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 Before the
 FEDERAL COMMUNICATIONS COMMISSION
 Washington, D.C. 20554

 )
In the Matter of )
 )
Columbia Communications Corporation )
 ) File No. SAT-MOD-20000208-00058
Application for Amendment to Pending )
Application to Extend Milestones )
 )

 MEMORANDUM OPINION AND ORDER

Adopted: April 4, 2000 Released: April 5, 2000

By the Deputy Chief, International Bureau:

 I. INTRODUCTION

 
 1. In this Order, we deny Columbia Communications Corporation's (Columbia's) second request for a
further extension of the construction commencement milestone applicable to its license to provide service in
the C-band from its satellite to be located at 47 W.L. Columbia has had fifteen months to begin
construction of this satellite, and it has already received one extension of the original milestone, which was
originally scheduled to lapse in September 1999. Columbia has not met its burden of demonstrating that it
faces extraordinary circumstances beyond its control that would warrant additional time in which to begin
construction. Granting Columbia's request would contravene the Commission's policy prohibiting licensees
from holding scarce orbit resources, thereby precluding effective use by others, while incumbent licensees
examine whether and how to proceed with their plans. 

 II. BACKGROUND

 1. In 1996, the International Bureau (the Bureau) granted Columbia Special Temporary Authority
(STA) to lease C-band capacity on NASA's TDRS-6 satellite, located at 47 W.L., subject to coordination
with adjacent satellite operators. In January 1999, the Bureau granted Columbia authority to launch and
operate its own C-band satellite at 47 W.L. Under the original terms of its license, which were based on
the representations in Columbia's application, Columbia was scheduled to commence construction of this
satellite in September 1999. We have already granted Columbia one extension of its construction
commencement milestone, to April 5, 2000.

 2. On May 11, 1999, Columbia requested us to extend again the construction commencement
milestone applicable to its C-band satellite. On January 21, 2000, the Bureau denied Columbia's request. 
On February 8, 2000, Columbia filed another request for extension, making essentially the same arguments
that the Bureau considered in denying the previous petition on January 21. 

 3. In support of its May 1999 milestone extension request, Columbia argued that it could not
proceed with construction until it knew whether its request for Ku-band authority at 47 W.L would be
granted. We explained that milestone schedules are included as a condition of space station authorizations
to ensure that licensees are moving forward with the construction and launch of their systems in a timely
manner. Requiring licensees to make and fulfill realistic construction and launch commitments prevents
increasingly scarce orbital resources from being warehoused by licensees. Such warehousing could hinder
the availability of services to the public by blocking entry by other entities willing and able to proceed
immediately with the construction and launch of their satellite systems. 

 4. We explained further that we grant milestone extensions only in the case of extraordinary
circumstances beyond the control of the licensee. We determined that Columbia's decision to seek a
license modification to add Ku-band capacity to its satellite was a business decision within the control of
the licensee, and so was not a "circumstance beyond its control" that would justify a milestone extension. 
Finally, we observed that milestone extensions could not be justified by delays due to negotiations with
potential investors, mergers, or construction contract negotiations. 

 5. On February 8, 2000, Columbia submitted another request to extend the construction
commencement milestone, from April 5, 2000 to a date two weeks after Commission action on its pending
request to transfer control of its licenses to GE American Communications, Inc. (GE Americom). In the
alternative, Columbia seeks a waiver of this milestone. According to Columbia, the pending merger
application creates uncertainty regarding the financially responsible contracting party, and this uncertainty
may potentially increase the cost of the spacecraft. GE Americom filed comments supporting Columbia's
request to extend its construction commencement milestone. No other parties filed comments.

 III. DISCUSSION

A. Request for Milestone Extension 

 6. We deny Columbia's request because Columbia fails again to show that the cause of its delay
in beginning to construct a satellite licensed over a year ago is a "circumstance beyond its control." Rather,
the cause of delay is a business decision within the control of the licensee. Columbia seeks an extension
because it was negotiating a possible merger with GE Americom concurrently with its negotiation of a
construction contract for its C-band satellite at 47 W.L. Columbia maintains that several contract terms,
such as "the specific terms of financing and appropriate contract termination penalties," may differ
depending on whether Columbia is authorized to transfer its licenses to GE Americom. Thus, Columbia
asserts that its pending transfer of control application creates "regulatory uncertainty that presents a
substantial impediment towards completion of a construction contract." 

