# Before the

# Federal Communications Commission

# Washington, D.C. 20554

In the Matter of )

)

Loral Space & Communications Corporation )

)

Request for Extension of Time to Construct, ) File Nos.
SAT-MOD-20000104-00042/43/44/45

Launch, and Operate a Ka-band Satellite )

System in the Fixed-Satellite Service )

# ORDER

**Adopted:** May 24, 2001 **Released:** May 25, 2001

By the Chief, International Bureau:

# I. INTRODUCTION

1.  With this *Order*, we deny Loral Space & Communications
    Corporation's ("Loral Corp.'s") request to extend the construction
    completion and launch milestones applicable to its licenses to
    launch and operate a satellite system in the geostationary-satellite
    orbit ("GSO") to provide fixed-satellite service ("FSS") in a
    portion of the Ka-band.[^1] Loral Corp.'s request to delay
    construction and launch of these satellites as authorized is not due
    to circumstances beyond its control, nor to any other factor that
    would justify providing it with more time to hold these scarce
    orbital resources to the exclusion of others.

# II. BACKGROUND

2.  In May 1997, as part of the first Ka-band processing round, the
    International Bureau ("Bureau") issued two licenses to Loral Corp.'s
    predecessors in interest, Orion Network Systems, Inc. ("Orion
    Network") and Orion Atlantic, L.P. ("Orion Atlantic") (collectively,
    "Orion"), to launch and operate a GSO satellite system to provide
    FSS in the Ka‑band.[^2] The *Orion Network License* and the *Orion
    Atlantic License* (collectively, the "*Orion Licenses*") authorized
    Orion to operate in the Ka-band at four orbit locations.[^3] In
    March 1998, pursuant to Bureau authority, Orion transferred control
    of the *Orion Licenses* to another first Ka-band processing round
    licensee, Loral Space & Communications Ltd. ("Loral Ltd.").[^4]
    Loral Ltd.'s license (the "*CyberStar License*"), also issued in May
    1997, authorized Loral Ltd. to operate in the Ka-band at three orbit
    locations.[^5] Through a series of subsequent *pro forma*
    transactions, the *Orion Licenses* are currently held by Loral
    Corp., and the *CyberStar License* is currently held by CyberStar
    Licensee LLC ("CyberStar").[^6]

3.  As in all other satellite services, Ka-band licensees are required
    to adhere to a strict timetable for system implementation. However,
    some of the first Ka-band processing round applicants, such as Loral
    Ltd. (now CyberStar), initially proposed to operate inter-satellite
    links ("ISLs") among multiple satellites in a constellation.[^7]
    When we granted the *CyberStar License*, there was no suitable
    spectrum allocated for ISL operations, and we deferred assigning the
    ISL frequencies.[^8] Consequently, we issued the *CyberStar License*
    without implementation milestones, stating that we would impose a
    strict milestone schedule once ISL frequencies were authorized.[^9]
    Since Orion (now Loral Corp.)'s initial applications did not
    contemplate the use of ISLs, the *Orion Licenses* included system
    implementation milestones as a condition of licensing, as follows:
    satellite construction to begin by May 1998, construction to be
    completed by April 2002, and the satellites to be launched by May
    2002.[^10]

4.  On December 9, 1999, we contacted Loral Corp. and CyberStar with
    separate letter requests for information. The letter to Loral Corp.
    requested that it submit a copy of any executed non-contingent
    contracts that would verify that it had met its first implementation
    milestone by commencing satellite construction by May 1998, and that
    its satellites would be built within the time frame specified in its
    licenses.[^11] On December 20, 1999, Loral Corp. submitted a copy of
    the requisite contract for construction and launch site delivery of
    four Ka-band satellites.[^12] The letter to CyberStar requested that
    it submit detailed information on its proposed ISL operation.[^13]
    On January 4, 2000, CyberStar submitted its detailed ISL
    proposal.[^14] That same day, January 4, 2000, Loral Corp. filed
    applications to modify the *Orion Licenses* to permit the use of
    ISLs, attaching CyberStar's detailed ISL proposal as its own.[^15]
    According to Loral Corp., employing ISLs would permit the four
    satellites authorized by the *Orion Licenses* to communicate
    directly with each other, and with CyberStar's three Ka-band
    satellites.[^16]

