#  Before the

# Federal Communications Commission

# Washington, D.C. 20554

In re Petition of )

)

)

R/L DBS Company, L.L.C. ) File Nos. DBS 87-01,

For Extension of its Direct ) 94-SAT-AL-96, 94-SAT-TC-96,

Broadcast Satellite Construction Permit ) 49-SAT-TC-95, 130-SAT-EXT-95,

) SAT-MOD-19990813-00083

)

)

# MEMORANDUM OPINION AND ORDER

**Adopted: December 28, 2000 Released: December 29, 2000**

By the Chief, International Bureau:

# I. Introduction

1\. By this Order, we grant R/L DBS Company, L.L.C. (R/L DBS) a 36-month
extension of time in which to bring its Direct Broadcast Satellite (DBS)
system into operation. Under the terms of its construction permit, R/L
DBS's satellite system was required to be in operation by August 15,
1999.[^1] The additional time will allow R/L DBS an opportunity to
implement its innovative, regionally targeted DBS service.

**II. Background**

2\. In 1989, the Commission issued Continental Satellite Corporation
(Continental), R/L DBS's predecessor in interest, a construction permit
for a two-satellite DBS system.[^2] Pursuant to that authorization, in
August 1995, the International Bureau assigned eleven DBS channels to
Continental at both the 166º W.L. and 61.5º W.L. orbit locations.[^3] In
November 1995, the International Bureau granted Continental a four-year
extension of the date on which it was required to commence service,
acknowledging that the government's delay in assigning channels to
Continental had made it difficult for the company to proceed with the
construction of its satellite.[^4] Subsequently, R/L DBS voluntarily
surrendered the eleven assigned western channels at the 166º W.L. orbit
location.[^5] R/L DBS now asks for a further extension of its service
commencement date for the channels at 61.5º W.L. or, in the alternative,
a six-month extension to pursue a transponder lease arrangement.[^6]

3\. Ownership of the DBS permits issued to Continental has followed a
long and tortuous history that stems from Continental's contractual
efforts to obtain equipment and programming for its DBS system, and from
the reaction of some Continental owners to those efforts. In July 1990,
Continental contracted with Ford Aerospace Corporation (Ford) for the
construction of a DBS satellite.[^7] To finance that purchase,
Continental executed a Memorandum of Understanding with Ford, granting
the latter a right to waive Continental's payments under the contract in
exchange for unilateral options by which Ford could acquire 51 percent
of Continental's stock.[^8] When payments were waived, Ford and its
successor in interest, Loral Aerospace Holdings, Inc., thereby gained
paid options to acquire a controlling interest in Continental. [^9] In
April 1992 Continental reached alternative contracts with Rainbow
Programming Holdings, Inc. (Rainbow) to obtain video programming content
for its service. Under these contracts, Continental would either lease
its DBS system to Rainbow or would assign its DBS permit to
Rainbow.[^10]

4\. Soon after the Rainbow agreements were executed, Continental's
shareholders removed the chief executive officer who had negotiated
those agreements, James Dixon. Continental's replacement management then
took a number of actions in an apparent effort to reverse the Ford/Loral
and Rainbow contracts. In July 1993, Continental filed a request for a
declaratory ruling from the Commission as to whether exercise of the
lease option under the Rainbow agreements would result in an
unauthorized transfer of control.

5\. Meanwhile, in October 1992, Loral notified Continental that it was
exercising its options to take control of Continental, subject to
Commission approval.[^11] When Continental's replacement management
refused to consent, Loral brought suit in California state court, where
the matter was referred to arbitration.[^12] Replacement management then
formed a new Nevada corporation with an identical name -- Continental
Satellite Corporation -- and applied to the Commission to assign its DBS
permit from the California to the Nevada corporation.[^13] The Mass
Media Bureau granted the assignment, conditioned on the outcome of
Loral's California arbitration, but rescinded the grant when Loral
obtained a favorable result in its arbitration.[^14] Loral then filed an
application for transfer of control so that it could exercise its
contractual options. The International Bureau granted the transfer in
the same Order in which it assigned DBS channels and orbital locations
to Continental.[^15]

6\. In November 1995, the International Bureau granted Continental a
four year extension, until August 1999, of the date upon which
Continental was required to bring its system into operation. The
Commission did so because it did not issue Continental its channel and
orbit assignment until the initial construction period was nearly
over.[^16] In February 1996 the International Bureau issued a
declaratory ruling without opinion that the Rainbow lease arrangement,
if implemented, would constitute an unauthorized transfer of control of
Continental's DBS permit.[^17] Rainbow and Loral then agreed to form a
joint venture to develop the Continental system.

