
FCC fines Swarm $900K for unauthorized satellite launch - daegloe
https://reuters.com/article/amp/idUSKCN1OJ2WT
======
mabbo
It feels to me as though the mantra of "move fast and break things" wasn't
meant to apply to _laws_. Purposely ignoring laws, regulations, or seeing
vague ones that didn't expect your crazy idea, and then hoping you can work it
all out later after you've made lots of money- this is becoming more and more
common in tech startups. And I personally don't like it.

Uber and AirBnB are the classic examples (and it's worked out wonderfully for
them). In Toronto, Car2Go told customers to just park anywhere- don't worry
about getting parking tickets, we'll handle it. (They didn't). Swarm was told
that their satellites could not be launched, so they just did it anyways
hoping no one would notice. (Someone did). RobinHood announced checking
accounts without checking if there were laws around such things. (There are).

Governments would be better to be ready for disruptive ideas and have
flexibility in regulations to try them out. And we should all be voting and
supporting candidates who want to see such changes happen. But until they do,
it seems wrong to purposely break laws in order to make money.

~~~
jstanley
Unfortunately, laws are unlikely to change without a bit of violation.

Alcohol prohibition in the US didn't end because everyone stayed good and
sober.

~~~
troydavis
> "Laws are unlikely to change without a bit of violation"

The flaw with that argument is that something like 99 of 100 laws exist
because, basically, they should. They benefit society, so essentially the
whole population wants them.

Someone will disagree with almost every law, and some subset of them will
violate it in protest. No single person knows which law is the 1 in 100 that
shouldn't exist - even someone who thinks they know. Often, the people who so
passionately think a law shouldn't exist that they're willing to break it are
actually the least representative of society.

(I'm completely ignoring whether space launch access is or isn't a worthwhile
law; it's moot.)

~~~
randallsquared
> The flaw with that argument is that something like 99 of 100 laws exist
> because, basically, they should. They benefit society, so essentially the
> whole population wants them.

That's very much debatable. It's not even clear how to count the number of
laws, even if we are only considering Federal law in the US. (see
[https://fas.org/sgp/crs/misc/R43056.pdf](https://fas.org/sgp/crs/misc/R43056.pdf)
)

Certainly there is no one who knows all the laws, and unlike in coding,
there's no commitment to DRY or modularization, which leads to very common
unintended consequences.

You're arguing the 99/100 case, but I'm sure it would be easy to find someone
to credibly argue the 1/100 case.

~~~
yholio
This is not even a law, it's a regulation from an agency that tries to assert
itself as a regulator of communication satellites. This has strategic
implications for US and it's probably a good idea anyway from a space
collision point of view - but nonetheless is a regulatory land grab from other
international bodies.

As a general rule, these type of moves can only be controlled by breaking them
and testing then in court. The agencies have a strong incentive to go for a
maximal interpretation of the relevant statues and increase their influence
and funding.

~~~
threeseed
Governments have a mandate to regulate what happens in their own country. It’s
how the entire world functions. And so it makes no sense that enforcement
should be considered a land grab from other international bodies.

And we don’t control crimes like murder by allowing people to break the laws
and then testing them in court.

~~~
yholio
> And we don’t control crimes like murder by allowing people to break the laws
> and then testing them in court.

I usually err on the side of constructive conversation, but I have to say that
is a ridiculous straw-man - and you know it.

------
carbocation
> _FCC Commissioner Mike O’Rielly said the size of the penalty “is probably
> not significant enough to deter future behavior, but the negative press
> coverage is likely to prevent this company and others from attempting to do
> this again.”_

To me, this reads like they're abdicating their responsibility. I'm sure their
goal is to punish the company without destroying it. But if even the regulator
doesn't believe the fine is going to serve as a deterrent, why do we even have
a regulator for this arena?

~~~
sokoloff
I read that as "the _financial penalty_ is not significant enough on a
standalone basis to deter future violations, but that perhaps the fine
combined with the press coverage may prevent it."

If you're a VC or company backer now, how willing are you to put your money
behind some company that's liable to be the _second_ intentional violator of
these regulations?

~~~
carbocation
Yes, I read this the same way you did, but I came to a different conclusion.

If the regulatory agency will tailor-make your fine to make sure that it's not
too stiff, I don't see why any startup would follow the rules the first time
around. Compliance has costs.

If you ignore compliance and your project doesn't work, then you spared
yourself the time and money needed for compliance, and you won't care about
the fine.

If you ignore compliance and your project does work, then the fine will not
kill you, and you'll know it's worth coming into compliance.

