**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

)

In the Matter of )

)

Intelsat, Ltd. ) IB Docket No. 05-18

)

Petition for Declaratory Ruling that )

Intelsat, Ltd. Complies With Section )

621(5)(F) of the ORBIT Act )

**MEMORANDUM OPINION AND ORDER**

**Adopted:** April 8, 2005 **Released:** April 15, 2005

By the Commission:

# INTRODUCTION

1.  In this Order, we find that Intelsat, Ltd. ("Intelsat") is in
    compliance with the Certification it submitted to the Commission[^1]
    pursuant to Section 621(5)(F) of the ORBIT Act,[^2] and it therefore
    need not comply with the criteria of Section 621(5)(A) and (B) of
    the ORBIT Act (which required that an initial public offering
    ("IPO") be conducted and that securities be publicly listed).[^3]
    The Commission has previously found that Intelsat has met its
    obligations to achieve a pro-competitive privatization under other
    criteria specified in Sections 621 and 622 of the ORBIT Act.[^4] In
    this Order, we also find that the provisions relating to additional
    services under Section 602 of the ORBIT Act are no longer applicable
    to Intelsat,[^5] and that the effective date for purposes of Section
    645(4) of the ORBIT Act is the effective date of this order.[^6]

# BACKGROUND

2.  In March 2000, Congress passed the ORBIT Act, to "promote
    competition in the provision of satellite communications services"
    through the pro-competitive privatization of former
    intergovernmental organizations ("IGOs"), INTELSAT and Inmarsat.[^7]
    The ORBIT Act requires among other things, that the Commission make
    a determination as to whether INTELSAT's privatization is
    pro-competitive and specifies the criteria that the Commission is to
    use for making this determination. The ORBIT Act sets out detailed
    criteria in Sections 621 and 622, which sets a standard to ensure a
    pro-competitive environment in the telecommunications markets of the
    United States. The criteria includes privatization from an IGO to a
    non-IGO status within a specified timeframe;[^8] conducting an IPO
    of securities that achieves substantial dilution of the aggregate
    ownership of former Signatories of INTELSAT after privatization;[^9]
    termination of privileges and immunities that INTELSAT had as an
    IGO;[^10] incorporation in a country that is a Signatory to the
    World Trade Organization ("WTO") Basic Telecommunications Agreement
    and that has effective laws and regulations that secure competition
    in telecommunications services;[^11] conversion to a stock
    corporation with a fiduciary board of directors;[^12] limitations on
    interlocking officers, directors, or employees shared with any IGO
    or any Signatory or former Signatory of INTELSAT;[^13] and an
    arms-length relationship between and among INTELSAT and any
    separated entities or Inmarsat.[^14] A recent amendment to Section
    621(5) of the ORBIT Act also added as an alternative to conducting
    an IPO and public securities listing, a certification process that
    permits Intelsat to certify, and the Commission to determine, that
    certain financial and control interests by Signatories and former
    Signatories, and certain ownership interests by IGOs, no longer
    exist in Inteslat.[^15] Until Intelsat is privatized in accordance
    with the requirements of the ORBIT Act, the ORBIT Act states that
    Intelsat "shall not be permitted to provide additional services" and
    the "United States shall oppose and decline to facilitate
    applications by \[Intelsat\] for new orbital locations to provide
    such services."[^16]

3.  On August 8, 2000, the Commission released the *Intelsat LLC
    Licensing Order*[^17] authorizing Intelsat LLC to operate INTELSAT's
    existing and planned C- and Ku-band satellites as a U.S. licensee
    upon privatization of INTELSAT.[^18] The Commission's authorization
    was to become effective upon the date of privatization -- then
    targeted for April 1, 2001 -- and was conditioned upon a further
    Commission finding that INTELSAT had actually privatized by
    transferring its satellites and associated assets to Intelsat LLC
    and transferring its ITU network filings related to its C- and
    Ku-band satellites to the national registry of the United
    States.[^19] The Commission's grant of licensing authority to
    Intelsat LLC was taken prior to INTELSAT's privatization recognizing
    that INTELSAT had to resolve a variety of issues and make requisite
    decisions in order to privatize under the timeframe required by the
    ORBIT Act.[^20] The Commission concluded that acting on Intelsat's
    request for licensing authority prior to INTELSAT undertaking its
    privatization would provide INTELSAT's September 2000 Board of
    Governors and November 2000 Assembly of Parties an opportunity to
    fully consider the United States as a licensing jurisdiction.[^21]
    The Commission required INTELSAT to supplement its applications
    following the November 2000 Assembly of Parties to provide the full
    details of INTELSAT's privatization and further conditioned the
    grant of its authorizations on INTELSAT privatizing in a manner
    consistent with Sections 621 and 622 of the ORBIT Act.[^22]

4.  In May 2001, as detailed in the *Intelsat LLC ORBIT Act Compliance
    Order,*[^23] the Commission completed its review and evaluation of
    privatization plans submitted by INTELSAT, and determined that as a
    whole, INTELSAT's privatization plans were consistent with the
    non-IPO privatization criteria in Sections 621 and 622 of the ORBIT
    Act. Thus, the Commission found that under Section 601 of the ORBIT
    Act, use of space segment operated by Intelsat Ltd. and Intelsat LLC
    for services to, from, or within the United States would not harm
    competition in the telecommunications market of the United
    States.[^24] The Commission authorized the licensing authority
    granted to Intelsat LLC to become effective upon INTELSAT
    implementing its privatization by July 18, 2001,[^25] and
    conditioned Intelsat Ltd.'s authorizations on a future finding that
    Intelsat Ltd. had conducted an IPO consistent with Sections 621(2)
    and 621(5)(A) of the ORBIT Act.[^26]

