**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+----+------------------------------+
| In the matter of                 | *  | Call Sign S2150              |
|                                  | *) |                              |
| **FINAL ANALYSIS COMMUNICATION   | ** | File Nos. 25-SAT-P/LA-95     |
| SERVICES, INC.**                 |    |                              |
|                                  | *  | 76-SAT-AMEND-95              |
| Authorization to Construct,      | *) |                              |
| Launch and Operate               | ** | 79-SAT-AMEND-96              |
|                                  |    |                              |
| a Non-Voice, Non-Geostationary   | *  | 151-SAT-AMEND-96             |
| Mobile Satellite System in the   | *) |                              |
| 148-150.5 MHz, 400.15-401 MHz,   | ** | 7-SAT-AMEND-97               |
| and 137-138 MHz Bands            |    |                              |
|                                  | *  | SAT-MOD-20020329-00245       |
|                                  | *) |                              |
|                                  | ** | SAT-AMD-20030606-00112       |
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**MEMORANDUM OPINION AND ORDER**

**Adopted:** March 17, 2004 **Released:** March 17, 2004

By the Chief, International Bureau:

# INTRODUCTION

1.  With this Order, we deny the request of Final Analysis Communication
    Services, Inc. ("Final Analysis") for waiver of the automatic
    termination provision of its authorization because it failed to meet
    the prescribed system implementation milestones set forth in its
    non-voice, non-geostationary satellite system license.[^1] Those
    milestones required Final Analysis to complete construction of its
    first two satellites by March 2002 \-- four years after its license
    was granted \-- and to launch those two satellites by
    September 2002. Final Analysis did not meet those milestones, and
    has not demonstrated sufficient reason to warrant a waiver of its
    milestone deadlines. Consequently, Final Analysis's license is
    rendered null and void by its own terms.

# background

2.  On March 31, 1998, the International Bureau granted Final Analysis a
    license to launch and operate a non-voice, non-geostationary
    satellite service system in low Earth orbit (a "Little LEO" system)
    in the second processing round for the Little LEO service.[^2] The
    grant of its license, as well as the other second-round system
    licenses, was based upon a joint sharing agreement among the
    second-round applicants, including Final Analysis.[^3] The
    Commission adopted this sharing agreement as the foundation for the
    service rules and procedures governing the licensing of second-round
    applicants.[^4] Under that sharing agreement, and the *Second Round
    Processing Order*, Final Analysis was designated as "System 2," and
    authorized to operate a 26-satellite Little LEO system in the
    148-150.05 MHz uplink and the 137-138 MHz and 400.15-401 MHz
    downlink frequency bands.

3.  At the time the Commission granted Final Analysis its license in
    1998, the licensee was the fully-owned subsidiary of Final Analysis,
    Inc. ("FAI"), a privately held, for-profit, Maryland
    corporation.[^5] FAI's stock, in turn, was owned 50% by Nader
    Modanlo ("Modanlo") and 50% by Michael H. Ahan ("Ahan").[^6] In
    September 2000, the Commission granted a *pro forma* transfer of
    control application to transfer less than ten percent of the stock
    of FAI from its equal shareholders, Modanlo and Ahan, to Polyot, a
    corporation located in Omsk, Russia.[^7] Modanlo and Ahan retained
    an equal portion of the remaining stock of FAI.

4.  In September 2001, a petition for involuntary Chapter 7 bankruptcy
    was filed by three creditors of FAI (the parent corporation) against
    FAI in the United States Bankruptcy Court for the District of
    Maryland to liquidate the assets of FAI.[^8] According to comments
    by Final Analysis on its post-bankruptcy transfer, equal ownership
    of FAI by Modanlo and Ahan created a decision-making deadlock, which
    led to extensive corporate litigation and eventually to FAI's
    bankruptcy.[^9] When the bankruptcy court granted the petition on
    October 16, 2001, allowing a bankruptcy case to proceed, the court
    appointed Cheryl Rose as Trustee for the company. Shortly
    thereafter, on February 7, 2002, the Commission approved transfer of
    control of the Final Analysis license from FAI to the Trustee.[^10]

5.  The Trustee sold the assets and properties of FAI on January 14,
    2002 \-- including all the stock of licensee Final Analysis \-- to
    New York Satellite Industries LLC ("NYSI"), a Delaware limited
    liability corporation that is 100% owned by Modanlo.[^11] Pursuant
    to the terms of the sale, the Trustee retained control over the
    license until the Commission granted an order approving the transfer
    to NYSI.[^12] Final Analysis filed an application seeking transfer
    of its license to NYSI on January 25, 2002.[^13] The Satellite
    Division granted the transfer on August 15, 2002.[^14]

6.  In addition to his ownership interests in the parent companies FAI
    and NYSI, Modanlo has been Chairman and President of Final Analysis,
    the wholly-owned subsidiary FCC licensee, from that company's
    inception through the present date. In this role, Modanlo managed
    Final Analysis's business operations, including whatever efforts it
    has made toward construction and launch of its satellite
    system.[^15]

7.  The *Final Analysis Authorization* specified a system implementation
    milestone schedule, including the milestone for completing
    construction of its first two satellites by March 2002, and the
    milestone for launching those two satellites by September 2002.[^16]
    The authorization explicitly states that unless the licensed space
    stations are constructed and launched in accordance with the dates
    specified, failure to meet the milestones will render the
    authorization null and void.[^17] In March 2002, four years into its
    license period and on the eve of the construction completion
    milestone, Final Analysis filed a petition seeking a waiver of the
    automatic termination of its license despite its anticipated failure
    to meet its third milestone.[^18] Final Analysis amended the
    Milestone Extension Request in June 2003, clarifying its reasons for
    requesting an extension of time to complete construction and launch
    of its system.[^19] The Milestone Extension Request, as amended, was
    placed on public notice as accepted for filing on June 30,
    2003.[^20] No comments were filed in response.

# DISCUSSION

8.  It is longstanding Commission policy to impose milestones for
    satellite system implementation. These milestones are deadlines by
    which licensees must commence construction, complete construction,
    and launch their satellites.[^21] Moreover, Section 319(b) of the
    Communications Act of 1934, as amended, requires any authorization
    to construct a radio station to specify dates by which the actual
    operation of such station is expected to begin, and requires
    automatic forfeiture of the authorization if the station is not
    ready for operation within the time specified.[^22] Requiring
    licensees to make and fulfill realistic construction and launch
    commitments prevents increasingly scarce orbital and spectrum
    resources from being warehoused by licensees. The Commission has
    strictly enforced system implementation milestones because it is in
    the public interest to ensure that licensees proceed expeditiously
    to complete construction of their full systems and to commence
    service.[^23] Indeed, strict milestones enforcement is especially
    important in the Little LEO service, because the Commission chose to
    rely on strict milestones enforcement rather than to apply financial
    qualification requirements on the service applicants.[^24]

9.  Section 25.117(e) of the Commission's rules permits modification of
    licenses to extend system implementation milestones only (1) when
    delay in implementation is due to unforeseeable circumstances beyond
    the control of the licensee or (2) where there are unique and
    overriding public interest concerns to justify an extension.[^25]
    Final Analysis advances two principal reasons to justify its request
    for extension under Section 25.117(e)(1). First, it argues that the
    bankruptcy proceeding of its former corporate parent impeded
    progress on its system implementation for one year. Second, it
    argues that the parent company's bankruptcy caused an unforeseen and
    uncontrollable delay in obtaining United States State Department
    approval of a technical assistance agreement for the launch of Final
    Analysis's satellites by a Russian company. We find that neither
    reason was unforeseeable, nor beyond the control of Final Analysis.
    We first discuss, however, the effect of Final Analysis's failure to
    implement its system in the three and one-half years that transpired
    *before* the commencement of a bankruptcy proceeding against its
    parent company.

## 1998 to 2001: Failure to Implement System

10. Long before the institution of an involuntary bankruptcy proceeding
    against FAI in September 2001, Final Analysis made little progress
    on system implementation. In its Milestone Extension Request, Final
    Analysis describes how, as early as 1999, the company was hindered
    by a decision-making deadlock between Modanlo and Ahan.[^26] The
    deadlock resulted in litigation and created significant
    uncertainties and delays in Final Analysis's satellite construction
    program.[^27] According to Final Analysis, these circumstances so
    adversely affected Final Analysis's ability to conduct business that
    progress on its construction program virtually came to a halt.[^28]

11. The record in this matter confirms the effect of the corporate
    deadlock on Final Analysis's design efforts during the four years'
    time granted it to build the first two satellites. Final Analysis
    asserts that it made substantial progress toward compliance with its
    milestones.[^29] We disagree. In an *ex parte* communication, Final
    Analysis filed 42 technical documents that it asserts demonstrate
    substantial progress on the development of its satellite
    system.[^30] We have reviewed these documents. Although most of the
    documents are undated and unsigned, they disclose that Final
    Analysis made no substantial progress on construction before the
    filing of the bankruptcy petition in 2001.

