On March 14, 2024, the U.S. Federal Communications Commission (FCC) adopted a licensing framework that authorizes satellite operators to partner with terrestrial wireless providers to develop hybrid satellite-terrestrial networks intended to provide ubiquitous network connectivity, including in “dead zones” and other hard-to-reach areas.  These “Supplemental Coverage from Space” (SCS) rules, which the FCC first proposed last April, enable satellite operators to serve as a gap-filler in the networks of their wireless provider partners by using their satellite capability combined with spectrum previously allocated exclusively to terrestrial service.

Although the FCC’s new rules limit SCS deployments to a handful of spectrum bands, the licensing regime nevertheless marks a significant opportunity for joint operations by satellite operators and wireless service providers.  The FCC’s decision also demonstrates the agency’s commitment to leadership in regulating space-based technologies – a motivation the agency cited as justification for adopting an SCS regulatory framework described as “the first of its kind in the world.”

The SCS item adopted by the FCC consists of two parts: a Report and Order adopting a licensing framework for SCS deployments in specified frequency bands (the “Order”), and (2) a Further Notice of Proposed Rulemaking (“FNPRM”) that seeks public comment on additional issues associated with the newly authorized SCS operations.

New SCS Licensing Framework

The new SCS rules generally are consistent with the April 2023 NPRM, which proposed to allow SCS deployments in certain frequency bands and enable a satellite operator to apply for a modification of its existing FCC license to provide satellite services in these reallocated spectrum bands, provided certain conditions are met.  However, in response to public comment, the new SCS rules reflect some key changes from what the FCC originally proposed.

Terrestrial-Only Spectrum Bands Eligible for SCS Use

The FCC’s new SCS rules authorize communications from satellites networks to mobile devices (i.e., Mobile Satellite Services or MSS) in the following spectrum bands:

  • 600 MHz (614–652 MHz and 663–698 MHz)
  • 700 MHz (698–769 MHz, 775–799 MHz, and 805–806 MHz)
  • 800 MHz (824–849 MHz and 869–894 MHz)
  • Broadband PCS (1850–1915 MHz and 1930–1995 MHz); and
  • AWS-H Block (1915–1920 MHz and 1995–2000 MHz)

The FCC concluded that each of these bands satisfies criteria intended to limit initial SCS partnerships to frequencies best suited for accelerated deployments.  In so doing, the FCC rejected requests to include other bands that commenters recommended as suitable for SCS operations, including 1670–1675 MHz, 1695–1710 MHz, the 1.4 GHz Band (1390–1392 MHz, 1392–1395 MHz, and 1432–1435 MHz), and the 2.5 GHz Band (2496–2690 MHz).  However, the FCC clarified that it will consider expanding the list of eligible bands as the SCS marketplace develops.  In addition, the FCC noted that it will continue to consider SCS proposals involving operations outside of these five bands on a case-by-case basis through its waiver and Special Temporary Authority (STA) procedures.

The list of SCS-eligible bands also reflects two notable changes from the rules the FCC proposed last year.  First, it excludes frequencies in the Wireless Communications Service (WCS) band (2305–2320 MHz and 2345–2360 MHz), which last year’s NPRM noted as presenting unique interference risks based on the band’s adjacency to federal operations and the Satellite Digital Audio Radio Service (SDARS). 

Second, the FCC’s list now includes the 758–769 MHz and 788–799 MHz bands allocated for public safety use and licensed to the First Responder Network Authority (FirstNet).  Although these bands are now eligible for SCS deployments, they are treated differently than other bands under the new SCS licensing procedures.  Because FirstNet’s use of these frequencies is subject to a different statutory framework (the FirstNet program is governed by the 2012 Spectrum Act), the newly added 758–769 MHz and 788–799 MHz bands are not subject to the spectrum-leasing requirements that apply to the other four SCS-eligible bands.

SCS Operations Authorized Only on Secondary Basis

The FCC’s new rules authorize SCS service in the above-specified terrestrial wireless frequencies only on a “secondary” basis, meaning that SCS operations in these bands may not cause harmful interference to – and may not claim interference protection from – any service operating on a “primary” basis in the same frequencies.  This marks a significant departure from the FCC’s proposed rules, which would have granted SCS operations “co-primary” status – i.e., SCS operations would have shared the bands with other primary services and would have been mutually entitled to interference protection from these services.

