International satellites can’t avoid US regulatory fees

WASHINGTON (CN) — For the first time since 1993, the D.C. Circuit mandated Tuesday, international satellite companies with access to the U.S. market must pay U.S. regulatory fees. 

The companies initially did not have to pay these fees, pursuant to section 9 of the Communications Act. When Congress amended this law in 2018, however, the Federal Communications Commission adopted a paid licensing scheme for international satellite companies and spurred a federal complaint based in Canada, France, the Netherlands and the U.K.

“It was only in the 11th hour that they came up with this brand-new theory: oh no, we’ve gone back and looked at legislative history from 30 years ago, decided we interpreted it incorrectly 25 years ago, and now we have a new view of what section 9 has always meant,” Wayne Kenneth Ferree, counsel for Telesat Canada, told a panel of the D.C. Circuit during oral arguments in April. 

The fees can be up to $1 million annually for Telesat and Eutelsat, up to $300,000 for Kinéis and Hiber, and up to $400,000 for Inmarsat. The companies call it unfair for them to pay American fees on top of what they already owe in their home countries — especially because U.S. companies don’t have to pay similar fees in Canada, France and the like. 

When a three-judge panel threw out the challenge last month, they ruled that an agency can lawfully change its interpretation of a statute: there is nothing in the text of the statute exempting non-U.S. licensed space stations from imposing regulatory fees.

Deputy court clerk Daniel Reidy solidified the move with a mandate Tuesday that links to the circuit's June 4 decision.

The commission argued that, because foreign-licensed satellites benefit from the commission’s oversight and regulation — and because it devotes significant resources to processing international petitions — abiding by the 1995 interpretation places the burden of the regulatory fees on the shoulders of U.S. licensees. 

Additionally, the FCC said, there are no more Comsat satellites, and the market has changed drastically in the past 25 years: commercial foreign-licensed satellites with general U.S. market access didn’t even exist until 1997. 

“When the Conference Report was written, the relevant category of satellites — foreign-licensed commercial satellites with general U.S. market access — simply didn’t exist,” U.S. Circuit Judge Laurence H. Silberman wrote for the court. “Thus, Congress was unlikely to have contemplated the type of satellites at issue in this case.”

The Bush-appinted Silberman was joined by U.S. Circuit Judge David S. Tatel, a Clinton appointee, and U.S. Senior Circuit Judge David B. Sentelle, a Reagan appointee. 

The Communications Act does allow fee exemptions for government and nonprofit entities, amateur operators and non-commercial radio and television stations, but the satellite companies bringing the lawsuit don’t fit into any of those categories.

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