**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+----+------------------------------+
| In the matter of                 | *  | File No.                     |
|                                  | *) | SAT-MOD-199981211-00099      |
| Sirius Satellite Radio Inc.      | ** |                              |
|                                  |    | Fee Control No.              |
| Application to Modify            | *  | 0107038345114001             |
| Authorization                    | *) |                              |
|                                  | ** |                              |
| To Launch and Operate a          |    |                              |
| Non-Geostationary                | *  |                              |
|                                  | *) |                              |
| Satellite DARS System            | ** |                              |
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|                                  | *) |                              |
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|                                  | *) |                              |
|                                  | ** |                              |
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|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
+----------------------------------+----+------------------------------+

**MEMORANDUM OPINION AND ORDER**

**Adopted:** June 13, 2003 **Released:** June 19, 2003

By the Commission:

1\. This memorandum opinion and order denies the Application for Review
filed March 15, 2002 by Sirius Satellite Radio Inc. and its subsidiary
Satellite CD Radio, Inc. (Sirius). Sirius seeks review of the Managing
Director\'s letter ruling rejecting Sirius's "Petition for Waiver of
Application Fee" in connection with modification of Sirius's space
station license.

**BACKGROUND**

2\. The Commission adopted rules for the satellite digital audio radio
service ("SDARS") in 1997. At that time the Commission authorized Sirius
to launch and operate a two-satellite geostationary satellite (GSO)
system to provide such radio service. *See Satellite CD Radio Inc.*, 13
FCC Rcd 7971 (1997). Thereafter, in an order released March 9, 2001, the
International Bureau (IB) granted Sirius's application to modify its
license to increase the number of satellites to three and to launch a
three-satellite, non-geostationary orbit (NGSO) system in order to offer
better quality service. *See* *Sirius Satellite Radio Inc.*, 16 FCC Rcd
5419 (IB 2001).[^1] IB determined, however, that Sirius had not
submitted the appropriate fee with its application and, pursuant to
Section 1.1116(b) of the Commission's rules, 47 C.F.R. § 1.1116(b),[^2]
it directed Sirius to pay the fee for authority to launch and operate an
NGSO system. On June 4, 2001, the Office of Managing Director (OMD)
issued Sirius a Bill For Collection in the amount of \$286,095, which
represented the difference between the \$308,105 fee for authority to
launch and operate an NGSO system and the \$22,010 fee for modification
of an NGSO system paid by Sirius. *See* 47 C.F.R. § 1.1107(10).

3\. At the same time as it paid the amount billed on July 2, 2001,
almost four months after IB's decision, Sirius filed a petition for
waiver or, if appropriate, reconsideration, and refund with OMD. It
argued that it was unlawful for the Commission to charge an initial
launch and operate fee when granting permission to modify an existing
license, that the fee was excessive in relation to the cost of
processing the application, and that a waiver would be consistent with
precedent. OMD denied Sirius's request principally on the ground that
Sirius was re-arguing issues already resolved by IB for which Sirius had
not sought timely reconsideration or filed a timely application for
review with the Commission. To the extent portions of Sirius's petition
properly raised fee waiver matters within OMD's authority, it also found
Sirius's allegations with regard to processing costs and Commission
precedent to be without merit.

4\. In its Application for Review Sirius argues that OMD erred in
refusing to reconsider the appropriateness of the launch and operate
fee. First, it contends that the Commission's rules delegate exclusive
authority to issue fee determinations and to reconsider them to OMD, not
IB, and that OMD made its fee determination in this case in its June 4,
2001 billing. Sirius argues that it thereupon properly sought
reconsideration of that ruling in a timely filed waiver request after it
paid the disputed fee, in accordance with Section 1.1118(b) of the
rules, 47 C.F.R. § 1.1118(b).[^3] This rule, Sirius maintains, did not
allow it to challenge the fee earlier by seeking reconsideration of IB's
order because it did not yet know the amount due and thus could not pay
and at the same time preserve its right to reconsideration until it was
billed by OMD. Second, Sirius asserts that its application was
miscategorized because it did not seek or receive new authority to
launch and operate, but only a modification of its license. Sirius
contends that both its application and IB's order expressly describe and
treat the application as one to modify Sirius's space station
authorization. Moreover, Sirius maintains, it was too late to apply for
authority to launch and operate a new SDARS system because the auction
that selected the SDARS licensees was completed in 1997. Finally, Sirius
argues that even if the Commission concludes that the launch and operate
fee applies to Sirius's application, good cause exists for a fee waiver
because of unusual circumstances. Specifically Sirius asserts that the
Commission has never before considered an application to modify a GSO
system to an NGSO system, and the fee rules do not directly address this
situation. Sirius concludes that a waiver is also warranted in order to
avoid putting it at a competitive disadvantage.

