

ago. It had initial capacity built into it. As regard to Mexico,

we launched a new satellite in January [2010], so we have

doubled the capacity for Mexico. For our Pan-Americana

platform, we have quite a bit of capacity, but we have got

more capacity out of that by investing in more significant

compression technologies. We have added capacity that way,

so in the near term, we don’t see the need for additional


capacity in Brazil and the Pan-Americana platform for at

least another three years.

VIA SATELLITE: Is it too early to be thinking about 3-D TV?

CHURCHILL: It is not even on the horizon. It is still all about

HD. We have around 2.3 million subscribers in Brazil, but only

350,000 have HD. In Brazil, our HD product only comes with

PVR. It gives you a sense of where we are with the things. That

is only around 15 percent of that market. We have a million

subscribers that have advanced products in Pan-Americana,

but a third of those are SD DVRs. It is still very early days in

HD. Some countries have not even defined the HD standard

yet, so it is hard to even imagine 3-D.

VIA SATELLITE: What will be your major launches in 2011?

CHURCHILL: The real action in our markets in 2011 will

be at the other end as we move down the pyramid and the

demographics and move more into the middle classes. Histori-

cally, pay-TV has been more for the A and B classes in Latin

America. We have made a concerted effort, along with our

competitors, to move into the C and D classes. As an example,

if you take a country like Brazil, pay-TV penetration is still

only at around 16 percent. The reason for that is that it has

been a product for the upper and upper-middle class.

This year, we have done some repackaging and have intro-

duced a couple of new products at lower price points to

address the fast growing middle class in Brazil. If you were to

look at the size of the middle class in Brazil, and the growth

there, there have been 30 million people added to the middle

class in the last five to six years. The favorable economic story

that is going on in Latin America, coupled with the favorable

demographic profile is good for us. Typically, these countries

have young populations, so around 70 percent of the people

are under the age of 40. These countries are moving into a

place in their history where large numbers of people are

moving into their high-earning years. There is tremendous

economic growth, and this is creating a burgeoning middle

class and that is where the action is going to be. I think a lot

of our growth will be in the middle class.

VIA SATELLITE: Does this take a different sales approach?

CHURCHILL: You have to price things differently. It is not a

case of lowering prices, because we don’t want to cannibalize

our existing subscriber base. We have been working with pro-

grammers to put together lower-end packages with few pay

channels but still to try and make it sufficiently compelling

for people. In Brazil, we have created completely different

communications strategies. The kind of advertising we have

run is very different. Even organization-wise, we have created

different sales structures, separate advertising teams, etc.

Probably, where we have taken the biggest leap in terms of

a change in method of operations when targeting the middle

classes, is that we offer a prepaid product. We have done this

in our Pan-Americana part of our operations. You can buy a

kit off the shelf, install it, gain a month’s programming and

you can top up the way you would with a cell phone. With a

lot of people that is an attractive option.

VIA SATELLITE: How many prepaid customers do you have?

CHURCHILL: It depends on how you count it. When we do

our financial reporting, we only count those subscribers who

are on at that moment in time. The last time we reported,

there were 500,000 prepaid subscribers at that time. What

is interesting to us about the prepaid model is if you look

at all the prepaid kits we have sold since we launched this

three years ago, we have sold around 1 million kits. At Sept.

30, only around 55 percent were actually active. Those were

the ones that were on and subscribing to DirecTV, but if you

look back from that moment in time and look and go back

30 days and ask what percentage of people had been on for

some period of time, that number jumps to 65 percent. If

you go back 180 days, it jumps to 80-plus percent. What that

means is that the million kits we have sold over the last three

to four years, sometime in the last 180 days, some 800,000

of them have used the service.

VIA SATELLITE: What country outside of Brazil and Mexico has

the strongest potential growth for pay-TV?

CHURCHILL: We have around 400,000 subscribers in Colom-

bia. It has been an industry that we have described euphemis-

tically as informal, which is another word for piracy. There are

analog cable operators who do not have conditional access

who are distributing to many more subscribers than they

are admitting to. They are paying programmers for fewer

subscribers than they are distributing to. They don’t pay the

government taxes on the full number of subscribers they

are distributing to. That creates competitive problems for

people like us, but what has happened in Colombia is there

has been more emphasis on law and order. The industry is

becoming much more formal and structured. Telmex has

come in and bought a lot of cable systems. The market has

become much more formal, and Telmex will come in and

start to run it like a proper business. They will start paying

programmers and the government taxes. Therefore, it charges

more to customers, so we become much more competitive.

