Decision 654
Regulatory Framework for the Commercial Use of the Member Countries’ Orbit-Spectrum Resource 

      THE ANDEAN COMMUNITY COMMISSION,

HAVING SEEN: The portion of Article 3 f) referring to economic and social cooperation programs and efforts and Chapter Eleven of the Cartagena Agreement, and Decisions 292 and 395 of the Andean Community Commission; and 

WHEREAS: Member Countries have a sovereign right to regulate and govern telecommunication services in order to achieve the objectives of their respective national telecommunication policies;

It is a commitment of Member Countries to promote and facilitate the commercial activities of Andean satellite systems;

There is a need to facilitate the growing participation of Member Countries in the international trade in telecommunication services;

It is important to ensure due commercial exploitation of the Member Countries’ orbit-spectrum resource as an essential element for deepening and strengthening the economic integration and socio-cultural cohesion of the Member Countries of the Andean Group, as well as the reinforcement of communication with the rest of the countries; 

CAATEL-XVI-OR-75 Resolution of the Andean Committee of Telecommunications Authorities (CAATEL) recommends that the Andean Community Commission repeal Decision  395;

The International Telecommunication Union’s (ITU) Radiocommunications Bureau notified the Member Countries through note 11SG(SPR)/0.3545/05 that the allocation of frequencies to the Simón Bolívar 2 satellite network had been suspended and that the suspension period would expire on 18 September 2007;

There is a pressing need to safeguard the Member Countries’ orbit-spectrum resource in  the 67° West orbital position, within the time frames notified by the ITU in application of the Radio Regulations; 

The mechanisms used within the framework of Decision 395 for the commercial exploitation of the Member Countries’ orbit-spectrum resource did not have the expected results, making it necessary to implement new mechanisms to ensure the due exploitation and safeguarding of that resource;

Based on CAATEL’s recommendations in the Report of the Sixteenth Regular Meeting of the Andean Committee of Telecommunications Authorities, CAATEL, held on 24 and 25   August 2006, the General Secretariat presented Proposal 177/Rev. 1 on the establishment of the Regulatory Framework for the Commercial Use of the Member Countries’ Orbit-Spectrum Resource;

DECIDES:

       To approve the present regulatory framework for the commercial use of the Member Countries’ orbit-spectrum resource. 

Chapter I

Definitions

       Article  1.-  For purposes of this Decision, the terms below are understood to have the following meanings:

Competent national authorities: the Member Countries’ telecommunications administrations.

Community authorization:  the right granted to the authorized enterprise to use a specific portion of the Member Countries’ orbit-spectrum resource.

Authorized enterprise: the enterprise that has received authorization to commercially use the Member Countries’ orbit-spectrum resource and to establish, operate and exploit Andean satellite systems in the way provided for in this Decision and under the terms and conditions established for each authorization.  

Orbit-spectrum resource: the natural resource made up of the orbit of the geostationary satellites or other satellite orbits and the spectrum of radio frequencies assigned or allocated by the International Telecommunication Union (ITU) to satellite radiocommunication services.

Member Countries’ orbit-spectrum resource: the orbit-spectrum resource for which the Member Countries together carry out the procedures stipulated in the ITU Radio Regulations for obtaining its international recognition.

Space segment: the capacity for communication of one or several telecommunications satellites, control and monitoring station facilities and equipment for tracking, telemetry, telecontrol, control, and verification, and the other connections needed to operate those satellites. 

Earth segment: all earth facilities needed to provide satellite telecommunication services. 

Andean Satellite System: space segment under the control or ownership of authorized enterprises that in keeping with this Decision uses a specific allocation of the Member Countries’ orbit-spectrum resource. 

Chapter II

Objectives and general principles 

Article 2.- The objective of this Decision is to establish the general framework for regulating commercial exploitation of the Member Countries’ orbit-spectrum resource and the procedures for granting Community authorization.   

Article 3.- The general principles that are applicable to this Decision are the following: 

a)     Principle of equity.- The Member Countries have equal rights to the Member Countries’ orbit-spectrum resource, as well as to aspects relating to the establishment, operation and exploitation of satellite systems.

b)     Principle of reciprocity.- The Member Countries will study formulas for establishing the principle of reciprocity with third countries in the case of benefits from commercial use of the Member Countries’ orbit-spectrum resource through the establishment, operation and exploitation of satellite systems. 

c)     Principle of national treatment.- Insofar as the commercial use of the Member Countries’ orbit-spectrum resource through the establishment, operation and exploitation of Andean satellite systems is concerned, Member Countries will give authorized enterprises treatment that is no less favorable than that accorded to their national enterprises in regard to taxes, liens and other domestic regulations.  

d)   Principle of nondiscrimination.- Authorized enterprises will offer their satellite capacity universally to all authorized operators, whether they are from Member Countries or from third countries, without any discrimination whatsoever and based only on commercial criteria. 

       Those enterprises will enjoy, in each of the Member Countries, conditions that are no less favorable than those established or to be established for other space segment suppliers.

