**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+---------------------------------+---+----------------------------------+
| In the Matter of                | ) | File No. EB-06-IH-2018           |
|                                 |   |                                  |
| **INTELSAT NORTH AMERICA LLC**  | ) | NAL Account No. 200632080167     |
|                                 |   |                                  |
| Licensee of Various C-band and  | ) | FRN No. 0013088984               |
| Ku-band Geostationary           |   |                                  |
| Satellites                      | ) |                                  |
|                                 |   |                                  |
|                                 | ) |                                  |
|                                 |   |                                  |
|                                 | ) |                                  |
+---------------------------------+---+----------------------------------+

## NOTICE OF APPARENT LIABILITY FOR FORFEITURE {#notice-of-apparent-liability-for-forfeiture .unnumbered}

**Adopted: August 16, 2006 Released: August 16, 2006**

By the Chief, Investigations and Hearings Division, Enforcement Bureau:

# INTRODUCTION

1.  In this *Notice of Apparent Liability for Forfeiture* (\"*NAL*\"),
    we find that Intelsat North America LLC ("Intelsat"), licensee of
    various C-band and Ku-band Geostationary Satellites, apparently
    violated Section 1.17 of the Commission's rules (relating to
    truthful and accurate statements to the Commission) by making
    incorrect and/or misleading certifications without a reasonable
    basis for doing so in an application to relocate one of its
    satellites. Specifically, Intelsat erroneously certified to the
    Commission that it was relocating a satellite to 178.0˚ E.L. and
    that the satellite's operation at that location would be in
    accordance with all applicable coordination agreements, and the
    Commission relied on this certification in allowing Intelsat to
    modify its license. Intelsat apparently made the required
    certifications without reviewing the entire applicable
    collocation/coordination agreement for the proposed destination. The
    incorrect certification resulted in Intelsat relocating the
    satellite without having followed the proper procedures to obtain
    approval to do so. For the reasons explained below, because Intelsat
    failed to exercise the requisite diligence in the application
    process, we conclude that Intelsat is apparently liable for a
    forfeiture in the amount of \$11,000.

# BACKGROUND

2.  On August 17, 2005, Intelsat filed an application entitled, "Fleet
    Management Notice of Intelsat North America LLC of Modification of
    Authorization for INTELSAT 604" to relocate one satellite in its
    fleet from 157.0˚ E.L. to 178.0˚ E.L.[^1] Intelsat filed this notice
    under the authority of Section 25.118 of the Commission's rules,
    which provides a streamlined procedure for satellite fleet operators
    to request authority to move satellites to alternative authorized
    locations provided that the licensee makes certain required
    certifications. [^2] As part of its application, Intelsat certified
    to the Commission that it was moving its spacecraft to 178˚ E.L. and
    that it would "comply with all applicable coordination agreements at
    the newly occupied orbital location" and that it has "completed any
    necessary coordination of its space station at the new location with
    potentially affected space station operators."[^3] Based on these
    certifications, the International Bureau, on September 16, 2005,
    modified Intelsat's authorization to reflect this change in
    authorized location.[^4]

3.  On January 30, 2006, Intelsat filed a request for a Special
    Temporary Authority to stop the drift of its Intelsat 604 spacecraft
    and to now operate the satellite at 177.85˚ E.L. before reaching its
    authorized destination, 178.0° E.L.[^5] Intelsat made this request
    after discovering that a 2001 collocation/coordination agreement
    between Intelsat and Inmarsat, the operator of a nearby satellite,
    actually precluded Intelsat's operation of its Intelsat 604
    satellite at the 178.0° E.L. location.[^6] The International Bureau,
    on January 30, 2006, granted Intelsat's request for special
    temporary authority but informed Intelsat that it was doing so
    without prejudice to any enforcement action that may be appropriate
    with respect to certifications made in the *August 17, 2005, Fleet
    Management Notice*.[^7]

4.  On June 21, 2006, the FCC's Enforcement Bureau issued a letter of
    inquiry to Intelsat directing Intelsat to*, inter alia*, explain the
    basis for its August 17, 2005, certification that operation of its
    Intelsat 604 spacecraft at the 178.0˚ E.L. orbital location would be
    in accordance with applicable coordination agreements and state when
    it learned that such agreements precluded such operation.[^8] The
    letter of inquiry also directed Intelsat to provide copies of the
    coordination agreements at issue.[^9] On July 20, 2006, Intelsat
    responded to the letter of inquiry.[^10] In its response, Intelsat
    indicated that it was precluded from operating its Intelsat 604
    spacecraft at the authorized destination by a 2001
    collocation/coordination agreement with Inmarsat, the operator of a
    satellite that was in the vicinity of 178.0˚ E.L.[^11] It further
    explained that the persons responsible for certifying that the
    operation at the proposed destination, 178.0˚ E.L., forgot about the
    collocation portion of Intelsat's collocation/coordination agreement
    with Inmarsat.[^12] This agreement provided for both the spacing
    between Intelsat and Inmarsat satellites and the technical
    parameters relating to frequency use by both satellites.[^13]

