# Before the

# Federal Communications Commission

## Washington, D.C. 20554

In the Matter of )

> )
>
> )

New Skies Satellites, N.V. Request ) File No: SAT-PDR-20001031-00146

For Unconditional Authority to Access )

The U.S. Market )

> )

## MEMORANDUM OPINION AND ORDER

Adopted: March 27, 2001 Released: March 29, 2001

By the Commission:

# I. INTRODUCTION

1.  New Skies Satellites N.V. (New Skies) has filed a Petition for
    Declaratory Ruling and Extension of Earth Station Licenses
    requesting the Commission to declare that: 1) New Skies has met the
    criteria for achieving independence from INTELSAT specified under
    Section 621 and 623 of the ORBIT Act[^1] and required by the *New
    Skies Market Access Order*,[^2] and 2) the use of space segment
    operated by New Skies will not harm competition in the
    telecommunications market of the United States, as contemplated in
    Section 601 of the ORBIT Act. New Skies asks the Commission to
    extend to a full term the licenses of all earth stations authorized
    to communicate with New Skies satellites and to add New Skies'
    satellites to the Permitted Space Station List. In addition, it asks
    us to waive our two-degree orbital spacing requirements for the four
    orbital locations outside the U.S. "domestic arc" where New Skies
    currently has operational satellites.

2.  The New Skies petition was placed on public notice on November 14,
    2000.[^3] PanAmSat Corporation (PanAmSat), GE American
    Communications Inc. (GE Americom) and Loral Space and Communications
    Ltd. (Loral) filed partial oppositions to New Skies' petition.
    Lockheed Martin Global Telecommunication (LMGT) filed comments and
    five New Skies customers also filed letters in support of the
    petition. New Skies filed a Consolidated Reply to PanAmSat, GE
    Americom and Loral. PanAmSat and GE Americom responded to New Skies.

3.  We find that New Skies has satisfied the requirements of the ORBIT
    Act. Its full access to the United States market under the
    conditions specified below will not harm competition in the U.S.
    telecommunications market and will be in the public interest. We
    grant, subject to conditions, an extended waiver of our two-degree
    orbital spacing requirements. The International Bureau is placing
    New Skies on the Permitted Space Station List in an order
    simultaneously released with this decision and is issuing modified
    earth station licenses consistent with this decision.

# II. BACKGROUND

4.  New Skies is a Netherlands-based company created in 1998 as a
    spin-off by INTELSAT. In the 1999 *New Skies Market Access Order*,
    the Commission granted U.S. earth station operators limited,
    three-year authorizations to operate with New Skies in the U.S.
    market pending New Skies' fulfillment of certain actions to ensure
    its independence from INTELSAT. The Commission found that New Skies
    had not yet: 1) conducted an initial public offering (IPO) as
    anticipated by the INTELSAT Assembly of Parties decision approving
    New Skies' creation, 2) novated customer contracts inherited from
    INTELSAT,[^4] or 3) terminated certain transitional support
    agreements with INTELSAT. [^5] The Commission said that it would
    consider extension of the three-year earth station licenses granted
    to a normal, full "ten-year" license term if New Skies demonstrates
    that it has achieved independence from INTELSAT.[^6] The Commission
    further said that any such request would be evaluated based on
    progress toward and the results of: 1) a substantial IPO and any
    additional plans to increase non-Signatory ownership; 2) termination
    of the remaining service agreements (with the exception of Telemetry
    Tracking and Command (TT&C)); and 3) novation of contracts and
    termination of leaseback arrangements. [^7] Additionally, the
    Commission required New Skies to submit periodic reports as to its
    progress toward these goals.[^8]

5.  Our decision granting New Skies limited entry into the U.S. market
    was taken pursuant to our 1997 *DISCO II Order,* in which the
    Commission adopted regulations implementing our commitment under the
    World Trade Organization Basic Telecom Agreement (WTO Agreement) to
    open the United States' Fixed Satellite Service (FSS) and mobile
    satellite service markets to satellites licensed by World Trade
    Organization (WTO) countries.[^9] In the *DISCO II Order,* the
    Commission adopted a presumption in favor of entry for non-U.S.
    satellites licensed by a WTO member. The Commission also stated that
    the presumption could be rebutted by a showing of potential
    competitive harm. In these cases, the Commission reserved the right
    to attach conditions to any grant of authority.[^10] The Commission
    held that, in the exceptional case, in which an application would
    pose a very high risk to competition in the U.S. satellite market
    that could not be cured with conditions, it would deny the
    application.[^11]

6.  The Commission also recognized, however, that prospective affiliates
    of intergovernmental satellite organizations (IGOs) raised special
    competition concerns because of their unique institutional heritage.
    Thus, the Commission set forth specific criteria to apply in
    determining whether an application by an IGO affiliate to serve the
    U.S. market, with satellites authorized by a WTO country, raises the
    potential for competitive harm. Specifically, the Commission stated
    that it would consider any potential anticompetitive or
    market-distorting consequences of continued relationships or
    connections between the IGO and its affiliate, particularly, the
    risk or likelihood of collusive behavior or
    cross-subsidization.[^12]

7.  The subsequently enacted ORBIT Act established legislative criteria
    for Commission review of applications to serve the U.S. market by
    privatized INTELSAT and Inmarsat, and by spin-offs such as New
    Skies. Under the ORBIT Act, we must determine whether authorizing
    New Skies services will harm competition in the U.S.
    telecommunications market.[^13] In making this determination, the
    Act directs the Commission to use the licensing criteria set forth
    in the Act, which includes: 1) independence from INTELSAT through
    conduct of an IPO that achieves substantial dilution of the
    aggregate ownership of Signatories of INTELSAT; 2) termination of
    privileges and immunities; 3) incorporation in a country that is a
    Signatory to the WTO Agreement and has effective laws and
    regulations that secure competition in telecommunications
    services; 4) conversion to a stock corporation with a fiduciary
    board of directors; 5) limitations on interlocking officers,
    directors, or employees shared with any intergovernmental
    organization or any Signatory or former Signatory of INTELSAT;
    and 6) an arms-length relationship with INTELSAT. [^14] The Act also
    directs the Commission to construe criteria in a manner consistent
    with the United States' WTO commitments.[^15] If the Commission
    determines that authorizing New Skies will, in fact, harm
    competition, the ORBIT Act directs the Commission to deny or revoke
    New Skies' authority to serve the U.S. market.[^16]

8.  INTELSAT is currently in the process of privatizing all of its
    commercial operations. As a part of the privatization, there will
    remain a small intergovernmental organization (IGO) to supervise
    Intelsat LLC's commitment to continue to provide service to lifeline
    users. The Commission has authorized the future privatized company,
    Intelsat LLC, to become a U.S. licensee for existing and planned
    satellites providing service in the C-band and Ku-band.[^17] The
    licenses granted were conditioned upon complying with applicable
    privatization criteria under the ORBIT Act.[^18] In granting the
    licenses, the Commission waived application of certain technical
    rules for the satellites authorized, including our two-degree
    orbital spacing requirements.[^19] As explained further below, New
    Skies seeks waivers similar to those the Commission granted to
    Intelsat LLC.

# III. PLEADINGS

9.  New Skies seeks a declaration from the Commission confirming that it
    has achieved independence from INTELSAT under the criteria
    established in the *New* *Skies Market Access Order* and Sections
    621 and 623 of the ORBIT Act. New Skies also requests that, based
    upon these findings and its recent market access precedents, the
    Commission take such actions as may be necessary to grant New Skies
    full access to the United States market on terms comparable to those
    enjoyed by other non-U.S. licensees.

10. No party in the proceeding contends that New Skies fails to satisfy
    the requirements of the ORBIT Act. LMGT states that New Skies has
    satisfied the ORBIT Act requirements and should be granted full
    entry into the U.S. market.[^20] Five customers of New Skies state
    that New Skies offers needed additional competition and should be
    granted full entry into the United States market.[^21] PanAmSat
    does, however, contend that New Skies should provide information
    concerning how its directors are selected and explain whether it has
    entered into any new agreements or arrangements such as capacity
    leases with INTELSAT and address whether any such agreements or
    arrangements were made at arms length.[^22]

11. PanAmSat, GE Americom, and Loral oppose that portion of the New
    Skies petition requesting a waiver of our two-degree orbital spacing
    requirements for New Skies orbital locations where it has
    operational satellites. They contend that New Skies has failed to
    demonstrate good cause for such a waiver and should continue to be
    required to protect two-degree compliant U.S. licensees from harmful
    interference. PanAmSat and GE Americom also argue that New Skies has
    failed to demonstrate how circumstances have changed from the
    Commission's treatment of this issue in the *New Skies Market Access
    Order*, [^23] and that New Skies' waiver request overlooks potential
    harm to other satellite operators.[^24] PanAmSat further states that
    if the Commission grants New Skies' waiver request, New Skies should
    not be given any right or expectation with respect to new satellites
    or orbital locations.[^25] New Skies responds that it has satisfied
    the Commission's waiver standard because the same factors upon which
    the Commission granted a waiver to Intelsat, LLC apply equally to
    New Skies,[^26] and that there is no basis for disparate treatment
    between Intelsat LLC and New Skies.[^27] LMGT supports grant of New
    Skies' requested waivers. [^28]

# IV. DISCUSSION

### A. ORBIT Act Analysis

12. The ORBIT Act amended the Communications Satellite Act of 1962[^29]
    to promote a competitive market for satellite communications
    services through a fully privatized INTELSAT and Inmarsat. It
    establishes criteria for privatization of INTELSAT and Inmarsat as
    well as IGO spin-offs or "separated entities," such as New
    Skies.[^30] As applied to New Skies, the ORBIT Act requires a
    Commission determination that New Skies will not harm competition in
    the U.S. market before the Commission can authorize New Skies to
    provide services in the United States. Section 601(a) provides:

\(a\) LICENSING FOR SEPARATED ENTITIES.---

> COMPETITION TEST.---The Commission may not issue a license or
> construction permit to any separated entity, or renew or permit the
> assignment or use of any such license or permit, or authorize the use
> by any entity subject to United States jurisdiction of any space
> segment owned, leased, or operated by any separated entity, unless the
> Commission determines that such issuance, renewal, assignment, or use
> will not harm competition in the telecommunications market of the
> United States. If the Commission does not make such a determination,
> it shall deny or revoke authority to use space segment owned, leased,
> or operated by the separated entity to provide services to, from, or
> within the United States.[^31]

13. The ORBIT Act provides general privatization criteria applicable to
    New Skies, as well as INTELSAT and Inmarsat.[^32] It also provides
    specific criteria applicable to New Skies.[^33] The Act requires the
    Commission to apply this criteria in determining whether competitive
    harm would result from New Skies provision of service in the United
    States. Section 601(a)(2) provides:

> \(2\) CRITERIA FOR COMPETITION TEST. -- In making the determination
> required by paragraph (1), the Commission shall use the licensing
> criteria in sections 621 and 623, and shall not make such a
> determination unless the Commission determines that the privatization
> of any separated entity is consistent with such criteria.[^34]

14. The ORBIT Act supercedes the requirements that the Commission placed
    on New Skies in the *New Skies Market Access Order*. As discussed
    below, however, New Skies' fulfillment of the requirements imposed
    in that Order provides a basis for concluding that it has satisfied
    certain ORBIT Act criteria.