5.  On July 18, 2001, Intelsat privatized, issuing shares of Intelsat
    Ltd. to former INTELSAT Signatories and non-Signatory investing
    entities in proportion to their March 2001 investment shares in
    INTELSAT.[^27] At that time, the authorizations issued to Intelsat
    Ltd.'s U.S. subsidiary, Intelsat LLC, by the Commission became
    effective, allowing Intelsat to provide C- and Ku-band services in
    the United States.[^28] Intelsat, however, remained subject to the
    ORBIT Act's requirements that Intelsat Ltd. conduct an IPO.[^29]
    Under the ORBIT Act's original deadline, Intelsat was required to
    conduct an IPO by October 1, 2001, unless, based on market
    conditions and relevant business factors, the Commission extended
    the deadline to no later than December 31, 2002.[^30] The deadlines
    for Intelsat to conduct an IPO have been extended several times by
    Congress and the Commission.[^31] The most recent extension provides
    that Intelsat must conduct its IPO by June 30, 2005, unless the
    Commission extends the deadline to no later than December 31,
    2005.[^32]

6.  In October 2004, Congress amended the ORBIT Act, adding Sections
    621(5)(F) and (G), to provide a certification process as an
    alternative to the IPO requirements under Sections 621(5)(A) and
    (B).[^33] Generally, the amendment provides that Intelsat may be
    deemed a national corporation and may forgo an IPO and public
    securities listing and still achieve the purposes of Section 621(5),
    if it certifies to the Commission that certain financial, control
    and ownership requirements have been met with respect to interests
    of Signatories, former Signatories and IGOs, and if the Commission,
    after notice and comment, determines that Intelsat is in compliance
    with such Certification.[^34]

7.  On December 22, 2004, the Commission authorized the transfer of
    control of Intelsat's licenses and authorizations to Zeus Holdings
    Limited ("Zeus"), a private equity group, organized under Bermuda
    law, which would acquire 100 percent of the equity and voting
    interests of Intelsat ("Zeus/Intelsat Transaction").[^35] Zeus is
    wholly owned by 20 entities (collectively, the "Investing Funds"),
    which are ultimately controlled by the following four private equity
    fund groups, with each fund group holding 25 percent of the shares
    of Zeus: (1) Apax Excelsior VI and Apax Europe V (together,
    "Apax"); (2) Apollo V ("Apollo"); (3) Madison Dearborn ("MDP");
    and (4) Permira Europe III ("Permira") (collectively, the "Private
    Equity Funds.") Two of the Private Equity Funds (Apollo and MDP)
    ultimately are controlled by U.S. citizens and the other two (Apax
    and Permira) ultimately are controlled by citizens of the United
    States and other WTO Members.[^36]

8.  On December 23, 2004, Intelsat filed the Petition for Declaratory
    Ruling and Certification pursuant to Section 621(5)(F) of the ORBIT
    Act at issue in this proceeding. On January 14, 2005, the Commission
    placed Intelsat's Petition for Declaratory Ruling and Certification
    on public notice.[^37] On January 28, 2005, Intelsat informed the
    Commission that the Zeus/Intelsat Transaction, as provided for in
    the *Zeus/Intelsat Order and Authorization*, had been
    consummated.[^38] On February 3, 2005, Intelsat filed applications
    for a *pro forma* transfer of control seeking to insert a new
    Bermuda holding company in the vertical ownership chain of
    Intelsat's U.S. licensees.[^39] On February 9, 2005, Intelsat filed
    an updated Certification in this proceeding to reflect the
    consummation of the Zeus/Intelsat Transaction.[^40] On February 23,
    2005, the Commission approved Intelsat's proposed *pro forma*
    transfer of control.[^41]

9.  Northrop Grumman Space & Mission Systems Corporation and Lockheed
    Martin Corporation filed comments in support of a finding that
    Intelsat is in compliance with its Certification under Section
    621(5)(F) of the ORBIT Act.[^42] Comments were also filed by the
    representative of certain Intelsat Retirees opposing Intelsat's
    Certification on grounds that Intelsat, Ltd. has not completed the
    transition to privatization as it continues to use the immunity
    accorded to pre-privatized Intelsat as a defense against claims
    brought against Intelsat.[^43] Intelsat filed an opposition against
    the filing made on behalf of the Intelsat Retirees.[^44] Below we
    review the assertions made by Intelsat in its Certification under
    Section 621(5)(F) of the ORBIT Act. We also address the arguments
    raised by the Intelsat Retirees and Intelsat's opposition thereto.
    As discussed, we determine that Intelsat is in compliance with its
    Certification.

# Discussion

10. The recent amendment to Section 621(5) of the ORBIT Act, provides
    the following:

> \(F\) Notwithstanding subparagraphs (A) and (B), a successor entity
> may be deemed a national corporation and may forgo an initial public
> offering and public securities listing and still achieve the purposes
> of this section if --
>
> \(i\) the successor entity certifies to the Commission that --

(I) the successor entity has achieved substantial dilution of the
    aggregate amount of signatory or former signatory financial interest
    in such entity;

(II) any signatories and former signatories that retain a financial
     interest in such successor entity do not possess, together or
     individually, effective control of such successor entity; and

(III) no intergovernmental organization has any ownership interest in a
      successor entity of INTELSAT;

> \(ii\) the successor entity provides such financial and other
> information to the Commission as the Commission may require to verify
> such certification.
>
> \(iii\) the Commission determines, after notice and comment, that the
> successor entity is in compliance with such certification
>
> \(G\) For purposes of subparagraph (F), the term 'substantial
> dilution' means that a majority of the financial interests in the
> successor entity is no longer held or controlled, directly of
> indirectly, by signatories or former signatories.[^45]

11. Intelsat's Certification, executed on February 8, 2005, by Conny L.
    Kullman, the Chief Executive Officer of Intelsat, Ltd., certifies to
    the financial, control, and ownership interests held in Intelsat as
    required under Section 621(5)(F)(i), stating under penalty of
    perjury, that the information provided in the Certification and the
    Petition for Declaratory Ruling is true and correct.[^46]

12. Specifically, Intelsat's Certification, as required under Section
    621(5)(F)(i)(I), states that "Intelsat has achieved substantial
    dilution of the aggregate amount of former signatory financial
    interest in Intelsat."[^47] Intelsat further certifies, as required
    under Section 621(5)(F)(i)(II), that "\[a\]ny signatories or former
    signatories that retain a financial interest in Intelsat do not
    possess, together or individually, effective control of
    Intelsat."[^48] These provisions concern the continued financial
    interests in, and continued control over, the privatized Intelsat by
    Signatories and former Signatories of INTELSAT.[^49] Intelsat also
    certifies, as required under Section 621(5)(F)(i)(III), that "\[n\]o
    intergovernmental organization has any ownership interest in a
    successor entity of Intelsat."[^50] This provision concerns the
    nature of any IGO ownership interests in Intelsat.