7\. On March 6, 1996, Loral SpaceCom DBS Holdings Inc. and Rainbow DBS
Holdings, Inc. formed R/L DBS, a Delaware limited liability company
owned equally by the forming companies. The combined venture inherited
Rainbow's right, under its agreements with Continental, to purchase
Continental's DBS permit outright. In March 1996, R/L DBS filed an
application to assign Continental's DBS permit to R/L DBS. The
International Bureau granted the assignment in May 1997.[^18]

8\. The issue before us now is whether we should grant R/L DBS an
extension of its service commencement milestone for its satellite at the
61.5º W.L. orbit location.[^19] R/L DBS represents that an extension is
needed to allow it to implement its service. Kelly Broadcasting Systems,
Inc. and EchoStar Satellite Corporation filed petitions to deny the
extension request.[^20] James B. Dixon, an executive and shareholder of
R/L DBS's predecessor in interest, also filed comments.[^21] Mr. Dixon
supports a two-year extension of the construction permit, but opposes
the alternative lease arrangement. He also continues to object to the
assignment of these DBS assets to R/L DBS.

# III. Discussion

9\. The Commission's DBS due diligence rules, and the deadlines they
contain, are designed to ensure that valuable spectrum is not
warehoused, and that service is timely deployed for the benefit of the
public. To facilitate service to the public, the Commission has chosen
not to conduct exhaustive and protracted proceedings, such as
comparative hearings, to determine in advance that licensees are
financially and technically capable of building and operating DBS
satellites.[^22] Rather, as it has done with other satellite services,
the Commission has required, through conditions, DBS permittees to
construct and commence satellite operations within a specified period of
time. These conditions, which are referred to as the DBS "due diligence"
milestones, contain two deadlines. The first due diligence milestone
requires that a DBS permittee complete a contract for construction of
the satellites in its system within one year of the grant of its
construction permit. [^23] Orbital positions and channels are not
assigned to a DBS permittee until it meets the first milestone.[^24] The
second due diligence milestone requires permittees to have their DBS
systems in operation within six years of the grant of their construction
permits.[^25]

10\. In granting Continental a four-year extension of its operating
deadline in 1995, the International Bureau found that Continental had
met its first due diligence milestone by timely completing a
construction contract for the system.[^26] The fundamental issue in this
proceeding is whether R/L DBS should be granted a further extension of
the operating milestone.[^27]

11\. When deciding whether to grant an extension of DBS due diligence
milestones, the Commission considers the "totality of circumstances."
This includes the following four factors: those efforts made and not
made, the difficulties encountered and those overcome, the rights of all
parties, and the ultimate goal of service to the public.[^28] Because
strict enforcement of our DBS milestones furthers the very important
spectrum management goal of ensuring that valuable spectrum resources
are efficiently put to use, we have been reluctant to grant extension
requests except in extraordinary circumstances.[^29] Our desire to
ensure that DBS orbital locations and spectrum will be put to efficient
use requires a rigorous evaluation of whether the "totality of the
circumstances" standard has been satisfied.

12\. R/L DBS asserts that the Commission should grant it an additional
extension of its operating milestone for the following reasons. First,
R/L DBS asserts that its failure to launch and operate a satellite was
justified because the market consolidated and changed during the period
when Continental's construction permit was the subject of litigation.
R/L DBS argues that, with eleven channels at an orbit location capable
of reaching only half of the continental United States (CONUS), it was
difficult to develop a viable DBS service that could compete with the
two dominant players in the DBS market DirecTV and EchoStar. According
to R/L DBS, these two service providers each have "substantially greater
channel capacity" than does R/L DBS and the majority of their capacity
is at full-CONUS orbit locations. In order to compete, R/L DBS states
that it must serve a niche market not being served by the current DBS
providers.[^30] Consequently, R/L DBS decided to offer a package of
locally oriented programming to major metropolitan markets in the
eastern United States. This service requires the system to incorporate
over seventeen different spot beams. R/L DBS asserts that this system
design required improvements in multiple spot beam and digital
compression technologies before it could be implemented. R/L DBS asserts
that these technical challenges caused additional delay in system
implementation and justifies an extension of the operating
milestone.[^31] R/L DBS also notes that EchoStar already has a satellite
in orbit at the 61.5º W.L. orbit location with capacity sufficient to
accommodate R/L DBS's eleven assigned channels. R/L DBS contends that if
the Commission refuses to extend R/L DBS's construction permit, EchoStar
could obtain the channels, thereby increasing concentration within the
industry.