12. These documents indicate that FAI, as the general contractor for
    construction of the Final Analysis system, coordinated the work of
    two subcontractors, as well as its own responsibility for
    construction of the communication payload on the satellites. General
    Dynamics and Polyot had subcontracts to build the satellite buses
    and portions of their frames. The documents indicated that
    preliminary design work was done by both General Dynamics and by
    Polyot, but both companies' work was stymied in the preliminary
    design phase, awaiting further input by FAI. For example, it appears
    that Polyot performed an initial structural analysis of the frame of
    the spacecraft. However, Polyot notes that the results of this
    analysis are preliminary, and would be corrected and modified when
    the actual configuration of the spacecraft was provided by FAI.[^31]
    The records do not show that FAI ever provided this information to
    Polyot. In addition, Polyot provided a DRAFT interface control
    document, describing the installation of the spacecraft bus into the
    Polyot rocket booster. These documents indicate that Polyot was
    awaiting input from Final Analysis, listed as "to be determined."
    General Dynamics provided a series of conceptual and interface
    documents, but in the Systems Requirement Review, General Dynamics
    noted that its presentation was not complete, because the interface
    control drawings to be drafted by FAI were not yet available.[^32]

13. Most critically, FAI failed to advance its own in-house construction
    of the spacecraft communications payload, a responsibility entirely
    within the control of FAI. The "Air Interface Specification"
    document for the communications payload to be built by FAI is an
    unsigned (and undated) DRAFT specification. It appears, then, that
    FAI's own in-house construction efforts never advanced to the
    preliminary design review ("PDR") stage, much less to critical
    design review ("CDR") or to actual construction work.

14. In a document entitled "FAISAT System Design Status CDR," Final
    Analysis acknowledges that 'the design of FAISAT subsystems varies
    between pre-PDR and CDR. A lot of things have not been designed. A
    full time staff is needed for a few months to complete the
    *design*."[^33] The document also states:

    "The antenna system is in a pre-PDR state. Only conceptual work was
    done....

    Launch vehicle interface design has recently been changed, and no
    detailed design nor analyses exist....

    No work has been done on payload software. The contract for
    developing the payload software was just awarded when the effort was
    suspended....

    The mechanical linkages of the solar array connecting them to the
    SADA are not designed. Only a conceptual design exists....

    The charge regulators and power distribution unit have not been
    designed yet. Only a preliminary design exists. The battery has been
    selected. It turns out that despite catalog listing of Eagle Pitcher
    batteries of the same AH rating that we need do not really
    exist."[^34]

    It is obvious from this documentation that FAI itself never got to
    the stage at which it was bending metal on the construction of the
    communications payload.

15. Final Analysis asserts it spent more than \$70 million on system
    implementation.[^35] An examination of the record submitted does not
    indicate any construction efforts. In the absence of evidence that
    these expenditures of time and money were specifically related to
    construction of the licensed system, there is no basis to conclude
    that the expenditures represent progress toward system
    implementation.[^36]

16. In addition, Final Analysis argues that its funding of efforts to
    win and implement a global allocation are properly viewed as steps
    taken to implement its system.[^37] According to Final Analysis, its
    license noted that it had insufficient spectrum and would receive
    first priority to apply for additional spectrum if attempts to
    obtain an international allocation of Little LEO spectrum were
    successful. Final Analysis argues that its system implementation was
    predicated on obtaining additional spectrum at the World
    Radiocommunication Conference ("WRC").[^38] In its view, gaining
    additional spectrum within the WRC process has been an integral and
    consistent part of Final Analysis strategic efforts and resource
    expenditures to implement its system.

17. We find that this argument misinterprets the grant of supplemental
    spectrum in the Commission's *Second Processing Round Order*. In
    that *Order*, the Commission noted Final Analysis's argument that
    without additional spectrum it lacked sufficient service downlink
    spectrum to implement a large Little LEO system.[^39] The Commission
    found, however, that the System 2 Little LEO applicant *could*
    operate a system in the bands that were licensed to Final
    Analysis.[^40] But because the other second-round Little LEO
    applicants agreed, in their joint spectrum proposal, to allow Final
    Analysis to have first priority on this future spectrum, the *Second
    Processing Round Order* granted that first priority. In doing so,
    however, the Commission explicitly conditioned that grant of
    priority on System 2 complying with the terms and conditions of its
    license, including its system construction, launch, and operation
    milestones.[^41] Far from being an integral part of its efforts to
    implement its system, expenditures on an international allocation,
    at the expense of work on its licensed system, were a misallocation
    of resources.

18. In every instance where the Commission has denied a milestone
    extension request, construction of the satellite either had not
    begun or was not continuing, thus raising questions regarding the
    licensee\'s intent to proceed.[^42] This case presents a far worse
    situation. In this case, system construction was completely halted
    due to Final Analysis's owners' inability to cooperate with each
    other. While Final Analysis continues to assert its intention to
    proceed, the only reliable measure of that intent is the physical
    result of its efforts. Because Final Analysis failed to build two
    satellites during four years of its license period, we have no basis
    to support its assertions of intent to proceed with system
    implementation. The record reveals that for the most part, progress
    on system implementation did not go beyond the preliminary design
    phase.

## Bankruptcy (September 2001 to January 2002)[^43]

19. Final Analysis failed to achieve substantial progress in the
    construction of its first two satellites during the first three and
    one-half years of its authorization. Shortly before the March 2002
    milestone deadline, a petition for involuntary bankruptcy was filed
    against FAI, Final Analysis's parent company. Final Analysis argues
    that this eleventh-hour occurrence prevented it from meeting its
    milestone deadlines.[^44] We find that a bankruptcy proceeding,
    particularly one commenced so very late in the system implementation
    construction period, had little, if any, relevance to Final
    Analysis's failure to meet its milestones. At best, it might be
    argued that the bankruptcy proceeding impeded the final six months
    of construction on Final Analysis's first two satellites.

20. In recent years, the Commission has considered issues relating to
    federal bankruptcy law and the Commission's enforcement of the
    regulatory obligations of licensees engaged in the bankruptcy
    process.[^45] In none of the decisions has the Commission looked
    favorably upon a claim that federal bankruptcy proceedings prevent a
    licensee from meeting its regulatory obligations to the Commission.
    The International Bureau, under delegated authority, has similarly
    grappled with various issues arising from the bankruptcy filings of
    a number of satellite licensees and the relevance of bankruptcy on a
    licensee's obligations to meet milestones deadlines. In each case,
    the Bureau has not been persuaded to extend a milestone deadline
    because of a bankruptcy proceeding. In fact, precedent has shown
    that satellite licensees have successfully undergone business
    reorganization under bankruptcy protection and maintained milestone
    schedules.

21. In July 2001, the International Bureau and the Office of Engineering
    and Technology authorized WT Docket No. 03-202, L.P. ("Globalstar")
    to construct, launch and operate a satellite system comprised of 64
    non-geostationary-satellite orbit satellites and four
    geostationary-satellite orbit satellites operating in the 2 GHz
    mobile satellite service.[^46] Globalstar's license contained
    milestones for system implementation, including a requirement to
    enter into a non-contingent satellite manufacturing contract for all
    system components by July 17, 2002. On February 15, 2002, Globalstar
    sought Chapter 11 bankruptcy protection.[^47] On its July 17, 2002
    milestone deadline, Globalstar filed a request for waiver and
    modification of its implementation milestones. Despite the fact that
    Globalstar's first milestone passed during its bankruptcy
    proceeding, the International Bureau found that the extension
    request did not present special circumstances justifying a waiver,
    and thus Globalstar did not meet its burden of demonstrating that it
    qualified for a milestone extension.[^48] On application for
    Commission review of the Bureau decision, Globalstar now claims that
    its status as debtor-in-possession under Chapter 11 of the U.S.
    Bankruptcy Code required the Bureau to give special consideration to
    its requests, and protects Globalstar's license from
    cancellation.[^49] The application for review is pending.

22. Similarly, in two other cases, the Bureau held licensees to their
    implementation milestone deadlines despite ongoing bankruptcy
    proceedings. First, in the case of Iridium, the principal corporate
    owner of the Iridium System's assets defaulted on loans in excess of
    \$1.5 billion in August 1999, and thereafter filed for protection
    from its creditors under Chapter 11 of the Bankruptcy Code.[^50]
    During the course of the parent company's bankruptcy proceedings,
    the International Bureau granted a 2 GHz mobile satellite system
    license to Iridium LLC, the Debtor-in-Possession in the Iridium
    bankruptcy proceeding.[^51] As with all satellite licenses,
    Iridium's authorization included system implementation milestones,
    including a condition that failure to meet the specified milestones
    would render the license null and void.[^52] Seven months later, the
    Commission authorized assignment of Iridium's 2 GHz license to the
    entity that purchased the Iridium system assets from the bankruptcy
    proceeding.[^53] Iridium was not granted additional time to meet its
    milestones because its parent was in bankruptcy. Indeed, despite its
    parent's bankruptcy, Iridium met its first milestone in July
    2002.[^54]

