NBN contracts to buy two satellites without the orbital slots to fly them in

April 16, 2012
Blog
Communications & Broadband

Should we be concerned?

We have had an interesting discussion in the NBN Committee today with Mr Quigley and the Department of Broadband about the fact that the NBN Co has entered into a $660 million contract to buy two satellites for the NBN without having obtained an allocation of the orbital slots in which those satellites would fly.

My best summary of Mr Quigley’s position regarding the satellites and the fact that the orbital slots for those satellites have not yet been allocated is set out below.

1. Slots have not been allocated yet, but they have been applied for.

2 The slot is an important input in the design of the satellite so in the absence of formal allocation, an assumption is made as to the slots expected to be allocated.

3. The NBN Co and the Department of Broadband are very confident they will be allocated.

4. Quigley says it isn’t without precedent to launch a satellite into a slot without a formal allocation

but

5. While the NBN Co does not expect that it will launch a satellite prior to the the orbital slot being formally allocated and the Department of Broadband’s advice is that the ITU will allocate the slots, nonetheless Quigley despite several opportunities to do so declined to put the matter beyond doubt by saying categorically that the NBN WILL NOT launch the satellite prior to the formal allocation of the orbital slot. He says this slot allocation risk factor ” doesn’t keep me awake at night”

Most people would have assumed that before agreeing to buy two satellites for $660 million, the design of which is directly affected by the orbital slot in which they will fly, the NBN Co would have secured the necessary orbital slots and certainly completely rule out any possibility of launching the satellites without the slots being formally allocated.

After all, if the orbital slot is an important assumption in the design of the satellite, and if the slot assumed in the design is not the one ultimately granted, there would presumably be additional costs to take into account the new slot and potential delays depending on how long the grant of the new slot actually took.

It will be interesting to see what the satellite community has to say about this – is it really a risk of such a miniscule nature that Mr Quigley is right not to lose a moment’s sleep about it? Or is it important when you invest $660 million of the taxpayers’ money you take a rigorous belt and braces approach to all of the legal requirements?

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