We saw this happen in Argentina, and now I expect to see

the same thing happen in Colombia. That market today has a

little more than 3 million pay-TV households. There are some

people that estimate that there are as many as another 3 mil-

lion more unreported households in Colombia.

INDUSTRY AT LARGE


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TECHNOLOGY

Technology 32

Services 32

Contracts 32

Executive Moves 34

Education 34

SERVICES

Sevis Systems

UNVEILS GSM BANDWIDTH OPTIMIZATION PLATFORM

Sevis Systems unveiled its third-generation GSM bandwidth

optimization platform, a backhaul solution designed to opti-

mize GSM traffic.

The Sevis 6104 is designed to work on 4 E1/T1 links over a

variety of WAN infrastructures such as Internet Protocol, digital

leased E1/T1 lines, Ethernet and satellite. It is designed for rural

areas in the developing world. The solution employs field GSM

A.bis optimization algorithms that reduce backhaul bandwidth.

In particular, it decreases satellite bandwidth consumption and

the operating costs of microwave and leased line networks.

Tripura

ROLLS OUT GEOSPATIAL SATELLITE TRACKING SYSTEM

Indian developer Tripura launched the Geo-Spatial 3D satel-

lite-based imagery system to track terrorists and curb crime

in the northeastern state.

Tripura is the second state in India to introduce the system,

which was developed by the Mission for Geo-Spatial Applica-

tions (MGSA) under Indian Government’s Department of Sci-

ence and Technology.

Iridium

UPGRADES DIRECT INTERNET SOFTWARE PACKAGE

Iridium Communications introduced an updated version of its

Direct Internet software package to connect to the Internet

using the Iridium 9555 and Iridium 9505A satellite phones

as well as the Iridium 9522B L-band Transceiver.

The Direct Internet 3 package aims to enhance Internet

connectivity by using new data compression, caching and

network optimization techniques powered by SlipStream

SP6.0 with Now Imaging compression technology. The update

is part of Iridium’s effort to enhance its offerings in prepara-

tion for Iridium Next, the company’s next-generation satellite

constellation expected to begin launching in 2015.

Italian Space Agency

COMMENCES SERVICE ON COSMO-SKYMED

Italy’s Cosmo-SkyMed constellation is complete and fully

operational after the system’s fourth satellite began sending

images to ground stations.

Thales Alenia Space developed the civil and military Cos-

mo-SkyMed program for the Italian Space Agency and the

Italian Ministry of Defense. The system will take images of the

Earth using an X-band synthetic aperture radar instrument

capable of operating in all visibility conditions.

Intelsat

TAPS SATLINK FOR VIRTUAL NETWORK SERVICES

Intelsat awarded a contract to SatLink Communications to

provide virtual network operator (VNO) end-to-end turnkey

services based on the iDirect Evolution hub. The long-term

agreement enables Intelsat to provide uplink and IP services

to clients in the Middle East from the Intelsat 15 satellite at

85.2 degrees East.

SatLink’s teleport services and strategic location will help Intel-

sat expand its geographic reach on multiple satellites and gain

independent regional control over remote management markets.

Telenor

LEASES THOR 3 BROADBAND CAPACITY TO VICUS LUXLINK

Teleport services provider Vicus Luxlink leased six transponders

of Thor 3 inclined-satellite capacity from Telenor Satellite Broad-

casting (TSB) with the option of an additional two transponders.

Vicus Luxlink will use the capacity to provide Internet con-

nectivity in the Middle East region from the 4 degrees West

orbital location at speeds of more than 600 Mbps. Vicus Lux-

link will support the service from its teleport facility in Ger-

many and also install and manage its own platform at Cyta’s

Makarios Teleport in Cyprus.

