**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+---+------------------------------+
| In the Matter of                 | * | IB DOCKET NO. 00-91          |
|                                  | * |                              |
| Availability of INTELSAT         | ) |                              |
|                                  | * |                              |
| Space Segment Capacity to        | * |                              |
|                                  |   |                              |
| Users and Service Providers      | * |                              |
|                                  | * |                              |
| Seeking to Access                | ) |                              |
|                                  | * |                              |
| INTELSAT Directly                | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
+----------------------------------+---+------------------------------+

**NOTICE OF PROPOSED RULE MAKING**

**Adopted:** May 22, 2000 **Released:** May 24, 2000

Comments due: June 23, 2000

Reply Comments due: July 6, 2000

Responses to reply comments due: July 11, 2000

By the Commission:

1.  We initiate this rulemaking pursuant to the Open-Market
    Reorganization for the Betterment of International
    Telecommunications Act (the ORBIT Act or Act), which was enacted
    into law on March 17, 2000.[^1] The ORBIT Act amends the
    Communications Satellite Act of 1962[^2] (1962 Satellite Act) to
    promote a fully competitive global market for satellite
    communications services by fully privatizing INTELSAT and
    Inmarsat.[^3] The ORBIT Act also provides for users or providers of
    telecommunications service to obtain Level 3 direct access from
    INTELSAT. Section 641(b) of the Act requires the Commission to
    complete a rulemaking within 180 days of enactment to determine
    whether "sufficient opportunity" exists for users and service
    providers "to access INTELSAT space segment capacity directly to
    meet their service or capacity requirements."[^4] It also requires
    the Commission to take "appropriate action" if it finds that
    sufficient opportunity does not exist and otherwise to "take such
    steps as may be necessary to prevent circumvention" of the
    section.[^5]

2.  The purpose of this proceeding is to: (1) obtain the information
    necessary to make the determination required by the ORBIT Act; (2)
    seek comment on potential Commission action should we conclude that
    sufficient opportunity does not exist for users and service
    providers to directly access INTELSAT space segment capacity; and
    (3)**,** if necessary**,** take such actions as may be appropriate
    to facilitate direct access. In reaching conclusions in this
    proceeding, we will take into account the fact that INTELSAT is
    currently seeking to privatize its commercial operations. As part of
    the privatization, INTELSAT will redefine existing distribution
    relationships with its Signatories and direct access users.
    Post-privatization distribution arrangements are currently being
    negotiated as part of the privatization process.

3.  We intend to make the determination required by Section 641(b) of
    the ORBIT Act no later than September 13, 2000, as required by the
    Act. If necessary, we may initiate additional proceedings if our
    determination warrants such action.

4.  We are making Comsat Corporation (Comsat), the U.S. Signatory to
    INTELSAT, a party respondent in this proceeding, and will require
    Comsat to provide the information concerning existing and future
    capacity in the INTELSAT system necessary for us to make the Section
    641(b) determination. We also may seek additional information from
    Comsat or directly from INTELSAT if necessary and appropriate. In
    view of the short time specified in Section 641(b), we do not
    anticipate extending the filing deadlines established by this
    Notice.

# Discussion

5.  INTELSAT is a 143-member intergovernmental cooperative that operates
    17 satellites providing telecommunications services to over 99
    percent of the globe. Comsat is the U.S. investor and participant in
    INTELSAT commercial decisions, pursuant to the 1962 Satellite Act.
    Until 1999, Comsat was the only company permitted to access INTELSAT
    satellites and distribute its services in the United States.

6.  In 1999, we permitted users and service providers in the United
    States to obtain Level 3 direct access to INTELSAT space segment
    capacity. Level 3 direct access permits non-signatory users and
    service providers to enter into contractual agreements with INTELSAT
    for space segment capacity at the same rates that INTELSAT charges
    its Signatories.[^6] We concluded that Level 3 direct access would
    result in substantial benefits, including: (1) creating operational
    efficiencies and cost savings for U.S. customers in accessing
    INTELSAT satellites;[^7] (2) exerting competitive pressure on other
    satellite operators in terms of service quality and rates, as well
    as on Comsat with respect to services for which Comsat has a
    substantial mark up over INTELSAT rates;[^8] and (3) enabling U.S.
    service providers to be more competitive in the global
    telecommunications market with their foreign counterparts.[^9]

7.  We declined, however, to take an additional step requested by two
    service providers and require the "portability" of INTELSAT space
    segment capacity controlled by Comsat by virtue of its historic
    monopoly over access to INTELSAT satellites. MCI Worldcom and Sprint
    argued that, because Comsat has access to the vast majority of
    INTELSAT satellite capacity accessible to U.S. users,
    "portability"of Comsat capacity is necessary for U.S. direct access
    customers to enjoy the benefits of direct access and prevent Comsat
    from continuing a de facto monopoly over INTELSAT capacity. In this
    context, "portability" would permit a customer of Comsat to obtain
    directly from INTELSAT the transponder capacity that the customer
    previously was receiving through Comsat. Comsat opposed portability
    contending that the Commission does not have authority to abrogate
    its agreements with INTELSAT for access to space segment capacity.

8.  We found that the record then before us did not support requiring
    the portability of INTELSAT space segment capacity controlled by
    Comsat.[^10] Absent evidence that INTELSAT will be unable to provide
    sufficient capacity to U.S. direct access customers, we did not wish
    to interfere with Comsat's service agreements with INTELSAT. We
    said, however, that we would be concerned if Comsat control of
    INTELSAT space segment capacity effectively denies U.S. carriers and
    users the benefits of direct access, or if Comsat moves to increase
    its control of INTELSAT capacity in order to deny the availability
    of capacity to U.S. direct access users. We therefore indicated our
    willingness to revisit this issue if evidence is presented of
    insufficient capacity available to direct access customers or that
    Comsat is using its Signatory status to buy future or additional
    INTELSAT space segment capacity without any U.S. customer
    requirements. We said that, if INTELSAT capacity proves insufficient
    to serve U.S. direct access user needs because Comsat acquires
    capacity available for U.S. service, direct access users should
    first pursue commercial solutions with Comsat to resolve the matter.
    We stated that we would entertain petitions for a regulatory
    solution if commercial solutions are unavailable and the full
    benefits of direct access are denied to U.S. users of INTELSAT.

**A. Requirements of the ORBIT Act**

9.  The ORBIT Act provides for users and service providers in the United
    States to obtain Level 3 direct access to INTELSAT. Section 641(a)
    provides:

> \[a\] ACCESS PERMITTED -- Beginning on the date of enactment of this
> title, users or providers of telecommunications services shall be
> permitted to obtain direct access to INTELSAT telecommunications
> services and space segment capacity through purchases of such capacity
> or services from INTELSAT. Such direct access shall be at the level
> commonly referred to by INTELSAT, on the date of enactment of this
> title, as "Level III".