**DISCUSSION**

5\. We conclude that the Managing Director correctly denied Sirius's
waiver request. To begin with, we affirm OMD's principal conclusion that
Sirius's claim that the Commission could not lawfully impose the fee was
an untimely and misdirected effort to re-argue or appeal IB's decision.
Sirius does not dispute that it did not seek reconsideration of IB's
order or file for Commission review within thirty days, as required by
our rules. *See* 47 C.F.R. §§ 1.106(f); 1.115(d). It argues, however,
that the relevant fee ruling was made subsequently by OMD and that IB
lacked authority to decide this matter. We disagree with Sirius's
analysis for a number of reasons.

6\. First, Sirius's characterization of IB's fee ruling as "preliminary"
and "thus, not ripe for reconsideration" (Application for Review at 8 n.
23) is erroneous. As OMD noted, the issue was squarely presented to the
Bureau by the parties. XM Satellite Radio, Inc., the other SDARS
licensee, filed comments with IB challenging Sirius's fee submission,
and Sirius responded. The Bureau directly addressed the parties'
arguments at ¶¶ 23-24 of its order, where it explained the reasons for
its fee determination, and specifically ordered compliance by Sirius at
¶ 35.[^4]

7\. Second, OMD's subsequent issuance of a Bill For Collection was not a
fee ruling, as Sirius describes it. Rather, presentation of the actual
bill was a ministerial act implementing the Bureau's prior decision.
OMD's Bill thus referenced the Bureau's order and expressly stated: "In
the course of reviewing the application and comments filed in the
proceeding, it was determined \[by IB\] that Sirius had filed the
incorrect fee." Accordingly, as provided by 47 C.F.R. § 1.1116(b), OMD
remitted a bill for the amount due. Moreover, despite its contention
otherwise, Sirius could have readily ascertained the amount it owed
earlier from IB's order by subtracting the payment it had submitted with
its application from the correct fee specified in 47 C.F.R. §
1.1107(10). Therefore, Sirius was not precluded from taking timely
action by 47 C.F.R. § 1.1118(b).[^5]

8\. Additionally, notwithstanding its insistence that OMD should have
considered the merits of its waiver petition, we agree that, for the
most part, Sirius's arguments were a belated challenge to IB's prior
conclusion regarding the proper fee category. To the extent that Sirius
presented arguments that properly could be deemed a request for waiver,
those matters were addressed by OMD. In sum, we agree with OMD that much
of Sirius's petition was an untimely attempt to further contest a final
Bureau order concerning the proper fee payment by seeking a new ruling
from OMD on the same question.

9\. Even if Sirius had filed a timely application for review of IB's
order, however, we would have affirmed IB's fee determination. The
Bureau's order stated that "because this \[application\] is Sirius's
first request to construct, launch, and operate an NGSO system, it is
appropriate that Sirius should pay the application fee for such a
system." *Sirius Satellite Radio Inc.*, 16 FCC Rcd at 5428 ¶ 24. We
agree. It was erroneous for Sirius to pay the fee for modification of an
NGSO system with its application because, as explained below, it had not
previously been authorized to launch and operate an NGSO system.

10\. In 1997 the Commission granted Sirius a license to construct,
launch, and operate an SDARS system consisting of two geostationary
satellites. Sirius's assertion that the Bureau only granted a
modification of that license is technically correct under Section 309 of
the Act. But for the first time, as IB correctly held, Sirius also
sought and was granted authority to launch three satellites into
non-geostationary orbits, which properly placed it in the specific fee
category governing authority to launch and operate an NGSO system. *See*
Section 1.1107(10) (application for authority to launch and operate per
system of technically identical \[NGSO\] satellites). The application at
issue did not "modify" either the GSO system previously approved or a
previously approved NGSO system (as contemplated under the statutory fee
provisions governing modification of these two types of satellite
systems), but asked the Commission to approve an entirely new NGSO
system, wholly different in its technical and operational aspects.

11\. We perceive no unfairness in the Bureau's decision to consider this
an NGSO application under the fee rules and its decision is fully
consistent with the language and policy of the statutory and rule
provisions governing fees.[^6] As to waiver issues, it is not
surprising, given the relatively short history of this service and small
number of licensees, that this situation is unusual if not unique, as
Sirius asserts, but this alone does not provide good cause for a waiver.
*See Establishment of a Fee Collection* Program, 2 FCC Rcd 947, 958 ¶ 70
(1987) (Commission construes waiver authority narrowly and requires
showing of "extraordinary and compelling circumstances"). Nor can we
accept Sirius's argument that it should not have to pay the correct fee
associated with its application because this will assertedly advantage
its competitor. We collect fees based on a schedule established by
Congress to recover a portion of the expenses we incur in processing
applications. These fees are incidental to system implementation and, as
a practical matter, are unlikely to affect marketplace competition. All
licensees incur fee-filing expenses. Sirius is no exception. Moreover,
our fee structure is designed such that all licensees who build a
particular type of satellite system pay the same fee.

