“Spectrum for European Companies, a Communications Network of Its Own”: EU Space Industry Self-Reliance Strategy Deepens US–EU Tensions

US warns of strong retaliation over EU satellite communications spectrum rules
SpaceX also pushes back directly, while US companies skip an international space summit
EU accelerates efforts to build its own satellite network and foster communications providers within the bloc

US President Donald Trump’s administration has warned the European Union (EU) of strong retaliatory measures. As the EU seeks to reduce its dependence on US satellite communications providers and give companies within the bloc priority access to spectrum rights, Washington has signaled reciprocal measures, viewing the move as a discriminatory restriction on market access for US companies. The dispute extends beyond spectrum allocation, affecting space industry development policies, investment regulations and related industries more broadly.

US Warns EU of Retaliation

According to the UK’s Financial Times (FT) on the 18th local time, Andrew Puzder, the US ambassador to the EU, said in an interview with the newspaper that day, “If the EU pursues plans to restrict US satellite communications providers’ access to spectrum, European companies could face US retaliation.” He added, “European companies should be mindful that this could happen,” and said, “Given the size of the US market, the damage could be very severe.”

Puzder’s remarks came as the EU pursued a plan to reserve some satellite internet service operating rights exclusively for providers within the bloc. In May, the European Commission outlined a proposed regulation centered on allocating one-third of the rights to use the 2-gigahertz (GHz) spectrum band for satellite internet services to EU-based operators. Another third would be allocated to IRIS², the EU’s independent satellite network led by SES, Eutelsat and Hispasat, which is scheduled to begin operating in 2029. The proposal was presented ahead of the spectrum allocation process next May.

Recurring Friction over Satellite Communications

This is not the first dispute over the issue. In June, SpaceX, the US space company led by Elon Musk, submitted comments to European Commission officials opposing the proposed regulation giving European companies priority access to 2 GHz satellite communications spectrum. SpaceX argued that the regulation could restrict European consumers’ access to direct-to-device (D2D) satellite-to-phone services and cause radio interference with satellite communications networks in other regions. It also warned that disruptions to emergency communications services could not be ruled out and that communications quality could deteriorate in Ukraine, which uses Starlink for civilian and military communications. The company argued that spectrum rights should be allocated based on technical requirements and the actual ability to provide services, rather than companies’ nationality or location.

US regulators had also been on alert even before the EU announced its proposed regulation. In early March, Brendan Carr, chairman of the US Federal Communications Commission (FCC), told US political news outlet Politico at Mobile World Congress (MWC) in Barcelona, Spain, “If the EU imposes regulations on non-European companies, the US will apply the same regulatory approach to European companies.” On the social media platform X, formerly Twitter, he described this as the principle of “reciprocity,” emphasizing that European companies operating in the US market would receive the same treatment as US companies in Europe. On the day the EU subsequently announced its proposal, Carr again raised the possibility of reciprocal measures, saying, “If Europe wants to move in a different direction, there are European satellite communications providers that also operate in the United States.”

Refusing to Attend a France-Led International Summit

Last month, several US space companies also declined to attend an international space summit in France. According to Politico’s European edition, four US space companies—SpaceX, Blue Origin, Stoke Space and Starcloud—informed the French government that they would not attend the international space summit in Paris. Championed by French President Emmanuel Macron, the summit was organized to bring together national governments, space agencies and private space companies to discuss issues including space exploration, security and industrial cooperation.

Reports also emerged that the White House had discouraged attendance before the US companies decided not to participate. Politico reported that, during a private call in August involving US companies including SpaceX, Stoke Space, K2 Space and Astra, an official from the White House Office of Science and Technology Policy (OSTP) expressed the view that attending the summit could be interpreted as tacit support for the EU’s policy direction. During the discussions, the White House also alleged that the French government had prepared the event without sufficient consultation with the United States and was engaging in anticompetitive practices that disadvantaged US companies.

Table 1. US Opposition to EU Satellite Communications Regulations

Constraints on EU Investment in SpaceX

As opposition from the US government and companies has grown noticeably stronger, the EU has also been stepping up efforts to keep US space companies in check. For example, in June, ahead of SpaceX’s initial public offering (IPO), European asset managers debated whether investments in its shares would be permissible under the EU’s Sustainable Finance Disclosure Regulation (SFDR). The SFDR mandates disclosures about the sustainability of financial products. In particular, it requires Article 8 funds, which promote environmental or social characteristics, and Article 9 funds, which have sustainable investment as their objective, to consider the good governance practices of companies they invest in. These include management practices, employee relations, remuneration structures and tax compliance. The FT reported at the time that European funds subject to these rules held a total of EUR 6.8 trillion in assets under management, equivalent to approximately USD 7.79 trillion.

The issue is that SpaceX’s governance structure may not meet some European funds’ investment criteria. Through a dual-class voting structure, SpaceX concentrates management control in the hands of insiders, including CEO Elon Musk, and has established a structure under which Musk retains about 82% of total voting rights even after listing. This has prompted concerns in various quarters about limits on ordinary shareholders’ ability to exercise voting rights and hold management accountable. Potential conflicts of interest, insufficient board independence and oversight of executive compensation have also been cited as investment risks.

EU Moves toward Satellite Communications Self-Reliance

The EU is also accelerating projects to reduce its dependence on US satellite communications providers and secure its own communications infrastructure. A leading example is IRIS², the EU’s project to build an independent satellite communications network. On December 16, 2024, the European Commission signed a 12-year concession contract with the SpaceRISE consortium, led by SES, Eutelsat and Hispasat, to design, build and operate IRIS². Major European space and defense companies, including Airbus Defence and Space, Thales Alenia Space and Germany’s OHB, are participating as partners, alongside telecommunications operators such as Deutsche Telekom and Orange. The project’s total cost is EUR 10.6 billion (approximately USD 12.1 billion), with the EU contributing EUR 6 billion (approximately USD 6.88 billion), the European Space Agency (ESA) EUR 550 million (approximately USD 631 million), and the private consortium more than EUR 4 billion (approximately USD 4.58 billion).

Major European mobile operators have recently also moved to establish a separate satellite communications service. On the 19th, Germany’s Deutsche Telekom, France’s Orange, Spain’s Telefónica and the UK’s Vodafone announced that they had signed a letter of intent (LOI) to explore jointly securing EU spectrum rights for mobile satellite services (MSS). The companies have drawn up plans to provide D2D services using the 2 GHz spectrum band that the EU will newly allocate. Their aim is to eliminate coverage gaps in rural and mountainous areas beyond the reach of existing mobile networks and maintain emergency communications services even during disasters or network outages.