Further, Section 641(b) provides:

> \[b\] RULEMAKING -- Within 180 days after the date of enactment of
> this title, the Commission shall complete a rulemaking, with notice
> and opportunity for submission of comment by interested persons, to
> determine if users or providers of telecommunications services have
> sufficient opportunity to access INTELSAT space segment capacity
> directly from INTELSAT to meet their service or capacity requirements.
> If the Commission determines that such opportunity to access does not
> exist, the Commission shall take appropriate action to facilitate such
> direct access pursuant to its authority under this Act and the
> Communications Act of 1934. The Commission shall take such steps as
> may be necessary to prevent the circumvention of the intent of this
> section.

And, Section 641(c) provides:

> \[c\] CONTRACT PRESERVATION -- Nothing in this section shall be
> construed to permit the abrogation or modification of any contract.

Finally, we note that the ORBIT Act retains sections 102(c) and
201(c)(2) of the 1962 Satellite Act until the Commission determines that
INTELSAT privatization is consistent with the criteria specified in
other provisions of the ORBIT Act.[^11] Section 102(c), in part,
requires that "all authorized users have non-discriminatory access to
the system."[^12] Section 201(c)(2) requires the Commission to ensure
that "all present and future authorized carriers shall have
non-discriminatory use of, and equitable access to" the system "under
just and reasonable charges" and to "regulate the manner in which
available facilities of the system.... are allocated."[^13]

10. In carrying out the requirements of Section 641, we must obtain
    information as to the availability of existing and planned INTELSAT
    capacity to meet present and future service and capacity
    requirements of direct access users and service providers in the
    United States. If we find inadequate capacity available to satisfy
    these requirements, we must determine whether users and service
    providers have a "sufficient opportunity" to directly access
    INTELSAT to meet these service and capacity requirements. In
    considering whether "sufficient opportunity" exists, we also must
    take into account how current distribution arrangements for INTELSAT
    impact the availability of current and planned capacity to U.S.
    users and service providers.

## INTELSAT Distribution Arrangements

11. INTELSAT provides capacity to Signatories and direct access users on
    a channel/carrier service basis and on a transponder lease
    basis.[^14] In addition, INTELSAT provides cable restoration,
    television, and radio broadcast channel services. Channel/carrier
    services generally are offered for periods ranging from one day to
    15 years, depending on the service. Transponder capacity can be
    leased for all services pursuant to INTELSAT's Transponder Lease
    Policy.[^15] That policy applies to operational and non-operational
    capacity and provides for guaranteed reservations and first refusal
    reservations.

12. Operational capacity is: (1) capacity currently operational at a
    specific orbital location, or (2) capacity (either procured or not
    yet procured) that will replace an existing satellite at a specific
    orbital location and that has the same or similar characteristics as
    the capacity it is replacing.[^16] Non-operational capacity is
    either: (1) capacity on a satellite at a new orbital location,
    or (2) capacity on a future satellite on an existing orbital
    location, that offers technical characteristics significantly
    different from those previously available.[^17]

13. A Signatory or direct access user can "guarantee" reservations for
    both operational and non-operational capacity by submitting an
    initial deposit and making additional payments prior to the start of
    service. No deposit is required from customers deemed to be fully
    creditworthy.[^18] The effect of a guaranteed reservation is to
    ensure the will be available to the customer at the start date for
    service. As an alternative, a Signatory or direct access user can
    obtain a "first refusal" reservation on operational capacity for a
    specified fee up to three years prior to initiation of service.[^19]
    The first refusal reservation gives the customer the first
    opportunity to place a guaranteed reservation on specific capacity.
    A first refusal reservation, however, may be challenged by another
    customer seeking to place a guaranteed reservation on the same
    capacity. In such a case, the customer with the first refusal
    reservation must either (1) enter into a guaranteed reservation, (2)
    transfer the first refusal reservation to alternative capacity,
    or (3) relinquish the first refusal reservation with refund of the
    fee. Both guaranteed and first refusal reservations also are
    available for non-operational capacity that has not yet been
    procured up to three and five years in advance of capacity
    availability, subject to such availability, a fee (unless the
    customer is deemed fully creditworthy), and other conditions.[^20]

14. Both guaranteed and first refusal reservations are accepted on a
    first-come, first-served basis.[^21] For international services,
    they must be accompanied by a matching order from the customer's
    foreign correspondent providing the matching half circuit link. Each
    customer may incur 50 percent of the termination liability for
    failure to implement a guaranteed reservation.[^22] All in-service
    long-term leases will be considered to be under an "automatic" first
    refusal reservation for purposes of renewal of the lease; and
    current leaseholders at any time may upgrade their automatic first
    refusal reservations from lease renewal to guaranteed status.[^23]

15. The INTELSAT arrangements for capacity distribution to Signatories
    and direct access users provide a process through which INTELSAT
    capacity can be tied up well into the future, even before satellites
    are constructed and launched. The primary beneficiaries of this
    arrangement are INTELSAT Signatories that are involved in the
    planning and implementation of new satellites and services. From a
    commercial standpoint, the process is beneficial to INTELSAT because
    it ensures the future usage of planned capacity. The process appears
    to apply equally to direct access users. We tentatively conclude,
    however, that to the extent that existing and future satellite
    capacity is tied up by guaranteed or first refusal reservations, and
    that long-term leases are automatically renewed as first refusal
    reservations, new direct access users are placed at a disadvantage
    in obtaining capacity. This disadvantage particularly applies to
    U.S. direct access users, who only recently have been allowed to use
    INTELSAT capacity on a direct access basis as a result of our 1999
    *Direct Access decision*. We request comment on this tentative
    conclusion.

16\. Finally, we note that privatization of INTELSAT will entail
redefinition of arrangements for distribution of INTELSAT services. The
benefits of direct access, however, must not be lost through
privatization. We indicated in our 1999 *Direct Access decision*,
INTELSAT should have a retail role upon privatization and arrangements
with distributors must be non-exclusive and non-preferential to
Signatories. [^24] The INTELSAT Assembly of Parties, in deciding on
principle to privatize, determined that, where permitted by national law
and policy, INTELSAT should \"enter into new service agreements to
provide satellite services (including, where permitted, direct to
customers) on an independent and transparent basis.\" [^25] The direct
access policy established by the ORBIT Act effectively mandates direct
access as a matter of law and policy in the United States. [^26]

17\. Accordingly, looking forward, we expect that U.S. service providers
who must compete in the global telecommunications market with former
INTELSAT Signatories will have the same distribution rights and
opportunities as those of former Signatories. We also expect that U.S.
users that make a commercial decision not to commit to being a
distributor will be able to take service directly from INTELSAT. We seek
comment on these expectations and the effect that post-privatization
distribution arrangements that do not meet these expectations would have
on the opportunity for users and service providers to access INTELSAT
space segment capacity directly. [^27] We also request comment on
whether and to what extent post-privatization arrangements may serve to
resolve or exacerbate any problems with the ability of U.S. users and
service providers to obtain INTELSAT capacity to meet their needs.
Specifically, we seek comment on what type of action, if any, would be
appropriate in the event that post-privatization distribution
arrangements limit INTELSAT\'s flexibility in negotiating other
arrangements with customers, whether retail or wholesale. Likewise, we
seek comment on what action we could take if distribution arrangements
impede the opportunity for direct access to INTELSAT capacity in the
U.S. market. In particular, how would we adequately address the concerns
expressed above if certain aspects of INTELSAT\'s current distribution
arrangements, including unlimited extension of leases and guaranteed
reservations, are replicated after privatization? We also would be
concerned if distribution arrangements limit INTELSAT\'s commercial
flexibility to develop and provide services and, thereby, diminish its
effectiveness as a competitor in the U.S. market and opportunities for
direct access. Finally, we seek comment whether we should also examine
these matters in connection with INTELSAT's request to operate in the
U.S. market as a private entity. [^28]

