Before the

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

Washington, D.C. 20554

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| In the Matter of                 | * | File Nos. 190 -              |
|                                  | * | 193-SAT-P/LA-95              |
| **MORNING STAR SATELLITE         | ) |                              |
| COMPANY, L.L.C.**                | * | New IBSF No.                 |
|                                  | * | SAT-LOA-19950929-00120/      |
| Application for Authorization to |   | 00123                        |
| Construct, Launch, and Operate a | * |                              |
| Ka-Band Communications Satellite | * |                              |
| System in the Fixed-Satellite    | ) |                              |
| Service at Orbital Locations 62º | * |                              |
| W.L., 30º E.L., 107.5º E.L., and | * |                              |
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**MEMORANDUM OPINION AND ORDER**

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

By the Chief, International Bureau:

# 

# I. INtroduction

1\. In this Order, we cancel Morning Star Satellite Company's, L.L.C.
("Morning Star") authorization to construct, launch, and operate Ka-band
satellites in the fixed-satellite service. Morning Star has failed to
satisfy the initial, mandatory implementation milestone explicitly set
forth in its authorization requiring it to begin construction of this
satellite system by May 1998. Consequently, we render Morning Star's
authorization null and void, and the orbit locations that had been
assigned to Morning Star are available for reassignment to a qualified
applicant in the second Ka-band "processing round."

II\. BACKGROUND

2\. On May 9, 1997, the Chief, International Bureau, pursuant to
delegated authority, authorized Morning Star to construct, launch, and
operate four geostationary-orbit satellites and to provide
fixed-satellite service in the United States in the 19.7--20.2 GHz
frequency bands ("Ka-band").[^1] This authorization was granted as part
of the first "processing round" of Ka-band systems. In the first round,
the Bureau authorized a total of 14 Ka-band systems, including Morning
Star's Ka-band system.[^2] Morning Star proposed to offer services such
as high-speed data, voice, and interactive video communications with its
satellite system.[^3]

3\. Morning Star's license, like all instruments of authorization
granted to satellite licensees, was a conditional license. It contained
explicit deadlines or "milestones" for system implementation that
Morning Star was required to satisfy. Morning Star's authorization
explained that the milestones are necessary to ensure that Morning Star
proceeds in a "timely manner and does not tie up valuable orbital
locations and spectrum to the exclusion of qualified applicants."[^4]
Morning Star's authorization specified that:

... unless extended by the Commission for good cause shown, this
authorization shall become NULL AND VOID in the event the space station
is not constructed, launched, and successfully placed into operation in
accordance with the technical parameters and terms and conditions of the
authorization by the following dates:[^5]

Construction Construction

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

First satellite May 1998 April 2002 May 2002

First satellite at

remaining orbit

locations May 1999 April 2002 May 2002

4\. On November 3, 1999, Celsat America, Inc. ("Celsat"), filed a
Petition for Declaratory Ruling requesting that the Commission cancel
Morning Star's authorization based on Morning Star's failure to satisfy
its May 1998 construction commencement milestone.[^6] In a responsive
filing submitted on November 18, 1999, Morning Star denied that it had
not complied with the milestones in its authorization.[^7]

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

The Commission requires the execution of a non-contingent construction
contract to satisfy the construction commencement milestone of domestic
satellite licenses. The non-contingent requirement contemplates that
there will be neither significant delays between the execution of the
construction contract and the actual commencement of construction, nor
conditions precedent to construction.[^8]

6\. In its response, Morning Star provided a redacted copy of a
construction contract, effective June 29, 1998. The contract, submitted
pursuant to a request for confidential treatment, provides for the
general design, development, and manufacture of Morning Star's
spacecraft and ground support equipment.[^9] It did not contain any
terms relating to the contractor's construction schedule, Morning Star's
payment schedule or any other evidence of a binding commitment for
satellite construction. Thereafter, Morning Star submitted an affidavit
from Francis X. Solomon, President of Morning Star, also pursuant to a
request for confidentially. Mr. Solomon indicated that a contract had
been executed and the parties were proceeding in accordance with the
terms of the contract but did not provide any additional information
regarding its specific terms.[^10]

**III. DISCUSSION**

7\. It is long-standing Commission policy to impose mandatory
construction commencement milestones upon licensees in the
fixed-satellite service.[^11] The milestone schedule included in each
authorization is designed to ensure that licensed entities are
proceeding with construction and will achieve launch in a timely manner.
Requiring licensees to adhere strictly to a milestone schedule prevents
orbital locations from being 'warehoused' by licensees to the exclusion
of qualified entities that are prepared to implement systems
immediately.[^12] Moreover, the Commission has consistently required
licensees to execute non-contingent satellite construction contracts in
order to meet their construction commencement milestones.[^13] Because
it is manifestly in the public interest to ensure that licensees proceed
expeditiously in completing construction of their systems and commencing
service, the Commission has strictly enforced its milestone
schedules.[^14]

