Contents

Introduction. 1

Outdated Competition Policy No Longer Reflects Market Realities 1

The Commission Should Apply the ECO-SAT Test to All Foreign-Licensed Satellite Systems 2

A Universally Applied ECO-SAT Test Would Not Violate WTO Obligations 2

Conclusion. 3

Endnotes 3

Introduction

The Information Technology and Innovation Foundation (ITIF) appreciates the opportunity to comment on Satellite Market Access Reciprocity.[1] The Commission should modernize its satellite market access framework by applying the Effective Competitive Opportunities for Satellite (ECO-SAT) reciprocity test to all foreign-licensed satellite systems seeking U.S. market access, regardless of World Trade Organization (WTO) membership status. This reform is legally non-discriminatory, consistent with WTO obligations, and gives the Commission a concrete tool to respond to asymmetric foreign regulatory burdens.

Outdated Competition Policy No Longer Reflects Market Realities

The Commission's current market access framework, adopted in 1997, presumes that satellite systems licensed by WTO member states are entitled to entry into U.S. markets for services covered under the WTO Basic Telecommunications Agreement (BTA).[2] That framework was a rational policy choice at the time of adoption, but it no longer reflects the commercial reality of the global satellite industry, the competitive posture of U.S. satellite operators, or the regulatory environment U.S. companies face abroad.

The U.S. commercial space sector has grown dramatically in the decades since the Commission adopted the WTO presumption.[3] The global satellite services market is far more dynamic, competitive, and commercially significant today than it was in 1997. At the same time, foreign jurisdictions, including major U.S. trading partners, are developing regulatory frameworks that impose asymmetric burdens on U.S. satellite operators. The WTO presumption was premised on reciprocal openness that these developments have called into question.

The European Union's proposed EU Space Act illustrates precisely the kind of regulatory development that a modernized U.S. market access framework should be capable of addressing.[4] The draft EU Space Act imposes additional regulatory requirements on non-EU satellite operators as a condition of accessing EU markets. While the European Commission may grant waivers from these requirements upon determining that the non-EU operator's home jurisdiction has a regulatory framework sufficiently equivalent to EU standards, the European Commission retains the right to include specific conditions in an equivalence decision.[5] U.S. representatives, including ITIF, have identified ways these proposed rules would asymmetrically disadvantage American satellite companies.[6]

The EU Space Act is significant not only for the specific barriers it imposes but for what it represents as a regulatory model. A major U.S. trading partner is deliberately structuring its domestic space sector competition policy to advantage its own operators. The United States' current market access policy provides no effective mechanism to prioritize domestic operators, because WTO membership triggers an automatic presumption of entry for non-U.S. companies regardless of what market access conditions U.S. operators actually face in that country.

The Commission Should Apply the ECO-SAT Test to All Foreign-Licensed Satellite Systems

For all other applicants, including non-WTO members and WTO members seeking access for services not covered by the BTA, the Commission applies the ECO-SAT test. The test measures whether U.S.-licensed satellite systems enjoy effective competitive opportunities to provide analogous services in the applicant's home jurisdiction and in all countries where communications with U.S. earth stations would originate or terminate.[7] A universally applied ECO-SAT framework would allow the Commission to modernize domestic competition policy without requiring new statutory authority, new regulatory standards, or country-specific rulemaking.

A Universally Applied ECO-SAT Test Would Not Violate WTO Obligations

The principal treaty concern implicated by any modification to the WTO presumption is the General Agreement on Trade in Services (GATS) Article II, which requires WTO members to extend most-favored-nation (MFN) treatment to all other WTO members.[8] A targeted, country-specific elimination of the presumption, for EU-licensed operators only, for example, would almost certainly violate Article II by treating operators from one WTO member less favorably than others based solely on national origin.

However, applying the ECO-SAT test to all countries resolves this concern. By applying a single, neutral analytical standard to all foreign-licensed satellite systems regardless of the applicant's WTO membership status or national origin, the Commission eliminates the country-specific discrimination that GATS Article II targets.

Conclusion

The U.S. commercial space industry has become a key sector for American economic competitiveness and national security since the Commission adopted its WTO market access presumption. The competition policy framework governing foreign satellite market access should reflect that reality. Applying the ECO-SAT test to all foreign-licensed satellite systems gives the Commission a principled and legally defensible mechanism to do so.

Thank you for your consideration.

Endnotes