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 FEDERAL  COMMUNICATIONS  COMMISSION  FCC  03-  102 
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 Before  the  Federal  Communications  Commission 
 Washington,  D.  C.  20554 


 In  the  Matter  of  )  ) 
 Amendment  of  the  Commission's  Space  )  IB  Docket  No.  02-  34  Station  Licensing  Rules  and  Policies  ) 
 )  Mitigation  of  Orbital  Debris  )  IB  Docket  No.  02-  54 


 FIRST  REPORT  AND  ORDER  AND  FURTHER  NOTICE  OF  PROPOSED  RULEMAKING  IN  IB  DOCKET  NO.  02-  34, 
 AND  FIRST  REPORT  AND  ORDER  IN  IB  DOCKET  NO.  02-  54 


 Adopted:  April  23,  2003  Released:  May  19,  2003 
 Comment  Date:  30  Days  After  Publication  in  the  Federal  Register  Reply  Comment  Date:  60  Days  After  Publication  in  the  Federal  Register 


 By  the  Commission:  Chairman  Powell,  Commissioners  Abernathy  and  Adelstein  issuing  separate  statements;  Commissioner  Copps  approving  in  part,  concurring 
 in  part  and  issuing  a  statement 
 TABLE  OF  CONTENTS 
 Paragraph 
 I.  Introduction  1  II.  Executive  Summary  2 
 III.  Background  8 
 A.  Current  Licensing  Procedure  8  B.  Proposed  Revisions  to  Satellite  Licensing  Procedure  11 


 IV.  Preliminary  Issues  14 
 A.  Need  for  Reform  14  B.  General  Framework  18 


 V.  Modified  Processing  Rounds  for  NGSO-  Like  Satellite  Systems  23 
 A.  Overview  23  B.  Opportunities  for  Competitive  Entry  for  NGSO-  Like  Satellite  Systems  24 
 C.  Modification  of  Processing  Round  Procedure  30 
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 1.  Sharing  Mechanism  30  2.  Facilitating  Processing  Round  Negotiations  35 
 a.  Time  Limit  on  Negotiations  35  b.  System  of  Preferences  39 
 c.  Other  Proposals  for  Facilitating  Negotiations  in  Processing  Rounds  42 
 d.  Need  for  Pre-  Licensing  Negotiations  44 
 D.  Details  of  Modified  Processing  Round  Procedure  48 
 1.  Overview  of  Framework  48  2.  Interrelation  with  Procedures  for  GSO-  Like  Satellite  Systems  56 
 3.  Amendments  and  Modifications  59  4.  Additional  Processing  Rounds  60 
 5.  Revision  of  Pleading  Cycles  66 
 E.  Other  Proposals  for  Modifying  Processing  Rounds  68 
 VI.  First-  Come,  First-  Served  Procedure  for  GSO-  Like  Satellite  Systems  71 
 A.  Background  71  B.  Benefits  of  First-  Come,  First-  Served  Procedure  74 
 C.  Opportunities  for  Competitive  Entry  for  GSO-  Like  Satellite  Systems  77  D.  General  Comments  80 


 1.  Introduction  80  2.  Spectrum  Efficiency  81 
 3.  Speculative  Applications  84  4.  Influx  of  Applications  87 
 5.  ITU  Issues  91  6.  Uncertainty  94 
 7.  Non-  U.  S.-  Licensed  Satellites  95  8.  Disadvantage  in  Non-  U.  S.  Markets  97 
 9.  Legal  Analysis  99 
 a.  Background  99  b.  Consistency  with  Communications  Act  102 
 c.  Qualifications  104  d.  Consistency  with  Commission  Precedent  106 


 E.  Details  of  First-  Come,  First-  Served  Procedure  108 
 1.  General  Framework  108 
 a.  Establishment  of  Queues  108  b.  Keeping  Subsequently  Filed  Applications  on  File  111 
 c.  Fees  115  d.  Service  Rules  117 
 e.  Frequency  Allocations  122  f.  Feeder  Links  and  Inter-  Satellite  Links  125 
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 2.  Selection  Among  Mutually  Exclusive  Applications  132  3.  Amendments  136 
 4.  Modifications  141  5.  Hybrids  145 
 6.  Filing  Window  149 
 F.  Modified  First-  Come,  First  Served  Proposal  151  G.  Fungibility  Policy  155 


 VII.  Other  Issues  160 
 A.  Background  160  B.  Financial  Qualifications  161 


 1.  Eliminating  the  Financial  Qualification  Requirement  161  2.  Posting  of  Bonds  166 
 C.  Milestone  Requirements  173 
 1.  Background  173  2.  General  Comments  on  Milestone  Proposals  176 
 3.  Contract  Execution  Milestone  179  4.  Standard  for  Determining  Compliance  with 
 Contract  Execution  Milestone  Requirement  181  5.  Confidential  Information  186 
 6.  Critical  Design  Review  188  7.  Commencement  of  Physical  Construction  192 
 8.  Milestones  for  Satellite  Systems  Using  Feeder  Links  194  9.  Other  Interim  or  Additional  Milestones  195 
 10.  Enforcement  of  Milestone  Requirements  197  11.  Incentives  for  Early  Launch  203 
 12.  Alternative  Milestone  Mechanism  205  13.  On-  site  Inspections  208 


 D.  Trafficking  in  Licenses  209 
 1.  Elimination  of  Satellite  Anti-  Trafficking  Rule  209  2.  Revision  of  Anti-  Trafficking  Rule  224 


 E.  Safeguards  Against  Frivolous  or  Speculative  Applications  226 
 1.  Safeguards  in  First-  Come,  First-  Served  Procedure  226  2.  Safeguards  Against  Speculation  in  Modified  Processing  Rounds  227 
 3.  Limit  on  Number  of  Pending  Applications  228  4.  Attributable  Interest  234 
 5.  Selling  Place  in  Queue  240  6.  Hard  Look  Doctrine  244 


 F.  Mandatory  Electronic  Filing  of  Space  Station  Applications  245  G.  Replacement  Satellites  250 
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 1.  Streamlined  Procedure  250  2.  Technical  Characteristics  of  Replacement  Satellites  255 
 H.  Full  Frequency  Reuse  259  I.  Miscellaneous  265 
 1.  Space  Station  License  Terms  265  2.  Spectrum  Reallocations  268 
 3.  Special  Temporary  Authority  271  4.  Petitions  for  Reconsideration  274 
 5.  Pending  Satellite  Applications  275 
 VIII.  Non-  U.  S.-  Licensed  Satellites  285 
 A.  Background  285  B.  Revision  of  Framework  290 


 1.  NGSO-  Like  Satellites  290  2.  GSO-  Like  Satellites  292 
 C.  Information  Requirements  of  Non-  U.  S.-  Licensed  Satellite  Operators  298 
 1.  Information  Requirements  for  Coordinated  Non-  U.  S.  Satellites  298  2.  Amendments  of  Letters  of  Intent  303 


 D.  Financial  Qualifications  of  Non-  U.  S.-  Licensed  Satellite  Operators  306 
 1.  Eliminating  the  Financial  Qualification  Requirement  306  2.  Posting  of  Bonds  307 


 E.  Milestone  Requirements  of  Non-  U.  S.-  Licensed  Satellite  Operators  310  F.  Safeguards  Against  Speculation  313 
 G.  Mandatory  Electronic  Filing  for  Non.-  U.  S.-  Licensed  Satellite  Operators  314  H.  Procedures  for  Modifications  of  Permitted  List  Satellite  Parameters  315 


 1.  Background  315  2.  Permitted  List  Satellite  Modifications  317 
 3.  Replacements  of  Permitted  List  Satellites  321  4.  Changes  of  Ownership  of  Satellites  on  the  Permitted  List  326 
 5.  Procedures  for  Non-  U.  S.-  Licensed  Satellites  That  Are  Not  on  the  Permitted  List  328 


 IX.  Conclusion  330  X.  Further  Notice  of  Proposed  Rulemaking:  Bond  Issues  333 
 XI.  Procedural  Matters  337  XII.  Ordering  Clauses  348 


 Appendix  A  Parties  Filing  Pleadings  Appendix  B  Rule  Revisions 
 Appendix  C  Default  Service  Rules 
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 Appendix  D  Final  Regulatory  Flexibility  Act  Analysis  Appendix  E  Initial  Regulatory  Flexibility  Act  Analysis 
 I.  INTRODUCTION 
 1.  In  this  Order,  we  revise  our  space  station  licensing  process  to  adapt  it  to  today's  satellite  environment.  The  procedures  we  adopt  today  significantly  revamp  the  licensing  process 
 that  we  have  used  since  the  early  1980s.  The  new  procedures  will  allow  us  to  act  on  applications  dramatically  faster  than  we  can  now,  and  to  recognize  the  technical  growth  in  satellite  design  over 
 the  last  two  decades.  Specifically,  in  this  Order,  we  consider  two  proposals  made  in  the  Space  Station  Reform  NPRM  to  expedite  the  satellite  licensing  process.  1  For  reasons  discussed  in  detail 
 below,  we  adopt  a  queue  for  considering  satellite  applications.  In  addition,  we  find  that  different  kinds  of  satellite  systems  raise  different  processing  issues.  Therefore,  we  adopt  two  different 
 licensing  frameworks    a  modified  processing  round  approach  based  on  our  current  procedure  for  non-  geostationary  satellite  orbit  (NGSO)-  like  systems,  and  a  "first-  come,  first-  served"  procedure 
 for  geostationary  satellite  orbit  (GSO)-  like  systems.  By  allowing  us  to  cut  processing  time  from  the  current  two-  to-  three  years  to  less  than  one  year,  these  procedures  will  lead  to  substantial 
 public  interest  benefits,  including  faster  provision  of  satellite  services  to  the  public,  and  maintenance  of  the  United  States'  position  as  the  leader  of  the  global  satellite  industry. 


 II.  EXECUTIVE  SUMMARY 
 2.  In  the  Space  Station  Reform  NPRM,  the  Commission  noted  that  the  satellite  industry  is  a  crucial  component  of  the  global  communications  marketplace.  2  For  example,  satellites  are  key 
 to  wide-  area  distribution  of  the  video  signals  of  over-  the-  air  broadcasts  and  cable  systems  to  other  satellite  systems  and  directly  to  consumers.  Satellite  facilities  also  constitute  a  major  component 
 of  the  wireless  backbone  infrastructure  for  voice  and  data  communications,  and  provide  an  important  opportunity  to  create  another  competitive  platform  for  delivery  of  broadband  services. 
 Satellite  facilities  are  especially  well  suited  for  extending  these  services  to  rural  and  unserved  areas.  3  Satellite  technology  facilitates  provision  of  Internet  services,  and  it  likely  will  continue  to 
 play  an  increasingly  important  role  in  this  area.  Satellite  systems  have  also  been  used  to  provide  data  and  voice  services  to  mobile  and  handheld  portable  devices. 


 3.  In  the  Space  Station  Reform  NPRM,  the  Commission  explained  in  detail  why  we  are  considering  revisions  to  our  satellite  licensing  procedure.  4  We  noted  that  there  are  several  factors 
 1  Amendment  of  the  Commission's  Space  Station  Licensing  Rules  and  Policies,  Notice  of 
 Proposed  Rulemaking,  IB  Docket  No.  02-  34,  17  FCC  Rcd  3847  (2002)  (Space  Station  Reform  NPRM  or  Notice). 


 2  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3849  (para.  2). 
 3  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3849  (para.  2),  citing  FWCC  Request  for 
 Declaratory  Ruling  on  Partial-  Band  Licensing  of  Earth  Stations  in  the  Fixed-  Satellite  Service  that  Share  Terrestrial  Spectrum,  First  Report  and  Order,  IB  Docket  No.  00-  203,  16  FCC  Rcd  11511  (2001) 


 (FWCC/  Onsat  First  Report  and  Order). 
 4  In  this  proceeding,  we  consider  revisions  to  the  procedure  for  all  new  satellite  license 
 applications  except  for  Direct  Broadcast  Satellite  (DBS)  and  Digital  Audio  Radio  Satellite  (DARS)  licenses.  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3850  n.  4.  Thus,  none  of  the  rules  adopted  in  this 


 Order  are  applicable  to  DBS  or  DARS  applications,  including  but  not  limited  to  the  licensing  procedure  rules.  Accordingly,  while  we  adopt  a  mandatory  electronic  filing  requirement  for  other  space  station 
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 that  can  increase  the  time  needed  to  issue  satellite  licenses,  and  one  major  factor  is  often  our  current  use  of  processing  rounds.  5  This  is  particularly  true  in  processing  rounds  in  which  there 
 are  not  enough  orbital  locations  and/  or  there  is  not  sufficient  spectrum  available  to  accommodate  all  the  qualified  applicants,  as  is  often  the  case.  In  those  cases,  we  afford  the  applicants  an 
 opportunity  to  negotiate  "mutually  agreeable"  compromises  so  that  all  the  applications  can  be  granted.  Those  negotiations  can  require  several  months  or  even  years  of  effort.  6 


 4.  Changes  in  the  satellite  industry  since  the  current  procedure  was  adopted  in  the  1980s  7  warrant  consideration  of  proposals  to  accelerate  the  licensing  process.  First,  the  satellite  industry 
 has  matured  tremendously  since  the  1980s.  For  example,  there  are  many  more  satellites  in  operation  now  then  there  were  in  1980.  Many  of  today's  satellites  operate  in  two  or  three  frequency 
 bands,  while  1980  technology  permitted  only  single-  band  satellites.  Furthermore,  all  of  today's  satellites  have  greater  capacity  and  operate  at  higher  power  than  was  possible  in  1980.  Other 
 factors  also  weigh  in  favor  of  accelerating  the  licensing  process.  For  example,  the  Commission  noted  that  the  International  Telecommunication  Union  (ITU)  had  recently  revised  its  procedures  to 
 require  satellite  operators  to  bring  planned  systems  into  use  within  seven  years  rather  than  nine  as  was  allowed  previously.  8  The  Commission  also  observed  that  the  current  procedure  can  result  in 
 long  and  complex  licensing  proceedings  in  cases  where  the  licensees  apply  for  mobile  satellite  service  (MSS)  or  non-  geostationary  satellite  orbit  (NGSO)  authority  and  request  feeder  link  or 
 intersatellite  link  authorizations  in  different  frequency  bands  as  well.  9  Finally,  delays  in  the  provision  of  satellite  services  caused  by  the  current  satellite  licensing  procedure  can  impose  costs  on 
 both  satellite  service  providers  and  their  customers.  10  It  also  results  in  inefficient  spectrum  use  because  it  increases  the  amount  of  time  scarce  orbit  and  spectrum  resources  lie  fallow.  11 


 applications  in  Section  VII.  F.,  DBS  and  DARS  applicants  will  continue  to  be  permitted  but  not  required  to  submit  applications  electronically.  In  addition,  DBS  license  terms  will  remain  as  specified  in  the  Part  100 
 Order  rather  than  Section  VII.  I.  1.  of  this  Order.  See  Policies  and  Rules  for  the  Direct  Broadcast  Satellite  Service,  Report  and  Order,  IB  Docket  No.  98-  21,  17  FCC  Rcd  11331,  11351  (para.  39)  (2002)  (Part  100 
 Order).  DBS  licensees  will  continue  to  be  required  to  comply  with  the  due  diligence  requirements  of  Section  25.  148(  b)  rather  than  the  milestone  requirements  we  adopt  in  Section  VII.  C.  below.  Part  100 
 Order,  17  FCC  Rcd  at  11353  (para.  44);  47  C.  F.  R.    25.  148(  b).  Nothing  in  the  discussion  of  the  anti-trafficking  rule  in  Section  VII.  D.  will  apply  to  DBS  or  DARS  licenses.  Instead,  DBS  license  transfers  are 
 discussed  in  the  Part  100  Order,  17  FCC  Rcd  at  11377-  78  (para.  99).  Finally,  neither  DBS  nor  DARS  applicants  are  subject  to  the  limit  on  number  of  pending  applications  in  Section  VII.  E.  3.,  or  the  replacement 
 satellite  procedure  in  Section  VII.  G. 
 5  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3850-  52  (paras.  5-  10).  We  explain 
 processing  rounds  in  Section  III.  A.  below. 
 6  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3851  (para.  10). 


 7  Filing  of  Applications  for  New  Space  Stations  in  the  Domestic  Fixed  Satellite  Service, 
 Memorandum  Opinion  and  Order,  93  FCC  2d  1260  (1983)  (1983  Cut-  Off  Order),  cited  in  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3850-  51  n.  3. 


 8  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3855  (paras.  19-  20). 
 9  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3853-  55  (paras.  15-  18). 
 10  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3852-  53  (paras.  12-  14). 
 11  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3855  (para.  21). 
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 Streamlining  the  satellite  licensing  process  would  reduce  those  costs.  Thus,  the  procedures  we  adopt  today  will  ensure  that  satellite  spectrum  and  orbital  resources  will  be  used  efficiently,  to  the 
 benefit  of  American  consumers. 
 5.  In  this  Order,  we  adopt  procedural  reforms  to  expedite  the  satellite  licensing  process.  The  central  procedural  revision  in  this  Order  is  to  create  a  single  queue  for  all  new  satellite 
 applications.  We  base  additional  reforms  on  our  determination  that  one  size  does  not  fit  all  --  that  different  procedures  are  better  suited  to  applications  for  different  kinds  of  satellite  systems.  For 
 satellites  communicating  with  earth  stations  with  omni-  directional  antennas  (NGSO-  like  systems),  we  adopt  a  modified  processing  round  procedure.  When  the  application  reaches  the 
 front  of  the  queue,  we  will  start  a  processing  round,  and  divide  the  available  spectrum  equally  among  all  the  qualified  applicants.  This  is  similar  to  the  approach  used  in  the  2  GHz  Order.  12 
 For  other  satellite  applications  (GSO-  like  systems),  we  adopt  the  first-  come,  first-  served  approach  we  proposed  in  the  Space  Station  Reform  NPRM,  with  revisions  to  address  some  concerns  raised 
 in  the  record.  13  Under  both  these  procedures,  we  will  be  able  to  issue  satellite  licenses  to  qualified  applicants  significantly  more  quickly  than  is  now  possible. 


 6.  We  also  adopt  a  number  of  other  measures  to  expedite  satellite  licensing  and  provision  of  service  to  the  public.  For  example,  we  adopt  a  streamlined  procedure  for  replacement  satellite 
 applications.  14  We  strengthen  our  milestone  requirements,  which  will  expedite  service  to  the  public  by  reassigning  the  orbit/  spectrum  resource  where  the  original  licensee  is  unwilling  or 
 unable  to  construct,  launch,  and  operate  its  proposed  satellite  system.  15  In  addition,  we  replace  our  current  financial  qualification  showing  with  a  bond-  posting  requirement.  16  The  current 
 financial  qualification  requirement  was  designed  to  address  whether  the  applicant  had  the  financial  resources  needed  to  launch  a  satellite  and  operate  it  for  one  year.  17  Our  experience  has 
 been  that  a  licensee's  financial  ability  to  implement  a  satellite  system  does  not  necessarily  mean  that  it  will  ultimately  expend  its  resources  to  that  end.  Finally,  we  remove  our  current  restrictions 
 on  sales  of  satellite  licenses,  to  facilitate  transfers  of  licenses  in  the  secondary  market  to  parties  that  can  provide  a  higher-  valued  use,  but  impose  certain  safeguards  to  ensure  against  spectrum 
 speculation  and  other  possible  abuses.  18 
 7.  Underlying  all  our  decisions  in  this  Order  is  our  long-  standing  policy  that,  as  a  general  proposition,  our  regulations  and  procedures  should  not  unreasonably  interfere  with  licensees' 
 business  negotiations,  and  we  should  allow  those  negotiations  to  be  based  on  market  forces  to  the 


 12  The  Establishment  of  Policies  and  Service  Rules  for  the  Mobile  Satellite  Service  in  the 
 2  GHz  Band,  Report  and  Order,  IB  Docket  No.  99-  81,  15  FCC  Rcd  16127  (2000)  (2  GHz  Order).  See  also  Section  V. 


 13  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3859-  61  (paras.  32-  39).  See  also  Section 
 VI. 
 14  Section  VII.  G. 


 15  Section  VII.  C. 
 16  Section  VII.  B. 
 17  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3880  (para.  100). 
 18  Sections  VII.  D.  and  VII.  E. 
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 extent  possible.  19  This  is  particularly  true  in  this  proceeding,  in  which  placing  greater  reliance  on  market  mechanisms  in  our  licensing  procedures  should  promote  the  interests  of  satellite  service 
 consumers  without  any  significant  negative  effect  on  satellite  operators.  Specifically,  we  adopt  procedures  that  should  enable  us  to  establish  satellite  licensees'  operating  rights  clearly  and 
 quickly.  We  also  remove  unnecessary  barriers  to  license  transfers,  so  that  satellite  operators  have  greater  flexibility  to  negotiate  post-  licensing  transfers  of  satellite  licenses  in  response  to  changing 
 market  conditions  and  consumer  demands.  As  a  result,  licensees  will  be  able  to  provide  service  to  the  public  much  sooner  than  is  often  possible  under  our  current  satellite  licensing  procedures. 
 Customers  should  not  have  to  wait  for  months  or  years  while  applicants  identify  and  discuss  their  concerns  with  each  other  in  the  context  of  processing  round  negotiations.  The  rules  adopted 
 today  rely  on  market  mechanisms  to  achieve  the  same  or  substantially  similar  results  more  efficiently,  on  a  faster  time  scale,  and  with  greater  administrative  ease  once  licenses  are  granted. 
 This  will  ensure  that  there  is  the  most  efficient  use  of  the  satellite  spectrum  and  orbit  resources.  20 
 III.  BACKGROUND 
 A.  Current  Licensing  Procedure 
 8.  As  we  explained  in  the  Notice,  we  currently  issue  satellite  licenses  in  "processing  rounds,"  a  procedure  by  which  we  combine  into  groups  and  process  together  applications  to 
 operate  satellites  in  a  particular  frequency  band.  21  The  typical  process  is  as  follows:  First,  an 
 19  See  Price  Cap  Performance  Review  for  Local  Exchange  Carriers,  First  Report  and  Order, 
 CC  Docket  No.  94-  1,  10  FCC  Rcd  8961,  8990-  92  (paras.  67-  69)  (1995);  Access  Charge  Reform,  Fifth  Report  and  Order  and  Further  Notice  of  Proposed  Rulemaking,  CC  Docket  No.  96-  262,  14  FCC  Rcd 


 14221,  14263-  64  (para.  79)  (1999)  (Incumbent  LEC  Pricing  Flexibility  Order),  cited  in  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3866  (para.  54).  In  particular,  in  this  Order  below,  we  adopt  licensing 
 procedures  to  facilitate  negotiations  among  licensees  outside  of  a  regulatory  process,  rather  than  encouraging  those  negotiations  in  the  context  of  processing  rounds  as  the  Commission  has  in  the  past. 


 20  In  November  2002,  the  Spectrum  Policy  Task  Force  (SPTF)  issued  a  Report  making 
 several  recommendations  to  revise  the  Commission's  spectrum  management  policies.  See  Federal  Communications  Commission,  SPTF  Report,  ET  Docket  No.  02-  135,  (released  Nov.  2002)  (Spectrum 


 Policy  Task  Force  Report).  This  report  can  be  found  at  www.  fcc.  gov/  sptf.  See  also  Commission  Seeks  Public  Comment  on  Spectrum  Policy  Task  Force  Report,  Public  Notice,  ET  Docket  No.  02-  135,  FCC  02- 
 322  (released  Nov.  25,  2002).  The  new  satellite  licensing  procedures  we  adopt  in  this  Order  place  greater  reliance  on  market  mechanisms,  and  so  are  consistent  with  the  recommendations  in  the  SPTF  Report. 
 SPTF  Report  at  56-  58.  In  addition,  the  SPTF  Report  recommends  that  the  Commission  consider  a  statutory  proposal  for  Congress  that  would  assess  and  re-  examine  Section  647  of  the  Orbit  Act  to  consider 
 permitting,  but  not  requiring,  the  Commission  to  utilize  competitive  bidding  to  resolve  mutually  exclusive  applications  for  global  and  international  satellite  services.  SPTF  Report  at  42.  Section  647  of  the 
 Communications  Satellite  Act  of  1962  (Satellite  Act),  as  amended  by  the  Open-  Market  Reorganization  for  the  Betterment  of  International  Telecommunications  Act  (ORBIT  Act),  47  U.  S.  C.    765f.  Our  adoption  of 
 new  satellite  licensing  procedures  should  not  be  construed  as  implying  any  conclusion  regarding  this  task  force  proposal.  Moreover,  nothing  in  this  Order  is  intended  to  preclude  the  Commission  from  designating 
 future  U.  S.  satellite  spectrum  allocations  for  domestic  satellite  service  only.  Moreover,  nothing  in  this  Order  is  intended  to  limit  the  Commission  from  designating  future  U.  S.  satellite  spectrum  rights  for 
 distribution  via  auction  consistent  with  our  statutory  authority. 
 21  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3850  (para.  5).  The  Commission  also  noted 
 that  it,  in  the  past,  it  has  used  another  procedure  for  Direct  Broadcast  Satellite  (DBS)  and  Digital  Audio  Radio  Satellite  (DARS)  licenses.  This  proceeding  does  not  address  the  DBS  or  DARS  licensing 


 procedures.  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3850  n.  4. 
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 initial  (or  "lead")  application  for  a  particular  service  in  a  specific  band  is  filed.  22  After  staff  determines  that  the  application  is  acceptable  for  filing,  we  issue  a  public  notice  announcing  a 
 "cut-  off"  date,  a  deadline  for  other  interested  parties  to  file  any  additional  applications  to  be  considered,  concurrently  with  the  lead  application,  as  part  of  a  group.  23  We  afford  an  opportunity 
 for  parties  to  file  petitions  to  deny,  comments,  and  replies  with  respect  to  each  applications  filed.  24 


 9.  On  occasion,  license  applications  in  a  processing  round  remain  pending  while  the  Commission  initiates  and  completes  a  notice-  and-  comment  rulemaking  proceeding  to  adopt  rules 
 for  the  newly  proposed  service.  25  In  addition,  in  cases  where  frequency  bands  have  not  been  allocated  internationally  or  domestically  for  a  proposed  service,  the  United  States  must  develop 
 and  submit  proposals  for  new  frequency  allocations  at  International  Telecommunication  Union  (ITU)  World  Radio  Conferences  (WRCs),  26  and  subsequently  the  Commission  must  amend  its 
 domestic  Table  of  Frequency  Allocations,  27  before  it  can  act  on  the  pending  satellite  license  applications.  28 


 10.  If  there  are  enough  orbital  locations  and/  or  there  is  sufficient  spectrum  available  to  accommodate  the  proposed  satellite  systems  of  all  of  the  qualified  applicants  in  the  processing 
 round,  we  issue  licenses  at  that  point.  29  If,  as  is  often  the  case,  there  are  not  enough  orbital  locations  and/  or  there  is  not  sufficient  spectrum  available  to  accommodate  all  the  qualified 
 applicants,  we  afford  the  applicants  an  opportunity  to  negotiate  "mutually  agreeable"  compromises  so  that  all  the  applications  can  be  granted.  30  Those  negotiations  can  require  several 
 months  or  even  years  of  effort.  31  On  occasion,  applicants  have  not  been  able  to  reach  mutually  agreeable  compromises,  and  the  Commission  has  had  to  mandate  a  solution.  32  This  process  also 


 22  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3850  (para.  6). 
 23  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3850  (para.  6),  citing  1983  Cut-  Off 
 Order,  93  FCC  2d  1260. 
 24  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3850  (para.  6). 


 25  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3850-  51  (para.  7). 
 26  WRCs  are  held  approximately  every  two  or  three  years.  Space  Station  Reform  NPRM,  17 
 FCC  Rcd  at  3851  (para.  9). 
 27  47  C.  F.  R.    2.106. 


 28  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3851  (para.  9). 
 29  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3851  (para.  10).  The  Commission 
 dismisses  applications  when  it  finds  that  the  applicant  is  not  legally,  financially,  or  technically  qualified  to  hold  a  satellite  license.  See,  e.  g.,  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3851  (para.  10). 


 30  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3851  (para.  10). 
 31  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3851  (para.  10). 
 32  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3852  (para.  10),  citing  2  GHz  Order,  15 
 FCC  Rcd  16127. 
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 requires  the  completion  of  a  notice-  and-  comment  rulemaking  proceeding  to  implement  an  assignment  scheme  consistent  with  the  negotiated  agreement  or,  in  cases  where  no  agreement  is 
 reached,  a  Commission  approach  to  resolving  mutual  exclusivity  among  the  competing  applicants.  Developing  proposals  in  a  Notice  of  Proposed  Rulemaking,  reviewing  comments,  and 
 finalizing  rules  in  a  Report  and  Order  can  also  be  time-  consuming. 
 B.  Proposed  Revisions  to  Satellite  Licensing  Procedure 
 11.  Certain  factors  outside  our  control  can  lengthen  the  time  needed  to  grant  a  license.  These  include  the  time  necessary  to  pursue  and  obtain  new  international  allocations  for  satellite 
 services  pursuant  to  ITU  procedures.  Rather  than  concentrate  on  those  factors  where  the  Commission's  ability  to  shorten  the  time  involved  is  limited,  we  have  focused  our  efforts  on  those 
 licensing  areas  that  are  within  our  control.  33 
 12.  Accordingly,  the  Notice  invited  comment  on  two  proposals  that  would  shorten  the  time  required  to  act  on  space  station  applications  by  either  eliminating,  or  limiting,  the 
 opportunity  for  negotiations  among  applicants.  Specifically,  we  invited  comment  on  two  alternatives  for  revising  our  satellite  processing  procedure.  The  first  option  is  a  first-  come,  first-served 
 approach,  based  in  large  part  on  the  procedure  we  used  for  FM  radio  and  television  licenses  from  1985  to  1998.  34  The  second  option  is  to  reform  and  streamline  our  current 
 processing  round  procedure.  35 
 13.  For  the  reasons  set  forth  below  in  Section  IV.,  we  conclude  that  license  applications  for  different  types  of  satellites  raise  distinct  issues  that  can  be  resolved  most  effectively  in 
 procedures  adapted  to  those  issues.  Specifically,  we  find  that  applications  for  certain  satellite  systems  are  best  considered  in  a  modified  processing  round,  while  others  are  best  considered  in  a 
 first-  come,  first-  served  approach.  In  Section  V.,  we  establish  a  single  queue  for  all  new  satellite  applications,  and  we  set  forth  our  modified  processing  round  procedure  in  detail.  We  discuss  our 
 first-  come,  first-  served  procedure  in  Section  VI.  In  Section  VII.,  we  adopt  other  revisions  to  our  space  station  licensing  rules,  including  replacing  our  current  financial  qualification  requirements 
 with  a  bond,  eliminating  the  satellite  anti-  trafficking  rules,  strengthening  our  milestone  requirements,  and  adopting  safeguards  to  protect  against  speculative  satellite  applications.  We 
 revise  our  procedures  for  non-  U.  S.-  licensed  satellite  operators  seeking  access  to  the  U.  S.  market  in  Section  VIII.,  to  be  consistent  with  our  procedures  for  U.  S.-  licensed  satellite  operators  that  we 
 adopt  herein.  36  Section  IX.  is  a  conclusion  for  the  Report  and  Order.  Finally,  in  Section  X.,  we 
 33  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3856  (para.  25). 
 34  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3857-  71  (paras.  28-  66),  citing  Amendment 
 of  the  Rules  Concerning  Cut-  Off  Procedures  for  FM  and  TV  Broadcast  Stations,  Report  and  Order,  MM  Docket  No.  84-  750,  FCC  85-  125,  50  Fed.  Reg.  19936,  19941-  42  (paras.  33-  36)  (May  13,  1985)  (TV  and 


 FM  Broadcast  Order),  recon.  denied,  50  Fed,  Reg.  43157  (Oct.  24,  1985),  aff'd  without  published  opinion  sub  nom.  Hilding  v.  FCC,  835  F.  2d  1435  (9th  Cir.  1987),  reprinted  at  58  Rad.  Reg.  2d  776  (1985).  In 
 Hilding,  the  Court  rejected  the  petitioner's  challenge  of  the  broadcast  first-  come,  first-  served  rule  because  it  found  that  the  Commission  reasonably  concluded  that  its  rules  balanced  the  competing  public  interest 
 concerns  better  than  alternative  rules  proposed  by  the  petitioner. 
 35  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3871-  75  (paras.  67-  83). 