> \(1\) Independence

15. The Act requires New Skies to be independent of INTELSAT and have a
    pro-competitive ownership structure.[^35] Independence is to be
    achieved, in part, through an initial public offering to be
    conducted by July 1, 2000, unless the date is extended by the
    Commission to no later than July 31, 2001. The purpose of the IPO is
    to "substantially dilute the aggregate ownership" in New Skies of
    Signatories or former Signatories of INTELSAT.[^36] The Act requires
    the Commission to determine whether a public offering attains such
    substantial dilution taking into account the purposes and intent,
    privatization criteria, and other provisions in the Act, as well as
    market conditions.[^37] The Act also prohibits INTELSAT from
    maintaining an ownership interest in New Skies. The Act provides in
    part:

> "\[New Skies\] shall operate as \[an\] independent commercial entity,
> and have a pro-competitive ownership structure. \[New Skies\] shall
> conduct an initial public offering in accordance with paragraph (5) to
> achieve such independence. Such offering shall substantially dilute
> the aggregate ownership of \[New Skies\] by such Signatories or former
> Signatories. In determining whether a public offering attains such
> substantial dilution, the Commission shall take into account the
> purposes and intent, privatization criteria, and other provisions of
> this title, as well as market conditions."[^38]

16. On June 30, 2000, the Commission granted a request from New Skies
    for a six-month extension of the original July 1, 2000 IPO deadline
    to January 1, 2001.[^39] On October 4, 2000, New Skies conducted an
    IPO of 28,500,000 shares (in the form of ordinary shares and
    American Depository Shares). The IPO amounted to over 22 percent of
    the issued and outstanding ordinary shares.[^40] Following the IPO,
    New Skies underwriters exercised an over-allotment option to
    purchase additional shares in New Skies. As a result, including the
    over-allotment option, 30,120,000 shares have been sold in the IPO,
    representing 23 percent of New Skies' total issued share
    capital.[^41]

17. New Skies contends that its 23 percent IPO was substantial in view
    of the depressed market conditions at the time it was held, and
    compared to the IPOs of other satellite companies.[^42] New Skies
    points out that an additional 6.3 percent of the company's post-IPO
    shares are owned by non-Signatories, totaling a current 29.3 percent
    non-Signatory interest. This additional non-Signatory ownership
    existed prior to the IPO. Of the Signatory ownership, Comsat, a
    subsidiary of Lockheed Martin Corporation, a publicly traded U.S.
    company, holds 14.5 percent of outstanding New Skies shares.[^43] No
    INTELSAT Signatory other than Comsat holds more than 4.4 percent
    post-IPO interest in New Skies. And 84 percent of New Skies
    non-public shareholders own less than 0.5 percent each of the
    outstanding shares.[^44]

18. LMGT agrees that New Skies has achieved "substantial dilution" under
    the terms of the ORBIT Act. LMGT states that the issue of
    substantial dilution requires an individualized determination based
    on the company's particular circumstances.[^45] It contends that the
    market conditions that existed and the amount of dilution achieved
    in comparison with other companies past IPOs merits a Commission
    finding that New Skies achieved "substantial dilution."[^46] No
    other party to this proceeding commented on this issue.

19. We find that New Skies timely conducted its IPO within the extended
    period that the Commission authorized pursuant to the ORBIT Act. We
    also find that the IPO achieved "substantial dilution" within the
    meaning Section 621(2) of the Act. Our finding is based upon the
    size of the IPO in light of existing market conditions at the time
    that it was concluded. New Skies achieved 23 percent dilution of
    INTELSAT Signatory ownership under less-than-optimum market
    conditions for IPOs in general and for the technology sector in
    particular.[^47] It was necessary, under these circumstances, for
    New Skies to price its IPO at the bottom (\$9) of the \$9 - \$11 IPO
    price range that it forecast in its filings with the Security and
    Exchange Commission (SEC). Nevertheless, New Skies has demonstrated
    that the 23 percent dilution achieved was, at that time, at the
    upper limit of available market demand based on the size of the
    offering, investor demand for New Skies securities and the
    prevailing market conditions at the time of the IPO.[^48] New Skies'
    investment banker also points out that PanAmSat sold 18.92 percent
    in 1995, SES Astra 14.93 percent in 1998, and JSAT 9.51 percent in
    2000 in their initial public offerings.[^49]

20. Under these circumstances, considering the 6.3 percent non-Signatory
    ownership that existed prior to the IPO, and the fact that 84
    percent of New Skies non-public Signatory shareholders own less than
    0.5 percent each of outstanding shares, we find that "substantial
    dilution" has been achieved. Taken together with our findings below
    that New Skies has satisfied other privatization criteria under the
    Act, we believe that the diversity of ownership achieved provides
    reasonable assurance that New Skies will operate as an independent
    commercial entity as required by the Act. In particular, we believe
    that a sufficient level of New Skies stock is now owned by
    individuals and companies other than INTELSAT Signatories, to give
    it a strong incentive to act in the interest of all rather than any
    particular shareholder. Additionally, we note that none of New Skies
    competitors, which commented on other issues in this proceeding,
    have alleged or provided information that New Skies' pre-IPO
    ownership structure has resulted in the potential problems that the
    Commission identified as associated with Signatory ownership in our
    *New Skies Market Access Order.* [^50] We conclude that New Skies
    has satisfied Sections 621(2) and 623(1).

\(2\) Prohibition on IGO Ownership

21. Section 621(2)(A) of the Act precludes an intergovernmental
    organization from having an ownership interest in New Skies.[^51]
    Initially, INTELSAT had a 10 percent ownership in New Skies that was
    held in a non-voting trust on behalf of INTELSAT.[^52] Subsequently,
    all but a tenth of one percent of these shares were distributed to
    individual Signatories.[^53] The remaining shares are held in a
    non-voting trust on behalf of the remaining Signatories.[^54]
    Because INTELSAT no longer holds any ownership interest in New
    Skies, New Skies therefore complies with this provision.

\(3\) Termination of Privileges and Immunities

22. Section 621(3) prohibits extension to New Skies of preferential
    treatment accorded to INTELSAT by national governments and the
    INTELSAT Agreement. The section provides:

> \(3\) TERMINATION OF PRIVILEGES AND IMMUNITIES.---The 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.[^55]

23. The Commission found in the *New Skies Market Access Order* that New
    Skies does not have privileges and immunities of the type currently
    accorded to INTELSAT.[^56] New Skies operates in the U.S. market
    subject to the same laws that apply to U.S. satellite service
    providers.[^57] There has been no change in New Skies' status in
    this regard. It has no immune treatment from the INTELSAT Agreement
    or the INTELSAT Headquarters Agreement. The Netherlands national
    government has not accorded it privileges and immunities. It is
    subject to regulatory authority of the Netherlands Government. As
    for access to orbital locations, the Netherlands regulatory
    authority, the Radiocommunications Agency (RDR), has informed the
    Commission that the authorizations issued to New Skies for operation
    of its satellites include due diligence requirements intended to
    prevent warehousing of orbital locations and spectrum
    resources.[^58] We therefore find that New Skies meets the
    requirements set forth in Section 621(3) of the ORBIT Act.

\(4\) Conversion to Stock Corporations

24. The ORBIT Act requires that New Skies be a "national corporation or
    similarly accepted commercial structure, subject to the laws of the
    nation in which incorporated."[^59] New Skies was incorporated in
    the Royal Kingdom of The Netherlands on April 23, 1998.[^60] It is
    organized as a limited liability company (N.V.) and is fully subject
    to the laws of the Netherlands.[^61]

25. The Act also requires that New Skies "have a board of directors with
    a fiduciary obligation."[^62] Under Dutch law, the New Skies board
    of directors must have fiduciary duties to the company.[^63]

26. Section 621(5)(B) of the Act requires that New Skies be listed for
    trading on one or more major stock exchanges with transparent and
    effective securities regulation.[^64] New Skies, since its IPO, has
    listed shares on the New York Stock Exchange and the official
    segment of the Euronext Amsterdam N.V.'s stock market.[^65] New
    Skies is subject to the regulation of the U.S. Securities and
    Exchange Commission and the Netherlands *Stichting Toezicht
    Effecteniorkeel* (Netherlands Securities Board).[^66]

\(5\) Limitations On Interlocking Directors, Officers And Managers

27. The Act places limitations on interlocking directors, officers,
    employees and managers with any intergovernmental organization or
    any Signatory or former Signatory of INTELSAT. Section 621(5)(C)
    provides:

> \(C\) A majority of the members of the board of directors of any
> successor entity or separated entity shall not be directors,
> employees, officers, or managers or otherwise serve as representatives
> of any signatory or former signatory. No member of the board of
> directors of any successor or separated entity shall be a director,
> employee, officer or manager of any intergovernmental organization
> remaining after the privatization.[^67]

28. New Skies' Articles of Association provide for a board of directors
    comprised of nine members.[^68] New Skies states that none of the
    nine directors hold a similar position with any intergovernmental
    organization, and that no more than two of New Skies directors may
    be considered to be affiliated (as a director, officer, manager,
    employee or representative) with a Signatory or former
    Signatory.[^69] New Skies identified in its petition two directors
    affiliated with Signatories of INTELSAT.[^70] Since then, one has
    terminated his relationship with that company.[^71] A review of the
    New Skies prospectus made public prior to the New Skies IPO confirms
    that none of the remaining seven directors have any of the
    affiliations proscribed by Section 621(5)(C) of the Act.[^72]

29. The Act also places additional restrictions on New Skies' officers,
    directors and managers. Section 621(5)(D) provides, in part, that
    New Skies shall:

> \(ii\) have no officers or managers who (I) are officers or managers
> of any signatories or former signatories, or (II) have any direct
> financial interest in or financial relationship to any signatories or
> former signatories, except that such interest may be managed through a
> blind trust or similar mechanism;
>
> \(iii\) have no directors, officers, or managers who hold such
> positions in any intergovernmental organization; and
>
> \(iv\) in the case of a separated entity, have no officers or
> directors, who (I) are officers or managers of any intergovernmental
> organization, or (II) have any direct financial interest in or
> financial relationship to any international organization, except that
> such interest may be managed through a blind trust or similar
> mechanism.[^73]

30. New Skies declares that none of its officers are officers with any
    Signatory or former Signatory, nor do they have any direct financial
    interest or financial relationship with a Signatory or former
    Signatories of INTELSAT.[^74] New Skies further declares that no
    officer or director of the company is an officer or director of, or
    has any direct financial interest in or financial relationship with,
    any intergovernmental organization.[^75] In addition, New Skies
    points out that the company has a Supervisory Board and a Managing
    Board. Under Dutch law applying to limited liability companies, the
    Managing Board holds the responsibility for managing the
    company.[^76] New Skies states that, for purposes of satisfying
    ORBIT Act criteria, "directors" refers to members of the Supervisory
    Board and "officers" refers to members of the Managing Board.[^77]
    We therefore find that New Skies' officers, directors, and senior
    management satisfy the requirements of Section 621(5)(D)(ii)-(iv).

31. In addition, the Act specifically precludes New Skies officers,
    directors and employees from being officers, directors or employees
    of INTELSAT.[^78] New Skies declares that none of its officers,
    directors, or employees hold such positions with INTELSAT.[^79]

32. Finally, we do not agree with PanAmSat that additional information
    is required of New Skies beyond what it has presented on the record
    to demonstrate its independence from INTELSAT as required by the
    ORBIT Act. PanAmSat contends that New Skies should provide
    additional information about nominating and approving
    directors.[^80] New Skies responds that, its board of directors is
    selected using the standard method -- by a majority vote of its
    shareholders at the annual shareholder meeting \-- and that the
    directors serve for a one-year term until the next annual
    shareholder meeting.[^81] It also states that no Signatory or
    limited group of Signatories has the right to appoint any member of
    the board.[^82] PanAmSat responds that New Skies does not address
    whether shareholder agreements govern how votes are conducted.[^83]
    It raises the concern that board members are "beholden to" the
    INTELSAT Signatories since they hold a majority of shares.[^84]

33. PanAmSat's concerns are misplaced. First, we have found above that
    New Skies has sufficient diversity of ownership to provide
    reasonable assurance that it will operate as an independent
    commercial entity. Second, New Skies has demonstrated, as required
    by the ORBIT Act, that the fiduciary obligations of the board
    members flow to the company and not individual investors or
    Signatories. Third, only one board member now has any connections
    with an INTELSAT Signatory. Fourth, the New Skies pre-IPO prospectus
    report does not show any special arrangements with INTELSAT
    Signatory-investors that govern how votes are conducted.[^85] Fifth,
    New Skies states that it is unaware of any agreements among its
    shareholders that affect their voting rights with respect to New
    Skies.[^86] Finally, there is no allegation before us or information
    provided that would lead us to conclude that concerns that the
    Commission expressed in our *New Skies Market Access Order* about
    potential New Skies collusion with INTELSAT or its Signatories to
    deny competitors market access or set prices have materialized.[^87]

\(6\) Arms-Length Relationship

34. The ORBIT Act requires that "any transactions or other relationship
    between or among \[New Skies and\] INTELSAT or Inmarsat shall be
    conducted on an arms-length basis."[^88] We find that New Skies
    maintains an arms-length relationship with INTELSAT, with the
    exception of certain inherited assigned and leaseback customer
    contracts. Our concerns with these contracts should be resolved upon
    INTELSAT's privatization.

