Before the

**[Federal Communications Commission]{.smallcaps}**

Washington, D.C. 20554

+----------------------------------+---+------------------------------+
| In the Matter of                 | ) | File No. 194-SAT-P/LA-95     |
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| **NETSAT 28 COMPANY, L.L.C.**    | ) | New IBSF No.                 |
|                                  |   | SAT-LOA-19950929-00150       |
| For Authority to Construct,      | ) |                              |
| Launch, and Operate a Ka-Band    |   | File No.                     |
| Communications Satellite in the  | ) | SAT-T/C-19990727-00080       |
| Fixed-Satellite Service in       |   |                              |
| Orbital Location 95º W.L.        | ) |                              |
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| For Authority to Transfer        | ) |                              |
| Control                          |   |                              |
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**MEMORANDUM OPINION AND ORDER**

Adopted: June 26, 2000 Released: June 26, 2000

By the Chief, International Bureau:

# I. INtroduction

1\. In this Order, we cancel NetSat 28 Company's, L.L.C. ("NetSat 28")
authorization to construct, launch, and operate a Ka-band satellite in
the fixed-satellite service. NetSat 28 has failed to satisfy the
initial, mandatory implementation milestone explicitly set forth in its
authorization requiring it to begin construction of this satellite
system by May 1998. Consequently, we render NetSat 28's authorization
null and void, and the orbit location that had been assigned to NetSat
28 is available for reassignment to a qualified applicant in the second
Ka-band "processing round." As a result, we also dismiss NetSat 28's
application for transfer of control as moot.

II\. BACKGROUND

2\. On May 9, 1997, the Chief, International Bureau, pursuant to
delegated authority, authorized NetSat 28 to construct, launch, and
operate a geostationary-orbit satellite and to provide fixed-satellite
service in the United States in the 19.7--20.2, 28.35--28.6, and
29.25--30.0 GHz frequency bands ("Ka-band").[^1] This authorization was
granted as part of the first "processing round" of Ka-band systems. In
the first round, the Bureau authorized a total of 14 Ka-band systems,
including NetSat 28's Ka-band system.[^2] Satellite systems in this band
have the potential to provide a wide variety of broadband interactive
digital services in the United States and around the world, including
voice, data, video, videoconferencing, facsimile, computer access and
telemedicine.[^3]

3\. NetSat 28's license, like all instruments of authorization granted
to satellite licensees, was a conditional license. It contained explicit
deadlines or "milestones" for system implementation that NetSat 28 was
required to satisfy. NetSat 28's authorization explained that the
milestones are necessary to ensure "that licensees are building their
systems in a timely manner and that the orbit-spectrum is not being held
by licensees unable or unwilling to proceed with their plans."[^4]
NetSat 28's authorization specified that:

... unless extended by the Commission for good cause shown, this
authorization shall become NULL AND VOID in the event the space station
is not constructed, launched, and successfully placed into operation in
accordance with the technical parameters and terms and conditions of the
authorization by the following dates:[^5]

[Construction Commenced]{.underline} [Construction
Completed]{.underline} [Launch]{.underline}

May 1998 April 2002 May 2002

4\. By late 1999, NetSat 28 had not informed the Commission that it had
begun construction by the required date, nor had it requested an
extension of the May 1998 construction commencement deadline.
Consequently, by letter dated December 9, 1999, the Chief, Satellite and
Radiocommunication Division, International Bureau, requested NetSat 28
to substantiate that it had complied with the May 1998 deadline. The
letter reminded NetSat 28 that:

The Commission requires the execution of a non-contingent construction
contract to satisfy the construction commencement milestone of domestic
satellite licenses. The non-contingent requirement contemplates that
there will be neither significant delays between the execution of the
construction contract and the actual commencement of construction, nor
conditions precedent to construction. [^6]

5\. In its response, NetSat 28 provided a redacted copy of a
construction contract with Space Systems/Loral, Inc.[^7] The contract,
which was effective December 17, 1999, provides for the on-orbit
delivery of a Ka-band communications satellite utilizing a payload that
is under development and will be supplied by EMS Technologies Canada,
Ltd., a subsidiary of EMS Technologies, Inc. NetSat 28 also provided a
written statement, dated December 20, 1999, from C. Patrick DeWitt,
Executive Vice President of Space Systems/Loral, stating that it "is
immediately commencing its performance under the contract\...." NetSat
28 did not provide a copy of any contract with EMS Technologies Canada,
Ltd. or EMS Technologies, Inc.