13\. R/L DBS also contends that it has expended substantial sums of
money, put forward great effort and shown significant progress toward
providing service from the 61.5º W.L. orbit location. Specifically, it
claims to have spent more than \$30 million to develop a DBS business,
including more than \$14 million in payments made in connection with the
design and construction of a DBS satellite.[^32] R/L DBS states that
these payments have included money for "extensive design work on an
innovative satellite using spot beam technology, as well as orders for
long lead-time parts." Additionally, R/L DBS contends an extension
should be granted because the constant disputes over the authorization
at the Commission and in California and Oregon state courts have
"created a cloud of uncertainty" that made moving forward with the
financing and construction of a satellite extremely difficult.[^33]

14\. In its petition to deny the extension, EchoStar questions whether
the \$14 million in satellite construction costs claimed by R/L DBS was
actually used for the R/L DBS system. Because Loral, one of the partners
in R/L DBS, is a satellite manufacturer, EchoStar contends that the
expenditures claimed for construction costs might not have been R/L DBS
specific. According to EchoStar, these expenditures may represent only
internal transfers, generic design work or parts purchases that Loral
could use in its normal satellite construction activities.[^34] EchoStar
contends that R/L DBS has not provided evidence of actual construction
activity. Further, EchoStar asserts that R/L DBS's \$14 million payment
for parts and design work does not constitute a significant effort
toward building a \$250 million satellite.[^35] EchoStar also points out
that \$15 million of R/L DBS's total \$30 million expenditure covered
Loral's acquisition of Continental's capital stock.[^36] While EchoStar
agrees that expenditure of these funds may have been necessary and
prudent business expenditures, it asserts that they have not been
applied to either the construction of R/L DBS's satellite and have not
furthered its progress toward the commencement of service.[^37] EchoStar
also argues that R/L DBS has not made additional progress toward
arranging the remaining financing for the completion of construction and
launch of its satellite.

15\. We find that based upon the totality of the circumstances, and,
specifically, the record that has been developed in this proceeding,
that an extension of R/L DBS's operating milestone is warranted. Under
the first factor of the "totality of the circumstances" standard, we
conclude that R/L DBS has made a significant effort to implement its DBS
system. It, or its members (Rainbow and Loral), has expended more than
\$14 million in connection with satellite design and construction. We
are not persuaded by EchoStar's speculation that R/L DBS's corporate
affiliation with its satellite manufacturer means that these monies were
not actually applied towards the development of the R/L DBS system. We
also recognize that R/L DBS has devised a comprehensive business plan
that incorporates the latest technological advances in digital
compression and multiplexing. Further, while we do not accept the
struggle for corporate control of Continental as a justification for
extension of the operating milestone, we recognize that R/L DBS's
expenditure of \$15 million to assure its control of the permit is
evidence of effort made to develop the system.

16\. These efforts become more notable when we consider the second
factor of the totality of the circumstances standard -- the difficulties
encountered and those overcome. R/L DBS holds a construction permit for
a satellite that can serve only half of the contiguous United States
(CONUS). Moreover, the permit authorizes R/L DBS to operate on only
eleven of the 32 available channels at that orbit location. As R/L DBS
notes, the Commission has recognized the difficulties associated with
the assignment of a small number of channels to DBS permittees.[^38]
These limitations are more pronounced in the current DBS market, which
is dominated by two companies offering up to 350 channels of video
programming and serving more than ten million subscribers.[^39]

17\. To overcome these difficulties, R/L DBS has incorporated recent
technological advances into its system design. Its plan will allow R/L
DBS to improve the quality of its video offerings and the number of
channels it can offer to consumers.[^40] Further, the plan allows R/L
DBS to use, to its best advantage, the geographic limitation of its
satellite. Under the plan, R/L DBS will market regional programming to
television markets in the eastern United States.[^41] This is an
unprecedented DBS service offering, which could enhance the commercial
viability of R/L DBS's half-CONUS, limited-channel DBS system.