35. As discussed above, New Skies has a corporate structure separate
    from INTELSAT. It also has a sales and marketing network that is
    independent of INTELSAT.[^89] And, it has developed its own payload
    operations center and has put into place its own technical
    infrastructure to conduct TT&C operations.[^90] New Skies states
    that it conducts its limited, remaining commercial arrangements with
    INTELSAT on an arms-length basis and has had no commercial
    relationship with Inmarsat.[^91] It says that the transitional
    service agreements with INTELSAT that were of concern to the
    Commission and all K-TV related support contracts have now been
    terminated.[^92] New Skies indicates that, while 65 out of 103
    assigned customer contracts and 20 out of 49 leaseback contracts
    remain, it has made and continues its best efforts to negotiate the
    novation of these agreements.[^93]

36. In the *New Skies Market Access Order* the Commission identified two
    areas -- transitional support contracts and assigned customer
    contracts and leaseback arrangements[^94] -- that impinged upon a
    finding that New Skies was independent of INTELSAT. The first area
    involved agreements by which INTELSAT provided New Skies with
    certain support services that it could not immediately provide for
    itself as a start-up company.[^95] In particular, the Commission
    found that the Satellite Communications contract, which encompassed
    maintenance and activation of satellite carriers gave INTELSAT
    direct contact with New Skies customers, which is normally not
    appropriate under an arms-length relationship.[^96] New Skies now
    performs this function for its satellites without INTELSAT
    involvement. The concerns the Commission expressed in our *New Skies
    Market Access Order* with respect to support service contracts are
    satisfied. As a result the question of support service contracts
    does not raise a concern with respect to New Skies' maintaining an
    arms-length relationship under the ORBIT Act.

37. The second area involved "temporary" assigned contracts and
    leaseback arrangements approved by the INTELSAT Assembly of Parties
    for INTELSAT customers (primarily INTELSAT Signatories) who chose
    not to novate their contracts to New Skies upon transfer of INTELSAT
    satellites to New Skies.[^97]

38. Customer contracts were assigned by INTELSAT to New Skies where the
    customers, who are INTELSAT's Signatories, did not want to lose
    their investment share in INTELSAT that would result from novation
    of the contracts with New Skies.[^98] Ownership in INTELSAT is
    determined by overall usage of the system by a Signatory. Assignment
    allowed the Signatories to maintain their investment share in
    INTELSAT associated with New Skies services involved because
    INTELSAT remained liable for performance under the contracts. We
    conclude that these assigned contracts no longer should present a
    concern. With the impending privatization of INTELSAT on July 18,
    2001, there will be no reason to continue assignment of these
    contracts. Former Signatories will then receive shares in the
    privatized INTELSAT commensurate with a final investment share
    calculation prior to privatization. We therefore anticipate that the
    remaining 65 assigned contracts will be novated to New Skies upon
    privatization of INTELSAT. We require New Skies to report on the
    progress toward this end within 30 days of the release of this
    decision.

39. The remaining 20 leaseback contracts present a more complicated
    situation. The leaseback arrangements were entered into because some
    national authorities were unable to grant New Skies landing rights
    prior to INTELSAT's transfer of assets to New Skies or, in some
    instances, could not extend New Skies customers the same tax-exempt
    status that they had enjoyed in obtaining service from INTELSAT as
    an intergovernmental organization.[^99] Leasebacks assured
    continuity of service and tax-exempt treatment by continuing direct
    customer relationships with INTELSAT for services over New Skies. It
    is unclear, however, how the leasebacks will be treated upon
    INTELSAT's privatization. While any country may decide to grant tax
    exempt status to New Skies' customers, we would be concerned if,
    upon INTELSAT's privatization, the residual intergovernmental
    organization (ITSO) created to oversee the privatized company's
    continued service to lifeline users is made a party to these
    leaseback arrangements as an artificial means of maintaining the
    customers' tax exempt status.[^100] Continuation of leaseback
    contracts through ITSO may limit competition by giving customers a
    tax incentive that is based on the tax immunities of the remaining
    intergovernmental organization to stay with New Skies rather than
    switch to a competitor. We understand that the customers may extend
    these leasebacks into the future in certain situations. These
    customers would have no incentive to consider obtaining service from
    competitors if it meant a loss of tax exempt status. Thus, if a
    significant number of leaseback agreements remain in effect for a
    significant amount of time, it will raise concerns as to whether New
    Skies is compliant with the "arms-length" requirements under the
    ORBIT Act.

40. On the other hand, as the Commission recognized in our *New Skies
    Market Access Order*, New Skies cannot unilaterally novate the
    leaseback arrangements.[^101] Novation is a matter of negotiation
    among the parties concerned. New Skies, nevertheless, has already
    made significant progress in novating the leaseback contracts.
    Leaseback contracts now appear to be limited to four
    countries.[^102] Furthermore, if the remaining contracts are novated
    before INTELSAT is privatized, we will no longer have any concerns
    regarding an arms-length relationship between New Skies and
    INTELSAT. We conclude that New Skies has made sufficient progress
    based on a good faith effort in novating its leaseback contracts
    that we need not delay the removal of the three-year limitation any
    further. Additionally, we anticipate that both New Skies and
    INTELSAT will seek a resolution that is consistent with requirements
    of the Act prior to INTELSAT's privatization. We require New Skies
    to report in writing on the progress toward this end within 30 days
    of release of this Order. If any leaseback contracts remain in
    effect at that time, and they appear likely to distort competition
    significantly, we will determine whether any actions, if any, would
    be appropriate under the ORBIT Act.

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(7) Regulatory Treatment

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41. The ORBIT Act requires that "separated entities" created after its
    enactment "apply through the appropriate national licensing
    authorities for international frequency assignments and associated
    orbital registrations for all satellites."[^103] New Skies is not
    subject to this requirement because it was created prior to
    enactment of the ORBIT Act. Nevertheless, as noted above, New Skies
    is subject to the authority of the RDR. The RDR has authorized New
    Skies to operate its satellites, submits and maintains satellite
    network filings with the International Telecommunication Union (ITU)
    on behalf of New Skies, and engages in international coordination
    for those filings with other administrations.

\(8\) Competition Oversight

42. The ORBIT Act requires that New Skies be subject to a jurisdiction
    that: (1) has effective laws and regulations that secure competition
    in telecommunications services; (2) is a Signatory to the WTO Basic
    Telecommunications Services Agreement; and (3) has a schedule of WTO
    commitments that include non-discriminatory market access to its
    satellite market.[^104] Under its 1998 Telecommunications Act, the
    Netherlands established an independent telecommunications regulatory
    authority, the OPTA, to transition from a former monopoly to a
    competitive market. The Commission have previously found, in
    authorizing facilities-based and resale international services in
    the United States by Netherlands companies, that the Netherlands has
    effective competitive safeguards to protect U.S. carriers from
    anti-competitive practices, and a regulatory environment and legal
    requirement to enforce pro-competitive safeguards.[^105] The
    Netherlands, as a member of the European Union, is a Signatory to
    the WTO Basic Telecommunications Services Agreement. It has
    committed to grant non-discriminatory market access to its satellite
    market.[^106] We therefore find that New Skies' location in the
    Netherlands satisfies ORBIT Act requirements.

\(9\) Spectrum Assignments

43. The ORBIT Act proscribes further transfer of frequency assignments
    between INTELSAT and New Skies after the initial transfer that
    occurred on November 30, 1998.[^107] INTELSAT has not transferred to
    New Skies any additional spectrum since the initial transfer.[^108]

\(10\) Re-affiliation

44. The ORBIT Act prohibits for 11 years after INTELSAT privatization
    "any merger or ownership or management ties or exclusive
    arrangements" between privatized INTELSAT and New Skies.[^109] The
    INTELSAT privatization plans do not contemplate a merger with New
    Skies.

> \(11\) Exclusive Arrangements

45. The ORBIT Act specifically provides for restrictions against
    exclusive arrangements for the provision of satellite services
    between the United States and other countries. Section 648 provides:

> \(a\) IN GENERAL.---No satellite operator shall acquire or enjoy the
> exclusive right of handling telecommunications to or from the United
> States, its territories or possessions, and any other country or
> territory by reason of any concession, contract, understanding, or
> working arrangement to which the satellite operator or any persons or
> companies controlling or controlled by the operator are parties.
>
> \(b\) EXCEPTION.\--In enforcing the provisions of this section, the
> Commission---
>
> \(1\) shall not require the termination of existing satellite
> telecommunications services under contract with, or tariff commitment
> to, such satellite operator; but
>
> \(2\) may require the termination of new services only to the country
> that has provided the exclusive right to handle telecommunications, if
> the Commission determines the public interest, convenience, and
> necessity so requires.[^110]

Nothing in the record before us indicates that New Skies has exclusive
arrangements precluded by the Act. As the Commission did in licensing
Intelsat LLC, we condition the earth station authorizations we grant in
this Order on New Skies' compliance with this restriction.[^111]

\(12\) Conclusions

46. In view of the above, we find that New Skies satisfies the
    requirements of the ORBIT Act. New Skies has been privatized in a
    manner consistent with the criteria of Sections 621 and 623 of the
    ORBIT Act. New Skies has conducted an IPO on a timely basis that has
    resulted in substantial dilution of INTELSAT Signatory ownership.
    New Skies is a national stock corporation with a fiduciary board of
    directors and complies with the Act's restrictions against having
    interlocking directors, officers, managers and employees with any
    intergovernmental organization or Signatory or former Signatory of
    INTELSAT. New Skies does not have privileges and immunities and is
    subject to the legal and regulatory processes of the Netherlands.
    The Netherlands has effective laws and regulations to protect
    competition and is a member of the European Union. It also is a
    Signatory to the WTO Basic Telecommunications Services Agreement and
    has committed under the Agreement to non-discriminatory access to
    its satellite market. We find that New Skies maintains an arms
    length relationship with INTELSAT, except for the remaining assigned
    customer contracts and leaseback arrangements, which we expect to be
    changed by the time INTELSAT completes its privatization in a few
    months. New Skies has terminated the transitional support contracts
    that the Commission found to raise competitive concerns. INTELSAT
    has not transferred additional frequency assignments to New Skies
    since New Skies was created in 1998. The Netherlands RDR is
    responsible for making New Skies spectrum and orbital filings with
    the ITU and coordinating with other administrations. It has imposed
    due diligence requirements on New Skies to prevent warehousing of
    orbital locations.

47. Having found that New Skies has satisfied the privatization criteria
    of the ORBIT Act, and has fulfilled the conditions imposed in the
    *New Skies Market Access Order* for achieving independence from
    INTELSAT, we conclude that New Skies' entry into the U.S. market
    will not harm competition in that market. Accordingly, we direct the
    International Bureau to modify each of the earth station licenses
    listed in Attachment A to the *New Skies Market Access Order* and
    subsequent earth station licensees for operation with New Skies'
    satellites by removing the limitation prohibiting these earth
    stations from communicating with one or more New Skies satellites
    after August 6, 2002.[^112] U.S. earth station licenses granted or
    modified in the *New Skies Market Access Order*, and U.S. earth
    station licenses authorizing communications with New Skies
    satellites issued subsequent to the *New Skies Market Access Order*,
    shall be authorized to communicate with New Skies satellites for a
    full ten-year term consistent with the original date the license was
    granted. We also conclude that, because New Skies has achieved
    independence from INTELSAT, it no longer needs to file the quarterly
    reports required by the *New Skies Market Access Order.*[^113]

48. New Skies requests that, if we conclude that it has satisfied the
    privatization criteria of the ORBIT Act and achieved independence
    from INTELSAT, we implement this conclusion by adding its satellites
    to the Permitted Space Station List. New Skies maintains that
    placing its satellites on the Permitted List would be more
    "efficient" than modifying each earth station license addressed in
    the *New Skies Market Access Order*.[^114] The International Bureau
    will soon act upon New Skies' pending request to place its
    satellites on the Permitted List. New Skies, however, misunderstands
    the effect of placing a satellite on the Permitted List. Adding a
    non-U.S.-licensed satellite to the Permitted List has the same
    effect as adding that satellite as a "point of communication"[^115]
    to all ALSAT earth station licenses.[^116] In the *DISCO II First
    Reconsideration Order*, the Commission explicitly stated that the
    Permitted List does not affect any condition placed on any U.S.
    earth station license other than expanding its points of
    communication.[^117] Thus, while New Skies satellites will be added
    to the Permitted List for the appropriate frequency bands in the
    International Bureau proceeding, we still need to modify the
    licenses of earth stations authorized to communicate with New Skies
    satellites on a case-by-case basis to reflect this Order.