Chapter III

Community authorization for the commercial use of the Member Countries’ orbit-spectrum resource through the establishment, operation and exploitation of Andean satellite systems

Article 4.- Community authorization grants the following rights:

a)          To use the Member Countries’ orbit-spectrum resource assigned to the authorized enterprise; and

 

b)          To market the Andean satellite system throughout the Subregion. 

Article 5.- The Andean Community Commission will grant the pertinent Community authorization when it deems it advisable, by adopting a Decision at the proposal of the General Secretariat and after having seen CAATEL’s report. 

The Commission Decision containing the Community authorization will give the Authorized Enterprise a sufficient legal basis to enjoy the rights established in the previous article, in keeping with the rights and obligations stipulated in the contract for the use and exploitation of the orbit-spectrum resource.

Article 6.- The following procedure will be used to grant Community authorization:

a)      The General Secretariat will carry out an objective and participatory international selection process with CAATEL’s assistance.

b)      After receiving a favorable report from CAATEL, the General Secretariat will recommend to the Andean Community Commission that it grant the corresponding Community authorization to the chosen enterprise. 

c)      The Decision granting Community authorization will instruct the Secretary General to sign the respective contract setting forth the rights and obligations for the use and exploitation of the Member Countries’ orbit-spectrum resource. 

d)      The selection process will summon duly recognized operators of international satellite systems that fulfill the established requirements for each case.  

Article 7.-  Community authorization will be granted for a twenty-year (20) period that may be renewed for equal and successive periods at the proposal of the Andean Community General Secretariat, after having received a favorable report from CAATEL, all of this subject to compliance with the provisions of the Radio Regulations. 

Chapter IV

Marketing of the space segment and the earth segment

Article 8.- The space segment may be marketed unrestrictedly throughout the Andean Subregion, with no other requirement than having received the corresponding Community authorization.  To this end, Member Countries will permit within their national territory the marketing of the respective space segment among duly authorized users. 

The operation and exploitation of the space segment will comply with the pertinent ITU provisions. 

Article 9.- Authorized enterprises will obtain certificates from Member Countries authorizing them to make use of their earth segments, in keeping with the respective national legislation. 

Article 10.- The consideration to be received by Member Countries in return for Community authorizations to exploit the Andean Community’s orbit-spectrum resource will be established for each particular authorization. 

Article 11.- It will be borne in mind in operating and exploiting the space segment that in the application of the provisions of articles 34 and 35 of the ITU Constitution, Member States reserve the right, according to their national legislation, to interrupt any telecommunication that could appear to jeopardize State security or contravene their laws, the public order or good morals and to suspend telecommunication services, either completely or for certain relationships and for specific types of correspondence.  Such events should be communicated to the Member Countries and to the authorized enterprise through the General Secretariat.  The Enterprise commits itself to take measures to eliminate the causes of those circumstances and the General Secretariat to make the corresponding investigation, as provided for in this Article.  

Chapter V

Relations with International Telecommunication Organizations

Article 12.- The competent national authorities of the Member Countries will appoint one of their number to be the Representative Administration which, on their behalf and in coordination with the authorized enterprises, will take the measures and implement the procedures stipulated in the ITU Radio Regulations to secure the registration of the frequency allocations and the associated orbital characteristics and, consequently, international recognition of the use of the assigned orbit-spectrum.  

Chapter VI

Violations

Article 13.- Failure by the authorized enterprise to fulfill any of the obligations established in the Authorization Decision and in the contracts signed by the Secretary General will constitute violations of this regulatory framework.  

Noncompliance with obligations that generate a consideration in return for the granting of Community Authorization will be considered a serious violation. 

The penalties resulting from the violations referred to in this article will be those established in the Authorization Decision.  

Chapter VII

Temporary Provisions

First: The Andean Community General Secretariat is entrusted, with CAATEL’s support, to shortly undertake an objective and competitive selection process of an international satellite operator to exploit the 67° West orbital position

Second: The General Secretariat will, with CAATEL’s assistance, prepare the Bidding Document for the selection process, bearing in mind the following requirements for bidders:

a)    To be a Fixed Satellite Service (FSS) Operator.

b)   To have experience operating at least three (3) fixed satellite service (FSS) satellites. This experience may be either direct or indirect, through the company possessing the majority shareholding in the Bidder.

c)    To currently possess at least one (1) operational satellite under direct exploitation by the Bidder. 

d)    Commit to take all necessary measures to safeguard the rights of the CAN Member Countries to the orbit-spectrum resource associated with the Simón Bolívar 2 Satellite Network in the 67° West orbital position and to cover the cost of these measures, as well as any possible pending costs on the date of the award and those inherent to the selection process, to be indicated beforehand. These measures may include the placement of a gap filler or the transfer of an operational satellite prior to any coordination processes that may be needed. 

e)  Bidders should provide Member Countries with a satellite capacity as a consideration in return for Community authorization to exploit the orbit-spectrum resource in the 67° West orbital position, under the terms and conditions set forth in this Bidding Document. 

 

REPEAL

Sole:  Decision 395 and all legal provisions contrary to this Decision are hereby repealed.

            Signed in the city of Lima, Peru, on the fifteenth of November of two thousand and six.