18\. In addition to the limitations inherent in its permit, R/L DBS and
its predecessors have also encountered -- and at long last, appear to
have overcome -- a prodigious number of legal struggles in connection
with the permit. While these struggles do not, in and of themselves,
justify an extension of a due diligence milestone, they have created a
cloud of uncertainty that has, until recently, prevented the development
of a definitive business plan.[^42]

19\. The third factor in a totality of the circumstances finding is the
ultimate goal of service to the public. We have recognized the trend
toward consolidation of DBS channel and orbit assignments.[^43] As R/L
DBS points out, DirecTV and Echostar are authorized to operate 157 of
the 172 DBS channels currently assigned. R/L DBS's planned service is
perhaps the last opportunity in the near-term for entry by a competitive
provider within the DBS service itself.[^44] Moreover**,** R/L DBS plans
to provide a service not now available in the DBS service \-- original
local or regional programming to each area served by a spot beam. An
extension may therefore facilitate the introduction of a new and
important DBS service to the public. Indeed, R/L DBS represents that it
would "accept an explicit condition in connection with grant of R/L
DBS's extension request requiring the fulfillment of its programming
commitments."[^45] We condition this extension accordingly.
Consequently, allowing R/L DBS additional time in which to implement its
system has the potential to enhance both competition in the industry and
the variety of service offerings available to the public.

20\. Moreover, granting an extension here will not result in these
channels lying idle. EchoStar is currently providing service over these
channels pursuant to a grant of special temporary authority, and will
continue to do so until R/L DBS is ready to launch its satellite.[^46]

21\. Last, in considering the totality of the circumstances, we evaluate
the rights of the parties. Both Echostar and Kelly Broadcasting Systems,
Inc. filed petitions to deny the extension. EchoStar is currently
providing service from its satellite at the 61.5 W.L. orbit location and
argues that, if revoked, R/L DBS's channels could be used to extend its
existing services. Kelly seeks to contract with EchoStar for expanded
carriage capacity. We do not believe that the rights of Echostar and
Kelly outweigh the efforts R/L DBS has made in implementing its DBS
system, the difficulties it has encountered and overcome, and the
ultimate goal of service to the public. We also recognize that James
Dixon, the third commenter in this proceeding, supports an extension of
R/L DBS's operating milestone.

22\. In its Petition For Extension, R/L DBS requested a 24-month
extension. In *ex parte* letters to Commission staff, R/L DBS later
requested a 27-month extension. We remind R/L DBS that it must obtain
authority to modify its satellite design within the extension period.
Because we must process that modification application, and because we
require that R/L DBS provide service to customers within the extension
time period rather than only *launching* the satellite, we grant a
slightly more generous extension of 36 months on our own motion. This is
designed to prevent any further requests for extension.

23\. Moreover, in an *ex parte* letter to the International Bureau in
support of its Petition for Extension, R/L DBS commits to completing an
extensive list of construction tasks at specified intervals during the
extension period.[^47] To ensure that these valuable DBS spectrum
resources are put to use as soon as possible, we adopt that proposed
schedule, and condition grant of this extension upon R/L DBS meeting all
the interim milestones it proposes, and providing verification that the
interim milestones are met. By the sixth month of the extension, R/L DBS
commits to reaching the effective date of its satellite contract,
placing subcontracts for its propulsion tank, battery cell and CIC
laydown, conducting the preliminary design review of its system, and
delivering an interface control document to its communications panel
subcontractor. By the twelfth month of its extension, R/L DBS commits to
starting construction of its propulsion and structure modules,
delivering its design review data package, conducting its system design
review, and completing construction of its central cylinder, travelling
wave tube, and propulsion tank. By the eighteenth month of its
extension, R/L DBS commits to completing its structure fabrication and
its propulsion module, and mating the main body of its satellite. By the
end of the second year of its extension, R/L DBS commits to completing
its reflector fabrication and payload integration, and completing
reference performance. Finally, at the end of 27 months, R/L DBS commits
to completing thermal vacuum tests, dynamics, CATR testing, final
testing, shipping the satellite to the launch site, and launching it. We
recognize, however, that because we must process R/L DBS's modification
application during the interim milestone period, launches can be delayed
for reasons that are beyond a licensee's control and R/L DBS will have
to test its satellite in orbit for several months before becoming fully
operational, an additional post-construction extension is also
warranted. In order to provide for a definitive operational milestone,
we grant R/L DBS an additional nine months to begin providing full
service to the public.[^48] Therefore, we grant R/L DBS a total of 36
months to become fully operational.