I don't think I'm more "move fast and break things" than the average HN'er;
this just seems like the logical outcome of fines that are intentionally too
small. What am I overlooking?

~~~
jstanley
I don't think you're overlooking anything, that sounds eminently reasonable.

New companies with new ideas can get their first projects off the ground
cheaply. As they become established and do more projects, they abide by the
rules. There's only a small number of "rule-breaking" projects, and plenty of
scope for innovation.

Where's the problem?

~~~
dsr_
Let's start a new LLC for every launch. After all, launches are expensive, and
LLCs are cheap. FCC will only penalize us a little because it's always the
first launch.

A little later: the FCC said we couldn't do that with LLCs that we own or are
directed by people who work for us, so let's hire a series of unconnected
LLCs, one per launch. We'll have to pay a bit more, but it's always the first
launch. We just sell them satellites and connect them with buyers.

A little later: oops, Ajit Pai is doing community service for the rest of his
life. Let's find a new loophole.

------
riskable
So if Swarm wasn't a US-based company they wouldn't have gotten this fine?
They launched the satellites from India and tested them from Georgia (the
state in the US or the country? The article isn't clear).

Seems to me that future companies that want to do this sort of testing just
need to do it in other countries or from off-shore platforms. _Then_ apply for
your FCC license so you can charge US customers without having to worry about
getting sanctioned (and losing your ability to process credit cards and bank
in the US).

When I started reading the article and read about all these international
launches my first thought was, "why does the FCC have a say in any of this?"
Now I'm thinking, "perhaps we need a better international framework for this
sort of thing."

~~~
mabbo
We do have an international framework, of sorts. It's that each country must
regulate satellites launched by their companies. A US-based company must
comply with US laws regarding satellite launches and get permission to launch
them.

In this case, Swarm lied to the Indian government and said the US had approved
it (which made sense as they are a US-based company), while trying to hide the
existence of the satellites from the US Government. Frankly, I think a $900k
fine is too small.

~~~
sgc
My first thought when I saw 900k was "Oh shit, now everybody will do it".

~~~
14
Yes 900k seems like for some companies that kind of fine would be worth it to
get their stuff in space and even if you made it 5 times higher seems like you
could account for all of that in your budget. I think a more severe penalty
would be ground them from future launches for 6 months(or other number maybe 6
months is too short), and failure to do that would have them sanctioned from
the US and it's allies. The article states they are hoping the negative
exposure from this fine is enough to deter the company, it is not even about
the money.

------
dr_orpheus
Fun fact, Swam now has a job open for "Regulatory Engineer". I wonder why they
would need that...

[https://jobs.lever.co/swarm-
technologies/437b187b-26f9-4da7-...](https://jobs.lever.co/swarm-
technologies/437b187b-26f9-4da7-ae6e-b0be64ce0bbc)

~~~
elliekelly
I feel bad for whoever ends up in this position. The FCC has required Swarm to
designate someone to be responsible for regulatory compliance. That means
someone with knowledge and experience with FCC regulatory compliance. _Not_ an
engineer who happens to be tasked with work an attorney should be doing.
Whoever takes this role isn't going to be compensated nearly enough for the
personal risk they're about to undertake and is being set up to fail. They
need a lawyer, and they need to listen to the lawyer, not an engineer.

~~~
dr_orpheus
Yeah, definitely not a job I want. I am an engineer who has worked on an
application for FCC license for a different smallsat company. It was already a
terrible experience dealing with the FCC. I can't imagine trying to do it when
the FCC is already pissed off at your company.

------
jedc
"Earlier this month, SpaceX launched three more satellites for Swarm on a
Falcon 9 rocket after winning FCC approval."

This feels like a pretty important point - Swarm got slapped for their
mistakes with that launch, but they're already back on track if the FCC
already granted permission (what must have been months ago) for their most
recent satellites. I wonder if it was just down to confusion on Swarm's part
on how the rules applied.

~~~
dr_orpheus
I am pretty sure that Swarm knew that they were breaking the rules. They
submitted an FCC license, were notified that the license was rejected, and
decided to launch anyways.

I think part of the reason that they were able to still get licenses approved
is that they agreed to more oversight from the FCC. Also, after launching the
satellites Swarm was able to show the FCC that they were able to track the
satellites, which was the original reason that FCC denied the license. So it
seems like the FCC had to say "we were wrong, but you still broke the law so
here is a fine and then we will continue on with life."

------
blauditore
I'm not well-informed on the topic, but why does the FCC regulate who's
allowed to launch satellites? Shouldn't there be an international authority
for this?

~~~
Cogito
It's hard to co-ordinate that kind of thing, so we might see it in the future
but I wouldn't hold my breath.

The FCC regulates the radio spectrum usage in the US, which means if you want
to talk to your satellite you need to get permission from them. They use that
to try and make sure everyone in space gets along and don't crash into each
other.

If the company only ever used base stations not falling under FCC jurisdiction
they might have been ok, but my guess is that as long as they were operating
in the US they'd probably run into issues trying to get around the FCC.

