Before the

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

Washington, D.C. 20554

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| In the Matter of                 | * | File Nos.                    |
|                                  | * | 198/199-SAT-P/LA-95          |
| **PANAMSAT LICENSEE CORP.**      | ) |                              |
|                                  | * | New IBSF No.                 |
| Application for Authorization to | * | SAT-LOA-19950929-00155/54;   |
| Construct, Launch, and Operate a |   | 202-SAT-AMEND-95             |
| Ka-Band Communications Satellite | * |                              |
| System in the Fixed-Satellite    | * | New IBSF No.                 |
| Service at Orbital Locations 58º | ) | SAT-AMD-19950929-00109       |
| W.L. and 125º W.L.               | * |                              |
|                                  | * | File No.                     |
| Applications for Modification of |   | SAT-MOD-19980521-00070       |
| License and for                  | * |                              |
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| Extension of Milestone Schedule  | ) |                              |
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**MEMORANDUM OPINION AND ORDER**

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

By the Chief, International Bureau:

# 

# I. INtroduction

1\. In this Order, we cancel PanAmSat Licensee Corp.'s ("PanAmSat")
authorization to construct, launch, and operate a Ka-band satellite
system in the fixed-satellite service. PanAmSat has failed to satisfy
the initial, mandatory implementation milestone explicitly set forth in
its authorization requiring it to begin construction of its satellite
system by May 1998. Consequently, we render PanAmSat's authorization
null and void, and the orbit locations that had been assigned to
PanAmSat are available for reassignment to a qualified applicant in the
second Ka-band "processing round." As a result, we also dismiss
PanAmSat's Applications for Modification of License and for Extension of
Milestone Schedule.

II\. BACKGROUND

2\. On May 9, 1997, the Chief, International Bureau, pursuant to
delegated authority, authorized PanAmSat to construct, launch, and
operate two geostationary-orbit satellites to provide fixed-satellite
service in the United States in the 19.7-20.2, 28.35-28.6, and
29.25-30.0 GHz frequency band ("Ka-band").[^1] This authorization was
granted as part of the first "processing round" of Ka-band systems. In
the first round, the Bureau authorized a total of 14 Ka-band systems,
including PanAmSat's Ka-band system.[^2] PanAmSat proposed to use its
satellite system to offer a broad range of video programming as well as
a range of data and voice services.[^3]

3\. PanAmSat's license, like all instruments of authorization granted to
Ka-band satellite system licensees in the fixed-satellite service, was a
conditional license. It contained explicit deadlines or "milestones" for
system implementation that PanAmSat was required to satisfy. PanAmSat's
authorization expressly articulated that the Commission intends "to
rigorously enforce the system milestone schedule \... to ensure that
PanAmSat proceeds in a timely manner and does not tie up valuable
orbital locations and spectrum to the exclusion of other qualified
applicants."[^4]

4\. PanAmSat's authorization specified the following mandatory system
implementation milestones upon which PanAmSat's license was conditioned:

... unless extended by the Commission for good cause shown, this
authorization

shall become NULL AND VOID in the event the space station is not
constructed, launched,

and successfully placed into operation in accordance with the technical
parameters and terms

and conditions of the authorizations by the following dates:[^5]

Construction Construction

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

PAS 10 May 1998 April 2002 May 2002

PAS 11 May 1999 April 2002 May 2002

5\. On May 21, 1998, more than a year after the captioned authorization
was granted, PanAmSat filed an application to modify its authorization
to permit the use of inter-satellite links ("ISLs").[^6] PanAmSat
requested the ISLs in order to integrate its two satellites with seven
other authorized Ka-band satellites acquired from Hughes Communications
Galaxy, Inc.[^7] PanAmSat noted that the Hughes satellite authorizations
did not contain milestone schedules because they contemplated the use of
ISLs for which the Commission had not yet assigned spectrum. PanAmSat
acknowledged that although it had not requested ISLs when it originally
filed its Ka-band application, the acquisition of the Hughes
authorizations made it necessary for PanAmSat to modify its system.
Consequently, PanAmSat also asked the Commission to suspend the
milestone schedule in its authorization pending the assignment of ISL
spectrum and the grant of an amended authorization.[^8]