13. Through its Petition for Declaratory Ruling and the record developed
    in the Zeus/Intelsat Transaction proceeding, Intelsat requests that
    the Commission determine that Intelsat is in compliance with the
    Certification it filed pursuant to Section 621(5)(F) of the ORBIT
    Act.[^51] In the Zeus/Intelsat proceeding, Intelsat provided
    information about the ownership structure of Intelsat prior to and
    after the merger transaction with Zeus.[^52] Prior to the
    Zeus/Intelsat Transaction, the majority of ordinary shares in
    Intelsat Ltd. were under Signatory ownership.[^53] Under the
    two-phase Zeus/Intelsat Transaction, approved in the *Zeus/Intelsat
    Order and Authorization,*[^54] 100 percent of the outstanding shares
    in Intelsat Ltd. were ultimately acquired by Zeus, thus eliminating
    the existing ownership interest of former Signatories in Intelsat,
    Ltd.[^55] As a result, upon consummation of this transaction, each
    of the four Private Equity Funds, which each hold 25 percent of the
    equity interest in Zeus, indirectly owns 25 percent of the equity
    interest in Intelsat, Ltd.[^56]

14. The record in the Zeus/Intelsat Transaction proceeding, and the
    Commission's decision in *Zeus/Intelsat Order and Authorization*,
    provide information as to the identification of the four Private
    Equity Funds, Intelsat's new owners.[^57] In addition, the board of
    directors of Zeus consists of an equal number of appointees from
    each of the Private Equity Funds so that none of the Private Equity
    Funds has *de facto* control.[^58] The Commission relied on this
    information in making its decision to approve the Zeus/Intelsat
    Transaction, and Intelsat consummated the transaction, as approved
    by the Commission, on January 28, 2005.[^59] Following consummation
    of the transaction, Intelsat states that all existing Signatory or
    former Signatory financial interests in all Intelsat entities have
    been eliminated and certifies to this result.[^60] Accordingly,
    based on the record in this proceeding and information provided in
    the Zeus/Intelsat Transaction proceeding, we find that no former
    Signatory has control over the voting interest held by any investing
    fund[^61] and that Intelsat has achieved substantial dilution of the
    aggregate amount of former Signatory financial interest in
    Intelsat.[^62] Thus, we find that Intelsat is in compliance with its
    Certification made pursuant to Sections 621(5)(F)(i)(I) and (II) of
    the ORBIT Act.

15. In the *Intelsat LLC ORBIT Act Compliance Order,* we found that the
    International Telecommunications Satellite Organization ("ITSO"), a
    residual IGO created in 2000 to monitor Intelsat's provision of
    services to lifeline countries under a "public service" agreement
    between INTESLAT and the residual IGO, retained no ownership
    interest in Intelsat.[^63] Based on the record in this proceeding
    and information provided in the Zeus/Intelsat Transaction
    proceeding, we find that there has been no change in ITSO's status
    with respect to its ownership relationship with Intelsat and that no
    other IGO has any ownership in Intelsat. Accordingly, we find that
    Intelsat is in compliance with its Certification made pursuant to
    Section 621(5)(F)(i)(III) of the ORBIT Act.

16. We next turn to the concerns raised by the Intelsat Retirees. The
    Intelsat Retirees argue that it is improper for Intelsat to claim in
    this proceeding that it has completed privatization while at the
    same time claiming treaty immunity as a public international
    organization in a pending court proceeding.[^64] The Intelsat
    Retirees also argue that, as alleged in the pending class action
    suit, Intelsat has failed to provide vested health benefits to
    certain Retirees as required by INTELSAT Board Resolutions in March
    and April 2001, a condition of the transfer of INTELSAT to the
    private entity. Until the vested health benefits are provided, the
    Intelsat Retirees claim Intelsat has not completed the transition to
    privatization.[^65] Intelsat replies that the Retirees' submission
    concerns a matter unrelated to Intelsat's Petition for Declaratory
    Ruling and Certification and improperly attempts to draw the
    Commission into an alleged private breach of contract dispute
    pending before a U.S. district court.[^66]

17. In the *Intelsat LLC ORBIT Act Compliance Order*, the Commission
    reviewed Intelsat's privatization plan and found that, consistent
    with the requirements under Section 621(3) of the ORBIT Act, neither
    Intelsat Ltd., Intelsat LLC nor any other Intelsat subsidiary have
    privileges and immunities of the type accorded to the former IGO
    (INTELSAT).[^67] The Commission found that the privatized Intelsat
    and its subsidiaries would be organized under national laws and
    subject to the requirements and regulations in which they operate
    including tax and legal liability.[^68] Thus, in granting Intelsat
    licensing authority, the Commission was satisfied that the
    privileges and immunities had been terminated consistent with the
    requirements of the ORBIT Act.[^69] Intelsat remains under a
    continuing obligation to comply with Section 621(3) of the ORBIT Act
    under the terms of its license.[^70] Our review in this proceeding,
    however, concerns the evaluation of Intelsat's Certification
    pursuant to Section 621(5)(F) of the ORBIT Act and whether Intelsat
    has achieved a substantial dilution of Signatory and former
    Signatory financial interest and control, and whether all IGO
    ownership interest in Intelsat has been eliminated. As discussed
    above, we have found that the record in this proceeding, along with
    the record in the Zeus/Intelsat Transaction proceeding, supports
    such a finding. The arguments raised by the Intelsat Retirees as to
    matters alleged in the pending class action case do not provide a
    basis for finding that Intelsat has not complied with its
    Certification under Section 621(5)(F).