12\. In this case, Sirius could have avoided the additional fees
associated with NGSO systems by continuing to pursue its originally
proposed GSO system configuration. Instead, Sirius chose to pursue a new
system configuration and, as a result, incurred additional fees
consistent with the obligation imposed on other NGSO applicants. Absent
such treatment, licensees would have every incentive to apply for the
system with the smallest fees and then "modify" for another small fee in
order to avoid the expense of applying for the more expensive system in
the first instance. That is the competitive and public policy harm we
seek to avoid here. We note that Sirius paid only \$39,600 when it filed
its original geostationary application on May 18, 1990. Three days
later, the statutory fee schedule for geostationary systems was changed
to \$72,030 per satellite (as opposed to the \$19,800 per satellite paid
by Sirius). *See Establishment of a Fee Collection Program to Implement
the Provisions of the Omnibus Budget Reconciliation Act of 1989,* 5 FCC
Rcd 3559, 3631 (1990). A separate fee category for LEO satellites was
enacted in 1993, which provided for a fee of \$210,000 to launch and
operate NGSO systems. *See Revised Fees Established Pursuant to the
Telecommunications Authorization Act of* 1992, 8 FCC Rcd 903, 905
(1993). Thus, we do not think that Sirius has suffered any unique
competitive disadvantage as a result of its fee payment; other satellite
applicants may have suffered similar disadvantages resulting from
changes in the statutory fee schedule and matters of timing. Each
applicant is expected to pay the statutory filing fee appropriate to the
type of application at issue. In short, we agree with OMD that Sirius's
arguments do not justify a fee waiver.

13\. ACCORDINGLY, IT IS ORDERED That the application for review filed
March 15, 2002 by Sirius Satellite Radio Inc. and its subsidiary
Satellite CD Radio, Inc. IS DENIED.

FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch

Secretary

[^1]: Sirius filed the application December 11, 1998. It launched all
    three of its satellites pursuant to special temporary authority
    granted by the Bureau December 20, 1999. *Id.* at 5420 n. 4.

[^2]: Section 1.1116(b) provides in pertinent part:

    > Applications or filings accompanied by insufficient fees or no
    > fees which are inadvertently forwarded to Commission staff for
    > substantive review will be billed for the amount due if the
    > discrepancy is not discovered until after 30 calendar days from
    > the receipt of the application or filing at the Commission.

[^3]: Section 1.1118(b) states in pertinent part that:

    > Actions taken by Financial Operations staff are subject to the
    > reconsideration and review provisions of §§ 1.106 and 1.115 of
    > this part, EXCEPT THAT reconsideration and/or review will only be
    > available where the applicant has made the full and proper payment
    > of the underlying fee as required by this subpart.

[^4]: We also disagree with Sirius that XM's comments were procedurally
    improper (Application for Review at 3-4) because they violated the
    requirement of 47 C.F.R. § 1.1117(c) that requests for fee
    determinations be "filed as a separate pleading" and directed "to
    the attention of the Managing Director." This language was added to
    Section 1.1117(c) in 2001, *see Assessment and Collection of
    Regulatory Fees for Fiscal Year 2001*, 16 FCC Rcd 13525, 13537 ¶ 40
    (2001), two years after XM's comments were filed. IB also had full
    authority to rule on this matter and to consider the views of the
    parties in doing so. *See* 47 C.F.R. § 0.261(a)(4) (IB delegation
    includes "without limitation" specific authority "to act upon
    applications for international and domestic satellite systems and
    earth stations"). Moreover, in this regard, an integral element in
    IB\'s evaluation of the application is its determination whether the
    applicant did, in fact, tender the appropriate fee. *See* 47 C.F.R.
    § 25.110(f) (\"Each \[satellite\] application shall be accompanied
    by the appropriate fee, specified by, and submitted in accordance
    with, subpart G of part 1 of this chapter.\"). In any event, if
    Sirius believed that IB's action exceeded its delegated authority,
    the proper course was to seek timely reconsideration or review of
    IB's decision, not to seek a new ruling from OMD.

[^5]: Sirius's assertion that it could not anticipate whether OMD would
    impose a late penalty is of no moment because 47 C.F.R. § 1.1118(b)
    only requires full payment of the "underlying fee" before an
    applicant may seek reconsideration of actions taken by Financial
    Operations staff.

[^6]: *See* 47 U.S.C. § 158(g) (Schedule of Application Fees, Common
    Carrier Services, Item 22); 47 C.F.R. § 1.1107(10). The OMD decision
    noted, for example, that:

    > \[T\]he work of reviewing the modification included substantial
    > international coordination, the overall effort of which was
    > comparable to efforts expended in the review of entirely new
    > applications.