Abstract:
Technological progress in both the space and the Earth segments has made it feasible to run satellite networks completely independent of terrestrial systems. Given its intrinsic advantages, especially in Europe, a separate satellite network could lead to efficiency gains resulting from facility-based competition. Moreover, a satellite entrant may induce the terrestrial network operators to compete directly against each other. It may therefore offer a solution to the problem of network fragmentation in Europe. Moreover, its insensitivity to distance implies that a satellite competitor will foster universal service. It is therefore argued that Eutelsat, the main player in the European satellite market, should be separated from the national telecommunications organizations.