### B. Request For Waiver

49. The Commission instituted in 1983 its two-degree spacing policy for
    assignment of orbital locations for domestic FSS space
    stations.[^118] It extended the policy in 1985 to international FSS
    space stations that it licensed.[^119] The two-degree orbital
    spacing policy promotes spectrum efficiency and maximizes
    opportunities for new entry.[^120] In its 1997 *DISCO II Order*, the
    Commission decided, in light of the commitments made by the United
    States in the WTO, that technical requirements imposed on U.S.
    licensees must be applied to foreign-licensed systems seeking to
    service the United States in order to avoid unacceptable
    interference to U.S. systems and resulting service
    disruptions.[^121] This process of seeking to fairly apply U.S.
    technical requirements to licensees that are not within our
    jurisdiction has been complex, requiring ongoing efforts to evolve
    our regulatory structure to meet the needs of the maturing
    international satellite community.

50. We therefore require U.S. earth stations seeking authority to
    operate with foreign satellites to demonstrate that those
    satellites\' operations comply with the technical requirements of
    Part 25 applicable to U.S.-licensed satellites.[^122] If an earth
    station applicant cannot make this demonstration, we require it to
    operate with the non-compliant foreign satellite on a non-harmful
    interference basis relative to future satellite networks serving the
    United States that are two-degree compliant.

51. In the *New Skies Market Access Order*, the Commission determined
    that the five New Skies satellites currently in operation do not
    meet several of the Part 25 technical requirements.[^123] While
    NSS-K operates only in the Ku-band, and meets all applicable
    technical requirements for that band, the rest of New Skies'
    satellites operate in both the C- and Ku-bands. Specifically, none
    of the New Skies satellites meet the Commission\'s polarization
    requirements for the C-band.[^124] In addition, New Skies\'
    satellites typically do not meet the Commission\'s FM/TV frequency
    plan requirement, applicable to satellites operating in the
    conventional C-band.[^125] Also, with the exception of NSS-K, none
    of the New Skies satellites operate on permitted C-band tracking,
    telemetry, and telecommand frequencies.[^126] Further, NSS-513 does
    not comply with rules governing saturation flux density,
    polarization isolation, and stationkeeping in the C-band.[^127]
    Nevertheless, based on a number of findings, including that there
    are no U.S. or foreign-licensed satellites serving the United States
    in the vicinity of the New Skies satellites that have not already
    been coordinated with the New Skies satellites prior to their
    transfer, the Commission waived these two-degree spacing
    requirements.[^128]

52. The *New Skies Market Access Order* also required New Skies to
    either reach coordination agreements or operate its satellites on a
    non-harmful interference basis relative to U.S.-licensed satellites
    that comply with our two-degree spacing rules.[^129] The Commission
    stated:

> In the future, should the Commission authorize access to the U.S.
> market by a satellite that is two-degree spacing compliant, and is
> located as close as two-degrees from a New Skies satellite, New Skies
> would be expected to coordinate, in good faith, with the licensee of
> this satellite. If a coordination agreement is not reached, New Skies'
> operation must be on a non-interference basis relative to U.S.
> services being provided by the compliant satellite.[^130]

For purposes of this Order, we refer to this requirement as the
"non-harmful interference condition."

\(1\) Waiver Standard and Comments

53. New Skies now requests that we grant a further waiver of the
    two-degree spacing policy for its four orbital locations outside the
    U.S. "domestic arc." New Skies asks that the Commission grant a
    waiver for its existing non-CONUS orbital locations[^131] (57° E.L.,
    183° E.L., 319.5° E.L., and 338.5° E.L.) and for its operating
    satellites at those locations and for an almost fully constructed
    satellite to be launched in 2001.[^132] Specifically, New Skies
    requests that we waive the requirement imposed in the *New Skies
    Market Access Order* that it provide service in the United States on
    a non-harmful interference basis relative to two-degree compliant
    satellite systems.[^133] New Skies observes all its orbital
    locations are outside the traditional U.S. \"domestic arc,\" and are
    non-CONUS orbital locations.[^134] New Skies also asserts that the
    waiver it requests is similar to the waiver we granted to Intelsat
    LLC.

54. Under our rules, the Commission may grant a waiver where good cause
    is shown.[^135] Good cause is demonstrated where special
    circumstances warrant a deviation from the general rule, such
    deviation serves the public interest, and a waiver would be
    consistent with the principles underlying the rule. [^136] In
    reviewing the Commission's waiver rule, the United States Court of
    Appeals has stated that granting a waiver may be appropriate if: (1)
    special circumstances support a finding that strict adherence would
    not be in the public interest; and (2) a grant would not undermine
    the underlying policy objectives of the rule in question.[^137] The
    Court further stated, that although "an agency may discharge its
    responsibilities by promulgating rules of general application which,
    in the overall perspective, establish the 'public interest' for a
    broad range of situations, \[this\] does not relieve it of an
    obligation to seek out the 'public interest' in particular,
    individualized cases."[^138]

55. New Skies contends that a waiver is justified based on the same
    factors identified by the Commission in waiving the two-degree
    spacing policy for Intelsat LLC.[^139] New Skies argues that the
    "special circumstances" that were considerations in granting
    Intelsat LLC's waiver are also present here because it inherited the
    satellites from INTELSAT. New Skies also states that the satellite
    now currently under construction is of necessity based on INTELSAT's
    technical design that is incompatible with two-degree spacing
    requirements.[^140] New Skies maintains that granting it a waiver
    will not undermine the underlying policy objectives of the
    two-degree spacing rule, because, as with Intelsat LLC, its
    satellites are located outside of the traditional U.S. domestic arc
    where two-degree spacing is applied most effectively; there is
    limited prospect for creating additional orbital locations without
    relocating satellites; there would be no increase in interference
    concerns; and, complying with the two-degree spacing rule would
    result in substantial customer costs.[^141] Additionally, New Skies
    states that it will design all future satellites at additional
    orbital locations serving the U.S. market to be two-degree spacing
    compliant.[^142]

56. PanAmSat, GE Americom, and Loral contend that New Skies has failed
    to meet the standard for a waiver. They contend that: (1) New Skies
    fails to demonstrate how circumstances have changed since issuance
    of the *New Skies Market Access Order*;[^143] (2) the Commission's
    issuance of a waiver to Intelsat LLC did not overrule its policy
    conditioning non-compliant satellites on operating on a non-harmful
    interference basis;[^144] (3) New Skies fails to distinguish
    Commission decisions on conditioning other non-compliant foreign
    systems;[^145] (4) granting New Skies a waiver based on the
    *Intelsat LLC Licensing Order* would undermine the two-degree
    spacing policy;[^146] (5) it is irrelevant that New Skies would
    incur costs in complying with the Commission's two-degree spacing,
    or that its satellites are located outside the U.S. domestic arc and
    have been coordinated;[^147] (6) New Skies has failed to show how it
    has been harmed during the period following our *New Skies Market
    Access Order* by the condition that it operate on a non-harmful
    interference basis with compliant satellites;[^148] and (7)
    compliant satellite operators could be harmed by grant of a waiver
    to New Skies based on the *Intelsat LLC Licensing Order*, in terms
    of costs associated with designing and coordinating satellites
    adjacent to non-compliant satellites.[^149] Additionally, GE
    Americom contends that, if the Commission wishes to revisit its
    two-degree spacing requirements, it should do so through a
    rulemaking and not selective application of them.[^150] PanAmSat
    states that, if the Commission grants New Skies' waiver request, it
    should be careful not to suggest that New Skies will have any right
    or expectation with respect to new satellites or orbital
    locations.[^151]

57. New Skies responds that changed circumstance is not a requirement
    for considering a waiver, rather the test is a demonstration of good
    cause.[^152] It maintains that, in any event, the intervening
    Commission action in granting the Intelsat LLC waiver justifies
    revisiting the *New Skies Market Access Order*.[^153] New Skies
    points out that decisions involved applications of U.S. earth
    station licensees to access New Skies satellites, that the
    Commission imposed technical conditions on its own motion, and that
    the Commission now has an opportunity to consider an actual request
    for a full waiver based on the record in this proceeding.[^154]
    Additionally, New Skies contends that it does not have to wait until
    it is harmed to request a waiver and that the harm to Intelsat LLC
    foreseen by the Commission is the type feared by New Skies.[^155]
    And, it argues that it suffers from a competitive disadvantage in
    the U.S. market as a result of the conditions currently imposed on
    it.[^156]

58. PanAmSat and GE Americom emphasize that, unlike Intelsat LLC, New
    Skies will not be subject to direct Commission oversight as a U.S.
    licensee should future interference problems develop.[^157] They
    argue that New Skies must be treated like other foreign satellite
    operators serving the United States whose satellites are not
    two-degree compliant and therefore are subject to non-harmful
    interference operation with two-degree orbit compliant
    satellites.[^158] Not to do so, they maintain, will undermine well
    established Commission policy and disserve the public
    interest.[^159]

\(2\) Scope

59. The issue before us is whether to waive the condition currently
    imposed by our *New Skies Market Access Order* that operation by
    U.S. earth stations licensed to communicate with New Skies
    satellites shall reach coordination agreements or shall not cause
    harmful interference to future authorized U.S. services provided
    over U.S. licensed satellites or non-U.S. satellites that are
    compliant with the two-degree spacing rules.[^160] In considering
    this issue, we will not, as New Skies initially requested in its
    petition, consider grant of a permanent waiver for each orbital
    location from which it currently provides service to the United
    States. We will consider any waiver only in the context of a per
    satellite basis applying the traditional waiver standard. This was
    the approach taken by the Commission in the Intelsat LLC decision
    last year.

60. The *New Skies Market Access Order* addressed only the five
    satellites in operation at that time. No earth station operators
    requested authority to communicate with NSS-7. Implicit in New
    Skies\' pleadings is a request to provide service to the United
    States with NSS-7.[^161] Accordingly, we have treated this as a
    petition for declaratory ruling to place NSS-7 on the Permitted
    Space Station List. The Satellite and Radiocommunication Division of
    the International Bureau (Division) has reviewed New Skies\'
    request, and the technical information New Skies submitted regarding
    NSS-7. Concurrently with this Order, the Division is adopting an
    Order placing NSS-7 on the Permitted List, thereby authorizing
    U.S.-licensed earth stations to communicate with NSS-7.[^162] In
    this Order, we consider New Skies\' request to waive the non-harmful
    interference condition placed on currently operating New Skies
    satellites, imposed in the *New Skies Market Access Order*. The
    factors supporting New Skies\' waiver request are also relevant to
    determining whether to apply the non-harmful interference condition
    to NSS-7. Accordingly, we address the NSS-7 non-harmful interference
    condition issue in this Order. For the reasons set forth below, we
    need not apply the non-harmful interference condition to NSS-7.

61. Although the *New Skies Market Access Order* treated the satellites
    in question on a satellite by satellite basis, we believe that it is
    appropriate at this time to consider the satellites by frequency
    bands as well. NSS-K operates only in the Ku-band, and meets all the
    Commission\'s technical requirements applicable to operations in
    that band, and the non-harmful interference condition therefore does
    not apply to NSS-K. Similarly, because NSS-803 and NSS-806 meet all
    the Commission\'s Ku-band technical requirements, waivers of the
    Commission\'s technical rules are necessary only for these two
    satellites\' C-band operations. Consequently, since no technical
    waivers are necessary for NSS-K, NSS-803, and NSS-806, when
    operating in the Ku-band, we determine that the non-harmful
    interference condition does not apply in these situations. However,
    because NSS-513 does not meet the Commission\'s two-degree spacing
    requirements for either the C-band or the Ku-band, the non-harmful
    interference condition applies to this satellite in both
    bands.[^163]

62. In addition, none of the earth station authorizations affected by
    this Order currently communicate with NSS-703 located at 57°
    E.L.[^164] Accordingly, we need not determine at this time whether
    New Skies has demonstrated good cause for a waiver of the
    non-harmful interference condition with respect to this satellite
    and conclude that New Skies\' request to extend the license term to
    ten years is moot with respect to NSS-703. [^165] In the event that
    a U.S.-licensed earth station capable of communicating with NSS-703
    requests authority to do so, we will act upon such applications at
    that time based on the precedents established in this Order.

