Overfiling of satellite networks is often referred to as "paper-satellites" because capacity (orbital position with associated frequencies) is reserved without actual use. When assessing the limited capacity of the geostationary satellite orbit to coordinate frequencies for both geostationary and non-geostationary satellite systems, one of the major problems is the existence of systems under coordination which do not represent real communication requirements.

It is now a well acknowledged fact that some administrations tend to initiate the coordination procedure for more geostationary or non-geostationary orbital positions and/or more spectrum than needed, expecting that some of these positions will not survive by the end of the coordination process. These "overfilings" can also be attributed to orbit "slot reservations" for potential future applications and, in some cases, for slots to be used for commercial arrangements or for later distribution in the domestic or international market under re-sale, leasing or other arrangements to the highest bidder.

With the still increasing tendency towards overfiling or overprotection of networks by notifying broader characteristics, and the resulting multiplication of the networks with which coordination is required, the administrative and technical burden for the administrations involved in more and increasingly complex coordination negotiations is growing considerably.

Thus, the reliable assessment of the level of actual congestion of the spectrum/orbit becomes more and more difficult. There is a growing challenge for administrations to determine which of the "filed" networks will be actually put into operation and which of them are "paper-satellites" with which administrations may feel that it is not worth coordinating.

To discourage the reservation of capacity without actual use (paper satellites), the World Radiocommunication Conference of 1997 considered an approach whereby each administration would be required to provide specific evidence demonstrating its serious intent to establish a satellite system to which the regulatory procedures are being applied. This approach is also coined "due diligence". Two different types of due diligence were put forward:

Administrative due diligence consists in regular disclosure of data on the implementationof the respective satellite system. The information include the name of the spacecraft manufacturer, the name of the satellite operator, the contractual date of delivery and the number of satellites procured, the name of the launch vehicle provider and the contractual launch date.

The consequence of not providing the due diligence information within the specified time limits is that the satellite network in question is removed from the queue of systems submitted for coordination or notification and is no longer taken into account when applying the coordination and recording procedures for other networks. Another consequence is the loss of right to obtain an extension of the regulatory time limit between the submission of the Advance Publication and the date of bringing into use.

The financial due diligence concept proposed at WRC 97 comprised three aspects:

• an annual coordination charge payable at the beginning of and during the coordination process;
• an annual registration charge payable for those systems recorded in the MIFR and being taken into account in any compatibility analysis
• a deposit for satellite networks with all or part of the deposit refundable when the system enters into service.

The rationale for a filing charge is that the user of the services who benefits should pay for the costs incurred. This charge might be either a fixed amount for each submission or proportional to the amount of the submitted data (e.g. proportional to the number of assignments involved, the number of earth stations in the space network, or the number of pages of the notice form, etc. or some other proxy of the workload in treating the submission). The ITU Council, the annual governing body of the Union, decided to adopt the principle of full recovery of processing costs for certain tasks relating to satellite notification processing (production of Special Sections of the Weekly Circular for space radiocommunication services concerning advance publications, requests for coordination or agreement and requests for modification of the BSS and FSS service Plans.)

As far as the registration charge aspect is concerned, two variations had been proposed i) a registration charge combined with a refundable deposit, whereby an annual registration charge would be payable after the deposit is returned, and would be required to be paid as long as the network is recorded in the MIFR; and ii) if the deposit approach is not utilized, an annual registration charge which would be payable at the start of coordination and for as long as the network is in coordination or recorded in the MIFR.

A financial deposit system had also been proposed as a means to eliminate those satellite networks that are not intented to be brought into use, i.e. to remove paper satellite networks by imposing a deposit returnable only if and when the satellite in question is actually launched. It has been suggested that: i) a properly designed and calculated deposit system would discourage the filing of excess and/or speculative filings; ii) administrations would not submit requests for coordination until the availability of the deposit funds from the proposed system operator is assured; and iii) because of this financial commitment, the operating entity would more carefully scrutinize the proposed filings. It had also been suggested that the amount of the refundable deposit could be calculated at a level sufficient to discourage paper satellites, but not so high as to deter genuine proposed systems.

There was however no consensus on the financial due diligence concept.

The World Radiocommunication Conference of 1997 could not agree on the introduction of financial due diligence because many were of the view that the Conference did not have such authority. The introduction was deferred until a plenipotentiary conference would provide the authority to a WRC and until the results of the administrative due diligence would be assessed.

The Plenipotentiary Conference therefore is asked to empower a future World Radiocommunication Conference to introduce Financial due diligence should it conclude that the other measures (administrative due diligence adopted by WRC 97 and the cost-recovery measures adopted by the ITU Council in 1998) failed to put under control overfiling.