**C. INTELSAT Capacity Availability**

16. The 17 currently operating INTELSAT satellites include one INTELSAT
    V-A, five INTELSAT VI, seven INTELSAT VII-VII-A, and four INTELSAT
    VIII satellites.[^29] They are used to provide telecommunications
    and video services, including telephony, facsimile, video
    conferencing, multi-media traffic, television, data transmission and
    Internet services.[^30] INTELSAT plans to launch and operate 10
    replacement satellites that include seven INTELSAT IX, two NI-ALPHA,
    and one NI-BETA satellite**s** in the future.[^31] Each operational
    and replacement satellite has C-band and Ku-band transponders,
    except for the NI-BETA satellite, which will operate in the Ku-band
    only.[^32] Some currently operating satellites will be taken out of
    operation as replacement satellites are launched. Other existing
    operating satellites will be moved to other orbit locations. By the
    end of 2004, INTELSAT plans to have a system comprised of 22
    satellites.[^33]

17. Of the 17 currently operational satellites, 13 are capable of
    accessing part of the contiguous United States (CONUS).[^34] Of the
    planned satellites, seven will have partial CONUS coverage.[^35] By
    the end of 2004, INTELSAT plans to have 15 satellites capable of
    partial CONUS coverage, of which some will have coverage of Puerto
    Rico. In addition, certain INTELSAT satellites are or will be
    capable of accessing Alaska, Hawaii, and/or the Mariana Islands and
    Guam.[^36] While the aggregate usable bandwidth of these satellites
    can be calculated,[^37] this calculation in and of itself would not
    yield an accurate picture of capacity available to U.S. users. The
    amount of available bandwidth depends on the configuration of
    services for which it is used. The same bandwidth also can be used
    for service to and from other countries. In addition, a U.S. user or
    service provider and its foreign correspondents must operate
    "matching" half circuits. Thus, in order to assess the availability
    of existing and future U.S. capacity, we must determine the amount
    of capacity in terms of bandwidth that has not yet been committed to
    Signatories, including Comsat, and whether available capacity can be
    "matched" with the user or service provider's foreign correspondent.

18. In 1999, INTELSAT provided to Commission staff on an informal basis
    a summary of uncommitted capacity available on INTELSAT satellites
    now serving North America.[^38] Uncommitted capacity means capacity
    not already claimed by Signatories and direct access users through
    service agreements, guaranteed or first refusal reservations. The
    information showed that there is very little capacity currently
    available for service to and from North America that could be used
    by U.S. direct access users. Only two satellites have an appreciable
    amount of uncommitted capacity available to and from North America.
    Of these, the available capacity on the 304.5E (55.5 W) satellite is
    not useful over North America because it is in the extended C band
    (3.4 -- 3.7 GHz), of which only 50 MHz (3.60 -- 3.65 GHz) is
    available on a very limited basis in the United States at this time,
    requiring case-by-case electromagnetic compatibility analysis. The
    capacity on the 330.5E (29.5W) satellite is of marginal use because
    the satellite is in inclined orbit and the connectivity is limited
    to a single spot beam.

19. The information informally received from INTELSAT, by itself, is
    inadequate for us to make the determinations required by the ORBIT
    Act. To determine whether users and service providers have a
    sufficient opportunity to access INTELSAT space segment capacity
    directly to meet their service or capacity requirements, we must
    provide them an opportunity to comment on current information about
    uncommitted capacity. This information must cover not only existing
    satellites, but also satellites planned for future construction and
    launch. Further, in considering "appropriate action" that may be
    available, we will require information about committed capacity on
    existing and planned satellites \-- that is, capacity that is
    subject to guaranteed and first refusal reservations. Our interest
    in committed capacity applies primarily to that held by Comsat as
    the U.S. Signatory. As we noted in our *Direct Access decision*, we
    would be concerned if Comsat's control of space segment capacity
    effectively denies users the benefits of direct access or if Comsat
    moves to increase its control of capacity in order to deny its
    availability to direct access users.

20. We therefore require Comsat to obtain from INTELSAT, and provide as
    part of its comments, the following information in the format shown
    in Appendix A:

> \[1\] Uncommitted capacity (*i.e.*, not committed under a first
> refusal reservation or a guaranteed reservation) available for service
> to and from North America on existing satellites identified in
> footnote 29. The information should be provided on a
> satellite-by-satellite basis by beam and in units of 36 MHz bandwidth
> equivalents. For each beam, the information should disclose beam
> direction (*e.g.*, Europe to North America; North America to South
> America); and
>
> \(2\) Uncommitted capacity (*i.e.*, not committed under a first
> refusal reservation or a guaranteed reservation) available for service
> to and from North America on future satellites identified in footnote
> 30. The information also should be provided on a
> satellite-by-satellite basis by beam and in units of 36 MHz bandwidth
> equivalents. For each beam, the information should disclose the beam
> direction (Europe to North America; North America to South America).

21. We request comment on what should constitute "sufficient
    opportunity" to access INTELSAT directly. In view of the information
    Comsat provides as to the availability of INTELSAT capacity, we
    request comment as to whether uncommitted capacity on existing and
    future satellites will give users and service providers "sufficient
    opportunity" to access INTELSAT directly to meet their service and
    capacity requirements. Users and service providers should describe
    their service and capacity requirements, including the type of
    services and current and future bandwidth requirements. They should
    discuss their initial experiences as direct access users in
    obtaining capacity from INTELSAT. They also should demonstrate the
    extent to which INTELSAT is the only alternative for international
    transmission capacity for operational or technical reasons, or why
    use of INTELSAT capacity may be preferable to other alternatives.