 36  In  the  Space  Station  Reform  NPRM,  we  proposed  revisions  to  Schedule  S,  a  standardized 
 space  station  licensing  form  initially  proposed  in  another  proceeding.  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3875-  79  (paras.  84-  94);  2000  Biennial  Regulatory  Review  --  Streamlining  and  Other  Revisions 
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 adopt  a  Further  Notice  of  Proposed  Rulemaking  to  invite  additional  comment  on  the  details  of  the  bond  requirement. 
 IV.  PRELIMINARY  ISSUES 
 A.  Need  for  Reform 
 14.  Background.  Several  commenters  claim  that  we  need  to  make  only  slight  revisions  to  our  satellite  licensing  procedures.  37  Many  of  these  parties  note  that  the  Commission  has  relied 
 on  processing  rounds  for  many  years  (since  1983)  with  good  results.  For  example,  a  number  of  parties  claim  that  processing  rounds  have  enabled  the  Commission  to  license  as  many  satellite 
 operators  as  possible  given  limited  satellite  spectrum.  38  Teledesic  argues  that,  while  processing  rounds  have  been  successful  in  the  past,  they  have  become  too  slow  to  be  a  good  means  for 
 issuing  satellite  licenses.  39  Teledesic  maintains  that  any  proposals  to  streamline  or  facilitate  processing  rounds  are  misplaced  because,  regardless  of  whether  or  to  what  extent  the  processing 
 round  procedure  can  be  improved,  the  first-  come,  first-  served  procedure  would  produce  a  better  result.  40  Teledesic  contends  that  processing  rounds  discourage  innovative  satellite  proposals  by 
 grouping  them  together  with  applications  from  parties  who  may  not  have  any  interest  in  moving  forward  with  their  proposed  satellite  systems.  41  SES  Americom  replies  that  Teledesic  overstates 
 the  delays  of  processing  rounds,  and  overstates  the  time  savings  of  the  first-  come,  first-  served  approach.  42 


 15.  Hughes  and  PanAmSat  argue  that  delays  in  licensing  are  often  not  the  result  of  processing  rounds,  but  rather  spectrum  allocation  or  service  rule  proceedings.  43  Hughes  also 


 of  Part  25  of  the  Commission's  Rules  Governing  the  Licensing  of,  and  Spectrum  Usage  by,  Satellite  Network  Earth  Stations  and  Space  Stations,  Notice  of  Proposed  Rulemaking,  IB  Docket  No.  00-  248,  15 
 FCC  Rcd  25128,  25191-  25201  (App.  C)  (2000)  (Part  25  Earth  Station  Streamlining  NPRM).  We  will  consider  comments  filed  in  response  to  the  revised  Schedule  S  in  a  future  Order,  as  well  as  our  proposal  to 
 require  non-  U.  S.-  licensed  satellite  operators  seeking  access  to  the  U.  S.  market  to  complete  Schedule  S.  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3890  (para.  127).  In  a  future  Order,  we  will  also  consider 
 some  commenters'  proposals  that  may  require  revisions  to  Schedule  S,  such  as  a  streamlined  procedure  for  some  space  station  modification  applications.  See,  e.  g.,  SIA  Comments  at  20-  21;  Teledesic  Space  Station 
 Comments  at  26-  27;  Intelsat  Comments  at  21. 
 37  See  Hughes  Comments  at  47;  SIA  Comments  at  14;  SES  Americom  Reply  at  11-  12; 
 PanAmSat  Comments  at  10;  Intelsat  Reply  at  6-  7;  PanAmSat  Reply  at  3-  4. 
 38  SIA  Comments  at  5-  6;  Hughes  Comments  at  2-  3;  PanAmSat  Comments  at  8-  9.  See  also 
 Boeing  Comments  at  5-  6,  10. 
 39  Teledesic  Comments  at  2-  5.  See  also  Intelsat  Comments  at  5-  6. 


 40  Teledesic  Comments  at  34-  35. 
 41  Teledesic  Comments  at  5. 
 42  SES  Americom  Reply  at  8-  9. 
 43  Hughes  Comments  at  3-  4,  33;  PanAmSat  Comments  at  9. 
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 questions  the  Commission's  reasons  in  the  Notice  for  considering  revisions  to  the  satellite  licensing  process.  44 
 16.  Discussion.  We  disagree  with  commenters  that  assert  that  we  should  limit  our  consideration  to  minor  revisions  to  the  satellite  licensing  process.  We  explained  in  the  Notice  that 
 the  negotiations  among  applicants  are  usually  time  consuming  and  not  always  successful.  45  In  these  cases,  the  Commission  must  develop  a  framework  for  resolving  mutual  exclusivity  among 
 the  applicants.  Such  a  framework  is  generally  adopted  in  a  notice-  and-  comment  rulemaking  proceeding.  This  process  (negotiations  and  rulemaking)  has  generally  taken  two  to  three  years,  or 
 more.  46  These  delays  impose  real  and  substantial  economic  costs  on  satellite  customers  as  well  as  service  providers.  47  Alternatively,  in  this  Order,  we  move  away  from  a  highly  regulatory 
 procedure  to  a  more  market-  based  approach.  Furthermore,  the  International  Telecommunication  Union  (ITU)  has  shortened  its  bringing-  into-  use  date  by  two  years,  48  which  prompts  us  to 
 expedite  our  licensing  procedures  as  much  as  possible.  In  addition  to  these  public  interest  benefits,  we  also  noted  that,  given  the  important  role  the  satellite  industry  plays  in  the  U.  S.  and 
 world  economy,  the  public  interest  demands  that  we  continually  review  our  procedures  and  improve  them  whenever  possible.  49  Moreover,  in  another  context,  at  least  one  applicant  has 
 criticized  the  length  of  the  current  processing  round  procedure.  50  Finally,  our  experience  has  shown  that  satellite  licensees  need  about  three  to  six  years  to  construct  and  launch  satellite 
 systems.  Given  the  now-  seven-  year  ITU  deadline  for  bringing  planned  satellites  into  use,  we  need  to  expedite  the  licensing  process  dramatically.  Accordingly,  we  conclude  that  we  must 
 reform  the  current  satellite  licensing  procedure. 
 17.  Furthermore,  while  Hughes  and  PanAmSat  are  correct  that  we  could  issue  satellite  licenses  more  quickly  if  we  could  expedite  spectrum  allocation  and  service  rule  proceedings,  this 
 observation  does  not  provide  a  sufficient  reason  to  defer  needed  revisions  of  the  satellite  licensing  process.  Moreover,  as  we  noted  in  the  Space  Station  Reform  NPRM,  attempting  to  streamline  the 
 spectrum  allocation  and  service  rule  procedures  in  addition  to  the  satellite  licensing  process  would  be  unwieldy.  51  Thus,  it  is  reasonable  to  address  these  issues  one  at  a  time,  and  to  address 
 the  satellite  licensing  process  first.  Moreover,  we  adopt  measures  in  this  Order  to  limit  the  delays 
 44  Hughes  Comments  at  5-  8. 


 45  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3851-  52  (para.  10). 
 46  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3871-  72  (para.  68). 
 47  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3852-  53  (paras.  12-  14). 
 48  The  ITU's  Radio  Regulations  requires  ITU  member  nations  to  bring  their  proposed 
 satellite  systems  into  use  within  five  years  of  the  date  the  nation  informed  the  ITU  of  its  intent  to  construct  and  operate  that  satellite  system.  This  deadline  can  be  extended  to  seven  years  under  certain 


 circumstances.  Failure  to  meet  the  bringing-  into-  use  date  causes  the  member  nation  to  lose  its  priority  relative  to  other  member  nations'  proposed  satellite  systems. 


 49  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3856  (para.  22). 
 50  See  Letter  from  Peter  Allen,  Director,  Pacific  Century  Group,  to  Jennifer  Gilsenan,  Chief, 
 Policy  Branch,  Satellite  Division,  International  Bureau,  FCC  (dated  Sept.  19,  2002)  (describing  the  Second  Ka-  band  processing  round  as  "unfortunately  all  too  lengthy"). 


 51  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3856  (para.  25). 
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 caused  by  frequency  allocation  and  service  rule  proceedings.  For  applications  filed  before  the  ITU  has  adopted  an  international  frequency  allocation,  we  decide  in  this  Order  to  return  the 
 application  without  prejudice  as  premature.  52  We  also  adopt  commenters'  recommendations  to  create  generic,  default  service  rules  to  apply  in  cases  where  we  grant  applications  filed  in  the 
 absence  of  specific  service  rules.  53  Accordingly,  we  do  not  expect  either  frequency  allocation  proceedings  or  service  rule  proceedings  to  delay  our  actions  on  satellite  applications  as  much  as 
 they  have  in  the  past.  In  any  case,  we  may  consider  exploring  other  options  for  expediting  service  rule  proceedings  in  the  future. 


 B.  General  Framework 
 18.  Background.  In  the  Notice,  we  invited  comment  on  two  general  approaches  for  revising  the  current  satellite  licensing  procedure.  One  of  those  approaches  is  the  first-  come,  first-served 
 approach,  in  which  we  are  to  process  satellite  applications  one  at  a  time  in  the  order  that  they  are  filed.  54  The  other  approach  modifies  and  streamlines  the  current  processing  round 
 procedure  by  placing  a  time  limit  on  negotiations  in  processing  rounds,  or  establishes  a  sharing  mechanism  that  would  clarify  the  operating  rights  of  the  prospective  licensees,  and  so  reduces  or 
 eliminates  the  need  for  processing  round  negotiations.  55 
 19.  Discussion.  Intelsat  proposes  something  it  calls  the  modified  first-  come,  first-  served  procedure.  56  Intelsat  recommends  applying  its  procedure  only  to  new  license  applications  for 
 orbital  locations  and  spectrum  with  established  service  rules  and  frequency  allocations,  such  as  the  C-  band,  Ku-  band,  and  Ka-  band,  but  not  to  services  where  band-  segmentation  is  preferable, 
 such  as  MSS  and  possibly  NGSO  satellite  constellation  applications.  57  In  other  words,  Intelsat  would  not  apply  a  first-  come,  first-  served  procedure  to  applications  for  authority  to  operate  in  a 
 frequency  band  where  needed  service  rules  or  allocations  have  not  yet  been  adopted.  58  SES  Americom  argues  that  limiting  the  first-  come,  first-  served  proposal  to  "established  bands"  would 
 not  address  any  of  the  concerns  that  commenters  have  raised  about  potential  for  speculation  in  or  the  legal  basis  for  a  first-  come,  first-  served  procedure.  59  SES  Americom  also  questions  whether  a 
 satellite  service  should  be  considered  "established"  as  soon  as  the  Commission  adopts  service 


 52  Sections  VI.  D.  1.  and  VI.  E.  1.  e.  below. 
 53  Sections  V.  D.  1.  and  VI.  E.  1.  d.  below. 
 54  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3857-  71  (paras.  28-  66). 
 55  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3871-  75  (paras.  67-  83). 
 56  Intelsat  Comments  at  8.  Intelsat  intends  all  the  proposals  in  its  "modified  first-  come, 
 first-  served"  approach  to  be  considered  together  as  a  single  package.  Intelsat  Comments  at  3.  For  reasons  discussed  below,  we  cannot  adopt  all  the  elements  in  Intelsat's  proposal.  Section  VI.  F.  We  find,  however, 


 that  adoption  of  some  of  Intelsat's  proposals  would  further  the  public  interest  even  if  we  do  not  adopt  everything  in  Intelsat's  proposal.  Accordingly,  we  will  consider  the  individual  elements  of  Intelsat's 
 proposal  on  a  case-  by-  case  basis. 
 57  Intelsat  Comments  at  9-  10. 


 58  Intelsat  Comments  at  9-  10. 
 59  SES  Americom  Reply  at  14-  15. 
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 rules  and  frequency  allocations.  60  Although  PanAmSat  supports  retaining  processing  rounds  over  a  first-  come,  first-  served  procedure,  PanAmSat  makes  a  point  very  similar  to  Intelsat.  PanAmSat 
 argues  that  different  factors  may  be  relevant  in  processing  rounds  for  different  kinds  of  satellite  licenses,  such  as  NGSO  or  GSO,  FSS  or  MSS.  61  Telesat  argues  that  operators  of  non-  U.  S.  -licensed 
 GSO  FSS  satellites  seeking  access  to  the  U.  S.  market  should  be  subject  to  a  different  procedure  than  other  non-  U.  S.-  licensed  satellite  operators.  62 


 20.  Intelsat  and  PanAmSat  raise  a  very  good  point,  in  that  different  kinds  of  satellite  applications  raise  different  kinds  of  issues,  and  therefore  it  may  be  reasonable  to  adopt  different 
 procedures  to  address  the  issues  raised  by  each  kind  of  satellite  application.  We  also  agree  with  SES  Americom,  however,  that  Intelsat's  proposal  to  apply  different  procedures  to  applications  for 
 satellites  in  "established"  and  "unestablished"  frequency  bands  may  not  be  the  best  way  to  classify  satellite  applications.  Rather,  we  find  that  Intelsat's  comment  is  very  relevant  when  it 
 noted  that  satellite  applications  for  which  band  segmentation  is  preferable  should  be  considered  pursuant  to  a  different  procedure  than  other  satellite  applications. 


 21.  The  framework  we  adopt  in  this  proceeding  is  based  on  Intelsat's  observation  that  band  segmentation  is  preferable  for  some  but  not  all  satellite  applications.  The  classification  we 
 adopt  here  is  based  on  a  refinement  of  Intelsat's  observation  that  MSS  and  NGSO  applications  raise  different  issues  than  other  satellite  applications.  63  Rather  than  adopting  Intelsat's 
 classification,  however,  we  conclude  that  the  classification  should  be  as  follows:  (1)  NGSO  satellite  constellations  and  GSO  satellites  communicating  with  earth  stations  with  omni-directional 
 antennas,  and  (2)  GSO  satellites  communicating  with  earth  stations  with  non-  omni-directional  antennas.  For  purposes  of  this  Order,  we  refer  to  these  types  of  satellite  applications 
 as  "NGSO-  like"  and  "GSO-  like"  applications,  respectively.  NGSO-  like  satellite  systems  are  those  in  which  the  earth  station  has  little  or  no  directivity  towards  a  satellite,  so  that  the  earth 
 station  must  track  the  satellite  in  all  directions,  such  as  hand-  held  satellite  telephones.  NGSO  systems  generally  cannot  operate  on  the  same  spectrum  without  causing  unacceptable 
 interference  to  each  other.  Examples  of  GSO-  like  satellite  systems  are  those  which  use  earth  stations  with  antennas  with  directivity  towards  the  satellites,  such  as  FSS,  and  MSS  feeder  links 
 which  use  GSO  satellites.  GSO  satellites  can  operate  on  the  same  spectrum  at  two-  degree  orbit  spacings. 


 22.  This  NGSO-  like  classification  better  describes  the  universe  of  satellite  applications  for  which  band  segmentation  is  preferable  because  it  promotes  better  our  goal  of  trying  to  license 
 as  many  satellite  systems  as  possible,  so  that  there  is  as  much  competition  as  possible  for  each  satellite  service.  If  we  adopted  a  first-  come,  first-  served  procedure  for  NGSO-  like  satellite 
 applications,  the  first  qualified  applicant  could  request  authority  to  operate  in  so  much  of  the  orbit-  spectrum  resource  that  additional  market  entry  would  be  precluded.  In  these  cases, 
 therefore,  band  segmentation  is  preferable  because  it  facilitates  the  potential  for  competitive  market  entry.  For  GSO-  like  satellite  applications,  however,  licensees  are  usually  authorized  to 
 operate  throughout  the  frequency  band.  Thus,  large  spectrum  requests  in  GSO-  like  satellite 


 60  SES  Americom  Reply  at  15-  16. 
 61  PanAmSat  Comments  at  13. 
 62  Telesat  Comments  at  4-  5. 
 63  Intelsat  Comments  at  9-  10. 
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 applications  do  not  by  themselves  preclude  additional  market  entry.  Accordingly,  we  adopt  a  first-  come,  first-  served  procedure  for  GSO-  like  satellite  applications.  We  explain  these 
 conclusions  in  Sections  V.  and  VI.  below. 
 V.  MODIFIED  PROCESSING  ROUNDS  FOR  NGSO-  LIKE  SATELLITE  SYSTEMS 


 A.  Overview 
 23.  As  we  explained  above,  the  Commisison  proposed  two  general  approaches  for  updating  and  expediting  our  satellite  licensing  process.  One  was  the  first-  come,  first-  served 
 approach,  64  and  the  other  approach  was  to  modify  the  current  processing  round  procedure.  We  proposed  several  modifications,  including  placing  a  60-  day  time  limit  on  those  negotiations,  65 
 adopting  criteria  for  selecting  among  applicants  if  the  negotiations  fail,  66  and  establishing  a  sharing  mechanism  that  would  clarify  the  operating  rights  of  the  prospective  licensees,  and  so 
 reduce  the  need  for  negotiations.  67  We  adopt  a  modified  processing  round  approach  using  a  spectrum-  splitting  framework  for  applications  for  NGSO-  like  satellite  applications.  We  find 
 further  that  the  first-  come,  first-  served  approach  is  not  well  suited  to  this  kind  of  satellite  system. 
 B.  Opportunities  for  Competitive  Entry  for  NGSO-  Like  Satellite  Systems 
 24.  Background.  In  the  Notice,  the  Commission  invited  comment  on  applying  a  first-come,  first-  served  procedure  to  both  NGSO-  like  and  GSO-  like  satellite  applications.  Under  a 
 first-  come,  first-  served  approach,  the  first-  filed  acceptable  application  for  a  particular  satellite  license  would  be  considered  before  considering  other  applications  requesting  to  use  the  same 
 spectrum.  68  Under  this  procedure,  we  would  issue  a  public  notice  inviting  comment  on  the  lead  application.  Subsequently  filed  applications  would  be  included  in  a  queue  according  to  their 
 sequential  date  of  filing.  If  for  any  reason  we  could  not  grant  the  lead  application,  we  would  dismiss  the  lead  application  and  consider  the  next  application  in  the  queue  and  continue  this 
 process  until  we  could  grant  an  application.  69 
 25.  The  Commission  recognized  the  possibility  that  the  first  applicant  in  the  queue  could  seek  authority  for  so  much  spectrum  that  future  service  providers  could  be  unreasonably 
 precluded  from  the  market.  70  This  is  especially  true  with  respect  to  NGSO-  like  satellite  systems,  in  which  licensing  one  satellite  system  operator  to  provide  service  in  a  particular  frequency  band 
 segment  precludes  other  satellite  system  operators  from  providing  service  in  that  frequency  band 
 64  This  approach  is  described  in  detail  in  the  Space  Station  Reform  NPRM,  17  FCC  Rcd  at 
 3859-  61  (paras.  32-  40),  and  in  this  Order  below. 
 65  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3872  (para.  70). 


 66  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3872-  73  (paras.  70-  76). 
 67  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3873-  74  (para.  78). 
 68  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3859  (para.  32). 
 69  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3859  (para.  33). 
 70  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860  (para.  36). 
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 segment.  71  The  Commission  suggested  that  this  issue  could  be  addressed  by  limiting  the  amount  of  the  spectrum-  orbit  resource  granted  to  each  applicant  to  the  amount  needed  to  provide  the 
 proposed  service.  The  Commission  also  proposed  to  determine  the  appropriate  amount  of  spectrum  in  the  context  of  service  rule  proceedings,  and  invited  parties  to  propose  methods  or 
 criteria  for  making  such  determinations.  72 
 26.  We  received  several  comments  on  the  first-  come,  first-  served  procedure.  We  address  those  comments  in  detail  below.  73  Here,  we  focus  on  comments  related  to  using  rulemaking 
 proceedings  to  determine  the  amount  of  spectrum  needed  to  provide  a  service.  Based  on  those  comments,  we  conclude  that  a  revised  processing  round  approach  using  a  pre-  established  sharing 
 mechanism  is  better  suited  for  NGSO-  like  satellite  systems  than  the  first-  come,  first-  served  procedure  is. 


 27.  Discussion.  Boeing  argues  that  it  would  be  virtually  impossible  for  the  Commission  to  determine  the  precise  amount  of  spectrum  necessary  to  provide  a  particular  service  on  a  case-by- 
 case  basis.  74  Hughes  maintains  that  determining  reasonable  spectrum  limits  in  service  rules  proceedings  would  force  those  proceedings  to  take  on  all  the  characteristics  of  processing  rounds, 
 and  so  would  not  reduce  the  time  needed  to  issue  licenses.  75  SES  Americom  argues  that  a  rulemaking  proceeding  is  not  a  good  forum  for  determining  the  amount  of  bandwidth  needed  by 
 an  applicant  in  a  first-  come,  first-  served  procedure.  This  is  because,  according  to  SES  Americom,  comments  in  the  rulemaking  proceeding  would  be  unduly  influenced  by  the  commenters'  place  in 
 the  queue,  rather  than  on  engineering  or  economic  considerations.  In  other  words,  according  to  SES  Americom,  commenters  who  are  near  the  front  of  the  queue  would  have  an  incentive  to 
 argue  that  more  spectrum  is  necessary  to  preclude  other  applicants  from  obtaining  bandwidth,  while  commenters  near  the  end  of  the  queue  would  have  an  incentive  to  argue  that  less  spectrum 
 is  necessary,  to  try  to  ensure  that  spectrum  is  still  available  by  the  time  they  reach  the  front  of  the  queue.  76  Telesat  argues  that,  in  some  cases,  it  would  not  be  in  the  public  interest  to  grant  the 
 entire  available  spectrum  to  the  first  applicant  in  the  queue,  and  so  suggests  the  band-  splitting  procedure  used  in  the  2  GHz  proceeding  in  those  cases.  77 


 28.  Teledesic  argues  that  a  first-  come,  first-  served  procedure  would  not  give  the  first  applicant  the  ability  to  monopolize  new  services,  because  the  Commission  can  deny  "excessive" 
 applications,  grant  such  applications  in  part,  or  condition  licenses  on  compliance  with  future 


 71  This  is  because  NGSO-  like  satellite  systems  use  earth  stations  that  cannot  discriminate 
 between  satellites  when  there  is  an  in-  line  event  for  NGSOs.  In  other  words,  the  earth  stations  have  no  isolation,  as  a  result  of  their  lack  of  directivity. 


 72  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860  (para.  36). 
 73  Section  VI.  D. 
 74  Boeing  Comments  at  7-  8. 
 75  Hughes  Comments  at  34. 
 76  SES  Americom  Comments  at  6-  7. 
 77  Telesat  Comments  at  3. 
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 rulemakings.  78  Teledesic  contends  further  that  the  Commission  will  need  to  consider  issues  of  spectrum  efficiency  and  spectrum  excess  regardless  of  whether  the  Commission  adopts  a  first-come, 
 first-  served  procedure,  and  that  the  Commission  would  be  able  to  resolve  those  issues  more  easily  if  the  Commission  can  "de-  link"  several  applications  on  file  and  address  the  spectrum  issue 
 "head-  on."  79  CTIA  also  advocates  limiting  spectrum  assignments  in  service  rule  proceedings,  and  recommends  using  those  proceedings  to  consider  reallocating  spectrum  to  other  uses.  80  Teledesic 
 and  CTIA  do  not,  however,  provide  any  suggestions  for  methods  or  criteria  for  determining  the  amount  of  spectrum  that  can  reasonably  be  considered  "excessive"  in  the  context  of  service  rule 
 proceedings. 
 29.  The  amount  of  spectrum  a  particular  satellite  operator  would  need  to  provide  a  particular  service  depends  on  the  satellite  operator's  system  design  itself  and  the  operator's 
 business  assessments  of  the  service  to  be  provided.  Given  the  innovative  designs,  unique  niche  markets  targeted  by  each  operator,  and  cutting  edge  technology,  we  have  not  attempted  to 
 evaluate  each  licensee's  individual  spectrum  needs.  Rather,  we  have  relied  on  market  mechanisms  to  the  extent  possible.  Rather  than  attempting  to  judge  whether  an  applicant  has 
 justified  its  spectrum  request  in  a  first-  come,  first-  served  procedure,  we  believe  that  a  more  efficient  way  of  awarding  spectrum  for  NGSO-  like  systems  is  through  a  modified  processing 
 round  approach  with  a  pre-  set  band-  splitting  mechanism.  This,  together  with  eliminating  the  anti-trafficking  rule  for  satellite  licenses  and  adopting  safeguards  against  speculation,  will  allow  the 
 secondary  market  to  determine  the  appropriate  amount  of  spectrum  for  each  NGSO-  like  system.  Accordingly,  we  adopt  Telesat's  recommendation  to  apply  a  modified  processing  round  procedure 
 using  a  band-  splitting  approach  to  NGSO-  like  satellite  system  applications. 
 C.  Modification  of  Processing  Round  Procedure 
 1.  Sharing  Mechanism 
 30.  Background.  Having  determined  to  implement  a  modified  processing  round  approach  using  a  band-  splitting  framework,  we  must  decide  how  to  divide  the  available  spectrum 
 among  the  competing  applicants.  The  Commission's  proposed  sharing  mechanism  is  based  on  the  method  it  used  in  the  2  GHz  Order  to  resolve  mutually  exclusive  situations.  81  Under  this 
 approach,  once  we  receive  an  application  to  use  particular  spectrum,  we  would  issue  a  public  notice  establishing  a  cut-  off  date  for  additional  applications  to  be  considered  together  with  the 
 "lead"  application.  After  the  cut-  off  date  has  passed,  we  would  dismiss  any  applications  that  are 


 78  Teledesic  Comments  at  11-  12,  citing  Assignment  of  Orbital  Locations  to  Space  Stations 
 in  the  Domestic  Fixed-  Satellite  Service,  Memorandum  Opinion  and  Order,  94  FCC  2d  129,  137  (para.  19)  (1983)  (denying  an  application  deemed  to  be  excessive);  Loral  Orion  Services,  Inc.,  Order  and 


 Authorization,  14  FCC  Rcd  17665  (Int'l  Bur.,  1999)  (granting  authority  to  launch  satellite  and  conduct  in-orbit  testing,  but  denying  authority  to  provide  commercial  service,  without  prejudice);  PanAmSat  Licensee 
 Corp.,  Order  and  Authorization,  13  FCC  Rcd  1405,  1414  (para.  27)  (Int'l  Bur.  1997)  (license  conditioned  on  outcome  of  future  rulemaking  proceeding). 


 79  Teledesic  Reply  at  22-  23. 
 80  CTIA  Comments  at  6-  7. 
 81  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3873-  74  (para.  78),  citing  2  GHz  Order,  15 
 FCC  Rcd  at  16138  (para.  16). 
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 not  "acceptable  for  filing."  82  After  we  have  placed  the  remaining  applications  on  public  notice,  we  would  deny  any  applications  that  do  not  demonstrate  that  the  applicant  is  qualified  to  operate 
 a  satellite  system  under  the  Commission's  rules.  If  spectrum  sufficient  to  accommodate  the  remaining  applicants  is  not  available,  we  would  divide  the  available  spectrum  equally  among 
 those  applicants.  83 
 31.  Discussion.  SIA  argues  that  a  modified  processing  round  procedure  of  the  kind  the  Commission  adopted  in  the  2  GHz  Order  may  not  always  be  the  best  method  for  resolving 
 mutually  exclusive  situations.  84  Teledesic  asserts  that  it  is  unreasonable  to  conclude  that  this  procedure  would  allow  applicants  an  adequate  amount  of  spectrum  regardless  of  the  number  of 
 applicants.  85 
 32.  We  conclude  that  dividing  the  available  spectrum  equally  among  the  qualified  applicants  is  the  best  way  of  issuing  licenses  for  NGSO-  like  satellite  systems  quickly  and  fairly. 
 Neither  SIA  nor  Teledesic  has  persuaded  us  otherwise.  We  explained  in  the  Space  Station  Reform  NPRM  and  in  this  Order  above  that  there  is  considerable  public  interest  harm  that  can 
 result  from  a  very  long  licensing  procedure.  86  If  we  do  not  adopt  a  pre-  set  method  of  assigning  bandwidth  to  satellite  system  applicants,  then  we  will  need  to  continue  to  base  bandwidth 
 assignments  on  lengthy  applicant  negotiations,  which  can  take  years  to  complete.  We  would  effectively  be  allowing  one  or  more  applicants  in  a  processing  round  to  delay  service  to  the  public 
 while  they  develop  a  spectrum  sharing  arrangement.  Thus,  we  need  to  adopt  a  pre-  set  method  of  assigning  bandwidth  to  achieve  a  primary  goal  of  this  proceeding,  to  expedite  the  satellite 
 licensing  process.  Further,  as  we  discussed  above,  it  is  difficult  to  determine  the  amount  of  spectrum  a  particular  satellite  operator  would  need  to  provide  a  particular  service.  87  Thus,  to  the 
 extent  that  Teledesic  contends  that  the  Commission  should  determine  the  amount  of  spectrum  that  would  be  adequate  for  each  applicant,  we  reject  that  proposal  because  it  would  delay  licenses  and 
 service  to  the  public  more  than  the  current  procedure. 
 33.  In  addition,  we  disagree  that  this  procedure  would  not  provide  licensees  with  sufficient  spectrum  for  their  systems.  We  eliminate  the  anti-  trafficking  rule  as  part  of  our 
 package  of  licensing  reforms,  88  and  so  licensees  will  be  free  to  purchase  spectrum  rights  from 


 82  In  other  words,  we  proposed  dismissing  applications  that  do  not  meet  all  the  applicable 
 information  requirements. 
 83  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3873-  74  (para.  78).  We  also  proposed  this 
 procedure  in  the  context  of  the  first-  come,  first-  served  approach,  as  a  second-  tier  selection  mechanism  in  the  event  that  we  adopt  a  first-  come,  first-  served  procedure  in  which  we  may  need  to  consider  two  or  more 


 satellite  applications  together.  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3863-  64  (paras.  46-  48).  We  discuss  this  issue  in  Section  VI.  E.  2.  below. 


 84  SIA  Comments  at  16. 
 85  Teledesic  Comments  at  32-  33. 
 86  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3852-  56  (paras.  11-  23);  Section  IV.  A. 
 above. 
 87  Section  V.  B.,  above. 


 88  Section  VII.  D. 
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 another  licensee  after  licenses  have  been  issued  if  they  believe  that  they  have  not  been  awarded  sufficient  spectrum,  provided  that  they  comply  with  all  applicable  rules  governing  that  license, 
 including  but  not  limited  to  the  milestone  requirements,  performance  bond,  and  limits  on  pending  applications  and  unbuilt  satellites  adopted  in  this  Order  below.  Alternatively,  the  parties  are  free 
 to  develop  spectrum-  sharing  arrangements.  Thus,  by  dividing  the  spectrum  equally  among  qualified  applicants,  we  do  not  need  to  rely  on  a  lengthy  and  complicated  rulemaking  proceeding, 
 or  regulatory  fiat,  to  determine  the  proper  amount  of  spectrum  to  give  to  each  applicant.  Rather,  we  rely  on  a  market  mechanism,  i.  e.,  the  purchase  of  additional  spectrum  from  other  licensees, 
 which  should  produce  a  reasonable  result  more  quickly  and  with  fewer  administrative  burdens  than  any  other  alternative  presented  in  this  record. 


