The 39th Assembly of Parties of ITSO, called for an extraordinary session, was held last 27-28 August by videoconference from Washington, D.C. A total of 94 of the 149 ITSO member states participated. Portugal was represented by ANACOM and by the Foreign Ministry.
The underlying reason for this Assembly (chaired by South Africa – Stella Tembisa Ndabeni-Abrahams) was the difference the organisation maintains with the satellite operator Intelsat, which refuses to finance the ITSO’s supervisory operations. There was not enough time to discuss all the agenda points in detail.
Unexpected developments caused the ITSO director-general (Patrick Masambu of Uganda) to urgently convoke this extraordinary AP, due to the fact that last 13 May Intelsat filed for bankruptcy protection with the Virginia Bankruptcy Court under Chapter 11 of the US Bankruptcy Code, increasing the organisation’s fear that the operation would make Intelsat’s fulfilment of its public service obligations unviable. The only agenda point of AP39 was Intelsat’s bankruptcy and its implications for the ITSO states.
Intelsat has generally considered that it is not obliged to finance ITSO activity beyond what is stipulated in the public service agreement (PSA) and has more recently openly called for disbanding the organisation. ITSO in turn accuses the satellite operator of acting in noncompliance with article 14 of the PSA since 1 July of this year, and with article 7 of the ITSO Agreement.
As soon as the work started, the delegation from the USA (the ITSO notifying administration before the International Telecommunication Union (ITU), along with the United Kingdom) contested the holding of this extraordinary AP, recalling that the AG’s rules of procedure do not envisage that decisions be adopted by remote means. It reserved the right to include a statement to that effect in the final minutes or even to challenge the meeting’s results. The USA had already sent a letter explaining this position to the director-general on 4 August, asking ITSO to disseminate it to all the parties. ITSO’s legal counsel considered that the Assembly has a sovereign right to decide, which was seconded by various parties.
AP39 was previously to have been an ordinary session scheduled for April, though it was successively postponed before being cancelled. The ordinary session was meant to discuss the future of the organisation’s Agreement (in July 2012 AP35 approved the organisation’s continuity only up to 18 July 2021 – the matter would have to be discussed again before that date) and the question of its financing, then already in question due to ITSO’s impasse with the Intelsat operator, which had refused to recognise the obligation to finance some of the organisation’s activities.
Last 18 November ITSO went ahead with an arbitration process against the operator at the International Chamber of Commerce (ICC), due to the difference regarding the extent and amount of the operator’s obligations to finance the organisation. It must be stressed that ITSO had to use its reserve fund to finance the arbitration process.
The tension between ITSO and Intelsat has led to a negotiating impasse. The director-general has requested written support from the parties several times in recent months; Portugal has always responded positively. The organisation currently has no financing source and is unable to meet its obligations. It has therefore had “residual operational status” since 1 September.
A meeting of group B (of which Portugal is a member) was recently held, chaired by Norway, but little progress was made on adopting solutions for the situation. The European region has generically defended that Intelsat’s use of the so-called parties’ common heritage (CH), i.e. the orbital resources and frequencies the operator held in the name of all the states at the moment ITSO was privatised, will remain conditional to honouring the commitments assumed when the organisation was privatised in 2001. Most of the states hold that the economic value of the CH pertains to the parties and should stay that way.
On this subject, the director-general has considered that the “common heritage” is “protected”, due to the fact that the “new Intelsat” resulting from this bankruptcy process will have to sign a new PSA with ITSO in order to use the CH orbital positions and so it can be licensed by the US regulator, the FCC.
The next meeting of the Assembly (AP40) should be held in the first quarter of 2021; the date and format have not yet been determined.