24\. In that same June 7, 2000 *ex parte* letter, R/L DBS also committed
to a number of concrete oversight actions, through which it proposes to
allow the Commission to monitor its progress closely, reviewing
appropriate documentation evidencing that progress, and taking
appropriate action if the milestones are not met. First, R/L DBS has
committed to completing its satellite design process within the first
six months of its extension period, and to make its preliminary design
review data package available for review by Commission staff.[^49]
Second, R/L DBS has committed to enter into subcontracts, also within
the first six months of its extension period, for production of its
satellite propulsion tank, its battery cell, and its solar power
cells.[^50] R/L DBS will be required to make those contracts available
for inspection so that Commission staff can verify that those promised
milestones are met. Third, R/L DBS has committed to finalizing the
design of its communications panel with its subcontractor within the
first six months of its extension period, and to make that document
available for Commission staff review.[^51] Fourth, R/L DBS has
committed to allow onsite inspection of the construction of its
satellite subsystems within the second six months of its extension
period. R/L DBS will be required to permit such onsite inspection as is
requested, both in that six month period and through the completion of
its satellite construction and launch. Failure to meet any of these
interim milestones will automatically render its DBS permit null and
void without further Commission action. No further extensions will be
granted.

# IV. Conclusion

25\. Based on the record before us, we conclude that the totality of
circumstances justifies an extension of the R/L DBS construction permit.

# V. Ordering Clauses

26\. Accordingly, IT IS ORDERED that the Petition For Extension filed by
R/L DBS Company, L.L.C., File No. SAT-MOD-19990813-00083, IS GRANTED,
subject to the conditions stated below.

27\. IT IS FURTHER ORDERED that the term of the construction permit held
by R/L DBS Company, L.L.C. IS EXTENDED to December 29, 2003, subject to
the conditions that R/L DBS Company, L.L.C. (1) must launch the
satellite and begin providing service to customers by that date and (2)
must provide original or regional programming to each area served by an
R/L DBS spot beam.

28\. IT IS FURTHER ORDERED that the interim milestones proposed by R/L
DBS are HEREBY ADOPTED as a condition of this grant. R/L DBS shall meet
all the interim milestones detailed in Paragraph 23 of this Order, and
shall provide to Commission staff the promised documentation detailed in
Paragraph 24 of this Order.

29\. This Order is issued under delegated authority, pursuant to Section
0.261 of the Commission's rules, 47 C.F.R. §0.261, and is effective upon
release.

> FEDERAL COMMUNICATIONS COMMISSION

Donald Abelson

Chief, International Bureau

[^1]: *Continental Satellite Corp. et al.*, 4 FCC Rcd 6292 (rel. August
    15, 1989) (*Continental CP Order)*; *see* *also* 47 C.F.R.
    §100.19(a) (six years from grant to be in operation); *Application
    of Continental Satellite Corporation for Extension of Construction
    Permit*, 11 FCC Rcd 1157 (Int'l Bur. 1995) (*Continental Extension
    Order*) at ¶ 17 (milestone deadline extended to August 15, 1999).

[^2]: *Continental CP Order*, 4 FCC Rcd at 6300.

[^3]: *Application of Continental Satellite Corp. For Assignment of
    Direct Broadcast Satellite Orbital Positions and Channels and For
    Consent To Transfer Of Control To Loral Aerospace Holdings, Inc.*,
    10 FCC Rcd 10473 (Int'l Bur. 1995) (*Continental Channel Assignment
    Order* and *Loral Transfer Order*).

[^4]: *Continental Extension Order*, 11 FCC Rcd at 1158.

[^5]: *Public Notice, International Bureau Satellite Policy Branch
    Information: Report No. SPB-138a*, DA 98-1869, 13 FCC Rcd. 17892
    (Sept. 15, 1998).

