Lack of competition in the satellite market for transportation applications

With the development of DTT, important changes have been introduced into the market that not only affect the diffusion to the home but also the transport of the signal. In the analog environment, transport to satellite distribution was not a necessity as is the case with DTT, since the analog signal could be re-amplified by capturing it from the emissions of a nearby transmitter. Miguel Pingarrón, business development director of SES Astra Ibérica, presents in this Tribune his opinion on how this change should be faced.

We will not refer here to the satellite market as a whole, where a reasonable competitive environment does exist, but to a recent service such as satellite transport to digital terrestrial television broadcasting sites. The changes in this market are recent, since they come hand in hand with the development of DTT.

In the analog environment, transport to satellite distribution was not a necessity as is the case with DTT, since the analog signal could be re-amplified by capturing it from the emissions of a nearby transmitter. Thus, through re-emitters, it was not necessary to carry the primary signal to the broadcast centers.

With DTT the scenario is different. The architecture of the DTT network implies the need to carry the primary signal to the majority of the broadcast sites, which creates the need to use the satellite as a means of transport to carry these DTT signals to the majority of the sites.

The aforementioned need also arises from the number of existing land locations. In most European countries, DTT networks are made up of a much smaller number of DTT transmitters than in Spain. They are normally networks of just 200 locations that can be reached through terrestrial links, either microwave or even fiber.

The particularity of Spain is that the DTT network is made up of about 5,000 sites (slightly less than half belong to Abertis, which is the company that provides broadcasting services to broadcasters, and the rest are small sites that are normally publicly owned).

Surprisingly, the Spanish regulatory body, the Telecommunications Market Commission (CMT), does not consider this change in the market as relevant and has not adopted any decision aimed at adapting the applicable regulatory environment to the new market situation so that the different companies can truly compete in this sector. Unlike the existing market reality (which SES ASTRA faces every day), for the CMT competition does exist in this sector. This unrealistic and incomplete vision has led to the fact that none of the different market analyzes prepared by the CMT contemplate all the circumstances and changes indicated, which has resulted in the analyzes carried out and the obligations imposed on the designated operators with significant weight in the market (specifically, in market 18 for the transport of television signals) being incomplete and insufficient to guarantee the options to compete.

It is evident that the situation does not correspond to reality and that the CMT, as the competent body to guarantee 'fair play' in the sector, should (in fact is obliged) to alleviate this situation by adopting the necessary regulatory measures. However, although it has been requested on several occasions and through different procedures, to date the CMT has not adopted any decision to remedy this situation and to implement solutions that allow companies to develop their activities in an environment of effective competition.

Why is there no competition?

To provide a transport service to DTT sites, a receiving system is required, consisting of a small satellite dish, from 60 cm to 1.2 m, plus a satellite receiving equipment that is also small in size. Both the broadcast operator's centers and those of public ownership have already been equipped with these reception systems for the satellite transport solution of the company that also provides broadcast services. Let us remember that for diffusion to exist it is necessary to transport the signal to the sites, in the Spanish case by satellite, due to the high number of sites.

The circumstance is that the satellite reception systems at publicly owned sites have been acquired by the corresponding Administration with public funds. This means that to set up a satellite transport network to compete with the existing network, where a large part of the reception systems have been acquired with public money, the centers currently prepared would have to be re-equipped.

In addition to clear discrimination - since a transport network would be paid for with public funds and not the competing one - there is an insurmountable barrier to entry in this sector for any company considering offering this service.

At Astra we are concerned that this barrier to entry has been raised with public funds and that regulatory bodies such as the CMT are turning their backs on facts that seriously distort competition.

The solution? It doesn't seem very complicated as long as there is the intention to do it. The idea would be for any company that wanted to compete in this market to be able to connect to existing digital receivers in publicly owned sites acquired with public funds. That is, it would only be necessary to recognize and guarantee the exercise of an interconnection right already established for all electronic communications operators in the current national and European sectoral regulation. It is contrary to basic principles of free competition that these receivers only serve for a proprietary solution of a single entity.