22\. We also require that Comsat provide in the format specified in
Appendix B information concerning capacity it has committed on both
future and planned satellites providing service to or from North
America. Comsat must provide on a satellite-by-satellite basis
information as to capacity that it: (1) now has in service; (2) holds
but does not have in service; (3) holds as a guaranteed reservation; and
(4) holds as a first refusal reservation. Comsat must also indicate the
extent to which the capacity it holds or has reserved on future
satellites is intended to satisfy existing long-term contracts that will
continue when future capacity becomes available. It must also identify
capacity on future satellites for which it has no explicit customer
requirements. In addition, Comsat must indicate the extent to which it
holds or has capacity reservations in anticipation of renewal of
existing long-term contracts. To the extent that certain portions of
this information may be commercially sensitive, we will consider
requests submitted consistent with Section 0.459 of the Commission's
rules that submitted materials be treated confidentially.[^39]

23\. We request that users and service providers comment on the effect
of Comsat-held capacity on their ability to directly access INTELSAT to
satisfy existing and future service and capacity requirements.
Specifically, we request comment on whether Comsat holds or has
reservations for capacity that is the only capacity useful to the user
or service provider. Users and service providers should specify
satellite and bandwidth held by Comsat and demonstrate how such capacity
is unique to their needs. That is, for example, does the user or service
provider require specific capacity because it is the only capacity that
can be matched with the capacity held by its foreign correspondent, or
because of ground segment considerations (e.g., the user's or service
provider's ground station antenna can only access a particular
satellite). We stress, however, that users and service providers
claiming that Comsat holds or has reserved capacity unique to their
needs must explain why the use of other available capacity is not viable
from a technical, operational, commercial or economic standpoint**.**

**D. Alternatives for Appropriate Action**

24\. The ORBIT Act requires the Commission to take "appropriate action"
if we determine that users and service providers do not have "sufficient
opportunity" to access INTELSAT space segment directly. The ORBIT Act
does not define what might be deemed "sufficient opportunity", nor does
it indicate what action to take if we determine that "sufficient
opportunity" does not exist. We essentially are directed to act to
facilitate the intent of Section 641 -- that users and service providers
be able to obtain capacity directly from INTELSAT. While we are not to
construe the section as permitting the abrogaation or modification of
any contract under subsection 641(c), subsection 641(b) directs us to
take "appropriate action" pursuant to our authority under ORBIT and the
Communications Act of 1934. We request comment on the appropriate
construction of Section 641(b) and (c), including the proper
construction of "appropriate action" in this Section. [^40]

25\. Without prejudging our determination of whether users and service
providers have "sufficient opportunity" to access INTELSAT space segment
capacity directly, we request comment on what actions are "appropriate"
should we find that "sufficient opportunity" to access INTELSAT directly
does not exist for users and service providers. We tentatively conclude
that the first option for resolving this problem should be commercial
solutions between Comsat and users and service providers seeking to
access INTELSAT directly through space segment capacity held or reserved
by Comsat. This is the approach that we adopted in our *Direct Access
decision*.[^41] The problem of allocation of limited satellite capacity
is better resolved through commercial negotiations which, if successful,
are more likely to result in a faster solution that addresses the
specific requirements of the user or service provider. The nature of any
commercial solution would depend on the type of Comsat holding --
existing lease, guaranteed reservation, or first refusal reservation on
space segment capacity. The success of this approach would depend on
good faith negotiation among parties. We would, however, retain the
option to fashion a regulatory solution where commercial negotiation
fails to yield a solution.

26\. One approach would be that proposed by the Satellite Users
Coalition in our Direct Access proceeding. The Satellite Users Coalition
proposed that, when a user's existing contract with Comsat expires, the
user should have the opportunity to renew its access to INTELSAT,
through Comsat, but by paying Comsat the INTELSAT Utilization Charge
(IUC) for the service plus a network management fee to cover Comsat's
costs for circuit orders, change orders and billing and collection.[^42]
The concept is intended to afford users and service providers the
advantages of lower direct access rates on space segment capacity that
they have previously used with these foreign correspondents on a
matching basis, while paying Comsat a negotiated network management fee
to cover its costs. The Satellite Users Coalition stated that the
concept would be a transitional mechanism for service providers to take
advantage of direct access "due to the limited amount of uncommitted
INTELSAT capacity available and the difficulties in using that capacity
with foreign correspondents." [^43] We request comment on this approach.

27\. If commercial solutions prove unattainable, regulatory action may
be appropriate where the user or service provider can demonstrate that
Comsat is holding capacity that is unique to its requirements and has
not engaged in good faith negotiations to find a commercial solution. We
may consider as "unique" space segment capacity on a planned and
yet-to-be launched satellite that is the only capacity available to meet
the needs of a particular user or service provider because of
operational requirements of its foreign correspondent or other
operational, commercial, technical, or economic considerations. The
burden would be on the user or service provider to demonstrate that
capacity is unique and regulatory action required. In such cases, we may
consider limiting or modifying Comsat's authority to provide services
via the capacity in question. This approach most appropriately might be
applied to guaranteed or first refusal reservations on satellites not
yet in operation.[^44] We further request comment on whether permissible
"appropriate action" under Section 641 includes requiring Comsat, at no
penalty to itself, to relinquish its claim on future capacity that is
unique to customer needs, as discussed above. While regulatory action is
not the preferable approach, we believe that we must be prepared to step
in if it appears Comsat is using its control of INTELSAT capacity to
extend its past monopoly over access to INTELSAT and deny users and
service providers the benefits of direct access in the future.

1.  We also request counter proposals that will achieve Congressional
    intent. We recognize that interested parties may not be able to
    develop counter proposals without consideration of the information
    we are requiring Comsat to provide in its comments. Parties,
    therefore, may offer counter proposals in their reply comments. To
    allow for an opportunity for comment on any counter-proposals we are
    providing for responses to reply comments.

# PROCEDURAL MATTERS

## Ex Parte Presentations

29\. This is a permit-but-disclose notice and comment rulemaking
proceeding. Ex Parte presentations are permitted, except during the
Sunshine Agenda period, provided that they are disclosed as provided in
the Commission's rules.[^45]

**B. Regulatory Flexibility Act**

*30 . See* Appendix C, *infra* for the Initial Regulatory Flexibility
Analysis.

**C. Paperwork Reduction Act**

31\. This Notice of Proposed Rulemaking has been analyzed with respect
to the Paperwork Reduction Act of 1995, Pub. L. No. 104-13, and contains
no new or modified information collection requirements that are subject
to Office of Management and Budget (OMB) review.

**D. Comment Filing Procedures**

32\. [General Requirements]{.underline}: Interested parties may file
comments on or before June 23, 2000, reply comments on or before July 6,
2000, and responses to reply comments on or before July 11, 2000.
Comments may be filed either by filing paper copies or using the
Commission's Electronic Comment Filing System (ECFS).[^46] Pursuant to
applicable procedures set forth in sections 1.415 and 1.419 of the
Commission's rules 47 C.F.R. §§ 1.415, 1.419, for paper filings,
interested parties must file an original and four copies of all
comments, reply comments, and supporting comments. If you want each
Commissioner to receive a personal copy of your comments, you must file
an original and 11 copies. All filings must be sent to the Commission's
Secretary, Magalie Roman Salas, Office of the Secretary, Federal
Communications Commission, 445 12^th^ Street, SW, Washington, D.C.
20554, with a copy to Kathleen A. Campbell of the International Bureau,
445 12^th^ Street, SW, Washington, D.C. 20554. Paper filings will be
received at a designated counter located at TW-A325 in the 12^th^ street
lobby. Parties should also file one copy of any documents filed in this
docket with the Commission's copy contractor, International
Transcription Services, Inc., 445 12^th^ Street, SW, Washington, D.C.
20554. Comments and reply comments will be available for public
inspection during regular business hours in the FCC Reference
Information Center within the Consumer Information Bureau, 445 12^th^
Street, SW, Room CY-A257, Washington, D.C. 20554.