Licensing Process for Newly Authorized SCS Operations

In addition to implementing a new secondary allocation for SCS services in the above frequency bands, the FCC’s new rules establish threshold eligibility requirements and licensing procedures for satellite operators to secure SCS authority.  The licensing framework generally follows what the FCC proposed in the April 2023 NPRM and requires that a satellite operator satisfy license and eligibility conditions across all three segments of an SCS network: (1) terrestrial spectrum access (through spectrum leasing), (2) satellite transmissions to U.S. points of communication, and (3) terrestrial device operations.

  1. Spectrum Lease Agreements.  A threshold requirement for SCS eligibility is that a satellite operator must have one or more spectrum lease notifications or applications on file with the FCC for each of the terrestrial providers with which it plans to partner to provide SCS service.  Moreover, SCS is authorized only when the satellite operator’s spectrum lease agreement(s) provide it with access to all the co-channel frequencies over which it will provide SCS service for an entire Geographically Independent Area (GIA).  There are six such GIAs in which the FCC will authorize SCS operations under these circumstances: (1) CONUS, (2) Alaska, (3) Hawaii, (4) American Samoa, (5) Puerto Rico and the U.S. Virgin Islands, or (6) Guam and the Northern Mariana Islands.

    The spectrum lease and GIA requirements vary from what the FCC originally proposed in one key respect.  Whereas the proposed rules would have restricted SCS operations to circumstances in which a single terrestrial licensee held all the co-channel licenses in a GIA, the final rules allow multiple terrestrial service providers to partner with a satellite operator to provide SCS.  The only requirement is that a satellite operator’s terrestrial partners collectively must hold all wireless licenses in the relevant channel throughout a GIA. 

    Further, the required lease agreements must be in place before the FCC will approve any application for SCS authority – the FCC will not grant any SCS application unless it already has approved all the necessary spectrum lease agreements between a satellite operator and its terrestrial wireless partners.  The lone exception is for any SCS arrangements with FirstNet for the public safety frequencies identified above.  For these frequencies, the parties may satisfy the lease requirement by FirstNet submitting proof of its contractual agreement with its satellite operator partner.
  1. Part 25 Satellite Authorization.  An application for SCS authority requires an authorization to operate a specific satellite (or satellite constellation) under Part 25 of the FCC’s rules, which govern commercial satellite operations.  However, this is not limited to U.S. satellites – operators holding U.S. market access (the equivalent Part 25 authorization for non-U.S.-licensed satellites) are eligible, as well.  In addition, the FCC’s final rules expand eligibility to both non-geostationary orbit (NGSO) satellites and geostationary orbit (GSO) satellites.  (The 2023 NPRM proposed eligibility for NGSO satellite operators but sought comment on whether to give GSO satellite operators the same opportunity.)

    Notably, although the new SCS licensing rules permit satellite operators with existing Part 25 authorizations to apply to modify their authorization to provide SCS, new entrants are eligible to apply for SCS authority, as well.  This includes companies that do not currently hold any FCC authorization for satellite operations, as well as those companies currently conducting satellite operations pursuant to a Part 5 experimental license.
  1. Licensing of Terrestrial Devices.  The new SCS rules separately authorize the terrestrial devices with which satellite operators will communicate using SCS services (e.g., smart phones, Internet of Things (IoT) devices, etc.) through a “license by rule” regime.  This means that as long as the terrestrial devices connected to an SCS network are Part 25 SCS-certified devices and operate within (1) the existing technical requirements of their FCC equipment authorization, (2) the conditions of the associated satellite operator’s Part 25 satellite authority, and (3) applicable service rules, these devices are authorized to transmit in an SCS network without the need for any standalone Part 25 license.  Note that although the “license by rule” flexibility avoids the need for a standalone Part 25 license for terrestrial devices, the FCC equipment authorization for these devices must include a certification that they are approved for operation under the new Part 25 SCS rules.  Accordingly, for a device to operate as an SCS-enabled device, the device manufacturer must modify the existing equipment authorization(s) for this device (or, in the case of new equipment, seek a new authorization) to reflect its operation under Part 25 and applicable SCS rules.