5.  Finally, Intelsat states that, on January 31, 2006, the day after
    this error was discovered, Intelsat took steps to prevent any future
    errors of this type.[^14] Specifically , Intelsat states that
    appropriate employees, at the direction of Intelsat's general
    counsel, have prepared a chart identifying all orbital locations
    subject to collocation agreements for its use when considering
    future moves of this type.[^15]

# DISCUSSION

6.  The Commission has adopted fleet management procedures to streamline
    the processing of satellite fleet management modifications.[^16] The
    procedures adopted under Section 25.118(e) of the Commission\'s
    rules allow a satellite operator to rearrange satellites in its
    fleet among its assigned orbital locations to reflect business and
    customer considerations where no other public interest factors are
    adversely affected.[^17] Accordingly, a space station operator may
    modify its license to this end without prior authorization, but upon
    30 days prior notice to the Commission and to any potentially
    affected licensed spectrum user.[^18] To ensure that the streamlined
    procedure is used only in the most appropriate circumstances, the
    Commission requires the operator to certify that it meets nine
    specific requirements.[^19] Among the requirements are that the
    licensee certify that the satellite in question will be located at a
    location assigned to the licensee, that the satellite will operate
    in accordance with all applicable coordination agreements at the
    proposed destination, and that the satellite licensee has completed
    any necessary coordination of its satellite at the new location with
    other potentially affected space station operators.[^20] In this
    case, if Intelsat had submitted accurate information (particularly
    with respect to its coordination agreements), which all Commission
    licensees are expected to do, its application for streamlined
    treatment would have been dismissed or denied. Instead, the
    Commission approved Intelsat's request for modification based on
    Intelsat's certifications, which apparently were untrue.

7.  Based on our review of the record, we find that Intelsat apparently
    violated Section 1.17 of the Commission's rules[^21] by making
    erroneous certifications in the process of relocating its Intelsat
    604 spacecraft. This rule provides in pertinent part:

> \(a\) . . . no \[Applicant for any Commission authorization\] shall .
> . .\
> \
> (2) in any written statement of fact, provide material factual
> information that is incorrect or omit material information that is
> necessary to prevent any material factual statement that is made from
> being incorrect or misleading without a reasonable basis for believing
> that any such material factual statement is correct and not
> misleading.[^22]

Thus, Intelsat was required to have a reasonable basis to believe its
certifications to the Commission in the *August 17, 2005, Fleet
Management Notice* were correct and not misleading.[^23] In this
instance, however, Intelsat did not comply with this requirement.

8.  While Intelsat concedes committing error in its submissions to the
    Commission, it contends that its actions do not rise to the level of
    a Section 1.17 violation for two reasons. First, Intelsat argues
    that its certifications to the Commission were technically
    correct.[^24] Intelsat asserts that industry practice distinguishes
    between "collocation" and "coordination."[^25] Therefore, according
    to Intelsat, when the company's employees referred only to the
    frequency coordination portion of the 2001 agreement in certifying
    that Intelsat was in compliance with all "coordination" agreements
    and had "coordinated" the new location with other satellite
    operators, those statements were literally true. We disagree.
    Intelsat's interpretation of Section 25.118(e) would eliminate the
    need for coordination of the physical location of satellites
    altogether, a position altogether at odds with the purpose and goals
    of the rule provision. Regardless of any distinction in "industry
    practice" between "collocation" and "coordination," we conclude that
    Intelsat's employees reasonably should have reviewed the company's
    entire agreement with Inmarsat before making the certifications to
    the Commission.

9.  Second, Intelsat asserts that even if the Section 25.118
    certification is read to encompass both coordination of frequencies
    and location, Section 1.17 of the Commission's rules does not create
    strict liability for erroneous representations, but simply requires
    a reasonable basis for making any representations in a written
    statement to the Commission.[^26] According to Intelsat, because the
    employee who actually made the certifications consulted with company
    personnel with specialized knowledge of the applicable
    agreements[^27] and was assured that the relocation was in keeping
    with applicable coordination agreements,[^28] Intelsat exercised the
    diligence required by Section 1.17.

