Proceedings of the Workshop - United Nations Office for Outer ...

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68 EXPANDING GLOBAL COMMUNICATIONS SERVICESbanks. This is particularly the case with INMARSATwhich needs to upgrade its satellite system at a time thatthe economic difficulties of some of its major membershas made them less likely to undertake the neededinvestment. Ordinary commercial borrowing is anoption not available to an international organisation, butavailable to a private entity.Another factor has been that, as the spacetelecommunications market has opened up tocompetition from private companies, the advantages oflimited liability have seemed increasingly attractive.The privileges and immunities of an internationalorganisation are not the same thing as limited liability.This interacts with the question of access to normalfinancial sources. Borrowing, whether or not withsecurity, is not available to an international organisationin the same way it is available for an economic entitywhose liabilities are defined and protected to a degreeby limited liability.However one looks at these matters, the die hasbeen cast in the one case, INMARSAT, and is likely tobe similarly cast in the other, INTELSAT. From 15April 1999 INMARSAT has been a rather differentthing. It has been extraordinary to see a camelmetamorphose into a horse, and I just hope that thatmetaphor is correct. Others might say that an armadillohas mutated into a dromedary. INMARSAT nowconsists of a much slimmed down internationalorganisation with supervisory functions in relation toINMARSAT Ltd, a company incorporated in the U.K.,and to which the assets and liabilities as well as theoperating functions for the former organisation havebeen transferred.17 INTELSAT may well go down thesame line, as may EUTELSAT and INTERSPUTNIK.This is not the place thoroughly to analyse thesedevelopments, actual and potential. But one shouldexpress some fears. What of the principles of a globalsystem with access for all on a basis of equality?First, we must recognise that incorporation of anentity within a legal system makes that entity subject tothe law of that system, and to governmental pressuresl7D. Sagar, ‘The Privatisation o f INMARSAT’, 1998 41 Proc.IISL, 205-23.backed up, if necessary, by appropriate legal changes.Will a global telecommunications system run by anincorporated private company be subjected to thedirection of the state of incorporation according to whatthat state’s government considers to be in its interests?To sharpen the point, would INTELSAT privatised andincorporated, for the sake of argument in the US, beallowed without interference to continue service to Iraqor the Former Yugoslavia because its system issupposed to be global and accessible withoutdiscrimination?18Second, if the major global internationaltelecommunications organisations are to be privatised,and therefore run on a commercial basis, what can bedone to ensure that profitability alone is not the measureof whether a particular service or link it maintained,particularly if it is not itself profit-making? What ofthe concept of an ‘international public service’?It is good to note that within the INMARSATmutation, steps have been taken to protect the publicservice obligations in relation to the safety of life at sea(the GMDSS (Global Maritime Distress and SafetySystem)). The Public Service Agreement between thenew company and the new Organisation secures thatelement.It has also been good to understand that in theINTELSAT discussions, public service is also anelement which is likely to be protected. From thebeginning the INTELSAT Agreements allowed theorganisation to provide domestic telecommunicationsservices, in some instances on the same basis as publicinternational services if that were feasible afterobligations to the international services were met. Thathas eventuated. Over thirty countries and fifteen ormore territories are dependent on the INTELSATsystem for their domestic telecommunications services,181. The INTELSAT ‘spin-ofF, New Skies NV, has beenincorporated in The Netherlands, not the US. 2. I note thatEUTELSAT withdrew service for a Yugoslavian TV newsbroadcast through its facilities at the beginning of June 1999.This, however, is not quite the same as the provision oftelecommunications services.
EXPANDING GLOBAL COMMUNICATIONS SERVICES 69In addition many developing countries are alsodependent on INTELSAT for their international traffic.In terms of Art. V(d) of the INTELSAT Agreement, thecharging rate for each type of utilisation of theINTELSAT space segment is the same for all users ofthat service. What this means is that routes andconnections which do not themselves generate sufficientincome to pay for their provision are charged at lessthan cost. It is to be hoped that a mutated INTELSATwill continue to provide these services, and thatfinancial considerations will not result in an undueincrease in charges to such countries and territories.Such services really are a public service, well within thetenor of the attitudes of UNGA Res. 1721.But how may one secure the INMARSAT and the(potential) INTELSAT position on such matters? In anera of competition where financial cost-effectivenessseems paramount, one can not wholly rely onassurances. As noted, there is the INMARSAT PublicService Agreement enforceable through the UK courts.Perhaps something similar could be done forINTELSAT, though I must say I would be reluctant tosee INTELSAT’s public service obligation securedthrough the vagaries of US law as it now exists.One solution might be to entrust the supervision ofsuch matters to an international body. I will come tothe question of an International Authority for otherpurposes, but that of enforcement of public serviceobligations could sit well with the other duties thatshould be given to such a body.In any event it is desirable that UNISPACE IIIshould express concerns on these matters, and theexpectation that the basic concept of ‘internationalpublic service telecommunications facilities’ should inthe general world interest be continued, if necessary bysubsidising uneconomic connections, routes andservices, by the more profitable. Telecommunicationsentities should not be able to cream off only profitableservices and routes, leaving others to shoulder theburden of the public interest where that service is lossmaking.New entrantsSome of the preceding discussion assumes the presenceof new telecommunications entities as providers ofspace services. That assumption is, of course, morethan an assumption. But there are certain mattersconnected with the entry of companies into the spacetelecommunications business which should causeconcern. Since some of these concerns can be metthrough the ITU, they will be mentioned under thatheading, below. Other general points arising from theentry of new providers into internationaltelecommunications may be identified here.States’ supervisory abilitiesIt is the duty of states parties to the 1967 Outer SpaceTreaty to authorise and on a continuing basis tosupervise the activities of state and non-governmentalentities in space (art. VI, OST). It is also the right ofall states to use Outer Space (Art. 1.2, OST).Similarly, states have duties under arts. 45.2 and 3 ofthe ITU Constitution as to the avoidance of harmfulradio interference. The question must be asked whetherall states are equally able to exercise these supervisoryroles. There is a risk that a state may be willing toauthorise space activities which it is not able properlyto superintend, and to allow the use of radio frequencieswithout being able properly to enforce the avoidance ofharmful interference. Perhaps where such an ability islacking, the ITU should be permitted not to acceptnotifications from such a state.Flags of convenience : HomesteadingWe can take the question of a state’s ability to meet itsduties as to licensing and supervision one step further.The concept of a ‘genuine connection’ has surfaced attimes in various matters of nationality. Companies andbusinesses are quite often created and registered withregard to taxation and other advantages, without therebeing a close or fundamental connection between thebusiness and the state of registration. Some states arein the business of being tax havens, and I note that atleast one of the new entrants to the spacetelecommunications business has so arranged its affairs.
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ST/SPACE/2Office for Outer Space Af
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IntroductionThe Workshop on Space L
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CONCLUSIONS AND PROPOSALS OF THEWOR
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3between public and private law and
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8obstacles that impede ratification
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SESSION ONEExisting United Nations
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POSSIBLE INTERNATIONAL REGULATORY F
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SESSION EIGHTMaintaining the Space
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220Session 3: Wednesday. 21 July. 1
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223Annex IITHIRD UNITED NATIONS CON
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225No Name Address E-Mail27. Ersfel
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