    The “license by rule” guidelines mark another significant departure from the NPRM, which proposed requiring a new “blanket” earth station license for SCS terrestrial devices.  And although modifications to existing device certifications are required before terrestrial devices may operate in SCS networks, the Order takes steps to alleviate the associated administrative burdens by adopting a streamlined process for adding Part 25 SCS authority to a device certification. 
  • Updating Device Certifications with Part 25 SCS Authorization.  When the only requested change to a device certification is the addition of Part 25 SCS authority, the Order allows device manufacturers to file a statement describing the change rather than a full modification application.  This must include the standard certifications required for device authorizations (e.g., confirmation that the equipment is not on the FCC’s “Covered List,” information on the manufacturer’s U.S. agent for service of process), but these filings will be accepted consistent with the FCC’s procedures for permissive changes and will not require long-form technical review.

    In addition, for devices subject to such a request, the Order waives the general prohibition that a device may not be marketed until FCC approval of a pending modification.  Provided the marketing of a device is consistent with its existing device certification and there are no statements indicating Part 25 SCS capability, the device may continue to be marketed during the pendency of a request to add Part 25 SCS authority.

911 Call Transmission Requirements

Although the FCC’s SCS rules do not extend 911 call transmission obligations to SCS-authorized satellite operators, certain 911 call requirements will apply to terrestrial wireless providers that use SCS arrangements to extend their coverage areas.  Specifically, the new rules establish interim 911 obligations requiring a terrestrial provider to take the following steps for any 911 call (or 911 text) initiated by a provider’s end-user subscriber and carried over satellite facilities pursuant to an SCS arrangement (each, an “SCS 911” call or text):

  1. Transmit All SCS 911 Calls and Texts to a PSAP.  Terrestrial providers must transmit all SCS 911 calls and texts to a Public Safety Answering Point (PSAP) using either an emergency call center or location-based routing.
  2. Transmit Location Information.  Terrestrial providers must transmit location information and the user’s phone number so that the receiving PSAP can facilitate dispatch and callback.

    To comply with these requirements, a terrestrial provider may either use automatic, location-based routing to transmit SCS 911 calls and texts or use emergency call centers for this purpose.  Terrestrial providers using SCS must also: (1) submit annual reports to the FCC explaining how SCS deployments support 911 call and text routing to the appropriate PSAP (with sufficient location information), (2) file a one-time privacy certification with the FCC, and (3) provide consumer disclosures regarding SCS 911 connectivity. 

    However, although the Order does not impose any immediate 911 call obligations on satellite operators, this reflects only an interim approach.  The FNPRM adopted along with the new SCS rules seeks further comment on a range of 911 call-related issues, including the key issue of whether 911 call obligations should apply to satellite operators providing SCS service.

    Other Issues

    The Order also includes the following notable rule changes and clarifications on the new SCS regulatory framework:

    • Regulatory Status of Satellite Operators Providing SCS.  Responding to public comment, the FCC’s final SCS rules will allow satellite operators (and new market entrants) to indicate whether they will operate as a non-common carrier or common carrier when applying to provide SCS.  Satellite operators providing SCS will not be automatically classified as common carriers.
    • Automatic Termination for Failure to Provide SCS Services or Loss of Spectrum Access.  If an SCS-authorized satellite operator fails to provide SCS for more than 90 days on all or some of its SCS frequencies, the operator’s Part 25 authority for those SCS frequencies automatically terminates.  Similarly, if the spectrum lease that allows for access to the terrestrial frequencies for SCS lapses or if the relevant terrestrial provider’s underlying license(s) no longer cover the entire relevant GIA, then the satellite operator must immediately cease providing SCS service in the affected GIA and associated terrestrial frequencies.
    • Restriction on Certain Transactions Involving Terrestrial Spectrum.  To avoid a satellite operator losing access to all the necessary terrestrial frequencies in a relevant GIA, a terrestrial wireless provider party to an SCS arrangement may not engage in any transaction (e.g., a lease, assignment, transfer of control, partition, or disaggregation) that would result in the satellite operator no longer satisfying the GIA requirement.  Accordingly, transactions that would result in the SCS arrangement continuing to meet the GIA requirement would be permissible.  For example, where multiple terrestrial licensees are party to an SCS arrangement, transactions between them that preserve a satellite operator’s access to all the necessary frequencies in a GIA are allowed.  The FCC has clarified that certain sale-and-leaseback transactions may be exempted, too, depending on the circumstances.