# Conclusion

18. Based on the above, we conclude that Intelsat has complied with
    Section 621(5)(F) of the ORBIT Act, and as such, may forego an IPO
    and public securities listing as required under Section 621(5)(A)
    and (B).[^71] Thus, we remove from Intelsat's licensing authority,
    conditions that require Intelsat to conduct an IPO consistent with
    Sections 621(2) and 621(5)(A) of the ORBIT Act.[^72] Further, given
    our findings in this Order, along with our previous findings in the
    *Intelsat LLC ORBIT Act Compliance Order* that Intelsat's
    privatization is consistent with the non-IPO provisions of ORBIT
    Act,[^73] we find that Intelsat has met the criteria set forth under
    Sections 621 and 622 of the ORBIT Act for the purpose of satisfying
    the Certification requirement. Consequently, we find that Section
    602, which prohibits Intelsat from providing additional services and
    requires the United States to decline and oppose new orbital
    locations for provision of such services until Intelsat meets the
    privatization requirements of the ORBIT Act, is no longer
    applicable.[^74]

# Ordering clauses

19. Accordingly, it is DETERMINED THAT Intelsat, Ltd's Certification
    COMPLIES WITH Section 621(5)(F) and (G) of the Open-Market
    Reorganization for the Betterment of International Communications
    Act, as amended. ORBIT Act §§ 621(5)(F) and 621(5)(G).

20. Accordingly, it is FURTHER DETERMINED THAT by this action, and
    consistent with the provisions of the Open-Market Reorganization for
    the Betterment of International Communications Act, as amended,
    Intelsat, Ltd. may forgo the requirement that it hold an initial
    public offering of securities as set forth in Sections 621(2) and
    621(5)(A) and a public listing of securities as set forth in Section
    621(5)(B). ORBIT Act §§ 621(2), 621(5)(A), 621(5)(B), 621(5)(F), and
    621(5)(G).

21. Accordingly, it is FURTHER DETERMINED THAT by this action, and
    consistent with the provisions of the Open-Market Reorganization for
    the Betterment of International Communications Act, as amended,
    Intelsat, Ltd. IS NO LONGER SUBJECT TO the provisions under Section
    602, which prohibited Intelsat, Ltd. from providing additional
    services and required the United States to oppose and decline to
    facilitate applications for new orbital locations to provide such
    services. ORBIT Act §§ 602(a), 602(b).

22. Accordingly, it is FURTHER DETERMINED THAT by this action, and
    consistent with the provisions of the Open-Market Reorganization for
    the Betterment of International Communications Act, as amended, the
    conditions on Intelsat Ltd.'s licenses and authorizations
    prohibiting Intelsat Ltd. from providing additional services,
    defined as direct-to-home (DTH) or direct broadcast satellite (DBS)
    video services, or services in the Ka or V bands, IS HEREBY REMOVED.
    ORBIT Act §§ 602(a), 681(a)(12)(B).

23. Accordingly, it is FURTHER DETERMINED THAT by this action, and
    consistent with the provisions of the Open-Market Reorganization for
    the Betterment of International Communications Act, as amended, the
    condition on Intelsat Ltd.'s licenses and authorizations that
    require a Commission finding that Intelsat has fully complied with
    the privatization requirements under Section 621 of the ORBIT Act by
    either conducting an initial public offering in accordance with
    Sections 621(2) and 621(5)(A)(i) or by making a certification to the
    Commission pursuant to Section 621(F) that the Commission has
    determined is in compliance with the certification requirements of
    Section 621(F) of the ORBIT Act, IS HEREBY REMOVED. ORBIT Act §§
    621(2), 621(5)(A)(i), 621(F).

    FEDERAL COMMUNICATIONS COMMISSION

    Marlene H. Dortch Secretary

[^1]: Petition for Declaratory Ruling that Intelsat, Ltd. Complies With
    Section 621(5)(F) of the ORBIT Act and attached Certification of
    Intelsat, Ltd., filed Dec. 23, 2004, and Supplemental Submissions
    updating Certification, filed Jan. 14, 2005 and Feb. 9, 2005, File
    No. SAT-PDR-20041228-00231, IB Docket No. 05-18.

[^2]: Open-Market Reorganization for the Betterment of International
    Telecommunications Act, Pub. L. No. 106-180, 114 Stat. 48 (2000),
    *as amended*, Pub. L. No. 107-233, 116 Stat. 1480 (2002), *as
    amended* Pub. L. No. 108-228, 118 Stat. 644 (2004), *as amended,*
    Pub. L. No. 108-371, 118 Stat. 1752 (2004). The ORBIT Act amended
    the Satellite Communications Act of 1962, 47 U.S.C. § 701 *et seq.*
    (Satellite Act) and is *codified* *at* 47 U.S.C. § 761 *et seq.* For
    the sake of convenience, in this Order, the term "ORBIT Act" and the
    citations to statutory section numbers refer to the Satellite Act,
    as amended by the ORBIT Act. The term "ORBIT Act, as amended" refers
    to the provisions added by the most recent amendment to the ORBIT
    Act, Pub. L. No. 108-371, 118 Stat. 1752 (2004), signed into law on
    October 25, 2004, adding new subsections (F) and (G) to Section
    621(5), which provide an alternative method for compliance with the
    privatization requirements of Section 621(5) of the ORBIT Act.
    *See,* ORBIT Act, as amended, §§ 621(5)(F) and (G).

[^3]: ORBIT Act, §§ 621(5)(A) and (B).

[^4]: ORBIT Act, §§ 621 and 622. See also, *Applications of Intelsat LLC
    for Authority to Operate, and to Further Construct, Launch and
    Operate C-band and Ku-band Satellites that Form a Global
    Communications System in Geostationary Orbit*, Memorandum Opinion
    Order and Authorization, FCC 01-183, 16 FCC Rcd 12280 (2001)
    ("*Intelsat LLC ORBIT Act Compliance Order*"). Herein reference to
    the *Intelsat LLC ORBIT Act Compliance Order* is by paragraph
    number.

