**JOINT STATEMENT OF**

**COMMISSIONERS MICHAEL J. COPPS AND JONATHAN S. ADELSTEIN**

**DISSENTING**

*Re: Rainbow DBS Company LLC; Consent to Withdraw and Unconditionally
Release Bonds and Request for Waiver of the Bond Requirement; File Nos.
SAT-LOA-20030827-00172 et al; Call Signs: S2485, S2554, S2488, S2555,
S2486*

While this is a case with difficult facts, we do not believe the public
interest is served by granting Rainbow DBS Company LLC ("Rainbow")
relief from its \$11.25 million bond obligation. Given the clear
Commission direction on the impact of changed economic circumstances on
satellite licensees, it is unclear to us why the majority, without
public comment, would substantially weaken the bond requirement and our
relatively new satellite licensing rules for the benefit of one company.

We are sympathetic to the expenses incurred by Rainbow in attempting to
develop its DBS service. The Commission actually took specific steps to
promote the Rainbow service on several occasions.[^1] But with regards
to our bond requirements, the Commission has been clear that "to the
extent petitioners are asserting that satellite entrepreneurs should be
free to apply for and obtain satellite licenses and later abandon their
licenses because of economic changes in the marketplace, we believe that
[such practices are inconsistent with the public
interest]{.underline}."[^2]

Indeed, all satellite licensees will incur costs in the development of
their systems. But the bond requirement should not rise or fall on how
many dollars a licensee incurs in development or whether similarly
situated spectrum may or may not be available.[^3] The Commission
created the bond requirement in the first place to avoid these very
questions. The theory behind the bond requirement is that the Commission
does not have to be put in the position of having to look behind the
original intent of the licensee. Instead, the applicant's willingness to
forfeit capital as a bond itself testifies to the applicant's
qualifications to secure the slot. "Thus, financial qualifications will
become a market-driven rather than a regulatory determination."[^4] How
the slot ultimately is used, though, is in the sole discretion of the
licensee.

In this case, Rainbow, and its parent company Cablevision, were well
aware of the bond requirements at the time of receiving their five
Ka-band licenses. In fact, the company initially submitted bonds in the
amount of \$25 million (based on a \$5 million bond per satellite)
before posting a reduced \$3 million per satellite as a result of
changes to the Commission's rules. After the company met the first
milestone to execute a binding contract, the total bond amount was
reduced from \$15 million to \$11.25 million, where it currently stands.

While we believe the legal position set forth by the Commission in
adopting the bond requirement counsels against a grant of the \$11.25
million bond waiver, we also are troubled by the lack of accountability
in reaching this decision. It is difficult to understand how the
Commission can part with \$11.25 million meant for the U.S. Treasury
without seeking public comment or developing a record beyond Rainbow's
initial three and half page filing. Where are the financial affidavits
detailing the \$13 million purportedly spent on developing and
constructing the five (5) Ka-band satellites? Is the \$2.6 million a
typical amount that a licensee would expend to hit its first milestone?
What is the financial impact of this decision with respect to current
licensees with bond requirements?

The Commission has spoken definitively on the issue of satellite
licensees facing changes in economic conditions that would lead them to
alter business plans: "regardless of its intent, the actions of a
licensee who obtains a license and surrenders it later have the same
effect as the actions of a licensee who warehouses scarce orbit and
spectrum resources."[^5] The situation involving Rainbow is on point,
and we see no reason to upset that determination and the public interest
for the benefit of one licensee.

[^1]: *See, e.g., Rainbow DBS Co. LLC; Applications for Special
    Temporary Authority to Operate a Direct Broadcast Satellite Over
    Channels 23 and 24 at the 61.5° W.L. Orbital Local,* Order and
    Authorization, 18 FCC Rcd 19825 (2003).

[^2]: Amendment of the Commission's Space Station Licensing Rules and
    Policies, *First Order on Reconsideration and Fifth Report and
    Order*, IB Docket No. 02-34, 19 FCC Rcd 12637, 12652 (2004) (*Fifth
    Report and Order*) (underline added).

[^3]: As the item notes, Echostar filed almost simultaneously with
    Rainbow for one of the Ka-band slots, but was denied access to that
    license because it was awarded to Rainbow under our first-come,
    first-served licensing regime.

[^4]: Amendment of the Commission's Space Station Licensing Rules and
    Policies, *First Report and Order and Further Notice of Proposed
    Rulemaking*, IB Docket No. 02-34, 18 FCC Rcd 10760, 10825 (2003).

[^5]: *Fifth Report and Order* at 12652.