 34.  In  summary,  we  conclude  that  the  modified  processing  round  procedure  with  the  sharing  mechanism  we  adopt  here,  together  with  a  policy  that  allows  licensees  to  buy  or  sell 
 licenses  freely,  should  result  not  only  in  faster  licensing  but  faster  deployment  of  satellite  systems. 


 2.  Facilitating  Processing  Round  Negotiations 
 a.  Time  Limit  on  Negotiations 
 35.  Background.  As  an  alternative  to  adopting  a  specific  sharing  mechanism,  we  sought  comment  on  placing  a  time  limit  on  negotiations  in  the  context  of  processing  rounds,  such  as  60 
 days  after  the  record  closes  on  applications  filed  on  the  cut-  off  date,  for  the  parties  to  negotiate  a  plan  to  accommodate  all  the  applicants.  If  the  parties  could  not  reach  an  agreement  by  that  time, 
 we  would  determine  which  applications  to  grant  based  on  specific  criteria.  89  Alternatively,  in  the  absence  of  an  agreement,  we  would  divide  the  spectrum  as  discussed  above.  90 


 36.  Discussion.  Teledesic  argues  that  many  applications  filed  in  processing  rounds  are  speculative,  and  parties  filing  such  applications  have  no  interest  in  reaching  a  negotiated 
 agreement.  As  a  result,  according  to  Teledesic,  efforts  to  facilitate  negotiations  by  placing  a  time  limit  on  negotiations  cannot  succeed.  91  SES  Americom  denies  that  satellite  applicants  in 
 processing  rounds  have  no  interest  in  reaching  a  negotiated  agreement.  92 
 37.  Hughes  observes  that  a  processing  round  is  a  zero-  sum  game,  and  compares  processing  rounds  to  a  game  of  "chicken"  in  which  parties  "posture  and  dig  in    claiming  that 
 they'll  never  swerve,  they  actually  like  car  crashes,  and  so  on    until  the  absolute  last  instant,  just  before  the  two  cars  collide."  93  Nevertheless,  Hughes  and  other  parties  support  placing  a  time 
 limit  on  negotiations  in  processing  rounds,  and  claim  that  no  other  licensing  procedure  reforms 


 89  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3872-  73  (paras.  71-  76). 
 90  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3873-  74  (para.  78). 
 91  Teledesic  Comments  at  31. 
 92  SES  Americom  Reply  at  10-  11. 
 93  Hughes  Comments  at  35. 
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 are  needed.  94  CTIA  claims  that  a  time  limit  on  negotiations  would  help  speed  the  process,  but  would  not  discourage  speculative  applications.  95 
 38.  Teledesic's  and  Hughes's  observations  weigh  heavily  against  adopting  any  negotiation  period,  either  as  part  of  the  sharing  approach  adopted  above  or  together  with  the 
 system  of  preferences  we  proposed  in  the  Notice,  96  as  discussed  below.  In  particular,  Hughes's  description  of  applicants'  behavior  in  processing  round  negotiations  suggests  that  any  mandated 
 negotiation  period  would  have  no  effect  other  than  delaying  our  actions  on  the  satellite  applications.  Although  this  delay  would  be  limited  to  60  days,  we  do  not  believe  that  there  is  any 
 public  interest  benefit  that  is  significant  enough  to  justify  even  a  limited  delay.  Furthermore,  as  we  noted  above,  this  procedure  does  not  preclude  negotiations  among  licensees  after  we  issue 
 licenses.  In  fact,  quickly  issuing  licenses  and  clarifying  licensees'  operating  rights  and  responsibilities  should  facilitate  subsequent  negotiations  more  than  a  time  limit  on  negotiations 
 would.  As  we  noted  above,  establishing  a  clear  delimitation  of  rights  and  responsibilities  provides  a  necessary  basis  for  negotiations  regarding  the  possible  purchase  and  sale  of  those 
 rights.  97  In  addition,  applicants  may  negotiate  before  or  after  we  issue  licenses.  If  the  applicants  present  a  frequency  band  assignment  plan  to  the  Commission  before  it  acts  on  the  applications, 
 the  Commission  will  consider  that  plan.  For  the  reasons  set  forth  below,  however,  we  will  not  delay  our  procedures  if  the  applicants  cannot  complete  their  negotiations  by  the  time  we  are  ready 
 to  issue  licenses.  98 
 b.  System  of  Preferences 
 39.  Background.  In  the  Notice,  we  invited  comment  on  adopting  criteria  for  selecting  among  applicants  in  a  processing  round  in  the  event  that  the  applicants  cannot  reach  a  negotiated 
 agreement.  We  noted  that  we  currently  have  one  such  criterion  in  our  rules,  in  that  GSO  satellite  operators  with  licenses  for  two  unbuilt  satellites  in  a  particular  frequency  band  may  not  apply  for 
 another  satellite  license  in  that  band.  99  We  requested  parties  to  discuss  additional  criteria.  For  example,  we  invited  comment  on  establishing  a  preference  for  new  entrants  over  existing 
 licensees.  100  We  also  proposed  giving  a  preference  to  satellite  operators  who  have  not  missed  a  milestone  in  the  past  five  years,  who  have  already  made  progress  in  constructing  a  satellite,  who 


 94  Hughes  Comments  at  47.  See  also  SIA  Comments  at  14  (supporting  a  limit  of  60  to  90 
 days);  SES  Americom  Reply  at  11-  12  (60  to  90  day  limit);  PanAmSat  Comments  at  10  (supporting  a  limit  "such  as  60  days");  Intelsat  Reply  at  6-  7;  PanAmSat  Reply  at  3-  4. 


 95  CTIA  Comments  at  4. 
 96  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3872-  73  (paras.  70-  76). 
 97  Section  V.  C.  2.,  citing  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3864  (para.  50); 
 Coase,  Social  Cost,  3  J.  L.  &  Econ.  at  8;  Coase,  FCC,  2  J.  L.  &  Econ.  at  25. 
 98  See  Section  V.  C.  2.d.  below. 


 99  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3872  (para.  70),  citing  47  C.  F.  R.   
 25.  140(  e),  (f). 
 100  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3872  (para.  71). 
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 have  made  a  commitment  to  provide  service  to  rural  and  unserved  areas,  and  who  filed  applications  before  the  end  of  the  cut-  off  period.  101 
 40.  Discussion.  Several  parties  argue  that  many  if  not  all  of  the  Commission's  proposed  criteria  would  be  at  best  difficult  to  apply,  and  so  would  not  make  it  easier  to  complete  a 
 processing  round.  102  Intelsat  urges  the  Commission  to  develop  selection  criteria  different  from  the  criteria  proposed  in  the  Notice.  It  argues  that  the  difficulty  in  developing  workable  criteria 
 weighs  in  favor  of  a  first-  come,  first-  served  approach.  103  Pegasus  supports  a  preference  for  new  entrants  and  a  limit  on  unbuilt  satellites  to  two  initial  GSO  orbit  locations  in  each  frequency  band, 
 but  maintains  that  the  other  criteria  proposed  in  the  Notice  support  no  sound  policy  objective  or  are  susceptible  to  gaming.  104  PanAmSat  argues  that  the  limit  on  unbuilt  satellites  should  help 
 avoid  most  mutually  exclusive  situations,  but  advocates  adoption  of  one  or  more  of  the  criteria  proposed  in  the  Notice  in  the  event  that  mutually  exclusive  situations  arise.  105 


 41.  We  agree  with  commenters  who  argue  that  many  of  the  criteria  we  proposed  in  the  Space  Station  Reform  NPRM  would  be  difficult  to  apply.  Moreover,  applying  any  of  the  criteria 
 proposed  in  the  Notice  would  not  streamline  our  licensing  procedure  as  well  as  the  modified  processing  round  procedure  we  adopt  above  for  NGSO-  like  satellite  system  applications.  In 
 addition,  the  criteria  may  not  accurately  reflect  who  will  actually  construct,  launch,  and  operate  a  satellite  system,  and  may  therefore  delay  service  to  the  public.  Accordingly,  we  will  not  adopt 
 the  proposal  to  decide  among  applicants  in  a  processing  round  based  on  any  of  the  criteria  suggested  in  the  Notice. 


 c.  Other  Proposals  for  Facilitating  Negotiations  in  Processing  Rounds 
 42.  Hughes  suggests  that  the  Commission  take  on  a  mediator  role  during  satellite  applicants'  negotiations,  giving  parties  in  processing  rounds  informal  opinions  regarding  their 
 relative  positions.  106  Although  this  might  facilitate  the  negotiations  in  some  cases,  it  would  not  facilitate  the  satellite  licensing  process  as  well  as  the  sharing  mechanism  we  adopt  above,  nor 
 would  it  lead  to  a  better  result  than  the  sharing  mechanism  we  adopt  above,  together  with  the  freedom  to  buy  and  sell  spectrum  after  licenses  are  granted.  In  fact,  issuing  licenses  quickly 
 pursuant  to  the  procedure  we  adopt  above,  and  thereby  clarifying  licensees'  operating  rights  and  responsibilities,  should  facilitate  negotiations  more  effectively  than  the  Commission  could  if  it 
 assumed  the  mediator  role  proposed  by  Hughes.  107 


 101  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3873  (paras.  72-  75). 
 102  Teledesic  Comments  at  31-  32;  SIA  Comments  at  35-  37;  Hughes  Comments  at  37-  42; 
 Pegasus  Comments  at  5-  6;  Intelsat  Reply  at  7-  9. 
 103  Intelsat  Reply  at  9. 


 104  Pegasus  Comments  at  5-  6. 
 105  PanAmSat  Comments  at  12-  13. 
 106  Hughes  Comments  at  47-  48. 
 107  Section  V.  C.  2.,  citing  Coase,  Social  Cost,  3  J.  L.  &  Econ.  at  8;  Coase,  FCC,  2  J.  L.  & 
 Econ.  at  25. 
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 43.  SIA  recommends  prohibiting  ex  parte  statements  filed  more  than  30  days  after  the  end  of  the  negotiation  period.  108  In  light  of  our  decision  to  adopt  a  pre-  set  sharing  mechanism 
 rather  than  a  negotiation  period,  there  is  no  need  to  consider  SIA's  proposal  further. 
 d.  Need  for  Pre-  Licensing  Negotiations 
 44.  Several  commenters  question  whether  we  should  adopt  any  licensing  procedure  that  does  not  base  the  resulting  licenses  on  applicant  negotiations.  SIA  contends  that  the 
 Commission's  band-  splitting  proposal  may  not  always  be  the  best  method  for  resolving  mutually  exclusive  situations.  109  SIA  argues  further  that  the  modified  processing  round  procedure  ignores 
 the  preferences  of  applicants  and  the  potential  for  alternative  spectrum  sharing  arrangements.  110  Similarly,  Teledesic  argues  that,  in  the  event  that  we  adopt  a  procedure  that  allows  for  mutually 
 exclusive  applications  to  be  considered  together,  we  should  allow  negotiations  and  not  limit  them  to  a  60-  day  period.  111  Hughes  and  PanAmSat  recommend  that  the  Commission  mediate  the 
 applicants'  negotiations  rather  than  adopt  predicable  rules  governing  bandwidth  assignments  in  processing  rounds.  112 


 45.  We  disagree  with  SIA  and  other  commenters  that  we  should  delay  issuing  licenses  until  the  applicants  have  completed  negotiations.  As  an  initial  matter,  nothing  in  this  proceeding 
 precludes  licensees  from  negotiating  alternative  agreements  to  redistribute  bandwidth  among  licensees  after  licenses  have  been  issued.  Rather,  in  this  Order  below,  we  eliminate  the  anti-trafficking 
 rule  in  part  to  facilitate  such  negotiations.  113  Furthermore,  as  we  observed  in  the  Notice,  creating  clearly  defined  initial  rights  should  encourage  rather  than  discourage  subsequent 
 negotiations.  114  This  is  consistent  with  our  determination  in  other  proceedings  that  creating  clearly  defined  initial  operating  rights  reduces  regulatory  uncertainty,  and  so  encourages 
 investment.  115  The  commenters  have  not  persuaded  us  to  revisit  this  observation.  We  also 
 108  SIA  Comments  at  14-  15.  See  also  SES  Americom  Reply  at  9-  10. 
 109  SIA  Comments  at  16. 
 110  SIA  Comments  at  6-  7,  16. 
 111  Teledesic  Comments  at  23. 
 112  Hughes  Comments  at  47-  48;  PanAmSat  Reply  at  3-  4. 
 113  The  Commission  noted  in  the  Space  Station  Reform  NPRM  that  eliminating  the  anti-trafficking 
 rule  would  encourage  negotiations.  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3864  n.  56. 
 114  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3864  (para.  50),  citing,  e.  g.,  Coase,  The 
 Problem  of  Social  Cost,  3  J.  L.  &  Econ.  1  (1960)  (Coase,  Social  Cost).  In  that  article,  Coase  points  out  that,  in  the  context  of  nuisance  cases,  "[  i]  t  is  necessary  to  know  whether  the  damaging  business  is  liable  or  not 


 for  damage  caused  since  without  the  establishment  of  this  initial  delimitation  of  rights  there  can  be  no  market  transactions  to  transfer  and  recombine  them."  3  J.  L.  &  Econ.  at  8.  See  also  Coase,  The  Federal 
 Communications  Commission,  2  J.  L.  &  Econ.  1,  25  (1959)  (Coase,  FCC)  ("  One  of  the  purposes  of  the  legal  system  is  to  establish  that  clear  delimitation  of  rights  on  the  basis  of  which  the  transfer  and  recombination 
 of  rights  can  take  place  through  the  market.") 
 115  The  Commission  has  noted  on  several  occasions  that  regulatory  uncertainty  can 
 discourage  investment,  and  so  unnecessary  regulatory  uncertainty  should  be  avoided.  See,  e.  g.,  Inquiry  Concerning  High-  Speed  Access  to  the  Internet  Over  Cable  and  Other  Facilities,  Internet  Over  Cable 


 Declaratory  Ruling,  Appropriate  Regulatory  Treatment  for  Broadband  Access  to  the  Internet  Over  Cable 
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 believe  that  post-  licensing  negotiations  will  often  be  easier  than  pre-  licensing  negotiations,  because  in  many  cases  only  two  parties  will  be  involved  in  negotiations  to  transfer  bandwidth 
 rights  from  one  party  to  the  other.  Unlike  pre-  licensing  negotiations,  it  will  not  be  necessary  to  have  unanimous  agreement  in  those  cases.  Therefore,  a  speculative  applicant  will  not  be  able  to 
 delay  its  competitors  through  manipulation  of  post-  licensing  negotiations,  as  it  could  do  in  pre-licensing  negotiations.  In  addition  to  finding  that  post-  licensing  negotiations  should  be  easier 
 than  pre-  licensing  negotiations  in  many  cases,  we  have  no  basis  for  assuming  that  the  spectrum  assignments  resulting  from  post-  licensing  negotiations  will  be  more  or  less  efficient,  or  more  or 
 less  likely  to  further  the  public  interest,  than  the  spectrum  assignments  resulting  from  pre-licensing  negotiations.  Moreover,  we  know  of  no  reason  to  assume  that  the  spectrum  assignments 
 resulting  from  pre-  licensing  negotiations  are  likely  to  be  so  superior  to  those  resulting  from  post-licensing  negotiations  that  even  the  60-  day  delay  of  service  to  the  public  advocated  by 
 commenters  is  warranted. 
 46.  We  also  disagree  with  commenters  to  the  extent  that  they  argue  that  the  Commission  cannot  or  should  not  issue  any  licenses  until  applicants  have  been  given  opportunities  to 
 determine  and  state  their  preferences,  beyond  the  statements  and  preferences  included  in  their  applications.  The  Commission  has  found  in  other  proceedings  that  applicants  do  not  have  an 
 automatic  right  to  a  license.  116  It  follows  that  applicants  do  not  have  an  automatic  right  to  a  license  for  a  particular  frequency  band  assignment,  particularly  when  we  adopt  measures  to 
 facilitate  post-  licensing  negotiations. 
 47.  In  sum,  the  procedures  we  adopt  in  this  Order  will  enable  us  to  issue  licenses  quickly,  thereby  clearly  defining  satellite  licensees'  rights  and  responsibilities,  and  facilitating 
 later  negotiations.  Accordingly,  there  is  no  reason  for  continuing  to  rely  on  a  much  slower  process  in  which  satellite  applicants  must  conduct  negotiations  before  their  rights  and 
 responsibilities  are  defined. 
 D.  Details  of  Modified  Processing  Round  Procedure 
 1.  Overview  of  Framework 
 48.  Under  this  procedure,  we  will  continue  to  license  NGSO-  like  satellite  systems  through  processing  rounds.  117  Once  a  satellite  application  is  filed,  and  we  have  determined  that  it 


 Facilities,  Declaratory  Ruling  and  Notice  of  Proposed  Rulemaking,  GN  Docket  No.  00-  185,  CS  Docket  No.  02-  52,  17  FCC  Rcd  4798,  4802  (para.  5)  (2002);  Appropriate  Framework  for  Broadband  Access  to  the 
 Internet  over  Wireline  Facilities;  Universal  Service  Obligations  of  Broadband  Providers;  Computer  III  Further  Remand  Proceedings:  Bell  Operating  Company  Provision  of  Enhanced  Services;  1998  Biennial 
 Regulatory  Review    Review  of  Computer  III  and  ONA  Safeguards  and  Requirements;  Notice  of  Proposed  Rulemaking,  CC  Docket  Nos.  02-  33,  95-  20,  98-  10,  17  FCC  Rcd  3019,  3022-  23  (para.  5)  (2002); 
 Implementation  of  Sections  3(  n)  and  332  of  the  Communications  Act,  Regulatory  Treatment  of  Mobile  Services,  Second  Report  and  Order,  GN  Docket  No.  93-  252,  9  FCC  Rcd  1411,  1421  (para.  25)  (1994).  See 
 also  Kirby  Corp.  v.  Pena,  109  F.  3d  258,  266-  67  (5th  Cir.,  1997);  Houston  Lighting  and  Power  Co.  v.  United  States,  606  F.  2d  1131,  1145  (D.  C.  Cir.,  1979);  Chemical  Bank  New  York  Trust  Co.  v.  S.  S. 
 Westhampton,  358  F.  2d  574,  580  (4th  Cir.  1965). 
 116  TelQuest  Ventures,  L.  L.  C.,  Memorandum  Opinion  and  Order,  16  FCC  Rcd  15026, 
 15038-  39  (para.  34)  (2001),  citing  National  Broadcasting  Co.,  Inc.  v.  United  States,  319  U.  S.  190,  227  (1943). 


 117  We  describe  the  procedure  for  feeder  link  applications  in  Section  VI.  E.  1.  f.  below. 
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 is  acceptable  for  filing,  we  will  put  it  on  public  notice,  and  announce  a  cut-  off  date  for  applications  to  be  considered  concurrently.  We  will  review  applications  filed  by  the  cut-  off  date 
 to  determine  whether  they  are  acceptable  for  filing,  and  if  so,  we  will  place  those  applications  on  public  notice.  118  Once  the  record  has  closed  on  all  the  applications  placed  on  public  notice,  we 
 will  act  on  the  applications.  If  there  is  not  enough  spectrum  to  accommodate  all  qualified  applicants,  we  will  divide  the  spectrum  equally  among  those  applicants.  Each  licensee  will  be 
 allowed  to  choose  its  specific  band  assignment  between  30  and  60  days  before  it  launches  its  first  satellite,  by  filing  a  letter  with  the  Commission  and  serving  the  other  participants  in  the 
 processing  round.  119 
 49.  In  cases  where  there  is  no  international  frequency  allocation,  we  will  dismiss  applications  for  NGSO-  like  satellite  systems  without  prejudice  as  premature.  In  the  past,  the 
 Commission  has  accepted  applications  before  needed  international  frequency  allocations  were  adopted  to  bolster  its  position  at  an  international  allocation  conference,  although  such 
 applications  are  not  necessary  for  the  United  States  to  develop  its  position  at  such  conferences.  In  any  event,  a  petition  for  rulemaking  to  amend  the  domestic  Table  of  Frequency  Allocations  120  can 
 also  provide  support  for  an  international  frequency  allocation. 
 50.  Once  there  is  an  international  frequency  allocation,  we  will  accept  and  consider  satellite  applications.  For  applications  filed  before  a  domestic  allocation  is  adopted,  the  applicant 
 must  request  a  waiver  of  the  domestic  Table  of  Frequency  Allocations.  121  We  will  consider  these  requests  on  a  case-  by-  case  basis  to  determine  whether  the  waiver  should  be  granted  or  denied,  or 
 whether  other  licensing  options,  including  but  not  limited  to  auctions,  consistent  with  our  statutory  authority,  should  be  pursued.  Further,  until  the  Commission  adopts  a  domestic 
 allocation,  operations  must  be  on  a  non-  conforming,  non-  interference  basis  with  respect  to  allocated  services.  We  will  also  include  a  condition  in  each  license  that  requires  the  licensee  to 
 meet  any  rules  that  may  be  adopted  for  the  service,  either  together  with  or  after  a  domestic  allocation  is  made.  122 


 51.  We  will  also  consider  applications  after  we  adopt  a  domestic  frequency  allocation,  but  before  we  have  adopted  frequency-  band-  specific  service  rules.  We  agree  with  Teledesic  that 


 118  In  the  event  that  only  one  or  two  applicants  file  applications  in  the  processing  round,  we 
 will  consider  initiating  a  second  processing  round  pursuant  to  the  procedure  discussed  in  Section  V.  D.  4.  below. 


 119  Allowing  licensees  to  select  their  frequency  band  segment  at  the  time  they  launch  their 
 first  satellite  is  consistent  with  the  2  GHz  Order.  2  GHz  Order,  15  FCC  Rcd  at  16139  (para.  19).  Also  consistent  with  the  2  GHz  Order,  licensees  will  be  permitted  to  operate  outside  their  band  segment  on  a 


 secondary  basis.  2  GHz  Order,  15  FCC  Rcd  at  16139  (para.  19). 
 120  47  C.  F.  R.    2.106. 


 121  47  C.  F.  R.    2.106. 
 122  If  the  international  allocation  is  appropriate  to  countries  or  Regions  not  including  the 
 United  States,  these  satellites  will  only  be  able  to  be  authorized  to  provide  service  in  these  internationally  allocated  bands  to  those  countries,  and  not  the  United  States.  If  the  Commission  has  made  a  determination 


 not  to  implement  an  international  allocation,  that  band  will  also  not  be  authorized  for  service  to  and  from  the  United  States. 
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 frequency-  band-  specific  service  rules  may  not  be  needed  in  all  cases.  123  In  addition,  SIA  is  also  correct  that  the  Commission  based  its  service  rules  for  2  GHz  licenses  on  the  service  rules  for  the 
 Big  LEO  satellite  service,  and  that  therefore  it  should  be  possible  to  craft  generic  service  rules  based  on  frequency-  band-  specific  service  rules  that  the  Commission  has  adopted  in  the  past.  124 
 Intelsat  also  supports  adoption  of  generic  or  default  service  rules,  although  it  does  not  suggest  any  such  rules.  125  For  the  reasons  discussed  below,  we  adopt  Teledesic's  proposal,  and  adopt  default 
 service  rules  to  govern  satellite  operations  in  frequency  bands  unless  and  until  the  Commission  adopts  frequency-  band-  specific  service  rules. 


 52.  We  generally  base  service  rules  for  new  satellite  services  on  our  existing  rules  governing  similar  services.  Thus,  we  based  our  service  rules  for  2  GHz  NGSO  mobile-  satellite 
 service  systems  on  rules  for  Big  LEO  NGSO  mobile-  satellite  service  systems.  Given  this,  we  see  no  reason  to  delay  licensing  satellite  systems  allocated  for  but  not  being  used  for  satellite 
 operations  pending  establishment  of  service  rules.  Rather,  as  the  commenters  suggest,  we  will  license  systems  based  on  default  rules  and  subject  to  any  subsequent  service  rules  for  specific 
 satellite  operations  in  that  band.  Specifically,  we  will  use  the  Part  25  technical  requirements  specified  in  Appendix  C  as  default  service  rules  for  NGSO-  like  satellite  systems.  126  We  also 
 require  licensees  to  comply  with  any  applicable  ITU  technical  requirements.  127  Furthermore,  licensees  will  be  required  to  comply  with  any  service-  band-  specific  service  rules  that  the 
 Commission  may  adopt  in  that  frequency  band. 
 53.  Also,  as  part  of  our  default  service  rules,  applicants  must  submit  a  narrative  statement  describing  the  design  and  operational  strategies  that  they  will  use  to  mitigate  orbital 
 debris,  as  well  as  a  casualty  risk  assessment  if  planned  post-  mission  disposal  involves  atmospheric  re-  entry  of  the  spacecraft.  We  have  consistently  adopted,  or  proposed  to  adopt,  this 
 requirement  in  recent  years  in  connection  with  a  number  of  new  services.  128  Furthermore,  last 
 123  Teledesic  Comments  at  20-  22. 
 124  SIA  Comments  at  13-  14,  citing  The  Establishment  of  Policies  and  Service  Rules  for  the 
 Mobile  Satellite  Service  in  the  2  GHz  Band,  Notice  of  Proposed  Rulemaking,  IB  Docket  No.  99-  81,  14  FCC  Rcd  4843,  4846  (para.  3)  (1999)  (2  GHz  NPRM)  (proposing  using  big  LEO  service  rules  as  a  "starting 


 point"  for  another  service  for  the  2  GHz  band). 
 125  Intelsat  Comments  at  9. 


 126  We  adopt  default  service  rules  for  GSO-  like  satellite  systems  in  Section  VI.  E.  1.  d.  below. 
 127  Of  course,  we  will  continue  to  require  all  earth  stations  operating  in  frequency  bands  that 
 are  shared  on  a  co-  primary  basis  between  satellite  and  other  services,  such  as  terrestrial  wireless  services,  to  coordinate  their  operations  in  accordance  with  Section  25.203  before  they  are  licensed,  regardless  of 


 whether  they  plan  to  communicate  with  space  stations  operating  under  default  service  rules  or  frequency-band-  specific  service  rules.  47  C.  F.  R.    25.  203.  Similarly,  non-  government  operations  of  earth  stations  in 
 a  frequency  band  that  is  shared  by  Government  and  Non-  Government  operations  will  be  required  to  be  coordinated  through  the  National  Telecommunications  and  Information  Administration  (NTIA) 
 Interdepartment  Radio  Advisory  Committees  (IRAC)  Frequency  Assignment  Subcommittee  (FAS)  before  awarding  a  license  in  these  bands.  See  Amendment  of  Parts  2,  25,  and  90  of  the  Commission's  Rules  to 
 Allocate  the  13.75-  14.  0  GHz  Band  to  the  Fixed-  Satellite  Service,  Report  and  Order,  ET  Docket  No.  96-  20,  11  FCC  Rcd  11951,  11960-  61  (para.  20)  (1996). 


 128  See  2  GHz  Order,  15  FCC  Rcd  at  16188  (paras.  135-  38);  The  Establishment  of  Policies 
 and  Service  Rules  for  the  Non-  Geostationary  Satellite  Orbit,  Fixed  Satellite  Service  in  the  Ku-  Band,  Report  and  Order  and  Further  Notice  of  Proposed  Rulemaking,  IB  Docket  No.  01-  96,  17  FCC  Rcd  7841,  7865-  66 
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 year  we  proposed  to  apply  this  requirement  to  all  FCC-  licensed  systems  in  the  Orbital  Debris  Notice.  129  Based  on  this  precedent  and  on  the  record  developed  in  response  to  the  Orbital  Debris 
 Notice,  we  find  that  the  public  interest  concerns  that  lead  us  to  require  satellite  licensees  in  the  past  to  disclose  their  orbital  debris  mitigation  plans  and  that  were  discussed  in  the  Orbital  Debris 
 Notice  also  support  adopting  this  requirement  for  satellite  systems  to  which  these  default  rules  will  apply.  In  preparing  such  exhibits,  applicants  may  find  guidance  in  the  U.  S.  Government 
 Orbital  Debris  Mitigation  Standard  Practices  and  the  debris  mitigation  guidelines  adopted  by  the  Inter-  Agency  Space  Debris  Coordination  Committee  (IADC).  130  We  note  that  the  Orbital  Debris 
 Notice  sought  comment  on  a  broad  range  of  issues  in  addition  to  the  question  of  whether  a  requirement  to  disclose  debris  mitigation  plans  should  be  adopted.  These  questions,  along  with 
 the  question  of  whether  additional  systems  should  be  subject  to  a  routine  disclosure  requirement,  will  be  addressed  by  subsequent  Commission  action. 


 54.  Our  adoption  of  default  service  rules  is  a  logical  outgrowth  of  the  Notice.  There,  the  Commission  proposed  a  procedure  for  considering  satellite  applications  filed  before  service  rules 
 are  adopted,  131  and  it  invited  parties  to  recommend  alternatives  to  this  proposal,  together  with  all  the  proposals  in  the  Notice.  132  In  response,  several  commenters  recommended  the  adoption  of 
 default  service  rules.  133  In  addition,  SIA  recommended  that  the  Commission  base  the  default  service  rules  on  service  rules  that  Commission  has  adopted  for  similar  services  in  the  past.  134 
 Furthermore,  the  Commission  emphasized  that  one  of  its  primary  goals  for  this  proceeding  is  to  expedite  the  satellite  licensing  process,  135  and  default  service  rules  further  that  goal.  136  Thus, 
 interested  parties  should  have  anticipated  that  the  Commission  might  consider  adopting  proposals 


 (para.  81)  (2002).  See  also  Establishment  of  Policies  and  Service  Rules  for  Non-  Geostationary  Satellite  Orbit,  Fixed  Satellite  Service  in  the  Ka-  Band,  Notice  of  Proposed  Rulemaking,  IB  Docket  No.  02-  19,  17  FCC  Rcd 
 2807,  2821  (para.  43)  (2002). 
 129  Mitigation  of  Orbital  Debris,  Notice  of  Proposed  Rulemaking,  IB  Docket  No.  02-  54,  17 
 FCC  Rcd  5586  (2002)  (Orbital  Debris  Notice). 
 130  Orbital  Debris  Notice,  17  FCC  Rcd  at  5615-  18  (App.  A).  See  also  Application  Of 
 Constellation  Communications  Holdings,  Inc.,  Order  and  Authorization,  16  FCC  Rcd  13724,  13731  (Intl  Bur.  and  Office  of  Eng.  and  Tech.  2001);  Application  of  the  Boeing  Company,  Order  and  Authorization, 


 16  FCC  Rcd  13691,  13702  (Intl  Bur.  2001).  A  technical  presentation  concerning  the  IADC  debris  mitigation  guidelines,  made  to  the  most  recent  meeting  of  the  Scientific  and  Technical  Subcommittee  of  the 
 U.  N.  Committee  on  the  Peaceful  Uses  of  Outer  Space,  is  available  at  www.  unvienna.  org.  The  guidelines  themselves  will  reportedly  be  available  electronically  in  the  near  future  at  www.  iadc-  online.  org. 