[^5]: ORBIT Act, §§ 602(a) and (b). Under the ORBIT Act, the term
    "additional services" means "for INTELSAT, direct-to-home (DTH) or
    direct broadcast satellite (DBS) video services, or services in the
    Ka or V bands." ORBIT Act, § 681(a)(12)(B).

[^6]: ORBIT Act, § 645(4).

[^7]: International Telecommunications Satellite Organization
    ("INTELSAT") and the International Maritime Satellite Organization
    ("Inmarsat") were originally intergovernmental organizations created
    by international agreements as a result of early initiatives to
    develop space technology.

[^8]: ORBIT Act, § 621(1)(A).

[^9]: ORBIT Act, §§ 621(2) and 621(5)(A).

[^10]: ORBIT Act, § 621(3).

[^11]: ORBIT Act, § 621(7).

[^12]: ORBIT Act, § 621(5)(D).

[^13]: ORBIT Act, § 621(5)(C).

[^14]: ORBIT Act, § 621(5)(E).

[^15]: ORBIT Act, as amended, §§ 621(5)(F) and (G).

[^16]: ORBIT Act, §§ 602(a) and (b).

[^17]: *Applications of Intelsat LLC For Authority to Operate, and to
    Further Construct, Launch, and Operate C-band and Ku-band Satellites
    that Form a Global Communications System in Geostationary Orbit*,
    Memorandum Opinion Order and Authorization*,* FCC 00-287, 15 FCC Rcd
    15460 (2000)*, Recon. denied,* FCC 00-437, 15 FCC Rcd 25234 (2000).
    Herein reference to the *Intelsat LLC Licensing Order* is by
    paragraph number.

[^18]: In the *Intelsat LLC Licensing Order*, the Commission reviewed
    Intelsat's applications regarding its proposed operation of
    INTELSAT's existing and planned C-band and Ku-band satellites in the
    United States. For purposes of review in that proceeding, C-band
    encompassed the 3.420-4.200 GHz and 5.850-6.650 GHz frequency bands;
    and the Ku-band encompassed the 10.950-11.200 GHz, 11.450-12.200
    GHz, 12.500-12.750 GHz, and 13.750-14.500 GHz frequency bands. In
    referring to the C-band and Ku-band in the United States, the
    frequency bands 3.700-4.200 GHz, 5.925-6.425 GHz, 11.7-12.2 GHz, and
    14.0-14.5 GHz are considered the "conventional" C-band and Ku-band.
    The remaining frequency bands, 3.420-3.700 GHz, 5.850-5.925 GHz,
    6.425-6.650 GHz, 10.95-11.20 GHz, 11.45-11.70 GHz, and 13.75-14.00
    GHz, are considered the "extended" C-band and Ku-band and are either
    not allocated or are shared with other services in the United
    States, including the Federal Government, and subject to special
    conditions when used for the fixed-satellite service ("FSS"). The
    Commission's decision in the *Intelsat LLC Licensing Order*
    specified the licensing requirements under which Intelsat could
    operate in the United States. *See,* *Intelsat LLC Licensing Order*
    at paras. 149-162, 166-172.

[^19]: *Intelsat LLC Licensing Order* at paras. 2, 158, 160. The C- and
    Ku-band orbital locations/frequency registrations were to be
    transferred to the United States; the Ka-, V-, and BSS-band orbital
    locations/frequency registrations were to be transferred to the
    United Kingdom.

[^20]: At the time, INTELSAT was a 143-member intergovernmental
    organization created by international agreement. *See,* Agreement
    Relating to the International Telecommunications Satellite
    Organization, "INTELSAT," 23 U.S.T. 3813; TIAS No. 7532, (February
    12, 1973) (INTELSAT Agreement). *See also,* Operating Agreement
    Relating to the International Telecommunications Satellite
    Organization, "INTELSAT," 23 U.S.T. 4091, (August 20, 1971)
    (INTELSAT Operating Agreement). INTELSAT's two-tier governance
    structure consisted of: (1) an Assembly of Parties, comprised of
    representatives from all 143-national governments, who determined
    overall policy and long-term objectives of INTELSAT consistent with
    the underlying INTELSAT Agreement; and (2) a Board of Governors,
    comprised of Signatories, or investors in the system, that made
    commercial decisions. Comsat was the U.S. Signatory to the INTELSAT
    Operating Agreement and a member of the Board of Governors. *See,*
    *Intelsat LLC Licensing Order* at paras. 5-7, and Appendix B.

[^21]: *Intelsat LLC Licensing Order* at paras. 34-38, 158. The 25^th^
    Assembly of Parties met in Washington, D.C. from November 13-17,
    2000, the INTELSAT Board of Governors convened from December 5-8,
    2000, and the Distribution Strategy Drafting Group met from December
    11-14, 2000. The decisions taken at these meetings, along with
    reports from the 30^th^ and 31^st^ Meeting of Signatories (AP-25-14
    and AP-25-15 and its Corrigendum) on review of reports of the Penang
    Working Party (AP-25-7) and Board of Governors (AP-25-10 and its
    Addendum No.1) presented extensive details on the plan for
    privatization of INTELSAT.

[^22]: *Intelsat LLC Licensing Order* at paras. 36, 38, 160 and 161.

[^23]: *See supra,* note 4.

[^24]: *Intelsat LLC ORBIT Act Compliance Order* at paras. 71 and 73.
    *Also*, ORBIT Act, §§ 601(a) and (b).

[^25]: Although the ORBIT Act specified April 1, 2001 as the date for
    INTELSAT's privatization, the Commission found that the ORBIT Act's
    'consistent with' standard permitted a degree of flexibility to
    consider timing issues associated with administrative processes of
    the various governmental bodies, as well as U.S. international
    policies and commitments. *Intelsat LLC ORBIT Act Compliance Order*
    at paras. 52-56. At that time, INTELSAT was also required to
    transfer its C- and Ku-band satellites and associated assets to
    Intelsat LLC and transfer INTELSAT's ITU network filings, for the
    locations associated with the operations of these satellites, on a
    permanent basis to the Untied States national registry. *Id.* at
    paras. 72, 74.

