Europe’s latest space policy has a simple theory: To build a champion, you must first clear the field.
The European Commission’s newly adopted proposal to reallocate the 2 GHz mobile-satellite-service (MSS) band—a slice of radio spectrum used for satellite communications—would reserve most of that spectrum for European operators. The same proposal would limit non-EU militaries and startups, including both EU and non-EU firms, to just one-third of the available and highly desirable band.
The move reflects a broader push for “tech sovereignty,” the idea that Europe should reduce dependence on foreign technology providers in strategically important sectors. That concern now spans data centers, payments processing, telecommunications, and, increasingly, space. But the EU’s 2 GHz plan is industrial policy dressed up as tech sovereignty. It assumes Europe can create a globally competitive satellite champion by reserving critical inputs for favored firms and denying them to more efficient rivals.
That is bad economic policy for what is inherently a global communications system. For anyone who remembers the first wave of digital-sovereignty fights two decades ago, it is also eerily familiar.
Spectrum by Passport
The European Commission has adopted a draft regulation to create an EU-level licensing process for the 2 GHz MSS band, which U.S. operators Viasat and EchoStar have held since 2009 under licenses set to expire in May 2027. Under the proposal, one-third of the band would be reserved for government, security, and defense uses, supplied by an EU operator and folded into the bloc’s IRIS² constellation. Of the remaining two-thirds reserved for commercial use, half would be limited to EU operators, leaving only one-third genuinely open to both EU and non-EU firms. The incumbents’ licenses would be extended by two years, but their rights would be frozen and nontransferable in the interim.
Although framed as a security measure, the proposal effectively allocates market share by nationality. The defense set-aside may be defensible on its own terms. Reserving a third of the commercial band for “EU operators entering the market” is not.
In the short run, scarce spectrum would sit idle by administrative fiat. In the long run, firms that do not yet exist—and may never prove commercially viable—would receive a subsidy in the form of excluding firms that already do.
When Licenses Become Suggestions
Much of the commentary on this proposal has focused on its implications for Starlink, which needs access to the 2 GHz band. But the larger problem is the blow it strikes against regulatory predictability—the basic expectation that governments will not rewrite the rules after companies have invested under them.
EchoStar and Viasat have held these 2 GHz rights for more than 15 years under the shared understanding that an EU-harmonized allocation meant what it said. SpaceX, meanwhile, agreed to pay roughly $17 billion for EchoStar’s 2 GHz MSS holdings—the AWS-4 and H-block licenses—on the assumption that those rights would remain usable through the current license term, which expires in 2027. Reallocating the band by nationality at renewal, while freezing transfers in the meantime, pulls the rug out from under exactly the sort of long-term, capital-intensive investment that spectrum policy is supposed to encourage.
The irony is that Europe says it wants more investment in space while signaling that spectrum rights can be effectively renationalized whenever political priorities favor a domestic champion—or a hoped-for domestic champion. Capital is not so trusting. A regime that treats vested, purchased rights as contingent on political discretion will be priced accordingly by investors, including those backing European firms.
When political priorities displace legitimate investment expectations, capital goes elsewhere. Firms focus on more predictable markets, and European consumers bear the opportunity costs. As the International Center for Law & Economics (ICLE) has argued in its comments on the EU Space Act, discriminatory measures of this sort function as nontariff barriers: They shield incumbents—or, here, prospective entrants—from competition while raising the cost of capital across the market. The European Union has run this play before. Its proposed “fair share” levy on content providers reflected the same instinct in a different guise.
You Can’t Nationalize Orbit
The deeper problem is conceptual. A low-Earth-orbit (LEO) satellite constellation is not a national asset that happens to cross borders. It is a global network whose economic logic depends on scale and scope. In plain English: These systems work because the same costly infrastructure can serve many users in many places at once.
The same satellites can serve users across multiple continents simultaneously. The marginal cost of extending service to one more country is low because the fixed costs are spread across a global customer base. Direct-to-device service, which would allow ordinary mobile phones to connect directly to satellites, is valuable for precisely this reason. A handset that works seamlessly across borders is far more useful than one that does not.
Fragmenting that system along national lines sacrifices those scale economies. If every bloc reserves “its” spectrum for “its” champions, the likely result is not a thriving ecosystem of national constellations. It is higher capacity costs, slower deployment, and balkanized coverage that leaves consumers worse off—including European consumers.