        Please note, however, that the above summaries are not comprehensive.  Stakeholders interested in SCS deployments should consult regulatory counsel if they have questions on SCS deployments or the FCC’s new licensing framework.

        FNPRM – Comment Sought on Additional Issues

        The second part of the FCC’s SCS item seeks further comment on various matters concerning two key issues: (1) how the FCC can improve 911 service for emergency calls placed via SCS connections and whether – and to what extent – it should require satellite operators providing SCS to comply with the FCC’s 911 rules; and (2) how the FCC can better protect sensitive radio astronomy operations, which are particularly susceptible to interference from satellite downlinks (i.e., SCS transmissions from satellites to terrestrial devices).

        *          *          *

        The FCC’s new SCS rules will become effective 30 days after publication in the Federal Register.  Comments on the issues raised in the FNPRM will be due 30 days after the FNPRM’s publication in the Federal Register (the new SCS rules and the FNPRM may not be published in the Federal Register on the same day).

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        Photo of Gerard J. Waldron Gerard J. Waldron

        Gerry Waldron represents communications, media, and technology clients before the Federal Communications Commission and Congress, and in commercial transactions. Gerry served as chair of the firm’s Communications and Media Practice Group from 1998 to 2008. Prior to joining Covington, Gerry served as the…

        Gerry Waldron represents communications, media, and technology clients before the Federal Communications Commission and Congress, and in commercial transactions. Gerry served as chair of the firm’s Communications and Media Practice Group from 1998 to 2008. Prior to joining Covington, Gerry served as the senior counsel on the House Subcommittee on Telecommunications. During his work for Congress, he was deeply involved in the drafting of the 1993 Spectrum Auction legislation, the 1992 Cable Act, the Telephone Consumer Protection Act (TCPA), CALEA, and key provisions that became part of the 1996 Telecommunications Act.

        Gerry’s practice includes working closely on strategic and regulatory issues with leading IT companies, high-quality content providers in the broadcasting and sports industries, telephone and cable companies on FCC proceedings, spectrum entrepreneurs, purchasers of telecommunications services, and companies across an array of industries facing privacy, TCPA and online content, gaming, and online gambling and sports betting-related issues.

        Gerry has testified on communications and Internet issues before the FCC, U.S. House of Representatives Energy & Commerce Committee, the House Judiciary Committee, the Maryland Public Utility Commission, and the Nevada Gaming Commission.

        Photo of Jocelyn Jezierny Jocelyn Jezierny

        Jocelyn Jezierny is an associate in Covington’s Washington, DC office and a member of the firm’s Communications and Media Industry Group. Before joining Covington, Jocelyn was an Attorney-Advisor in the Federal Communications Commission’s International Bureau, where she worked on matters pertaining to the…

        Jocelyn Jezierny is an associate in Covington’s Washington, DC office and a member of the firm’s Communications and Media Industry Group. Before joining Covington, Jocelyn was an Attorney-Advisor in the Federal Communications Commission’s International Bureau, where she worked on matters pertaining to the licensing of foreign-owned U.S. telecommunications services providers.

        Jocelyn is a member of the Bar of New York. District of Columbia bar application pending; supervised by principals of the firm.

        Photo of Corey Walker Corey Walker

        Corey Walker advises clients on a broad range of regulatory, compliance, and enforcement matters in the media, technology, satellite and space, and telecommunications sectors. Corey also provides strategic counsel to leading media, sports, and technology companies on gaming matters, with a focus on…

        Corey Walker advises clients on a broad range of regulatory, compliance, and enforcement matters in the media, technology, satellite and space, and telecommunications sectors. Corey also provides strategic counsel to leading media, sports, and technology companies on gaming matters, with a focus on sports betting, fantasy sports, and online gaming.

        Corey represents clients before the Federal Communications Commission in connection with a range of policy and compliance issues, including satellite and earth station operations, radiofrequency (RF) spectrum use and availability, and experimental licensing for new and innovative technologies. He also advises clients on structuring transactions and securing regulatory approvals at the federal, state, and local levels for mergers, asset acquisitions, and similar transactions involving FCC and state telecommunications licensees and companies holding private remote sensing space system licenses issued by the National Oceanic and Atmospheric Administration.

        Corey also maintains an active gaming and sports betting practice, and routinely counsels companies on state licensing and compliance matters, including those that pertain to fantasy sports and online gaming.