[^26]: *Intelsat LLC ORBIT Act Compliance Order* at para. 76. The
    Commission found that under Section 601(b)(1)(D) it had discretion
    to authorize Intelsat LLC services prior to Intelsat, Ltd.
    conducting an IPO of securities under the timeframe provided in the
    Act. *Id*. at para. 24.

[^27]: INTELSAT privatized at 7:59:59 PM EDT, on July 18, 2001. *See,
    FCC Report to Congress as Required by the ORBIT Act* (rel. June 15,
    2000) at 3. At the time, foreign government-owned Signatories
    accounted for approximately 30 percent of INTELSAT's total
    ownership, distributed among 80 Signatories. The remaining 70
    percent ownership was held by 63 private Signatories. In addition,
    approximately 91 percent of the shares were owned by entities from
    WTO Member countries, including the United States, and approximately
    nine percent of the shares were owned by entities from non-WTO
    Member countries. *See, Intelsat LLC ORBIT Act Compliance Order* at
    para. 26; *Intelsat LLC Licensing Order* at paras. 44, 45.

[^28]: Currently, five Intelsat licensees hold Commission licenses: (1)
    Intelsat LLC (Title III satellite and earth station licenses,
    certain experimental earth station authorizations and private land
    mobile radio licenses); (2) Intelsat North America LLC (Title III
    space station licenses); (3) Intelsat USA License Corp. (Title II
    international common carrier authorizations); (4) Intelsat General
    Corporation (Title II international common carrier authorizations);
    and (5) Intelsat MTC LLC (Title II international common carrier
    authorization and Title III earth station authorizations).

[^29]: ORBIT Act, §§ 621(2) and (5)(A). *See also*, *Intelsat LLC ORBIT
    Act Compliance Order* at paras. 26-27, 71, 76.

[^30]: ORBIT Act, § 621(5)(A)(i).

[^31]: The Commission extended the October 1, 2001 deadline to December
    31, 2002. *Intelsat LLC Request for Extension of Time Under Section
    621(5) of the ORBIT Act*, Memorandum Opinion and Order*,* 16 FCC Rcd
    18185 (2001). On October 1, 2002, the first amendment to Section
    621(5)(A)(i) was signed into law and established a new IPO deadline
    for Intelsat as December 31, 2003, but provided the Commission with
    discretion to extend this deadline, in consideration of market
    conditions and relevant business factors relating to the timing of
    an IPO, to no later than June 30, 2004. *See,* Pub. L. No. 107-233,
    116 Stat. 1480 (2002). The Commission extended the December 31, 2003
    deadline to June 30, 2004. *Intelsat LLC Request for Extension of
    Time Under Section 621(5) of the ORBIT Act*, Memorandum Opinion and
    Order, DA 03-4023, 18 FCC Rcd 26290 (2003).

[^32]: The second amendment to Section 621(5)(A)(i) was signed into law
    on May 18, 2004, and extended the IPO deadline for Intelsat until
    June 30, 2005, unless the Commission extends the deadline, in
    consideration of market conditions and relevant business factors, to
    no later than December 31, 2005. *See,* Pub. L. No. 108-228, 118
    Stat. 644 (2004).

[^33]: ORBIT Act, as amended, §§ 621(5)(F) and (G).

[^34]: ORBIT Act, as amended, § 621(5)(F).

[^35]: The Commission approved the proposed transfer of control of
    Intelsat's Title II and Title III licenses and authorizations to
    Zeus Holdings Limited. *See, Intelsat, Ltd., Transferor, and Zeus
    Holdings Limited, Transferee, Consolidated Application for Consent
    to Transfer Control of Holders of Title II and Title III
    Authorizations and Petition for Declaratory Ruling under Sections
    310 of the Communications Act of 1934, as amended,* Order and
    Authorization, IB Docket No. 04-366, DA 04-4034, 19 FCC Rcd 24820
    (Int'l Bur., Wireless Tele. Bur., OET, 2004) ("*Zeus/Intelsat Order
    and Authorization"*). Herein reference to the *Zeus/Intelsat Order
    and Authorization* is by paragraph number. *See also*, Erratum, IB
    Docket No. 04-366, rel. Jan 28, 2005; Satellite Communications
    Services Information, Actions Taken, Public Notice, Report No.
    SES-00682, Feb. 2, 2005.

[^36]: *Zeus/Intelsat Order and Authorization* at para. 6 and Appendix
    B.

[^37]: Intelsat, Ltd. Files Petition for Declaratory Ruling and
    Certification Pursuant to Section 621(5)(F) of the Open-Market
    Reorganization for the Betterment of International
    Telecommunications Act, as amended, Public Notice, DA 05-88, IB
    Docket No. 05-18 (rel. Jan. 14, 2005).

[^38]: Letter from Counsel for Intelsat LLC and Intelsat North America
    LLC, to Secretary, FCC, IB Docket No. 04-366, dated Jan. 28, 2005;
    Letter from Counsel for Zeus Holdings Limited to Secretary, FCC, IB
    Docket No. 04-366, dated Jan. 28, 2005.

[^39]: An internal restructuring was proposed that contemplated the
    insertion of a new holding company for the purpose of securing
    certain financing through a debt issuance of new Senior Discount
    Notes due 2015. As the creation of the new holding company resulted
    in no change in ultimate ownership or control of the Intelsat's U.S.
    licensees, the request for approval was properly filed as a *pro
    forma* transfer of control application. *See*, IB File Nos.
    SAT-T/C-20050203-00022, SAT-T/C-20050203-00023,
    SES-T/C-20050203-00137, SES-T/C-20050203-00138,
    SES-T/C-20050203-00139, SES-T/C-20050203-00140,
    SES-T/C-20050203-00141 and OET File No. 0005-EX-TU-2005, and WTB
    File No. 0002034757. On February 17, 2005, pursuant to Section 1.65
    of Commission rules, Intelsat filed updates to these applications to
    indicate a change in the slate of officers and directors of Zeus and
    certain of its subsidiaries. Letter from Counsel for Intelsat, LLC,
    to Secretary, FCC, Feb. 17, 2005.