[^6]: Petition for Extension of the R/L DBS Direct Broadcast Satellite
    Construction Permit, File. No. SAT-MOD-19990813-00083 (filed Aug.
    13, 1999) (R/L DBS Petition).

[^7]: *See* *Continental Satellite Corp. Application for Consent to
    Assignment of Construction Permit for a New Direct Broadcast
    Satellite System*, 10 FCC Rcd. 9537 (Int'l Bur. 1995)
    (*Continental/Nevada DBS Rescission Order*).

[^8]: *Id.*

[^9]: This controlling interest itself followed a circuitous trail
    before joining in the filing of this petition for extension. Ford
    Aerospace Corporation apparently conveyed its interests in
    Continental to Loral Aerospace Holdings, Inc. before Ford exercised
    those contractual rights itself. Loral Aerospace Holdings, Inc. was
    then part of a 1996 merger of Loral Corporation with Lockheed
    Martin. *Loral Corp. Request For a Declaratory Ruling Concerning
    Section 310(b)(4) of the Communications Act of 1934* and
    *Application of R/L DBS Company For Assignment of Continental
    Satellite Corporation's Direct Broadcast Satellite Construction
    Permit* , 12 FCC Rcd. 21164, 21165 (Int'l Bur. 1997) (*Loral
    Declaratory Ruling Order* and *R/L DBS Assignment Order*) (identical
    text also published at 12 FCC Rcd. 24325). After completing that
    merger and subsequently reorganizing its subsidiaries, Loral
    Corporation requested Commission approval to transfer its majority
    ownership interest in Continental to Loral SpaceCom DBS Inc., a
    Delaware corporation, which is wholly owned by Loral SpaceCom DBS
    Holdings Inc., also a Delaware corporation, which in turn is wholly
    owned by Loral Space and Communications Ltd., a Bermuda corporation.
    *Id.* at 21165-66. The Commission granted the requested transfer of
    control, and found that the Bermuda corporation's indirect ownership
    of the DBS permit did not contravene foreign ownership restrictions.
    *Id.* at 21168. For simplicity, "Loral" loosely describes all Loral
    entities in this Order. More precisely, Loral SpaceCom DBS Holdings
    Inc., which owns fifty percent of R/L DBS, is a petitioner for this
    extension.

[^10]: *Continental/Nevada DBS Rescission Order*, 10 FCC Rcd. at 9538.

[^11]: *Continental/Nevada DBS Rescission Order*, 10 FCC Rcd. at 9537.

[^12]: *Id.*

[^13]: *Id.*

[^14]: *Id*

[^15]: *Loral Transfer Order*, 10 FCC Rcd. at 10476-79.

[^16]: *Continental Extension Order*, 11 FCC Rcd 1157.

[^17]: *Continental Satellite Corp. Request for Declaratory Ruling*, 11
    FCC Rcd. 5395 (Int'l Bur. 1996).

[^18]: *R/L DBS Assignment Order*, 12 FCC Rcd. at 21173.

[^19]: This proceeding is a non-restricted, permit-but-disclose
    proceeding subject to the disclosure requirements set forth in 47
    C.F.R. § 1.1206. *Public Notice, International Bureau Satellite
    Policy Branch Information: Report No. SPB-153*, DA 99-2450 (Nov. 4,
    1999). Pursuant to this Section, R/L DBS disclosed *ex parte*
    contacts with various Commissioners and staff on the following
    dates: March 22, 2000, March 23, 2000, March 30, 2000, April 19,
    2000, April 25, 2000, May 24, 2000, June 1, 2000, June 6, 2000, June
    7, 2000, June 15, 2000, June 23, 2000, June 28, 2000, August 2,
    2000, October 27, 2000 and November 1, 2000. EchoStar made an *ex
    parte* contact by letter on December 4, 2000.

[^20]: Petition to Deny of Kelly Broadcasting Systems, Inc. (filed Sep.
    24, 1999) and Petition of EchoStar Satellite Corporation to Deny
    Request for Extension of Construction Permit (filed Sep. 24, 1999).
    EchoStar subsequently announced that it acquired 100 percent
    ownership of Kelly Broadcasting Systems, Inc., EchoStar press
    release dated March 16, 2000. Finally, R/L DBS filed an Opposition
    to Petitions to Deny Extension of the R/L DBS Direct Broadcast
    Satellite Construction Permit (Oct. 7, 1999) (R/L DBS Opposition).

