Direct-to-device (D2D) satellite technology is launching traditional mobile communications out of this world. By enabling standard mobile devices to connect directly to satellites, D2D promises expanded coverage and connectivity in areas where terrestrial networks are unavailable.
As mobile carriers, satellite operators, and device manufacturers race to deploy D2D services, the technology is creating a new set of legal, sourcing, and regulatory considerations. Companies involved in D2D-enabled services should consider how their responsibilities will be designated across an increasingly complex ecosystem of providers.
Complex Technology, Complex Contracting Challenges
Unlike traditional wireless communications, which primarily rely on terrestrial infrastructure, such as cell towers D2D technology enables devices to communicate directly with satellites in low Earth orbit. While the prospect of uninterrupted connectivity is compelling, implementing D2D services requires rethinking the commercial and legal frameworks that have historically governed telecommunications services.
Due to D2D services spanning both space-based and terrestrial communications infrastructure, the service depends on multiple parties, each responsible for a different component of the solution. A typical D2D deployment may involve satellite constellation operators, ground station providers, mobile network operators, cloud infrastructure providers, and device manufacturers.
With so many participants involved in delivering a single service, companies should carefully evaluate how responsibilities are allocated through sourcing, partnership, and service agreements. Key considerations may include the following:
- Which party is responsible for service outages or performance failures?
- How should service levels be measured when performance depends on multiple providers?
- How should cybersecurity incidents affecting shared infrastructure be addressed?
- What indemnities are available if regulatory approvals—including spectrum authorization, satellite licensing, market access approvals, or other governmental permits— are delayed or revoked?
- Who owns the intellectual property developed, generated, or derived from the D2D service, including network performance data, telemetry, and analytics?
Traditional telecommunications agreements may not adequately address these multi-party dependencies, making thoughtful risk allocation increasingly important.
Regulatory and Compliance Considerations
Additionally, because D2D services operate across national borders and rely on both terrestrial and space-based infrastructure, they present unique regulatory questions:
- What telecommunications licenses or regulatory approvals are required to operate in each jurisdiction?
- How will data localization and cross-border transfer requirements apply when communications are routed through satellite and cloud infrastructure?
- What cybersecurity and critical infrastructure obligations may apply to D2D networks and supporting systems?
- How will evolving regulations affect commercial commitments?
As governments continue to develop frameworks for satellite-enabled communications, compliance obligations may vary significantly across jurisdictions.
Looking Ahead
D2D technology has the potential to reshape the telecommunications landscape by extending connectivity beyond the reach of traditional networks. However, the success of these services will depend not only on technological innovation but also on effective contracting, governance, and risk management.
How We Can Help
Morgan Lewis helps clients negotiate and manage complex commercial arrangements involving emerging technologies. Whether evaluating a new D2D offering or expanding an existing ecosystem, companies face a range of commercial and regulatory considerations. We help clients structure agreements, allocate risk, protect intellectual property, and address cybersecurity, data governance, and regulatory requirements to support their business objectives in the evolving satellite communications market.
Summer associate Trinh Nguyen contributed to this blog post.