Satellite operators could have greater flexibility to offer terrestrial broadband services as a result of a Notice of Proposed Rulemaking issued this week from the Federal Communications Commission. The NPRM, which focuses on 90 MHz of spectrum in three different satellite bands, aims to make it easier for satellite operators to use the spectrum to offer terrestrial broadband wireless service.

“We intend to modify our rules in a way that both expands terrestrial mobile broadband and ensures that America has a robust mobile satellite capability for rural areas and when disaster strikes,” said FCC Chairman Julius Genachowski in a statement.

The NPRM, which was triggered by a recommendation in the National Broadband Plan, would allow satellite operators to lease spectrum to other carriers who would provide the terrestrial portion of the link under the same regulations that currently apply to wireless terrestrial services. Currently such arrangements are more restricted and as a result satellite operators have not yet exercised their option to include a terrestrial component in their offerings. Currently Globalstar has a broadband terrestrial component in the works through a partnership with Open Range Communications. And SkyTerra was required to commit to adding a terrestrial component to its offering as a condition of its acquisition by Harbinger Capital.

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The NPRM also seeks to eliminate certain restrictions on using satellite spectrum for terrestrial communications that are unique to the 2 GHz spectrum band. Along with the NPRM, the FCC issued a Notice of Inquiry seeking comment on other actions it might take to encourage the use of satellite spectrum for terrestrial use. One important action could be to allow spectrum holders to assign their spectrum to another party or to allow the FCC to auction it in exchange for a portion of the proceeds.

Several operators—including SkyTerra, Globalstar and Iridium–currently offer satellite service in the L-Band and LEO band, two of the bands covered by the NPRM and NOI. The 2 GHz band, which includes two license-holders and is the third band covered by the NPRM and NOI, is a different story.

DBSD Satellite Services (formerly New ICO Satellite Services) launched a satellite but does not yet offer service and is in the process of emerging from bankruptcy. TerreStar Networks also has launched a satellite and has an agreement with AT&T for an integrated smartphone but has not yet launched service or built any terrestrial base stations.

Neither the new NPRM nor the new NOI mentions a suggestion previously made by the FCC that would have prevented AT&T and Verizon from operating the terrestrial portion of satellite-based networks.

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