23. Another 2 GHZ MSS licensee, ICO Services Limited ("ICO"), a
    corporation organized under the laws of the United Kingdom, filed a
    letter of intent in 1997 to access the U.S. market to provide mobile
    satellite service in the 2 GHz frequency bands.[^55] In June 2000,
    ICO filed an amendment to its letter of intent, disclosing the
    reorganization of the company pursuant to bankruptcy
    proceedings.[^56] In July 2001, ICO's letter of intent was
    granted.[^57] Like the Globalstar 2 GHz license, ICO's license
    specified system implementation milestones, including a requirement
    to enter into a non-contingent satellite manufacturing contract for
    all system components by July 17, 2002.[^58] ICO was not granted
    additional time to meet its milestones because it was in bankruptcy.
    Indeed, ICO met its first milestone in July 2002.[^59]

24. These recent International Bureau decisions are consistent with
    earlier Commission decisions involving Commission licensees in
    federal bankruptcy proceedings. In 1990, Geostar Positioning
    Corporation ("Geostar") applied to make various modifications to its
    radiodetermination satellite service system license, including a
    request for a two-and-a-half year extension to launch its Geostar 3
    satellite.[^60] Although the Common Carrier Bureau's decision noted
    that Geostar had filed a bankruptcy petition under Chapter 11 of the
    Bankruptcy Code, the Bureau held that Geostar's bankruptcy petition
    was not in itself dispositive of Geostar's financial ability to
    proceed with system implementation.[^61] The Bureau nevertheless
    required Geostar to submit a revised business plan and any other
    documentation necessary to demonstrate its ability to meet the
    system implementation milestones schedule in its authorization.[^62]
    Geostar requested an extension of time to launch its Geostar 3
    satellite because the extended schedule comported with its market
    forecasts. The Bureau denied the extension because independent
    business judgments based upon economic considerations are not
    considered circumstances beyond a licensee's control. Thus, while
    Geostar's bankruptcy was not dispositive of its financial ability,
    it was required to meet its milestones. Moreover, Geostar's
    bankruptcy was not considered a justification for its failure to
    meet its milestones.

25. In *JET-TEL Group Limited Partnership*, the Wireless
    Telecommunications Bureau rejected a request to waive the automatic
    termination of a license for failure to meet a construction
    requirement.[^63] JET-TEL alleged that it was unable to construct
    the required 25 ground stations for three years because of the
    bankruptcy of its principal financing source, the Haas Group.[^64]
    According to JET-TEL, the assets of the Haas Group were frozen in
    the bankruptcy proceeding and unavailable to JET-TEL. JET-TEL
    asserted, however, that it would meet the next construction
    milestone.[^65] The Wireless Bureau rejected the bankruptcy of
    JET-TEL's financing source as a justification for its waiver
    request. The Wireless Bureau noted that lack of financing cannot be
    used as a basis for granting an extension of time to construct.[^66]

26. In none of these decisions did the Commission look favorably upon
    the claim that a bankruptcy proceeding prevented a licensee from
    meeting its regulatory obligations. Nor does Final Analysis cite any
    decision in which the Commission's regulatory requirements were
    excused due to the initiation of federal bankruptcy proceedings.

27. The Supreme Court's decision in *FCC v. NextWave Personal
    Communications* is consistent with the view that licensees cannot
    use an ongoing federal bankruptcy proceeding to excuse their
    regulatory obligations.[^67] *NextWave* involved Section 525(a) of
    the Bankruptcy Code,[^68] in which Congress limited government
    agencies' regulatory licensing powers under specific narrow
    conditions (such as where the license is revoked for non-payment of
    a debt that is dischargeable in the bankruptcy case). *NextWave*
    does not, however, support a wholesale bankruptcy exception to
    otherwise enforceable regulatory requirements. Indeed, the
    *NextWave* decision took pains to point out that "\[t\]he government
    *may* take action that is otherwise forbidden \[under 11 U.S.C. §
    525\] when the debt in question is one of the disfavored class that
    is non-dischargeable.\"[^69] Here, there is no debt at issue, only
    the even-handed enforcement of system implementation milestones to
    all similarly situated licensees. The Commission has not taken any
    action that discriminates against a licensee simply because it is in
    bankruptcy or associated with a firm in bankruptcy. Nothing in the
    Bankruptcy Code prevented this licensee, or its parent, from
    complying with the regulatory construction milestones other than
    issues related to the licensee or its parent's business discretion.
    The Commission's consistent application of its milestone policy is
    thus not inconsistent with the Bankruptcy Code or the Supreme
    Court's *NextWave* holding.

28. Final Analysis repeatedly emphasizes the fact that its parent
    company's bankruptcy began as an involuntary Chapter 7
    proceeding.[^70] According to Final Analysis, an involuntary
    bankruptcy proceeding is beyond its legal or practical control.[^71]
    We disagree. Under bankruptcy law, ample opportunities are afforded
    for a debtor to control the course of its bankruptcy proceeding. For
    instance, when an involuntary petition for liquidation under Chapter
    7 of the Bankruptcy Code is filed against a debtor company, the
    debtor has a right to "controvert," or oppose, the petition.[^72] If
    the petition is not controverted, the Bankruptcy Code provides that
    the court will order relief against the debtor, by commencing a
    liquidation proceeding.[^73] If, however, the debtor controverts the
    petition, the bankruptcy court must order a trial on whether to
    grant bankruptcy relief against the debtor.[^74] Aside from the
    debtor's own right to controvert the petition, the Bankruptcy Code
    also permits other interested parties to move for dismissal of the
    bankruptcy proceeding.[^75]

29. Even if an involuntary petition is not challenged at its
    commencement, a debtor in Chapter 7 does not lose control of its
    proceeding. The Bankruptcy Code also grants the debtor a one-time,
    absolute right to convert a Chapter 7 liquidation case into a
    Chapter 11 reorganization proceeding at any time.[^76] Thus, the
    term "involuntary bankruptcy" describes little more than the fact
    that the debtor itself did not choose to initiate the bankruptcy
    proceeding. Debtors, creditors, and the principals of these
    companies employ bankruptcy proceedings for any number of strategic
    business purposes, including -- as in this case -- the opportunity
    to buy a company's assets in a liquidation sale. We find that the
    decision to resort to bankruptcy, or to fail to contest a bankruptcy
    initiated by creditors, is a business decision. As we noted in
    denying a milestone extension to Globalstar, "\[w\]e have held that
    'business decisions' based on economic considerations are not
    circumstances outside the control of the licensee, and therefore, do
    not warrant an extension of milestones."[^77]

30. Moreover, the bankruptcy in question here is not even the bankruptcy
    of Final Analysis, our licensee, but instead the bankruptcy of its
    parent corporation. Final Analysis emphasizes that it was
    financially solvent at the time that its parent company was forced
    into bankruptcy, but at the same time claims that the bankruptcy
    trustee -- through her control of Final Analysis's stock --
    prevented the licensee from doing anything to meet its regulatory
    obligations. Final Analysis asserts that the automatic stay in a
    bankruptcy proceeding reaches not just to any action against the
    debtor, but also to any business operations by its wholly-owned
    subsidiary.[^78] This argument, however, is questionable as a matter
    of corporate law and bankruptcy law. Under corporate law, having
    chosen its parent and subsidiary incorporations, Final Analysis,
    Inc. must respect all corporate formalities, including controlling
    its subsidiary by voting its stock. The two corporate entities
    cannot be collapsed into a single controlling voice without piercing
    the corporate veil.[^79] Under bankruptcy law, the bankruptcy
    petition of Final Analysis, Inc. placed its shares in Final Analysis
    Communication Services, Inc. under the bankruptcy court's control,
    but not the assets or property of the subsidiary itself.
    Consequently, the automatic stay in the parent's bankruptcy does not
    apply to actions by or against the subsidiary. [^80]

31. We are unable to conclude, as Final Analysis would have us do, that
    a bankruptcy trustee, who has a statutory and fiduciary duty to
    preserve the assets of the debtor, would effectively de-value the
    debtor's principle asset, Final Analysis's FCC license, by
    instructing it not to meet its milestones.[^81] Final Analysis
    argues that the Trustee directed Final Analysis not to take any
    action outside the normal course of business and threatened to
    institute legal proceedings in the event that Final Analysis took
    such actions.[^82] In Final Analysis's view, it "was prohibited by
    the Trustee from entering into new contracts, hiring additional
    employees, selling assets, incurring debt, or taking any action
    which would affect FACS' balance sheet, or which might make the
    controlling stock interest less attractive to a potential
    investor."[^83] There is no support for this view in the record.

32. On January 9, 2002, James M. Hoffman, counsel for Cheryl E. Rose,
    who was the bankruptcy Trustee, wrote to George N. Grammas and
    Ann E. Schmitt, counsel for Final Analysis:

    "This letter will confirm our previous agreement that FACS \[Final
    Analysis Communication Services, Inc., "Final Analysis" herein\]
    will not make any disbursements or enter into any transactions not
    in the ordinary course of business without first seeking the
    approval of the Trustee. If you have any questions or concerns,
    please contact me."[^84]

    Grammas responded:

    "I received your letter earlier today. I do not understand what you
    have in mind or to which agreement you refer. Perhaps you had an
    understanding with Ann. I believe that \[Final Analysis's\] position
    has always been that the Trustee represents the interest of the
    majority voting shareholders of \[Final Analysis\] and has the
    rights and obligations associated with such interest."[^85]

    Hoffman then wrote:

    "This letter responds to George's letter dated January 9, 2002,
    regarding \[Final Analysis's\] use of money. It is the Trustee's
    recollection that \[Final Analysis\] represented at the meeting of
    creditors that \[Final Analysis\] would use its funds for its
    ordinary operations and no other purposes. \[Final Analysis\]
    represented that its funds would not be used outside the ordinary
    course of business without the Trustee's prior consent. The
    above-described use of \[Final Analysis\] funds is not subject to
    debate, interpretation, or even \[Final Analysis's\] apparent
    misinterpretation of the role of a Chapter 7 Trustee in a bankruptcy
    proceeding.