 131  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860  (para.  35). 
 132  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3897  (para.  147). 
 133  SIA  Comments  at  13-  14;  Teledesic  Comments  at  20-  22;  Intelsat  Comments  at  9. 
 134  SIA  Comments  at  13-  14. 
 135  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3849-  50  (para.  3). 
 136  SIA  Comments  at  13-  14. 
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 for  default  service  rules.  137  Moreover,  because  these  parties  made  their  recommendations  in  their  comments,  interested  parties  had  an  opportunity  to  respond  to  the  proposals  in  their  replies.  138 
 55.  In  sum,  our  default  service  rules  for  NGSO-  like  satellite  systems  are  consistent  with  requirements  that  we  have  imposed  on  satellite  licenses  in  the  past.  These  default  service  rules 
 are  reasonable,  and  they  further  the  public  interest  by  enabling  licensees  to  proceed  with  their  business  plans  more  quickly  than  would  be  possible  otherwise.  Moreover,  if  the  default  service 
 rules  are  not  appropriate  in  a  particular  case,  they  will  be  superceded  by  any  service-  specific  service  rules  that  we  may  adopt  subsequently.  Thus,  licensees  will  be  required  to  comply  with 
 those  subsequent  service-  specific  service  rules.  Finally,  we  emphasize  that,  in  cases  where  we  find  that  frequency-  band-  specific  service  rules  may  be  warranted,  we  will  initiate  a  rulemaking 
 proceeding  to  consider  such  rules  within  four  to  six  months  of  that  determination.  For  example,  frequency-  band-  specific  service  rules  may  be  particularly  appropriate  in  cases  in  which  the  band 
 is  shared  between  satellite  service  and  other  services. 
 2.  Interrelation  with  Procedures  for  GSO-  Like  Satellite  Systems 
 56.  Because  we  stated  above  that  we  are  adopting  one  licensing  procedure  for  NGSO-like  satellite  system  applications  and  another  for  GSO-  like  satellite  system  applications,  139  we 
 will  process  both  types  of  satellite  system  applications  in  a  single  queue  in  the  order  that  they  are  filed.  We  will  consider  GSO-  like  satellite  system  applications,  one  at  a  time  in  the  order  they  are 
 filed.  When  an  NGSO-  like  satellite  system  application  reaches  the  front  of  the  queue,  we  will  conduct  a  processing  round  based  on  the  modified  processing  round  procedure  we  adopted  above. 


 57.  In  cases  where  an  applicant  files  an  application  for  a  satellite  system  that  includes  both  categories  of  satellites,  and  we  have  established  service  rules  for  sharing  between  GSO  and 
 NGSO  satellite  systems,  we  will  treat  that  application  as  two  separate  applications.  We  will  consider  the  GSO-  like  request  under  the  first-  come,  first-  served  procedure,  and  the  NGSO-  like 
 request  under  the  modified  processing  round  procedure  we  adopt  today. 
 58.  On  a  going-  forward  basis,  in  cases  where  there  are  no  service  rules  establishing  criteria  for  sharing  between  GSO  and  NGSO  satellite  systems  in  a  particular  frequency  band,  we 
 will  consider  only  applications  of  the  kind  that  is  filed  first.  That  is,  if  an  NGSO-  like  satellite  system  application  is  filed  first,  we  will  conduct  a  processing  round  pursuant  to  the  modified 
 processing  round  procedure,  and  we  will  dismiss  subsequently-  filed  GSO-  like  satellite  system  applications  in  that  band  until  sharing  criteria  are  established.  Similarly,  if  a  GSO-  like  satellite 
 system  application  is  filed  first,  we  will  consider  other  GSO-  like  satellite  system  applications  in  the  order  they  are  filed,  and  we  will  dismiss  subsequently-  filed  NGSO-  like  satellite  system 
 applications  in  that  band  until  sharing  criteria  are  established.  This  is  consistent  with  our  current  practice.  For  example,  in  the  Ku-  band,  we  initially  considered  only  GSO  satellite  applications 


 137  The  concept  of  "logical  outgrowth"  includes  proposals  that  parties  should  have 
 anticipated  might  be  imposed.  Small  Refiner  Lead  Phase-  Down  Task  Force  v.  EPA,  705  F.  2d  506,  548-  49  (D.  C.  Cir.,  1983). 


 138  See  also  American  Iron  and  Steel  Institute  v.  EPA,  115  F.  3d  979,  988  (D.  C.  Cir.,  1997) 
 (statute  directing  agency  to  issue  "guidance"  for  state  water  quality  criteria  also  authorized  agency  to  adopt  default  rules  applicable  to  States  that  did  not  adopt  standards,  policies,  and  procedures  consistent  with  the 


 guidance). 
 139  Section  IV.  B.  above. 
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 because  the  first  applications  for  licenses  in  that  band  were  for  GSO  systems.  140  We  did  not  begin  considering  Ku-  band  NGSO  applications  until  we  had  established  sharing  criteria  for 
 compatible  services  with  GSO  applicants  in  that  band.  141  In  cases  in  which  an  applicant  proposes  a  hybrid  GSO-  like/  NGSO-  like  satellite  system  in  a  frequency  band  before  we  adopt  sharing 
 criteria  for  that  band,  we  will  treat  the  proposed  satellite  system  as  an  NGSO-  like  system,  with  the  GSO  portion  of  the  system  as  additional  satellites  in  the  constellation.  This  is  consistent  with 
 the  Commission's  actions  in  the  2  GHz  Order.  Finally,  in  the  event  that  one  or  more  GSO-  like  satellite  system  applications  and  one  or  more  NGSO-  like  satellite  system  applications  are  filed  at 
 the  same  time,  we  will  initiate  a  processing  round,  and  divide  the  frequency  band  equally  among  all  the  qualified  applicants.  We  will  designate  part  of  the  band  for  GSO-  like  satellites  and  the  rest 
 of  the  band  for  NGSO-  like  satellite  systems,  based  on  the  proportion  of  qualified  GSO-  like  applicants  to  qualified  NGSO-  like  applicants. 


 3.  Amendments  and  Modifications 
 59.  In  the  Notice,  the  Commission  invited  comment  on  revising  the  amendment  and  modification  procedures.  142  We  find  here  that  neither  our  amendment  procedure  nor  our 
 modification  procedure  require  any  revision  as  a  result  of  our  decision  to  modify  the  processing  round  procedure  for  NGSO-  like  satellite  system  applications.  In  contrast,  we  discuss  below 
 revisions  to  the  amendment  and  modification  procedures  to  be  adopted  in  conjunction  with  the  first-  come,  first-  served  procedure.  143 


 4.  Additional  Processing  Rounds 
 60.  Teledesic  criticizes  the  Commission  for  not  explaining  in  the  Notice  how  this  approach  would  apply  to  second  processing  rounds.  144  We  explain  here  the  procedure  we  will  use 
 for  second  and  additional  processing  rounds.  This  procedure  is  a  logical  outgrowth  of  the  procedure  we  proposed  in  the  Notice.  145 


 140  See  Assignment  of  Orbital  Locations  to  Space  Stations  in  the  Domestic  Fixed-  Satellite 
 Service,  Memorandum  Opinion  and  Order,  94  FCC  2d  129  (1983);  Assignment  of  Orbital  Locations  to  Space  Stations  in  the  Domestic  Fixed-  Satellite  Service,  Memorandum  Opinion  and  Order,  3  FCC  Rcd  6972 


 (1988);  Assignment  of  Orbital  Locations  to  Space  Stations  in  the  Domestic  Fixed-  Satellite  Service,  Order  and  Authorizations,  11  FCC  Rcd  13788  (Int'l  Bur.  1996). 


 141  Amendment  of  Parts  2  and  25  of  the  Commission's  Rules  to  Permit  Operation  of  NGSO  FSS 
 Systems  Co-  Frequency  with  GSO  and  Terrestrial  Systems  in  the  Ku-  Band  Frequency  Range,  First  Report  and  Order  and  Further  Notice  of  Proposed  Rulemaking,  ET  Docket  No.  98-  206,  16  FCC  Rcd  4096  (2000). 


 142  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3866-  67  (paras.  55-  58).  By  definition,  the 
 term  "amendment"  refers  to  changes  to  an  application  before  a  license  is  issued,  and  the  term  "modification"  refers  to  changes  to  a  license  after  it  is  issued.  47  C.  F.  R.    25.  116  (amendments);  47 


 C.  F.  R.    25.117(  d)  (space  station  license  modifications).  The  Notice  did  not  propose  revisions  to  the  definitions  of  "amendment"  or  "modification,"  but  rather  invited  comment  on  revising  the  treatment  of 
 amendments  or  modifications  in  a  first-  come,  first-  served  framework. 
 143  Sections  VI.  E.  3.  and  VI.  E.  4.  below.  We  discuss  transfer  of  control  applications  for  both 
 GSO-  like  and  NGSO-  like  applications  in  Section  VII.  D.  below. 
 144  Teledesic  Comments  at  33. 


 145  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3863-  64  (paras.  46-  48),  3873-  74  (para.  78). 
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 61.  As  an  initial  matter,  we  do  not  anticipate  conducting  many  second  or  additional  processing  rounds,  because  operating  rights  in  all  the  available  spectrum  in  the  frequency  band 
 will  be  assigned  equally  to  all  qualified  applicants  in  the  first  processing  round,  assuming  that  the  applicants'  spectrum  requirements  exceed  the  available  allocation.  In  addition,  the  Commission 
 invited  comment  on  redistributing  a  licensee's  spectrum  rights  to  the  licensee  or  licensees  remaining  in  operation,  in  the  event  that  a  license  is  cancelled  or  relinquished.  146  The 
 Commission  argued  that  this  would  likely  put  the  spectrum  into  use  more  quickly  than  any  other  alternative.  147  We  hereby  adopt  this  proposal  in  a  slightly  modified  form.  If  a  licensee  loses  or 
 terminates  its  license,  we  will  probably  reassign  the  spectrum  assigned  to  that  licensee  equally  among  the  remaining  licensees,  assuming  that  there  are  a  sufficient  number  of  licensees 
 remaining  to  make  reasonably  efficient  use  of  the  frequency  band,  and  assuming  that  there  is  no  basis  at  that  time  for  considering  reallocation  of  the  spectrum.  For  reasons  discussed  below,  we 
 presume  that  a  "sufficient  number  of  licensees"  for  this  purpose  is  three  or  more.  By  "reasonably  efficient  use  of  the  frequency  band,"  we  mean  that  the  remaining  satellite  licensees  have  not  been 
 assigned  more  spectrum  than  they  need  to  meet  their  current  and  reasonably  anticipated  future  customer  needs. 


 62.  Under  this  procedure,  if  one  of  those  three  licensees  were  to  lose  its  license,  the  two  remaining  licensees  would  keep  their  spectrum  assignments,  and  we  could  reassign  the  newly 
 available  spectrum  to  a  new  applicant  or  applicants  pursuant  to  the  applicable  processing  procedure.  The  existing  licensees  would  not  be  allowed  to  apply  for  another  license.  This 
 procedure  represents  a  reasonable  balance  between  quickly  bringing  spectrum  into  use  and  promoting  multiple  service  providers  in  each  frequency  band.  148  Of  course,  the  Commission 
 always  has  the  option  to  consider  initiating  a  rulemaking  proceeding  to  determine  whether  the  available  spectrum  should  be  reallocated. 


 63.  We  will  also  apply  this  procedure  to  initial  processing  rounds  in  cases  in  which  fewer  than  three  qualified  applicants  file  applications.  In  those  cases,  we  will  license  each  qualified 
 applicant  to  operate  in  1/  3  of  the  available  spectrum,  and  initiate  a  second  processing  round  for  the  remaining  spectrum.  If  there  are  fewer  than  a  total  of  three  licensees  after  the  completion  of 
 the  second  processing  round,  we  will  determine  at  that  time  whether  to  keep  that  spectrum  available  for  possible  future  applicants,  or  consider  reallocation  of  the  unlicensed  spectrum. 


 64.  We  base  this  presumption  that  three  is  a  sufficient  number  of  remaining  licensees  on  the  Commission's  reasoning  in  the  EchoStar-  DirecTV  Hearing  Designation  Order,  in  which  the 
 Commission  observed  that  courts  have  generally  condemned  mergers  that  would  result  in  duopoly,  particularly  in  cases  where  additional  market  entry  would  be  difficult.  149  The 
 Commission  explained  further  that,  in  cases  where  the  merger  is  likely  to  result  in  a  significant 
 146  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3864  (para.  48). 


 147  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3864  (para.  48). 
 148  We  noted  our  concerns  about  promoting  multiple  service  providers  in  the  Space  Station 
 Reform  NPRM,  17  FCC  Rcd  at  3860  (para.  36). 
 149  Application  of  EchoStar  Communications  Corporation,  General  Motors  Corporation  and 
 Hughes  Electronics  Corporation,  Hearing  Designation  Order,  CS  Docket  No.  01-  348,  17  FCC  Rcd  20559,  20604-  05  (paras.  99-  103)  (2002)  (EchoStar-  DirecTV  Hearing  Designation  Order),  citing,  e.  g.,  FTC  v.  H.  J. 


 Heinz  Co.,  246  F.  3d  708,  717  (D.  C.  Cir.  2001);  FTC  v.  Staples,  970  F.  Supp.  1066,  1081  (D.  D.  C.  1997). 
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 reduction  in  the  number  of  competitors  and  a  substantial  increase  in  concentration,  antitrust  authorities  generally  require  the  parties  to  demonstrate  that  there  exist  countervailing, 
 extraordinarily  large,  cognizable,  and  non-  speculative  efficiencies  that  are  likely  to  result  from  the  merger.  150  Here,  we  find  that  the  factors  that  have  led  courts  to  disfavor  mergers  to  duopoly 
 also  support  establishing  a  procedure  that  will  maintain  at  least  three  competitors  in  a  frequency  band,  unless  an  interested  party  can  rebut  our  presumption  that  three  is  necessary  to  maintain  a 
 competitive  market.  To  rebut  this  presumption,  a  party  must  provide  convincing  evidence  that  allowing  only  two  licensees  in  the  frequency  band  will  result  in  extraordinarily  large,  cognizable, 
 and  non-  speculative  efficiencies.  151  We  also  reserve  the  authority  to  initiate  a  second  processing  round  or  spectrum  reallocation  rulemaking  proceeding  as  circumstances  warrant  when  there  are 
 more  than  three  licensees  remaining  in  operation  in  cases  where  it  can  be  shown  that  our  presumption  is  incorrect  that  three  licensees  would  not  make  reasonably  efficient  use  of  the 
 frequency  band.  152 
 65.  This  procedure  for  reassigning  spectrum  among  the  remaining  NGSO-  like  licensees  in  a  processing  round,  and  the  presumption  of  initiating  a  new  processing  round  when  there  are 
 fewer  than  three  licensees,  are  logical  outgrowths  of  our  proposals  in  the  Notice.  The  focus  of  the  "logical  outgrowth"  test  is  whether  parties  should  have  anticipated  that  such  a  requirement  might  be 
 imposed.  153  The  Commission  explicitly  invited  comment  on  redistributing  spectrum  initially  licensed  in  a  modified  processing  round  among  the  remaining  licensees.  154  The  Commission  also 
 noted  its  concerns  about  promoting  multiple  service  providers  in  the  Notice.  155  Thus,  parties  should  have  anticipated  that  we  would  adopt  rules  to  redistribute  spectrum  in  this  manner,  and  to 
 allow  new  licensees  an  opportunity  to  apply  for  licenses  when  the  number  of  licensees  in  a  frequency  band  is  less  than  a  certain  amount.  Furthermore,  even  if  this  were  not  a  logical 


 150  EchoStar-  DirecTV  Hearing  Designation  Order,  17  FCC  Rcd  at  20604-  05  (para.  102). 
 151  In  some  cases  in  the  past,  prior  to  the  Commission's  adoption  of  the  EchoStar-  DirecTV 
 Hearing  Designation  Order,  the  Commission  has  allowed  only  two  licensees  in  a  market.  See  An  Inquiry  Into  the  Use  of  the  Bands  825-  845  MHz  and  870-  890  for  Cellular  Communications  Systems;  and 


 Amendment  of  Parts  2  and  22  of  the  Commission's  Rules  Relative  to  Cellular  Communications  Systems,  Report  and  Order,  CC  Docket  No.  79-  318,  86  FCC  2d  469,  478-  79  (para.  19)  (1981);  Amendments  to  Parts 
 1,  2,  27  and  90  of  the  Commission's  Rules  to  License  Services  in  the  216-  220  MHz,  1390-  1395  MHz,  1427-  1429  MHz,  1429-  1432  MHz,  1432-  1435  MHz,  1670-  1675  MHz,  and  2385-  2390  MHz  Government 
 Transfer  Bands,  Report  and  Order,  WT  Docket  No.  02-  8,  17  FCC  Rcd  9980,  9993  (para.  23)  (2002). 
 152  PanAmSat  argues  that  the  Commission  could  expedite  processing  rounds  by  starting  a 
 second  processing  round  before  completing  the  first  round.  PanAmSat  Comments  at  10.  We  disagree.  The  licenses  that  could  be  issued  in  a  second  processing  round  are  dependent  on  the  licenses  issued  in  the 


 first  round.  Thus,  conducting  two  processing  rounds  simultaneously  would  needlessly  complicate  the  second  round.  In  any  case,  under  our  new  procedure,  there  will  be  little  need  to  have  a  second  processing 
 round,  and  so  we  need  not  determine  the  timing  of  those  proceedings  at  this  time. 
 153  Aeronautical  Radio,  Inc.,  v.  FCC,  928  F.  2d  428,  445-  46  (D.  C.  Cir.  1991);  Small  Refiner 
 Lead  Phase-  Down  Task  Force  v.  EPA,  705  F.  2d  506,  549  (D.  C.  Cir.  1983). 
 154  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3864  (para.  48). 


 155  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860  (para.  36). 
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 outgrowth,  Courts  have  explained  that  the  Commission  has  broad  discretion  to  manage  its  proceedings  as  we  have  done  here.  156 
 5.  Revision  of  Pleading  Cycles 
 66.  Background.  In  the  Notice,  we  invited  comment  on  whether  the  pleading  cycle  for  petitions  to  deny,  oppositions,  and  replies  to  a  lead  application  should  run  concurrently  with  the 
 pleading  cycle  for  competing  applications.  In  other  words,  after  mutually  exclusive  applications  are  filed  in  response  to  a  cut-  off  date  announcement,  petitions  to  deny,  oppositions,  and  replies 
 would  be  filed  in  response  to  all  applications,  including  the  lead  application,  under  the  same  pleading  cycle.  157 


 67.  Discussion.  SIA  suggests  placing  all  applications  in  a  processing  round  on  identical  pleading  cycles.  158  We  will  not  adopt  this  suggestion  because  it  could  cause  a  further  delay  in 
 processing  applications  in  a  processing  round.  Under  our  current  practice,  we  can  start  our  review  of  the  lead  application  to  determine  the  applicant's  qualifications  while  we  wait  for  the 
 record  to  close  on  the  other  applications  in  the  processing  round.  If  we  postponed  the  pleading  cycle  for  the  lead  application  to  run  concurrently  with  other  applications,  we  would  lose  that 
 opportunity.  As  a  result,  our  review  of  the  lead  application  would  be  delayed  somewhat,  and  thus  action  on  all  the  applications  in  the  processing  round  would  also  be  delayed.  Moreover,  in  cases 
 where  no  competing  applications  are  filed,  the  pleading  cycle  for  the  lead  application  would  be  delayed  by  30  days  unnecessarily,  which  in  turn  would  delay  licensing  and  service  to  the  public. 


 E.  Other  Proposals  for  Modifying  Processing  Rounds 
 68.  Some  commenters  propose  other  modifications  to  the  processing  round  procedure.  For  example,  SIA  contends  that,  in  1998,  the  International  Bureau  (Bureau)  adopted  a  goal  of 
 placing  satellite  applications  on  public  notice  within  10  days,  and  recommends  renewing  its  efforts  towards  that  goal.  159  While  the  Bureau  strives  to  place  applications  on  public  notice  as 
 quickly  as  possible,  and  will  continue  to  do  so  in  the  future,  this  10-  day  goal  applies  to  routine  earth  station  applications  only.  160  Space  station  applications  are  more  complex  than  routine  earth 


 156  See  Telecommunications  Resellers  Association  v.  FCC,  141  F.  3d  1193,  1196  (D.  C.  Cir., 
 1998),  citing  Motor  Vehicle  Mfrs.  Ass'n  v.  State  Farm  Mutual  Auto.  Ins.  Co.,  463  U.  S.  29,  43  (1983);  GTE  Service  Corp.  v.  FCC,  782  F.  2d  263,  273-  74  (D.  C.  Cir.,  1986). 


 157  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3873  (para.  77). 
 158  SIA  Comments  at  13. 
 159  SIA  Comments  at  12-  13,  citing  International  Bureau  to  Streamline  Satellite  and  Earth 
 Station  Processing,  Public  Notice,  Report  No.  SPB-  140  (released  Oct.  28,  1998).  See  also  Hughes  Comments  at  46-  47. 


 160  See  International  Bureau  to  Streamline  Satellite  and  Earth  Station  Processing,  Public 
 Notice,  Report  No.  SPB-  140  (released  Oct.  28,  1998).  The  public  notice  states  that  the  Bureau  will  place  "routine  applications"  on  public  notice  within  10  business  days  of  receipt.  The  Commission  does  not 


 distinguish  between  routine  and  non-  routine  space  station  applications.  These  categories  apply  only  to  earth  station  applications.  See  2000  Biennial  Regulatory  Review  --  Streamlining  and  Other  Revisions  of 
 Part  25  of  the  Commission's  Rules  Governing  the  Licensing  of,  and  Spectrum  Usage  by,  Satellite  Network 
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 station  applications,  and  it  will  be  difficult  to  determine  whether  a  space  station  application  is  complete  and  acceptable  for  filing  given  that  the  Commission  does  not  currently  have  a  uniform 
 format  for  such  applications.  161  In  addition,  placing  applications  on  public  notice  has  not  been  a  major  source  of  delay  in  most  processing  round  proceedings  in  the  past,  162  and  so  we  do  not  see  a 
 need  for  a  formal  requirement  at  this  time. 
 69.  PanAmSat  recommends  establishing  a  deadline  of  one  year  for  the  Commission  to  complete  processing  rounds.  163  We  anticipate  that  the  processing  round  procedure  we  adopt 
 today  will  take  less  than  a  year  to  complete,  and  so  PanAmSat's  proposed  deadline  appears  unnecessary  at  this  time. 


 70.  Finally,  SIA  observes  that  a  number  of  potential  sources  of  delay  in  issuing  satellite  licenses,  such  as  coordination  with  other  Federal  Government  agencies,  and  the  international 
 spectrum  allocation  process,  are  outside  the  Commission's  control,  and  recommends  focusing  on  sources  of  delay  within  its  control.  164  We  agree  with  SIA.  Accordingly,  the  Commission  focused 
 on  sources  of  delay  within  its  control  in  the  Notice.  The  Commission  directed  its  attention  on  procedures  for  processing  satellite  applications  in  the  Notice  when  an  allocation  and  service  rules 
 are  available.  165  Moreover,  we  note  that  we  have  adopted  procedures  in  this  Order  to  dismiss  satellite  applications  before  an  international  frequency  allocation  is  adopted,  and  that  enable  us  to 
 consider  satellite  applications  before  we  adopt  service-  band  specific  service  rules.  166  Therefore,  we  expect  frequency  band  allocation  and  service  rule  proceedings  to  cause  less  licensing  delay 
 than  they  have  in  the  past.  Finally,  in  the  Notice,  the  Commission  also  recognized  that  interagency  coordination  can  also  delay  processing  of  some  satellite  applications.  167  In  the  past, 
 we  have  worked  together  with  other  Federal  Government  agencies  to  find  ways  to  facilitate  interagency  coordination,  168  and  we  will  continue  to  do  so  in  the  future.  In  the  meantime, 
 however,  SIA's  discussion  of  sources  of  potential  licensing  delay  outside  our  control  does  not  dissuade  us  from  addressing  the  sources  of  potential  licensing  delay  within  our  control.  We 


 Earth  Stations  and  Space  Stations,  Notice  of  Proposed  Rulemaking,  IB  Docket  No.  00-  248,  15  FCC  Rcd  25128,  25132  (para.  7)  (2000)  (Part  25  Earth  Station  Streamlining  NPRM). 
 161  47  C.  F.  R.    25.114(  b).  The  Commission  has  decided  to  adopt  a  uniform  format  for  space 
 station  applications,  to  be  called  "Schedule  S."  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3877  (para.  88).  We  are  currently  considering  comments  regarding  the  details  of  Schedule  S,  and  we  will  address  those 


 issues  in  a  future  Order. 
 162  Generally,  we  have  delayed  placing  satellite  applications  on  public  notice  only  in  cases  in 
 which  a  needed  domestic  or  international  frequency  allocation  has  not  been  adopted. 
 163  PanAmSat  Comments  at  10. 


 164  SIA  Comments  at  9-  11. 
 165  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3856  (para.  25). 
 166  Section  V.  D.  1.  above. 
 167  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3851  (para.  8). 
 168  See  FCC  and  NTIA  Sign  New  Memorandum  of  Understanding  on  Spectrum 
 Coordination,  Press  Release  (released  Jan.  31,  2003). 
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 believe  that  those  specific  issues  need  to  be  addressed  during  the  development  of  multilateral  procedures  to  facilitate  interagency  coordination. 
 VI.  FIRST-  COME,  FIRST-  SERVED  PROCEDURE  FOR  GSO-  LIKE  SATELLITE  SYSTEMS 
 A.  Background 
 71.  In  the  Notice,  the  Commission  also  invited  comment  on  a  first-  come,  first-  served  processing  approach,  based  in  large  part  on  the  procedure  used  for  FM  radio  and  television 
 licenses  from  1985  to  1998.  169  Under  this  approach,  in  cases  where  frequencies  have  been  allocated  for  the  proposed  service,  and  we  have  adopted  service  rules,  we  would  issue  a  public 
 notice  inviting  comment  on  the  first  application  filed.  170  Subsequently  filed  mutually  exclusive  applications  would  be  included  in  a  queue  according  to  their  date  of  filing.  171  If  for  any  reason 
 we  could  not  grant  the  lead  application,  we  would  dismiss  it  and  begin  consideration  of  the  next  application  in  the  queue  and  continue  this  process  until  we  could  grant  an  application.  172  After 
 we  issue  a  license,  we  would  keep  the  subsequently  filed  applications  on  file  for  the  specific  GSO  orbit  location  and  frequency  band.  If  the  licensee  loses  its  license  at  any  time  before  it  begins 
 operation,  for  failure  to  meet  a  milestone  or  for  any  other  reason,  the  next  application  in  the  queue  would  be  considered.  If  and  when  the  licensee  places  its  satellite  or  any  of  its  satellites  in  a 
 constellation  in  operation,  we  proposed  returning  the  later-  filed  applications  to  those  applicants.  173 
 72.  In  cases  where  frequencies  have  not  been  allocated  for  the  proposed  service,  or  the  Commission  has  not  adopted  service  rules,  the  Commission  proposed  placing  the  lead  application 
 and  subsequently  filed  applications  in  a  queue.  The  applications  would  remain  pending  until  the  frequency  allocation  and  service  rule  proceedings  are  complete.  At  that  time,  under  the 
 Commission's  proposal  in  the  Notice,  it  would  consider  the  pending  applications  under  the  first-come,  first  served  approach.  Specifically,  it  would  process  those  applications  one  at  a  time,  in  the 
 order  that  they  have  been  placed  in  the  queue,  until  it  grants  an  application.  174 
 73.  For  reasons  discussed  in  Section  VI.  B.  below,  we  conclude  that  the  first-  come,  first-served  procedure  is  the  best  option  available  for  GSO-  like  satellite  systems,  i.  e.,  satellite  systems 
 where  the  earth  station  antennas  accessing  the  satellites  in  that  system  can  exclude  transmissions  from  satellites  other  than  the  one  at  which  it  is  directly  pointed.  In  Section  VI.  C.,  we  explain  why 
 a  modified  processing  round  approach  is  not  well  suited  to  GSO-  like  satellite  systems.  In  Section 
 169  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3857  (para.  26).  See  also  Amendment  of 
 the  Rules  Concerning  Cut-  Off  Procedures  for  FM  and  TV  Broadcast  Stations,  Report  and  Order,  MM  Docket  No.  84-  750,  FCC  85-  125,  50  Fed.  Reg.  19936,  19941-  42  (paras.  33-  36)  (May  13,  1985)  (TV  and 


 FM  Broadcast  Order),  recon.  denied,  50  Fed,  Reg.  43157  (Oct.  24,  1985),  aff'd  without  published  opinion  sub  nom.  Hilding  v.  FCC.  835  F.  2d  1435  (9th  Cir.  1987),  reprinted  at  58  Rad.  Reg.  2d  776  (1985). 


 170  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3859  (para.  33). 
 171  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3859  (para.  33). 
 172  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3859  (para.  33). 
 173  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860  (para.  34). 
 174  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860  (paras.  35-  37). 
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 VI.  D.,  we  consider  and  reject  several  arguments  raised  in  opposition  to  the  first-  come,  first-served  procedure.  In  Section  VI.  E.,  we  describe  in  detail  the  first-  come,  first-  served  procedure 
 we  adopt  in  this  Order,  including  slight  variations  from  the  proposals  in  the  Notice  based  on  the  record  in  this  proceeding.  In  Section  VI.  F.,  we  consider  Intelsat's  modified  first-  come,  first-served 
 proposal.  Finally,  Section  VI.  G.  addresses  the  proposal  in  the  Notice  to  eliminate  the  fungibility  policy. 


 B.  Benefits  of  First-  Come,  First-  Served  Procedure 
 74.  We  find  that  the  first-  come,  first-  served  procedure  will  enable  us  to  act  on  satellite  applications  dramatically  more  quickly  and  efficiently  than  under  the  current  processing  round 
 procedure.  Thus,  consumers  will  benefit  because  they  will  receive  service  faster.  In  addition,  our  procedure  will  lead  to  more  efficient  spectrum  usage  because  it  will  reduce  the  amount  of  time 
 spectrum  lies  fallow.  Furthermore,  a  faster  licensing  procedure  would  enable  U.  S.  satellite  operators  to  comply  with  ITU  bringing-  into-  use  requirements  more  easily,  and  so  help  preserve 
 U.  S.  leadership  in  the  satellite  industry.  Moreover,  we  expect  that  the  first-  come,  first-  served  procedure  will  be  faster  than  the  modified  processing  round  procedure  we  adopt  in  this  Order 
 above.  Accordingly,  it  would  further  the  public  interest  to  adopt  a  first-  come,  first-  served  procedure  for  as  many  types  of  satellite  licenses  as  possible,  except  NGSO-  like  applications,  for 
 which  licensing  the  first  applicant  to  operate  in  a  certain  frequency  band  would  prevent  other  applicants  from  using  that  spectrum.  175 


 75.  Some  commenters  question  whether  the  first-  come,  first-  served  procedure  will  expedite  licensing.  For  example,  Hughes  and  PanAmSat  argue  that  delays  in  licensing  are  often 
 not  the  result  of  processing  rounds,  but  rather  spectrum  allocation  or  service  rule  proceedings.  176  Although  we  agree  that  spectrum  allocation  or  service  rule  proceedings  can  increase  the  time 
 needed  to  issue  satellite  licenses,  Hughes  and  PanAmSat  are  mistaken  in  asserting  that  the  use  of  processing  rounds  under  our  current  procedure  does  not  also  cause  delay.  Even  in  cases  where 
 we  did  not  have  to  obtain  an  international  allocation  or  adopt  service  rules,  such  as  the  second  processing  round  for  GSO  Ka-  band  satellite  systems,  it  often  takes  several  years  from  filing  date 
 to  licensing.  177  We  also  note  that  the  procedures  we  adopt  here  will  enable  us  to  act  on  satellite  applications  before  we  adopt  specific  service  rules,  178  which  will  further  expedite  licensing 
 procedures. 
 76.  Boeing  and  Hughes  also  question  whether  the  procedure  proposed  in  the  Notice  would  expedite  licensing  because  of  our  proposal  to  facilitate  competition  by  setting  spectrum 
 limits  in  service  rule  proceedings.  179  These  parties  maintain  that  determining  spectrum  limits  in  rulemaking  proceedings  would  force  those  proceedings  to  take  on  all  the  characteristics  of 
 processing  rounds,  and  so  would  not  reduce  the  time  needed  to  issue  licenses.  180  We  do  not 
 175  Section  V.  B. 