Thales Alenia Space

TO BUILD MULTIBEAM RADAR FOR CFOSAT

Thales Alenia Space signed a contract with French space

agency CNES to produce the Surface Waves Investigation

and Monitoring (SWIM) instrument as part of a joint French-

Chinese program to develop an Earth observation satellite.

The SWIM multibeam Ku-band radar will be integrated with

the China France Oceanography Satellite (CFOSat), built by

CNES and the China National Space Administration (CNSA).

Thales Alenia Space has built similar spectrometers for other

civil spacecraft, such as the Siral instrument on the Cryosat

satellite, AltiKa on Saral and Poseidon on the Jason satellite.

CFOSat’s mission is to detect and characterize surface

winds and ocean wave spectrum properties. The SWIM

instrument will be paired with a SCAT instrument made by

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Industry At Large


China to form the payload for the CFOSat satellite.

EMS Technologies

NAMES MACKAY TO BOARDEMS Technologies appointed President and CEO Neil Mack-

ay to its board and said Mackay’s involvement in overseeing

the company’s strategy development, risk management and

corporate governance will expand.

Prior to becoming CEO, Mackay served as EMS’ COO and

executive vice president of strategy. Prior to joining EMS,

Mackay served as CEO for Innotech Aviation.

NASA

APPOINTS ASSOCIATE DEPUTY ADMINISTRATOR NASA named Richard Keegan associate deputy administra-

tor, replacing Charles Scales, who is retiring after serving in

the position since April 2007 .

Keegan will assist and support in day-to-day agency oper-

ations, institutional and workforce issues, and with contin-

gency and continuity of operations planning. He previously

served as director of NASA’s Office of Program and Institu-

tional Integration.

NASA

SEEKS SPACE TECHNOLOGY NASA is accepting applications from U.S. graduate students

for the agency’s Space Technology Research Fellowships to

perform space technology research beginning in the fall.

The fellowships, sponsored by NASA’s Office of the Chief

Technologist, are intended to provide the nation with a pipe-

line of highly skilled engineers and technologists to improve

America’s technological competitiveness.

The deadline for submitting fellowship proposals is Feb. 23.

EXECUTIVE MOVESEDUCATION

For more industry news, sign up for SatelliteTODAY’s

Daily News Feed e-mail at

www.satelliteTODAY.com/mailinglist/

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ManSat, LLC 15

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satellite companies can be found on our Web site

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Company WebsiteAAE Systems Inc. aaesys.com