    "If \[Final Analysis\] has misunderstood the Trustee's position,
    then the Trustee demands that you inform me immediately of any
    \[Final Analysis\] transactions that have occurred outside or the
    ordinary course of business since the meeting of creditors. Also, in
    the event \[Final Analysis\] has made any transfers outside the
    ordinary course of business since the meeting of creditors, then I
    strongly suggest that the transfers be immediately returned to
    \[Final Analysis\] prior to the institution of legal proceedings
    related to such transfers."[^86]

    We find that Final Analysis's argument is not a reasonable
    interpretation of the Trustee's instructions. The Trustee's
    correspondence simply stated the standard obligations and
    limitations of a debtor-in-possession in a bankruptcy
    proceeding.[^87] The Trustee said nothing whatsoever about new
    contracts, additional employees, selling assets, incurring debt, or
    taking actions which would affect Final Analysis's balance sheet.
    Instead, the Trustee reminded Final Analysis that it was limited to
    operations in the ordinary course of its business, which was
    constructing and launching communications satellites. Even if Final
    Analysis somehow did not view building and launching satellites as
    the ordinary course of its business, the Trustee also suggested that
    Final Analysis could seek actions outside the ordinary course of
    business so long as it obtained the Trustee's prior consent. There
    is nothing in the record to suggest that it attempted to obtain that
    consent.

33. Regardless of Final Analysis's apparent misinterpretation of the
    role of a Chapter 7 Trustee in a bankruptcy proceeding, it is
    important to note that any Trustee appointed by the bankruptcy court
    is always subject to the supervision of the bankruptcy court.
    Consequently, Final Analysis always retained the right to ask the
    court to overrule the Trustee's judgments on whether the licensee
    could proceed with system implementation milestones in order to
    preserve the debtor estate's valuable asset -- the FCC license.[^88]
    Final Analysis never did so.

34. Instead, Final Analysis's view of its parent company's bankruptcy
    proceeding was that it was legally paralyzed, and that the only
    thing its principals could do was to urge that the bankruptcy
    proceeding be expedited so that Modanlo alone could take charge of
    the entity that emerged from bankruptcy. Under these circumstances,
    Final Analysis argues, the only thing that it could do to minimize
    the time in which Final Analysis's business discretion would be
    constrained by the bankruptcy was to make the Trustee aware of the
    urgent need to accelerate the sale of FAI. Final Analysis submitted
    an *ex parte* filing including a transcript of testimony from a
    December 21, 2001 hearing before the U.S. Bankruptcy Court for the
    District of Maryland. Final Analysis asserts that this testimony
    shows that it was successful in convincing the Trustee to expedite
    the sale of the FAI. In the transcript of direct testimony before
    the bankruptcy court, Ann Schmitt, bankruptcy counsel to FAI,
    examines Aileen Pisciotta, telecommunications counsel for Final
    Analysis:

    Schmitt: What happens if \[Final Analysis\] doesn't meet its March
    deadline?

    Pisciotta: By the terms of the license, the license becomes null and
    void. It is a conditional license. It is an automatic nullification
    of the license on that date.

    Schmitt: And as counsel for \[Final Analysis\], what recommendation
    have you made in terms of avoiding that termination?

    Pisciotta: We have recommended, because the effort to obtain a
    waiver or an extension of time is very difficult, that the company
    should go to the Commission with a petition for modification of
    their license to extend the milestones or, in the alternative,
    request a waiver by the FCC of the rule requiring compliance with
    the milestones.

    We have advised them that they need to do that as soon as possible
    because even delaying asking for such an extension has been held
    against companies in the past who have sought them, and we have
    advised them that the Commission's policies, which is set forth in a
    variety of decisions and Commission case law, is very clear that it
    is very difficult to get such an extension or waiver.

    Schmitt: Is there any reason \[Final Analysis\] couldn't simply file
    that extension now with its current shareholder situation?

    Pisciotta: The factors that the FCC will look at in acting on a
    request for extension or waiver include for an extension request,
    demonstration of unforeseen circumstances and -- or a significant
    public interest reason why an extension should be granted.

    In the case of a waiver, asking the Commission to waiver the rule on
    its own motion has to be good cause shown. The case law is very
    clear that the Commission will take into consideration the
    capabilities of the company and a demonstration of its intent to
    proceed.

    When the Commission granted \[Final Analysis\] its license and it
    was granting its license in the context of granting licenses to
    everyone in that processing round, the Commission declined to impose
    strict financial qualification standards. Their public policy
    objective was to approve a number of licenses so as to achieve a
    competitive industry in the little LEO industry.

    They said at the time that they would require in lieu of the
    imposition up front of strict financial standards, strict compliance
    with these construction milestones.

    In order to convince the Commission that they should grant an
    extension at this time, which is very late as it is in the process,
    we need to make a very clear demonstration that the company not only
    has accomplished an awful lot in the past up to this point and is in
    the process of constructing a system, but that it is capable of
    carrying forward even a very precise extension period. The
    Commission will require that they identify an exact period, that we
    have a demonstration of exactly how we are going to meet that
    extended period of time. So we need to go to the Commission with a
    very clear business plan with core credentials for moving forward
    and with a demonstration, probably, of contracts in place that will
    be required to implement the construction and launch over that time
    table.

    The process for obtaining an extension requires, first, that we go
    and talk to the Commission and make them aware that we need the
    extension and then submitting formal papers with our best case put
    forward. We can't submit an intention to seek a waiver. We need to
    submit a fully justified request at the outset. The Commission has
    to deliberate. They might ask for information. They might ask to see
    contracts. We would have meetings with them. Then we have to write
    an order. And all of this has to take place before the end of March
    2002.

    So the time is getting extremely short for us to be in a position
    where we could go to the Commission with a resolution of the
    financial and corporate qualifications of the licensee and a
    business plan that clearly sets out a plan to meet an extended
    construction schedule in a precise time frame. And I think the
    Commission would need to see that the company is basically hitting
    the ground running.

    Schmitt: And just to make clear, if the licensee under any scenario
    continued to be \[Final Analysis\], does the identity and financial
    wherewithal of the controlling party of \[Final Analysis\] impact on
    that decision?

    Pisciotta: Absolutely. Absolutely. I think the Commission is going
    to have to see that all of the resources of the company, and
    particularly because FAI is the prime contractor, they are the
    entity that the Commission is relying upon to actually implement
    this revised construction schedule. So both parties have to be
    before the Commission in one way or the other to make a convincing
    case that a revised construction milestone can be -- can be granted.

    There are considerations that weigh both in favor and against the
    company under the best of circumstances in their request for a
    wavier, but among the circumstances that we are concerned about is
    that the ultimate decision that the Commission will have to reach
    is, is a public interest better served by granting a waiver or not,
    and the fundamental issue in the Commission's mind is the
    warehousing of spectrum. They don't want to grant a waiver to a
    company that isn't going to do anything with the spectrum. They must
    have a rationale to overcome the significant case law that is there
    and that will not put them in a bad situation for future cases. They
    must have a very clear rationale for granting a waiver to a company
    at this -- under these kinds of circumstances.

    Schmitt: And is it your opinion that it you waited 45 or 60 days to
    file this application that the probability of success would be
    reduced?

    Pisciotta: I think it would be virtually nil.

    January 28, 2004 *ex parte* Letter from Patricia J. Paoletta,
    counsel for New York Satellite Industries, LLC to Marlene H. Dortch,
    Secretary, FCC at Exhibit 5, pp. 42-46.

    Final Analysis argues that this bankruptcy court testimony by
    Pisciotta establishes that it was successful in convincing the
    Trustee to expedite the sale of FAI because of the potential effect
    on Final Analysis's FCC license. Final Analysis views this as proof
    of its urgent intent to proceed with its system implementation after
    its future owner was empowered to take over its business operations.
    Beyond its testimony as to the urgency of the impending milestone
    deadline, however, there is nothing in the record to suggest that
    Final Analysis requested permission from either the Trustee or the
    court to undertake concrete business activity in the ordinary course
    of its business, or outside the ordinary course, during the
    bankruptcy proceeding.

35. Final Analysis asserts that its "commitment" to construction and
    launch of its satellite system has been unwavering.[^89] However,
    the facts suggest otherwise. Expenses incurred by Final Analysis
    prior to bankruptcy were primarily attributable to the design phase
    of the satellite system. Any progress on actual construction of the
    satellites virtually came to a halt within one year of its license
    grant because its two owners could not agree on any decisions
    affecting the company.[^90] This "deadlock" prompted the initiation
    of bankruptcy proceedings against the parent company, FAI. The
    milestones upon which its license is conditioned require
    demonstrations of actual system *implementation*. Intent to proceed,
    commitment, or developmental efforts are insufficient to meet
    milestones if they fail to result in actual, physical system
    implementation. In this case, intent would be established by
    completing construction of the first two commercial system
    satellites and launching those two satellites into orbit.