\(3\) Special Circumstances

63. New Skies argues that the Commission's findings in the *Intelsat LLC
    Licensing Order* are applicable to the New Skies satellites and
    should be applied in the same way. In the Intelsat proceeding, the
    Commission granted Intelsat LLC licenses to: (1) operate 17 existing
    C-band and Ku-band satellites presently owned and operated by
    INTELSAT; (2) construct, launch and operate 10 satellites planned by
    INTELSAT for operation in these bands; and (3) relocate certain
    currently operating satellites to different orbital locations upon
    launch of planned satellites.[^166] The Commission also waived
    certain technical rules in connection with the operation of these
    satellites, including our two-degree spacing requirement.[^167] In
    waiving the two-degree spacing requirement for the satellites
    authorized, the Commission did not impose the condition that
    Intelsat LLC operate on a non-harmful interference basis with
    two-degree compliant satellites based on the circumstances
    concerning other administrations' satellites currently operating
    adjacent to INTELSAT satellites.[^168] The licenses issued will be
    effective upon the successful privatization of INTELSAT, now
    scheduled for July 18, 2001.

64. The Commission's action with respect to Intelsat LLC entailed the
    authorization of an already operating satellite system owned and
    operated by an intergovernmental organization that had never been
    subject to a national licensing regime.[^169] The Commission noted
    the historical and policy reasons why the design and technical
    parameters of the INTELSAT system were different from
    U.S.-authorized systems.[^170] INTELSAT was established largely with
    the support and participation of the U.S. government in order to
    carry out the U.S. policy goals of the Satellite Act.[^171] The
    creation, development, implementation, and operation of the INTELSAT
    system was subject to U.S. government oversight, including
    Commission authorization of Comsat participation in the procurement
    of satellites and provision of services.[^172] The Commission
    concluded that this "particular individualized" situation
    surrounding creation of the INTELSAT global system -- including the
    fact that the basic design characteristics of INTELSAT satellites
    predated the adoption of most of the U.S. technical rules --
    supported a finding of special circumstances sufficient to warrant
    the waiver of some of our technical rules.[^173]

65. New Skies was created as a first step toward complete privatization
    of INTELSAT. It was intended to be a separate, spin-off company free
    from the institutional and organizational constraints that INTELSAT
    was experiencing as an intergovernmental organization in responding
    to competition from private companies, but not having the attributes
    of an intergovernmental organization that gave INTELSAT advantages
    over its competitors.[^174] In international negotiations, the
    United States supported New Skies\' creation as a step toward full
    privatization.[^175] New Skies thus inherited operating satellites
    and associated frequency assignments and orbital locations from
    INTELSAT with existing customers on those satellites and contractual
    commitments to continue services.[^176] Having been part of the
    INTELSAT global system, the satellites transferred to New Skies had
    the same basic design and technical parameters. INTELSAT's use of
    the satellites orbital locations transferred to New Skies had not
    been subject to technical rules applied by either this Commission or
    any regulatory authority from another administration. Thus, having
    been designed and developed based on the same historical
    considerations and for the same policy objectives that the
    Commission found to be special circumstances with respect to
    Intelsat LLC, we find that the same special circumstances also apply
    to New Skies' currently operating satellites.

66. We also find these special circumstances apply to the NSS-7
    satellite currently under construction to be launched in the near
    future. New Skies states that it needed to begin construction
    immediately of a new hybrid C-band and Ku-band satellite to replace
    the old satellites NSS-513 (in inclined orbit) located at 183° E.L.
    and NSS-K located at 338.5° E.L.[^177] The NSS-803 will be relocated
    to 183° E.L. to replace NSS-513 and the NSS-7 will be located at
    338.5° E.L. (21.5° W.L). New Skies states that it had no option but
    to design NSS-7 in the manner that would allow it to continue to
    serve a large existing customer base that already accessed the
    inherited satellite at that location.[^178] We agree that NSS-7
    should receive the same considerations as the currently operating
    satellites that New Skies inherited from INTELSAT. Treating NSS-7 in
    this manner is consistent with our treatment of INTELSAT planned
    satellites in our *Intelsat LLC Licensing Order*. There the
    Commission found special circumstances with respect to satellites
    being developed by INTELSAT to continue to provide continued service
    to INTELSAT's customer base.[^179]

67. We disagree with PanAmSat, GE Americom and Loral that this limited
    finding of special circumstances in any way creates a precedent by
    which other foreign satellite operators can claim a basis for a
    waiver. Our finding of special circumstances applies only to
    satellites constructed by INTELSAT and to NSS-7. No other foreign
    satellite operator can claim its satellites have such origin. We do
    not anticipate INTELSAT heritage considerations to apply to future
    New Skies satellites regardless of the orbital location. In our
    *Intelsat LLC Licensing Order*, the Commission anticipated that
    Intelsat LLC would transition over time toward a system that
    complies with the technical rules upon which other U.S. systems
    operate.[^180] The Commission also indicated that it planned to
    review our technical rules to consider whether the changes are
    needed, particularly in light of our actions licensing Intelsat
    LLC.[^181] The Commission said that this review could present an
    opportunity to effect changes in our rules to accommodate
    differently designed satellite systems and to assure more
    flexibility for U.S. licensees to develop future systems to compete
    with each other and foreign competitors.[^182] New Skies will have
    the opportunity to participate in that proceeding.

\(4\) Underlying Principles

68. In granting Intelsat LLC a waiver of our two-degree spacing policy,
    the Commission concluded that: (1) two-degree spacing normally can
    be applied most effectively among U.S. satellites such as those
    located in the traditional U.S. "domestic arc"; (2) INTELSAT
    existing and planned satellites are located outside the traditional
    U.S. domestic arc; (3) the prospect of creating additional orbital
    locations by applying two-degree spacing to Intelsat LLC is limited;
    and (4) waiver of the two-degree spacing rule would not materially
    undermine our ability to maintain a reasonable level of efficiency
    -- that is, maximizing the number of satellites in the geostationary
    satellite orbital arc without unduly increasing interference.[^183]
    The Commission also found that a waiver would not increase
    interference with respect to currently operational and planned
    INTELSAT satellites at the relevant orbital locations, including
    subsequent reassignments of certain INTELSAT satellites.[^184] In
    addition, requiring Intelsat LLC to comply with the two-degree
    spacing requirement would entail customer costs and service
    disruptions associated with repointing or replacement of antennas
    operating with each satellite.[^185]

69. The Commission also determined that Intelsat LLC would not be
    required to operate on a non-harmful interference basis with future
    two-degree compliant satellites. The Commission noted that this
    policy had not previously been applied to INTELSAT satellites
    providing service in the United States, and that the potential for
    service disruptions to U.S. customers resulting from its
    applications would outweigh any benefits.[^186] The Commission
    concluded that any concern about harmful interference from the
    satellites that it licensed in that proceeding was misplaced.[^187]

70. We are able to draw similar conclusions in this proceeding with
    respect to each of the currently operating New Skies satellites that
    are being authorized to serve the United States:

> \(1\) NSS-513 at 183° E.L.: NSS-513 is fully coordinated with U.S.
> licensed satellites. There is little likelihood that a two-degree
> compliant satellite would be located nearby. Two-degree spacing at
> this location would require re-coordination of U.S. and non-U.S.
> satellites requiring agreement of several administrations.
>
> \(2\) NSS-803 at 338.5° E.L.: NSS-803 is fully coordinated with U.S.
> licensed satellites. There is little likelihood of a two-degree
> compliant satellite located nearby. Two-degree spacing could be
> achieved only by movement of an INTELSAT and a non-U.S. satellite,
> requiring international re-coordination agreements among other
> administrations.
>
> \(3\) NSS-806 at 319.5° E.L.: NSS-806 is coordinated with U.S.
> licensed satellites. As with other NSS orbital locations, two-degree
> spacing could only be achieved by movement of U.S. and non-U.S.
> satellites -- an unlikely possibility given the necessary
> international coordination.
>
> \(4\) NSS-7 has not been coordinated with U.S. licensed satellites.
> But, because NSS-7 will be located at 338.5° E.L., achieving
> two-degree spacing is unlikely for the same reasons discussed above.

71. The fact that New Skies\' operating satellites are fully coordinated
    and have been providing services to the United States for a number
    of years, either as New Skies satellites, or formerly as INTELSAT
    satellites, supports a conclusion that continued operation is not
    likely to result in harmful interference. As for NSS-7, we will
    require that New Skies complete full coordination with U.S.
    licensees before any waiver with respect to NSS-7 is effective.
    Additionally, as discussed above, all of New Skies' satellites are
    located outside the U.S. "domestic arc" at locations where
    two-degree spacing of satellites cannot be achieved without
    relocation of other satellites not under Commission jurisdiction.
    Such relocation, if obtainable, would entail added costs and service
    disruptions to customers as a result of earth station
    re-pointing.[^188] In fact, U.S. licensed satellites outside the
    domestic arc often operate with earth stations that are not
    two-degree compliant.[^189] However, all U.S.-licensed satellite
    operators, both within and outside the \"domestic arc,\" must
    coordinate their operations using non-two-degree compliant earth
    stations with other potentially affected satellite systems on an
    individual, earth-station-by-earth-station basis. As a result, we
    can conclude that granting New Skies the requested waiver will not
    result in loss of opportunities for new entry -- another purpose of
    our two-degree spacing policy.

72. Finally, we find that the argument of PanAmSat, GE Americom and
    Loral that U.S. licensees will incur added costs if we grant New
    Skies a waiver is misplaced. New Skies is seeking waiver of the
    non-harmful interference condition currently imposed upon operation
    of earth stations that access its satellites in the United States
    and its territories. Those are satellites that have served the U.S.
    for a number of years and a replacement satellite that will continue
    services to New Skies customers. Nothing in this Order affects any
    coordination agreement between New Skies and any other satellite
    operator. Moreover, the effective date of any waivers must be
    conditioned on New Skies' continued compliance with its coordination
    agreements. Grant of the requested waiver will therefore not affect
    the current operating satellites of PanAmSat, GE Americom or Loral.
    We therefore find no basis on the record to conclude that a waiver
    limited to the satellites identified above would directly result in
    U.S. licensees incurring future design and coordination costs with
    respect to any U.S.-licensed satellite currently in operation.

73. We recognize that there is a possibility of adjacent satellite
    systems incurring some additional costs as a result of the
    elimination of the non-harmful interference condition that we adopt
    in this Order, at the time that the current U.S.-licensed satellites
    are replaced. There is no information in the record to quantify
    these costs, and so we cannot conclude that these costs negate the
    factors supporting the waiver of the non-harmful interference
    condition. Furthermore, as explained further below, waiver of the
    non-harmful interference condition can only take effect if New Skies
    chooses to undertake certain commitments comparable to those
    undertaken by U.S. licensees to prevent interference problems. Those
    commitments should alleviate concerns about the possibility of added
    costs to future replacement satellites.