Acorde S.A. acorde.com

Advanced Switch Technology astswitch.com

Advantech AMT advantechamt.com

Alcatel alcatel.com/space

Allen Communications alncom.com

Alga Microwave Inc. alga.ca

AMDOCS amdocs.com

American Antenna americanantenna.com

Americom Government Services americom-gs.com

Amplus amplus.biz

Anacom Inc. anacominc.com

Analytical Graphics Inc. stk.com

Andersen Manufacturing Inc. anderseninc.com

Andrew Corp. andrew.com

Antek Systems LLC antek.com

Arianespace arianespace.com

Artel Inc. artelinc.com

ASC Signal Corp. ascsignal.com

Ascent Media ascentmedia.com

Asset Recovery Center assetrecovery.com

Astrotel International LLCastroteleurope.com

astrointernational.comATCi (Antenna Technology Communications Inc.) atci.com

Atlantic Satellite Corp. atlanticsat.com

AvcomRamsey avcomramsey.com

AvL Technologies avltech.com

Azure Shine International Inc. azureshine.com.tw

Boeing boeing.com

CapRock Communications caprock.com

C-Com Satellite Systems Inc. c-comsat.com

Centrex Communications centrexcom.com

Cerona Networks cerona.com

Chelton Inc. chelton.com

Cisco Systems cisco.com

Clear Channel Satellite clearchannelsatellite.com

Codem Systems Inc codem.com

Communications & Energy Corp. cefilter.com

Computer Modules Inc. computermodules.com

Comtech Antenna Systems comtechantenna.com

Comtech EF Data comtechefdata.com

Comtech Mobile Datacom comtechmobile.com

Constellation Networks Corp. constellationnetcorp.com

Conus Communications conus.com

Convergent Media Systems convergent.com

Corporativo Dotcomexico S.A. de C.V. dotcommexico.com

CPI Canada Inc. cpii.com/cmp

CPI Satcom Division cpii.com/satcom

CPI MPP cpii.com/mpp

Crawford Communications crawford.com

Cross Technologies Inc. crosstechnologies.com

Crown Media Inernational crownmedia.net

dBm dbmcorp.com

Desert Sky Digital Satellite Inc. sattruck.com

DEV Systemtechnik GmbH & Co.KG dev-systemtechnik.de

DH Satellite dhsatellite.com

Digicast Networks Inc. digicastnet.com

Digital Voice Systems Inc. dvsinc.com

Disitron Industries Inc. disitron.com

Diversified Communications Inc. dciteleport.com

Company WebsiteDucommun ductech.come2v e2v.comEADS Space space.eads.netEASi (Efficient Antenna Systems Inc.) easisat.comEasy Trading Communications Inc. etcny.netEchostar echostarfixedsatellite.comEfficient Channel Coding eccincorp.comEmbedded Consultants LLC embeddedconsult.comEmerging Markets Communications emc-corp.netEmcore Corp. emcore.comEutelsat eutelsat.comEvertz Microsystems Ltd. evertz.comFlextronics Software Systems flextronicssoftware.com

Force Inc. forceinc.com

Foxcom Inc. foxcom.com

General Dynamics C4 Systems gdc4s.com/space

Geosync Microwave geosyncmicrowave.com

Gilat gilat.com

GL Communications Inc. gl.com

Global Communications Solutions Inc. globalcoms.com

Global Digital Media Xchange Inc. gdmxchange.com

Globecomm Systems globecommsystems.com

Glowlink glowlink.com

Gulf Communications International gcigulf.com

HDTV Uplink hdtvuplink.com

Helius Inc. helius.com

Hispasat hispasat.com

Honeywell ERI honeywell.com/satcomprotection

Hughes hughes.com

IDB Systems idbsystems.com

iDirect Technologies idirect.net

ILC ilc.com

Integral Systems Inc.integ.com

integ-europe.com

Intellian intelliantech.com

Intelsat General intelsatgeneral.comInternational Launch Services ilslaunch.comIntorel intorel.comIrdeto Access irdetoaccess.comITS Electronics, Inc. itselectronics.comITT Industries ittsystems.comIronlink Communications ironlinkus.comJ A Taylor & Associates broadcastassociates.comJersey Microwave jerseymicrowave.comJSAT International Inc. jsati.comJuch-Tech Inc. juch-tech.comKayou Communications kayoucommunications.comKencast Inc. kencast.comL-3 Satellite Networks l-3com.comLinearizer Technology lintech.comLinksat, Inc. linksat.comLocus Microwave locusmicrowave.comLogus Microwave logusmicrowave.comLongbottom Communications LLC longbottomcommunications.comLoral Space & Communications loral.comM2 Global Inc. m2global.comM&C Systems Inc. mcsys.comManSat spaceisle.comMCL Inc. mcl.comMicroSpace Communications Corp. microspace.comMicrowave Radio Communications mrcbroadcast.comMitec Telecom mitectelecom.comMITEQ miteq.comNabtesco Motion Control Inc nabtescomotioncontrol.comNarda Satellite Networks lnr.comND Satcom ndsatcom.comNew and Used Inc. newandusedinc.com