36. Our decision to reject FAI's bankruptcy as a justification for an
    extension of system implementation milestones is consistent with
    Commission precedent.[^91] As there is no inherent conflict between
    the Communications Act and the Bankruptcy Code,[^92] we choose not
    to create a conflict, by establishing bankruptcy proceedings as an
    excuse for failure to meet unrelated regulatory obligations where
    debt is not an issue. In the precedents discussed, licensees
    continued to meet their regulatory obligations regardless of the
    fact that the licensees or their corporate owners were engaged in
    bankruptcy proceedings. In fact, in the very industry in which Final
    Analysis is a prospective competitor, Orbital Communications
    Corporation, provided Little LEO service to the public before,
    during, and after its bankruptcy proceeding. While the Bankruptcy
    Code protects debtors from discrimination based on their debtor
    status, debtors cannot use bankruptcy to obtain a competitive
    advantage by exempting themselves from regulatory obligations that
    their competitors must bear.[^93]

37. Although we have carefully reviewed Final Analysis\'s arguments as
    to why the four-month bankruptcy of FAI justified an extension of
    the milestone deadlines, our discussion of the details of the
    bankruptcy should not detract from the central point of our
    conclusion \-- that the bankruptcy, coming only a few months before
    the milestone deadline, was essentially irrelevant to Final
    Analysis's failure to meet the milestone requirements. Our
    conclusion that Final Analysis did not make substantial progress in
    construction of its satellites during the four-year period allowed
    by our rules is based on its failure to make any progress over the
    *entire period*, the vast majority of which preceded the bankruptcy.
    For that reason, even if we accepted Final Analysis's bankruptcy
    argument, the bankruptcy itself is not sufficient to justify a
    further extension.

## Technical Assistance Agreement for Launch in Russia

38. Our decision regarding bankruptcy undermines another of Final
    Analysis's arguments for milestone extension. The registration and
    new technical assistance agreement at the State Department were only
    made necessary by the change in ownership when FAI was liquidated in
    bankruptcy. Absent the bankruptcy proceeding, the State Department's
    first technical assistance agreement would not have expired until
    late 2005. Nevertheless, we examine whether the need to gain State
    Department approval of a technical assistance agreement would,
    standing alone, justify extending system implementation milestones.

39. The International Traffic in Arms Regulations ("ITAR") require
    certain companies to obtain express approval, in the form of a
    Technical Assistance Agreement ("TAA"), from the United States
    Department of State's Directorate of Defense Trade Controls
    ("DDTC").[^94] The act of Congress that mandates the required
    registration and TAA for Final Analysis incorporates a sense of
    Congress that the "United States should pursue policies that protect
    and enhance the United States space launch industry."[^95] The
    export of any satellite for launch in, or by nationals of, a country
    that is not a member of the North Atlantic Treaty Organization or a
    major non-NATO ally of the United States always requires special
    export controls.[^96] The converse is that the ITAR requirements do
    not apply to trade with North Atlantic Treaty Organization allies or
    major non-NATO allies of the United States.

40. Final Analysis chose Polyot to manufacture the spacecraft bus for
    its satellite system. As reported in an August 1996 amendment to
    Final Analysis's Little LEO application, Polyot committed to launch
    Final Analysis's entire satellite constellation at no cost to Final
    Analysis as part of an agreement between Final Analysis and Polyot.
    Under the agreement, Polyot is to be the national service provider
    for Final Analysis's communications services in Russia.[^97] It is
    reasonable to assume that these financial arrangements for
    construction and launch of the satellites underscored Final
    Analysis's business decision to undertake engaging the construction
    and launch services of a country that falls under the ITAR
    regulations. The inevitable result of its business decision required
    Final Analysis to obtain a TAA from the State Department.[^98]
    Consequently, the events relating to obtaining the necessary TAA
    cannot be used to justify an extension of milestone deadlines.

## Alternative Justification for Extension

41. Alternatively, Final Analysis advances two reasons to justify its
    request for extension under Section 25.117(e)(2) of the Commission's
    rules.[^99] Under that rule subsection, an applicant for a milestone
    extension must demonstrate that there are unique and overriding
    public interest concerns to justify the extension.[^100] Final
    Analysis argues that Final Analysis, Inc., the bankrupt entity, was
    both its parent company and its prime contractor, and that this
    constitutes a unique set of facts that warrant an extension. We
    disagree. The choice of these arrangements was a business judgment
    wholly within the control of Final Analysis's original owners. The
    rule subsection requires unique and overriding public interest
    concerns, not just unique facts. Final Analysis's business
    arrangements were not compelled by any unique and overriding public
    interest concern in the ownership structure of applicants and
    licensees.

42. Final Analysis also asserts that the public interest in competitive,
    affordable data services justifies its extension request.[^101] A
    decade ago, this argument was rejected in the application of
    National Exchange Satellite, Inc. ("NEXSAT") for a milestone
    extension request.[^102] Like NEXSAT, Final Analysis presents no
    evidence that strict enforcement of milestone schedules impairs new
    entrants' opportunity to compete. As the Common Carrier Bureau noted
    in the *NEXSAT Milestone Order*, the enforcement of milestone
    schedules does not inhibit new entry, it merely ensures the timely
    availability of proposed services.[^103] New entrants and the
    innovative services that they might provide are of little public
    value if the proposed satellite services are not predictably and
    promptly made available.[^104]

43. We note that rule Section 25.117(e)(2) also requires an applicant to
    justify a precise extension period. Final Analysis's request does
    not satisfy this requirement. The entire period of delay caused by
    the circumstances outlined by Final Analysis amounts to 20 months,
    from September 2001 through May 2003. Yet Final Analysis requests a
    30-month extension to complete construction its first two
    satellites. Final Analysis also seeks a 31-month extension of its
    final milestones, for completing construction and launch of its
    remaining satellites. In the rare instances in which they have been
    granted, milestone extensions have been precisely tied to the
    circumstances that justify them. For example, in the two milestone
    extension decisions Final Analysis cites, NetSat was granted just 12
    more months to proceed, and EarthWatch was granted just six
    additional months for completion, because its request for an
    additional year to launch was deemed excessive. [^105]

## Waiver of Rules

44. We also find that grant of Final Analysis's waiver request would
    undermine Commission policies. It is in the public interest to
    ensure that licensees proceed expeditiously to complete construction
    of their full systems and to commence service.[^106] The Commission
    has repeatedly denied extension or waiver of system completion
    milestones where construction of satellites had either not begun or
    was not continuing, thus raising questions regarding the licensee's
    intention to proceed.[^107]

45. Final Analysis argues that we should waive Commission rules because
    its failure to meet its milestones is not precluding new entrants
    into the market.[^108] This assertion is based on the fact that
    some, but not all, of the Little LEO spectrum is shared among the
    Little LEO licensees. We reject the proposition that licensees in
    shared frequency bands can extend their milestone deadlines
    indefinitely so long as they are not blocking other users of the
    frequency. Commission decisions have frequently explained our
    milestones policy as a means of preventing warehousing of scarce
    orbit and spectrum resources.[^109] Our decisions have also
    described warehousing in terms of the ability to inhibit new
    entrants into a service, but no decision has suggested that
    inhibiting new entry is the only form of warehousing scarce orbit
    and spectrum resources. [^110] Even where licensees operate in a
    service with shared frequencies, a licensee that fails to progress
    in construction of its licensed system is preventing another
    licensee from operating at those particular orbital parameters in
    that particular frequency band. Final Analysis has therefore been
    warehousing public frequency resources that might have been put to
    use by another licensee. The full use of the shared Little LEO
    frequency bands anticipated multiple operating licensees. Final
    Analysis's inability to construct its system for four years while
    its owners fought amongst themselves resulted in the warehousing of
    valuable public resources.

## Other Matters

46. In support of its Milestone Extension Request, Final Analysis has
    made a number of ancillary arguments which have little to do with
    the Commission's standards for extending milestones. Although these
    matters are not directly relevant to the instant request, we
    nevertheless discuss the merits of these arguments.

47. We note that if Final Analysis \-- under the new ownership of New
    York Satellite Industries, LLC, which purchased the licensee last
    year -- now has financial backing and the physical capacity to
    construct and launch a Little LEO satellite system, it may apply
    under the expedited new application procedures adopted in the *First
    Space Station Reform Order*.[^111] Anticipating this reality, Final
    Analysis argues that it if loses its license, and thereafter decides
    to file a new application, then as a new licensee, it would be
    constrained to operate under power flux density ("PFD") limits
    applied by the ITU to new systems.[^112] These new lower power
    limits, Final Analysis says, would put it at a severe competitive
    disadvantage with the one other existing, operational Little LEO
    system. We find that Final Analysis misunderstands that the
    international priority under which it claims frequency rights is not
    dependent upon its domestic license. The LEOTELCOM 5 filing with the
    ITU is an asset of the United States, not Final Analysis. It will
    not expire if Final Analysis ceases to be a Commission licensee. The
    frequency priorities claimed by the United States under LEOTELCOM 5
    will continue to exist. Any future domestic applicants for the
    spectrum bands brought into use under the LEOTELCOM 5 international
    priority will receive the rights and priorities claimed under that
    filing, including grandfathered power limits.