[^40]: Letter from Counsel to Intelsat, Ltd. to Secretary, FCC,
    attaching updated Certification of Intelsat, Ltd., Feb. 9, 2005,
    File No. SAT-PDR-20041228-00231, IB Docket No. 05-18 ("*February 9
    Kullman Certification*"). *See also, supra,* note 1.

[^41]: The Commission determined that as proposed, the insertion of the
    new Bermuda holding company, Intelsat Subsidiary Holding Company,
    Ltd., into the vertical ownership chain of the U.S. Intelsat
    licensees was a non-substantial *pro forma* change and did not
    change the control and ownership structure approved in the
    *Zeus/Intelsat Order and Authorization*. *See, e.g., Intelsat,
    Ltd*., File No. ISP-PDR-20050203-00004, Public Notice, International
    Authorizations Granted, Report No. TEL-00884, DA 05-479 (Int\'l
    Bur., Feb. 24, 2005).

[^42]: Comments of Northrup Grumman Space & Mission Corporation, IB
    Docket No. 05-18, filed Feb. 3, 2005. Comments of Lockheed Martin
    Corporation, IB Docket No. 05-18, filed Feb. 14, 2005.

[^43]: Statement and Attachments filed by Larry Postol on behalf of
    Intelsat Retirees, IB Docket No. 05-18, filed Feb. 14, 2005
    ("Intelsat Retirees").

[^44]: Intelsat, Ltd. Response to Submission of Larry Postol, IB Docket
    No. 05-18, filed February 28, 2005 ("*Intelsat Response*").

[^45]: ORBIT Act, as amended, §§ 621(5)(F) and (G).

[^46]: *February 9 Kullman Certification*.

[^47]: *February 9 Kullman Certification* at (i)*.*

[^48]: *February 9 Kullman Certification* at (ii).

[^49]: In its Petition for Declaratory Ruling, Intelsat states that upon
    consummation of the Zeus/Intelsat Transaction, all existing
    Signatory or former Signatory *financial* interest in all Intelsat
    entities will be eliminated (Petition for Declaratory Ruling at 3);
    and that upon closing of the Zeus/Intelsat Transaction, the existing
    *ownership* interest of former Signatories in Intelsat, Ltd. will be
    eliminated (Petition for Declaratory Ruling at n.12). *See also,*
    *February 9 Kullman Certification* at (iv) ("I have read the
    foregoing Petition for Declaratory Ruling that Intelsat, Ltd.
    Complies with Section 621(5)(F) of the ORBIT Act. The
    representations contained therein are true and correct.")

[^50]: *February 9 Kullman Certification* at (iii).

[^51]: *Intelsat* *Petition* at 2, 4, and 5. *See also Zeus/Intelsat
    Order and Authorization*, para. 33 and n. 96 (Zeus acquired all
    interests held by former Signatories).

[^52]: The record in IB Docket No. 04-366 has been incorporated into
    this proceeding as directed in Public Notice, DA 05-88, Jan. 14,
    2005, at 2. Detailed information concerning (then proposed) new
    ownership interests in Intelsat is set forth in (1) the
    Intelsat/Zeus Consolidated Application for Consent to Transfers of
    Control of the Holders of Title II and Title III Authorizations,
    Sept. 3, 2004 ("Consolidated Application"); (2) Erratum to the
    Consolidated Application, including a replacement application, Sept.
    10, 2004; (3) Letters from Counsel for Applicants Zeus Holdings
    Limited and Intelsat, Ltd. to Secretary, FCC, IB Docket No. 04-366,
    dated Nov. 6, 2004 ("*Nov. 6 Letter*"), Nov. 30, 2004 ("*Nov. 30
    Letter*"), and Dec. 9, 2004 ("*Dec. 9 Letter*"). We also rely on
    public data as well as information provided in other Commission
    proceedings for purposes of verifying Intelsat's Certification.

[^53]: According to Intelsat, in August 2004, at the time of the
    announcement of the sale of Intelsat to Zeus, ownership interest of
    former Signatories was 76.6%. Intelsat Petition for Declaratory
    Ruling at p. 5, n. 12.

[^54]: *Zeus/Intelsat Order and Authorization* at paras. 12 and 13.

[^55]: Intelsat Petition for Declaratory Ruling at pp. 3, 5, and n. 12.

[^56]: *See e.g.,* Consolidated Application, Attachment 3 and *Nov. 6
    Letter* at pp. 6-11, explaining the ownership and control structure
    of the Private Equity Funds. *See also*, *Zeus/Intelsat Order and
    Authorization* at paras. 6-10; Appendix B, para. 4, and Part III.

[^57]: As generally described in the Consolidated Application, Zeus is
    wholly owned by 20 Investing Funds (including domestic, Cayman
    Islands, German, Guernsey, and United Kingdom limited partnerships,
    a Guernsey corporation, Dutch partnerships, and a Guernsey employee
    investment plan) ultimately controlled by the four Private Equity
    Funds, Apax, Apollo, MDP, and Permira. *See,* Consolidated
    Application at 2. *See also*, *Nov. 6 Letter* at pp. 6-11, and
    *Zeus/Intelsat Order and Authorization* at paras. 6-10, 16-27, and
    Appendix B.

[^58]: As noted in the *Zeus/Intelsat Order and Authorization*: the
    board of directors of Zeus was to consist of four individuals
    elected by the affirmative vote of three-fourths of the votes of all
    issued and outstanding shares of Zeus entitled to vote on the
    election of directors; each private equity fund had the right to
    appoint one board member; and all approvals or actions of Zeus would
    require approval by three of the four directors, with the exception
    of any act that treats any one of the Investing Funds differently
    from the treatment of the other Investing Funds, which would require
    the approval of the differently-treated Investing Fund. *See
    Zeus/Intelsat Order and Authorization* at para. 13. As shown in a
    subsequent *pro forma* transfer of control application there was a
    change in the number of directors from four to nine; each of the
    four Private Equity Funds now appoints two members to the board, and
    one of the directors is from Zeus. This change did not result in a
    change of ownership or control of Intelsat. *See*, *supra,* notes 39
    and 41.

