Puzder warns European companies of devastating US retaliation over satellite spectrum restrictions
Key Facts
US Ambassador to the European Union Andrew Puzder warned that European companies could face "devastating" US retaliation if the bloc moves ahead with restrictions on access for American competitors such as SpaceX, ANSA reported, citing the Financial Times. The warning concerns plans to allocate spectrum for satellite-to-phone communications and their potential impact on US companies' access to these services in Europe. Puzder raised the prospect of US retaliation against European companies as part of his objection to the proposed restrictions. SpaceX, for its part, criticised the proposed changes to spectrum allocation, according to ANSA's account of the company's position. The company said the changes "could harm connectivity in Ukraine", adding an objection concerning connectivity there to the dispute over access to European spectrum.
On the European initiative, Deutsche Telekom announced that it, Orange, Telefonica and Vodafone had signed a letter of intent concerning mobile satellite services spectrum in Europe. It said the letter aimed to "explore a potential joint bid", meaning the operators' participation in a bid remains under consideration and has not reached a final decision to submit one. The initiative intends to make direct-to-device connectivity services available to all mobile network operators, according to Deutsche Telekom's statement. The company described the planned access as "open and non-discriminatory", with the initiative encompassing network operators wishing to offer these services. The statement also clarified that the letter of intent does not replace the signatories' existing satellite partnerships, which remain separate from the exploration of a potential joint bid.
When the European proposal was announced in May, EU technology chief Henna Virkkunen rejected potential criticism portraying it as targeting American companies, Reuters reported at the time. Describing the EU's handling of the matter, Virkkunen said: "We are being very transparent and fair." Before the proposal was announced, European Commission spokesperson Thomas Regnier linked satellite connectivity to the concept of European technological sovereignty, according to Reuters. Regnier's description included the importance of this connectivity for security and defence in Europe, alongside the technological dimension the Commission seeks to emphasise. The spokesperson said: "Satellite connectivity is a cornerstone of our technological sovereignty, security and defence," outlining the context in which the Commission places its plans for the sector.
In an assessment of the plan published by Reuters alongside the proposal's announcement in May, BNP Paribas analyst Sam McHugh said it offered a limited benefit to European telecom operators. McHugh described the proposal as "modestly positive for European telecom operators", linking his assessment to its potential impact on direct competition. The analyst attributed this to a reduced likelihood of SpaceX competing directly with those operators in the European market. On broader technology issues, Puzder questioned the motives behind fines imposed under the Digital Markets Act, according to ANSA. He questioned whether the fines were intended to protect competition or "generate revenue" for the European budget, expressing a separate objection to enforcement of the law alongside his warning over satellite spectrum.
Despite his objections to European policies, Puzder called for cooperation between Europe and the United States in technology, according to ANSA's account of his remarks. He identified artificial intelligence as an area for cooperation between the two sides amid competition with China to develop those technologies. His call also included quantum computing, which he listed among the areas in which Europeans and Americans should cooperate. He said the cooperation aimed to "compete with China in developing artificial intelligence and quantum technologies", identifying the counterpart against which he wants efforts coordinated. The call for cooperation came in remarks by the ambassador that addressed, alongside objections to spectrum allocation, the motives behind applying European rules to technology companies.
As for the European initiative's next steps, the companies that signed the letter of intent plan to establish the necessary ground network infrastructure in Europe, according to Deutsche Telekom's statement. Their plans also include establishing coordination and monitoring functions within Europe, alongside the ground infrastructure that would serve the proposed project. As for providing the satellite constellation, the company said the operators' plan does not include direct investment in it. A partner will be selected to provide the constellation, according to the arrangements outlined in the statement on the division of responsibilities for ground infrastructure and satellite services. These steps remain part of an initiative exploring a potential joint bid for mobile satellite services spectrum under the letter of intent signed by the operators.