US warns of strong retaliation over EU satellite communications spectrum rules
SpaceX also voices direct opposition; US companies skip international space summit
EU accelerates efforts to build an independent 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 in allocating spectrum rights, Washington appears to view the move as a discriminatory restriction on market access for US companies and has signaled potential countermeasures. The dispute extends beyond spectrum allocation, affecting policies to foster the space industry, investment regulations and related industries more broadly.

US Issues Retaliation Warning to EU

According to Britain’s Financial Times (FT) on the 18th, local time, US Ambassador to the EU Andrew Puzder 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 retaliatory measures.” He added, “European companies should be wary 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 plans to reserve some satellite internet service operating rights exclusively for providers within the bloc. In May, the European Commission had announced plans for new rules centered on allocating one-third of the spectrum rights in the 2-gigahertz (GHz) band used for satellite internet services to EU-based providers. It also plans to allocate another third to IRIS², the EU’s independent satellite network led by SES, Eutelsat and Hispasat and 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 time the issue has sparked controversy. In June, SpaceX, the US space company led by Elon Musk, submitted comments to European Commission officials opposing proposed rules that would give European companies priority in allocating 2 GHz satellite communications spectrum. SpaceX said the rules 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. Its argument was that spectrum rights should be allocated based on technical requirements and actual service delivery capabilities, rather than a company’s nationality or location.

US regulators had also remained on alert even before the EU announced its proposed rules. 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,” stressing 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 proposed rules, Carr again raised the possibility of countermeasures, saying, “If Europe wants to move in a different direction, there are European satellite communications providers that also operate in the US.”

Companies Also Refuse to Attend French-Led International Summit

Last month, a succession of US space companies also opted out of an international space summit in France. According to Politico Europe, 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. The event, initiated by French President Emmanuel Macron, was organized to bring together 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 to stay away. 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) said attendance at the summit could be interpreted as tacit support for the EU’s policy direction. In the process, the White House also argued that the French government had prepared the event without sufficient consultation with the US and was applying anticompetitive practices that disadvantaged US companies.

Table 1. US Opposition to EU Satellite Communications Regulations

EU Capital Faces Constraints on SpaceX Investment

As opposition from the US government and companies has grown noticeably stronger, the EU has also been stepping up its efforts to keep US space companies in check. For example, ahead of SpaceX’s initial public offering (IPO) in June, European asset managers debated whether they could invest in its shares under the EU’s Sustainable Finance Disclosure Regulation (SFDR). The SFDR requires disclosures on the sustainability of financial products. In particular, Article 8 funds, which promote environmental or social characteristics, and Article 9 funds, which target sustainable investment, must consider whether investee companies follow good governance practices. 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 total assets under management of EUR 6.8 trillion, approximately USD 7.79 trillion.

The problem is that SpaceX’s governance structure may not meet the investment criteria of some European funds. 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 the listing. This has prompted criticism from various quarters that ordinary shareholders have limited ability to exercise voting rights and hold management in check. Potential conflicts of interest, a lack of board independence and issues with 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 total project 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 begun efforts to establish a separate satellite communications service. On the 19th, Germany’s Deutsche Telekom, France’s Orange, Spain’s Telefónica and Britain’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 spectrum in the 2 GHz band that the EU will newly allocate. They aim to eliminate coverage gaps in rural and mountainous areas beyond the reach of existing mobile networks and maintain emergency communications services during disasters or network outages.