 7. Columbia's reasoning is unpersuasive for several reasons. First, Columbia's concerns over the
potential for additional cost or complexity in its construction contract are not sufficient grounds for
granting a milestone extension request. Second, Columbia fails to meet its burden of demonstrating that it
qualifies for an additional milestone extension. Third, Columbia fails to recognize that a milestone is a
legally binding condition on the licensee's authorization. It is mistaken in assuming that a milestone is
merely a "moment in time that has been chosen for the purpose of determining whether a licensee has taken
adequate steps toward the ultimate goal of commencing service." We discuss each of these reasons
below.

1. Contractual Complexity 

 8. Columbia asserts that extension of its construction commencement milestone is justified by the
"regulatory uncertainty" created by the pending GE Americom/Columbia merger application. According
to Columbia, the pending merger application "presents a substantial impediment" to finalizing a
construction contract, because the specific terms of financing and contract termination penalties may differ
depending on whether the merger application is granted. Columbia also maintains that contract
negotiations and the final construction contract will be "unnecessarily complicated" if completed before the
Commission acts on the merger application, and that this complexity could "potentially increas[e] the cost
of the spacecraft."

 9. A desire to avoid increased costs or contractual complications is a business decision within the
control of the licensee, which does not justify a milestone extension. In the MCI Order, the Common
Carrier Bureau denied MCI's milestone extension request in part because MCI had not shown that the
complexities surrounding its planned merger were "anything other than the necessary and routine matters
involved in such an, albeit large, transaction." Similarly, Columbia has not shown that accounting for
merger-related contingencies in a construction contract would be substantially different than the necessary
and routine matters normally involved in a merger transaction. Furthermore, the "regulatory uncertainty"
cited by Columbia would not exist if it had not filed its merger application, and so it is a direct result of
Columbia's business decision to merge with GE Americom. Recasting a pending merger application as
"regulatory uncertainty" does not convert it into a circumstance beyond the licensee's control, and so does
not justify a milestone extension.

 10. In addition, Columbia's contention that a complicated contract could "potentially increase the
cost of the spacecraft" is an economic consideration that cannot justify a milestone extension. In the
AT&T/Ford Order, the Commission determined that AT&T could not justify a milestone extension by
asserting that delay might clarify certain launch and insurance issues and lower satellite construction
costs. The Commission concluded that AT&T's extension request was motivated primarily by economic
considerations, and that such considerations were not a sufficient basis for granting a milestone extension
request. Columbia's concerns over construction cost increases caused by contractual complications are
also economic considerations. Furthermore, even if we could extend a milestone for economic
considerations, Columbia does not elaborate on either the likelihood or the amount of any cost increases
that might be caused by the outstanding merger application. Consequently, we would still conclude that
Columbia's request was not justified. 

 11. Even assuming, however, that contractual complications could justify a milestone extension,
Columbia has not shown that this is such a case. Columbia asserts only that the pending merger
application presents a "substantial impediment" to finalizing a construction contract. Columbia does not
explain why it and the satellite vendor could not agree to a contingent contract by April 5, 2000 that would
transfer to GE Americom if the merger is approved. Thus, in addition to failing to show that it faces
circumstances beyond its control, Columbia has failed to show that it is in fact unable to meet its
construction commencement milestone. 

2. Consistency with Precedent 

 12. Columbia claims that its milestone extension request is distinguishable from several Orders in
which the Commission has denied milestone extension requests in the past, and consistent with Commission
Orders granting extensions. We disagree with Columbia. 