\(5\) Commitment from New Skies

74. The analysis thus far has found that New Skies is in the same
    technical position that Intelsat LLC was in when the Commission
    granted it waivers of our two-degree spacing policy. Notwithstanding
    our findings above, there is one more factor to be weighed to assure
    that our two-degree spacing policy is not undermined. The Commission
    noted in the *Intelsat LLC Licensing Order* that considering such a
    waiver request from a non-U.S. licensee would require us also to
    weigh the lack of direct jurisdiction over the satellites
    involved.[^190] Furthermore, in the *DISCO II Order*, the Commission
    determined that spectrum availability and technical requirements
    would be considerations in allowing non-U.S. licensed satellites to
    serve the United States pursuant to WTO commitments.[^191] The
    Commission also explained that it would consider spectrum
    availability as a factor in determining whether allowing a
    non-U.S.-licensed satellite to serve the U.S. market is in the
    public interest.[^192] In particular, we noted that there could be
    cases in which granting an earth station operator authority to
    communicate with a non-U.S.-licensed satellite would create harmful
    interference problems, or create a heavy burden on U.S.-licensed
    satellite systems by requiring them to alter their operations
    significantly.[^193] In those cases, we stated that we would impose
    technical constraints on the foreign system\'s operations in the
    United States, or where such measures would be insufficient to
    remedy the technical problem, deny the request.[^194]

75. Our concern with New Skies' status as a non-U.S. licensed system is
    two-fold. First, while Intelsat LLC, as a U.S. licensee, will
    participate in a relatively informal coordination process with other
    U.S. licensees, any coordination with New Skies, which is not a U.S.
    licensee, will take place pursuant to the more formal, potentially
    more protracted procedures between the United States and the
    Netherlands Administrations.[^195] Second, as a U.S. licensee,
    Intelsat LLC will no longer maintain its ITU filing date
    "priorities" for its satellites vis-à-vis U.S.-licensed satellites.
    As part of the informal negotiation process, Intelsat LLC will be
    expected to coordinate with U.S. licensees in good faith
    notwithstanding ITU filing date priorities. New Skies, however, as a
    non-U.S. licensee, may assert its ITU priorities as part of the ITU
    coordination process. As a result, it will have an advantage over
    U.S. licensees that must comply with the Commission's two-degree
    spacing policy. Simply lifting the non-harmful interference
    condition that we place on earth stations that wish to access any
    non-U.S. licensees that are not two-degree compliant would give New
    Skies a discriminatory advantage compared to U.S. licensees and
    would therefore undermine our legitimate domestic policy objectives
    aimed at preventing interference and subsequent harm to the public
    interest.

76. Our current policy of requiring earth stations accessing
    non-two-degree compliant foreign licensees to not interfere with
    U.S. systems allows us to treat foreign space stations in a
    non-discriminatory manner, taking into account the fact that the ITU
    filing process and coordinating requirements leave the establishment
    of guidelines for national spectrum management policies to the ITU
    Member States. We could grant New Skies' request to waive the
    non-harmful interference condition only if New Skies committed to
    placing itself in a position that is no better than U.S. operators
    in coordination negotiations. New Skies might therefore have to
    commit not to claim priorities against U.S. licensees, in the
    unlikely event that the Commission authorize a U.S. satellite that
    is providing services that are two-degree compliant that requires
    coordination with a non-compliant New Skies satellite.

77. U.S. licensees are required to respect our two-degree requirement.
    There is no coordination requirement between U.S. licensees when the
    services are provided over two-degree compliant satellites and
    routinely-licensed earth stations ("compliant services"). We license
    non-compliant services only when they protect or are coordinated
    with compliant U.S.-services over U.S.-licensed or non-U.S. licensed
    satellites serving the U.S. market. Coordination between two
    non-compliant services over U.S.-licensed satellites is accomplished
    between the operators on an equal basis regardless of which one is
    or was implemented first or which satellite may have an earlier
    filing at the ITU. One way in which a similar approach could be
    achieved for U.S. services over New Skies satellites would be if the
    following conditions were met: (1) U.S. services over New Skies
    satellites protect compliant U.S. services over current and future
    U.S.-licensed or non-U.S. licensed satellites spaced two degrees or
    more from New Skies satellites, and (2) New Skies coordinates its
    U.S. services with non-compliant U.S. services over current and
    future U.S.-licensed or non-U.S. licensed satellites serving the
    U.S. market spaced two degrees or more from New Skies satellites on
    an equal basis.

78. Thus, we could waive the non-harmful interference condition
    currently placed on New Skies\' satellites if New Skies undertakes
    the following commitments with respect to U.S. services over
    satellite networks filed by the Netherlands at the ITU for the
    satellites subject of this Order: (1) two-degree-compliant U.S.
    services over current and future U.S.-licensed or non-U.S.-licensed
    satellites serving the U.S. market spaced two degrees or more from
    the New Skies satellites are assumed to be fully coordinated,
    and (2) non-compliant U.S. services over current or future
    U.S.-licensed or non-U.S.-licensed satellites serving the U.S.
    market spaced two degrees or more from the New Skies satellites will
    be coordinated on an equal basis irrespective of the relative dates
    of receipt of the coordination at the ITU. In this way, New Skies
    would not be subject to the non-harmful interference conditions but
    New Skies will not have any unfair advantages in coordination over
    U.S. licensees or be able to undermine the Commission's legitimate
    domestic policies preventing interference by virtue of resulting
    from being subject to a foreign licensing administration. Because
    the Netherlands is the sovereign administration responsible for New
    Skies, any such commitment by New Skies would also need the
    concurrence of the Netherlands Administration. We recognize that the
    Netherlands Administration is under no obligation under ITU
    procedures to give its concurrence. However, we cannot grant a
    waiver unless the above conditions are fulfilled.

\(6\) Conclusion

79. We find that a waiver of the non-harmful interference condition we
    placed on operations with New Skies satellites is only warranted if
    New Skies acts on a comparable basis in coordinations with other
    U.S. licensees. We conclude that New Skies faces many of the same
    special circumstances that we found warranted granting a waiver to
    Intelsat LLC. In addition, because New Skies acquired its satellites
    from INTELSAT, and those satellites are based on the same design as
    the satellites considered in the *Intelsat LLC Licensing Order*,
    there is precedent for finding that a waiver would not undermine the
    Commission's rules. However, a problem arises in that New Skies, as
    a foreign licensee, might have certain fundamental advantages in
    coordinations with U.S. licensees that other U.S. licensees would
    not. Specifically, New Skies is not required to protect two-degree
    compliant satellites and retains any ITU filing date priority with
    regard to U.S. licensees. We therefore find that granting New Skies
    a waiver will not undermine the Commission\'s rules provided that
    New Skies takes on commitments regarding coordinations similar to
    those assumed by U.S. licensees.

80. Consequently, we conclude, for the reasons discussed above, that if
    New Skies is willing to put itself in a comparable position to U.S.
    licensees with regard to coordination, there is good cause for a
    waiver of the non-harmful interference condition with respect to
    NSS-513, and the C-band operations of NSS-803, and NSS-806. We
    further conclude that this waiver is limited to these currently
    operating satellites authorized to service the United States from
    the following orbital locations: (1) 183° E.L. (NSS 513); (2) 338.5°
    E.L. (NSS 803); and (3) 319.5° E.L. (NSS 806); and to the New Skies
    NSS-7 satellite currently under construction to be located at 338.5°
    E.L. The waiver also covers the relocation of NSS-803 at 183° E.L.
    upon the launch of NSS-7. The waiver would not extend to any future
    New Skies satellites other than NSS-7 that may be located at these
    orbital locations. The record before us provides no basis for
    assuming that New Skies will not be able to replace its satellites
    with satellites that meet the Commission\'s two-degree spacing
    technical requirements.

# V. ORDERING CLAUSES

81. Accordingly, IT IS ORDERED, pursuant to Section 5(d) of the
    Administrative Procedure Act, 5 U.S.C. § 554(e), and Section 1.2 of
    the Commission's Rules and Regulations, 47 C.F.R. § 1.2, that New
    Skies Satellites N.V.'s Petition for Declaratory Ruling is GRANTED,
    and, it is determined that: (1) New Skies' privatization is
    consistent with the criteria specified in Sections 621 and 623 of
    the Open-Market Reorganization for the Betterment of International
    Telecommunications Act (the "ORBIT Act"), Pub. L. 106-180, §§ 621
    and 623; and (2) the use of space segment operated by New Skies for
    services to, from, or within the United States will not harm
    competition in the telecommunications market of the United States as
    contemplated by Section 601(a) of the ORBIT Act, Pub. L. 106-180, §
    601;

82. IT IS FURTHER ORDERED, pursuant to Section 316(a)(1) of the
    Communications Act of 1934, 5 U.S.C. § 316(a)(1), that U.S. earth
    stations licensed to operate with New Skies satellites shall be
    modified to extend the terms of the licenses to full ten year terms
    for the provision of Fixed Satellite Services (FSS), excluding FSS
    direct-to-home services. The individual license terms shall be
    consistent with the original date the license was granted;

83. IT IS FURTHER ORDERED, pursuant to Section 316(a)(1) of the
    Communications Act of 1934, 47 U.S.C. § 316(a)(1), that U.S. earth
    stations licensed to operate with New Skies satellites are modified
    to remove the non-harmful interference condition adopted in the *New
    Skies Market Access Order* for C-band operations with respect to New
    Skies satellites: (1) NSS-513 at 183° E.L.; (2) NSS-803 at 338.5°
    E.L.; (3) NSS-806 at 319.5° E.L.; and (4) NSS-803 at 183° E.L. (at
    such time as that satellite replaces NSS-513 at that location) and
    for Ku-band operations on NSS-513 at 183° E.L This waiver shall take
    effect only if New Skies undertakes the following commitments with
    respect to U.S. services over satellite networks filed by the
    Netherlands at the ITU for the satellites subject of this Order: (1)
    compliant U.S. services over U.S.-licensed or non-U.S.-licensed
    satellites serving the U.S. market spaced two degrees or more from
    the satellites of the Netherlands are assumed to be fully
    coordinated, and (2) non-compliant U.S. services over U.S.-licensed
    or non-U.S.-licensed satellites serving the U.S. market spaced two
    degrees or more from the satellites of the Netherlands will be
    coordinated on an equal basis irrespective of the relative dates of
    receipt of the coordination requests at the ITU for the relevant
    satellite networks. In addition, the termination of this condition
    would not take effect until the Commission has received the
    concurrence of the Netherlands Administration;

84. IT IS FURTHER ORDERED, pursuant to Section 316(a)(1) of the
    Communications Act of 1934, 47 U.S.C. § 316(a)(1), that U.S. earth
    stations licensed in the future to operate with NSS-7, to be located
    at 338.5° E.L. will not be required to do so on a non-harmful
    interference basis, provided that New Skies initiates and completes
    the advance publication, international coordination, and
    notification process of this space station in accordance with the
    International Telecommunication Union (ITU) Radio Regulations, in
    addition to meeting the conditions placed on the waiver granted to
    New Skies in this Order with respect to NSS-513, NSS-803, and
    NSS-806;

85. IT IS FURTHER ORDERED that the conditions imposed in the *New Skies
    Market Access Order*, 14 FCC Rcd 13003, 13040 (1999) at paragraphs
    90, 91 and 92 are TERMINATED subject to the conditions set forth in
    this Order above;

86. IT IS FURTHER ORDERED that access to New Skies satellites by
    U.S.-licensed earth station operators shall be in compliance with
    satellite coordination agreements reached between the United States
    and INTELSAT and transferred to New Skies regarding operations of
    NSS 513, NSS-803, NSS K and NSS-806;

87. IT IS FURTHER ORDERED that New Skies shall report to the Commission
    within 30 days of release of this Order progress on novating current
    assigned contracts and leaseback arrangements in anticipation of
    INTELSAT's privatization, and report on the results of negotiations
    15 days following the date of INTELSAT's privatization;

88. IT IS FURTHER ORDERED that the reporting requirements imposed in
    paragraph 87 of the *New Skies Market Access Order,* 14 FCC Rcd at
    13039-40 are TERMINATED;

89. IT IS FURTHER ORDERED that, subject to Section 648 of the ORBIT Act,
    New Skies shall not acquire or enjoy the exclusive right of handling
    telecommunications to or from the United States, its territories or
    possessions, and any other country or territory, by reason of any
    concession, contract, understanding or working arrangement to which
    the satellite operator or any persons or companies controlling or
    controlled by the operator or parties;

90. IT IS FURTHER ORDERED that the partial oppositions filed by PanAmSat
    Corporation, GE American Communications, Inc. and Loral Space and
    Communications Ltd. are GRANTED to the extent that we limit the
    non-harmful interference condition granted to New Skies to the
    satellites specified above to be operated at the identified orbital
    locations and specific frequency assignments and are DENIED in all
    other respects;

91. IT IS FURTHER ORDERED that New Skies Satellites, N.V. petition for
    waiver is DISMISSED AS MOOT without prejudice, with respect to
    NSS-703 at 57° E.L.

