Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+---+------------------------------+
| In the Matter of                 | * | File Nos.:                   |
|                                  | * | SAT-MSC-20000526-0093        |
| New Skies Satellites, N. V.      | ) |                              |
|                                  | * |                              |
| Request for an Extension Under   | * |                              |
| Section                          |   |                              |
|                                  | * |                              |
| 623(l) of the ORBIT Act          | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
+----------------------------------+---+------------------------------+

**MEMORANDUM OPINION AND ORDER**

**Adopted:** June 27, 2000 **Released:** June 30, 2000

By the Commission:

1.  New Skies Satellites N. V. (New Skies) has requested a six-month
    extension of the July 1, 2000 deadline set forth in Section 623(l)
    of the Open-Market Reorganization for the Betterment of
    International Telecommunications Act (the ORBIT Act) for conducting
    an initial public offering (IPO).[^1] Section 623(l) requires an
    INTELSAT "separated entity" that serves the U.S. market to conduct a
    public offering no later than July 1, 2000.[^2] The Commission is
    allowed to extend this deadline "in consideration of market
    conditions and relevant business factors relating to the timing of
    an initial public offering" to no later than July 31, 2001.

2.  The Commission placed New Skies' request on public notice on May 31,
    2000.[^3] Comsat, Inmarsat and Lockheed Martin support New Skies
    request.[^4] PanAmSat opposes the request for a six-month extension,
    but would support a three-month extension. [^5]

3.  New Skies is the Netherlands-based INTELSAT spin-off created in 1998
    as INTELSAT's first step toward privatization. In 1999, the
    Commission granted U.S. earth station operators limited, three-year
    authorizations to operate with New Skies in the U.S. market pending
    New Skies' fulfillment of a number of actions to become independent
    of INTELSAT.[^6] One such action is undertaking an IPO in order to
    achieve substantial non-signatory ownership in the company, as
    anticipated by the 1998 INTELSAT Assembly of Parties decision to
    create New Skies.[^7]

4.  The subsequently enacted ORBIT Act establishes criteria for
    Commission review of applications to serve the U.S. market by
    "separated entities" of INTELSAT. New Skies meets the definition of
    a "separated entity."[^8] It therefore now is subject to the
    requirement in Section 623(l) that it conduct an IPO by July 1,
    2000, unless the Commission extends this deadline. New Skies states
    that it has made all appropriate preparations for an initial public
    offering and is prepared to go forward pending improvement of market
    conditions. It requests an extension of six months in order to give
    it the certainty needed for a successful offering and the
    flexibility to act rapidly when market conditions improve.

**DISCUSSION**

5.  Section 623(l) of the ORBIT Act provides:

> "(1) DATE FOR PUBLIC OFFERING.---Within one year after any decision
>
> to create any separated entity, a public offering of the securities of
> such entity
>
> shall be conducted. In the case of a separated entity created before
> January 1, 1999,
>
> such public offering shall be conducted no later than July 1, 2000,
> except that the
>
> Commission may extend this deadline in consideration of market
> conditions and
>
> relevant business factors relating to the timing of an initial public
> offering, but
>
> such extensions shall not permit such offering to be conducted later
> than July 31, 2001.

The purpose of this requirement is to ensure that New Skies becomes an
independent commercial entity with a pro-competitive ownership
structure.[^9] The Act anticipates that independence will be achieved
through substantial dilution of the aggregate ownership in New Skies
held by INTELSAT signatories or former signatories.[^10] Thus, our
consideration of any request for an extension must consider whether the
proposed extension would serve to achieve the underlying purpose of the
requirement for an IPO.

6\. We conclude that a grant of the extension requested by New Skies
would serve to achieve the purpose of the ORBIT Act and be in the public
interest. We grant New Skies a six-month extension, noting that New
Skies should make all good faith efforts to conduct its IPO as soon as
practicable based on market conditions and business factors.

7.  We find that New Skies has demonstrated diligence in preparing for
    an IPO to be conducted within the timeframe provided in the Act. New
    Skies states that it began working with investment bankers in
    October 1999 to prepare a draft prospectus for an IPO. The draft
    prospectus was submitted to the Securities and Exchange Commission
    (SEC) on January 27, 2000. The SEC fully cleared the prospectus in
    mid-April, following submissions of new drafts based on SEC comments
    and changes in New Skies business. New Skies states that it was
    poised to begin its "road show" in mid-April to discuss its offering
    to investors, but delayed this process based on the advice of its
    underwriters.