5.  In conjunction with the newly-filed request for ISLs, Loral Corp.
    also requested that the Commission extend the construction and
    launch milestones associated with the *Orion Licenses* to conform
    them to CyberStar's milestones, once imposed.[^17] On January 31,
    2001, we assigned CyberStar its requested ISL spectrum and imposed
    system implementation milestones as a condition of licensing, as
    follows: satellite construction to begin by January 2002, and the
    satellites to be launched and operational by June and July
    2005.[^18] On January 31, 2001, we also assigned Loral Corp. its
    requested ISL spectrum, but deferred consideration of Loral Corp.'s
    request to synchronize its remaining milestones with CyberStar's
    milestones.[^19] This *Order* disposes of Loral Corp.'s milestone
    extension request.

# III. DISCUSSION

6.  Loral Corp. states that by employing ISLs, it can operationally
    integrate its system with the CyberStar system, thereby enhancing
    the performance of the Loral-affiliated Ka-band satellite
    constellation.[^20] Loral Corp. contends that the addition of the
    ISLs for this purpose warrants that the remaining milestones
    associated with the *Orion Licenses* (*i.e.*, April and May 2002) be
    extended an additional three years to comport with those imposed on
    CyberStar (*i.e.*, June and July 2005).[^21] We deny Loral Corp.'s
    request. The milestone schedule, included as a condition of space
    station authorizations, is designed to ensure that licensees are
    proceeding with construction and will launch their satellites in a
    timely manner.[^22] Requiring licensees to adhere strictly to a
    milestone schedule prevents increasingly scarce orbital resources
    from being warehoused by licensees.[^23] Such warehousing could
    hinder the availability of services to the public at the earliest
    possible date by blocking entry by other entities willing and able
    to proceed immediately with the construction and launch of their
    satellite systems.[^24] Accordingly, extensions of the milestone
    schedule are granted only when delay in implementation is due to
    circumstances beyond the licensee's control.[^25]

7.  The Commission has repeatedly determined that requesting a license
    modification is a business decision wholly within the discretion and
    control of the licensee, and so, is not a circumstance beyond the
    licensee's control.[^26] Further, extending milestones on this basis
    would allow licensees to "extend indefinitely their nonperformance
    by repeated modifications of their proposals."[^27] This in turn
    could facilitate warehousing of scarce orbital resources or, at a
    minimum, delay service to the public. Loral Corp. made a business
    decision to merge with Orion in 1998, aware that the *Orion
    Licenses*' milestones began to run in May 1997.[^28] Yet, Loral
    Corp. waited until January 2000 -- nearly two years after
    consummating the merger with Orion -- to request ISLs and milestone
    extensions for the Orion satellites. Moreover, Loral Corp. requested
    the ISLs, and the associated milestone extensions, only after the
    Bureau sought to verify the status of the Orion satellites'
    construction. There is nothing in the record to explain why it took
    two years and a milestone compliance letter from the Bureau for
    Loral Corp. to apply for ISLs to integrate the Orion satellites with
    its affiliated CyberStar system. This business decision may enhance
    the interoperability of its satellite assets, as Loral Corp.
    suggests, but does not constitute a circumstance beyond Loral
    Corp.'s control. Therefore, we find no good cause for deferring
    Loral Corp.'s milestone schedules set forth in the *Orion
    Licenses*.[^29]

# IV. CONCLUSION AND ORDERING CLAUSE

8.  Based on the foregoing, we deny Loral Corp.'s request to extend the
    construction completion and launch milestones applicable to the
    satellites authorized by the *Orion Licenses*. Failure to meet the
    remaining milestones as set forth in the *Orion Licenses* will
    automatically render the authorizations for these satellites null
    and void without further Commission action.