92. IT IS FURTHER ORDERED that this authorization is effective upon
    adoption. Petitions for Reconsideration, pursuant to Section 1.106
    of the Commission's Rules, may be filed within 30 days of the public
    notice of this Order. 47 C.F.R. § 1.106. This grant is also subject
    to Section 1.110 of the Commission's Rules. 47 C.F.R. § 1.110.

> FEDERAL COMMUNICATIONS COMMISSION
>
> Magalie Roman Salas
>
> Secretary

[^1]: *Open-Market Reorganization for the Betterment of International
    Telecommunications Act* ("the ORBIT Act"). Pub.L. 106-180, 114 Stat.
    48 (2000).

[^2]: *New Skies Satellites, N.V.*, Memorandum Opinion and Order, 14 FCC
    Rcd 13003 (1999) (\"*New Skies Market Access Order*\").

[^3]: Public Notice Report No. SAT-00059, November 14, 2000.

[^4]: Novation is the substitution of a new obligation or contract for
    an old one by mutual agreement of all parties concerned. In this
    case it refers to the substitution of New Skies for INTELSAT in the
    customer contracts inherited by New Skies from INTELSAT.

[^5]: *New Skies Market Access Order,* 14 FCC Rcd at 13034-13035*.*

[^6]: *Id.* at 13035.

[^7]: *Id.*

[^8]: *Id.*

[^9]: *Amendment of the Commission's Regulatory Policies to Allow Non
    U.S. Licensed Space Stations to Provide Domestic and International
    Satellite Services in the United States*, Report and Order, 12 FCC
    Rcd 24094, 24112 (1997)("*DISCO II Order*") on reconsideration, 15
    FCC Rcd 7207 (1999).

[^10]: *Id.*

[^11]: *Id.*

[^12]: *Id.* We said that, "in determining whether an application to
    serve the U.S. market by an IGO affiliate raises the potential for
    competitive harm, we will consider any potential anticompetitive or
    market distorting consequences of continued relationships or
    connections between an IGO and its affiliate. For example, we will
    look at whether the affiliate is structured to prevent practices
    such as collusive behavior or cross-subsidization."

[^13]: Pub. L. 106-180, § 601(a)(1)

[^14]: *Id.* at §§ 621 and 623.

[^15]: *Id.* at § 601(c).

[^16]: *Id.* at § 601(a)(1).

[^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, 15 FCC Rcd 15460
    (2000) ("*INTELSAT LLC Licensing Order*"); *recon. denied*, FCC
    00-437 (released December 12, 2000). For purposes of Intelsat LLC,
    the C-band encompasses the 3.420-4.200 GHz and 5.850-6.650 GHz
    frequency bands. The Ku-band encompasses the 10.950-11.200 GHz,
    11.450-12.200 GHz, 12.500-12.750 GHz, and 13.750-14.500 GHz
    frequency bands. *Intelsat LLC Licensing Order*, 15 FCC Rcd at 15462
    n.2.

[^18]: *Intelsat LLC Licensing Order,* 15 FCC Rcd at 15477, 15519.

[^19]: *Id.* at 15484-15508.

[^20]: LMGT Comments at 3-6 and 8.

[^21]: Letters to Secretary, FCC from Richard Kline, Transglobal
    Networks, Ltd., dated December 13, 2000; Dario Brandas Bestetti,
    Vant Communications, dated December 14, 2000; Naomi Dolinsky, U.S.A.
    Teleport, dated December 14, 2000; Keith Ramsay, Teleports New
    Zealand Limited, dated December 14, 2000; and Wilson Harada, Impsat,
    dated December 11, 2000.

[^22]: PanAmSat Partial Opposition at 2.

[^23]: PanAmSat Partial Opposition of 4-5; GE Americom Partial
    Opposition at 4.

[^24]: PanAmSat Partial Opposition at 7-9; GE Americom Partial
    Opposition at 6-8.

[^25]: PanAmSat Partial Opposition at 2.

[^26]: New Skies Consolidated Reply at 5-9.

[^27]: *Id.* at 9-11.

[^28]: LMGT Comments at 8.

[^29]: Communications Satellite Act of 1962, 47 U.S.C. § 701 *et seq.*

[^30]: Pub. L. 106-180, §§ 621-624.

[^31]: Pub. L. 106-180, § 601(a).

[^32]: *Id*. § 621.

[^33]: *Id*. § 623.

[^34]: *Id*. § 601(a)(2).

[^35]: *Id*. § 623(1).

[^36]: *Id*. §§ 621(2) and 623(1).

[^37]: *Id*. § 621(2).

[^38]: *Id*.

[^39]: *New Skies Satellites N.V.*, Memorandum Opinion and Order, 15 FCC
    Rcd 11934 (2000).

[^40]: New Skies Petition at 6 and 9; Exhibit A, Declaration of Robert
    W. Ross, Chief Executive of New Skies Satellites, N.V., dated
    October 31, 2000 (Ross Declaration).

[^41]: Letter from William M. Wiltshire, Counsel for New Skies
    Satellites, N.V. to Secretary, FCC, dated November 14, 2000.

[^42]: New Skies Petition at 11-12.

[^43]: New Skies Petition at 9.

[^44]: *Id.*

[^45]: LMGT comments at 3.

[^46]: *Id.* at 3-4.

[^47]: New Skies Petition, Exhibit B, Letter to Chairman Kennard from
    Mathew Westerman, Managing Director, Goldman Sachs International,
    dated October 31, 2000 (Goldman Sachs International Letter).

[^48]: Goldman Sachs International Letter.

[^49]: *Id.*

[^50]: *New Skies Market Access Order,* 14 FCC Rcd at 13017-13022, where
    we expressed concern that New Skies Signatory-owners might restrict
    market access to its competitors or give New Skies preferential
    treatment through collusive behavior.

[^51]: Pub L. 106-180, § 621(2)(A).

[^52]: *New Skies Market Access Order,* 14 FCC Rcd at 13007.

[^53]: New Skies Petition at 4, citing *New Skies Market Access Order*,
    14 FCC Rcd at 13019; Letter to Donald Abelson, Chief, International
    Bureau from Andrew D'Uva, New Skies Satellite N.V., dated April 14,
    2000.

[^54]: *Id.*

[^55]: Pub. L. 106-180, § 621(3).

[^56]: *New Skies Market Access Order,* 14 FCC Rcd at 13022-13024.

[^57]: *Id.*

[^58]: Letter from C.G.H.M. Dijkmans, Radiocommunications Agency to
    Secretary, FCC, dated December 22, 2000.

[^59]: Pub. L. 106-180, § 621(5).

[^60]: *New Skies Market Access Order,* 14 FCC Rcd at 13006, *citing*
    New Skies Annual Report, 1998 at 28.

[^61]: New Skies Petition at 14; Ross Declaration at 2.

[^62]: Pub. L. 106-180, § 621(D)(l)(I).

[^63]: New Skies Petition at 14, citing the Dutch Civil code, BW § 219.

[^64]: Pub. L. 106-180, § 621(5)(B).

[^65]: New Skies Petition at 14; Ross Declaration at 2.

[^66]: New Skies Petition at 14.

[^67]: Pub. L. 106-180, § 621(5)(C).

[^68]: New Skies Petition at 14, citing New Skies Articles of
    Association at Article 18.1.

[^69]: New Skies Petition at 14; Ross Declaration at 2.

[^70]: Ross Declaration at 2.

[^71]: New Skies Consolidated Reply at 3 fn. 9.

[^72]: Letter from William Wiltshire on behalf of New Skies to
    Secretary, Federal Communications Commission dated October 10, 2000,
    enclosing the Prospectus of New Skies Satellites, N.V., dated
    October 3, 2000, at 79-80.

[^73]: Pub. L. 106-180, § 621(5)(D) (ii)-(iii) and (iv).

[^74]: New Skies Petition, Ross Declaration at 2-3.

[^75]: *Id.*

[^76]: Letter to Secretary, FCC, from Andrew R. D'Uva, Vice President
    and Associate General Counsel, New Skies Satellites N.V., dated
    February 14, 2001.

[^77]: *Id.*

[^78]: Pub. L. 106-180, § 642(2).

[^79]: New Skies Petition, Ross Declaration at 3.

[^80]: PanAmSat Partial Opposition at 3-4.

[^81]: New Skies Consolidated Reply at 4.

[^82]: *Id.*

[^83]: PanAmSat Response at 1 fn. 1.

[^84]: *Id.*

[^85]: New Skies N.V. Prospectus, dated October 3, 2000.

[^86]: D'Uva February 14, 2001 letter.

[^87]: *New Skies Market Access Order,* 14 FCC Rcd at 13023-24.

[^88]: Pub. L. 106-180, § 621(5)(E).

[^89]: New Skies Petition at 3.

[^90]: *Id.* at 18.

[^91]: New Skies Petition at 15.

[^92]: *Id.* at 18. INTELSAT had transferred to New Skies the contract
    for the K-TV satellite under construction when New Skies was
    created. New Skies chose to terminate that contract in 1999 and
    thereafter all K-TV related contracts with INTELSAT.

[^93]: Ross Declaration at 3-4; Letter from Andrew D'uva, Vice President
    and Associate General Counsel, New Skies N.V. to Donald Abelson,
    Chief, International Bureau, dated January 29, 2001 (D\'Uva January
    29 letter).

[^94]: For purposes of this proceeding, leaseback arrangements are
    certain arrangements governed by the Transponder Lease Agreement
    between INTELSAT and New Skies that established the terms by which
    INTELSAT leases capacity from New Skies for use by Signatories. The
    leaseback arrangements were intended to be temporary measures that
    allow the customer to continue to have direct legal relationships
    with INTELSAT while INTELSAT maintains a leasing relationship with
    New Skies.

[^95]: *New Skies Market Access Order,* 14 FCC Rcd at 13025-13030.

[^96]: *Id.* at 13028-13029.

[^97]: *Id.* at 13031-13034.

[^98]: *New Skies Market Access Order,* 14 FCC Rcd at 13033.

[^99]: *New Skies Market Access Order,* 14 FCC Rcd at 13031; New Skies
    N.V. Prospectus, dated October 3, 2000, at 60.

[^100]: *See Intelsat LLC Licensing Order*, 15 FCC Rcd at 15472-74.

[^101]: *New Skies Market Access Order*, 14 FCC Rcd at 13033.

[^102]: D'Uva January 29 letter.

[^103]: Pub. L. 106-180, § 621(6).

[^104]: Pub. L. 106-180, § 621(7).

[^105]: *KPN US Inc*., Order, Authorization, and Certificate, 13 FCC Rcd
    2345 (Int\'l\' Bur. 1998); *Unisource* *USA, Inc.*, Order,
    Authorization, and Certificate, 13 FCC Rcd 2514 (Int\'l Bur. 1998).

[^106]: Fourth Protocol to the GATS, April 30, 1996, 36 I.L.M. 366
    (1997)(Agreement on Basic Telecommunications containing specific
    commitments).

[^107]: Pub. L. 106-180, § 623(3).

[^108]: *New Skies Market Access Order,* 14 FCC Rcd at 13066.

[^109]: Pub. L. 106-180, § 623(4).

[^110]: Pub. L. 106-180, § 648.

[^111]: *Intelsat LLC Licensing Order,* 15 FCC Rcd at 15479-80.

[^112]: *New Skies Market Access Order*, 14 FCC Rcd at 13034-35.

[^113]: *New Skies Market Access Order,* 14 FCC Rcd at 13035-36.

[^114]: New Skies Petition at 20-21.

[^115]: Points of communication are all the satellites listed in an
    earth station license with which that station is authorized to
    communicate.

[^116]: Originally, "ALSAT" was an abbreviation for "all U.S.-licensed
    satellites." The *DISCO II First Reconsideration Order* expanded
    "ALSAT" to include non-U.S.-licensed satellites that have completed
    the *DISCO II* analysis, one we have been requested to place those
    satellites on the Permitted List. *See DISCO II First
    Reconsideration Order*, 15 FCC Rcd at 7216 (para. 20).