 176  Hughes  Comments  at  3-  4,  5-  8,  33;  PanAmSat  Comments  at  9. 
 177  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3871-  72  (para.  68)  (citing  second  Ka-band 
 processing  round). 
 178  Section  V.  D.  1.  above. 


 179  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860  (para.  36). 
 180  Boeing  Comments  at  7-  8;  Hughes  Comments  at  34. 
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 intend  to  use  rulemaking  proceedings  to  determine  spectrum  limits.  Rather,  because  competitive  GSO-  like  satellite  systems  can  operate  in  the  same  spectrum,  we  intend  to  assign  qualified 
 applicants  to  their  requested  spectrum,  subject  to  additional  limits  to  prevent  speculation  and  warehousing.  We  conclude  that  this  adequately  addresses  Boeing's  and  Hughes's  concern. 


 C.  Opportunities  for  Competitive  Entry  for  GSO-  Like  Satellite  Systems 
 77.  Background.  In  this  Section,  we  explain  why  the  procedure  we  adopted  for  NGSO-like  satellite  system  applications  is  not  well  suited  for  GSO-  like  satellite  system  applications.  We 
 also  conclude  that  the  issue  that  persuaded  us  that  a  first-  come,  first-  served  procedure  is  not  appropriate  for  NGSO-  like  satellite  system  applications  --  the  possibility  of  unreasonably  limiting 
 additional  market  entry  --  is  more  easily  addressed  in  the  context  of  GSO-  like  satellite  system  applications. 


 78.  Discussion.  PanAmSat  claims  that  a  band  segmentation  approach  for  GSO  FSS  satellite  applications  would  limit  satellite  operators  to  a  fraction  of  the  frequencies  in  the  band, 
 and  would  not  allow  them  to  develop  a  viable  business.  181  PanAmSat  raises  a  good  point.  Unlike  the  case  of  NGSO-  like  satellite  systems,  182  splitting  spectrum  at  a  single  orbit  location  among 
 several  processing  round  participants  would  not  give  any  of  the  applicants  adequate  spectrum  in  many  cases,  particularly  when  there  are  many  participants  in  the  processing  round.  183 
 Furthermore,  an  applicant  would  require  several  transactions  to  acquire  the  spectrum  needed  for  a  viable  service,  and  completing  all  those  transactions  would  necessarily  take  a  great  deal  of  time. 
 Accordingly,  we  conclude  that  the  first-  come,  first-  served  procedure  is  better-  suited  for  GSO-  like  satellite  systems  than  the  modified  processing  round  approach.  184 


 79.  We  also  find  here  that  the  concerns  that  lead  us  to  reject  the  first-  come,  first-  served  procedure  for  NGSO-  like  satellite  systems  do  not  apply  to  GSO-  like  satellite  systems.  We 
 observed  above  that  several  parties  criticized  our  proposal  for  preventing  a  lead  applicant  from  applying  for  an  excessive  amount  of  spectrum  in  a  first-  come,  first-  served  procedure,  and  thereby 


 181  PanAmSat  Comments  at  13. 
 182  Section  V.  C.  1. 
 183  For  example,  there  were  13  participants  in  the  first  Ka-  band  processing  round.  See 
 Assignments  of  Orbital  Locations  to  Space  Stations  in  the  Ka-  band,  Order,  11  FCC  Rcd  13737  (Int'l  Bur.  1996). 


 184  Although  we  find  that  the  band-  splitting  approach  in  the  modified  processing  round 
 procedure  is  not  well  suited  to  GSO-  like  satellite  system  applications,  we  adopt  this  approach  for  resolving  mutually  exclusive  situations  among  two  or  more  GSO-  like  applications  filed  at  the  same  millisecond. 


 Section  VI.  E.  2.  This  is  because  a  significant  factor  weighing  against  the  modified  processing  round  procedure  for  GSO-  like  satellite  system  applications  are  less  of  a  concern  when  we  use  this  approach  as  a 
 second-  tier  selection  mechanism  in  a  first-  come,  first-  served  procedure.  Specifically,  splitting  the  band  equally  among  multiple  applicants  for  a  single  GSO  orbit  location  in  a  modified  processing  round, 
 applicants  may  need  to  engage  in  several  transactions  to  acquire  enough  bandwidth  for  a  viable  service.  On  the  other  hand,  applying  the  band-  splitting  approach  to  GSO-  like  satellite  systems  only  as  a  second-  tier 
 selection  mechanism  should  mean  that  we  use  this  procedure  for  that  kind  of  application  very  rarely,  and  in  those  cases,  the  bandwidth  should  be  divided  equally  between  only  two  applicants.  Thus,  if  a  licensee  is 
 authorized  to  operate  with  what  it  considers  to  be  an  insufficient  amount  of  bandwidth,  it  should  need  only  one  transaction  to  obtain  the  bandwidth  it  desires. 
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 preclude  additional  market  entry.  185  We  also  concluded  above  that  we  cannot  adopt  a  first-  come,  first-  served  procedure  for  NGSO-  like  satellite  system  applications  because  it  would  either  allow 
 an  applicant  to  request  so  much  spectrum  as  to  preclude  additional  entry,  or  require  us  to  determine  the  amount  of  spectrum  needed  to  provide  a  service  in  a  processing  round.  186  These 
 concerns  do  not  apply  to  GSO-  like  satellite  applications  because  assigning  a  frequency  band  segment  to  one  licensee  at  one  orbit  location  does  not  preclude  other  licensees  from  using  the 
 same  frequency  band  segments  at  other  orbit  locations,  or  to  use  other  frequency  band  segments  at  the  same  orbit  location.  Moreover,  we  adopt  additional  safeguards  in  this  Order  below.  First, 
 we  limit  the  number  of  pending  applications  each  applicant  may  have  in  any  frequency  band.  187  Second,  we  adopt  default  service  rules  for  GSO-  like  satellite  system  applications  based  on  our 
 two-  degree-  spacing  policy,  to  facilitate  additional  entry  into  the  market.  188 
 D.  General  Comments 
 1.  Introduction 
 80.  Several  parties  opposed  the  proposed  first-  come,  first-  served  procedure.  With  respect  to  GSO-  like  satellite  systems,  however,  those  parties  do  not  raise  persuasive  reasons  for 
 rejecting  this  proposal.  We  explain  our  conclusion  in  detail  below. 


 2.  Spectrum  Efficiency 
 81.  Background.  Several  parties  contend  that  processing  rounds  facilitate  the  development  of  efficient  spectrum  sharing  plans  and  methods  to  accommodate  more  satellites.  189 
 Teledesic  counters  that  the  first-  come,  first-  served  approach  encourages  later  applicants  to  develop  methods  to  share  with  existing  licensees.  190 


 82.  Discussion.  As  an  initial  matter,  we  will  use  our  two-  degree-  spacing  standards  for  GSO-  like  satellites  in  new  frequency  bands,  in  the  absence  of  frequency  band-  specific  service 
 rules.  191  The  Commission  has  explained  how  its  two-  degree  spacing  requirements  have  lead  to  efficient  use  of  the  C-  band  and  Ku-  band.  192  Nothing  in  the  first-  come,  first-  served  procedure  will 


 185  Section  V.  B.,  citing  Boeing  Comments  at  7-  8;  Hughes  Comments  at  34;  SES  Americom 
 Comments  at  6-  7;  Telesat  Comments  at  3. 
 186  Section  V.  B. 


 187  Section  VII.  E. 
 188  Section  VI.  E.  1.  d. 
 189  SIA  Comments  at  6-  8;  SES  Americom  Comments  at  7;  Final  Analysis  Comments  at  2-  3; 
 Boeing  Comments  at  5;  PanAmSat  Reply  at  2-  3;  Orbcomm  Reply  at  2-  3. 
 190  Teledesic  Reply  at  25. 


 191  Section  VI.  E.  1.  d. 
 192  Licensing  of  Space  Stations  in  the  Domestic  Fixed-  Satellite  Service  and  Related 
 Revisions  of  Part  25  of  the  Rules  and  Regulations,  Report  and  Order,  CC  Docket  No.  81-  704,  FCC  83-  184,  54  Rad.  Reg.  2d  577  (released  Aug.  16,  1983);  Licensing  Space  Stations  in  the  Domestic  Fixed-  Satellite 
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 affect  the  Commission's  technical  requirements  for  satellites.  Further,  by  enabling  us  to  issue  licenses  more  quickly,  the  first-  come,  first-  served  approach  will  lead  to  more  efficient  spectrum 
 use  than  is  now  possible  under  our  current  procedure,  by  reducing  the  amount  of  time  spectrum  lies  fallow. 


 83.  Moreover,  assuming  for  the  sake  of  argument  that  the  current  processing  round  procedure  does  result  in  more  efficient  spectrum  use  than  the  first-  come,  first-  served  procedure 
 we  adopt  here,  we  would  still  conclude  that  the  first-  come,  first-  served  procedure  furthers  the  public  interest  more  effectively  than  the  current  procedure.  We  believe  that  any  marginal 
 increase  in  public  interest  benefit  that  could  result  from  the  current  processing  round  procedure  would  be  outweighed  by  the  additional  months  or  years  that  the  current  procedure  delays  service 
 to  the  public. 
 3.  Speculative  Applications 
 84.  Background.  PanAmSat  and  Boeing  liken  the  first-  come,  first-  serve  proposal  to  the  ITU  notification  procedure,  and  maintain  that  speculation  is  a  serious  problem  in  that 
 procedure.  193  Several  parties  doubt  that  the  Commission's  proposals  to  limit  speculative  or  frivolous  applications  in  a  first-  come,  first-  served  procedure  are  adequate.  194  SES  Americom 
 maintains  that  satellite  applicants  intending  to  construct  their  proposed  systems  need  protection  from  speculative  satellite  applicants,  particularly  applicants  proposing  multiple-  satellite 
 systems.  195 
 85.  In  contrast,  Teledesic  argues  that  the  first-  come,  first-  served  approach  discourages  speculation  by  enabling  the  Commission  to  act  on  all  applications  quickly,  196  and  by  substantially 
 reducing  the  incentives  to  file  applications  as  a  "place  holder"  or  to  block  a  competitor's  application.  197  Teledesic  argues  further  that  a  queue  would  reduce  the  number  of  speculative 
 applications  by  requiring  applicants  to  perform  interference  studies  and  develop  any  needed  sharing  strategies  before  they  file  their  applications.  198  SES  Americom  replies  that  applicants  in  a 
 first-  come,  first-  served  approach  have  no  incentive  to  develop  sharing  strategies  with  other  applicants  later  in  the  queue.  199  SES  Americom  also  contends  that  a  first-  come,  first-  served 


 Service,  48  F.  R.  40233  (Sept.  6,  1983)  (Two  Degree  Spacing  Order)  (two-  degree  spacing  adopted  to  maximize  the  number  of  satellites  in  orbit). 
 193  PanAmSat  Comments  at  7-  8;  Boeing  Comments  at  9. 
 194  SIA  Comments  at  22-  25;  SES  Americom  Comments  at  3;  Final  Analysis  Comments  at  3; 
 Inmarsat  Comments  at  7-  8;  Boeing  Comments  at  5;  Hughes  Comments  at  25-  27;  PanAmSat  Comments  at  5-  6;  Pegasus  Comments  at  2-  3;  SES  Americom  Reply  at  4-  5;  PanAmSat  Reply  at  3;  CTIA  Comments  at  4- 


 5. 
 195  SES  Americom  Comments  at  4. 


 196  Teledesic  Comments  at  27-  28. 
 197  Teledesic  Reply  at  18-  19. 
 198  Teledesic  Comments  at  9-  10. 
 199  SES  Americom  Reply  at  6-  7. 
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 approach  would  discourage  satellite  operators  from  developing  sharing  strategies  before  they  file  their  applications,  because  it  could  require  an  applicant  to  reveal  its  business  plans  to  a  competitor 
 and  enable  that  competitor  to  apply  for  that  orbital  location  first.  200 
 86.  Discussion.  Both  Teledesic  and  other  commenters  are  correct,  in  that  both  processing  rounds  and  the  first-  come,  first-  served  procedure  create  incentives  for  speculation. 
 Thus,  we  disagree  with  parties  who  argue  that  a  first-  come,  first-  served  procedure  will  necessarily  increase  the  incentives  for  filing  speculative  satellite  applications.  In  addition,  although  giving 
 licensees  flexibility  to  propose  and  implement  new  or  innovative  satellite  systems  will  always  create  some  potential  for  speculation,  we  adopt  safeguards  that  should  substantially  reduce  that 
 potential.  These  safeguards  include  limiting  the  number  of  licensed  but  unbuilt  satellite  systems,  adopting  new  milestones,  including  a  bond-  posting  requirement,  and  strictly  enforcing 
 milestones.  201  Accordingly,  we  conclude  that  the  mere  possibility  of  some  speculation  in  a  first-come,  first-  served  procedure  does  not  by  itself  justify  rejection  of  the  first-  come,  first-  served 
 procedure  for  satellite  applications. 
 4.  Influx  of  Applications 
 87.  Background.  A  number  of  parties  assert  that,  if  the  Commission  establishes  a  first-come,  first-  served  licensing  procedure,  it  would  be  difficult  to  address  a  large  influx  of  satellite 
 applications  because  those  applications  can  be  complex  and  the  Commission  would  need  to  address  multiple  queues.  202  Teledesic  argues  that  this  problem  could  be  resolved  if  the 
 Commission  considers  all  applications  in  the  order  they  are  filed,  and  create  a  single  queue  for  all  satellite  applications,  rather  than  establish  a  separate  queue  for  each  orbit  location.  203 
 Specifically,  Teledesic  denies  the  premise  that  applications  will  form  themselves  easily  into  identifiable  groups  of  mutually  exclusive  applications  for  particular  orbit  locations.  204  Rather 
 than  making  the  difficult  determination  of  which  application  should  be  placed  in  which  queue,  Teledesic  recommends  creating  a  single  queue,  and  granting  all  qualified  applications  for 
 satellites  that  would  not  cause  harmful  interference  to  any  previously  licensed  satellite.  205 
 88.  Discussion.  We  agree  that  a  large  influx  of  satellite  applications  could  be  problematic  if  it  overwhelms  our  electronic  filing  system.  We  conclude,  however,  that  this 
 possibility  does  not  justify  rejecting  the  first-  come,  first-  served  procedure.  First,  any  problem  that  occurs  would  occur  only  at  the  time  the  first-  come,  first-  served  rules  take  effect.  Second,  we 
 hereby  adopt  measures  to  mitigate  any  problem  that  may  occur.  We  adopt  Teledesic's  proposal  in  modified  form,  and  will  maintain  one  queue.  We  discuss  this  queue  in  detail  below.  206  Here,  we 


 200  SES  Americom  Reply  at  7. 
 201  Sections  VII.  E.  3,  VII.  C. 
 202  SES  Americom  Comments  at  9;  PanAmSat  Comments  at  8;  Boeing  Comments  at  8-  10; 
 SES  Americom  Reply  at  4. 
 203  Teledesic  Reply  at  20-  21. 


 204  Teledesic  Reply  at  20. 
 205  Teledesic  Reply  at  21. 
 206  Section  VI.  E.  1.  a. 
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 conclude  that  eliminating  the  complexity  caused  by  maintaining  a  separate  queue  for  each  orbit  location  sufficiently  addresses  the  concern  that  the  Commission  might  have  difficulty  with  a  large 
 influx  of  applications. 
 89.  Furthermore,  we  will  adopt  a  freeze  on  all  satellite  applications,  starting  with  the  adoption  of  this  Order,  and  ending  on  the  date  a  summary  of  this  Order  is  published  in  the  Federal 
 Register.  This  will  give  us  additional  time  to  ensure  that  our  electronic  filing  system  is  sufficient  for  any  influx  of  applications  that  may  develop.  Courts  have  recognized  the  Commission's 
 authority  to  adopt  application  freezes.  207  Moreover,  freezes  on  application  filing  are  procedural  in  nature  and  hence  are  not  subject  to  the  notice  and  comment  requirements  of  the  Administrative 
 Procedure  Act.  208 
 90.  Finally,  the  rule  revisions  in  Appendix  B  will  generally  take  effect  upon  publication  in  the  Federal  Register,  rather  than  30  days  after  publication.  This  is  consistent  with  our  actions 
 when  we  adopted  a  first-  come,  first-  served  procedure  with  a  one-  day  cut-  off  rule  for  the  multipoint  distribution  service  (MDS).  209  In  the  MDS  Order,  we  concluded  that  cut-  off  rule  was  a 
 procedural  rule  that  could  take  effect  on  less  than  30  days  notice.  210  We  concluded  further  that  preventing  speculation  constituted  good  cause  to  make  the  rule  revisions  take  effect  upon 
 publication  in  the  Federal  Register.  211 
 5.  ITU  Issues 
 91.  Background.  SIA  and  SES  Americom  assert  that  a  first-  come,  first-  served  approach  would  limit  the  number  of  companies  participating  in  the  ITU  spectrum  allocation  process, 
 because  a  first-  come,  first-  served  approach  would  substantially  reduce  the  number  of  applicants  receiving  licenses.  212  Similarly,  Boeing  asserts  that  a  first-  come,  first-  served  approach  would 


 207  See,  e.  g.,  Neighborhood  TV  Co.  v.  FCC,  742  F.  2d  629,  637-  38  (D.  C.  Cir.,  1984)  and 
 Kessler  v.  FCC,  326  F.  2d  673,  680-  82  (D.  C.  Cir.,  1963). 
 208  Administrative  Procedure  Act,  5  U.  S.  C.    553(  b)(  3)(  B).  The  Commission  has  previously 
 found  that,  in  cases  where  it  adopts  a  new  licensing  procedure,  it  may  be  necessary  to  adopt  temporary  licensing  freezes  to  prevent  applicants  from  using  the  old  licensing  procedures  to  engage  in  speculative 


 activity  prior  to  the  effectiveness  of  the  new  rules.  Implementation  of  Sections  309(  j)  and  337  of  the  Communications  Act  of  1934  as  Amended,  Report  and  Order  and  Further  Notice  of  Proposed  Rulemaking, 
 WT  Docket  No.  99-  87,  15  FCC  Rcd  22709,  22737-  38  (paras.  60-  61)  (2000). 
 209  Amendment  of  Parts  21,  43,  74,  78,  and  94  of  the  Commission's  Rules  Governing  Use  of 
 the  Frequencies  in  the  2.1  and  2.5  GHz  Bands  Affecting  Private  Operational-  Fixed  Microwave  Service,  Multichannel  Multipoint  Distribution  Service,  Instructional  Television  Fixed  Service,  and  Cable  Television 


 Relay  Service,  Gen.  Docket  Nos.  90-  54  and  80-  113,  5  FCC  Rcd  6410,  6424  (para.  90)  (1990)  (MDS  Order). 


 210  MDS  Order,  5  FCC  Rcd  at  6441  n.  73. 
 211  MDS  Order,  5  FCC  Rcd  at  6441  n.  73. 
 212  SIA  Comments  at  8-  9;  SES  Americom  Comments  at  6.  See  also  Intelsat  Comments  at  10 
 (applying  a  version  of  a  first-  come,  first-  served  approach  to  services  without  frequency  allocations  or  service  rules  would  place  the  burden  of  championing  service  rules  or  frequency  allocations  on  one 


 applicant). 
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 limit  the  number  of  ITU  submissions  that  the  Commission  could  file.  213  Hughes  and  Boeing  argue  that  the  ITU  submission  for  a  lead  applicant  could  limit  the  options  of  subsequent  parties  if 
 the  lead  applicant  fails  by  requiring  the  subsequent  party  to  operate  within  the  technical  parameters  of  the  first  licensee's  application.  214 


 92.  Discussion.  None  of  the  parties'  concerns  regarding  the  ITU  persuade  us  to  reject  the  first-  come,  first-  served  procedure.  First,  SIA  and  SES  Americom  are  mistaken  in  assuming  that  a 
 first-  come,  first-  served  approach  would  substantially  reduce  the  number  of  applicants  receiving  licenses  relative  to  processing  rounds.  We  will  generally  require  GSO-  like  satellite  systems  to  be 
 two-  degree-  compliant,  allowing  us  to  license  multiple  satellites  that  will  use  the  same  spectrum.  Therefore,  it  seems  likely  the  same  number  of  satellites  will  be  licensed  under  a  first-  come,  first-served 
 procedure  as  would  be  in  a  processing  round.  Furthermore,  because  we  expect  to  grant  the  same  number  of  satellite  applications,  we  disagree  with  Boeing  that  the  first-  come,  first-  served 
 procedure  will  limit  U.  S.  ITU  submissions. 
 93.  Finally,  we  do  not  agree  with  Hughes  or  Boeing  that  the  ITU  submission  for  a  lead  applicant  could  limit  the  options  of  subsequent  parties  if  the  lead  applicant  fails.  Under  the 
 processing  round  procedure,  if  a  license  is  revoked  and  the  orbit  location  is  reassigned,  the  new  licensee  is  required  to  meet  the  specifications  of  the  original  ITU  filing  or  file  a  new  ITU  filing, 
 and  assume  any  subsequent  ITU  costs  associated  with  that  filing.  215  This  will  not  change  under  the  first-  come,  first-  served  procedure  we  adopt  today. 


 6.  Uncertainty 
 94.  A  number  of  commenters  maintain  that  any  major  revision  of  the  satellite  licensing  procedure  could  cause  uncertainty  and  could  lead  to  litigation  over  the  details  of  the  new 
 procedure.  216  Even  if  this  is  true,  it  does  not  justify  keeping  an  inefficient  processing  system  in  place. 


 7.  Non-  U.  S.-  Licensed  Satellites 
 95.  Background.  Inmarsat  argues  that  the  first-  come,  first-  served  approach  does  not  adequately  consider  whether  the  lead  applicant  is  requesting  a  license  for  an  orbital  location  for 
 which  the  United  States  has  ITU  priority,  and  so  could  unreasonably  preclude  some  non-  U.  S.  satellite  operators  from  entering  the  U.  S.  market.  217 


 96.  Discussion.  As  is  the  case  now  in  processing  rounds,  U.  S.  licensees  assigned  to  a  particular  orbit  location  in  a  first-  come,  first-  served  approach  take  their  licenses  subject  to  the 
 outcome  of  the  international  coordination  process.  The  Commission  is  not  responsible  for  the  outcome  of  any  particular  satellite  coordination  and  does  not  guarantee  the  success  or  failure  of 


 213  Boeing  Comments  at  6. 
 214  Hughes  Comments  at  32-  33;  Boeing  Comments  at  6-  7. 
 215  We  do  not  require  new  licensees  under  these  circumstances  to  reimburse  the  original 
 licensee  for  ITU  fees  or  any  other  fees,  however. 
 216  Hughes  Comments  at  23-  24;  Pegasus  Comments  at  3;  PanAmSat  Reply  at  3. 


 217  Inmarsat  Comments  at  4-  7. 
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 the  required  international  coordination.  218  Moreover,  we  expect  U.  S.  licensees  to  abide  by  international  regulations  when  their  systems  are  coordinated.  This  may  mean  that  the  U.  S.  -licensee 
 may  not  be  able  to  operate  its  system  if  the  coordination  cannot  be  appropriately  completed.  Indeed,  with  the  first-  come,  first-  served  approach,  we  assign  applicants  to  the  orbit 
 location  that  is  requested.  Consequently,  the  applicant  assumed  the  coordination  risk  when  choosing  that  particular  orbit  location  at  the  time  it  submitted  its  application. 


 8.  Disadvantage  in  Non-  U.  S.  Markets 
 97.  Background.  Final  Analysis  contends  that,  if  the  Commission  adopts  a  first-  come,  first-  served  approach,  it  might  encourage  other  countries  to  adopt  this  approach.  Final  Analysis 
 further  speculates  that  some  foreign  Administrations  might  implement  their  first-  come,  first-served  procedures  in  a  way  that  gives  an  unfair  advantage  to  their  foreign  government-  controlled 
 satellite  operators.  219 
 98.  Discussion.  Even  assuming  that  our  actions  in  this  Order  might  induce  more  countries  to  adopt  a  first-  come,  first-  served  procedure,  there  is  no  evidence  that  U.  S.  satellite 
 operators  would  be  disadvantaged.  We  note  that  several  countries  already  use  a  first-  come,  first-served  procedure,  and  no  U.  S.  operators  have  claimed  to  be  disadvantaged  in  those  countries. 
 Further,  there  are  safeguards  in  place  to  discourage  governments  from  favoring  their  own  providers.  Under  the  World  Trade  Organization  (WTO)  Basic  Telecom  Agreement,  WTO 
 signatories  are  required  to  treat  service  providers  from  other  signatories  no  less  favorably  than  their  own  service  providers.  220  This  requirement  applies  to  any  WTO  signatory  adopting  a  first-come, 
 first-  served  procedure  for  satellite  licenses.  Furthermore,  we  have  procedures  in  place  now  that  preclude  operators  of  satellites  licensed  by  non-  WTO  signatories  from  entering  the  U.  S. 
 market  unless  they  can  show  that  their  licensing  procedures  do  not  distort  competition  by  creating  de  facto  or  de  jure  barriers  for  U.  S.-  licensed  satellite  operators  trying  to  enter  that  country's 
 market.  221 
 9.  Legal  Analysis 
 a.  Background 
 99.  In  the  Space  Station  Reform  NPRM,  the  Commission  noted  that  the  processing  round  process  was  developed  in  response  to  Ashbacker,  a  1945  Supreme  Court  case.  222  In  Ashbacker, 


 218  Pegasus  Development  Corporation,  Application  for  Authority  to  Construct,  Launch,  and 
 Operate  a  Ka-  Band  Satellite  System  in  the  Fixed-  Satellite  Service,  Order  and  Authorization,  16  FCC  Rcd  14378,  14386  (para.  24)  (Int'l  Bur.,  2001). 


 219  Final  Analysis  Comments  at  2. 
 220  See  Amendment  of  the  Commission's  Regulatory  Policies  to  Allow  Non-  U.  S.  Licensed 
 Satellites  Providing  Domestic  and  International  Service  in  the  United  States,  Report  and  Order,  IB  Docket  No.  96-  111,  12  FCC  Rcd  24094,  24103  (para.  22)  (1997)  (DISCO  II),  and  sources  cited  therein. 


 221  DISCO  II,  12  FCC  Rcd  at  24127-  28  (paras.  72-  73). 
 222  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3868-  69  (para.  62),  citing  Ashbacker  v. 
 FCC,  326  U.  S.  327  (1945)  (Ashbacker). 
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 the  Court  interpreted  the  hearing  requirement  in  Section  309  of  the  Communications  Act  223  to  require  the  Commission  to  consider  two  mutually  exclusive  applications,  both  of  which  had  been 
 accepted  for  filing,  in  a  comparative  hearing  before  granting  one  and  denying  the  other.  224  At  the  time  the  Commission  adopted  the  current  processing  round  procedure,  in  1983,  it  interpreted 
 Ashbacker  as  permitting  a  cut-  off  procedure  to  preserve  the  rights  of  all  existing  applicants  and  all  potential  future  qualified  space  station  license  applicants  with  concrete  proposals  for  satellite 
 systems.  225 
 100.  As  the  Commission  explained  in  the  Space  Station  Reform  NPRM,  it  subsequently  recognized  that  the  first-  come,  first-  served  procedure  also  meets  the  Ashbacker  requirements.  226 
 Specifically,  the  Commission  observed  that  Ashbacker  allows  it  to  promulgate  regulations  limiting  the  filing  rights  of  competing  applicants,  and  leaves  to  the  Commission's  discretion  the 
 circumstances  under  which  applications  are  considered  mutually  exclusive.  227  The  Commission  also  observed  that  the  Supreme  Court's  discussion  in  Storer  is  consistent  with  our  first-  come, 
 first-  served  proposal.  228  In  Storer,  a  broadcast  license  applicant  argued  that  Section  309  required  the  Commission  to  consider  its  application  even  though  granting  the  application  would  cause  the 
 applicant  to  exceed  the  Commission's  limit  on  the  number  of  broadcast  stations  that  could  be  held  by  one  party.  229  The  Court  held  that  the  hearing  requirement  in  Section  309  does  not  require  the 
 Commission  to  consider  applications  that  are  inconsistent  with  its  rules.  230 
 101.  Hughes  and  other  parties  question  the  legal  analysis  of  a  first-  come,  first-  served  procedure  in  the  Space  Station  Reform  NPRM.  For  the  reasons  set  forth  below,  none  of  the 
 parties  have  convinced  us  that  our  analysis  is  incorrect. 
 b.  Consistency  with  Communications  Act 
 102.  Background.  Hughes  asserts  that  the  first-  come,  first-  served  approach  is  inconsistent  with  the  Communications  Act,  based  on  an  assumption  that  the  Commission's 


 223  47  U.  S.  C.    309. 
 224  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3868-  69  (para.  62),  citing  Ashbacker,  326 
 U.  S.  at  330-  31. 
 225  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3868-  69  (para.  62),  citing  1983  Cut-  Off 
 Order,  93  FCC  2d  at  1261  (para.  2). 
 226  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3869  (para.  63),  citing  TV  and  FM 
 Broadcast  Order,  50  Fed.  Reg.  at  19938-  39  (para.  16). 
 227  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3869  (para.  63),  citing  TV  and  FM 
 Broadcast  Order,  50  Fed.  Reg.  at  19939  (para.  16),  Ashbacker,  326  U.  S.  at  333  n.  9;  MCI  Airsignal  International,  Inc.,  FCC  84-  397  (released  Aug.  17,  1984). 


 228  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3869  (para.  64),  citing  United  States  v. 
 Storer  Broadcasting  Co.,  351  U.  S.  192  (1956)  (Storer). 
 229  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3869  (para.  64),  citing  Storer,  351  U.  S.  at 
 193. 
 230  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3869  (para.  64),  citing  Storer,  351  U.  S.  at 
 202-  04;  National  Broadcasting  Co.  v.  United  States,  319  U.  S.  190,  230  (1943). 
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 proposed  procedure  would  result  in  issuing  licenses  without  a  public  interest  inquiry.  231  Hughes  also  cites  court  cases  which  it  claims  require  the  Commission  to  give  parties  an  opportunity  to  file 
 applications  to  be  considered  together  with  a  lead  application.  232  Teledesic  and  Intelsat  question  Hughes's  legal  analysis.  233 


 103.  Discussion.  We  agree  with  Teledesic's  interpretation  of  Ashbacker  and  its  progeny.  In  particular,  as  Teledesic  points  out,  we  have  considered  and  rejected  arguments  that  Ashbacker 
 or  the  Communications  Act  requires  the  Commission  to  give  parties  an  opportunity  to  file  mutually  exclusive  applications.  234  Moreover,  we  have  not  always  issued  satellite  licenses 
 pursuant  to  processing  rounds.  For  example,  we  used  a  de  facto  first-  come,  first-  served  procedure,  without  processing  rounds,  for  the  first  decade  during  which  we  accepted  commercial 
 satellite  applications.  235  We  also  considered  separate  system  satellites  outside  of  processing  rounds  until  1996,  when  we  adopted  a  unified  licensing  framework  for  domestic  and  international 
 satellites.  236  Moreover,  we  consider  replacement  satellite  applications  outside  of  processing  rounds.  237  This  practice  includes  applications  for  replacements  of  conventional  C-  band  or  Ku-band 
 satellites  seeking  authority  to  operate  in  the  extended  C-  band  or  extended  Ku-  band, 


 231  Hughes  Comments  at  9-  11,  20-  21.  See  also  SES  Americom  Reply  at  5-  6. 
 232  Hughes  Comments  at  12-  14,  citing  United  States  v.  Storer  Broadcasting  Co.,  351  U.  S. 
 192  (1956),  Aeronautical  Radio,  Inc.  v.  FCC,  928  F.  2d  428  (D.  C.  Cir.  1991). 
 233  Teledesic  Reply  at  5-  13,  citing,  e.  g.,  Ashbacker,  326  U.  S.  at  333  n.  9,  FCC  v.  Pottsville 
 Broadcasting  Co.,  309  U.  S.  134,  138  (1940)  (Pottsville  Broadcasting);  Intelsat  Comments  at  12  n.  28;  Intelsat  Reply  at  3,  citing  47  U.  S.  C.    309(  e),  Hispanic  Information  &  Telecommunications  Network  v. 