9.  Accordingly, IT IS ORDERED that, pursuant to Section 0.261 of the
    Commission's rules, 47 C.F.R. § 0.261, the request to defer
    milestones filed by Loral Space & Communications Corporation on
    January 4, 2000, File Nos. SAT-MOD-20000104-00042/43/44/45, IS
    DENIED.

    FEDERAL COMMUNICATIONS COMMISSION

    Donald Abelson

> Chief, International Bureau

[^1]: The Ka-band refers to the Earth-to-space (uplink) frequencies at
    27.5-30.0 GHz and the corresponding space-to-Earth (downlink)
    frequencies at 17.7-20.2 GHz.

[^2]: *Orion Network Systems, Inc.*, Order and Authorization, 12 FCC Rcd
    23027 (Int'l Bur. 1997) ("*Orion Network License*") and *Orion
    Atlantic, L.P.*, Order and Authorization, 13 FCC Rcd 1416 (Int'l
    Bur. 1997) ("*Orion Atlantic License*"), *each modified by Loral
    Space & Communications Corporation*, Order and Authorization, 16 FCC
    Rcd 2481 (Int'l Bur. 2001) ("*Loral Space ISL Order*").

[^3]: These orbit locations are at 89° W.L., 81° W.L., 47° W.L., and 78°
    E.L.

[^4]: *See Loral Space & Communications Ltd. and Orion Network Systems,
    Inc., et al.*, Order and Authorization, 13 FCC Rcd 4592 (Int'l Bur.
    1998) ("*Loral/Orion Merger Order*"); Letter from Laurence D. Atlas,
    Vice President, Government Relations, Telecommunications, Loral
    Space & Communications Ltd. to Magalie R. Salas, Secretary, FCC
    (April 1, 1998) (notifying the Commission that the Loral/Orion
    merger consummated on March 20, 1998).

[^5]: These orbit locations are at 115° W.L., 93° W.L., and 105.5° E.L.
    *See Loral Space & Communications Ltd.*, Order and Authorization, 13
    FCC Rcd 1379 (Int'l Bur. 1997) ("*CyberStar License*"), *modified*,
    *CyberStar Licensee LLC*, Order and Authorization, 16 FCC Rcd 2442
    (Int'l Bur. 2001) ("*CyberStar Milestone Order*").

[^6]: *See Loral Space ISL Order*, 16 FCC Rcd at 2482 ¶ 2 & nn.7-8.

[^7]: ISLs are communication links between in-orbit satellites. ISLs
    operate in spectrum allocated to the inter-satellite service.
    International Telecommunication Union ("ITU") Radio Regulation
    S1.22.

[^8]: *CyberStar License*, 13 FCC Rcd at 1386-87 ¶¶ 24-26.

[^9]: *Id.*, 13 FCC Rcd at 1387-88 ¶ 27.

[^10]: *Orion Network License*, 12 FCC Rcd at 23037 ¶ 31; *Orion
    Atlantic License*, 13 FCC Rcd at 1426 ¶ 32.

[^11]: *See* Letter from Thomas S. Tycz, Chief, Satellite and
    Radiocommunication Division, FCC to Philip L. Verveer, Counsel for
    Loral Orion Network Systems, Inc. and Orion Atlantic, L.P. (December
    9, 1999).

[^12]: *See* Letter from John P. Stern, Associate General Counsel, Loral
    Space & Communications Ltd. to Magalie R. Salas, Secretary, FCC
    (December 20, 1999) (confidential treatment of attachment
    requested).

[^13]: *See* Letter from Thomas S. Tycz, Chief, Satellite and
    Radiocommunication Division, FCC to Philip L. Verveer, Counsel for
    CyberStar Licensee LLC (December 9, 1999).