8\. The delay was based on the view of the underwriters against moving
forward with an IPO under then-current market conditions because of "the
tremendously adverse conditions that have faced most companies that have
attempted to conclude a public offering and, in particular, an initial
public offering, in the past two months"[^11]. New Skies states that it
has revisited these recommendations three times and will do so again in
mid-June. New Skies also states that it may conduct its IPO in mid-July
if, "based on this assessment and the advice of its underwriters, it can
conclude that reasonable market stability, investor interest and market
strength exist."[^12] New Skies further states that it, together with
its underwriters, "continually have reevaluated the market to see
whether it would support an offering at a size and under terms that are
reasonable and that would lead to a substantial dilution in New Skies'
existing shareholding base." [^13]

9\. Additionally, we find that New Skies has acted reasonably in
delaying its IPO based on the advice of its investment bankers. In
support of its request, New Skies has provided opinions from its
investment bankers that are unambiguous and unequivocal as to the need
to delay the IPO pending more favorable market conditions.[^14] New
Skies also has provided significant support for its view of current
market conditions.[^15] While opinions may differ as to the
receptiveness of the market to an IPO at any given time, recent market
fluctuations are a well known fact that have affected the prospects of
companies such as New Skies. New Skies shows that other technology
companies have delayed planned IPOs recently because of market
conditions.[^16] We are unpersuaded by PanAmSat's argument that New
Skies is still capable of conducting an IPO now and should do so even
though New Skies' investment banker "may be correct in its assessment
that there have been better times to release an IPO."[^17]

10\. There is no evidence, as PanAmSat suggests, that New Skies has the
ulterior motive of delaying its IPO so that it can continue to enjoy the
advantages afforded by close relationships with INTELSAT
signatories.[^18] The evidence in fact demonstrates the New Skies is
exercising reasonable business judgment in scheduling an IPO that will
achieve the goals of the ORBIT Act as well as support the business needs
of the company. We agree with New Skies and those commenters that
support grant of its requested extension that forcing New Skies to
conduct an IPO at this time against the advice of its investment
bankers, under current market conditions, may not achieve substantial
dilution contemplated by the ORBIT Act.

11\. We disagree with PanAmSat that this extension should be limited to
three months. The best timing for conducting an IPO cannot be accurately
forecast. More importantly, limiting such an IPO by mandating narrow
time constraints could have the effect of decreasing the market value of
the offering because potential investors could be positioned to offer
only a low price to purchase the available shares. Such an outcome would
be counter to the intended purpose of obtaining substantial dilution in
the ownership of New Skies, while also supporting the business needs of
the company. No purpose is served by revisiting this issue on a
quarterly basis to reassess New Skies' efforts. New Skies has shown that
it is poised to conduct its IPO. We believe that a six-month extension
will give New Skies a clear opportunity to do so at a time that will
achieve the purpose of the ORBIT Act. New Skies has incentive to move
forward to assure its continued access to the U.S. market.[^19] As
market conditions improve, any New Skies failure to move forward would
become self-evident.

12\. We therefore conclude that New Skies has made a sufficient showing
of market conditions and relevant business factors relating to the
timing of an IPO so as to warrant an extension for six months.

13\. Accordingly, IT IS ORDERED, pursuant to Sections 623(2) and 623(1)
of the Open-Market Reorganization for the Betterment of International
Telecommunications Act, Pub. L. 106-180, 114 Stat. 48 (2000), §§ 621(2)
and 623(1), that the New Skies Satellites, N. V., request for an
extension of the July 1, 2000 deadline to conduct an IPO IS GRANTED, and
the deadline for New Skies to conduct its IPO consistent with the ORBIT
Act is January 1, 2001.

> FEDERAL COMMUNICATIONS COMMISSION
>
> Magalie Roman Salas
>
> Secretary

# 

[^1]: Letter to Donald Abelson, Chief, International Bureau, from Andrew
    R. D'Uva, Associate General Counsel, New Skies Satellites, N. V.,
    dated May 26, 2000.

[^2]: Pub. L. 106-180, 114 Stat. 48 (2000) § 623(l).

[^3]: Public Notice Report No. SAT-00044, May 31, 2000.

[^4]: Letter to Secretary, Federal Communications Commission, from
    Robert Mansbach, Comsat Corporation, dated June 7, 2000; Letters to
    Secretary, Federal Communications Commission, from Kelly Cameron and
    Robert Galbreath, Counsel for Inmarsat, Ltd., dated June 7, and June
    14, 2000; Letter to Secretary, Federal Communications Commission,
    from Gerald Mussara, Lockheed Martin Corporation, dated June 12,
    2000.