~~~
ceejayoz
As a US company, even launching an inert block of metal would've still made
the US liable for any mishaps they caused (say, by running into another
satellite or hitting someone on the ground with it) under the Outer Space
Treaty and the Space Liability Convention.

Evade the FCC and _someone_ with enforcement powers is still gonna be grumpy.

------
vasilipupkin
negative press coverage? I can't believe people still don't get that there is
almost never such a thing as negative publicity, especially for a new ventur (
with exceptions, within reason, of course )

~~~
matt4077
> with exceptions, within reason

Well, how about applying those, then?

I also think you’re misunderstanding the sentiment. It’s not so much about
negative coverage serving as additional punishment in this case, but about the
coverage putting future would-be offenders on notice, and effectively
preventing any profession of ignorance to serve as a mitigating factor.

------
cbolat
Swarm Technologies Inc Advisors: Julius Genachowski Former Chairman, FCC
(2009-2013)

good advice Mr Genachowski..

------
jacquesm
I can see a Sealand 2.0 spring up around the launching of rockets from
international waters. It also looks as if the bulk of the regulatory reason
here is the use of the radio spectrum and not the actual launch.

~~~
ceejayoz
Sealand was an abject failure, wasn't it?

The UK basically rolled their eyes the same way they'd ignore a kid declaring
their backyard tree fort to be sovereign territory. If they'd started
launching rockets, that might've been different.

~~~
jacquesm
I think if HavenCo had been a success the eye rolling would have rapidly
stopped and we'd have seen whether or not copyright will be enforced with guns
if it comes to it.

~~~
ghaff
Or just cut their network access. You can figurative be an island on the high
seas but a business needs to ultimately interact with others in various ways
and those interactions are vulnerable.

------
reaperducer
$900,000? I wonder how this was calculated. It doesn't sound like much of a
deterrent. The next rouge satellite launching company can just work that into
startup costs.

~~~
matt4077
It sounds like a pretty hefty fine for a small startup. It’s also a fine, not
a tax. Meaning this does not establish a price that you can consciously factor
in when breaking the law.

The next one would surly be treated much harder, considering it would be hard
to claim ignorance. And fines would also rise proportional with the size of
the offender, not to menation repeat offenders.

~~~
dnadler
That sounds reasonable, but do you have anything to back up any of what you
said? It's just as likely that $900k is the statutory limit for this
infraction.

------
androidgirl
900k is almost chump change in the world of aerospace, sats, and space tech.

This isn't a deterrant, it can be framed as the cost of doing business.

The fine is far too small.

------
sschueller
This isn't large enough. The fine should include the cost to remove the
satellites from orbit.

~~~
wcoenen
If you're OK with waiting a while, the "removal cost" is zero. Those
satellites are in 490km orbits which should decay in 50 years or so.

~~~
sschueller
In the mean time they can hit the ISS and damage other satellites.

------
gioscarab
I can't wait to see the first private pirate/rogue satellite launch :)

------
harrisonjackson
This article reads as sponsored content. The outcome was a $900k advertising
bill with the FCC telling everyone that Swarm has got tech up and working and
that they're moving forward with the approval of the FCC... "YOU WON'T BELIEVE
WHAT WORKOUT SUPPLEMENT NEARLY LANDED THE ROCK IN JAIL"

------
eggy
I go back and forth on government regulation in the domains of the FCC. On the
one hand, you have the BBC, which seems to produce interesting TV when
compared to all the fluff on US TV, however, it also banned airing certain
things back in the day. The BBC does well here where it can be chosen, but the
Brits didn't have much choice. I remember visiting my cousins in Ireland and
England in 1984, and my cousin in England only had three or four channels.
Some could argue that FCC regulation led to what we have today (not Netflix
and other variants) on broadcast television. I found this podcast interesting
on the subject of the FCC:

[https://www.libertarianism.org/podcasts/free-thoughts/sad-
hi...](https://www.libertarianism.org/podcasts/free-thoughts/sad-history-fcc-
thomas-hazlett)

------
AznHisoka
At first I thought this was SwarmApp by Foursquare, and they wanted to track
the location of every human on earth.

------
gesman
I'd modify the fine by adding: $1m/per month while your stuff is polluting the
space orbit.

------
ryanmccullagh
It's not related to Swarm, by FourSquare, right?

~~~
ryanmccullagh
Was this really so horrible?

------
smkellat
Was there an option to use an anti-satellite weapon to blow these things out
of the sky? These rules have been pretty firm since the 1970s so pleading
ignorance just looks bad.

~~~
bagels
The complaint by fcc was these objects were too small to be tracked (which was
not true in the first place). How would turning them in to many more smaller
pieces of debris in orbit help?

