Insight - CubeSats and the FCC: The Sky is Not Falling

Thursday, August 2, 2018

By Ian Christensen, Director of Private Sector Programs, and Josh Wolny, Project Manager

This August, the CubeSat and smallsat developer and operator community will gather in Logan, Utah for the annual Small Satellite Conference. Organizers are expecting record attendance surpassing the 2,300 people that attended last year’s conference (which itself had record attendance). The growth and energy around the Small Satellite Conference is emblematic of the rapid growth in the use, and utility, of small satellites in today’s space sector. Analysts report that 2017 saw a record number of satellites launched: 466 by one count, a number that included more than 300 satellites smaller than 50 kg in mass. These smaller satellites include CubeSats, or satellites defined in terms of units of 10 cm³ cube form factors (1U, 3U, 6U, etc.). This growth has led to efforts to reform the regulatory structure related to small satellites, efforts which unfortunately have lead to some confusion over licensing frameworks.

A key community driving this activity, often referred to as the CubeSat revolution, is the university, academic, and amateur research community. The relatively low cost, standardization, and ease of access of CubeSat technology has contributed to a rapid expansion in the use of these systems for educational and research capabilities. The emergence of CubeSats has supported a number of disruptive business models in the commercial sector - in some cases as spin-outs from university research. While operators around the planet have launched CubeSats, the majority of these systems have been launched by US entities. Apart from CubesSats, other larger, but still small, satellites are an increasingly common architecture being employed in the commercial sector.

The increasing commercial utility of small satellites was not envisioned when the existing satellite licensing regime was developed in the United States. Accordingly, the industry and regulatory communities saw a need to propose implementing “a new authorization process tailored specifically to small satellite operations.”  Applications were being granted under existing rules that were not designed for current commercial small satellite-based approaches, leading to concerns about efficacy and appropriateness.

The Federal Communications Commission (FCC) is the regulatory body for all non-governmental uses of the radiofrequency spectrum in the United States. The FCC issues three different types of licenses to satellite operators to communicate with and control their satellites. The three categories differentiate on the intended use of the satellite, and are colloquially referred to by their “part” in the Code of Federal Regulations.

Part 25 is for licensing a wide range of commercial operations included communications and remote sensing applications. Companies like DIRECTV, DigitalGlobe, and Intelsat maintain large satellites at geosynchronous orbit (GSO) and procure Part 25 licenses for a term of typically 15 years with an application cost of $454,705 and annual fees of $135,350.

Part 5 licenses are for experimental radio operations, including satellites. In the satellite context, Part 5 licenses are used the most by the university small satellite community and startup companies with a term of two to five years, an application cost of $70 and no annual fees.

Part 97 licenses are for amateur radio service satellite operations. This category is also used among the university and amateur small satellite community, but serves as less of a license and more of a notification to the FCC about the satellite’s planned use of the reserved amateur radio spectrum. There are no fees associated with this license.

On April 17, the Federal Communications Commission (FCC) released a Notice of Proposed Rulemaking (NPRM) titled Streamlining Licensing Procedures for Small Satellites. The goal of the new rules, from the NPRM:

The proposed rules are designed to lower the regulatory burden involved in licensing small satellites and reduce application processing times while offering protection for critical communication links and enabling efficient use of spectrum for this dynamic sector.

The NPRM suggests an edit to the Part 25 license to allow for a new category of commercial smallsat constellations. This new category would reduce the application cost (down to $30,000) and annual fee (approx. $6,767.50) for non-geostationary orbit (NGSO) small satellites with a commercial purpose. Companies like Planet and Spire demonstrated the need for a lower cost NGSO commercial category by applying first for Part 5 licenses that they later transitioned to Part 25 when their commercial viability increased. In their formal comments to the FCC, companies like Boeing, Iridium, Inmarsat, and industry groups like the Satellite Industry Association all praise the FCC for this new category and offer tweaks on the nuances of the proposed rules.

Unfortunately, confusion about this NPRM has stoked fear and concern within other parts of the CubeSat community. Following the release of the NPRM, news reports surfaced claiming this rulemaking, if implemented, would drastically increase the cost of academic small satellite programs and thus threaten their continued existence. In formal comments to the FCC, representatives of the university research community express their fears that this new rulemaking is an attempt to extract rents from their research operations by increasing the licensing fees from $70 to as high as $43,535. While that would be a big concern if it were true this NPRM does not suggest any modification to the Part 5 licensing procedure that the majority of university small satellites utilize.

Under the revised framework proposed in the NPRM, existing Part 5 and 97 licensing continues: the vast majority of all operators that currently qualify for these existing license categories will continue to do so.  However, the confusion over the proposed changes has highlighted a knowledge and relationship gap between the academic CubeSat operator community and the regulatory process. The FCC has made an active effort to engage through participation in forums such as the Small Satellite Conference and the Cubesat Developers Workshop. Secure World Foundation has previously conducted dialogue and workshops at the Small Satellite Conference, in which participants highlighted the need for developing enhanced information sharing links between the smallsat operator and regulatory communities.

The concern expressed by the academic community in response to this NPRM was a natural and understandable reaction rooted in an interest to protect the environment which has nurtured a particularly innovative and beneficial area of space activities. It suggests a need for further clarity in the continued future availability of the Part 5 (and Part 97) licensing pathways - clarity that those pathways will be available to the entities that fit them today and clarity that alternative pathways will be developed where needed for actors that are not appropriately matched to the amateur and experimental pathways.