[^5]: Opposition of PanAmSat Corporation, dated June 7, 2000; *See also*
    Letter to Secretary, Federal Communications Commission, from Henry
    Goldberg, Counsel for PanAmSat, dated June 19, 2000.

[^6]: *See In the Matter of New Skies Satellites, N. V. for
    Authorization to Access the U.S. Market, Order and Authorization,*
    14 FCC Rcd. 13003 (1999).

[^7]: *See* INTELSAT Assembly of Parties, *Record of Decisions of the
    Twenty-Second (Extraordinary) Meeting,* (AP-22-3E Final) Salvador,
    Brazil, March 31, 1998 ("Assembly Decision").

[^8]: *See* Pub. L. 106-180, § 681(a)(8) which defines a "separated
    entity" as "a privatized entity to whom a portion of the assets
    owned by INTELSAT or Inmarsat are transferred prior to full
    privatization of INTELSAT or Inmarsat, including in particular the
    entity whose structure was under discussion by INTELSAT as of March
    25, 1998." New Skies is that entity.

[^9]: *See* Pub. L. 106-180, § 621(2), which provides, in part:

    "(2) INDEPENDENCE.---The privatized successor entities and separated
    entities of INTELSAT

    > and Inmarsat shall operate as independent commercial entities, and
    > have a pro-competitive ownership structure. The successor entities
    > and separated entities of INTELSAT and Inmarsat shall conduct an
    > initial public offering in accordance with paragraph (5) to
    > achieve such independence. Such offering shall substantially
    > dilute the aggregate ownership of such entities by such
    > signatories or former signatories. In determining whether a public
    > offering attains such substantial dilution, the Commission
    >
    > shall take into account the purposes and intent, privatization
    > criteria, and other provisions of this title, as well as market
    > conditions.

[^10]: *Id*.

[^11]: Letter to Donald Abelson, Chief, International Bureau, from
    Goldman Sachs International, dated May 26, 2000 at 1. "{W}e are well
    aware of both New Skies' diligent efforts to complete its IPO and
    the market conditions that have prevented it from achieving this
    objective. . . In addition, we confirm that we have advised New
    Skies on several occasions against proceeding with its IPO under
    current market conditions and concur with New Skies' assessment of
    the potential adverse consequences of proceeding with an IPO against
    this advice." *See also* New Skies May 26 letter at 2.

[^12]: *See* New Skies May 26 letter at 3.

[^13]: *Id* at 2.

[^14]: *See* Goldman Sachs International May 26 letter; *See also*
    letter to Chief, International Bureau, from ABN Amy Rothschild,
    dated June 9, 2000; and Letter to Chief, International Bureau, from
    Morgan Stanley Dean Witter, dated June 9, 2000.

[^15]: *See* New Skies May 26 letter; s*ee* *also* Letter to Secretary,
    Federal Communications Commission, from New Skies Satellites N. V.,
    dated June 12, 2000.

[^16]: New Skies June 12 letter, citing Jeffrey R. Hirschborg, *May 2000
    IPO Cadets Face Rough Seas,* IPOCom (June 6, 2000); *IPOs Withdrawn
    or Postponed*, located at
    [www.ipo.com/ipoinfo/withdrawn.asp?p=IPO](http://www.ipo.com/ipoinfo/withdrawn.asp?p=IPO);
    Raymond Hennessey, *Underwriters Say IPO May Take Until End of
    Summer,* Wall Street Journal (May 30, 2000). *See also* Elizabeth
    Lazarwitz, *Blue Chips Cling to Gains Tehs Say* (June 14, 2000) and
    Steve Gelsi, *CBS Market Watch,*
    [www.cbsmarketwatch.com](http://www.cbsmarketwatch.com/), Julie
    Rannazzisi, CBS Market Watch *Market Snapshot*: Dow, *Nasdeq Perky*
    (last visited June 15,
    2000)[http://www.cbsmarketwatch.com](http://www.cbsmarketwatch.com/),Dow
    Jones Co.,*Stocks Turn Modestly Higher As Technology Shares
    Strengthen* (last visited June 15,
    2000)<http://www.quicken.com/investments/news_center/story>, Tara
    Murphy, The Street.Com *Market Comes Off Lows, Treads Cautiously
    Into the Green* (last visited June 15,
    2000)<http://www.quicken.com/investments/thestreet>.

[^17]: PanAmSat Opposition at 8.

[^18]: *Id*. at 9.

[^19]: *See* Pub. L. 106-180, §§ 601(a), (c), 621 and 623.