[^14]: *See* Letter from Jennifer D. McCarthy, Counsel for CyberStar
    Licensee LLC to Magalie Roman Salas, Secretary, Federal
    Communications Commission (January 4, 2000) ("CyberStar ISL
    Letter").

[^15]: *See* Loral CyberStar, Inc. Applications for Modification at 3-4,
    File Nos. SAT-MOD-20000104-00042/43/44/45 (January 4, 2000) ("ISL
    Modification Applications"). *See also* Public Notice, Report No.
    SAT-00036 (rel. February 8, 2000).

[^16]: ISL Modification Applications at 1, 3-4 & Exhibit 1 (attaching
    CyberStar ISL Letter at 1).

[^17]: *Id.* at 2, 5-6.

[^18]: *CyberStar Milestone Order*, 16 FCC Rcd at 2451 ¶ 24, 2452 ¶ 29.

[^19]: *Loral Space ISL Order*, 16 FCC Rcd at 2483 n.16, 2485-86 ¶ 10,
    2488 ¶ 16.

[^20]: ISL Modification Applications at 3-4.

[^21]: *Id.* at 5-6.

[^22]: *See, e.g.*, *Columbia Communications Corporation*, Memorandum
    Opinion and Order, 15 FCC Rcd 15566, 15571 ¶ 11 (Int'l Bur. 2000)
    ("*Columbia MO&O*").

[^23]: *Id.*

[^24]: *Id.*

[^25]: *Id.*; *see also National Exchange Satellite, Inc.*, Memorandum
    Opinion and Order, 7 FCC Rcd 1990, 1991 ¶ 8 (Com. Car. Bur. 1992);
    *Hughes Communications Galaxy, Inc.*, Order and Authorization, 5 FCC
    Rcd 3423, 3424 ¶ 10 (Com. Car. Bur. 1990); *MCI Communications
    Corporation*, Memorandum Opinion and Order, 2 FCC Rcd 233, 233 ¶ 5
    (Com. Car. Bur. 1987) ("*MCI Order*").

[^26]: *See,* *e.g.*, *Columbia MO&O*, 15 FCC Rcd at 15571 ¶ 12;
    *Columbia Communications Corporation*, Memorandum Opinion and Order,
    15 FCC Rcd 16496, 16497-98 ¶ 5 (Int'l Bur. 2000); *Advanced
    Communications Corporation*, Memorandum Opinion and Order, 10 FCC
    Rcd 13337, 13341 ¶ 14 (Int'l Bur. 1995) ("*Advanced Order*"). *Cf.*
    *Advanced Communications Corporation*, Memorandum Opinion and Order,
    11 FCC Rcd 3399, 3417 ¶ 45 (1995) (delay related to negotiations
    with potential investors does not constitute circumstances beyond
    the licensee's control); *American Telephone and Telegraph Company
    and Ford Aerospace Satellite Services Corporation*, Memorandum
    Opinion and Order, 2 FCC Rcd 4431, 4433-34 ¶ 21 (1987) (delay due to
    construction contract negotiation does not constitute circumstances
    beyond the licensee's control).

[^27]: *Advanced Order*, 10 FCC Rcd at 13341 ¶ 14 (quoting *Tempo
    Enterprises, Inc.*, Memorandum Opinion and Order, 1 FCC Rcd 20
    (1986)).

[^28]: *Accord MCI Order*, 2 FCC Rcd at 234 ¶ 7 (mergers do not justify
    extension of milestones).

[^29]: *But see GE American Communications, Inc.*, Order, DA 01-1286
    (Int'l Bur. rel. May 25, 2001) (granting GE Americom a waiver of its
    remaining construction and launch milestones because, *inter alia*,
    GE Americom requested its ISLs and associated milestone extension a
    few days after actions taken at the World Radiocommunication
    Conference in November 1997 (WRC-97) made ISL frequencies available
    internationally, and a review of its construction contract shows
    that ISLs were contemplated in the early stages of system design).