33\. Electronically filed comments that conform to the Commission's
Rules will be considered part of the record in this proceeding.
Generally, only one copy of an electronic submission must be filed. If
multiple docket or rulemaking numbers appear in the caption of this
proceeding, however, commenters must transmit one electronic copy of the
comments to each docket or rulemaking number referenced in the caption.
In completing the transmittal screen, commenters should include their
full name, Postal Service mailing address, and the applicable docket or
rulemaking number. Comments filed through the ECFS can be sent as an
electronic file via the Internet to
<http://www.fcc.gov/e-file/ecfs.html>. To file electronic comments, you
must use the electronic filing interface available on the FCC's World
Wide Web site at
<http://dettifoss.fcc.gov:8080/cgi-bin/ws.exe/beta/ecfs/upload/hts>.
Further information on the process of submitting comments electronically
is available at that location and at <http://www.fcc.gov/e-file/>. You
must note whether an electronic submission is an exact copy of the
formal comments on the subject line. You also must include your full
name and Postal Service mailing address in your submission. To get
filing instructions for e-mail comments, commenters should send an
e-mail to <ecfs@fcc.gov>, and should include the following words in the
body of the message, "get form \<your e-mail address\>." A sample form
and directions will be sent in reply.

34\. [Other requirements]{.underline}: Comments and reply comments must
include a short and concise summary of the substantive arguments raised
in the pleading. Comments and reply comments must also comply with
Section 1.49 and all other applicable sections of the Commission's
rules.[^47] We also direct all interested parties to include the name of
the filing party and the date of the filing on each page of their
comments and reply comments. Comments and reply comments also must
clearly identify the specific portion of this Notice to which a
particular comment or set of comments is responsive. If a portion of a
party's comments does not fall under a particular topic listed in the
outline of this Notice, such comments must be included in a clearly
labeled section at the beginning or end of the filing.

35\. Parties submitting diskettes should submit them along with their
formal filing to the Office of the Secretary. These diskettes should be
submitted to: Kathleen A. Campbell of the International Bureau, 445 12th
Street, SW, Room 6-B418, Washington, DC, 20554. Such a submission should
be on a 3.5-inch diskette formatted in an IBM compatible format using
Microsoft Word for Windows or compatible software. The diskette should
be accompanied by a cover letter and should be submitted in "read only"
mode. The diskette should be clearly labeled with the commenter's name,
proceeding (including the lead docket number, in this proceeding IB
Docket No. 00-91), type of pleading (comment, reply comment, or response
to reply comment), date of submission, and the name of the electronic
file on the diskette. The label should also include the following phrase
"Disk Copy -- Not an Original." Each diskette should contain only one
party's pleading, preferably in a single electronic file. In addition,
commenters must send diskette copies to the Commission's copy
contractor, International Transcription Services, Inc., 445 12^th^
Street, SW, Washington, D.C. 20554.

**III ORDERING CLAUSES**

36\. Accordingly, IT IS ORDERED, that pursuant to the authority
contained in sections 1, 4(i), 4(j), 201, 202, 214 and Title III and 403
of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 154(i)
and (j), 201, 202, 214, 301 [et]{.underline} [seq]{.underline}. and 403,
and sections 102(c), 201(c)(2), and c(11), of the Communications
Satellite Act of 1962, as amended, 47 U.S.C. §§ 721(c), 741(c)(12) and
(11), section 641 of the Open-Market Reorganization for the Betterment
of International Telecommunications Act, 47 U.S.C. § 601 [et.
Seq.]{.underline}, the applicable procedures set forth in sections 1.415
and 1.419 of the Commission's rules, 47 C.F.R. §§ 1.415 and 1.419, and 5
USC 553 of the Administrative Procedures Act, that this Notice of
Proposed Rulemaking IS HEREBY ADOPTED.

37\. IT IS FURTHER ORDERED that interested parties MAY FILE COMMENTS on
or before June 23, 2000, reply comments on or before July 6, 2000 and
responses to reply comments on or before July 11, 2000.

38\. IT IS FURTHER ORDERED, that Comsat Corporation IS NAMED A PARTY
RESPONDENT in this proceeding and IS REQUIRED TO SUBMIT in its comments
the information specified in paragraphs 20 and 22 of this Notice, using
the format provided in Appendix A and B.

39\. IT IS FURTHER ORDERED, that the Commission's Consumer Information
Bureau Reference Information Center, SHALL SEND a copy of this *Notice
of Proposed Rulemaking*, including the Initial Regulatory Flexibility
Analysis, to the Chief Counsel for Advocacy of the Small Business
Administration.

FEDERAL COMMUNICATIONS COMMISSION

> Magalie Roman Salas

Secretary

> APPENDIX A

**Available Capacity for North America in 36 MHz Bandwidth (as of April
1, 2000)**

**Table 1**

+-------+---------------+--------+-----------------+------------------+
| Sate  | Orbital       | List   | From North      | To               |
| llite | Location      | Beams  | America         |                  |
+-------+---------------+--------+-----------------+------------------+
|       |               |        |                 |                  |
+-------+---------------+--------+-----------------+------------------+
| #     |               |        |                 |                  |
| # Exi |               |        |                 |                  |
| sting |               |        |                 |                  |
+-------+---------------+--------+-----------------+------------------+
| #     | 55.5°w        |        |                 |                  |
| ## IS |               |        |                 |                  |
| -805  |               |        |                 |                  |
+-------+---------------+--------+-----------------+------------------+
| I     | 53.0°W        |        |                 |                  |
| S-706 |               |        |                 |                  |
+-------+---------------+--------+-----------------+------------------+
| I     | 50.0°W        |        |                 |                  |
| S-709 |               |        |                 |                  |
+-------+---------------+--------+-----------------+------------------+
| I     | 34.5°W        |        |                 |                  |
| S-601 |               |        |                 |                  |
+-------+---------------+--------+-----------------+------------------+
| I     | 31.5°W        |        |                 |                  |
| S-801 |               |        |                 |                  |
+-------+---------------+--------+-----------------+------------------+
| I     | 29.5°W        |        |                 |                  |
| S-511 |               |        |                 |                  |
+-------+---------------+--------+-----------------+------------------+
| I     | 27.5°W        |        |                 |                  |
| S-605 |               |        |                 |                  |
+-------+---------------+--------+-----------------+------------------+
| I     | 24.5°W        |        |                 |                  |
| S-603 |               |        |                 |                  |
+-------+---------------+--------+-----------------+------------------+
| I     | 18.0°W        |        |                 |                  |
| S-705 |               |        |                 |                  |
+-------+---------------+--------+-----------------+------------------+
| ## I  | 1.0°W         |        |                 |                  |
| S-707 |               |        |                 |                  |
+-------+---------------+--------+-----------------+------------------+
| I     | 186°W         |        |                 |                  |
| S-802 |               |        |                 |                  |
+-------+---------------+--------+-----------------+------------------+
| I     | 184°W         |        |                 |                  |
| S-702 |               |        |                 |                  |
+-------+---------------+--------+-----------------+------------------+
| I     | 180°W         |        |                 |                  |
| S-701 |               |        |                 |                  |
+-------+---------------+--------+-----------------+------------------+
| ## Pl |               |        |                 |                  |
| anned |               |        |                 |                  |
+-------+---------------+--------+-----------------+------------------+
| ## AL | ## 50.0°W     |        |                 |                  |
| PHA-1 |               |        |                 |                  |
+-------+---------------+--------+-----------------+------------------+