8\. By its terms, Morning Star's authorization required Morning Star to
commence construction of its satellite system by no later than May 1998.
To meet this deadline, Morning Star was required to have entered into a
non-contingent construction contract executed on or before this
deadline. Morning Star did not execute a construction contract until
June 29, 1998. Moreover, even if it had been timely executed, the
contract provided to the staff to document Morning Star's compliance
with its license condition shows no evidence that it binds the parties,
does not contain conditions precedent, and does not commit the
contractor to construct the satellite.

9\. Morning Star's authorization expressly provided that, unless
extended upon a showing of good cause, the license would become null and
void in the event Morning Star failed to satisfy any one of the three
milestones. Morning Star did not request an extension of the May 1998
construction commencement deadline, and we find no independent basis for
extending or otherwise waiving this threshold milestone.

**IV. CONCLUSION AND ORDERING CLAUSES**

10\. Based on our review of the record, including, but not limited to,
Morning Star's arguments in response to Celsat's informal complaint as
well as the affidavit from Morning Star's President, Francis X. Solomon,
we conclude that Morning Star has failed to meet the May 1998
construction commencement deadline, as required by its authorization. We
further conclude that Morning Star's failure to satisfy this condition
in its authorization renders the authorization null and void.

11\. Accordingly, IT IS ORDERED that, pursuant to Section 0.261 of the
Commission's rules, 47 C.F.R. § 0.261, the authorization held by Morning
Star Company L.L.C., File No. 190-193, SAT-P/LA-95, IBSF No.
SAT-LOA-19950929-00120/00123, IS DECLARED NULL AND VOID.

12\. IT IS FURTHER ORDERED that the orbital assignments granted in
*Morning Star Company, L.L.C.*, 12 FCC Rcd 6039 (Int'l Bur. 1997) are
available for reassignment.

**FEDERAL COMMUNICATIONS COMMISSION**

Donald Abelson

Chief, International Bureau

[^1]: *Morning Star Company, L.L.C.*, 12 FCC Rcd 6039 (Int'l Bur. 1997).
    Morning Star's request for uplink spectrum was inconsisent with the
    Ka-band frequency plan. Morning Star was authorized to operate in
    the 28.35-28.6 and/or 29.25-30.0 GHz bands and directed to file a
    modification once it determined which 300 MHz it wanted to use.
    *Id.* at 6045.

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

[^3]: *Morning Star Company, L.L.C.*, 12 FCC Rcd at 6040.

[^4]: *Id*. at 6044.

[^5]: *Id.* at 6050.

[^6]: Although styled as a Petition for Declaratory Ruling, Celsat's
    filing is in the nature of an informal complaint and will be treated
    as such herein.

[^7]: We have also considered the following related filings: Letter from
    Tara Kalagner Giunta, Counsel for Pacific Century Group, Inc., to
    Magalie Roman Salas, Secretary of the FCC (Nov. 5, 1999); Reply of
    Celsat America, Inc., filed on December 1, 1999; and Motion to
    Strike, filed on December 9, 1999, by Morning Star.

[^8]: Letter from Thomas S. Tycz, Chief, Satellite and
    Radiocommunication Division, FCC, to Francis L. Young, Esq., Young &
    Jatlow (Dec. 9, 1999), citing *Norris Satellite Communications,
    Inc*., 12 FCC Rcd 22299, 22303-04 (1997).

[^9]: Letter from Francis L. Young, Young & Jatlow, Counsel for Morning
    Star, Inc. to Magalie Roman Salas, Secretary, FCC (Dec. 22, 1999).

[^10]: Letter from Francis L. Young, Young & Jatlow, Counsel for Morning
    Star, Inc. to Magalie Roman Salas, Secretary, FCC (Jan. 19, 1999).

[^11]: *See, e.g., Norris Satellite Communications, Inc.*, 12 FCC Rcd
    22,299 (1997).

[^12]: *MCI Communications Corporation*, 2 FCC Rcd 233 (CCB 1987).

[^13]: *Norris Satellite Communications, Inc.*, 12 FCC Rcd 22,299
    (1997).

[^14]: *See, e.g., National Exchange Satellite*, Inc., 8 FCC Rcd 636
    (1993); *Advanced Communications Corporation*, 10 FCC Rcd 13,337
    (Int'l Bur. 1995).