6\. By letter, dated December 9, 1999, the Chief, Satellite and
Radiocommunication Division, International Bureau, asked PanAmSat to
substantiate its compliance with the first implementation milestone
requiring the commencement of construction by May 1998. The letter
reminded PanAmSat that:

The Commission requires the execution of a non-contingent construction
contract to satisfy the construction commencement milestone of domestic
satellite licenses. The non-contingent requirement contemplates that
there will be neither significant delays between the execution of the
construction contract and the actual commencement of

construction, nor conditions precedent to construction.[^9]

7\. In its response, PanAmSat acknowledged the May 1998 construction
commencement milestone in its authorization and the requirement to
timely enter into a non-contingent construction contract in order to
satisfy this milestone. Nevertheless, PanAmSat represented, among other
things, that "\[b\]ecause of regulatory uncertainties regarding the
\[ISL\] frequencies that can be used on PanAmSat's Ka-band satellites
\... PanAmSat has not been in a position to enter into 'non-contingent
contracts' for the construction of either of the two licensed satellites
identified in \[its authorization\]."[^10] PanAmSat further explained
that "\[u\]ntil PanAmSat's modification request is acted upon and, if
granted, until a final ISL spectrum assignment is made, PanAmSat cannot
finalize the design of its system and, therefore, it cannot proceed to
construct and launch its Ka-band satellites."[^11]

**III. DISCUSSION**

8\. It is long-standing Commission policy to impose mandatory
construction commencement milestones upon licensees in the
fixed-satellite service.[^12] The milestone schedule included in each
authorization is designed to ensure that licensed entities are
proceeding with construction and will launch their satellites into the
limited orbit spectrum resource in a timely manner. Requiring licensees
to adhere strictly to a milestone schedule prevents orbital locations
from being warehoused by licensees to the exclusion of qualified
entities that are prepared to implement systems immediately.[^13]
Moreover, the Commission has consistently required licensees to execute
non-contingent satellite construction contracts in order to meet their
construction commencement milestones.[^14] Because it is manifestly in
the public interest to ensure that licensees proceed expeditiously in
completing construction of their systems and commencing service, the
Commission has strictly enforced its milestone schedules.[^15]

9\. By its terms, PanAmSat's authorization required PanAmSat to commence
construction of its satellite system no later than May 1998. To meet
this milestone, PanAmSat was required to have entered into a
non-contingent construction contract executed on or before May 9, 1998.
PanAmSat concedes that it did not do so on the basis of its pending
modification and extension applications.

10\. PanAmSat's reliance on its pending license modification and
extension applications as a basis for failing to satisfy the first of
its milestones is without merit. It is well established that an
extension of a milestone schedule is granted only when delay in
implementation is due to circumstances beyond the licensee's
control.[^16] The filing of a license modification application does not
justify an extension of a milestone schedule because the decision to
seek a modification of one's license is a business decision wholly
within the discretion and control of the licensee.[^17] Otherwise, a
licensee could routinely extend its milestone deadlines by filing
repeated modification requests for its system. Moreover, the "regulatory
uncertainties" referenced by PanAmSat relate to the modifications that
PanAmSat voluntarily proposed to its system, not to the system
authorized in its license. In other words, PanAmSat could have satisfied
the initial milestone by entering into a non-contingent construction
contract by May 9, 1998, if it so desired; it chose, at its peril, not
to do so.

11\. PanAmSat's authorization expressly provided that, unless extended
upon a showing of good cause, the license would become null and void in
the event PanAmSat failed to satisfy any one of the milestones. PanAmSat
voluntarily refrained from entering into a timely non-contingent
construction contract apparently in the misguided belief that the
Commission would eventually act favorably on its extension request.
Indeed, it filed its extension request just days before the expiration
of its initial milestone. We find, however, based on the foregoing, no
good cause for extending, suspending or otherwise waiving PanAmSat's
milestone schedule in this instance.

