Executive Summary

Space in Low Earth Orbit (LEO) is becoming increasingly crowded with communication satellites, and policy developments have failed to keep up. This report, prepared by the LEO Policy Working Group, seeks to provide policymakers with a forward-looking assessment of the evolving landscape of LEO satellite policy. It highlights three central themes that U.S. policymakers will need to address: (1) enabling effective spectrum sharing and coexistence; (2) fostering a sustainable competitive environment in a rapidly evolving industry; and (3) optimizing LEO connectivity’s role in closing the digital divide.

LEO Spectrum Sharing and Coexistence

While a proliferation of large constellations and advances in technology will increase network capacity dramatically, LEO satellite growth and performance is hamstrung by limited access to spectrum, constrained power levels, and outdated regulations that impose more restrictive and burdensome licensing and coordination requirements than are needed. To realize the full potential of LEO systems for ubiquitous connectivity, innovation, and competition, along with closing digital divides, regulators must ensure sufficient access to spectrum and modernize coordination and coexistence mechanisms.

The regulatory processes that govern satellite licensing and access to spectrum (and recommendations for their improvement) can be broken into three categories: the licensing system that allows operators access to satellite spectrum bands, the framework for good-faith spectrum sharing and coexistence among a growing number of systems, and the satellite spectrum access pipeline.

First, we find the current satellite-licensing system to be overly slow, bespoke, and burdensome. It could be improved by a shift to clear, uniform ex ante rules and conditions, with targeted ex post enforcement as needed. Second, the report endorses a new U.S.-led framework for satellite spectrum sharing, allowing higher power and more extensive spectrum access for LEOs in shared bands. Finally, a robust spectrum pipeline is needed to create far greater spectrum availability for both fixed satellite service (FSS) and mobile satellite service (MSS), which can be achieved through modern interference protection frameworks, coordinated sharing, and allocating more bands for satellite use.

Satellite Competition in LEO

Cost reductions in LEO launch and satellite production, coupled with advances in throughput and latency, have enabled the deployment of large constellations capable of serving consumer broadband, enterprise backhaul, and emerging applications such as direct-to-device connectivity. Yet this transformation is not the product of a purely competitive market. From the outset, LEO has been shaped by geopolitics: state-backed constellations in China and Europe, government equity in OneWeb, and heavy subsidies that tilt the field. The industry must therefore be understood as a hybrid arena where statecraft and economics interact.

The report examines how competition is unfolding, and where it may be lacking, across four principal dimensions: market structure, barriers to entry, competitive differentiation, and potential anticompetitive conduct. We find that competition is real and intensifying, but also skewed by political sponsorship and regulatory asymmetries. Market consolidation becomes likely as systems move from rapid deployment to the provision of sustainable services, with only a handful of global-scale operators likely to survive. Looking forward, policymakers should remain alert to how vertical integration, tying, and merger activity shape outcomes while recognizing that many forms of integration and consolidation can be efficiency-enhancing and pro-consumer.

Bridging the Digital Divide with LEO Satellite

The world of communications services has changed. Home broadband, traditionally the purview of fixed terrestrial broadband, can now be offered through a wireless connection—including, with recent advances, through LEO satellite service that can beam 100/20 Mbps service directly to a building or home. These advances have arrived as federal policy aims to close lingering deployment gaps to extend broadband internet service to all remaining unserved and underserved households. LEO satellite has an important role to play in closing the digital divide, and policymakers should be aware of its unique strengths, weaknesses, and particular use cases in order to effectively include LEO systems in ongoing and future federal subsidy programs.

The report examines considerations for including LEO satellite service in broadband subsidy programs. We find that LEO service is appropriate in otherwise hard-to-reach locations due to its minimal ground infrastructure and ability to deliver broadband in a variety of geographies, although capacity constraints and potential high prices mean it is not a ubiquitous solution. The report further explores how LEO satellite service’s unique business structure, deployment model, and policy context create challenges when incorporating it into existing subsidy programs. We close on recommendations for policymakers to create a policy and regulatory environment that addresses barriers and allows LEO satellite service to reach consumers effectively.