Company WebsiteNew Era Systems newerasystems.netNewSat/Multiemedia newsat.com.auNewpoint Technologies Inc. newpointtech.comNewtec newtec.beNJRC (New Japan Radio Corp.) njr.co.jp/index_e.htmNorthrop Grumman northropgrumman.comNorthStar Studios northstarstudios.tvNPR Satellite Services nprss.orgNTT Electronics nel-world.comOn Call Communications occsat.comOptimal Satcom optimalsatcom.comOrbit orbit-techgroup.comOrtel ortel.comPALS Electronic Co. Ltd. pals.com.trParadise Datacom paradisedata.comPatriot Antenna Systems sepatriot.comPetrocom petrocom.comPolarSat polarsat.comPSSI-USA pssi-usa.comPulse Power & Measurement Ltd. (PPM) vialite.netQuintech quintechelectronics.comRadyne radn.comRainbow Network Communications rncnetwork.comResearch Concepts Inc. researchconcepts.comRockwell Collins rockwellcollins.comRussian Satellite Communications Co. (RSCC) rscc.ruSAT Corp. sat.comSATELLITE 2010 SATELLITE2010.comSatellite Today satellitetoday.comSatellite Engineering Group sateng.comSatellite Systems Corp. satsyscorp.comSat-Lite Technologies sat-litetech.comSatmex satmex.comSatService GmbH satservicegmbh.deSea-Cell Inc. seacellsatellite.com Sea Launch sea-launch.comSeatel seatel.comSector Microwave sectormicrowave.comSivers Lab AB siverslab.seSES Americom ses-americom.comSES Global ses.comShiron Satellite Communications shiron.comSingTel Optus Pty Ltd optus.com.au/satellite

Company WebsiteSKY Perfect JSAT Corp. sptvjsat.com/enSkyWeb Inc. skydigital.comSojitz Corporation of America myvsat.comSophia Wireless Inc. sophiawireless.com Spacecom amos-spacecom.comSpacenet spacenet.comSpace Star Technology (Group) Corp. space-star.comSpace Systems/Loral ssloral.comSPC Electronics America Inc. spcamerica.comST Electronics Pte Ltd. stee.stengg.com/satcomsStarling Advanced Communications starling-com.comSTM Group stmi.comSuperior Satellite Engineers superiorsatelliteusa.comSWE-DISH Satellite Systems swe-dish.comSystems Technology stainc.comTampa Microwave Lab Inc. tmli.comTeleCommunication Systems telecomsys.comTeleSpectra telespectra.comTelinc Corp. telinc.comTerrasat Communications Inc. terrasatinc.comThales thales-bm.comThrane & Thrane us.thrane.comThe SpaceConnection thespaceconnection.com

Ultra Electronics-DNE Technologies ultra-dne.comUniversal Switching Corp., Inc. uswi.com

Unlimi-Tech Software Inc. utechsoft.comUplit exceedthefeed.comVerso Technologies verso.comViasat viasat.comVia Satellite magazine viasatellite.comVislink Group vislink.co.ukVizada vizada.comWarner Bros. Entertainment Inc. warnerbros.comWavestream wavestream.comW.B. Walton Enterprises Inc. de-ice.comW.C. & A.N. Miller wcanmiller.comWegener wegener.comWork GmbH Satcom work-gmbh.deWorldsat International Inc. worldsat.comXicom Technology xicomtech.comXipLink xiplink .com

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W40 178x121_Layout 1 07/01/2011 08:24 Page 1


DOLLARS AND SENSE

Owen D. Kurtin is a

founder and princi-

pal of private invest-

ment firm The Vin-

land Group LLC and

a practising attorney

in New York City. He

may be reached by

e-mail at okurtin@

vinlandgroup.com.

• Not Just Passengers: New Opportunities for In-Flight Voice and Data

• Moving Onto Each Others’ Turf: MSS And FSS Operators Compete To Serve The

• The Changing World of MSS Distribution: Views from the Front Lines• Competing For Customers: The MSS CEOs Speak Out• A New Generation of MSS Terminals: What’s Next for MSS Equipment

Providers?• How Can Commercial Satellite Providers Best Meet Government

Requirements for COTM?• Public Safety and Homeland Security Applications• Developing the Next Generation of Satellite Tracking Solutions

On Dec. 1 Julius Genachowski, chairman of the U.S.

Federal Communications Commission, announced that

the FCC would pursue enactment of rules to ensure “Net

Neutrality — unblocked, non-discriminatory access to the

Internet. The rules, released Dec. 23, will be reviewed in

March — and debated for a long time.

Whether law or regulation should guarantee Net Neutral-

ity is critical for the development of satellite broadband ser-

vice. Net Neutrality opponents, the owners of the Internet

backbone — the fiber optic and coaxial cables, routers and

switches over which Internet traffic travels, such as Verizon,

AT&T and the major cable operators — argue that they should

be free to charge differential rates for high bandwidth users of

their networks and, in some cases, block some users in favor

of others who pay to be hosted. Net Neutrality proponents,

the high traffic, content and application providers, such as

Google/YouTube, Amazon, Ebay, and Facebook, which do not

pay the backbone owners to host their traffic, argue that the

Internet must remain an open network that guarantees non-

discriminatory access to all users. The Obama administration

and the FCC officially are pro-Net Neutrality.