 FCC,  865  F.  2d  1289,  1294  (D.  C.  Cir.  1989). 


 234  Teledesic  Reply  at  13-  15,  citing  Amendment  of  Parts  21,  43,  74,  78,  and  94  of  the 
 Commission's  Rules  Governing  the  Use  of  Frequencies  in  the  2.  1  and  2.5  GHz  Bands,  Order  on  Reconsideration,  Gen.  Docket  Nos.  90-  54  and  80-  113,  6  FCC  Rcd  6764,  6776  (paras.  61-  62)  (1991) 


 (Wireless  Cable  Reconsideration  Order)  (denying  petitions  for  reconsideration  claiming  that  licensing  procedure  violated  the  Communications  Act  because  it  effectively  deprives  applicants  from  filing  mutually 
 exclusive  applications). 
 235  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3849  n.  3,  and  Orders  cited  therein. 


 236  The  Commission  adopted  a  unified  licensing  framework  in  Amendment  to  the 
 Commissions  Regulatory  Policies  Governing  Domestic  Fixed  Satellites  and  Separate  International  Satellite  Systems,  Report  and  Order,  CC  Docket  No.  95-  41,  11  FCC  Rcd  2429  (1996)  (DISCO  I  Order  or 


 DISCO  I).  The  term  "separate  system"  referred  to  international  satellite  systems  separate  from  INTELSAT.  See  Establishment  of  Satellite  Systems  Providing  International  Communications,  Report  and  Order,  CC 
 Docket  No.  84-  1299,  101  FCC  2d  1046,  1174  (1985)  (Separate  Systems  Order),  recon.  61  Rad.  Reg.  2d  649  (1986),  further  recon.  1  FCC  Rcd  439  (1986). 


 237  See,  e.  g.,  Loral  Space  &  Communication  Ltd.,  f/  k/  a  Orion  Atlantic,  L.  P.,  for  Authority  to 
 Launch  and  Operate  a  Hybrid  Ku-  band/  C-  band  Satellite  System  at  the  37.  5  W.  L.  Orbit  Location,  Memorandum  Opinion  and  Order,  16  FCC  Rcd  12490,  12492  (para.  7)  (Int'l  Bur.  2001);  GE  American 


 Communications,  Inc.,  Order  and  Authorization,  10  FCC  Rcd  13775,  13775-  76  (para.  6)  (Int'l  Bur.  1995)  (GE  Americom  Replacement  Order);  Loral  Spacecom  Corp.,  Order  and  Authorization,  13  FCC  Rcd  16348, 
 16440  (para.  5)  (Int'l  Bur.,  Sat.  and  Rad.  Div.,  1995). 
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 respectively.  238  We  have  also  granted  licenses  for  satellite  land  remote  sensing  systems  outside  of  processing  rounds.  239  Finally,  when  in-  orbit,  non-  U.  S.-  licensed  satellite  operators  seek  access  to 
 the  U.  S.  satellite  market  under  the  Commission's  DISCO  II  framework,  240  we  consider  those  requests  outside  of  processing  rounds.  For  these  reasons,  we  conclude  that  neither  the 
 Communications  Act  nor  Ashbacker  require  us  to  consider  satellite  license  applications  in  processing  rounds. 


 c.  Qualifications 
 104.  Background.  PanAmSat  assumes  that  the  first-  come,  first-  served  approach  would  lead  to  issuing  licenses  without  consideration  of  whether  the  licensee  is  qualified,  and  asserts  that 
 such  a  procedure  would  lead  to  litigation.  241  In  contrast,  Teledesic  contends  that  the  first-  come,  first-  served  approach  would  not  and  could  not  preclude  the  Commission  from  determining 
 whether  an  applicant  is  qualified  before  granting  a  license.  242 
 105.  Discussion.  We  intend  to  consider  an  applicant's  qualifications  before  granting  it  a  license.  We  stated  specifically  in  the  Space  Station  Reform  NPRM  that  we  would  place 
 applications  on  public  notice.  243  We  also  noted  that  the  first-  come,  first-  served  procedure  allows  us  to  deny  applications  when  appropriate,  including  but  not  limited  to  concerns  raised  in  petitions 
 to  reject  that  application.  244 
 d.  Consistency  with  Commission  Precedent 
 106.  Background.  In  the  Notice,  the  Commission  observed  that  it  has  used  a  first-  come,  first-  served  procedure  for  FM  radio  licenses,  and  that  this  experience  might  provide  a  potentially 
 sound,  efficient  basis  for  revising  its  satellite  licensing  process.  245  Some  commenters  claim  that 
 238  PanAmSat  Licensee  Corporation,  Application  for  Authority  to  Launch  and  Operate  a 
 Hybrid  Replacement  Fixed  Satellite  Service  Space  Station,  Order  and  Authorization,  15  FCC  Rcd  22156,  22157-  58  (para.  5)  (Int'l  Bur.,  Sat.  and  Rad.  Div.,  2000). 


 239  Application  of  EarthWatch  Incorporated  For  Authority  to  Construct,  Launch  and  Operate 
 a  Remote  Sensing-  Satellite  System,  Order  and  Authorization,  10  FCC  Rcd  10467  (Int'l  Bur.,  1995)  (EarthWatch  Authorization  Order).  Remote-  sensing  satellites  use  in-  orbit  passive  optical  sensors  to 


 measure  light  reflected  from  the  earths  surface,  and  then  transmit  that  information  to  a  central  earth  station  where  it  is  transformed  into  useable  information  about  the  "remotely  sensed"  object  or  phenomenon. 
 EarthWatch  Authorization  Order,  10  FCC  Rcd  at  10467  (para.  2).  Satellite  remote-  sensing  systems  can  be  used  for  mapping,  resource  conservation,  law  enforcement,  national  security,  environmental  monitoring, 
 and  forecasting  functions.  EarthWatch  Authorization  Order,  10  FCC  Rcd  at  10468  (para.  6). 
 240  DISCO  II,  12  FCC  Rcd  at  24174  (para.  186).  We  describe  the  DISCO  II  framework  in 
 detail  below. 
 241  PanAmSat  Comments  at  6-  7.  See  also  Hughes  Comments  at  11-  12. 


 242  Teledesic  Reply  at  23-  24. 
 243  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3859  (para.  33). 
 244  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3859  (para.  33). 
 245  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3858-  59  (paras.  29-  31). 
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 any  reliance  on  the  first-  come,  first-  served  procedure  for  broadcast  licenses  is  misplaced,  because  that  procedure  is  not  the  same  as  the  Commission's  satellite  first-  come,  first-  served  proposal.  246 
 Hughes  also  notes  that  the  Commission  has  employed  processing  rounds  for  satellite  licenses  for  a  long  time,  and  asserts  that  the  proposals  in  the  Notice  constitute  an  arbitrary  and  capricious 
 change  in  policy  unless  the  Commission  provides  an  adequate  explanation.  247  Teledesic  replies,  among  other  things,  that  the  Commission  has  authority  to  change  its  procedures  in  rulemaking 
 proceedings.  248 
 107.  Discussion.  These  contentions  do  not  persuade  us  to  reject  the  proposals  in  the  Notice.  Courts  have  held  that  the  Commission  had  broad  discretion  to  determine  whether  and 
 when  to  initiate  a  rulemaking.  249  Courts  have  also  held  that  administrative  agencies  are  free  to  adjust  or  abandon  its  proposals  in  light  of  public  comments  or  agency  reconsideration.  250 
 Therefore,  we  disagree  with  Hughes  that  Commission  precedents  or  practices  can  limit  or  preclude  the  Commission  from  inviting  comment  on  any  particular  rule  change  in  a  rulemaking 
 proceeding.  Furthermore,  in  the  Notice,  the  Commission  explained  in  detail  why  the  satellite  licensing  process  needs  reform.  251  Moreover,  commenters  overstate  the  extent  to  which  we  rely 
 on  the  broadcast  first-  come,  first-  served  procedure.  The  Commission  stated  that,  because  that  procedure  was  successful,  it  might  provide  a  good  starting  point  for  revising  satellite  licensing 
 procedures.  Specifically,  "we  invite[  d]  comment  on  appropriate  procedural  revisions  consistent  with  a  first-  come,  first-  served  approach,  with  certain  modifications  to  make  it  fit  satellite 
 licenses."  252 
 E.  Details  of  First-  Come,  First-  Served  Procedure 
 1.  General  Framework 
 a.  Establishment  of  Queues 


 246  Hughes  Comments  at  14-  20;  Boeing  Comments  at  5-  6;  SIA  Comments  at  9. 
 247  Hughes  Comments  at  21-  23.  See  also  Hughes  Comments  at  4-  5,  citing  Amendment  to 
 the  Commission's  Regulatory  Policies  Governing  Domestic  Fixed  Satellites  and  Separate  International  Satellite  Systems,  Order  on  Reconsideration,  IB  Docket  No.  95-  41,  16  FCC  Rcd  15579  (2001)  (DISCO  I 


 Reconsideration  Order). 
 248  Teledesic  Reply  at  13-  16,  citing  Committee  for  Effective  Cellular  Rules  v.  FCC,  53  F.  3d 
 1309,  1317  (D.  C.  Cir.  1995),  Florida  Cellular  Mobil  Communications  Corp.  v.  FCC,  28  F.  3d  191,  196-  97  (D.  C.  Cir.  1994),  cert.  denied  514  U.  S.  1016  (1995);  Rainbow  Broadcasting  Co.  v.  FCC,  949  F.  2d  405,  409 


 (D.  C.  Cir.  1991). 
 249  See  WWHT  v.  FCC,  656  F.  2d  807  (D.  C.  Cir.  1981)  (Commission  has  broad  discretion  to 
 determine  whether  and  when  to  initiate  a  rulemaking).  See  also  Telecommunications  Resellers  Assn.  v.  FCC,  141  F.  3d  1193,  1197  n.  6  (D.  C.  Cir.  1998)  (Commission  has  discretion  to  initiate  rulemaking  even  in 


 case  where  the  court  found  that  a  rulemaking  was  not  "necessary"  to  implement  a  statutory  requirement). 
 250  Kooritsky  v.  Reich,  17  F.  3d  1509,  1513  (D.  C.  Cir.  1994);  International  Harvester  Co.  v. 
 Ruckelshaus,  478  F.  2d  615,  632  &  n.  51  (D.  C.  Cir.  1973). 
 251  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3852-  55  (paras.  12-  20). 


 252  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3859  (para.  31). 
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 108.  Background.  Under  the  proposal  in  the  Notice,  we  would  consider  applications  for  each  particular  geostationary  satellite  orbit  (GSO)  satellite  license,  one  at  a  time  in  the  order  they 
 were  filed.  253  Teledesic  suggests  that  the  procedure  would  work  better  if  the  Commission  maintained  a  single  queue  rather  than  a  separate  queue  for  each  orbit  location  and/  or  frequency 
 band.  Under  Teledesic's  proposal,  the  Commission  would  review  all  satellite  applications  in  the  order  they  are  filed,  regardless  of  the  orbit  location  and  frequency  band  requested.  Teledesic 
 recommends  further  that  the  Commission  grant  each  application  that  complies  with  the  Commission's  rules  and  does  not  conflict  with  any  previously  granted  license,  and  otherwise  deny 
 the  application.  254 
 109.  Discussion.  We  agree  with  Teledesic  that  establishing  a  separate  queue  for  each  GSO  orbital  location  could  unnecessarily  complicate  the  first-  come,  first-  served  procedure.  For 
 example,  if  an  applicant  seeks  authority  for  the  96  W.  L.  location,  it  is  not  clear  whether  that  application  should  be  included  in  the  same  queue  as  an  application  for  the  95  W.  L.  location,  or 
 the  97  W.  L.  location,  or  whether  all  three  applications  should  be  included  in  the  same  queue.  By  including  all  applications  in  one  queue,  we  can  consider  all  issues  relating  to  that  application, 
 such  as  compliance  with  the  Commission's  two-  degree  spacing  framework  and  interference  with  adjacent  satellites  operating  in  the  same  frequency  bands.  255  We  will  make  a  current  list  of 
 applications  in  the  queue  publicly  available. 
 110.  We  also  recognize  that  some  applications  will  necessarily  require  more  time  to  review  than  others.  In  cases  in  which  we  are  reviewing  an  application  that  raises  such  unusually 
 complex  issues,  it  would  not  serve  the  public  interest  to  delay  consideration  of  all  subsequently  filed  applications  while  we  resolve  those  complex  issues.  Therefore,  we  may  act  on  some  of  those 
 subsequently  filed  applications  before  we  act  on  the  complex  application.  Those  subsequent  applications  will  be  considered  one  at  a  time  in  the  order  they  are  filed,  but  only  if  they  are  not 
 mutually  exclusive  with  a  previously-  filed  application.  We  will  act  on  those  mutually  exclusive  applications  after  we  act  on  the  complex  application. 


 b.  Keeping  Subsequently  Filed  Applications  on  File 
 111.  Background.  After  we  issue  a  license,  we  proposed  keeping  subsequently  filed  applications  on  file.  If  at  any  time  the  licensee  loses  its  license,  for  failure  to  meet  the  first  milestone 
 or  for  any  other  reason,  the  next  application  in  the  queue  would  be  considered.  We  also  proposed  returning  the  later-  filed  applications  to  those  applicants  if  and  when  the  licensee  places  its  satellite  or 
 satellites  in  operation,  and  to  return  the  associated  application  fee  at  that  time  upon  the  applicant's  request.  256 


 112.  Discussion.  All  the  parties  commenting  on  this  issue  oppose  keeping  subsequent  applications  on  file  to  be  considered  in  the  event  that  a  licensee  loses  its  license.  Teledesic  claims 
 that  keeping  subsequent  applications  on  file  would  encourage  speculative  or  "place  holder" 


 253  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3859  (para.  32). 
 254  Teledesic  Comments  at  13-  17;  Teledesic  Reply  at  20-  21. 
 255  We  discuss  our  treatment  of  hybrid  applications,  and  applications  with  feeder  link  or 
 intersatellite  link  requests  below. 
 256  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860  (para.  34). 
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 applications,  and  discourage  applications  by  parties  with  innovative  methods  for  using  or  sharing  spectrum.  257  SES  Americom  argues  that,  if  the  lead  applicant  does  not  build  its  system,  there 
 would  be  delay  before  the  next  application  could  be  processed,  and  this  delay  could  discourage  other  parties  from  applying  for  competing  licenses.  258  SES  Americom  also  asserts  that  this  delay 
 could  cause  the  United  States  to  lose  its  international  priority  at  the  location  in  question.  259 
 113.  We  decide  not  to  keep  subsequently  filed  applications  on  file.  In  other  words,  if  an  application  reaches  the  front  of  the  queue  that  conflicts  with  a  previously  granted  license,  we  will 
 deny  the  application  rather  than  keeping  the  application  on  file  in  case  the  lead  applicant  does  not  construct  its  satellite  system.  We  agree  with  Teledesic  that  keeping  applications  on  file  would 
 encourage  speculative  or  "place  holder"  applications.  Moreover,  we  proposed  keeping  applications  on  file  because  we  thought  it  would  expedite  reassignment  of  the  orbit  location  in 
 cases  where  a  licensee  loses  a  license.  Under  a  single  queue  approach,  we  could  reassign  the  orbit  location  just  as  quickly,  or  perhaps  more  quickly,  if  we  accept  new  applications  at  the  time 
 the  location  becomes  available.  For  these  purposes,  we  will  consider  an  orbit  location  to  become  "available"  at  the  time  we  adopt  an  Order  revoking  a  license  in  cases  where  we  revoke  the 
 license,  or  upon  release  of  a  public  notice  announcing  that  a  licensee  has  surrendered  its  license  in  cases  where  the  licensee  surrenders  its  license.  260  Thus,  all  parties  potentially  interested  in 
 providing  satellite  service  from  the  orbit  location  at  issue  have  an  equal  opportunity  to  apply  for  the  license  when  that  orbit  location  becomes  available.  261  In  summary,  we  will  deny  applications 
 that  conflict  with  previously  granted  applications  because  it  is  more  likely  to  result  in  faster  service  to  the  public,  and  it  will  not  disadvantage  any  party  that  may  wish  to  apply  for  that  orbit 
 location  if  it  becomes  available. 
 114.  Our  decision  not  to  keep  subsequently  filed  applications  on  file  pending  the  successful  launch  of  a  satellite  moots  the  issue  of  whether  to  allow  applicants  to  request  the  fees 
 associated  with  their  applications  to  be  returned  when  a  licensee  launches  its  satellite.  262  Although  no  one  commented  specifically  on  this  proposal,  we  emphasize  that  everyone 
 commenting  on  the  underlying  proposal  to  keep  subsequent  applications  on  file  opposed  it.  263  Accordingly,  parties  applying  for  a  license  that  is  mutually  exclusive  with  a  previously  filed 
 application  are  on  notice  that  they  will  not  be  able  to  request  an  application  fee  refund  after  the  application  is  placed  on  public  notice. 


 257  Teledesic  Comments  at  17-  20;  Teledesic  Reply  at  19-  20. 
 258  SES  Americom  Comments  at  3-  4. 
 259  SES  Americom  Comments  at  3-  4. 
 260  In  the  event  that  a  licensee  files  a  petition  for  reconsideration  or  application  for  review  of 
 a  decision  to  revoke  a  license,  we  would  grant  the  new  license  subject  to  the  outcome  of  the  reconsideration  or  review  proceeding. 


 261  We  will  give  applicants  the  option  of  assuming  the  previous  licensee's  ITU  filing  or 
 submitting  a  new  filing. 
 262  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860  (para.  34). 


 263  Teledesic  Comments  at  17-  20;  Teledesic  Reply  at  19-  20;  SES  Americom  Comments  at  3-4. 
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 c.  Fees 
 115.  Background.  The  Commission  invited  comment  on  allowing  an  applicant  to  request  the  return  of  the  application  fee  if  it  voluntarily  withdraws  its  application  before  it  is  placed  on  public 
 notice.  264  After  the  application  is  placed  on  public  notice,  however,  the  Commission  maintained  that  it  would  no  longer  be  appropriate  to  return  the  application  fee.  265  No  one  commented  on  this 
 proposal. 
 116.  Discussion.  We  adopt  this  proposal.  Application  fees  represent  the  Commissions  estimate,  accepted  by  Congress,  on  the  average  cost  to  the  Commission  of  providing  the 
 service.  266  The  Commission  incurs  a  cost  regardless  of  the  final  result  to  the  applicant,  and  it  is  on  that  basis  that  the  Commission  proposed  to  Congress  that  fixed  processing  costs  be  recovered 
 from  each  applicant  through  fees.  267  Therefore,  once  that  application  has  cleared  the  fee  review  process,  its  subsequent  rejection  will  not  result  in  a  fee  refund.  The  conclusion  of  the  fee  review 
 process  coincides  with  the  date  that  the  application  is  placed  on  public  notice.  Consequently,  we  adopt  the  proposal  in  the  Notice  to  allow  requests  for  the  return  of  GSO-  like  satellite  license 
 application  fees  if  the  applicant  voluntarily  withdraws  its  application  before  it  is  placed  on  public  notice.  This  procedure  is  also  similar  to  the  Commission's  first-  come,  first-  served  rules  for 
 broadcast  licenses,  which  were  cited  in  the  Notice.  268 
 d.  Service  Rules 
 117.  Background.  In  the  Notice,  the  Commission  proposed  holding  applications  in  abeyance  if  they  are  filed  after  the  Commission  has  adopted  a  frequency  allocation  for  the 
 proposed  service,  but  it  has  not  adopted  service  rules.  269  Commenters  offered  differing  opinions  on  this  proposal.  Teledesic  opposes  the  proposal  to  hold  applications  in  abeyance  pending 
 adoption  of  service  rules,  because  service  rules  may  not  be  needed  in  all  cases.  270  CTIA  opposes  accepting  satellite  applications  before  service  rules  are  adopted.  271 


 264  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860  (para.  34). 
 265  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860  (para.  34). 
 266  Establishment  of  a  Fee  Collection  Program  to  Implement  the  Provisions  of  the 
 Consolidated  Omnibus  Budget  Reconciliation  Act  of  1985,  Memorandum  Opinion  and  Order,  Gen.  Docket  No.  86-  285,  3  FCC  Rcd  5987,  5987  (para.  5)  (1988). 


 267  Establishment  of  a  Fee  Collection  Program  to  Implement  the  Provisions  of  the 
 Consolidated  Omnibus  Budget  Reconciliation  Act  of  1985,  Report  and  Order,  Gen.  Docket  No.  86-  285,  2  FCC  Rcd  947,  949  (para.  14)  (1987). 


 268  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860  (para.  34),  citing  47  C.  F.  R.   
 1.1113(  c). 
 269  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860  (para.  35). 


 270  Teledesic  Comments  at  20-  22. 
 271  CTIA  Comments  at  2-  3. 
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 118.  Discussion.  We  reject  the  proposal  in  the  Notice  to  hold  in  abeyance  applications  filed  before  service  rules  are  adopted  until  the  Commission  adopts  such  rules.  As  we  noted  above 
 in  the  context  of  adopting  default  service  rules  for  NGSO-  like  satellite  system  applications,  SIA  and  Intelsat  argue  that  it  is  not  necessary  to  develop  service  rules  for  each  new  satellite  service, 
 and  recommend  adopting  uniform  service  rules  for  future  satellite  services.  272  We  agree.  Consequently,  we  adopt  default  service  rules  as  suggested  by  SIA  and  Intelsat  for  GSO-  like 
 satellite  system  applications.  In  light  of  these  default  rules,  we  will  be  able  to  act  on  applications  as  they  are  filed  and  therefore  need  not  consider  further  the  issue  of  holding  applications  in 
 abeyance  pending  final  service  rules. 
 119.  None  of  the  commenters  in  this  proceeding  propose  specific  default  service  rules.  We  will  apply  the  two-  degree-  spacing  requirements  that  we  currently  apply  to  GSO-  like  satellites 
 in  the  C-  band,  Ku-  band,  and  Ka-  band  satellites  to  GSO-  like  proposed  satellites  in  different  frequency  bands.  273  Specifically,  we  will  apply  the  requirements  set  forth  in  Appendix  C.  By 
 applying  these  requirements,  we  can  be  assured  that  satellites  in  new  bands  will  be  designed  to  allow  other  satellites  to  operate  in  that  band  as  close  as  two  degrees  away.  This  decision  does  not 
 preclude  us  from  considering  other  service  rules,  or  from  adopting  other  service  rules  in  notice-and-  comment  rulemaking  proceedings.  Rather,  when  we  issue  licenses  in  new  frequency  bands 
 that  comply  with  our  two-  degree-  spacing  requirements,  we  will  do  so  subject  to  any  band-  specific  service  rules,  or  rules  for  earth  station  coordination  in  shared  bands,  that  we  may  adopt  in  the 
 future. 
 120.  In  addition,  as  we  did  with  respect  to  NGSO-  like  satellite  licenses,  we  will  require  GSO-  like  satellite  licensees  to  comply  with  applicable  ITU  requirements  when  we  issue  a  license 
 before  we  adopt  frequency-  band-  specific  service  rules.  274  We  will  also  require  GSO-  like  satellite  licensees  operating  in  bands  shared  with  other  commercial  operations  to  communicate  only  with 
 earth  stations  that  have  been  coordinated  pursuant  to  Section  25.203.  Finally,  we  will  coordinate  with  NTIA  regarding  the  operations  of  GSO-  like  satellite  licensees  operating  in  bands  shared  by 
 Government  and  non-  Government  uses. 
 121.  Establishing  default  service  rules  based  on  our  two-  degree-  spacing  policy  provides  an  additional  benefit  by  ensuring  opportunities  for  competitive  entry  by  GSO-  like  satellite 
 operators.  In  addition,  granting  licenses  before  we  adopt  final  service  rules  should  allow  licensees  to  meet  their  ITU  bringing-  into-  use  dates.  Furthermore,  unnecessary  delay  in 
 considering  satellite  applications  is  contrary  to  the  public  interest,  as  we  explained  in  the  Space  Station  Reform  NPRM.  275  Accordingly,  we  will  not  adopt  CTIA's  proposal  to  preclude 
 consideration  of  satellite  applications  before  we  adopt  service-  band-  specific  service  rules. 
 e.  Frequency  Allocations 


 272  Section  V.  D.  1.,  citing  SIA  Comments  at  13-  14;  Intelsat  Comments  at  9. 
 273  We  note,  however,  that  the  power  flux  density  (PFD)  limits  applicable  to  the  C-  band,  Ku-band, 
 and  Ka-  band  are  not  included  in  our  default  service  rules  for  GSO-  like  satellites.  Instead,  licensees  will  be  required  to  comply  with  the  applicable  PFD  limits  established  in  the  ITU  Radio  Regulations  for  the 


 frequency  band  in  which  they  plan  to  operate. 
 274  Section  V.  D.  1. 


 275  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3852-  53  (paras.  12-  14). 
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 122.  Background.  In  cases  where  a  party  files  a  satellite  application,  and  there  is  no  international  or  domestic  frequency  allocation  for  the  proposed  service,  the  Commission  proposed 
 allowing  the  application  to  remain  pending  until  the  frequencies  were  allocated.  276  In  the  past,  the  Commission  used  the  satellite  system  applications  received  in  processing  rounds  as  justification 
 to  pursue  an  international  allocation  for  the  service.  In  the  Notice,  the  Commission  expected  to  continue  this  practice.  277 


 123.  Discussion.  CTIA  opposes  accepting  satellite  applications  before  frequency  allocations  are  adopted.  278  Teledesic  maintains  that  the  Commission  could  decide  on  a  case-  by-case 
 basis  to  hold  applications  in  abeyance  pending  an  international  frequency  allocation.  279 
 124.  Because  it  can  take  several  years  for  the  ITU  to  adopt  an  international  frequency  allocation,  we  will  dismiss  GSO-  like  satellite  applications  without  prejudice  as  premature  if  the 
 application  is  filed  before  the  ITU  adopts  a  necessary  frequency  allocation.  In  this  Order  above,  we  also  decided  to  dismiss  NGSO-  like  satellite  applications  filed  before  a  needed  international 
 frequency  allocation.  280  In  the  past,  the  Commission  has  accepted  applications  before  needed  international  frequency  allocations  were  adopted  so  that  it  could  demonstrate  that  the  frequency 
 allocation  is  needed.  We  conclude  here  that  a  petition  for  rulemaking  to  amend  the  Table  of  Frequency  Allocations  281  can  serve  the  same  purpose.  282  Furthermore,  when  an  applicant  files  its 
 application  years  before  it  will  be  possible  to  provide  service,  it  is  likely  that  the  application  may  be  a  "place  holder."  Accordingly,  we  will  dismiss  satellite  applications  without  prejudice  as 
 premature  if  the  application  is  filed  before  the  ITU  adopts  a  necessary  international  frequency  allocation.  We  will,  however,  consider  applications  filed  after  the  ITU  adopts  an  international 
 frequency  allocation  but  before  the  Commission  adopts  a  domestic  allocation.  We  will  consider  such  applications  only  on  a  non-  conforming,  non-  harmful  interference  basis  to  facilities  operating 
 consistent  with  the  Table  of  Frequency  Allocations.  283  In  addition,  parties  seeking  authority  to  operate  on  a  non-  conforming  basis  must  request  a  waiver  of  Section  2.  106  of  the  Commission's 
 rules,  284  and  must  demonstrate  good  cause  for  that  waiver.  285 


 276  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860  (para.  37). 
 277  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860  (para.  37). 
 278  CTIA  Comments  at  2-  3. 
 279  Teledesic  Comments  at  17. 
 280  Section  V.  D.  1. 
 281  47  C.  F.  R.    2.106. 
 282  Although  we  will  no  longer  accept  satellite  applications  before  an  international  frequency 
 allocation  is  adopted,  we  will  submit  advance  notice  publications  to  the  ITU  on  behalf  of  U.  S.  entities  before  an  international  frequency  allocation  is  adopted,  provided  that  the  entity  agrees  to  pay  all  ITU  cost 


 recovery  fees.  Preparing  an  advance  publication  will  not  give  a  party  any  standing  in  any  queue. 
 283  In  the  event  that  the  Commission  later  adopts  a  frequency  allocation,  any  entity  operating 
 on  a  non-  conforming,  non-  harmful  interference  basis  will  be  required  to  come  into  compliance  with  the  rules  governing  that  allocation. 


 284  47  C.  F.  R.    2.106. 
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 f.  Feeder  Links  and  Inter-  Satellite  Links 
 125.  Background.  In  the  Notice,  the  Commission  observed  that  some  MSS  services  use  feeder  links,  which  are  radio  links  that  transmit  a  user's  messages  in  both  directions  between  the 
 system's  satellites  and  the  gateway  earth  station  that  connects  the  MSS  network  with  the  public  switched  telephone  network.  286  Other  satellite  services  employ  inter-  satellite  service  links,  by 
 which  satellites  in  a  constellation  may  communicate  with  each  other.  287  The  Commission  proposed  using  the  first-  come,  first-  served  procedure  for  applications  for  feeder  links  or  inter-satellite 
 links,  and  considering  service  link  requests  separately  from  requests  for  feeder  links  or  intersatellite  links.  288  The  Commission  recognized  that  this  could  result  in  granting  service  band 
 authority  and  feeder  link  authority  to  different  parties,  but  reasoned  that  applicants  that  are  not  authorized  to  use  the  feeder  link  frequencies  they  requested  can  apply  for  authority  to  operate  in 
 other  feeder  link  frequencies.  289 
 126.  Discussion.  SES  Americom  argues  that  considering  feeder  links  and  intersatellite  links  separately  from  service  link  requests  would  increase  delay  because  the  licensee  could  not 
 proceed  with  its  business  plan  until  it  receives  all  the  authority  it  requests.  290  SES  Americom  is  also  concerned  that  considering  these  requests  separately  might  prevent  an  applicant  from 
 obtaining  all  the  authority  it  requests.  291 
 127.  We  will  consider  requests  for  service  link  authority  separately  from  feeder  link  and  intersatellite  link  requests.  292  SES  Americom  is  mistaken  in  assuming  that  separate  processes  for 
 service  link,  feeder  link,  and  intersatellite  link  requests  would  not  allow  us  to  issue  satellite  licenses  faster  than  we  could  in  a  processing  round.  This  is  because,  as  we  explained  in  the 
 Notice,  the  current  procedure  is  particularly  slow  when  it  is  used  to  consider  feeder  link  and  intersatellite  link  requests.  293  Because  both  the  modified  processing  round  approach  and  the  first- 


 285  See  WAIT  Radio  v.  FCC,  418  F.  2d  1153  (D.  C.  Cir.,  1969);  Northeast  Cellular  Telephone 
 Co.  v.  FCC,  897  F.  2d  1164  (D.  C.  Cir.,  1990). 
 286  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860-  61  (para.  38),  citing  2  GHz  Order,  15 
 FCC  Rcd  at  13156  (para.  68). 
 287  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860-  61  (para.  38),  citing  2  GHz  Order,  15 
 FCC  Rcd  at  13156  (para.  68);  PanAmSat  Licensee  Corp.  Application  for  Authority  to  Construct,  Launch,  and  Operate  a  Ka-  Band  Communications  Satellite  System  in  the  Fixed-  Satellite  Service  at  Orbital  Locations  58 


 W.  L.  and  125  W.  L.,  Memorandum  Opinion  and  Order,  16  FCC  Rcd  11534,  11535  (para.  4)  (2001)  (PanAmSat  Ka-  band  License  Cancellation  Review  Order). 