Satellite Orbital Location List Beams From North America To

  ------------ ----------- --------- --------------------- -------------------
  IS-904       34.5°W                                      

  IS-907       31.5°W                                      

  IS-905       27.5°W                                      

  IS-903       24.5°W                                      

  IS-906       18.0°W                                      

  IS-ALPHA-2   1.0°W                                       

                                                           

                                                           
  ------------ ----------- --------- --------------------- -------------------

#  

# 

# APPENDIX A

**Table 2**

+----------------+---+--------+--------------------+------------------+
| Satellite      | O | List   | From               | To North America |
|                | r | Beams  |                    |                  |
|                | b |        |                    |                  |
|                | i |        |                    |                  |
|                | t |        |                    |                  |
|                | a |        |                    |                  |
|                | l |        |                    |                  |
|                | L |        |                    |                  |
|                | o |        |                    |                  |
|                | c |        |                    |                  |
|                | a |        |                    |                  |
|                | t |        |                    |                  |
|                | i |        |                    |                  |
|                | o |        |                    |                  |
|                | n |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
|                |   |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| ## Existing    |   |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| IS-805         | 5 |        |                    |                  |
|                | 5 |        |                    |                  |
|                | . |        |                    |                  |
|                | 5 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| IS-706         | 5 |        |                    |                  |
|                | 3 |        |                    |                  |
|                | . |        |                    |                  |
|                | 0 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| IS-709         | 5 |        |                    |                  |
|                | 0 |        |                    |                  |
|                | . |        |                    |                  |
|                | 0 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| IS-601         | 3 |        |                    |                  |
|                | 4 |        |                    |                  |
|                | . |        |                    |                  |
|                | 5 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| IS-801         | 3 |        |                    |                  |
|                | 1 |        |                    |                  |
|                | . |        |                    |                  |
|                | 5 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| IS-511         | 2 |        |                    |                  |
|                | 9 |        |                    |                  |
|                | . |        |                    |                  |
|                | 5 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| IS-605         | 2 |        |                    |                  |
|                | 7 |        |                    |                  |
|                | . |        |                    |                  |
|                | 5 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| IS-603         | 2 |        |                    |                  |
|                | 4 |        |                    |                  |
|                | . |        |                    |                  |
|                | 5 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| IS-705         | 1 |        |                    |                  |
|                | 8 |        |                    |                  |
|                | . |        |                    |                  |
|                | 0 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| IS-707         | 1 |        |                    |                  |
|                | . |        |                    |                  |
|                | 0 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| ## IS-802      | 1 |        |                    |                  |
|                | 8 |        |                    |                  |
|                | 6 |        |                    |                  |
|                | . |        |                    |                  |
|                | 0 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| IS-702         | 1 |        |                    |                  |
|                | 8 |        |                    |                  |
|                | 4 |        |                    |                  |
|                | . |        |                    |                  |
|                | 0 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| IS-701         | 1 |        |                    |                  |
|                | 8 |        |                    |                  |
|                | 0 |        |                    |                  |
|                | . |        |                    |                  |
|                | 0 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
|                |   |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| ## Planned     |   |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
|                |   |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| IS-ALPHA-1     | 5 |        |                    |                  |
|                | 0 |        |                    |                  |
|                | . |        |                    |                  |
|                | 0 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| IS-904         | 3 |        |                    |                  |
|                | 4 |        |                    |                  |
|                | . |        |                    |                  |
|                | 5 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| IS-907         | 3 |        |                    |                  |
|                | 1 |        |                    |                  |
|                | . |        |                    |                  |
|                | 5 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| IS-905         | 2 |        |                    |                  |
|                | 7 |        |                    |                  |
|                | . |        |                    |                  |
|                | 5 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| IS-903         | 2 |        |                    |                  |
|                | 4 |        |                    |                  |
|                | . |        |                    |                  |
|                | 5 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| IS-906         | 1 |        |                    |                  |
|                | 8 |        |                    |                  |
|                | . |        |                    |                  |
|                | 0 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
| ## IS-ALPHA-2  | 1 |        |                    |                  |
|                | . |        |                    |                  |
|                | 0 |        |                    |                  |
|                | ° |        |                    |                  |
|                | W |        |                    |                  |
+----------------+---+--------+--------------------+------------------+
|                |   |        |                    |                  |
+----------------+---+--------+--------------------+------------------+

# APPENDIX B

**Comsat Capacity in 36 MHz Bandwidth in Satellites Providing Service
from North America to Other Points (as of April 1, 2000)**

+--------------+-----+---------+----------+-------------+-------------+
| Satellite    | O   | List    | Current  | Guaranteed  | 1^st^       |
|              | rbi | Beams   | Lease    | Reservation | Refusal     |
|              | tal |         |          |             | Reservation |
|              | Lo  |         |          |             |             |
|              | cat |         |          |             |             |
|              | ion |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
|              |     |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| ## Existing  |     |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
|              |     |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-805       | 55. |         |          |             |             |
|              | 5°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-706       | 53. |         |          |             |             |
|              | 0°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-709       | 50. |         |          |             |             |
|              | 0°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-601       | 34. |         |          |             |             |
|              | 5°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-801       | 31. |         |          |             |             |
|              | 5°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-511       | 29. |         |          |             |             |
|              | 5°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-605       | 27. |         |          |             |             |
|              | 5°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-603       | 24. |         |          |             |             |
|              | 5°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-705       | 18. |         |          |             |             |
|              | 0°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-709       | 1.  |         |          |             |             |
|              | 0°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-802       | 1   |         |          |             |             |
|              | 86. |         |          |             |             |
|              | 0°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| ## IS-702    | 1   |         |          |             |             |
|              | 84. |         |          |             |             |
|              | 0°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-701       | 1   |         |          |             |             |
|              | 80. |         |          |             |             |
|              | 0°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
|              |     |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| ## Planned   |     |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-ALPHA-1   | 50. |         |          |             |             |
|              | 0°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-904       | 34. |         |          |             |             |
|              | 5°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-907       | 31. |         |          |             |             |
|              | 5°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-905       | 27. |         |          |             |             |
|              | 5°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-903       | 24. |         |          |             |             |
|              | 5°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-906       | 18. |         |          |             |             |
|              | 0°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| IS-ALPHA-2   | 1.  |         |          |             |             |
|              | 0°W |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
|              |     |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
| Satellite    | O   | List    | Current  | Guaranteed  | 1^st^       |
|              | rbi | Beams   | Lease    | Reserve     | Refusal     |
|              | tal |         |          |             | Res.        |
|              | Lo  |         |          |             |             |
|              | cat |         |          |             |             |
|              | ion |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
|              |     |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
|              |     |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+
|              |     |         |          |             |             |
+--------------+-----+---------+----------+-------------+-------------+