[^117]: *DISCO II First Reconsideration Order*, 15 FCC Rcd at 7213 n.31.

[^118]: *Space Stations in the Domestic Fixed-Satellite Service and
    Related Revisions of Part 25 of the Rules and Regulations*, Report
    and Order, FCC 83-184, 48 FR 40233, 54 RR 2d (P&F) 577
    (1983)(*"Two-degree Spacing decision").*

[^119]: *Establishment of Satellite Systems Providing International
    Communications*, Report and Order, 101 FCC 2d 1046, 1048, 1167-1169
    (1985)(*"Separate Systems decision").* In 1996, the Commission
    adopted its *DISCO I decision*, allowing both domestic and
    international U.S.-licensed satellites to provide both domestic and
    international services. The result was that all U.S.-authorized FSS
    satellites, domestic and international, would be under a single
    regulatory regime -- including two-degree spacing requirements. *See
    Amendment to the Commission's Regulatory Policies Governing Domestic
    Fixed Satellites and Separate International Satellite Systems*,
    Report and Order, 11 FCC Rcd 2429 (1996) ("*DISCO I decision"*).

[^120]: Assignment of Orbital Locations to Space Stations in the
    Domestic Fixed-Satellite Service, Order and Authorizations, 11 FCC
    Rcd 13788, 13790 (para. 6) (Int\'l Bur. 1996). Prior to the
    Commission\'s adoption of the two-degree spacing policy, satellites
    in the geostationary satellite orbit were usually spaced three or
    four degrees apart. By adopting rules that enabled satellite
    operators to place their space stations two degrees apart, the
    Commission was able to accommodate more geostationary satellites.

[^121]: *DISCO II Order,* 12 FCC Rcd at 24161-24162.

[^122]: 47 C.F.R. § 25.137; *DISCO II Order*, 12 FCC Rcd at 24175.

[^123]: *New Skies Market Access Order*, 14 FCC Rcd at 13037-38 (paras.
    75-76).

[^124]: *New Skies Market Access Order*, 14 FCC Rcd at 13037 (para. 76),
    *citing* Sections 25.210(a)(1) and (3) of the Commission\'s rules,
    47 C.F.R. §§ 25.210(a)(1), (3).

[^125]: *New Skies Market Access Order*, 14 FCC Rcd at 13037 (para. 76),
    *citing* Section 25.211(a) of the Commission\'s rules, 47 C.F.R. §
    25.211(a).

[^126]: *New Skies Market Access Order*, 14 FCC Rcd at 13037 (para. 76),
    *citing* Section 25.202(g) of the Commission\'s rules, 47 C.F.R. §
    25.202(g).

[^127]: *New Skies Market Access Order*, 14 FCC Rcd at 13037-38 (para.
    76), *citing* Sections 25.210(c), (i), and (j)(1) of the
    Commission\'s rules, 47 C.F.R. §§ 25.210(c), (i), (j)(1).

[^128]: *New Skies Market Access Order*, 14 FCC Rcd at 13038 (para. 77).

[^129]: *New Skies Market Access Order*, 14 FCC Rcd at 13038 (paras.
    78-79).

[^130]: *Id.*

[^131]: A non-CONUS orbital location is one that is unable to access all
    the area of the continental United States.

[^132]: New Skies Petition at 20-24 and Consolidated Reply at 3-4; as
    clarified in Letter from William M. Wiltshire, Counsel for New Skies
    Satellites, N.V. to Secretary, FCC, dated January 22, 2001(Wiltshire
    January 22 letter).

[^133]: New Skies Petition at 21.

[^134]: New Skies Petition at 22-23; Wiltshire January 22 letter at 1.

[^135]: 47 C.F.R. § 1.3 ("Any provision of the rules may be waived by
    the Commission on its own motion or on petition if good cause
    therefor is shown"). *WAIT Radio v. FCC*, 418 F.2d 1153 (D.C. Cir.
    1969)(*"WAIT Radio").* While we address New Skies\' request as a
    petition for waiver, we could have treated it as a request to modify
    the licenses issued in the *New Skies Market Access Order*. A
    license modification request, pursuant to Section 316 of the
    Communications Act, may carry a less strict standard depending on
    the circumstances. In this case, we believe the action we take is
    also justified under the public interest standard for a license
    modification.

[^136]: *Northeast Cellular Telephone Co. v. FCC*, 897 F.2d 1166 (D.C.
    Cir. 1990)(*Northeast Cellular);* *WAIT Radio*, 418 F. 2d at 1157.
    *See also* *Comsat Corporation, Petition for Partial Relief from the
    Current Regulatory Treatment of Comsat World Systems' Switched
    Voice, Private Line, and Video and Audio Services*, Order, 11 FCC
    Rcd 9622, 9625 (para. 10)(1996); *Petition of General
    Communications, Inc. for a Partial Waiver of the Bush Earth Station
    Policy*, Memorandum Opinion and Order, 11 FCC Rcd 2535, 2536 (para.
    4)(Int'l Bur. 1996); *Dominion Video Satellite, Inc.*, Order and
    Authorization, 14 FCC Rcd 8182, 8185 (para. 5)(Int'l Bur., 1999)
    (*Dominion Video*).

[^137]: *WAIT Radio*, 418 F.2d at 1157.

[^138]: *Id.*

[^139]: New Skies Petition at 21-24; Consolidated Reply at 5-8.

[^140]: New Skies Petition at 23; Consolidated Reply at 7; Wiltshire
    January 22 letter.

[^141]: New Skies Petition at 22-24 citing *Intelsat LLC Licensing
    Order*; Consolidated Reply at 6-7.

[^142]: New Skies Petition at 22.

[^143]: PanAmSat Partial Opposition at 4-5; GE Americom Partial
    Opposition at 4.

[^144]: PanAmSat Partial Opposition at 5-6; GE Americom Partial
    Opposition at 4.

[^145]: Loral Partial Opposition at 5.

[^146]: PanAmSat Partial Opposition at 6-7; GE Americom Partial
    Opposition at 7.

[^147]: PanAmSat Partial Opposition at 7-10; GE Americom Partial
    Opposition at 6.

[^148]: GE Americom Partial Opposition at 6; Loral Partial Opposition at
    6.

[^149]: PanAmSat Partial Opposition at 9; GE Americom Partial Opposition
    at 8; Loral Partial Opposition at 2.

[^150]: GE Americom Partial Opposition at 7-8.

[^151]: PanAmSat Partial Opposition at 2 and 10-11.

[^152]: New Skies Consolidated Reply at 11-12.

[^153]: *Id.* at 12.

[^154]: *Id.* at 12-13.

[^155]: *Id.* at 13-14.

[^156]: *Id.* at 15.

[^157]: PanAmSat Response at 2 and 3-4; GE Americom at 4.

[^158]: PanAmSat at 5; GE Americom at 4.

[^159]: PanAmSat at 5-6; GE Americom at 6-8.

[^160]: *New Skies Market Access Order*, 14 FCC Rcd at 13040.

[^161]: *See* Wiltshire January 22 Letter at 2 (explaining that it
    designed NSS-7 to enable it to continue to provide service to U.S.
    customers).

[^162]: New Skies Satellites N. V., Petition for Declaratory Ruling, ,
    Order, DA 01-513 (Int\'l Bur., Sat. and Rad. Div., released
    concurrently with this Order).

[^163]: NSS-513 does not meet the requirements of Sections 25.202(g),
    25.210(a)(1), 25.210(a)(3), 25.210(c), 25.210(i), 25.210(j)(1), and
    25.211(a) of the Commission\'s rules, 47 C.F.R. §§ 25.202(g),
    25.210(a)(1), 25.210(a)(3), 25.210(c), 25.210(i), 25.210(j)(1),
    25.211(a).

[^164]: It is unlikely that any U.S. earth stations could access NSS-703
    at 57° E.L. because the satellite is below the horizon at Guam, the
    closest U.S. soil to the 57° E.L. orbital position. It is
    conceivable, however, that a U.S.-registered oil drilling or
    research platform could seek access to NSS-703 if it were operating
    within the satellite\'s service area.

[^165]: In the *New Skies Market Access Order*, the Commission granted
    136 earth station license applications and modification
    applications. Only one of those 136 applications, filed by
    Communications Satellite Systems, Inc. requested authority to
    communicate with NSS-703 at 57° E.L. Subsequently, this earth
    station operator informed us that, in practice, it does not
    communicate with NSS-703. Letter from Dori Schmitz, General Manager,
    Satellite Communications Systems, Inc., to Steven Spaeth,
    Attorney-Advisor, FCC, dated February 20, 2001. It therefore does
    not need this authority.

[^166]: *Intelsat LLC Licensing Order*, 15 FCC Rcd at 15517-18.

[^167]: *Id.* at 15518 and 15493-98.

[^168]: *Id.* at 15497.

[^169]: *Id.* at 15486-89.

[^170]: *Id.* at 15486.

[^171]: *Id.* at 15486-89.

[^172]: *Id.*

[^173]: *Id.*

[^174]: *New Skies Market Access Order,* 14 FCC Rcd at 13006 and 13012.

[^175]: *Id.*

[^176]: *Id.* at 13004.

[^177]: Wiltshire January 22 letter at 2.

[^178]: Wiltshire January 22 letter at 2.

[^179]: *Intelsat LLC Licensing Order,* 15 FCC Rcd 15490-92.

[^180]: *Id.* at 15493.

[^181]: *Intelsat LLC Licensing Reconsideration Order,* at ¶ 25.

[^182]: *Id.*

[^183]: *Id.*

[^184]: *Id.*

[^185]: *Intelsat LLC Licensing Order*, 15 FCC Rcd at 15494-95.

[^186]: *Id.* at 15497-98; *Intelsat LLC Licensing Reconsideration*
    *Order* at ¶ 35-36.

[^187]: *Intelsat LLC Licensing Reconsideration* *Order* at ¶ 35.

[^188]: *See* D'Uva February 14 letter.

[^189]: For example, the PanAmSat operational satellites PAS-2R and
    PAS-8B at 317º E.L. (2.5º from the NSS-806 at 319.5º E.L.) are the
    U.S. licensed satellites most closely spaced with any of the New
    Skies satellites subject of this Order. Coordination of the NSS-806,
    NSS-K, NSS-803, and NSS-513 with U.S. licensed satellites was
    effected prior to the transfer of these satellites from INTELSAT to
    New Skies. As we noted in the *Intelsat LLC Licensing Order*, the
    size of the smallest earth station antennas in either of the two
    satellite networks being coordinated is the most significant factor
    leading to a need for spacing greater than two degrees. *Intelsat
    LLC Licensing Order*, 15 FCC Rcd at 15496-97. Whereas we do not
    routinely license antennas with diameters smaller than 4.5 meters in
    diameter operating in the C-band or 1.2 meters in diameter operating
    in the Ku-band for services on U.S. territory, we do not control the
    size of antennas that may access either U.S. or non-U.S. licensed
    satellites from foreign points. This is a factor in satellite
    coordination, especially outside the U.S. domestic arc. The
    re-coordination that would be required if closer spacing were
    desired would still need to address earth station antenna size
    considerations.

[^190]: *Intelsat LLC Licensing Order*, 15 FCC Rcd at 15489-90.

[^191]: In the World Trade Organization Agreement on Basic
    Telecommunications Services, the U.S. committed to allow service
    providers from WTO member countries to provide a broad range of
    basic telecommunications services, including satellite services, in
    the United States. Final Act Embodying the Results of the Uruguay
    Round of Multilateral Trade Negotiations, Apr. 15, 1994, THE RESULTS
    OF THE URUGUAY ROUND OF MULTILATERAL TRADE NEGOTIATIONS: THE LEGAL
    TEXTS 2 (GATT Secretariat 1994), 33 I.L.M. 1125 (1994). The *DISCO
    II Order* revised FCC rules so that they are consistent with U.S.
    obligations with respect to satellite services.

[^192]: *DISCO II*, 12 FCC Rcd at 24158.

[^193]: *DISCO II*, 12 FCC Rcd at 24159.

[^194]: *DISCO II*, 12 FCC Rcd at 24159.

[^195]: *Intelsat LLC Licensing Order*, 15 FCC Rcd at 15489-90.