 288  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860-  61  (para.  38). 
 289  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3861  (para.  39). 
 290  SES  Americom  Comments  at  7-  8. 
 291  SES  Americom  Comments  at  8. 
 292  Although  we  will  consider  these  requests  separately,  we  will  allow  applicants  to  include 
 service  link  requests  and  feeder  link  or  intersatellite  link  requests  in  the  same  application. 
 293  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3853-  54  (paras.  15-  18). 
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 come,  first-  served  approach  are  faster  than  the  current  procedure,  considering  feeder  link  and  intersatellite  link  requests  separately  from  service  link  requests  will  eliminate  substantial  delay  in 
 service  to  the  public.  Moreover,  under  the  single  queue  approach  we  adopt  above,  we  will  begin  our  consideration  of  a  service  link  request  and  its  associated  feeder  link  or  intersatellite  link 
 request  at  the  same  time.  Thus,  it  is  not  likely  that  there  will  be  a  long  time  between  our  action  on  the  service  link  request  and  our  action  on  the  feeder  link  or  intersatellite  link  request. 
 Conversely,  on  occasion,  there  have  been  long  periods  of  time  between  service  link  authorizations  and  feeder  link  or  intersatellite  link  authorizations  under  our  current  procedures.  294 
 In  any  case,  we  will  continue  to  give  licensees  30  days  to  decide  whether  to  accept  the  license. 
 128.  We  disagree  with  SES  Americom  that  considering  feeder  link  and  intersatellite  link  requests  separately  from  service  link  requests,  by  itself,  might  prevent  an  applicant  from 
 obtaining  all  the  authority  it  requests.  In  cases  where  both  service  link  and  feeder  link  requests  are  considered  in  modified  processing  rounds,  all  qualified  applicants  will  get  some  service  link 
 authority  and  some  feeder  link  authority.  In  cases  where  we  consider  a  feeder  link  request  pursuant  to  the  first-  come,  first-  served  procedure,  we  would  grant  the  request  unless  the  applicant 
 is  not  qualified,  or  we  previously  granted  that  authority  to  another  applicant.  Trying  to  combine  our  review  of  service  link  requests  together  with  our  review  of  feeder  link  and  intersatellite  link 
 requests  would  not  have  any  effect  on  our  substantive  decisions  regarding  each  satellite  application.  It  would  make  the  analysis  more  complex  and  lengthen  the  procedure,  however. 


 129.  In  addition,  even  if  considering  feeder  link  and  intersatellite  link  requests  separately  from  service  link  requests  prevented  an  applicant  from  obtaining  all  the  authority  it  requests,  this 
 would  not  warrant  rejection  of  the  Commission's  proposal.  295  MSS  systems  have  a  great  deal  of  flexibility.  In  cases  where  an  applicant  is  not  granted  the  specific  feeder  link  or  intersatellite  link 
 authority  it  requests,  the  licensee  will  often  still  be  able  to  satisfy  its  requirements  by  applying  for  other  frequencies.  Alternatively,  in  cases  where  the  licensee's  MSS  satellite  system  employs  a 
 GSO  satellite,  there  are  usually  several  orbital  positions  available  at  which  a  GSO  satellite  could  communicate  with  the  MSS  system's  gateway  earth  stations.  This  gives  the  licensee  additional 
 flexibility  in  provisioning  its  feeder  links.  In  any  case,  as  a  result  of  eliminating  the  anti-trafficking  rule  for  satellites,  296  an  applicant  will  be  able  to  negotiate  with  other  licensees  to 
 purchase  feeder  link  or  intersatellite  link  authority. 
 130.  Furthermore,  we  must  consider  service  link  requests  separately  from  feeder  link  and  intersatellite  link  requests  in  cases  in  which  the  service  link  application  may  not  fall  under  the 
 same  classification  as  its  associated  feeder  link  or  intersatellite  link  request.  In  such  cases,  considering  service  link  and  feeder  link  requests  together  would  require  the  Commission  to 
 consider  part  of  an  application  pursuant  to  a  procedure  that  is  not  well  suited  to  that  request.  By  considering  service  link  requests  separately  from  feeder  link  or  intersatellite  link  requests,  we  can 
 ensure  that  this  situation  will  not  arise. 
 294  See,  e.  g.,  GE  Americom  Communications  Galaxy  Inc.  Application  for  Authority  to 
 Construct,  Launch,  and  Operate  a  Ka-  band  Satellite  System  in  the  Fixed  Satellite  Service,  Order  and  Authorization,  12  FCC  Rcd  6475  (Int'l  Bur.,  1997);  GE  American  Communications,  Inc.,  Application  for 


 Authority  to  Construct,  Launch,  and  Operate  a  Ka-  band  Satellite  System  in  the  Fixed-  Satellite  Service,  Order  and  Authorization,  16  FCC  Rcd  2461  (Int'l  Bur.,  2001)  (about  three-  and-  a-  half  years  between  service  band 
 authorizations  and  intersatellite  link  authorizations  in  first  Ka-  band  processing  round). 
 295  SES  Americom  Comments  at  8. 


 296  Section  VII.  D. 
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 131.  Accordingly,  our  procedures  for  applications  for  feeder  link  or  intersatellite  link  authority  will  be  consistent  with  our  procedures  for  the  associated  service  link  application.  In 
 cases  where  the  proposed  service  link  is  a  GSO-  like  service,  the  first-  come  first-  served  procedure  set  forth  in  this  section  of  the  Order  will  apply.  Examples  of  these  applications  are  requests  for 
 an  intersatellite  link  between  two  GSO  satellites,  and  requests  for  a  feeder  link  between  a  fixed  earth  station  and  a  GSO  satellite.  In  all  other  cases,  where  the  associated  service  link  application 
 proposes  an  NGSO-  like  satellite  system,  the  modified  processing  round  procedure  will  apply.  297  We  also  note  that  licensees  will  be  allowed  30  days  to  decide  whether  to  accept  any  license  grant. 


 2.  Selection  Among  Mutually  Exclusive  Applications 
 132.  Background.  In  the  Notice,  the  Commission  pointed  out  that  a  first-  come,  first-served  procedure  requires  some  method  for  deciding  among  two  or  more  mutually  exclusive 
 space  station  applications  that  are  filed  on  the  same  day.  298  As  a  first-  tier  selection  mechanism,  the  Commission  proposed  mandatory  electronic  filing  for  satellite  applications,  and  considering 
 applications  in  the  chronological  order  that  they  are  filed,  to  the  nearest  thousandth  of  a  second,  regardless  of  whether  it  receives  the  application  after  the  close  of  business  or  during  a 
 weekend.  299  As  a  second-  tier  selection  mechanism,  in  the  rare  event  that  two  applications  requesting  the  same  frequencies  are  filed  at  the  same  instant,  the  Commission  proposed  dividing 
 the  available  spectrum  by  the  number  of  mutually  exclusive  applicants.  300  The  Commission  noted  that  it  adopted  this  approach  in  the  2  GHz  Order.  301 


 133.  Discussion.  Teledesic  supports  basing  the  filing  status  of  applications  on  the  time  each  application  is  filed,  measured  to  the  nearest  thousandth  of  a  second,  because  it  expects  this 
 will  eliminate  cases  of  mutually  exclusivity.  302  Teledesic  also  argues  that  the  Commission's  proposed  sharing  method  is  acceptable,  provided  that  there  are  few  cases  in  which  mutually 
 exclusive  applications  must  be  considered  together.  303 


 297  We  discuss  milestones  for  satellite  systems  using  feeder  links  or  intersatellite  links  in 
 Section  VII.  C.  7.  below. 
 298  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3862-  63  (para.  45). 


 299  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3862-  63  (para.  45).  As  discussed  below, 
 we  expect  to  manage  this  process  by  adopting  our  mandatory  electronic  filing  proposal  in  this  Order. 
 300  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3863  (para.  46). 


 301  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3863  (para.  46),  citing  2  GHz  Order,  15 
 FCC  Rcd  at  16138  (para.  16). 
 302  Teledesic  Comments  at  22;  Teledesic  Reply  at  21-  22. 


 303  Teledesic  Comments  at  23.  In  the  event  that  the  Commission  adopts  any  procedure  in 
 which  a  large  number  of  mutually  exclusive  applications  must  be  considered  together,  Teledesic  opposes  band  segmentation,  claiming  that  there  are  other  sharing  methods  that  make  more  use  of  the  available 


 spectrum.  Teledesic  does  not  identify  those  other  methods,  however.  Teledesic  Comments  at  22-  24.  Teledesic  argues  further  that,  in  the  event  that  we  adopt  a  procedure  that  allows  for  mutually  exclusive 
 applications  to  be  considered  together,  we  should  allow  negotiations  and  not  limit  them  to  a  60-  day  period.  Teledesic  Comments  at  23. 
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 134.  We  adopt  our  proposal  to  base  the  filing  status  of  satellite  applications  on  the  time  each  application  is  filed  measured  to  the  nearest  thousandth  of  a  second.  As  Teledesic  points  out, 
 this  will  limit  the  number  of  applications  that  must  be  considered  together,  and  so  should  enable  us  to  expedite  our  review  of  satellite  applications  substantially.  Also,  as  we  explained  above, 
 there  is  nothing  in  the  Communications  Act  that  precludes  us  from  defining  mutual  exclusivity  narrowly,  to  facilitate  the  orderly  administration  of  applications.  304 


 135.  We  also  adopt  our  proposed  second-  tier  selection  mechanism  of  dividing  the  spectrum  at  a  particular  orbit  location  evenly  among  the  applicants  in  cases  where  two  or  more 
 applicants  file  mutually  exclusive  applications  at  the  same  thousandth  of  a  second.  Because  there  should  be  very  few  cases  in  which  multiple  applicants  file  at  the  same  thousandth  of  a  second,  if 
 any,  we  do  not  envision  a  situation  where  a  GSO-  like  satellite  applicant  will  be  authorized  to  use  less  than  half  the  spectrum  at  a  given  orbit  location.  305  In  those  rare  cases  in  which  a  licensee  is 
 authorized  to  use  only  half  the  spectrum  at  a  given  orbit  location,  it  may  be  possible  for  both  licensees  to  provide  a  viable  service  with  that  spectrum.  Further,  by  eliminating  the  anti-trafficking 
 rule  for  satellites,  licensees  will  be  able  to  purchase  each  other's  spectrum  rights  and  responsibilities. 


 3.  Amendments 
 136.  Background.  In  the  Space  Station  Reform  NPRM,  the  Commission  noted  that  its  first-  come,  first-  served  procedure  for  broadcast  license  applications  included  a  provision  that 
 amendments  to  an  application  that  create  a  conflict  with  any  other  application  filed  prior  to  the  amendment  would  cause  the  underlying  application  to  lose  its  "status"  relative  to  applications 
 behind  it  in  the  queue.  306  The  Commission  observed  further  that  a  "major"  amendment  to  a  satellite  application  in  a  processing  round  is  treated  like  a  new  application,  and  so  a  major 
 amendment  filed  after  a  cut-  off  date  causes  the  underlying  application  to  be  removed  from  the  processing  round.  307  Generally,  a  "major  amendment"  is  one  that  increases  the  potential  for 
 interference  to  other  applicants  or  licensees.  308  The  Commission  proposed  revising  its  satellite  application  amendment  rules  so  that  a  major  amendment  to  a  satellite  application  in  a  first-  come, 
 first-  served  procedure  would  cause  the  underlying  application  to  be  moved  to  the  end  of  the  queue.  309 


 304  Section  VI.  D.  9.b.  above,  citing,  e.  g.,  Ashbacker,  326  U.  S.  at  333  n.  9. 
 305  In  fact,  the  only  time  we  think  that  the  probability  of  two  or  more  applications  file  at  the 
 same  thousandth  of  a  second  is  more  than  de  minimis  is  the  time  that  the  rule  revisions  we  adopt  in  this  Order  take  effect.  We  adopt  safeguards  for  this  possibility  in  Section  VII.  E.  below. 


 306  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3866  (para.  55),  citing  TV  and  FM 
 Broadcast  Order,  50  Fed.  Reg.  at  19941  (para.  31). 
 307  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3866-  67  (para.  56),  citing  47  C.  F.  R.   
 25.  116. 
 308  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3866-  67  (para.  56),  citing  47  C.  F.  R.   
 25.  116(  b)(  1). 
 309  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3866-  67  (para.  56). 
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 137.  Furthermore,  to  prevent  applicants  from  bypassing  this  prohibition  by  merging  with  another  company  or  transferring  control  of  its  business,  the  Commission  proposed  treating  such 
 transactions  as  major  amendments  that  cause  any  pending  applications  filed  by  that  applicant  to  be  treated  as  a  new  application  for  purposes  of  determining  processing  order.  In  other  words,  the 
 Commission  did  not  propose  a  blanket  prohibition  on  such  transfers  that  otherwise  meet  the  requirements  of  our  rules,  but  rather  proposed  moving  the  pending  applications  of  the  parties  in 
 the  transaction  to  the  end  of  the  relevant  queue.  310  We  did  not  expect  adoption  of  this  proposal  to  deter  a  significant  number  of  legitimate  business  transactions.  This  was  because,  in  most  cases  in 
 which  the  parties  to  the  transaction  have  assets  or  provide  services,  the  effects  of  the  transaction  on  their  pending  satellite  applications  would  appear  to  be  a  small  consideration,  especially  given 
 that  they  would  have  a  limited  number  of  pending  applications  under  our  proposed  rules.  311 
 138.  Discussion.  Teledesic  supports  the  Commission's  proposal  for  considering  amendments  to  pending  applications  in  a  first-  come,  first-  served  procedure.  312  SES  Americom 
 and  Teledesic  assert  that  treating  a  transfer  of  control  application  as  a  major  amendment  with  respect  to  pending  satellite  license  applications  could  deter  applicants  from  entering  into 
 legitimate  business  transactions,  however.  313 
 139.  Commenters  focus  their  attention  on  the  treatment  of  transfers  of  control  as  a  major  amendment,  but  do  not  specifically  oppose  the  Commission's  proposal  to  move  an  application  to 
 the  end  of  the  queue  when  the  applicant  files  a  major  amendment  to  that  application.  Accordingly,  we  adopt  this  proposal.  We  will  treat  major  amendments  to  GSO-  like  satellite 
 license  applications  as  newly  filed  applications.  Major  amendments  will  cause  the  license  application  to  be  moved  to  the  end  of  the  queue. 


 140.  Transfers  of  control  are  treated  as  major  amendments  under  our  current  rules.  314  Thus,  in  effect,  SES  Americom  and  Teledesic  are  requesting  us  to  revise  our  rules  so  that  transfer 
 of  control  applications  are  no  longer  considered  major  amendments.  We  adopt  the  commenters'  recommendation.  The  Commission  did  not  intend  the  first-  come,  first-  served  procedure  to  deter 
 legitimate  business  transactions.  Accordingly,  in  light  of  the  evidence  in  the  record  that  continuing  to  treat  transfers  of  control  as  major  amendments  in  a  first-  come,  first-  served 
 procedure  might  deter  legitimate  business  transactions,  we  revise  this  rule.  We  also  revise  this  rule  for  NGSO-  like  satellite  system  applications  considered  in  modified  processing  rounds.  We 
 see  no  reason  to  treat  transfers  of  control  differently  in  the  two  licensing  procedures  we  adopt  in  this  Order.  315 


 4.  Modifications 
 310  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3865-  66  (para.  53). 
 311  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3865-  66  (para.  53). 
 312  Teledesic  Comments  at  24. 
 313  SES  Americom  Comments  at  5;  Teledesic  Comments  at  30. 
 314  47  C.  F.  R.    25.  116(  b)(  3). 
 315  In  the  event  of  a  merger,  the  limits  on  pending  applications  and  unbuilt  satellites  will 
 apply  to  the  new  company,  and  it  will  be  required  to  withdraw  applications  to  the  extent  that  it  exceeds  those  limits.  See  Section  VII.  E.  3. 
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 141.  Background.  Modifications  are  changes  to  a  licensee's  operating  authority  after  the  license  has  been  granted.  In  the  Notice,  the  Commission  proposed  retaining  our  current 
 modification  procedure  as  part  of  our  first-  come,  first-  served  approach,  with  a  few  exceptions.  316  First,  in  those  rare  cases  in  which  two  or  more  applications  are  submitted  at  the  same  thousandth 
 of  a  second,  and  we  divide  the  spectrum  at  a  particular  orbit  location  evenly  among  the  applicants  pursuant  to  the  second-  tier  selection  mechanism,  317  the  Commission  proposed  that  it  would  not 
 consider  modification  requests  seeking  to  increase  the  licensee's  bandwidth.  318  Second,  for  modification  requests  such  as  relocating  a  GSO  satellite  to  a  new  orbital  location,  or  to  add 
 additional  operating  spectrum,  the  Commission  would  place  those  modification  requests  behind  other  applications  with  priority  in  the  queue,  and  behind  any  other  previously  filed  conflicting 
 application.  319 
 142.  Discussion.  The  Commission's  proposal  for  considering  modification  requests  in  a  first-  come,  first-  served  procedure  is  in  accord  with  Teledesic's  single-  queue  proposal  that  we 
 adopted  above.  320  Modification  requests  can  be  placed  in  the  queue  together  with  new  license  applications,  and  granted  if  they  are  not  inconsistent  with  any  previously  granted  license  or 
 modification. 
 143.  Teledesic  argues,  however,  that  there  are  some  license  modifications  that  do  not  increase  the  likelihood  of  interference,  and  that  the  consideration  of  such  modification  requests 
 should  not  be  delayed  pending  considerations  of  other  applications.  321  Teledesic  recommends  considering  modification  requests  outside  of  any  queue  if  they  do  not  "degrade"  the  interference 
 environment,  and  classifying  such  requests  as  "minor."  Teledesic  recommends  classifying  other  modification  requests  as  "major"  and  considering  them  only  after  consideration  of  previously 
 filed  applications.  322  Teledesic  recommends  making  the  determination  between  major  and  minor  modification  requests  on  a  case-  by-  case  basis.  323 


 144.  We  do  not  adopt  Teledesic's  proposal  at  this  time.  The  first-  come,  first-  served  procedure  will  enable  the  Commission  to  act  on  new  satellite  license  applications  more  quickly 


 316  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3867  (para.  58). 
 317  Section  VI.  E.  2.  above. 
 318  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3867  (para.  57). 
 319  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3867  (para.  58). 
 320  Section  VI.  E.  1.  a. 
 321  Teledesic  Comments  at  25-  26.  According  to  Teledesic,  "current  law"  distinguishes 
 between  major  and  minor  modifications  based  on  whether  the  modification  increases  or  decreases  the  likelihood  of  interference.  Teledesic  Comments  at  24-  25.  Teledesic  is  mistaken.  Section  25.  117(  d)  does 


 not  distinguish  between  major  and  minor  modifications  for  space  station  licenses.  This  mistake  does  not,  however,  preclude  us  from  considering  Teledesic's  proposal. 


 322  Teledesic  Comments  at  26-  27. 
 323  Teledesic  Comments  at  27. 
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 than  is  now  possible,  324  and  should  expedite  our  review  of  modification  requests  as  well.  Further,  deciding  whether  a  proposed  modification  increases  the  potential  for  interference  often  requires  a 
 complex  analysis.  Unless  we  can  categorically  classify  some  modifications  as  "minor,"  conducting  such  a  complex  case-  by-  case  analysis  of  modification  requests  as  they  are  filed  will 
 delay  action  on  other  applications  in  the  queue.  325 
 5.  Hybrids 
 145.  Background.  Hybrid  satellites  are  satellites  designed  to  operate  in  more  than  one  frequency  band.  326  We  try  to  encourage  deployment  of  hybrid  satellites  because  there  are  cost 
 benefits  in  implementing  several  service  bands  on  a  single  space  platform.  327  In  the  Notice,  when  the  Commission  was  contemplating  a  first-  come,  first-  served  procedure  with  a  separate  queue  for 
 each  orbit  location  and  each  band,  the  Commission  proposed  considering  hybrid  applications  as  follows.  In  cases  where  the  applicant  is  first  in  the  queue  in  both  frequency  bands,  the 
 Commission  would  simply  grant  the  application.  In  cases  where  the  applicant  is  first  in  the  queue  in  only  one  frequency  band,  the  Commission  proposed  to  grant  authority  to  operate  in  that  band, 
 and  deny  authority  to  operate  in  the  other  band.  328  In  cases  where  one  of  the  frequency  bands  has  not  been  allocated  for  satellite  service,  or  where  the  Commission  has  adopted  service  rules  for 
 only  one  of  the  bands,  the  Commission  proposed  granting  authority  to  operate  in  one  frequency  band.  The  application  would  remain  pending  with  respect  to  the  band  without  the  international  or 
 domestic  frequency  allocation  or  service  rules,  consistent  with  the  Commission's  proposed  first-come,  first-  served  procedure  for  single  band  satellites.  329 


 146.  Discussion.  Hughes  contends  that  a  first-  come,  first-  served  procedure  would  discourage  hybrid  satellites,  assuming  that  two  separate  queues  would  seldom  be  aligned.  330  SES 
 Americom  argues  that  a  hybrid  satellite  applicant  could  be  foreclosed  from  using  a  "critical  frequency  band"  if  another  applicant  filed  for  that  band  a  few  seconds  before  the  hybrid 
 applicant.  331  Teledesic  contends  that  adopting  its  proposal  to  create  a  first-  come,  first-  served  procedure  with  one  queue  would  simplify  treatment  of  hybrid  satellite  applications  more  than  the 
 Commission's  proposed  first-  come,  first-  served  procedure.  332 
 324  Section  VI.  D.  2.  above.  See  also  Teledesic  Comments  at  27-  28. 


 325  Some  parties  have  proposed  such  a  categorization  for  space  station  modifications.  We 
 will  consider  those  proposals  in  a  future  Order. 
 326  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3868  (para.  59). 


 327  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3868  (para.  59),  citing  Rulemaking  to 
 Amend  Parts  1,  2,  21,  and  25  of  the  Commissions  Rules  to  Redesignate  the  27.  5-  29.5  GHz  Frequency  Band,  to  Reallocate  the  29.5-  30.0  GHz  Frequency  Band,  to  Establish  Rules  and  Policies  for  Local 


 Multipoint  Distribution  Service  and  for  Fixed  Satellite  Services,  Third  Report  and  Order,  CC  Docket  No.  92-  297,  12  FCC  Rcd  22310,  22322  (para.  31)  (1997)  (Ka-  Band  Service  Rules  Order). 


 328  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3868  (para.  60). 
 329  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3868  (para.  61). 
 330  Hughes  Comments  at  31. 
 331  SES  Americom  Reply  at  9. 
 332  Teledesic  Comments  at  17. 
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 147.  In  this  Order  above,  we  adopt  a  single  queue  to  implement  our  first-  come,  first-served  approach.  333  We  explain  that  a  single  queue  eliminates  the  issues  raised  by  maintaining  a 
 queue  for  each  orbit  location,  and  allows  us  to  expedite  our  process  by  reviewing  applications  in  different  bands  at  the  same  time.  Consistent  with  that  decision,  we  will  consider  together  both 
 frequency  band  requests  in  a  hybrid  satellite  application  for  purposes  of  the  first-  come,  first-served  procedure.  334  Under  this  approach,  when  an  applicant  files  a  hybrid  application,  and  that 
 application  reaches  the  head  of  the  queue,  we  will  grant  it  if  the  applicant  is  qualified,  and  granting  authority  to  operate  in  that  band  would  not  conflict  with  any  previously  filed  license.  In 
 cases  where  the  applicant  meets  these  standards  for  both  requested  frequency  bands,  335  we  will  authorize  the  requested  hybrid  satellite.  In  other  cases,  we  may  authorize  the  applicant  to  operate 
 in  only  one  of  its  requested  frequency  bands.  Also,  as  we  proposed  in  the  Notice,  our  treatment  of  hybrid  satellite  applications  in  which  we  have  not  adopted  a  frequency  allocation  or  service 
 rules  for  one  or  both  of  the  bands  will  be  consistent  with  the  procedure  we  adopted  above  for  single  band  satellites.  336  In  other  words,  if  we  have  not  adopted  service  rules  for  one  frequency 
 band  in  a  hybrid  satellite  application,  we  will  authorize  the  applicant  to  operate  in  that  band  if  it  shows  that  it  will  be  2  compliant,  and  subject  to  any  future  service  rules  we  may  adopt.  337  If  we 
 have  not  adopted  a  domestic  frequency  allocation  in  one  band,  we  will  dismiss  the  application  in  part  with  respect  to  that  band,  or  grant  operating  authority  on  a  non-  conforming,  non-  interference 
 basis.  338 
 148.  Finally,  we  conclude  that  SES  Americom's  concern,  that  some  hybrid  satellite  applicants  may  not  receive  authority  to  operate  in  all  the  frequency  bands  they  request,  does  not 
 justify  rejection  of  the  first-  come,  first-  served  approach,  either  generally  or  for  hybrid  satellite  applications.  Satellite  operators  under  the  current  procedure  may  not  necessarily  be  awarded  all 
 of  the  spectrum  requested.  339  Moreover,  eliminating  the  anti-  trafficking  rule  will  allow  a  licensee  to  purchase  spectrum  rights  from  another  licensee  in  a  number  of  cases,  which  would  allow  it  to 
 construct,  launch,  and  operate  its  proposed  hybrid  satellite.  Finally,  we  emphasize  that  one  of  the 


 333  Section  VI.  E.  1.  a. 
 334  An  applicant  filing  a  hybrid  satellite  applications  will  still  be  required  to  pay  the  fee  for 
 one  satellite  application,  however. 
 335  As  we  did  in  the  Space  Station  Reform  NPRM,  we  assume  that  the  application  is 
 acceptable  for  filing,  and  seeks  authority  to  operate  in  two  frequency  bands  to  simplify  this  discussion.  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3868  n.  71. 


 336  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3868  (para.  61). 
 337  Section  VI.  E.  1.  d. 
 338  Section  VI.  E.  1.  e. 
 339  Application  of  Columbia  Communications  Corporation  for  Modification  of  Authorization 
 to  Permit  Operation  of  Ku-  band  Satellite  Capacity  on  the  Columbia  515  Satellite  Located  at  37.  7  West  Longitude,  Memorandum  Opinion  and  Order,  16  FCC  Rcd  12480  (Int'l  Bur.  2001);  Loral  Space  & 


 Communication  Ltd.,  f/  k/  a  Orion  Atlantic,  L.  P.,  for  Authority  to  Launch  and  Operate  a  Hybrid  Ku-  band/  C-band  Satellite  System  at  the  37.  5  W.  L.  Orbit  Location,  Memorandum  Opinion  and  Order,  16  FCC  Rcd 
 12490  (Int'l  Bur.  2001);  Columbia  Communications  Corporation,  Memorandum  Opinion  and  Order,  15  FCC  Rcd  15566,  15571  (para.  10)  (Int'l  Bur.  2000)  (First  Columbia  Milestone  Order). 
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 overriding  policy  goals  of  this  proceeding  is  to  enable  customers  to  get  satellite  service  more  quickly  than  is  usually  possible  under  our  current  procedure.  Although  we  recognize  that  there 
 are  cost  benefits  in  hybrid  satellites,  340  those  benefits  do  not  outweigh  this  overriding  policy  goal  of  expediting  service  to  the  public.  341 


 6.  Filing  Window 
 149.  Background.  In  the  Notice,  the  Commission  noted  that  its  procedure  for  broadcast  licenses  included  an  initial  30-  day  filing  window.  All  applications  filed  during  that  window  were 
 considered  together  on  a  consolidated  basis,  while  the  first-  come,  first-  served  procedure  applied  only  to  applications  filed  after  the  close  of  the  window.  342  We  did  not  include  a  filing  window  in 
 our  first-  come,  first-  served  proposal  for  satellite  license  applications.  343 
 150.  Discussion.  Teledesic  and  Intelsat  supports  the  Commission's  proposal.  344  On  the  other  hand,  Hughes  argues  that,  whenever  an  application  is  filed,  the  Commission  must  give  other 
 parties  an  opportunity  to  file  applications  that  are  mutually  exclusive  with  the  first  application.  345  We  will  not  include  a  filing  window  in  our  first-  come,  first-  served  procedure  for  GSO-  like 
 satellites.  We  have  previously  considered  and  rejected  Hughes's  argument  that  the  Communications  Act  requires  the  Commission  to  give  applicants  an  opportunity  to  file  mutually 
 exclusive  applications.  346 


 F.  Modified  First-  Come,  First  Served  Proposal 
 151.  Background.  Intelsat  proposes  something  it  calls  the  modified  first-  come,  first-served  procedure.  347  Intelsat  intends  all  of  its  proposals  to  be  considered  together  as  a  single 
 package.  348  This  package  of  proposals  may  be  summarized  as  follows: 
 340  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3868  (para.  59),  citing  Ka-  band  Service 
 Rules  Order,  12  FCC  Rcd  at  22322  (para.  31). 
 341  When  a  satellite  operator  proposed  modifying  its  hybrid  C/  Ku-  band  satellite  license  to 
 authorize  two  single-  band  satellites,  the  Bureau  found  that  there  were  no  compelling  public  interest  considerations  weighing  against  the  modification  request  because  the  modification  would  "permit  the 


 expedited  introduction  of  Ku-  band  service  to  customers.  .  .  "  Assignment  of  Orbital  Locations  to  Space  Stations  in  the  Domestic  Fixed-  Satellite  Service,  Application  of  GE  American  Communications,  Inc.,  for 
 Modification  of  Authorization  to  Construct,  Launch,  and  Operate  a  Space  Station  in  the  Fixed-  Satellite  Service,  Memorandum  Opinion  and  Order,  14  FCC  Rcd  686,  688  (para.  7)  (Int'l  Bur.,  Sat.  and  Rad.  Div., 
 1998). 
 342  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3862  (para.  42),  citing  TV  and  FM 
 Broadcast  Order,  50  Fed.  Reg.  at  19940-  41  (paras.  28-  30). 
 343  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3862  (paras.  43-  44). 


 344  Teledesic  Comments  at  22;  Intelsat  Comments  at  13-  14. 
 345  Hughes  Comments  at  19-  20. 
 346  Section  VI.  D.  9.b.  above;  Wireless  Cable  Reconsideration  Order,  6  FCC  Rcd  at  6776 
 (paras.  61-  62). 
 347  Intelsat  Comments  at  8. 
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   Applies  only  to  new  license  applications  for  orbital  locations  and  spectrum  with  established  service  rules  and  frequency  allocations,  such  as  the  C-  band,  Ku-  band,  and 
 Ka-  band,  but  not  to  services  where  band-  segmentation  is  preferable,  such  as  MSS.  In  other  words,  Intelsat  would  not  apply  this  procedure  to  applications  for  authority  to 
 operate  in  a  frequency  band  where  needed  service  rules  or  allocations  have  not  yet  been  adopted.  349 
   Applicants  are  allowed  "partial  fungibility."  Under  this  proposal,  an  applicant  that  is  second-  in-  line  in  a  given  queue  is  permitted  to  switch  its  application  to  a  GSO  orbit 
 location  for  which  there  are  no  pending  applications.  If  two  or  more  second-  in-  line  applicants  switch  to  the  same  location,  however,  they  would  be  allowed  to  switch  back  to 
 their  originally  requested  location.  350    The  Commission  must  strenuously  enforce  milestone  obligations.  351 
   Applicants  must  provide  evidence  of  a  $10  million  bond,  payable  to  the  U.  S.  Treasury,  upon  failure  to  meet  a  milestone  or  revocation  of  a  license  for  any  other  reason.  352 
   Applicants  can  transfer  licenses  and  applications  at  cost.  353    The  Commission  must  act  on  applications  within  90  days.  354 


 152.  SES  Americom  argues  that  limiting  the  first-  come,  first-  served  proposal  to  "established  bands"  would  not  address  any  of  the  concerns  that  commenters  have  raised  about 
 potential  for  speculation  in  or  the  legal  basis  for  a  first-  come,  first-  served  procedure.  355  SES  Americom  also  questions  whether  a  satellite  service  should  be  considered  "established"  as  soon 
 as  the  Commission  adopts  service  rules  and  frequency  allocations.  356  SES  Americom  criticizes  Intelsat's  partial  fungibility  proposal  because  it  could  lead  to  multiple  applicants  switching  among 
 queues  on  an  almost  constant  basis.  357 
 153.  Discussion.  In  this  Order,  we  have  adopted  portions  of  Intelsat's  modified  first-come,  first-  served  approach.  As  Intelsat  suggests,  we  have  adopted  a  first-  come,  first-  served 
 approach  for  GSO-  like  systems  but  not  for  NGSO-  like  systems,  where  we  agree  that  a  band- 


 348  Intelsat  Comments  at  3. 
 349  Intelsat  Comments  at  9-  10. 
 350  Intelsat  Comments  at  15-  17. 
 351  Intelsat  Comments  at  19-  21. 
 352  Intelsat  Comments  at  10-  12. 
 353  Intelsat  Comments  at  17-  19. 
 354  Intelsat  Comments  at  14-  15.  See  also  Teledesic  Reply  at  24  (acting  on  applications 
 within  90  to  180  days  would  deter  speculation). 
 355  SES  Americom  Reply  at  14-  15. 