APPENDIX C

**Initial Regulatory Flexibility Analysis**

As required by the Regulatory Flexibility Act (RFA),[^48] the Commission
has prepared this present Initial Regulatory Flexibility Analysis (IRFA)
of the possible significant economic impact on small entities by the
policies and rules proposed in this *Notice of Proposed Rulemaking*
(*Notice*). Written public comments are requested on the IRFA. Comments
must be identified as responses to the IRFA and must be filed by the
deadlines for comments on the *Notice* provided above in paragraphs 34 -
38. The Commission will send a copy of the *Notice*, including this
IRFA, to the Chief Counsel for Advocacy of the Small Business
Administration. 5 U.S.C. § 603(a). In addition, the *Notice* and IRFA
(or summaries thereof) will be published in the Federal Register.

**I. Need for, and Objectives of, the Proposed Rules**

The purpose of the *Notice* is to comply with the Orbit Act requirement
that the Commission initiate a notice and comment proceeding to
determine whether sufficient opportunity exists for users and service
providers to access INTELSAT space segment capacity directly to meet
their service or capacity requirements. If commenters believe that the
proposals discussed in the *Notice* require additional RFA analysis,
they should include a discussion of this in their comments.

**II. Legal Basis**

The authority for the *Notice* is pursuant to the authority contained in
sections 1, 4(i), 4(j), 201, 202, 214 and Title III and 403 of the
Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 154(i) and
(j), 201, 202, 214, 301 [et]{.underline} [seq]{.underline}. and 403, and
sections 102(c), 201(c)(2), and c(11), of the Communications Satellite
Act of 1962, as amended, 47 U.S.C. §§ 721(c), 741(c)(12) and (11),
section 641 of the Open-Market Reorganization for the Betterment of
International Telecommunications Act, Pub. L. 106-180, 114 Stat. 48
(2000) § 641, the applicable procedures set forth in sections 1.415 and
1.419 of the Commission's rules, 47 C.F.R. §§ 1.415 and 1.419, and 5 USC
553 of the Administrative Procedures Act.

**III. Description and Estimate of the Number of Small Entities to Which
Proposed Rule Will Apply**

The RFA directs agencies to provide a description of, and, where
feasible, an estimate of the number of small entities that may be
affected by the proposed rules, if adopted. 5 U.S.C. § 603(b)(3). The
RFA defines the term "small entity" as having the same meaning as the
terms "small business," "small organization" and "small business
concern" under Section 3 of the Small Business Act. A \"small business
concern\" is one which is (1) independently owned and operated; (2) not
dominant in its field of operation; (3) satisfies any additional
criteria established by the Small Business Administration ("SBA"). 15
U.S.C. § 632.

The Commission has not developed a definition of small entities
applicable to satellite service licensees. Therefore, the applicable
definition of small entity is the definition under the Small Business
Administration (\"SBA\") rules applicable to Communications Services
\"Not Elsewhere Classified.\" This definition provides that a small
entity is one with \$11 million or less in annual receipts. 13 C.F.R. §
121.201, Standard Industrial Classification (SIC) Code 4899. According
to the SBA, the Census Bureau estimates that there are approximately 631
entities providing communications services, not elsewhere classified. Of
those, between 401-631 reported annual receipts of less than \$9.999
million or less and would qualify as small entities subject to the
proposed rules.[^49] More precise data is not available.

The proposed *Notice* requires Comsat Corporation (\"Comsat\") to
provide information concerning existing and future capacity in the
INTELSAT system necessary for us to make the determination required by
the ORBIT Act. The Commission also may seek information directly from
INTELSAT if necessary and appropriate. Comsat\'s 1999 revenues were in
excess of \$11 million. Thus, Comsat does not qualify as a small entity
under the SBA\'s definition. U.S. carriers and users, including any
small entities, that may be affected indirectly, would likely benefit
from the proposed action.

**IV. Description of Projected Reporting, Recordkeeping or Other
Compliance Requirements**

The proposals in the *Notice* are not expected to result in any
additional reporting, recordkeeping and other compliance.

V. Steps Taken to Minimize Significant Economic Burden on Small
Entities, and Significant Alternatives Considered

The RFA requires an agency to describe any significant alternatives that
it has considered in reaching its proposed approach, which may include
the following four alternatives: (1) The establishment of differing
compliance or reporting requirements or timetables that take into
account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance or
reporting requirements under the rule for small entities; (3) the use of
performance, rather than design, standards; and (4) an exemption from
coverage of the rule, or any part thereof, for small entities.

Without prejudgment as to whether it will determine that "sufficient
opportunity" exists, the Commission is seeking comment on alternatives
for "appropriate action" should it determine that sufficient opportunity
does not exist for users and service providers to access INTELSAT
directly. The Commission tentatively concludes that the first option for
resolving this problem should be commercial solutions between Comsat and
users and service providers. It also seeks comment on possible
regulatory action should commercial negotiations fail to yield a
solution. The intent of any regulatory action would be to permit users
and service providers, including small entities, to benefit from the
availability of direct access to INTELSAT space segment capacity to meet
service or capacity requirements. We do not expect the proposals to
cause any economic burden to small entities, and seek comment on any
issues pertinent to this.

**VI. Federal Rules That Overlap, Duplicate, or Conflict with These
Proposed Rules**

None.

List of Subjects in 47 CFR Part 25

Satellites

Federal Communications Commission

[^1]: Pub. L. No. 106-180, 114 Stat. 48 (2000).

[^2]: 47 U.S.C. §§ 701 et. seq.

[^3]: Pub. L. No. 106-180 § 2.

[^4]: Pub. L. No. 106-180 § 641(b)

[^5]: *Id.*

[^6]: *Direct Access to the INTELSAT System*, Report and Order, 14 FCC
    Rcd 15703 (1999), (*Direct Access decision*).

[^7]: *Direct Access decision*, 14 FCC Rcd at 15716.

[^8]: *Id* at 15723.

[^9]: *Id* at 15725.

[^10]: *Direct Access decision* at 15754.

[^11]: Pub. L. No. 106-180, § 645(4).

[^12]: 47 U.S.C. § 701(c).

[^13]: 47 U.S.C. § 741(c)(2).

[^14]: *See* INTELSAT Tariff Manual, July 1999, for a full description
    of the services offered and the terms and conditions of the
    services.

[^15]: INTELSAT Tariff Manual, Lease Reservation Policy at 96 -- 106.

[^16]: *Id.* at 96.

[^17]: *Id.*

[^18]: *Id*. at 96-98.

[^19]: *Id.* at 98-99.

[^20]: *Id.* at 102-103.