10. We disagree with the assertion that such cursory consultation
    constitutes due diligence under these circumstances. It is incumbent
    on satellite operators making Section 25.118(e) certifications to
    fully and thoroughly review all applicable agreements to determine
    the accuracy of information to be certified to the Commission; it is
    not sufficient to merely rely on the recollection of company
    personnel of matters contained in written agreements. As the
    Commission has stated, "\[we rely\] heavily on the truthfulness and
    accuracy of the information provided to us. If information submitted
    to us is incorrect, we cannot properly carry out our statutory
    responsibilities."[^29] Intelsat's perfunctory review of the 2001
    agreement resulted in a significant error, which placed its
    satellite and that of Inmarsat in danger of operating in unsafe
    proximity. Only after Intelsat began moving its satellite did it
    learn of its mistake,[^30] and then only when an Inmarsat employee
    sought confirmation that Intelsat was moving its satellite to the
    location designated in the 2001 agreement. At that point, Intelsat
    realized it had erred and took corrective measures.[^31]

11. Section 503(b)(1) of the Communications Act of 1934, as amended, 47
    U.S.C. § 503(b)(1), provides that any person who willfully or
    repeatedly fails to comply substantially with the terms and
    conditions of any license, or willfully or repeatedly fails to
    comply with any of the provisions of the Act or of any rule,
    regulation or order issued by the Commission thereunder, shall be
    liable for a forfeiture penalty. The term \"willful\" as used in
    Section 503(b)(1) has been interpreted to mean simply that the acts
    or omissions are committed knowingly.[^32] Based on the evidence
    before us, we find that Intelsat apparently provided to the
    Commission in conjunction with its *August 17, 2005, Fleet
    Management Notice* material factual information that was incorrect
    and/or misleading without having a reasonable basis for making the
    representations contained therein, in violation of Section 1.17 of
    the Commission's rules.

12. Pursuant to Section 1.80 of the Commission's rules,[^33] the base
    forfeiture amount for misrepresentations or lack of candor is the
    statutory maximum or, in this case, \$11,000.[^34] Section
    1.80(b)(4) of the Commission's rules also specifies that, in
    determining the amount of a forfeiture penalty, the Commission or
    its designee will take into account \"the nature, circumstances,
    extent, and gravity of the violations and, with respect to the
    violator, the degree of culpability, any history of prior offenses,
    ability to pay, and such other matters as justice may
    require.\"[^35] The Commission takes very seriously the requirement
    that applicants and licensees provide truthful and accurate
    information at all times. In light of Intelsat's ability to
    pay,[^36] and the seriousness of this violation as described above,
    we find that the base amount is appropriate in this instance. Under
    these circumstances, we believe that a forfeiture in the amount of
    \$11,000 is warranted.

# ORDERING CLAUSES

13. ACCORDINGLY, IT IS ORDERED that, pursuant to Section 503(b) of the
    Communications Act of 1934, as amended, and Sections 0.111, 0.311,
    0.314, and 1.80 of the Commission\'s Rules, Intelsat North America
    LLC is hereby NOTIFIED of its APPARENT LIABILITY FOR A FORFEITURE in
    the amount of eleven thousand dollars (\$11,000) for willfully
    violating Section 1.17 of the Commission's rules.

14. IT IS FURTHER ORDERED that, pursuant to Section 1.80 of the
    Commission\'s rules, within 30 days of the release date of this
    *Notice of Apparent Liability for Forfeiture*, Intelsat North
    America, LLC SHALL PAY the full amount of the proposed forfeiture or
    SHALL FILE a written statement seeking reduction or cancellation of
    the proposed forfeiture.

15. Payment of the forfeiture must be made by check or similar
    instrument, payable to the order of the Federal Communications
    Commission.  The payment must include the NAL Acct. No. and FRN No.
    referenced in the caption.  Payment by check or money order may be
    mailed to Federal Communications Commission, P.O.
    Box 358340, Pittsburgh, PA 15251-8340.  Payment by overnight mail
    may be sent to Mellon Bank /LB 358340, 500 Ross Street, Room
    1540670, Pittsburgh, PA 15251.   Payment by wire transfer may be
    made to ABA Number 043000261, receiving bank Mellon Bank, and
    account number 911-6106.