 13. Columbia first cites the AT&T/Ford Order, where the Commission denied a request to
transfer satellite authorizations from Ford to AT&T, and to extend the milestones associated with three of
those authorizations. Columbia asserts that its extension request is distinguishable from the one in the
AT&T/Ford Order because, unlike Columbia, AT&T was effectively seeking authority to build a new
satellite system outside of a processing round. To the contrary, AT&T's position with respect to a
processing round was not germane to the Commission's decision to deny AT&T an extension of the
milestone dates. In particular, the Commission stated "... even if AT&T were considered as [Ford's]
successor, the extensions sought are not due to circumstances beyond AT&T's control, and thus cannot be
granted," and that "[h]ad [Ford] requested the modifications sought be AT&T, its applications would not
have been granted." In so finding, the Commission emphasized that seeking additional time to negotiate a
construction contract in view of a proposed merger does not warrant a milestone extension. Thus,
contrary to Columbia's argument, a "processing round" criterion is not relevant to our consideration of
Columbia's milestone extension request. 

 14. Columbia also observes that, in many Orders denying milestone extension requests, the
Commission emphasized that the petitioners requested long extensions of time. Columbia argues that its
extension request is distinguishable from those requests because it seeks a short extension. There is no
support in those Orders for Columbia's implicit assumption that the relevant precedent allows milestone
extensions for business decisions within the control of the licensee provided that the licensee requests a
short extension of time. In any case, allowing a short extension does not provide us with any additional
assurance that the milestone will be met. Further, it may place us in the position of considering repeated
short extensions as the licensee's business and financial plans progress, again with no assurance that the
milestone will ultimately be met. Consequently, we will not treat requests for "short" extensions any
differently than requests for "longer" extensions. 

 15. Columbia maintains further that extension is warranted because it limits its request to its
construction commencement milestone, and does not seek extension of its construction completion or
launch milestones. We disagree. If a licensee does not even begin construction of its satellite by the date
specified in its license, it raises substantial doubts as to whether the licensee intends to or is able to proceed
with its business plan. Consequently, to ensure that unused spectrum is reassigned as quickly as possible
to another qualified entity that seeks to implement a system, the Commission has strictly construed the
construction commencement milestone contained in every space station license. Thus, Columbia
misplaces its reliance on the AMSC Order and the 1992 GE Americom Order. In both Orders, the
licensees requested extension of only their construction completion and launch milestones. They had begun
construction of their satellites, and were continuing with construction.
 
3. Flexibility in Milestone Enforcement

 16. Finally, Columbia asserts that a milestone is not an absolute, wholly inflexible "cut-off
date." Rather, Columbia claims that a milestone is a moment to determine whether a licensee has taken
adequate steps towards commencement of service. To the contrary, milestones are obligations placed on
licensees as conditions on their authority to launch and operate a satellite, not merely times set aside for a
qualitative assessment of a licensee's progress. Columbia's license expressly provides that the license
would be null and void if it failed to meet its construction commencement milestone. Thus, Columbia has
no basis to maintain that its construction commencement milestone was not a "cut-off date." Columbia
misinterprets the Orders its cites for the proposition that the Commission is flexible in its milestone
enforcement. In cases where the Commission has extended a construction commencement date, other
overriding public interest factors or unforeseen circumstances beyond the licensee's control have been
involved. Columbia bases its milestone extension request on a desire to simplify its construction contract,
not to facilitate international coordination, or to deal with launch failures, or any other factor outside its
control. In summary, there is no policy reason, and no basis in Commission precedent, for treating a
milestone commitment as a flexible, qualitative assessment of a licensee's construction progress. 

B. Request for Waiver 

 17. In the event that we conclude that it does not face circumstances outside its control that justify
a milestone extension, Columbia seeks waiver of its construction commencement milestone. Waiving
Columbia's construction commencement milestone would relieve Columbia of any requirement to
commence construction of its satellite, rather than merely rescheduling Columbia's construction
commencement deadline. Elimination of Columbia's construction commencement deadline is no more
justified than extending the deadline.
 
