Direct to device satellite services and MSS services: Upcoming regulatory changes

New satellite services are in development which will permit satellites to communicate directly with unmodified end user phones. These services fall into a category of satellite services known as direct to device services, or “D2D” services. In addition to these services, a number of other innovative “mobile satellite services” in development including satellite services for machine to machine communications and internet of things (IoT) applications.

Being wireless, these services are reliant on the availability of radio frequencies, the use of which is authorised by Ofcom.

Ofcom published a Call for Input: Improving mobile connectivity from sky and space (“CFI“) in July 2024 to obtain a better view of how it will approach a number of regulatory issues that must be addressed in order to facilitate the development and rollout of D2D services, and in light of the expected growth in MSS services.

Ofcom’s CFI has closed, and Ofcom has published a Statement setting out its plans in this area (“Statement“).

This article provides a background to D2D services, and other innovative satellite services, an overview of Ofcom’s proposals, and commentary on various regulatory challenges that exist in this area.

Direct to device services

Direct to deviceservices are not entirely new; technology permitting direct communications between a satellite and a satellite phone has existed for some time now.  Such traditional satellite phone services continue to be offered; however, devices and associated services can be unaffordable to most, meaning such services have had more limited adoption.

From late 2022, mobile phone devices have been available with “satellite” based emergency SOS capabilities, enabling end user phones to send SMSs over a satellite network. These services are referred to in the Ofcom CFI as “D2D in MSS spectrum” as such devices are specially designed to include chipsets that permit the phone to operate using the same radio frequencies that satellites traditionally use.  

Another type of D2D service to develop permits direct connectivity between satellites and unmodified mobile phones i.e an end user could buy a mobile phone off the mass market and use it with a proposed D2D satellite network, without the need for the manufacturer to make any changes to the phone to facilitate such use. These services have been referred to in Ofcom’s CFI as “D2D in mobile bands” as such services will involve communications between mobile devices and satellites using spectrum traditionally used for terrestrial communications between mobile phones and terrestrial mobile towers.

With D2D in mobile bands, the potential use of such services is more immediate as services can be used with unmodified phones and does not need a radical change to the relevant end user device ecosystem.  However, the uptake of D2D services in MSS spectrum is dependent on the development of standards to facilitate the development of mobile devices that support D2D MSS services, and the take up of such devices by end users.

Ofcom’s CFI and relevant spectrum management issues

One of the main regulatory challenges relating to spectrum management arises from the finite nature of spectrum.

Where there is surplus demand for spectrum or different competing uses, a decision must be made in respect of what uses to permit the spectrum to be used for, and who to licence such spectrum to. This is impacted by a variety of factors, including whether spectrum can be shared by users, the likelihood of interference to other services, among others.

Ofcom’s CFI was therefore issued to gauge interest in the rollout of D2D services in the UK, likely uses of spectrum allocated to mobile satellite services (MSS) into the future, the benefits such services would bring to UK end users, and the spectrum requirements of relevant stakeholders.

In light of the growing interest in MSS spectrum (for D2D services in MSS spectrum, and for other innovative MSS services) Ofcom flagged a need to consider existing authorisations and licensing models for MSS frequencies in the UK. In particular:

1. Currently MSS earth stations operate on a licence exempt basis. However, if MSS services are expected to grow substantially, then a licence exempt authorisation model (which is based on installation being unlikely to cause undue interference, lead to inefficient use of spectrum or inhibit the development of effective sharing arrangements) may no longer be appropriate.

• The 2 GHz band is currently licenced to two operators, each holding 2 x 15 MHz each of 2 GHz spectrum until May 2027, when their licences expire. Therefore, Ofcom flagged a need to determine how to authorise such spectrum after May 2027.

D2D in mobile bands poses a separate regulatory challenge. For “unmodified” phones to be used with a satellite, the “uplink” and “downlink” between the satellite and mobile phone must use the same spectrum as is currently used for terrestrial mobile communications between a mobile tower and a mobile phone. The use of spectrum in this manner is not currently contemplated under relevant international regulation but is due to be considered at the ITU World Radio Conference 2027 (WRC-27).

The UK can still authorise such services in advance of a decision at WRC-27, but such services will be subject to technical limitations (including to not cause interference to, nor claim protection from interference from, other services). A further regulatory challenge in the UK is that typically the standard mobile frequencies have been auctioned and are now exclusively licenced to mobile network operators.

Ofcom’s proposals

In response to its CFI, Ofcom’s has now set out the following streams of work:

What does this mean for satellite operators?

1. Authorisation of D2D in mobile bands

Ofcom has two choices in respect of the authorisation of D2D services in mobile bands – to wait until such services have been formally considered at WRC-27 and to adopt the ITU’s recommendations, or to proceed with developing a specific UK authorisation model now. For now, Ofcom has not provided a suggestion of how it would authorise D2D in mobile bands, so the industry will need to wait until its consultation is released.

Given much of the intended mobile spectrum for D2D in mobile bands is already exclusively licenced to mobile network operators (MNOs), what is currently unknown is whether Ofcom will require D2D operators to obtain a spectrum lease from existing licensees, or whether Ofcom will develop some form of sharing model. Ofcom already has a “shared access” licence where mobile spectrum can be licenced to others, however it is unclear if this model would support the deployment models of D2D operators.

Contracting models between D2D operators and MNO customers could vary widely depending on the specific authorisation model adopted by regulators for D2D services in mobile bands. For example, will the D2D operator be required to obtain a licence and hold direct obligations in respect of the use of the spectrum? Or will a spectrum lease model be used where the MNO leases spectrum to the D2D operator and ultimately remain liable to Ofcom for any non-compliance. Another possibility which is that the D2D operator effectively acts as a very tall tower company and the UK licensed MNO continues to control the use of their licensed spectrum. Until an authorisation approach is developed, it is clear that there will be ongoing uncertainty for risk allocation in contracts between these parties.

• Future use of the 2 GHz MSS bands:

The 2 GHz band was harmonised across the European Union (EU) for MSS use. The harmonisation of the 2 GHz band across the EU provides a variety of benefits for end users, including the potential for a seamless service provision across regions.

In 2009, EU members (including, at the time, the UK) were directed by the European Commission to licence the 2 GHz band to two selected operators of MSS systems up to May 2027.

In the EU, the Radio Spectrum Policy Group has consulted on this issue, and has made several recommendations to the European Commission on how such spectrum should be authorised after May 2027 in an opinion released in February 2024.

Now that the UK is no longer part of the EU, it is unclear what approach the UK will take and whether the chosen approach will deviate widely from the approach the EU settles on for the 2 GHz band.

• Review of licence exemption of MSS earth station terminals

Ofcom will consider whether to move current licence exempt satellite terminals to a “light licensing” approach, and whether to make additional bands available on such a light licence authorisation basis. If this approach is adopted, this will mean operators relying on licence exemptions will need to formally apply for relevant licences.