In the Dec. 1 announcement, Genachowski stated that the

FCC would proceed without attempting to reclassify broad-

band from its existing classification as Communications Act

of 1934 Title I Information Service to Title II Telecommu-

nications Service. The FCC, in making its announcement,

tacitly abandoned the “third-way” approach it proposed in

May, which attempted to reverse its own winning position

before the U.S. Supreme Court in the 2005 Brand X decision,

in which the FCC successfully argued that broadband service

was Information Service and not subject to telephone-like

common carrier regulation set out in Title II. At the time, the

FCC saw the substantially unregulated Information Service

classification as the best way to pre-

serve the Internet’s open-access, low-

entry barrier structure.

Subsequent events convinced the

FCC that it had made a mistake. In

April, the Comcast v. FCC decision by

the D.C. Circuit U.S. Court of Appeals

threw out the FCC’s claim of “ancillary

authority” under Title I to impose

common carrier-like regulation on

broadband service providers, in a case in which the FCC

had taken action against cable operator Comcast for blocking

the use by subscribers on its cable modem lines of certain

peer-to-peer networking software.

The FCC a month later announced the third-way plan, by

which the data transport part of broadband service would

be reclassified as Telecommunications Service but with the

FCC exercising its authority to forebear from all but the most

basic access-assuring regulation. The data processing aspect

of broadband service would be unbundled from the data trans-

port part and would continue to be treated as Information Ser-

vice. The plan was based on the dissenting opinion in Brand X,

which contemplated that kind of unbundling.

During the following comment period, this column argued

that the FCC’s effort was doomed to fail, but not before

subjecting Net Neutrality proponents, opponents and con-

sumers to years of litigation, much like that which followed

the FCC’s ill-fated 1996 Local Competition Order, another

attempt at unbundling packaged services which ultimately

failed to achieve a competitive local telecommunications

market (see “Broadband Pendulum Swings: FCC Hoist with

its own Petard,” Via Satellite, June 2010).

In particular, we argued that the FCC, having pushed

successfully for a broadband Information Service classi-

fication only five years ago, and having, at the time, refut-

ed opponents’ attempts to impose a Telecommunications

Service classification, taken together with the 40-year his-

tory of the Computer Inquiries FCC regulatory proceed-

ings, which led to the Brand X decision, would doom the

third-way reclassification attempt. The new opponents

would put before the court the FCC’s own arguments and

record of five years ago. We argued that the FCC instead

should follow the majority decision in Brand X, that the

FCC’s classification of broadband as Information Service

was reasonable and that it should be accorded deference

in asserting its statutory ancillary authority. The Brand X

majority recognized not only ancillary authority as a legiti-

mate way to regulate broadband service but the right of

an administrative agency to change its position on regula-

tory paradigms based on changing conditions and still be

afforded judicial deference.

It is this position that the FCC has now adopted as the

way to proceed in its Net Neutrality rulemaking.

Net Neutrality Update

By Owen D. Kur t in

New Systems, New Opportunities:

The Future of Mobile Satellite Services

For the third year in a row, the MSUA Conference will take place during SATELLITE, giving you a 360-degree view of satellite communications. At MSUA-8, you’ll experience sessions such as: • Not Just Passengers: New Opportunities for In-Flight Voice and Data

Connectivity• Moving Onto Each Others’ Turf: MSS And FSS Operators Compete To Serve The

Maritime Broadband Market• The Changing World of MSS Distribution: Views from the Front Lines• Competing For Customers: The MSS CEOs Speak Out• A New Generation of MSS Terminals: What’s Next for MSS Equipment

Providers?• How Can Commercial Satellite Providers Best Meet Government

Requirements for COTM?• Public Safety and Homeland Security Applications• Developing the Next Generation of Satellite Tracking Solutions

18328

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Celebrating 30 Years

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