16. IT IS FURTHER ORDERED that the response, if any, shall be mailed to
    William H. Davenport, Chief, Investigation and Hearings Division,
    Enforcement Bureau, Federal Communications Commission, 445 12^th^
    Street, S.W., Suite 4-C330, Washington, D.C. 20554, and must include
    the NAL/Acct. No. referenced in the caption.

17. IT IS FURTHER ORDERED that the Commission shall not consider
    reducing or canceling a forfeiture in response to a claim of
    inability to pay unless the respondent submits: (1) federal tax
    returns for the most recent three-year period; (2) financial
    statements prepared according to generally accepted accounting
    practices ("GAAP"); or (3) some other reliable and objective
    documentation that accurately reflects the respondent's current
    financial status. Any claim of inability to pay must specifically
    identify the basis for the claim by reference to the financial
    documentation submitted.

18. Requests for payment of the full amount of this *NAL* under an
    installment plan should be sent to: Associate Managing Director \--
    Financial Operations, Federal Communications Commission, 445 12th
    Street, S.W., Room 1-A625, Washington, DC 20554.[^37]

19. IT IS FURTHER ORDERED that a copy of this Notice of Apparent
    Liability for Forfeiture shall be sent by Certified Mail - Return
    Receipt Requested, and regular mail, to the attention of Robert
    Pettit, Esquire, Wiley Rein & Fielding LLP, 1776 K Street, N.W.,
    Washington D.C. 20006, counsel for Intelsat North America LLC.; and
    to the licensee.

FEDERAL COMMUNICATIONS COMMISSION

William H. Davenport

Chief, Investigations and Hearings Division

Enforcement Bureau

[^1]: *See Fleet Management Notice of Intelsat North America LLC of
    Modification of Authorization for INTELSAT 604,* IBFS File Number
    SAT-MOD-20050817-00161 filed August 17, 2005 ("*August 17, 2005,
    Fleet Management Notice*"). Intelsat operates a fleet of
    geostationary satellites in the C-band and the Ku-band. *Id.* at
    1-2.

[^2]: 47 C.F.R. § 25.118.

[^3]: *August 17, 2005, Fleet Management Notice,* Exhibit 2.

[^4]: *See* Public Notice*, "*Policy Branch Information,*"* 20 FCC Rcd
    15816, 15817-18 (2005).

[^5]: Section 25.210(j) requires that the satellite operate within 0.05˚
    of its assigned location. *See* 47 C.F.R. § 25.210(j). Intelsat's
    request involved moving the Intelsat 604 spacecraft 0.15˚ from its
    assigned location.

[^6]: *See Request for Special Temporary Authority Intelsat 604*,
    SAT-STA-20060130-00011 filed January 30, 2006.

[^7]: Attachment to STA Grant dated January 30, 2006.

[^8]: Letter from William H. Davenport, Chief, Investigations and
    Hearings Division, Enforcement Bureau, Federal Communications
    Commission, to Intelsat North America LLC dated June 21, 2006.

[^9]: *See id*. at 5.

[^10]: *See* Letter from Robert L. Pettit, Esq., Wiley Rein & Fielding
    LLP, counsel for Intelsat North America LLC, to Jennifer Lewis,
    Assistant Chief, Investigations and Hearings Division, Enforcement
    Bureau, Federal Communications Commission, dated July 20, 2006
    ("Response"). *See also* Letter from Robert L. Pettit, Esq., Wiley
    Rein & Fielding LLP, counsel for Intelsat North America LLC, to
    Jennifer Lewis, Assistant Chief, Investigations and Hearings
    Division, Enforcement Bureau, Federal Communications Commission,
    dated July 25, 2006 (transmitting two additional affidavits relating
    to the Response). Intelsat requested confidential treatment of its
    Response, including electronic mail and other documents relevant to
    the planning operation of its Intelsat 604 spacecrafts at the 178.0
    E.L. location. We do not rule on Intelsat's request at this time
    because it is unnecessary to do so for purposes of this Order.
    Consistent with the request, however, we limit ourselves to
    describing or characterizing the substance of the materials and
    providing record citations herein, rather than actually quoting the
    materials or otherwise incorporating them into the Order.

[^11]: *See* Response at 8.

[^12]: *See id*. at 10.

[^13]: *See id* at 9.

[^14]: *See id*. at 12.

[^15]: *See id*.

[^16]: *See* *Amendment of the Commission\'s Space Station Licensing
    Rules and Policies*, Second Report and Order, 18 FCC Rcd 12507
    (2003); *see also* Letter from Thomas S. Tycz, Chief, Satellite
    Division, to David K. Moskowitz, Esq., Executive Vice President and
    General Counsel, EchoStar Satellite LLC, 20 FCC Rcd 9156, 9157
    (2005) (dated May 19, 2005).

