CONTRACTS AND (HARMFUL) INTERFERENCE PROFESSOR LESLEY JANE SMITH, LEUPHANA UNIVERSITY OF LÜNEBURG/ WEBER-STEINHAUS & SMITH BREMEN 3rd Luxembourg Workshop on Space and Satellite Communications Law Luxembourg, 5-7 June 2014

Overview 1. Scope and Definition, Interference 2. Cause and Effect 3. Legal Considerations 4. Contractual Solutions 5. Conclusions

1. Scope of Contracts (1) – Which Service? What Level? Which User? Perspectives and Risk allocated accordingly Future: Real-time, satellite-based, integrated universal services Performance linked to delivery requirements from particular service component (‚satisfactory‘) Space segment / Control segment Ground component /distribution component Distinguish Customer/ User/ ‚Final‘ End Users Distinguish integrated real-time services from space- data-based, derivative services and products

1. Contracts (2) regulate connectivity, and interference beyond harmful Defined by Art 1.169 ITU RR: „Harmful interference: Interference which endangers the functioning of a radionavigation service or of other safety services or seriously degrades, obstructs, or repeatedly interrupts a radiocommunications service operating in accordance with Radio Regulations“

Frequency interference 2. Causes of ‚External‘ Interference (1)- Satellite Services and Loss of Signals in Space (SiS) 5 Space weather Solar storms, coronal flares, solar mass ejections Space debris Frequency interference Jamming Hacking Black outs

2. Loss of SiS – Impact (1) on Economy and Finance Developing markets in commercial satellite-based products and services PNT(Positioning, Navigation and Timing [GNSS]) Errors in data collection Growth of markets for all types of EO data Impact on growth markets in downstream sector 6

2. Impact - Loss of SiS (2) on Space and Ground-based Infrastructure 7 Loss of signals Loss of transport services eg. tracking Damage to aircraft in flight etc. Navigation Loss of telecommunication Loss of telemedicine services Loss of life Communication Loss of EO availability Loss of disaster management services Damage to society Remote sensing

2. Impact of Loss of SiS on Society (3)- Dependency Malfunction of satellites Power grids collapse Critical services fail Threat to national/global security 8

3. No Flowdown of Space Treaties + ITU, at commercial level - indirect remedies 9 No definition of loss of SiS Parties to the treaties Commercial activities only covered under state to state ‘umbrella’ Intern. Intergovernmental organisations (Art XXII LIAB) Scope of space treaties Unsuited for space activities Impact and victim-orientated character of the LIAB

4. Contractual Solutions (1) focus on ‚Capacity‘/ Service Level Agreements Details of hosting communication levels required; operational characteristics; essentials Levels generally defined by specifying % capacity required Use of Key Performance Indicators – KPIs- to manage service requirements Maximum and minimum levels below which service not to fall Linked to penalties = reduction in service charges payable

4. Contractual Solutions (2)= ‚Satisfactory‘ Penalties v. Liability Consequences of underperformance expressed as penalties Penalties – in contrast to liquidated damages - can be challenged if disproportionatemay lead to invalidity Maintain link between penalties and actual loss Measure of financial loss must not be in terrorem Legal reasoning: liability goes beyond SLA which regulates charges for services Liability = breach, or failure to perform contract Force majeure

Current situation: Outlook 4. Contractual Solutions (3): New: Derivative sat-based navigation/communication ‚apps‘ Current situation: free of charge disclaimer of liability, no penalty clauses, force majeure Outlook - Telemedicine - Health - Logistic - (unmanned) transportation Who is liable for harmful interference of these critical services?

4. Cf: Current contracts approach (4) + delivery of future derivative products? EO based services ´product` data protected by IPR (licencing) or under GMES/ Copernicus rules Telecomnmunication/navigation services Pure `services´ = not protected by IPR If free of charge = you pay with your personal data and information! secure Telecom/Navi systems are expensive govnernment/ commercial sector cannot/will not take over contractual risks () A new end-user basesd insurance regime may be established

Conclusions 14 Direct (integrated satellite-based) services/and real-time satellite-based services Key clauses Availability Force majeure Loss mitigation Justified and unjustified interruption Derivative indirect satallite-based services No warranty No disclaimer 14

Prof. Dr. Lesley Jane Smith Further Information Contacts: Prof. Dr. Lesley Jane Smith smith@leuphana.de smith@weber-steinhaus.com