[^21]: *Id.* at 99.

[^22]: *Id.*

[^23]: *Id.* at 100-101.

[^24]: *Direct Access decision,* 14 FCC Rcd at 15759.

[^25]: Twenty-fourth INTELSAT Assembly of Parties, Penang, Malaysia,
    October 26-29, 1999. Record of Decisions (AP 24-3EP/10/99) at page
    14.

[^26]: In addition to Section 641(a), Section 601(b)(1)(c) of the ORBIT
    Act provides that certain departments or agencies of the United
    States may obtain "non-core" INTELSAT services directly from
    INTELSAT, as well as indirectly through Comsat, authorized carriers,
    or distributors of a privatized INTELSAT.

[^27]: Comment on INTELSAT post-privatization distribution arrangements
    is appropriate in this proceeding. U.S. service providers other than
    Comsat are not involved in the negotiations regarding such
    distribution arrangements. As the Commission has the responsibility
    for upholding its policies, including those relating to direct
    access and pro-competitive behavior of licensees, it is important to
    have a robust understanding of the potential implications of
    post-privatization distribution arrangements within INTELSAT.

[^28]: Section 601(b) of the ORBIT Act requires the Commission to
    determine after April 1, 2001, whether INTELSAT has been privatized
    in a manner that will harm competition in the U.S.
    telecommunications market. As we have noted, the ORBIT Act maintains
    our 1962 Satellite Act authority to assure non-discriminatory use
    and equitable access to INTELSAT capacity until we make such a
    determination.

[^29]: INTELSAT L.L.C. Satellite Applications for Authority to Operate,
    Further Construct and Operate, C-band and Ku-band Satellites that
    form a Global Communications System in Geostationery Orbit,
    SAT-A/O-20000119-00002 S2388 [et]{.underline} [seq]{.underline}.,
    filed January 19, 2000, at Vol. I, p.11 (INTELSAT Application).

[^30]: INTELSAT Application, Vol. I at p.11

[^31]: *Id.*

[^32]: *Id.* For specific frequency bands included in the system, *see*
    INTELSAT L.L.C. Application, Vol. 11 at p.11.

[^33]: INTELSAT Application Vol. I at p.12.

[^34]: The currently-operating INTELSAT satellites whose coverage
    include parts of CONUS are INTELSAT-805 (55.5°W), INTELSAT-706
    (53.0°W), INTELSAT-709 (50.0°W), INTELSAT-601 (34.5°W), INTELSAT-801
    (31.5°W), INTELSAT-511 (29.5°W), INTELSAT-605 (27.5°W), INTELSAT-603
    (24.5°W), INTELSAT-705 (18.0°W), INTELSAT-707 (1.0°), INTELSAT-802
    (186°W), INTELSAT-702 (184°W) and INTELSAT-701 (180°W).

[^35]: The planned INTELSAT satellites whose coverage will include parts
    of CONUS are INTELSAT-ALPHA-1 (50.0°W), INTELSAT-904 (34.5°W),
    INTELSAT-907 (31.5°W), INTELSAT-905 (27.5°W), INTELSAT-903 (24.5°W),
    INTELSAT-906 (18.0°W) and INTELSAT-ALPHA-2 (1.0°W).

[^36]: In the future, INTELSAT plans to deploy first the INTELSAT-601
    and later the INTELSAT-BETA-1 to 85.0°E from which location service
    will be possible to Guam and the Mariana Islands. INTELSAT also
    plans to deploy the INTELSAT-602 and later the INTELSAT-709 to
    157°E, from which location service will be possible to the U.S.
    Pacific island territories in addition to Hawaii and Alaska.

[^37]: *See* INTELSAT Applications Vol. II at p.17.

[^38]: INTELSAT uses the designation "North America" in describing beam
    direction (*i.e*., North America to Europe; South America to North
    America). For purposes of consistency with INTELSAT practices, we
    will use it in this document as well. We clarify, however, that the
    purpose of any information requested or positions suggested is only
    to address issues related to the services provided to and from the
    U.S. market.

[^39]: 47 C.F.R. § 0.459.

[^40]: Subsection 641(c) provides that "\[n\]othing in this section
    shall be construed to permit the abrogation or modification of any
    contract". We seek comment on the appropriate construction of
    subsection 641(c) and its effect on existing precedents that permit
    the Commission to prescribe changes in contracts if it finds
    provisions unlawful or to modify contract provisions if in the
    public interest. *See* *Cable and Wireless v. FCC*, No. 97-1612
    (D.C. Circuit, January 12, 1999), citing *Western Union Telegraph v.
    FCC*, 815 F.2^nd^ 1495 at 1501 (D.C. Cir. 1987). *See also
    Interconnection between Local Exchange Carriers and Commercial
    Mobile Radio Service Providers,* 11 FCC Rcd 15499, 16044-45 (1996);
    *Expanded Interconnection with Local Telephone Company Facilities,*
    8 FCC Rcd 7341., 7342, 7346-48; *Allocation of the 849-851
    MHz/894-896 MHz Bands*, 6 Fcc Rcd 4582, 4583 (1991); *Western Union
    Tel. Co. v. FCC,* 815 F.2^nd^ 1495, 1495, 1501 (D.C. Cir. 1987).

[^41]: ^?^ *Direct Access decision at 15754*

[^42]: *See* Letter from Alfred Mamlet on behalf of the Satellite Users
    Coalition (AT&T Corp., MCI Worldcom, Inc., and Sprint
    Communications, L.P.) to Secretary, Federal Communications
    Commission, dated September 8, 1999.

[^43]: *Id.*

[^44]: Comsat must obtain Commission authorization to participate in the
    launch and provide regularly authorized services over INTELSAT
    satellites. *See* *Comsat Corporation, Application for Authority to
    Participate and Provide Authorized Services via INTELSAT VIII
    Satellites*, DA 98-985 (International Bureau, rel. May 22, 1998).

[^45]: See generally 47 C.F.R. §§ 1.1202, 1.1203, 1.1206.

[^46]: *See Electronic Filing of Documents in Rulemaking Proceedings,*
    63 FR 24, 121 (1998).

[^47]: *See* 47 C.F.R. § 1.49. We require, however, that a summary be
    included with all comments, reply comments, and responses to reply
    comments. The summary may be paginated separately from the rest of
    the pleading (e.g. as "I, ii"). *See* 47 C.F.R. § 1.49.

[^48]: 5 U.S.C. § 603. The RFA, 5 U.S.C. § 601 *et seq.*, has been
    amended by the Contract with America Advancement Act of 1996, Pub L.
    No. 104-121, 110 Stat. 847 (1996) (\"CWAAA\"). Title II of the CWAAA
    is the Small Business Regulatory Enforcement Fairness Act of 1996
    ("SBREFA").

[^49]: U.S. Bureau of the Census, U.S. Department of Commerce, 1992
    Census of Transportation, Communications, and Utilities, UC92-S-1,
    Subject Series, Establishment and Firm Size, Table D, Employment
    Size of Firms: 1992, SIC Code 4899 (May 1995).