48. Final Analysis also asserts that the modified processing round
    procedures under the Commission's *First Space Station Reform Order*
    will result in any new applicant getting just one-third of the
    spectrum that is now licensed to Final Analysis. In the *Second
    Processing Round Order*, the Commission determined that the best
    approach to licensing Little LEO operators was to adopt the unique
    sharing arrangements proposed by the applicants.[^113] A simple
    division of the Little LEO spectrum among the qualified applicants
    in a modified processing round would be inconsistent with those
    sharing arrangements. Therefore, in order to preserve the carefully
    balanced policy decisions adopted by the Commission in the *Second
    Processing Round Order*, we conclude that a waiver of Sections
    25.157 and 25.158 is warranted[^114], to the extent necessary to
    permit consideration of any future Little LEO applications for the
    System 2 license under the first-come, first-served procedure,
    rather than the modified processing round procedure.

49. In its discussion of the enforcement of milestone requirements, and
    as a means of preventing warehousing, the Commission adopted an
    additional milestone enforcement measure. As a logical outgrowth of
    the Commission's proposal to prohibit a licensee from filing future
    applications upon failure to meet milestones, the Commission decided
    to apply a stricter limit on the number of pending applications and
    unbuilt satellites for a licensee that has established a pattern of
    failure to meet milestones.[^115] The Commission also presumed that
    missing three milestones in any three-year period would constitute
    such a pattern. The circumstances underlying the decision herein do
    not constitute a pattern.[^116]

50. Finally, Final Analysis argues that if it is not involved going
    forward in the coordination activities with Argentina, Brazil and
    Japan there is no one else in the industry that has demonstrated it
    is prepared to work with the FCC to maintain the priority and
    preserve the spectrum for U.S. interests. For example, it says, it
    is the only industry advocate for the 400 MHz band sought by
    Argentina. No other U.S. system has expressed interest in the
    supplemental spectrum or worked with ITU to obtain it. This is to be
    expected, since Final Analysis currently holds the only first
    priority to that spectrum granted by the Commission. No other U.S.
    system has any incentive to work for spectrum that will only benefit
    Final Analysis. We also note that the 400 MHz band sought by
    Argentina is on behalf of a system with operating satellites. Final
    Analysis is unable to contest Argentina's claimed international
    priority because Final Analysis does not have an operating satellite
    with which Argentina's system might interfere.

# CONCLUSION

51. Based on the foregoing, we conclude that Final Analysis failed to
    meet the milestone conditions of its authorization. Final Analysis
    has not shown that its failure was due to circumstances beyond its
    control that would warrant an extension of its construction
    milestones. We further conclude that Final Analysis has not shown
    any special circumstances that would justify a waiver of Commission
    rules on the milestone conditions of its license. As a consequence
    of its failure to meet these system implementation milestones, Final
    Analysis's system authorization has been rendered null and void by
    operation of its terms.[^117]

# ORDERING CLAUSES

52. Accordingly, IT IS ORDERED that the Final Analysis Communication
    Services, Inc. Milestone Extension Request, SAT-MOD-20020329-00245,
    as amended, SAT-AMD-20030606-00112, is DENIED.

53. IT IS FURTHER ORDERED that the authorization held by Final Analysis
    Communication Services, Inc., File Nos. 25-SAT-P/LA-95,
    76-SAT-AMEND-95, 79-SAT-AMEND-96, 151-SAT-AMEND-96, 7-SAT-AMEND-97
    is DECLARED NULL and VOID.

54. This Order is issued pursuant to delegated authority, 47 C.F.R. §
    0.261, and is effective upon release.

FEDERAL COMMUNICATIONS COMMISSION

Donald Abelson

Chief

International Bureau

[^1]: Final Analysis Communication Services, Inc. Petition for Waiver,
    SAT-MOD-20020329-00245 (filed March 29, 2002) (the "Milestone
    Extension Request"). *See* 47 C.F.R. § 25.161 (2002) (rule section
    on automatic termination of station authorization).

[^2]: *Final Analysis Communication Services, Inc. Application for
    Authorization to Construct, Launch and Operate a Non-Voice,
    Non-Geostationary Mobile Satellite System in the 148-150.05,
    400.15-401 MHz, and 137-138 MHz Bands*, Order and Authorization, 13
    FCC Rcd 6618 (Int'l Bur. 1998) ("*Final Analysis Authorization*").

[^3]: Joint Proposal of E-SAT, Inc., Final Analysis Communication
    Services, Inc., Leo One USA Corporation, Orbital Communications
    Corporation, and Volunteers in Technical Assistance (filed Sept. 22,
    1997) ("Joint Proposal").

[^4]: *Amendment of Part 25 of the Commission's Rules to Establish Rules
    and Policies Pertaining to the Second Processing Round of the
    Non-Voice, Non-Geostationary Mobile Satellite Service*, Report and
    Order, 13 FCC Rcd 9111, 9124 (1997) ("*Second Processing Round
    Order*").

[^5]: *See Final Analysis Communications Services, Inc's Application to
    Construct, Launch and Operate the FACS Low-Earth Orbit Satellite
    System*, File No. 25-SAT-P/LA-95 (filed November 16, 1994), Exhibits
    VI - VIII (the application also encompassed amendments filed
    February 24, 1995, February 23, 1996, August 19, 1996, and October
    30, 1997) ("Application"). Final Analysis had only one class of
    common (voting) stock. *Id. See also, Final Analysis Communication
    Services, Inc.*, Order and Authorization, 13 FCC Rcd 6618 (1998).

[^6]: *See* Application at Exhibits VI - VII.

[^7]: *Final Analysis Communication Services, Inc.* *Application for
    Consent to Non-substantial (pro forma) Transfer of Control*, File
    No. SAT-T/C-20000815-00120 (filed August 15, 2000; granted September
    5, 2000) ("*pro forma* transfer").

[^8]: United States Bankruptcy Court for the District of Maryland, Case
    Number 01-21039, filed September 14, 2001. *See* Milestone Extension
    Request at p. 9.

[^9]: *See* Final Analysis Communication Services, Inc. Reply to
    Comments (filed April 22, 2002). *See also* Michael Ahan Comments
    (filed April 12, 2002) (the "Ahan Comments").

[^10]: Final Analysis Communication Services, Inc. Application for
    Consent to Involuntary Transfer of Control, File No.
    SAT-T/C-20011105-00094 (filed November 5, 2001; granted February 7,
    2002).

[^11]: *See* Application at 2. *See also* letter to William F. Caton,
    Acting Secretary, Federal Communications Commission from Aileen A.
    Pisciotta, Counsel to Final Analysis Communication Services, Inc.,
    dated February 20, 2002, submitting Supplemental Statement to
    Exhibit A. Nader Modanlo holds 100% of the equity and voting stock
    of NYSI. Other litigation against Modanlo stems from NYSI's purchase
    of FACS's assets. Various minority shareholders of FACS initiated a
    shareholders' derivative action on behalf of FACS against Modanlo
    and NYSI in the Circuit Court for Montgomery County, Maryland. *See*
    February 6, 2004 *Ex Parte* letter from Patricia J. Paoletta,
    Counsel to New York Satellite Industries, to Marlene H. Dortch,
    Secretary, FCC, and Attached Settlement Report by Independent
    Investigator in that action. Although the investigator's report may
    be an encouraging development for Modanlo personally, that civil
    suit is not yet concluded, and, in any event, this state court
    litigation has no relevance to the instant Milestone Extension
    Request.

[^12]: Application at Exhibit A, p.2, attached Exhibit (Bill of Sale)
    and attached Exhibit (Federal Communications Commission Addendum to
    Trustee's Bill of Sale).

[^13]: Final Analysis Communication Services, Inc. application for
    transfer of control, File No. SAT-T/C 20020125-00010 at Exhibit A,
    p.1 (filed January 25, 2002) ("post-bankruptcy transfer").

[^14]: *Final Analysis Communication Services, Inc.*, Order and
    Authorization, (Satellite Division, Int'l Bur., released August 17,
    2002).

[^15]: *See* August 30, 2000 Letter from Thomas S. Tycz, Chief,
    Satellite and Radiocommunication Division, International Bureau,
    FCC, to Randall W. Sifers, counsel to Final Analysis Communications
    Services, Inc., granting *pro forma* transfer.

[^16]: *Final Analysis Authorization*, 13 FCC Rcd at 6646, 6649. These
    March 2002 and September 2002 deadlines are the third and fourth
    system implementation milestones, respectively. Final Analysis
    asserts that its non-contingent construction agreement with Final
    Analysis, Inc., its parent company, satisfied its first two
    milestones, which required the commencement of construction of the
    first two satellites by March 1999, and the commencement of
    construction of the remaining satellites by March 2001. April 1,
    1999 Letter from Aileen A. Pisciotta, counsel to Final Analysis,
    Inc. and Final Analysis Communication Services, Inc., to Roderick K.
    Porter, Acting Chief, International Bureau, FCC (certifying Final
    Analysis's compliance with the initial construction commencement
    milestone in its license). *See also*, *Applications Of The Boeing
    Company*, 18 FCC Rcd 12317, 12327 (Int'l Bur. and OET 2003)
    (showings relevant to in-house manufacturing contracts).