**IV. CONCLUSION AND ORDERING CLAUSES**

12\. Based on the foregoing, we find that PanAmSat failed to meet the
May 1998 construction commencement deadline and there is no basis
presented for relieving PanAmSat of its obligation to meet this
milestone.

13\. Accordingly, IT IS ORDERED that, pursuant to Section 0.261 of the
Commission's rules, 47 C.F.R. § 0.261, the authorization held by
PanAmSat Licensee Corp., File Nos. 198/199-SAT-P/LA-95 and
202-SAT-AMEND-95, IBSF Nos. SAT-LOA-19950929-00155/54 and
SAT-AMD-19950929-00109, IS DECLARED NULL AND VOID.

14\. IT IS FURTHER ORDERED that the above-captioned application for
modification of license and extension of milestone schedule, filed by
PanAmSat Licensee Corp. on May 21, 1998, File No.
SAT-MOD-19980521-00070, IS DENIED.

15\. IT IS FURTHER ORDERED that the Petition to Deny, filed on August
26, 1999, by Pacific Century Group, Inc. IS DISMISSED AS MOOT.

16\. IT IS FURTHER ORDERED that orbital assignments granted in *PanAmSat
Licensee Corp.,* 13 FCC Rcd 1405 (Int'l Bur. 1997), are available for
reassignment.

**FEDERAL COMMUNICATIONS COMMISSION**

Donald Abelson

Chief, International Bureau

[^1]: *PanAmSat Licensee Corp.,* 13 FCC Rcd 1405 (Int'l Bur. 1997).

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

[^3]: *PanAmSat Licensee Corp*., 13 FCC Rcd at 1406.

[^4]: *PanAmSat Licensee Corp*., 13 FCC Rcd at 1409.

[^5]: *Id*. at 1414.

[^6]: PanAmSat Licensee Corporation, File No. SAT-MOD-19980521-00070.
    PanAmSat's license modification was the subject of a Petition to
    Deny, filed on August 26, 1999, by Pacific Century Group, Inc. Given
    our action herein, the Petition to Deny and related filings are
    dismissed as moot.

[^7]: *Hughes Communications, Inc. and Affiliated Companies*, 12 FCC Rcd
    7534 (1997).

[^8]: PanAmSat Licensee Corp., Application for Extension of Time, File
    No. SAT-MOD-19980521-00070, filed May 21, 1998.

[^9]: Letter, dated December 9, 1999, from Thomas S. Tycz, Chief,
    Satellite and Radiocommunication Division, FCC, to Joseph A. Godles,
    Esq., Counsel for PanAmSat, citing Norris Satellite Communications,
    Inc., 12 FCC Rcd 22299, 22303-04 (1997).

[^10]: Letter, dated December 20, 1999, from Joseph A. Godles, Esq.,
    Counsel for PanAmSat, to Magalie R. Salas, Secretary, FCC.

[^11]: *Id*. at 2.

[^12]: *See, e.g., Norris Satellite Communications, Inc.*, 12 FCC Rcd
    22299 (1997).

[^13]: *MCI Communications Corporation*, 2 FCC Rcd 233 (CCB 1987).

[^14]: *Norris Satellite Communications, Inc.*, 12 FCC Rcd at 22303.

[^15]: *See, e.g.,* *National Exchange Satellite, Inc.*, 8 FCC Rcd 636
    (1993); *Advanced Communications Corporation*, 10 FCC Rcd 13337
    (Int'l Bur. 1995).

[^16]: *MCI Communications Corp.*, 2 FCC Rcd 233 (Com. Car. Bur. 1987).

[^17]: *Columbia Communications Corporation*, DA 00-113 (rel. Jan. 21,
    2000) at ¶ 12; *Advanced Communications Corporation*, 10 FCC Rcd
    10,337, 13,341 (Int'l Bur. 1995); *National Exchange Satellite*, 8
    FCC Rcd 636 (1993); *AT&T and Ford AeroSpace Satellite Services*, 2
    FCC Rcd 4431 (1987) (request for additional time to conform
    satellites acquired from Ford to AT&T's business plan denied).