[^59]: *See, supra,* note 38. We note that the *pro forma* transfer of
    control applications filed by Intelsat on February 3, 2005, and
    granted by the Commission on February 23, 2005, did not involve a
    change in the ultimate ownership and control of Intelsat, as
    approved by the Commission in its *Zeus/Intelsat Order and
    Authorization*. *See, supra,* notes 39 and 41.

[^60]: Intelsat Petition for Declaratory Ruling at p. 3; and *February 9
    Kullman Certification* at (i), (ii) and (iv). *See also
    Zeus/Intelsat Order and Authorization*, para. 33 and n. 96 (Zeus
    acquired all interests held by former Signatories).

[^61]: Our finding that no former Signatory has control over the voting
    interest held by any investing fund is supported by the record in
    the Intelsat/Zeus Transaction. That record established that none of
    the four Private Equity Funds itself is controlled by any principal
    or group of principals, except that two U.S. citizens control the
    Apollo fund. *See, Zeus/Intelsat Order and Authorization* at
    Appendix B para. 26 and n. 85 (two Apollo principals that are the
    members, managers, and shareholders of Apollo Advisors V (EH), LLC
    and AIF V Management Inc. are U.S. citizens); *see also id*. at
    Appendix C (ownership charts). The principals who ultimately hold
    the voting rights of each of the four Private Equity Funds are
    citizens or the estate planning vehicles of citizens of the United
    States or other WTO Member countries. *Id*. at Appendix C. *See
    also, Nov. 6 Letter* at pp. 6-11.

[^62]: The ORBIT Act defines "substantial dilution" for purposes of
    Section 621(5)(F) to mean that a majority of the financial interests
    in the successor entity (*i.e*., INTELSAT) is no longer held or
    controlled, directly or indirectly, by signatories or former
    signatories. *See,* ORBIT Act § 621(5)(G). In the *Zeus/Intelsat
    Order and Authorization* we examined the foreign equity and voting
    interests that would be held by and through the 20 Investing Funds,
    which were ultimately controlled by the principals of the four
    Private Equity Funds, which collectively owned 100 percent of Zeus.
    *See*, *Zeus/Intelsat Order and Authorization* at Appendix B, para.
    4. Based on our review and findings in the Zeus/Intelsat proceeding,
    we conclude for purposes of this proceeding, that any financial or
    equity interest held by existing Signatories or former Signatories
    in INTELSAT by the new owners of Intelsat has been substantially
    diluted as defined under Section 621(5)(G) of the ORBIT Act. *See,*
    ORBIT Act § 621(5)(G); and *Zeus/Intelsat Order and Authorization*
    at Appendix B, paras. 6-40. In addition, we note that in this
    proceeding, Intelsat claims that all existing Signatory or former
    Signatory financial interest in all Intelsat entities was eliminated
    upon consummation of the transaction approved by the Commission in
    the *Zeus/Intelsat Order and Authorization*. *See* Petition for
    Declaratory Ruling at p. 3 and *February 9 Kullman Certification* at
    (iv).

[^63]: *Intelsat LLC ORBIT Act Compliance Order* at para. 28. Rather,
    ITSO has a supervisory role to ensure that Intelsat honors its
    commitments to maintain global connectivity and coverage and provide
    satellite capacity to lifeline countries under the public services
    agreement. *See,* INTELSAT Assembly of Parties, Record of Decisions
    of the Twenty-Fifth (Extraordinary) Meeting, 13-17 Nov. 2000,
    AP-25-3E FINAL W/11/00.

[^64]: *See,* Statement on behalf of Intelsat Retirees*, supra,* note
    43. The attachments filed on behalf of the Intelsat Retirees
    included pleadings pending before the United States District Court
    for the District of Columbia, Civil Action No. 1:04CV01618 (D.D.C.
    filed Sept. 20, 2004) ("*Acosta v. Intelsat Global Service Corp*.").

[^65]: *See,* Statement on behalf of Intelsat Retirees*, supra,* note
    43.

[^66]: *Intelsat Response* at 1.

[^67]: *Intelsat LLC ORBIT Act Compliance Order* at para. 29. Section
    621(3) of the ORBIT Act provides: [termination of privileges and
    immunities. -- T]{.smallcaps}he preferential treatment of INTELSAT
    and Inmarsat shall not be extended to any successor entity or
    separated entity of INTELSAT or Inmarsat. Such preferential
    treatment includes -- (A) privileged or immune treatment by national
    governments; (B) privileges or immunities or other competitive
    advantages of the type accorded INTELSAT and Inmarsat and their
    Signatories through the terms and operation of the INTELSAT
    Agreement and the associated Headquarters Agreement and the Inmarsat
    Convention; and (C) preferential access to orbital locations. Access
    to new, or renewal of access to, orbital locations shall be subject
    to the legal or regulatory processes of a national government that
    applies due diligence requirements intended to prevent the
    warehousing of orbital locations. *See,* ORBIT Act § 621(3).

[^68]: *Intelsat LLC ORBIT Act Compliance Order* at para. 29 ("Intelsat
    LLC will operate in the U.S. market subject to the same laws that
    apply to U.S. satellite service providers. It will have no immune
    treatment from the INTELSAT Agreement that provides for the creation
    of ITSO.")

[^69]: *Intelsat LLC ORBIT Act Compliance Order* at para. 31.

[^70]: The Commission conditioned Intelsat's licenses in 2000 on
    privatization in a manner consistent with Section 621 and 622 of the
    ORBIT Act. *Intelsat LLC Licensing Order* at para. 160. It
    conditioned its findings in the 2001 *Intelsat LLC ORBIT Act
    Compliance Order* on compliance with the terms and conditions of the
    *Intelsat LLC Licensing Order*. *See,* *Intelsat LLC ORBIT Act
    Compliance Order* at para. 75.

[^71]: ORBIT Act, as amended, § 621(5)(F).

[^72]: *Intelsat LLC ORBIT Act Compliance Order* at paras. 71, 76.

[^73]: *Intelsat LLC ORBIT Act Compliance Order* at paras. 71-73, 76.

[^74]: ORBIT Act, §§ 602(a) and (b).