[^21]: Comments of James B. Dixon (filed September 17, 1999).

[^22]: *Direct Broadcast Satellite Service*, Report and Order, 90 FCC 2d
    676 at ¶114 (1982).

[^23]: 47 C.F.R. § 100.19(a) (second sentence).

[^24]: *Processing Procedures Regarding the Direct Broadcast Service*,
    95 F.C.C.2d 250, 253 (1983).

[^25]: 47 C.F.R. § 100.19(a) (third sentence).

[^26]: *Continental Channel Assignment Order,* 10 FCC Rcd at 10476.

[^27]: 47 C.F.R. § 100.19(c). Subsection (c) permits the Commission to
    grant extensions of the due diligence requirements "upon a proper
    showing in any particular case."

[^28]: *United States Satellite Broadcasting Co.*, 3 FCC Rcd. 6858, 6860
    (1988). *See also Advanced Communications Corp.,* 10 FCC Rcd. 13337,
    13340 (Int'l Bur. 1995), 11 FCC Rcd. 3399, 3411 (FCC 1995), *aff'd
    by Advanced Communications Corp. v. Federal Communications
    Commission*, 84 F.3d 1452 (D.C. Cir. 1996), *cert. denied*, 519 U.S.
    1071 (1977).

[^29]: *Advanced Communications Corp.*, 11 FCC Rcd. at 3411; *Tempo
    Satellite, Inc.*, 13 FCC Rcd. 11068, 11074 (Int'l Bur. 1998).

[^30]: R/L DBS Petition at 4.

[^31]: *Id.*

[^32]: *Id.*

[^33]: *Id.* at 2.

[^34]: EchoStar Petition at ii and 5.

[^35]: *Id*.

[^36]: *Id.* at 4.

[^37]: *See* EchoStar Petition at 6-7.

[^38]: *Revision of Rules and Policies for the Direct Broadcast
    Satellite Service*, 11 FCC Rcd. 9712 (1995). USSB *Extension Order,*
    14 FCC Rcd. at 4595.

[^39]: *In the Matter of Annual Assessment Of The Status Of Competition
    In Markets For The Delivery Of Video Programming*, 15 FCC Rcd. 978
    at ¶¶69-70 (2000)(*1999 MVPD Report*) (as of June 1999, DirecTV had
    72% share of the domestic DBS market and EchoStar had 28% DBS market
    share).

[^40]: R/L DBS Petition at 9.

[^41]: R/L DBS Petition at 10.

[^42]: We reject the suggestion by R/L DBS that internal corporate
    litigation justifies extension of a construction permit. Letter from
    James A. Kirkland to Anna Gomez, Linda Haller, International Bureau,
    June 28, 2000, at p.8. While we cannot interpret the Mass Media
    Bureau's rules, we find nothing in the broadcast rules cited by R/L
    DBS to suggest that a construction permit deadline may be tolled
    because a permittee cannot find agreement within itself.

[^43]: *Revision of Rules and Policies for the Direct Broadcast
    Satellite Service*, 11 FCC Rcd. at 9736.

[^44]: The Commission has recognized that the DBS service competes with
    video programming provided by broadcast and cable providers. *1999
    MVPD Report*, 15 FCC Rcd. 978.

[^45]: *See* letter from Charles D. Ferris to Adam Krinsky (Sept. 26,
    2000).

[^46]: *Direct Broadcasting Satellite Corporation Application for
    Special Temporary Authority to Operate a Direct Broadcast Satellite
    Over Channels 1-21 (odd) and 23-32 (odd and even) at 61.5º W.L.*, 13
    FCC Rcd. 6392 (Int'l Bur. 1998).

[^47]: Letter from Howard J. Symons to Linda L. Haller, International
    Bureau, June 7, 2000.

[^48]: The DBS milestone rules require that satellite stations must be
    in operation within the construction permit time period. 47 C.F.R
    §100.19(a). We have previously decided that this milestone means not
    merely having launched a satellite, but also providing service to
    the public. *Tempo Satellite*, 13 FCC Rcd. at 11071-72.

[^49]: Symons letter to Haller, June 7, 2000, at p.2.

[^50]: *Id.* at p.3

[^51]: *Id.*