**III. DISCUSSION**

6\. It is long-standing Commission policy to impose mandatory
construction commencement milestones upon licensees in the
fixed-satellite service.[^8] The milestone schedule included in each
authorization is designed to ensure that licensed entities are
proceeding with construction and will launch their authorized satellites
into the limited orbit spectrum resource in a timely manner. Requiring
licensees to adhere strictly to a milestone schedule prevents orbital
locations and spectrum from being "warehoused" by licensees to the
exclusion of qualified entities that are prepared to implement systems
immediately.[^9] Moreover, the Commission has consistently required
licensees to execute non-contingent satellite construction contracts in
order to meet their construction commencement milestones.[^10] Because
it is manifestly in the public interest to ensure that licensees proceed
expeditiously in completing construction of their systems and commencing
service, the Commission has strictly enforced its milestone
schedules.[^11]

7\. By its terms, NetSat 28's authorization required NetSat 28 to
commence construction of its satellite system no later than May 1998. To
meet this deadline, NetSat 28 was required to have entered into a
non-contingent construction contract executed on or before this
deadline. NetSat 28 did not execute a construction contract with Space
Systems/Loral, Inc. until December 17, 1999 -- approximately 18 months
after the mandatory milestone. The supporting statement from C. Patrick
DeWitt, Executive Vice President of Space Systems/Loral, stating that it
"is immediately commencing its performance under the contract \..."
further demonstrates NetSat 28's failure to satisfy the May 1998
construction commencement deadline. NetSat 28's response to the
Commission inquiry does not attempt to explain this deficiency.

8\. NetSat 28's authorization expressly provided that, unless extended
upon a showing of good cause, the license would become null and void in
the event NetSat 28 failed to satisfy any one of its milestones. NetSat
28 did not request an extension of the May 1998 construction
commencement deadline, and we find no basis for extending or otherwise
waiving this threshold milestone.

9\. In addition, we dismiss NetSat 28's application for transfer of
control filed in July 1999 and amended October 1999.[^12] NetSat 28
requested authorization to permit EMS Technologies, Inc. to obtain a
controlling interest in the company. Because NetSat 28's authorization
has become null and void, however, there is no license to transfer.
Therefore, we dismiss the transfer of control application as moot.

**IV. CONCLUSION AND ORDERING CLAUSES**

10\. Based on the foregoing, we conclude that NetSat 28 has failed to
meet the May 1998 construction commencement deadline, as required by its
authorization. We further conclude that NetSat 28's failure to satisfy
this condition renders the authorization null and void.

11\. Accordingly, IT IS ORDERED that, pursuant to Section 0.261 of the
Commission's rules, 47 C.F.R. § 0.261, the authorization held by NetSat
28 Company, L.L.C., File No. 194-SAT-P/LA-95, IBSF No.
SAT-LOA-19950929-00150, IS DECLARED NULL AND VOID.

12\. IT IS FURTHER ORDERED that the orbital assignment granted in
*NetSat 28 Company, L.L.C.*, 13 FCC Rcd 1392 (Int'l Bur. 1997), is
available for reassignment.

13\. IT IS FURTHER ORDERED that the application for transfer of control
filed by NetSat 28 Company Inc., File No. SAT-T/C-19990727-00080, is
DISMISSED.

**FEDERAL COMMUNICATIONS COMMISSION**

Donald Abelson

Chief, International Bureau

[^1]: *NetSat 28 Company, L.L.C.*, 13 FCC Rcd 1392 (Int'l Bur. 1997).

[^2]: Assignment of Orbital Locations to Space Stations in the Ka-band,
    *Order*, 13 FCC Rcd 13737 (1996).

[^3]: *In the Matter of RuleMaking to Amend Parts 1, 2, 21, and 25 of
    the Commission's Rules to Redesignate the 27.5-29.5 GHz frequency
    Band, to Reallocate the 29.5-30.0 GHz frequency Band, to Establish
    rules and Policies for Local Multipoint Distribution Service and for
    Fixed Satellite Services*, 12 FCC Rcd 22,310 (1997).

[^4]: *NetSat 28 Company, L.L.C*., 13 FCC Rcd at 1401.

[^5]: *Id.* at 1403.

[^6]: Letter from Thomas S. Tycz, Chief, Satellite and
    Radiocommunication Division, FCC, to Albert Shuldiner, Esq., Vinson
    & Elkins, L.L.P., Counsel for NetSat 28, (Dec. 9, 1999), citing
    Norris *Satellite Communications, Inc.*, 12 FCC Rcd 22299, 22303-04
    (1997).

[^7]: Letter from Albert Shuldiner, Vinson & Elkins, L.L.P., Counsel for
    NetSat 28, to Thomas Tycz, Chief, Radiocommunication Division, FCC
    (Dec. 20, 1999).

[^8]: *See, e.g., Norris Satellite Communications, Inc.*, 12 FCC Rcd
    22,299 (1997).

[^9]: *MCI Communications Corporation*, 2 FCC Rcd 233 (CCB 1987).

[^10]: *Norris Satellite Communications, Inc.*, 12 FCC Rcd 22,299
    (1997).

[^11]: *See, e.g., National Exchange Satellite, Inc*., 8 FCC Rcd 636
    (1993); *Advanced Communications Corporation*, 10 FCC Rcd 13,337
    (Int'l Bur. 1995).

[^12]: NetSat 28 Company, Inc., File No. SAT-T/C-19990727-00080, amended
    October 17, 1999. Celsat America, Inc., Hughes Communications, Inc.,
    Pacific Century Group, and Pegasus Development Corp. filed
    oppositions to the application asserting, among other things, that
    NetSat failed to meet its construction commencement milestones.