The 2 GHz proposal also undermines one of satellite broadband’s greatest promises: making rural and remote coverage economical for the first time. That promise depends on spreading fixed costs across the widest feasible market. Divide the market into national or regional preserves, and the economics get worse quickly.
Beneath the sovereignty rhetoric lies a serious concern, and it deserves a serious response. Europe worries about dependence. The war in Ukraine showed how reliance on a single foreign-owned, privately controlled constellation can become a strategic vulnerability if the operator’s interests—or whims—diverge from those of the user. That concern is legitimate. No continent should want critical communications infrastructure to depend entirely on one company beyond its jurisdiction.
The relevant policy goal, however, is resilience, not exclusion. Resilience comes from multisourcing, interoperability, and clear rules governing who can suspend service and under what conditions. Regulators can impose those requirements on operators regardless of nationality.
Reserving a third of the commercial band for European-only firms does little to improve resilience. One European champion remains a single point of failure. The policy does, however, make higher prices and slower innovation more likely. The Commission reached for a protectionist tool when more narrowly tailored alternatives were available. The language of “sovereignty” may obscure that choice for casual observers, but it does not justify it.
The Ghost of Dubai
None of this is new. The impulse to bring a global communications network under national or intergovernmental control has been a recurring feature of governance debates since the internet became commercial.
One of the clearest examples came in 2012 at the International Telecommunication Union’s World Conference on International Telecommunications in Dubai. There, Russia and a coalition of states sought to expand the International Telecommunication Regulations to place internet naming, addressing, and traffic management under greater intergovernmental control. Put less technically, they wanted more internet governance to move from open technical bodies to governments negotiating with one another.
The United States, the European Union, and dozens of other countries refused to sign on. The open, multistakeholder model—embodied by institutions such as the Internet Corporation for Assigned Names and Numbers and the Internet Engineering Task Force—prevailed, to the enormous benefit of the global internet. That model is not anarchic. It is governance by technical standards, broad participation, and interoperable rules rather than by national gatekeepers.
The throughline from Dubai in 2012 to Brussels in 2026 is the conviction that borderless networks must ultimately answer to borders. The European Union’s 2 GHz proposal reflects that impulse in the form of economic protectionism. A related debate is now unfolding ahead of the 2027 World Radiocommunication Conference, where Russia and Iran are advancing Agenda Item 1.5, a proposal that would allow governments to require satellite operators to shut off service within their territory.
The objectives differ. The EU proposal aims to favor domestic industry; the World Radiocommunication Conference proposal is closer to traditional information control. Both, however, occupy different points on the same sovereignty spectrum. Each rejects the premise that some networks work best under neutral, harmonized rules rather than political boundaries.
Two Wrongs, One Spectrum
The right response is not to answer European protectionism with an American version of the same mistake. Candor requires turning the lens around. The Federal Communications Commission (FCC) has opened a proceeding to reconsider the longstanding presumption that World Trade Organization-licensed satellites may access the U.S. market, and it has signaled that the United States may “mirror” whatever restrictions the European Union ultimately adopts.
The reciprocity impulse is understandable as a bargaining tool. A principled commitment to neutral, merit-based spectrum policy, however, points in the opposite direction. As the ICLE argued in its comments to the FCC on satellite market-access reciprocity, the goal should be to expand access to global markets, not accelerate a race to the bottom in which every jurisdiction walls off “its” spectrum. Mirroring Brussels’ mistake does not correct it. It merely doubles down on it. Ideally, trade negotiators can resolve the dispute before regulators do.
What would neutral rules look like instead? Operators would compete on technical capability, interference management, and demonstrated ability to coexist with other systems—not on the nationality of their shareholders. Regulators would honor vested, paid-for rights and alter them only prospectively and predictably. Governments would pursue reciprocal openness, rather than reciprocal exclusion, by employing mutual-recognition agreements, harmonized interference standards, and transparent licensing processes that any qualified operator can navigate.
That is how spectrum becomes a platform for competition rather than a trophy for favored firms. It is also the standard against which both Brussels’ and Washington’s policies should be judged.
In the end, treating an inherently global resource as a national trophy does not create strong domestic champions. It creates protected firms that face less competition, higher costs for consumers, and a slower closing of the digital divide that satellite broadband is uniquely positioned to bridge.
Europe can have a thriving satellite industry, or it can have spectrum sovereignty. The more it chases the latter, the harder it becomes to achieve the former.
