Globecomm, Artel, CapRock Accuse Intelsat of Anticompetitive Behavior
Several Intelsat customers accused the company of anticompetitive behavior, ranging from refusing to provide capacity to companies directly competing for projects to retaliation and intimidation in FCC filings. Additional filings along the same lines are expected, said an industry executive. The companies making the allegations are Globecomm, Artel and CapRock. Spacenet also said it was concerned with the consolidation of satellite operators in the fixed satellite services (FSS) market.
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The companies filed their comments with the FCC as part of the Open-Market Reorganization for the Betterment of International Telecommunications (ORBIT) Act, which requires the agency to provide annual reports to the House and Senate Commerce and Foreign Relations Committees on the effect of the privatization of Intelsat and Inmarsat. The ORBIT Act filings have been largely innocuous for the last several years and many industry executives were surprised to hear the filings had come up as part of that proceeding. Another industry executive said if the companies had true antitrust concerns, they wouldn’t be filing with the FCC but rather with the Justice Department. The International Bureau declined to comment on the matter because it is ongoing and comments are still coming in.
CapRock said Intelsat is leveraging its “highly advantaged position as both a supplier and competitor” to satellite network service providers, said the comments. CapRock alleges that in a recent bidding on a U.S. Navy Commercial Broadband Satellite Program, Intelsat forced bidders to take a pre-engineered service, which Intelsat personnel described as a “Take It or Leave It Bundle.” The service was up to $40 million more expensive than services needed by CapRock, it said. While the companies are risking retaliation from Intelsat in its business decisions going forward, the risk of not officially addressing the problem was even bigger, an industry executive said.
Artel CEO Abbas Yazdani said he hoped Intelsat would change its ways, which “hurt industry, kills competition, increases costs to taxpayers, increases cost to the U.S. Government.” Artel “discourages [Intelsat] from this anticompetitive behavior because it is not something a multi-billion dollar corporation should be doing,” said Yazdani in an interview. Globecomm asked the FCC to restore the FSS market, saying the FCC should clarify Intelsat’s obligations to the international telecommunications satellites organization treaty and provide procedures for “identifying and addressing noncompliant behavior."
Intelsat said the comments reflect the companies’ realization that their monopoly over government services is shrinking as the government expands the bidding pool for satellite projects through the Future Comsatcom Services Acquisition process. “Overall, while I think this is an unfortunate waste of time for the FCC, it may be good,” said Intelsat General Vice President of Government Relations Richard Dalbello. “It’s a good chance to address these baseless allegations. There isn’t anyone in the world that understands the ORBIT Act better than Intelsat. We have filed reports on a yearly basis and if you look at the recent filing and FCC responses, the FCC noted Intelsat was responsible for increasing competition.”