Despite identifying four potential risks to competition, Ofcom expects to grant the new satellite licence, citing particular benefits for consumers in rural areas
Ofcom believes that Kuiper will be able to coexist will current NGSO networks
On 5 September 2024, Ofcom published a consultation on its proposal to grant Amazon’s Kuiper project a Non Geo Stationary Orbit (NGSO) licence following the firm’s application in July. Amazon’s Kuiper project aims to provide secure, high-speed, low latency broadband services to a variety of retail and wholesale customers in the UK, including consumers, businesses, schools and hospitals. The country is already home to a number of NGSO satellite networks, such as Starlink (a SpaceX subsidiary) and Network Access Associates (a OneWeb subsidiary) – both of which use spectrum in the Ku (i.e. 12-18GHz) band. In contrast, Kuiper’s licence would authorise it to operate user terminals in the Ka (i.e. 27-40GHz) band. A key issue for Ofcom is whether NGSO applicants can prove that they can coexist with the various existing NGSO networks. Ofcom’s consultation explains that Kuiper has done so, showing a willingness to cooperate with existing systems. For example, Kuiper’s licence application outlined how its system will not operate in frequencies that are allocated or adjacent to the UK radio astronomy service, and also demonstrated how it complies with ITU Radio Regulations by ensuring that fixed links in the 17.7-19.7GHz band will be protected.
The regulator has identified three main risks to competition, plus another that could materialise in future
Ofcom’s consultation sets out the three main risks to competition of awarding Kuiper an NGSO licence:
Interference: The NGSO licence would allow Kuiper to build key terminals anywhere in the UK. If these are built in close proximity to existing terminals, there is a risk of harmful interference. Ofcom sees this risk as unlikely after conducting their own analysis and seeing Kuiper establishing an ITU coordination agreement with Telesat, an existing NGSO network provider in the UK;
Coexistence: Kuiper terminals may not be able to coexist with future NGSO systems, embedding a barrier to entry to potential new NGSO networks, restricting competition. Ofcom do not see this risk as likely either due to Kuiper’s commitment to coordinate with any future NGSO systems as a part of their application. Kuiper further reassured Ofcom that its NGSO is designed with flexible techniques to ease the process of coexisting with future systems such as adaptive coding, sophisticated frequency planning algorithms and using redundant communication pathways in the event of any unforeseen outages or interference; and
Competition: Operators such as Kuiper failing to coordinate in good faith could hinder the service quality of other current and future NGSO operators. Ofcom is prepared to use its licensing conditions and enforcement powers to remedy any issues like this.
Ofcom has also identified a fourth potential risk to competition that could materialise in future, but has said that it is not something that it will conclude on yet as Kuiper has not launched services in the UK. This risk relates to uncertainty over how Amazon will manage Kuiper in relation to its other products and services. For example, Amazon could bundle Kuiper and Prime together for customers. Although such commercial practices may benefit consumers, they also have the potential to harm competition. This aligns with pre-existing concerns about the ambitions of big tech in the telecoms industry.
Ofcom is prepared to seek more information from Kuiper based on stakeholder comments
Having evaluated Kuiper’s ability to coexist with other NGSO systems and the possible effects on competition, Ofcom has provisionally determined to accept Kuiper’s NGSO licence application, considering this would improve connectivity options for consumers in the UK – particularly those in more rural and remote areas. The regulator’s consultation now opens the floor for stakeholders to provide input on its draft decision. Until 4 October 2024, stakeholders have the opportunity to voice their opinions and recommendations, with Ofcom emphasising the need for clear and open communications on this issue in order to increase the transparency of its NGSO licensing process. Depending on the responses it receives and the issues that are raised, Ofcom may seek additional information from Kuiper, although it currently appears final approval on the NGSO licence will ultimately be given.
