Small-scale satellite operations licensed in the United States may soon benefit from a more accessible and flexible authorization framework. The Federal Communications Commission (FCC) last year proposed and is now poised to adopt new processes aimed at encouraging “efficient use of spectrum and mitigation of orbital debris” by lessening the regulatory burden on and strengthening radio-frequency interference protection for smaller, less expensive satellites. This new initiative joins other U.S. government efforts (such as those of the U.S. Department of Commerce and National Space Council) to facilitate the continued growth of the U.S. “space economy.”

The FCC will vote on a draft Report and Order (R&O) at its next Open Meeting, scheduled for August 1, 2019. This draft R&O stems from proposals made in the FCC’s previous Notice of Proposed Rulemaking (NPRM), under consideration since April 2018. It continues to focus on allowing satellites with certain characteristics to share spectrum with other operations and to become subject to more streamlined regulatory review and processing.

The FCC’s satellite licensing rules are in Part 25 of the Code of Federal Regulations. Historically, the FCC imposed fees and regulatory requirements uniformly, regardless of the price, lifespan, or size of the satellite. Existing FCC regulations group satellites into two general categories – geostationary-satellite orbit (GEO) systems and non-geostationary-satellite orbit (NGSO) systems. As the FCC observes in its draft R&O, “[a]s a result, an application for a single commercial NGSO small satellite with a planned two-year mission would be subject to the same application process and fee as an application for an NGSO communications system consisting of hundreds or more satellites to be replenished on a regular basis.” The agency recognized that some types of satellites are not the same and should not be subject to a range of requirements that are not necessary.

What Will Qualify as “Small Satellites”?

As drafted, the FCC’s new framework will create an alternative, optional application process for “small satellites” used for scientific and research missions as well as for commercial purposes that qualify based on a set of characteristics. Built upon the general categories of criteria proposed in the NPRM, the draft R&O specifies numerical thresholds for each characteristic, namely:

• Maximum mass of any individual satellite will be 180 kg, including propellant (“wet mass”).

• Satellite(s) will be deployed below 600 kilometers altitude or have the capability to perform collision avoidance and de-orbit maneuvers using propulsion.

• Satellite(s) will release no planned debris.

• The satellite operator has assessed and limited the probability of debris being generated due to an accidental explosion resulting from the conversion of energy sources on board the satellite into energy that fragments the spacecraft.

• The probability of in-orbit collision between any satellite and large objects is 0.001 or less as calculated using current NASA software or other higher fidelity model.

• Any individual satellite is 10 cm or larger in its smallest dimension.

• Satellite(s) will have a unique telemetry marker.

• Probability of casualty resulting from uncontrolled atmospheric re-entry of any satellite is zero, as calculated using current NASA software or other higher fidelity model.

• Ten or fewer satellites will be permitted under a single license.

• No limitation on the number of separate applications that may be filed.

• Maximum in-orbit lifetime of any individual satellite is six years, including time to de-orbit the satellite.

• All operations under a license will be completed within six years.

In defining these criteria, the FCC relied upon the record of public comments collected on its 2018 NPRM. While many of these comments proposed other characteristics to define “small satellites” such as frequency of use, bandwidth range, or power levels, the FCC declined to adopt these additional categories as unnecessary because the characteristics the FCC had proposed appeared to be “sufficiently rigorous.”

Specifically, the FCC concluded that it is not necessary to adopt limitations on spectrum use for streamlined small satellite applications. Depending on your point of view, this approach either will allow small satellites great flexibility to work out the details on how to share the requested frequency band with existing operations, or will effectively leave small satellites to negotiate on their own with all other existing and future operators in the same frequency band.

How Will Small Satellite Application Processes Change?

According to the FCC, qualifying small satellite applicants using this optional application process will benefit from “an easier application process” and “a lower application fee” than other applicants for satellite licenses. If adopted, the new process will continue to use the existing FCC Form 312 and Schedule S required for satellite space and earth station authorizations, but will eliminate the requirement that applicants must submit a “narrative demonstration” of the proposed operations. Instead, the applicants are simply required to certify that various conditions have been met and may elect to provide supplemental narrative information if desired.

Additionally, more applicants will be able to seek experimental licenses for small satellites planned for noncommercial use, which will no longer be subject to a requirement that experimental licenses be restricted to applications “with large cost differences between the experimental application fee and part 25 application fee.”

The FCC retained the thirty-day public notice period for small satellite applications, stating that “the amount of time gained from reducing the public notice period would not be worth establishing an entirely separate set of timelines for the comment period on these streamlined applications, and might restrict the opportunity for meaningful comment on applications.”

Additional Changes for Foreign-Licensed Applicants

Notably, the draft R&O also specifies that the proposed streamlined processes will apply equally to foreign-licensed small satellite applicants seeking a U.S. license or access to the U.S. market. Such foreign applicants, however, will need to file a petition for a declaratory ruling instead of an earth station application to the FCC and will be subject to a new application fee category. Previously, foreign-licensed satellites seeking access to the U.S. market were not subject to application fees. This new license fee ($30,000) is intended to recover the costs associated with the petition for declaratory ruling process required of foreign-licensed entities seeking U.S. market access.

The draft R&O suggests that the FCC has still not reached a decision on providing satellite operators with flags of convenience to reduce operating costs internationally. But according to the FCC Chairman Ajit Pai, such coordination continues to be a frequent topic in talks with his counterparts in other countries.

Next Steps

Some commenters predict that the new FCC order could be a tremendous help to the emerging small satellite industry, while others caution that the streamlined process will be used sparingly. Concerns have also been raised about the costs of streamlined satellite applications that may present challenges to small satellite entities with low launch success rates.

Despite these concerns, the R&O has been generally welcomed by industry and is expected to receive unanimous approval at the FCC’s August Open Meeting. It remains unclear whether the FCC, as part of its meeting, will further amend the draft order before adoption. The FCC is expected to officially release the final R&O within days after the August Open Meeting.

The streamlined application processes portion of the final R&O will be subject to approval by the Office of Management and Budget. If approved, the notice of approval will be published in the Federal Register, at which time the new application processes will become effective. The revised fee schedules will become effective after ninety days following the FCC’s notification to Congress of these revisions.