 18. Rules may be waived if there is "good cause" to do so. Waiver is appropriate if special
circumstances warrant a deviation from the general rule and such deviation would better serve the public interest
than would strict adherence to the general rule. Circumstances that would justify a waiver include
"considerations of hardship, equity, or more effective implementation of overall policy." Also, if the
Commission grants waivers, it must identify and articulate reasonable standards that are predictable, workable,
and not susceptible to discriminatory application. Generally, the Commission may grant a waiver of its rules in
a particular case only if the relief requested would not undermine the policy objective of the rule in question, and
would otherwise serve the public interest. Courts have observed that "[a]n applicant for waiver faces a high
hurdle even at the starting gate. 'When an applicant seeks a waiver of a rule, it must plead with
particularity the facts and circumstances which warrant such action.'" 

 19. Columbia has not demonstrated that it faces special circumstances that warrant a waiver. We
explained above that Columbia is concerned that its pending merger application may make its construction
contract "complicated." We also concluded that the any construction contract complications related to
Columbia's proposed merger are not substantially different than the necessary and routine matters normally
involved in merger transactions. Thus, the possibility of a complicated construction contract is not a
"special circumstance" that can justify a waiver.

 20. We also find that waiving Columbia's construction commencement milestone would
undermine the policy objective of milestone requirements. We noted in the Columbia Modification Order
that the milestone schedule is necessary to ensure that licensees cannot "warehouse" increasingly scarce
orbital resources. We also observed above that the construction commencement milestone is crucial to
the Commission's warehousing policies, to ensure that unused spectrum is reassigned as quickly as possible
to another qualified entity when there are substantial doubts as to whether the licensee intends to or is able
to proceed with its business plan. We have waived construction commencement milestones only in rare
instances. In the Dominion Video Order, for example, the Bureau waived Dominion Video's construction
commencement milestone in part because the licensee was already providing service by leasing capacity on
Echostar III, a "state-of-the-art" satellite, and because of the unique channel assignment policies in the
Direct Broadcast Service. This is not the case here. First, Columbia plans to serve existing C-band
customers with its leased capacity on TDRS-6 until it launches its replacement satellite. In contrast to the
Echostar II satellite, TDRS-6 does not meet Commission technical requirements in place since 1983. We
have already found that Columbia cannot justify delaying construction and launch of a state-of-the-art
satellite on the basis of its lease on TDRS-6. Second, in the Dominion Video Order, the Commission
found that since Echostar and Dominion were both assigned to operate on various channels at the 61.5 
W.L. orbit location, "[t]aking advantage of the transponder capacity that is already in orbit will avoid the
enormous expense and delay involved in constructing and launching a separate satellite." Dominion was
authorized to operate on only eight of the 32 available DBS channels at that orbit location. In contrast,
Columbia is authorized to operate across the entire 500 MHz of C-band bandwidth available at the 47 
W.L. orbit location. Consequently, Columbia's leased capacity on TDRS-6 cannot justify elimination of its
construction commencement deadline any more than it can justify extension of that deadline.

 IV. CONCLUSION

 21. We conclude that Columbia has not shown that it faces any circumstances beyond its control
that would warrant an extension of its construction commencement milestone. We further conclude that
Columbia has not shown that it faces any special circumstances that would justify as waiver under the
Commission's rules. 

 V. ORDERING CLAUSES

 22. Accordingly, IT IS ORDERED that Section 25.153(a) of the Commission's rules, 47 C.F.R.
 25.153(a), IS WAIVED, to the extent necessary to address Columbia Communications Corporation's
milestone extension request on its merits. 

 23. IT IS FURTHER ORDERED that the request to extend milestones, filed by Columbia
Communications Corporation on February 8, 2000, IS DENIED. 

 24. IT IS FURTHER ORDERED that the request to waive milestone requirements, filed by
Columbia Communications Corporation on February 8, 2000, IS DENIED. 

 25. This Order is issued pursuant to Section 0.261 of the Commission's rules on delegated
authority, 47 C.F.R.  0.261, and is effective upon release. Petitions for reconsideration under Section
1.106 or applications for review under Section 1.115 of the Commission's rules, 47 C.F.R.  1.106,
1.115, may be filed within 30 days of the date of the release of this Order. (See 47 C.F.R.  1.4(b)(2).)


 FEDERAL COMMUNICATIONS COMMISSION



 

 Anna M. Gomez 
 Deputy Chief, 
 International Bureau