[^17]: *Final Analysis Authorization*, 13 FCC Rcd at 6649.

[^18]: Milestone Extension Request at p. 16.

[^19]: Final Analysis Communication Services, Inc. Amendment to Petition
    for Waiver and Modification to Extend Milestones,
    SAT-AMD-20030606-00112 (filed June 6, 2003) (the "Amendment").

[^20]: Public Notice Report No. SAT-00154, Policy Branch Information,
    Satellite Space Applications Accepted for Filing (June 30, 2003).

[^21]: *See, e.g., MCI Communications Corporation*, 2 FCC Rcd 233, 234
    (Comm Carr. Bur. 1987) ("*MCI Order*") (milestone schedule included
    in each domestic space station authorization issued by the
    Commission).

[^22]: 47 U.S.C. § 319(b).

[^23]: *Amendment of the Commission's Space Station Licensing Rules and
    Policies and Mitigation of Orbital Debris*, First Report and Order
    and Further Notice of Proposed Rulemaking, 18 FCC Rcd 10760, 10828
    (2003) ("*First Space Station Reform Order*"). *See also, Advanced
    Communications Corporation*, Memorandum Opinion and Order, 10 FCC
    Rcd 13337, 13338 (Int'l Bur. 1995); *Policies and Procedures for the
    Licensing of Space and Earth Stations in the Radiodetermination
    Satellite Service*, Second Report and Order, 104 F.C.C.2d 650, 665
    (1986)*.*

[^24]: *Amendment of Part 25 of the Commission's Rules to Establish
    Rules and Policies Pertaining to the Second Processing Round of the
    Non-Voice, Non-Geostationary Mobile Satellite Service*, Report and
    Order, 13 FCC Rcd 9111, 9119 (1997) ("*Second Processing Round
    Order*").

[^25]: 47 C.F.R. § 25.117(e). In the *Third Space Station Reform Order*,
    the Commission moved subsection 25.117(e) to 25.117(c). *Amendment
    of the Commission's Space Station Licensing Rules and Policies and
    Mitigation of Orbital Debris*, Third Report and Order and Further
    Notice of Proposed Rulemaking, IB Dockets No. 02-34 and 02-54, 18
    FCC Rcd 13486 (2003) ("*Third Space Station Reform Order*"). For
    purposes of this Order, we will continue to refer to the subsection
    as 25.117(e) to avoid confusion with the citations in the pleadings
    before us.

[^26]: Milestone Extension Request at p. 8.

[^27]: *Id.*

[^28]: *Id.* at p. 9.

[^29]: *Id.*

[^30]: May 12, 2003 Letter from Randall W. Sifers, Counsel to Final
    Analysis Communication Services, Inc., to Donald Abelson, Chief,
    International Bureau, Federal Communications Commission, at
    Attachment A.

[^31]: *Id.* at Attachment A, Document #5.

[^32]: *Id.* at Attachment A, Document \# 36.

[^33]: *Id.* at Attachment A, Document \# 34, FAISAT System Design
    Status CDR (emphasis added).

[^34]: *Id.*

[^35]: Milestone Extension Request at Summary p. i.

[^36]: *See, e.g.*, *Panamsat Licensee Corp,* Memorandum Opinion and
    Order, 16 FCC Rcd 11534, 11548 (2001).

[^37]: January 28, 2004 *ex parte* Letter from Patricia J. Paoletta,
    counsel to New York Satellite Industries LLC, to Marlene H. Dortch,
    Secretary, FCC, at p.4.

[^38]: *Id.*

[^39]: *Second Processing Round Order*, 13 FCC Rcd at 9125.

[^40]: *Id.* at p. 9124.

[^41]: *Id.* at 9127*.*

[^42]: *See GE American Communications, Inc.*, Order and Authorization,
    16 FCC Rcd 11038, 11041 (Int'l Bur. 2001); *see also*, *Advanced
    Communications Corporation*, 10 FCC Rcd 13337, 13342 (Int'l Bur.
    1995), *aff'd* 11 FCC Rcd 3399 (1995), *aff\'d* *Advanced
    Communications Corp. v. FCC*, 84 F.3d 1452 (D.C. Cir. 1996), *cert.
    denied*, *Advanced Communications Corp. v. FCC*, 519 U.S. 1071
    (1997).

[^43]: September 2001 was the month in which a bankruptcy petition was
    filed against FAI. January 2002 was the month in which the
    bankruptcy trustee sold FAI's assets to NYSI.

[^44]: Amendment to Petition for Waiver at p. 10.

[^45]: *See, e.g.*, *Globalstar, L.P.*, 18 FCC Rcd 1249 (Int'l Bur.
    2003); *Space Station System Licensee, Inc. and Iridium
    Constellation, LLC*, 17 FCC Rcd 2271 (Int'l Bur. 2002);
    *ICO-Teledesic Global Limited*, 16 FCC Rcd 6403 (Int'l Bur. 2001).
    *See also,* Luisia Beltran, "WorldCom Files Largest Bankruptcy
    Ever," CNN/Money, [http://money.cnn.com/2002/07/19/news/worldcom
    bankruptcy](http://money.cnn.com/2002/07/19/news/worldcom bankruptcy)
    (July 22, 2002).

[^46]: *Globalstar, L.P.*, Order and Authorization, 16 FCC Rcd 13739
    (Int'l Bur./Off. Eng'g and Tech. 2001) ("*Globalstar License"*).

[^47]: "Globalstar, Creditors Finalize Agreement On Debt Restructuring
    and New Business Model," News Release, Globalstar L.P., Feb. 15,
    2002.

[^48]: *Globalstar, L.P.*, 18 FCC Rcd 1249 (Int'l Bur. 2003).

[^49]: Emergency Application for Review of Globalstar, L.P., File Nos.
    SAT-LOA-19970926-00151/52/53/54/56, SAT-AMD-20001103-00154,
    SAT-MOD-20020717-00116/17/18/19, SAT-MOD-20020722-00107/08/09/10/12
    (March 3, 2003) ("Globalstar Emergency Application for Review") at
    pp. 7-8, 11-12, 19-22.

[^50]: *Space Station System Licensee, Inc. and Iridium Constellation,
    LLC*, 17 FCC Rcd 2271, 2274 (Int'l Bur. 2002) ("*Iridium
    Assignment*").

[^51]: *Iridium LLC*, Order and Authorization, 16 FCC Rcd 13778 (Int'l
    Bur. 2001).

[^52]: *Id.* at 13791.

[^53]: *Iridium Assignment*, 17 FCC Rcd at 2291.

[^54]: Public Notice, *Satellite Division Information: 2 GHz MSS Systems
    in Compliance with First Milestone Requirement*, Report No.
    SAT-00135, DA 03-386 (released February 10, 2003).

[^55]: Letter of Intent of ICO Services Limited, File No.
    188-SAT-LOI-97; IBFS File Nos. SAT-LOI-19970926-00163.

[^56]: Amendment of Letter of Intent of ICO Services Limited to Access
    the 2 Ghz MSS Frequency Bands, File no. SAT-AMD-20000612-00107 (June
    12, 2000).

[^57]: *ICO Services Limited*, Order, 16 FCC Rcd 13762 (Int'l Bur.
    2001).

[^58]: *Id.* at 13775.

[^59]: Public Notice, *Satellite Division Information: 2 GHz MSS Systems
    in Compliance with First Milestone Requirement*, Report No.
    SAT-00135, DA 03-386 (released February 10, 2003).

[^60]: *Application of Geostar Positioning Corporation*, Memorandum
    Opinion and Order, 6 FCC Rcd 2276 (Comm. Carr. Bur. 1991).

[^61]: *Id.* at 2278.

[^62]: *Id.*

[^63]: *JET-TEL Group Limited Partnership Air-Ground Station KNKG802*,
    Order, 11 FCC Rcd 21215 (Wireless Bur. 1996).

[^64]: *Id.* at 21217.

[^65]: *Id.*

[^66]: *Id.* at 21220.

[^67]: *FCC v. NextWave Personal Communications, Inc*., 123 S. Ct. 832
    (2003) ("*NextWave*").

[^68]: 11 U.S.C § 525(a).

[^69]: *NextWave* 123 S. Ct. at 841 (emphasis in original).

[^70]: Amendment at 4, 10.

[^71]: Amendment at 10.

[^72]: 11 U.S.C. § 303(a) provides for the filing of an involuntary
    petition and § 303(d) provides for a answer to the petition.

[^73]: 11 U.S.C. § 303(h).

[^74]: *See, generally, In re Jr. Food Mart of Arkansas, Inc.*, 234 B.R.
    420, 421 (Bankr. E.D. Ark. 1999).

[^75]: *Id.*, citing 11 U.S.C. § 707(a).