[^17]: *See* *Amendment of the Commission\'s Space Station Licensing
    Rules and Policies*, 18 FCC Rcd at 12509-10, ¶ 7.

[^18]: *See id.* at 12511, ¶ 9.

[^19]: S*ee* 47 C.F.R. § 25.118(e)(1)-(9).

[^20]: *See* 47 C.F.R. § 25.118(e)(1), (4)-(5).

[^21]: 47 C.F.R. § 1.17.

[^22]: *Id.*

[^23]: *See Amendment of Section 1.17 of the Commission's Rules
    Concerning Truthful Statements to the Commission,* Report and Order,
    18 FCC Rcd 4016, 4021 ¶ 10 (2003) (reasonableness depends on the
    circumstances under which a written statement is made to the
    Commission, and the Commission described its standard as akin to a
    negligence standard), *recon. denied,* Memorandum Opinion and Order,
    19 FCC Rcd 5790, *further recon. denied,* Memorandum Opinion and
    Order, 20 FCC Rcd 1250 (2004). *See also* Letter from Peter H.
    Doyle, Chief, Audio Services Division, Media Bureau, Federal
    Communications Commission, to Lee W. Shupert, Esq., KMZ Roseman,
    counsel for ICS Holdings, Inc., DA 06-1427, 2006 WL 1911076 (MB/ASD
    rel. July 12, 2006) (admonishing applicant in a renewal application
    proceeding for minor technical violation of Section 1.17 and
    cautioning applicant to be more attentive to applicant
    certifications in the future as a false statement, even absent an
    intent to deceive, constitutes an actionable violation of Section
    1.17 of the Commission's rules).

[^24]: *See* Response at 9.

[^25]: *Id.*

[^26]: *See id*. at 11.

[^27]: *See id*.

[^28]: *See id.*

[^29]: *See Amendment of Section 1.17 of the Commission's Rules
    Concerning Truthful Statements to the Commission,* Notice of
    Proposed Rulemaking, 17 FCC Rcd 3296, 3297 ¶ 3 (2002) (subsequent
    history omitted).

[^30]: Response at 2.

[^31]: Response at 8.

[^32]: Section 312(f)(1) of the Communications Act, or 1934, as amended,
    47 U.S.C. § 312(f)(1), which applies to violations for which
    forfeitures are assessed under Section 503(b) of the Act, provides
    that "\[t\]he term \'willful\', when used with reference to the
    commission or omission of any act, means the conscious and
    deliberate commission or omission of such act, irrespective of any
    intent to violate any provision of this Act or any rule or
    regulation of the Commission authorized by this Act..." *See
    Southern California Broadcasting Co.*, Memorandum Opinion and Order,
    6 FCC Rcd 4387 (1991).

[^33]: *See* 47 C.F.R. § 1.80.

[^34]: *See* 47 U.S.C. § 503(b)(2)(C) (setting forth the statutory
    maximum forfeiture for non-broadcast licensees). The Commission
    twice amended Section 1.80(b)(3) of the Rules, 47 C.F.R. §
    1.80(b)(3), to increase the maximum forfeiture amounts, in
    accordance with the inflation adjustment requirements contained in
    the Debt Collection Improvement Act of 1996, 28 U.S.C. § 2461. *See
    Amendment of Section 1.80 of the Commission\'s Rules and Adjustment
    of Forfeiture Maxima to Reflect Inflation*, Order, 15 FCC Rcd 18221
    (2000) (adjusting the maximum forfeiture amounts for non-broadcast
    licensees from \$10,000/\$75,000 to \$11,000/\$87,500); *Amendment
    of Section 1.80 of the Commission\'s Rules and Adjustment of
    Forfeiture Maxima to Reflect Inflation*, Order, 19 FCC Rcd 10945
    (2004) (adjusting the maximum forfeiture amounts from
    \$11,000/\$87,500 to \$11,000/\$97,500).

[^35]: 47 C.F.R. § 1.80(b)(4).

[^36]: *See Intelsat Investor Fact Sheet -- First Quarter 2006,*
    available at
    <http://ww2.intelsat.com/pdf/en/investors/financial/2006/2006-Fact-Sheet_1Q.pdf>
    (visited Aug. 15, 2006) (first quarter 2006 revenues for Intelsat
    were \$280 million).

[^37]: *See* 47 C.F.R. § 1.1914.