[^76]: 11 U.S.C. § 706(a); *In re Anna Wade Bowman*, 181 B.R. 836, 842
    (Bankr. D. Md. 1995); *Finney v. Smith*, 992 F.2d 43, 44 (4^th^ Cir.
    1993).

[^77]: *Globalstar, L.P.*, Memorandum Opinion and Order, 18 FCC Rcd.
    1249, 1252 (Int'l Bur. 2003). *See also,* *Panamsat License Corp*,
    Memorandum Opinion and Order, 15 FCC Rcd 18720, 18723 (Int\'l Bur.
    2000). We have determined on several occasions that business
    transactions are within the control of the licensee, and so cannot
    justify a milestone extension. For example, we have observed that
    mergers cannot justify a milestone extension request. *MCI Order*, 2
    FCC Rcd at 234; *Columbia Communications Corporation*, Memorandum
    Opinion and Order, 15 FCC Rcd 15566, 15571 n.35 (Int\'l Bur. 2000)
    ("*First Columbia Order*"). We have determined that construction
    contract negotiations cannot justify a milestone extension request.
    *Advanced Communications Corporation*, Memorandum Opinion and Order,
    11 FCC Rcd 3399, 3417 (1995); *First Columbia Order*, 15 FCC Rcd at
    15571 n.35. We have also determined that the filing of a
    modification application does not warrant extension of milestone
    deadlines, as the decision to seek modification of a license is a
    business decision wholly within the control of the licensee. *First
    Columbia Order*, 15 FCC Rcd at 15571; *Advanced Communications
    Corp.*, 10 FCC Rcd at 13341.

[^78]: Amendment at p. 11. Subject to exceptions, the commencement of a
    bankruptcy proceeding by filing a petition for bankruptcy, generally
    operates as a stay against any legal actions to obtain possession of
    property of the bankrupt entity's estate. 11 U.S.C. § 362 (2003).

[^79]: *See* *In re Tonkawa Refining Company*, 502 F.2d 1341, 1343
    (10^th^ Cir. 1974) ("Except in circumstances in which the parent and
    subsidiary are so completely 'one' that the corporate veil may be
    pierced with impunity and technicalities laid aside (not the
    situation here), the tendency of the courts, in general, is to
    interpret their jurisdiction over the debtor parent as limited to
    the parent's property ownership, i.e., to the stock held by the
    parent corporation.").

[^80]: *See* *In re Winer*, 158 B.R. 736, 743 (Bankr. N.D. Ill. 1993)
    (the automatic stay "does not proscribe actions brought against
    nondebtor entities," a doctrine that "applies with equal force even
    where the nondebtor is a corporation wholly owned by the debtor\...
    the debtor cannot invoke the automatic stay just because the action
    against the nondebtor subsidiary will impact on the value of the
    debtor's stock").

[^81]: We note that the trustee filed comments in support of the
    application to transfer the Final Analysis licensee from Final
    Analysis, Inc. to New York Satellite. *See* Letter from Cheryl E.
    Rose, Chapter 7 Trustee for the Estate of Final Analysis, Inc. to
    Marlene H. Dortch, Secretary, Federal Communications Commission
    (April 22, 2002) (filed with Application of Final Analysis
    Communication Services, Inc. For Authority to Transfer Control of
    NVNG MSS License to New York Satellite Industries, L.L.C., File No.
    SAT-T/C-20020125-00010).

[^82]: Amendment at p. 12.

[^83]: *Id.*

[^84]: January 9, 2002 letter from James M. Hoffman, counsel to
    bankruptcy trustee Cheryl E. Rose, to George N. Grammas and Ann E.
    Schmitt, counsel to Final Analysis Communication Services, Inc.

[^85]: January 9, 2002 letter from George N. Grammas, counsel to Final
    Analysis Communication Services, Inc. James M. Hoffman, counsel to
    bankruptcy trustee Cheryl E. Rose.

[^86]: January 9, 2002 letter from James M. Hoffman, counsel to
    bankruptcy trustee Cheryl E. Rose, to George N. Grammas and Ann E.
    Schmitt, counsel to Final Analysis Communication Services, Inc.

[^87]: *See* 11 U.S.C. § 363.

[^88]: 11 U.S.C. § 363(e) ("Notwithstanding any other provision of this
    section, at any time, on request of an entity that has an interest
    in property used, sold, or leased, or proposed to be used, sold, or
    leased, by the trustee, the court, with or without a hearing, shall
    prohibit or condition such use, sale, or lease as is necessary to
    provide adequate protection of such interest.").

[^89]: Amendment at p. 19.

[^90]: Milestone Extension Request at pp. 8-9.

[^91]: As the Court of Appeals recognized in *LaRose v. FCC,* 494 F.2d
    1145, 1146 n.2 (D.C. Cir. 1974): "\[T\]he Commission should assure
    that licensees do not use bankruptcy as a means of circumventing
    their obligation to operate in the public interest."

[^92]: *See NextWave*, 112 S. Ct. at 840.

[^93]: *White Crane Trading Company, Inc.*, 170 B.R. 694, 702 (Bankr.
    E.D. Ca. 1994); *see also Palmer v. Webster & Atlas National Bank of
    Boston*, 312 U.S. 156, 163 (1941) ("No good reason is perceived why
    a receiver should be permitted to operate under such an advantage as
    against his competitors not in receivership.").

[^94]: *See* ITAR Regulations, codified at 22 C.F.R. §§ 120-130.

[^95]: Strom Thurmond National Defense Authorization Act for Fiscal Year
    1999, Public Law 105-261 (October 17, 1998), 112 Stat 1920, at
    Section 1511.

[^96]: 22 C.F.R. § 124.15 (2003)

[^97]: *See* Final Analysis Communication Services, Inc., Amendment to
    Application, File No. 7-SAT-AMEND-97 at p. 62 (filed October 30,
    1997).

[^98]: We note that not only was this business decision by Final
    Analysis wholly within its control, the amount of time required for
    the recent State Department approval was foreseeable. Final Analysis
    emphasizes what it asserts were processing delays at the State
    Department in its effort to obtain the second TAA that was made
    necessary by the change in Final Analysis's ownership. In support of
    its Milestone Extension Request, Final Analysis submitted extensive
    correspondence it had with the State Department. We note that the
    same Final Analysis officers and counsel were involved with both the
    recent application to the State Department and Final Analysis's
    prior application. We observe that while the first application took
    approximately seven months to prosecute, the second application took
    just seven and one-half months to prosecute. The first application
    was submitted on April 15, 1999 and was granted on November 18,
    1999; the second application was submitted on September 26, 2002 and
    granted on May 14, 2003. Both TAAs were authorized to expire on
    December 31, 2005. The difference in processing time is negligible.

[^99]: Amendment at p. 16.

[^100]: *See* ¶ 5, *supra.*

[^101]: Amendment at pp. 16-17.

[^102]: *National Exchange Satellite, Inc. Application for Extension of
    Time to Construct and Launch Space Stations in the Domestic
    Fixed-Satellite Service*, Memorandum Opinion and Order, 7 FCC Rcd
    1990, 1991 (Comm. Car. Bur. 1992) ("*NEXSAT Milestone Order*").

[^103]: *Id.*

[^104]: *NEXSAT Milestones Order*, 7 FCC Rcd at 1992.

[^105]: *See NetSat 28 Company, L.L.C.*, Memorandum Opinion and Order,
    16 FCC Rcd 11025 (Int'l Bur. 2001); *EarthWatch Incorporated*, Order
    and Authorization, 15 FCC Rcd 13594, 13597-98 (Int'l Bur. 2000).

[^106]: *See* note 10, *supra*.

[^107]: *See, e.g., GE American Communications, Inc.*, Order and
    Authorization, 16 FCC Rcd 11038, 11041 (Int'l Bur. 2001); *AMSC
    Subsidiary Corporation*, Memorandum Opinion and Order, 8 FCC Rcd
    4040, 4042 (1993).

[^108]: Amendment at p. 20.

[^109]: *See, e.g., Amendment of the Commission's Space Station
    Licensing Rules and Policies and Mitigation of Orbital Debris*,
    First Report and Order and Further Notice of Proposed Rulemaking, IB
    Dockets No. 02-34 and 02-54, 18 FCC Rcd 10760, 10826 (2003) ("*First
    Space Station Reform Order*").

[^110]: *PanAmSat Licensee Corp.*, Memorandum Opinion and Order, 16 FCC
    Rcd 11534, 11538 (2001); *NEXSAT Milestones Order*, 7 FCC Rcd at
    1991; *MCI Order*, 2 FCC Rcd at 233.

[^111]: *Id.* at 10774-90.

[^112]: December 11, 2003 *ex parte* Letter from Patricia J. Paoletta,
    counsel to New York Satellite Industries LLC, to Marlene H. Dortch,
    Secretary, FCC, at p.2.

[^113]: *Second Processing Round Order*, 13 FCC Rcd at 9117.

[^114]: 47 C.F.R. §§ 25.157 and 25.158.

[^115]: *First Space Station Reform Order*, 18 FCC Rcd at 10836.

[^116]: *Id.*, 18 FCC Rcd at 10835.

[^117]: *Final Analysis Authorization*, 13 FCC Rcd at 6649.