 356  SES  Americom  Reply  at  15-  16. 
 357  SES  Americom  Reply  at  17. 
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 segmentation  framework  is  more  appropriate.  We  also  agree  that  licensees  should  be  able  to  freely  transfer  licenses  and  that  we  should  strictly  enforce  milestone  conditions. 
 154.  Nevertheless,  limiting  these  reforms  to  "established"  frequency  bands  would  make  them  inapplicable  to  the  vast  majority  of  future  satellite  applications.  As  we  explained 
 previously,  we  find  that  the  first-  come,  first-  served  framework,  as  adopted  here,  will  allow  us  to  act  on  applications  involving  "new"  frequency  bands  efficiently  and  effectively.  Nor  will  we 
 adopt  Intelsat's  proposal  to  permit  second-  in-  line  applicants  to  switch  to  a  queue  for  another  GSO  orbital  location,  because  we  decided  above  not  to  maintain  separate  queues  for  each  orbit 
 location.  358  Moreover,  to  the  extent  that  Intelsat  is  in  effect  proposing  that  we  allow  applicants  to  make  major  amendments  to  their  applications  to  state  new  orbit  locations  without  moving  to  the 
 end  of  the  queue,  we  reject  this  proposal.  It  would  unreasonably  encourage  speculation  to  allow  applicants  to  select  any  orbit  location  available  at  the  time  their  application  reaches  the  head  of 
 the  queue,  rather  than  submitting  a  substantially  complete  satellite  application  specifying  an  orbit  location.  For  this  reason,  this  would  be  an  unreasonable  departure  from  the  Commission's  first-come, 
 first-  served  procedure  for  broadcast  licenses.  359  Finally,  we  consider  below  Intelsat's  proposed  bond-  posting  requirement  and  mandatory  electronic  filing  requirement. 


 G.  Fungibility  Policy 
 155.  Background.  In  Section  V.  of  this  Order  above,  we  considered  many  proposals  from  the  Notice  for  revising  the  current  processing  round  procedure.  Another  revision  proposed 
 in  the  Notice  was  to  eliminate  the  fungibility  policy.  360  In  the  Notice,  the  Commission  noted  that  it  has  historically  maintained  a  policy  of  treating  GSO  orbital  locations  as  fungible  in  the  context 
 of  processing  rounds  in  the  fixed  satellite  service  as  one  means  of  resolving  mutually  exclusive  situations  in  those  processing  rounds.  361  The  fungibility  policy  is  applied  where  it  is  not  possible 
 to  assign  to  each  participant  in  a  processing  round  the  exact  orbital  location  that  is  requested.  In  those  situations,  rather  than  institute  lengthy  proceedings  to  decide  which  of  several  applicants 
 should  be  assigned  to  a  requested  location,  we  assign  some  other  GSO  location  to  that  applicant.  362 


 156.  The  Commission  proposed  to  streamline  processing  rounds  by  eliminating  the  fungibility  policy.  363  We  observed  that  working  to  find  a  way  to  accommodate  each  applicant  as 


 358  Section  VI.  E.  1.  a.  Because  we  do  not  adopt  Intelsat's  proposals  as  a  single  package,  we 
 need  not  determine  whether  Intelsat's  proposals  would  have  enabled  us  to  act  on  satellite  applications  within  90  days  as  Intelsat  claims.  See  Intelsat  Comments  at  14-  15. 


 359  TV  and  FM  Broadcast  Order,  50  Fed.  Reg.  at  19941  (para.  31),  cited  in  Space  Station 
 Reform  NPRM,  17  FCC  Rcd  at  3866  (para.  55). 
 360  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3874-  75  (paras.  79-  81). 


 361  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3874  (para.  79),  citing  Assignment  of 
 Orbital  Locations  to  Space  Stations  in  the  Domestic  Fixed  Satellite  Service,  Memorandum  Opinion  and  Order,  84  FCC  2d  584,  601  (para.  45)  (1981)  (1980  Assignment  Order);  Separate  Systems  Order,  101  FCC 


 2d  at  1176  n.  168. 
 362  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3874  (para.  79). 


 363  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3874  (para.  80). 
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 much  as  possible  can  substantially  increase  the  time  needed  to  complete  a  processing  round.  364  We  further  observed  that  the  backlog  in  publishing  ITU  submissions  makes  this  accommodation 
 more  difficult,  because  it  is  difficult  to  determine  whether  we  are  assigning  an  applicant  to  an  orbit  location  that  has  been  encumbered  by  an  ITU  filing  from  another  Administration.  365  We 
 reasoned  that  relying  on  applicants  to  take  responsibility  for  requesting  orbit  locations  that  are  not  encumbered  by  another  Administration's  ITU  submission  would  enable  us  to  complete  processing 
 rounds  more  quickly.  366  Accordingly,  we  proposed  eliminating  the  fungibility  policy  because  it  would  eliminate  the  need  to  make  these  determinations.  367 


 157.  Pleadings.  Several  commenters  claim  that  the  fungibility  policy  is  necessary  to  resolve  mutually  exclusive  situations  in  processing  rounds.  368  SIA  and  PanAmSat  disagree  with 
 the  Commission  that  the  ITU's  backlog  in  publishing  ITU  submissions  warrants  eliminating  the  fungibility  policy,  because  the  ITU  maintains  a  database  of  filed  but  unpublished  ITU 
 submissions.  369  SIA  also  asserts  that  the  Commission  has  not  in  the  past  delayed  issuing  licenses  until  the  ITU  has  assigned  the  orbit  location  to  a  United  States  licensee.  370  Inmarsat  maintains 
 that  eliminating  the  fungibility  policy  would  preclude  the  Commission  from  reassigning  a  satellite  operator  to  a  new  location  in  cases  involving  coordination  of  U.  S.-  licensed  and  non-  U.  S.-  licensed 
 satellite  systems.  371  Alternatively,  Teledesic  recommends  eliminating  the  fungibility  policy  because  GSO  orbital  locations  are  not  in  fact  fungible  in  the  fixed  satellite  service.  372 


 158.  Discussion.  Under  the  procedures  we  adopt  here,  the  fungibility  policy  is  unnecessary  because  it  will  no  longer  apply  to  any  satellite  applications.  As  we  explained  in  the 
 Notice,  the  fungibility  policy  applies  only  to  GSO-  like  satellite  applications  considered  in  processing  rounds.  373  Thus,  under  our  new  procedures,  the  fungibility  policy  cannot  be  applied  to 
 GSO-  like  applications  because  we  will  consider  those  applications  in  a  first-  come,  first-  served  procedure,  not  in  processing  rounds.  We  assume  that  applicants  are  willing  to  be  licensed  for  the 
 orbital  locations  for  which  they  apply,  and  that  they  will  either  take  the  location  subject  to  any  encumbrances  such  as  ITU  priority,  and  at  their  own  risk,  or  will  reject  the  license.  Moreover, 
 the  fungibility  policy  has  never  been  applicable  to  NGSO-  like  satellite  applications.  The 
 364  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3874  (para.  80). 


 365  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3874  (para.  80). 
 366  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3874  (para.  80). 
 367  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3874  (para.  80). 
 368  SIA  Space  Station  Comments  at  27;  PanAmSat  Space  Station  Comments  at  11;  Hughes 
 Space  Station  Comments  at  48-  49;  SES  Americom  Space  Station  Reply  at  10. 
 369  SIA  Space  Station  Comments  at  27;  PanAmSat  Space  Station  Comments  at  11-  12. 


 370  SIA  Space  Station  Comments  at  11,  27. 
 371  Inmarsat  Space  Station  Comments  at  8-  11,  citing  Assignment  of  Orbital  Locations  to 
 Space  Stations  in  the  Fixed-  Satellite  Service,  Memorandum  Opinion  and  Order,  13  FCC  Rcd  13863  (Int'l  Bur.  1998). 


 372  Teledesic  Space  Station  Comments  at  33-  34. 
 373  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3874  (para.  80). 
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 fungibility  policy  applies  to  GSO  orbital  locations,  not  NGSO  orbital  planes.  Finally,  the  fungibility  policy  is  unnecessary  for  GSO  MSS  satellite  applications,  which  are  "NGSO-  like," 
 and  so  they  will  be  considered  pursuant  to  the  modified  processing  round  approach.  Such  satellites  must  operate  in  different  frequency  band  segments  to  avoid  becoming  mutually 
 exclusive,  and  therefore  may  be  essentially  collocated  in  the  GSO  orbit,  which  in  turn  obviates  the  need  for  the  fungibility  policy. 


 159.  We  disagree  with  Inmarsat  that  elimination  of  the  fungibility  policy  would  preclude  us  from  considering  licensees'  modification  applications  requesting  relocation  of  a  satellite.  By 
 definition,  modification  applications  request  revisions  to  a  license  after  it  is  issued.  Under  the  fungibility  policy,  the  Commission  treated  FSS  orbital  locations  as  fungible  as  one  means  of 
 resolving  mutually  exclusive  situations  in  the  context  of  processing  rounds.  374  In  other  words,  the  fungibility  policy  applies  only  at  the  time  licenses  are  issued  in  a  processing  round  context,  not 
 afterwards.  Thus,  eliminating  the  fungibility  policy  will  have  no  effect  on  future  modification  applications. 


 VII.  OTHER  ISSUES 
 A.  Background 
 160.  The  Commission  invited  comment  on  several  proposals  intended  to  make  the  satellite  application  process  more  efficient,  and  thus  help  speed  provision  of  service  to  the  public, 
 regardless  of  whether  we  adopt  the  first-  come,  first-  served  option  or  modify  the  current  procedure.  375  We  discuss  each  of  those  proposals  below. 


 B.  Financial  Qualifications 
 1.  Eliminating  the  Financial  Qualification  Requirement 
 161.  Background.  Applicants  for  satellite  licenses  must  now  show  generally  that  they  have  the  financial  resources  to  construct  and  launch  a  satellite  or  satellite  constellation,  and  to 
 operate  it  for  one  year.  376  In  the  Notice,  the  Commission  observed  that  this  requirement  and  its  milestone  requirements  serve  very  similar  purposes.  377  The  Commission  explained  that  it 
 examines  financial  qualifications  to  help  ensure  that  licensees  have  the  financial  resources  to  proceed  with  their  plans  so  that  service  is  promptly  made  available  to  users.  378  Similarly, 


 374  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3874  (para.  79),  citing  1980 
 Assignment  Order,  84  FCC  2d  at  601  (para.  45);  Separate  Systems  Order,  101  FCC  2d  at  1176  n.  168. 
 375  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3880  (para.  98). 


 376  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3880  (para.  100),  citing  47  C.  F.  R.   
 25.  114(  c)(  13)  and  rules  cited  therein. 
 377  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3881  (para.  102). 


 378  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3880  (para.  100),  citing,  e.  g.,  Amendment 
 to  the  Commission's  Rules  to  Allocate  Spectrum  for,  and  to  Establish  Other  Rules  and  Policies  Pertaining  to,  a  Radiodetermination  Satellite  Service,  Second  Report  and  Order,  Gen.  Docket  No.  84-  689,  104  FCC 


 2d  650,  663  (para.  23)  (1986)  (RDSS  Second  Report  and  Order);  Norris  Satellite  Communications,  Inc.,  Order  and  Authorization,  7  FCC  Rcd  4289,  4291  (para.  11)  (1992). 
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 milestone  deadlines  ensure  that  licensees  construct  and  launch  their  systems  in  a  timely  manner.  379  Accordingly,  the  Commission  invited  comment  on  eliminating  the  financial 
 qualification  requirements  currently  in  its  rules,  and  relying  exclusively  on  our  milestone  policy  to  ensure  that  licensees  provide  service  in  a  timely  fashion.  380 


 162.  Discussion.  Several  commenters  oppose  eliminating  the  financial  showing  and  stress  that  it  is  necessary  to  ensure  that  prospective  licensees  are  able  to  construct  their  proposed 
 satellite  systems.  381  Teledesic,  however,  supports  the  proposal  to  eliminate  financial  qualification  requirements  and  agrees  with  the  Commission  that  milestones  serve  many  of  the  same 
 purposes.  382  Teledesic  argues  further  that  there  have  been  several  cases  of  licensees  who  failed  to  launch  their  satellites  despite  meeting  the  financial  qualification  requirements,  and  licensees  who 
 launched  their  satellites  based  on  attracting  investment  with  a  sound  business  plan  rather  than  relying  on  assets  available  at  the  time  an  application  is  filed,  as  our  financial  qualification 
 requirements  primarily  measure.  383 
 163.  Some  parties  suggest  relaxing  the  financial  qualification  requirement  rather  than  eliminating  it.  PanAmSat  specifically  proposes  that  the  Commission  require  applicants  to 
 demonstrate  financing  for  a  substantial  portion  (e.  g.,  30  percent)  of  their  costs  when  they  file  or  require  applicants  to  demonstrate  financing  for  an  additional  portion  of  costs  after  a  later 
 specified  period.  384  Additionally,  PanAmSat  proposes  that  the  Commission  refrain  from  requiring  a  financial  showing  for  new  services  or  frequencies  until  the  process  for  allocating 
 frequencies  internationally  and  domestically  has  been  completed  and  the  Commission  has  adopted  service  rules.  385  SIA  and  Inmarsat  also  argue  that  the  Commission  should  not  eliminate 
 its  financial  qualification  requirement,  but  instead  should  revise  the  requirement  to  accommodate  new  entrants  in  the  industry.  386 


 379  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3881  (para.  101),  citing  First  Columbia 
 Milestone  Order,  15  FCC  Rcd  at  15571  (para.  11);  National  Exchange  Satellite,  Inc.,  Memorandum  Opinion  and  Order,  7  FCC  Rcd  1990,  1991  (para.  8)  (Com.  Car.  Bur.  1992)  (Nexsat  Order),  citing  MCI 


 Communications  Corporation,  Memorandum  Opinion  and  Order,  2  FCC  Rcd  233  (1987)  (MCI  Order). 
 380  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3881  (para.  102). 


 381  Hughes  Comments  at  43-  45;  Boeing  Comments  at  10-  12;  Intelsat  Comments  at  10-  12; 
 SES  Americom  Reply  at  12. 
 382  Teledesic  Comments  at  41-  42. 


 383  According  to  Teledesic,  only  11  of  19  participants  in  the  1983  C  and  Ku-  band  processing 
 round  launched  their  satellites,  3  of  23  participants  in  the  1985  processing  round,  and  11  of  19  in  the  1988  processing  round.  Teledesic  Reply  at  26-  28.  See  also  Application  of  TRW,  Inc.,  for  Authority  to 


 Construct,  Launch,  and  Operate  a  Low  Earth  Orbit  Satellite  System  in  the  1610-  1626.  5  MHz/  2483.  5-  2500  MH  Band,  Order  and  Authorization,  10  FCC  Rcd  2263,  2264  (para.  6)  (Int'l  Bur.  1995),  citied  in  Teledesic 
 Reply  at  27. 
 384  PanAmSat  Comments  at  15-  16. 


 385  PanAmSat  Comments  at  15-  16. 
 386  SIA  Comments  at  34;  Inmarsat  Comments  at  11-  12. 
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 164.  We  decide  to  eliminate  the  financial  qualification  requirement  currently  in  the  Commission's  rules.  Our  current  financial  qualification  requirements  have  not  proven  to  be 
 determinative  of  whether  a  licensee  implements  its  system.  Our  experience  has  shown  that  financially  qualified  licensees  have  chosen  not  to  go  forward,  while  other  licensees  who  could  not 
 have  met  the  requirement  but  were  awarded  a  license  because  we  waived  the  requirement,  have  successfully  built  and  launched  systems.  We  note  that  we  have  decided  not  to  apply  the  current 
 financial  qualification  requirements  to  mobile  satellite  service  (MSS)  operators  in  the  2  GHz  band,  in  part  because  strict  enforcement  of  milestone  requirements  would  ensure  timely  system 
 construction  and  service  deployment,  387  and  have  often  granted  waivers  of  this  rule  in  cases  where  all  the  pending  satellite  license  applications  could  be  accommodated.  We  conclude  that 
 strictly  enforcing  our  milestone  schedule  provides  more  certainty  that  systems  will  be  timely  built,  while  allowing  smaller  or  start-  up  companies  an  opportunity  to  succeed  or  fail  in  the 
 marketplace.  Our  milestone  policy  will  also  allow  us  to  reclaim  unused  spectrum  in  a  timely  manner,  and  to  assign  that  spectrum  immediately  to  those  licensees  that  are  proceeding  (in  the 
 NGSO-  like  context)  or  quickly  to  new  applicants  (in  the  GSO-  like  context). 
 165.  We  also  decide  not  to  revise  the  current  financial  qualification  requirement  as  commenters  propose.  By  eliminating  the  requirement,  we  facilitate  new  entry  more  effectively 
 than  the  relaxed  financial  qualifications  would.  In  addition,  relaxing  the  financial  qualification  requirement  would  not  make  it  a  better  predictor  of  whether  the  licensee  will  construct  its  satellite 
 system  in  a  timely  manner.  Instead,  we  adopt  a  new  financial  qualification  requirement  proposed  by  commenters,  posting  bonds,  as  set  forth  below. 


 2.  Posting  of  Bonds 
 166.  Background.  In  the  Notice,  the  Commission  invited  interested  parties  to  suggest  alternatives  to  its  proposal  to  eliminate  the  current  financial  qualification  requirement,  388  and  in 
 general  to  recommend  other  ways  to  reform  the  satellite  licensing  process.  389  Intelsat  argues  that  the  existing  policy  is  insufficient  to  deter  the  filing  of  frivolous  applications.  390  Intelsat  proposes 
 that  the  Commission  require  applicants  to  execute  a  bond  in  the  amount  of  $10  million,  to  be  included  in  their  applications.  Those  bonds  would  be  payable  to  the  U.  S.  Treasury  upon  license 
 revocation  if  the  licensee  has  not  yet  incurred  ten  percent  of  their  costs  at  the  time  the  license  is  revoked.  391  Intelsat  argues  that  a  $10  million  bond  would  be  sufficient  to  discourage  speculative 
 applications,  but  would  not  discourage  legitimate  applicants  because  the  bond  would  be  payable  only  if  the  licensee  does  not  make  a  good  faith  effort  to  proceed  with  construction  of  its 
 satellite.  392  Intelsat  claims  that  the  Commission  has  previously  adopted  a  bond  requirement  in 


 387  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3881  (para.  103),  citing  2  GHz  Order,  15 
 FCC  Rcd  at  16150-  51  (para.  48). 
 388  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3883  (para.  108). 


 389  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3897  (para.  147). 
 390  Intelsat  Comments  at  10-  12. 
 391  Intelsat  Comments  at  10-  11. 
 392  Intelsat  Comments  at  11-  12. 
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 another  service.  393  SES  Americom  argues  that  a  $10  million  bond  would  unreasonably  discourage  new  entry  and  innovative  new  services.  394  PanAmSat  also  opposes  a  bond 
 requirement  as  excessive.  395 
 167.  Discussion.  We  adopt  Intelsat's  proposal,  as  modified  below,  and  replace  our  existing  financial  qualification  requirements  with  a  bond  requirement.  By  requiring  satellite 
 licensees  to  make  a  financial  commitment  to  construct  and  launch  their  satellites,  we  help  deter  speculative  satellite  applications,  and  help  expedite  provision  of  service  to  the  public.  Moreover, 
 replacing  our  current  financial  qualification  requirement  with  a  bond  requirement  will  result  in  the  financial  community  determining  whether  the  licensee  is  likely  to  construct  and  launch  its 
 satellite  system.  Thus,  financial  qualifications  will  become  a  market-  driven  rather  than  a  regulatory  determination.  We  will  apply  this  bond  requirement  to  new  satellite  licensees  only, 
 not  replacement  satellites.  Once  a  licensee  has  begun  to  provide  service,  we  are  confident  that  its  replacement  satellite  application  will  be  intended  to  continue  service,  and  would  not  be  filed  for 
 speculative  purposes.  The  bond  will  be  payable  upon  missing  a  milestone  without  providing  an  adequate  justification  for  extending  the  milestone.  Licensees  will  be  allowed  to  reduce  the 
 amount  of  the  bond  upon  meeting  each  milestone. 
 168.  We  are  concerned,  however,  by  Intelsat's  proposed  bond  amount  of  $10  million.  The  bond  amount  should  help  deter  speculation,  without  deterring  legitimate  satellite 
 applications.  While  Intelsat  argues  that  a  $10  million  bond  requirement  meets  these  standards,  SES  Americom  and  PanAmSat  disagree,  and  we  do  not  have  an  adequate  basis  in  the  record  at 
 this  time  for  resolving  this  issue.  Accordingly,  on  an  interim  basis,  we  will  set  the  required  bond  amount  at  $5  million  for  GSO-  like  satellite  licensees,  and  $7.5  million  for  NGSO-  like  satellite 
 system  licensees.  A  higher  amount  for  NGSO-  like  satellite  system  licensees  is  reasonable  because  a  greater  commitment  is  required  to  implement  a  multiple-  satellite  system.  Below,  we 
 adopt  a  Further  Notice  of  Proposed  Rulemaking  inviting  parties  to  comment  on  a  long-  term  bond  requirement. 


 169.  Furthermore,  to  the  extent  that  SES  Americom  is  correct  that  a  bond  requirement  may  discourage  legitimate  satellite  operators  from  applying,  we  do  not  want  this  to  affect  public 
 safety  services.  Accordingly,  we  will  consider  requests  for  complete  or  partial  waivers  of  the  bond  requirement  for  satellite  operators  proposing  satellites  designed  to  provide  public  safety 
 services.  The  Commission's  rules  provide  for  waivers  of  any  rule,  provided  that  the  petitioner  can  show  good  cause  for  its  waiver  request.  396  We  would  consider  things  such  as  public  safety  intent 
 in  deciding  whether  a  waiver  is  warranted. 


 393  Intelsat  Reply  at  4-  6,  citing  Amendment  of  the  Commission's  Rules  to  Provide  Channel 
 Exclusivity  to  Qualified  Private  Paging  Systems  at  929-  930  MHz,  Report  and  Order,  PR  Docket  No.  93-  35,  8  FCC  Rcd  8318,  8325-  27  (paras.  22-  23)  (1993)  (Private  Paging  Exclusivity  Order).  In  that  Order,  the 


 Commission  adopted  a  bond  requirement  for  paging  companies  seeking  an  extension  of  their  milestones. 
 394  SES  Americom  Reply  at  16-  17. 


 395  PanAmSat  Reply  at  3. 
 396  47  C.  F.  R.    1.3.  For  more  on  the  meaning  of  "good  cause"  for  purposes  of  waivers  of 
 Commission  rules,  see  WAIT  Radio  v.  FCC,  418  F.  2d  1153  (D.  C.  Cir.  1969)  (WAIT  Radio);  Northeast  Cellular  Telephone  Co.  v.  FCC,  897  F.  2d  1166  (D.  C.  Cir.  1990)  (Northeast  Cellular). 
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 170.  As  proposed  by  Intelsat,  and  as  the  Commission  did  in  the  Private  Paging  Exclusivity  Order,  we  require  licensees  to  execute  performance  bonds  payable  to  the  U.  S. 
 Treasury.  397  We  require  a  licensee  to  obtain  this  bond  within  30  days  of  grant  of  their  license,  as  a  condition  of  its  license.  Otherwise,  its  license  will  be  null  and  void.  Thus,  the  bond 
 requirement  is  in  effect  an  additional  milestone  requirement.  We  intend  this  bond  requirement  to  provide  assurance  that  the  licensee  is  fully  committed  at  the  time  its  license  is  granted  to  construct 
 its  satellite  facilities,  not  committed  merely  to  spend  up  to  ten  percent  of  the  construction  costs  of  the  satellite.  Therefore,  we  will  not  adopt  Intelsat's  proposal  to  make  the  bond  payable  only  if  the 
 licensee  has  not  incurred  ten  percent  of  its  costs  at  the  time  the  license  is  revoked.  398  Instead,  the  bond  will  be  payable  upon  failure  to  meet  any  milestone,  without  providing  adequate  justification 
 for  extending  that  milestone.  The  bond  would  not  be  payable  if  the  licensee  missed  a  milestone  because  of  circumstances  beyond  its  control  that  warrant  a  milestone  extension.  By  making  the 
 bond  payable  upon  failure  to  meet  any  milestone  based  on  circumstances  within  the  licensee's  control,  we  require  licensees  to  commit  to  construct  and  launch  its  satellite  system,  and  so  we 
 further  strengthen  our  protections  against  speculation  and  warehousing. 
 171.  If  a  licensee  transfers  or  assigns  its  license,  the  purchaser  of  the  license  will  be  required  to  assume  the  bond.  The  bond  will  also  be  payable  if  the  licensee  surrenders  its  license 
 voluntarily  before  a  milestone  date.  Again,  the  purpose  of  the  bond  is  to  require  the  licensee  to  commit  at  the  time  the  license  is  granted  to  construct  and  launch  a  satellite  system.  The  purpose 
 of  the  commitment  is  to  ensure  that  the  service  is  provided  to  the  public  as  soon  as  possible.  Allowing  a  licensee  to  avoid  paying  the  bond  by  merely  selling  or  surrendering  its  license 
 substantially  reduces  the  licensee's  commitment  to  construct  and  launch  the  satellite,  and  so  increases  the  likelihood  that  service  to  the  public  would  be  delayed  until  the  license  is 
 surrendered  and  we  reassign  the  license  to  another  party. 
 172.  In  the  Private  Paging  Exclusivity  Order,  the  Commission  allowed  paging  licensees  to  reduce  the  outstanding  principle  on  their  bonds  as  they  progressed  on  the  construction  of  their 
 networks.  399  Intelsat  did  not  include  this  in  its  proposal,  however.  400  We  adopt  a  similar  provision  in  this  Order.  Below,  we  revise  our  milestone  requirements  to  establish  a  total  of  five 
 milestones  for  NGSO-  like  licensees,  and  four  for  GSO-  like  licensees.  401  Accordingly,  NGSO- 


 397  Private  Paging  Exclusivity  Order,  8  FCC  Rcd  at  8326  n.  45;  Intelsat  Comments  at  10-  11. 
 The  surety  on  the  bond  must  be  a  surety  company  deemed  acceptable  within  the  meaning  of  31  U.  S.  C.    9304,  et  seq.  This  requirement  is  also  consistent  with  the  Private  Paging  Exclusivity  Order,  8  FCC  Rcd  at 


 8326  n.  45. 
 398  Intelsat  Comments  at  10-  11.  Further,  we  reject  proposals  below  for  basing  milestones  on 
 payment  of  certain  percentages  of  the  construction  cost  of  a  satellite  system,  because  it  would  encourage  applicants  to  project  unreasonably  low  satellite  costs.  Section  VII.  C.  12.  The  same  reasoning  weighs 


 against  Intelsat's  proposal  to  make  the  bond  payable  upon  failure  to  spend  ten  percent  on  the  construction  of  the  satellite. 


 399  Private  Paging  Exclusivity  Order,  8  FCC  Rcd  at  8326-  27  (para.  23). 
 400  Intelsat  Comments  at  10-  12. 
 401  The  NGSO-  like  milestones  are:  (1)  contract  execution;  (2)  critical  design  review;  (3) 
 commencement  of  construction;  (4)  launch;  and  (5)  bring  entire  system  into  operation.  The  GSO-  like  milestones  are  (1)  contract  execution;  (2)  critical  design  review;  (3)  commencement  of  construction;  and 


 (4)  launch.  See  Section  VII.  C.  2.  below. 
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 like  licensees  will  be  allowed  to  reduce  the  amount  of  the  bond  by  20  percent  of  the  original  bond  amount  upon  meeting  each  milestone  after  they  post  their  bonds,  and  GSO-  like  licensees  will  be 
 allowed  to  reduce  the  amount  of  the  bond  by  25  percent  of  the  original  bond  amount  upon  meeting  each  milestone  after  they  post  their  bonds. 


 C.  Milestone  Requirements 
 1.  Background 
 173.  Milestones  are  intended  to  ensure  that  licensees  provide  service  to  the  public  in  a  timely  manner,  to  prevent  warehousing  of  scarce  orbit  and  spectrum  resources.  Such 
 warehousing  could  hinder  the  availability  of  services  to  the  public  at  the  earliest  possible  date  by  blocking  entry  by  other  entities  willing  and  able  to  proceed  immediately  with  the  construction  and 
 launch  of  their  satellite  systems.  402  Currently,  we  require  licensees  to  execute  a  construction  contract  within  one  year  of  the  license  grant,  and  to  launch  and  begin  operation  of  all  of  their 
 authorized  satellites  within  five  to  six  years,  depending  on  the  type  of  satellite.  We  include  these  requirements  as  conditions  in  satellite  licenses. 


 174.  In  the  Notice,  we  proposed  to  adopt  generic  milestone  requirements  for  all  satellite  services.  We  also  invited  comment  on  adding  a  milestone  for  completion  of  Critical  Design 
 Review  (CDR),  or  in  other  words,  completion  of  the  design  phase  of  implementation  and  commencement  of  physical  construction.  403  We  noted  that  we  adopted  this  requirement  for 
 mobile  satellite  service  (MSS)  operators  in  the  2  GHz  band.  404  In  addition,  the  Commission  invited  comment  on  whether  we  should  apply  the  milestones  adopted  in  the  2  GHz  Order  to  all 
 satellite  services,  405  including  a  "Commence  Construction"  milestone  for  beginning  the  physical  construction  of  the  satellite.  406 


 NGSO  GSO  Contract  Execution  407  1  1 
 CDR  2  2 


 402  PanAmSat  Ka-  Band  License  Revocation  Review  Order,  16  FCC  Rcd  at  11537-  38  (para. 
 12),  citing  Nexsat  Order,  7  FCC  Rcd  at  1991  (para.  8);  MCI  Order,  2  FCC  Rcd  at  233  (para.  5);  First  Columbia  Milestone  Order,  15  FCC  Rcd  at  15571  (para.  11). 


 403  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3881  (para.  103).  We  discuss  these 
 milestones  in  more  detail  in  this  Order  below. 
 404  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3881  (para.  103),  citing  2  GHz  Order,  15 
 FCC  Rcd  at  16178-  79  (para.  108). 
 405  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3881  (para.  103),  citing  2  GHz  Order,  15 
 FCC  Rcd  at  16177-  78  (para.  106). 
 406  See  2  GHz  Order,  15  FCC  Rcd  at  16177-  78  (para.  106). 


 407  In  the  past,  we  have  used  the  term  "construction  commencement"  for  the  first  milestone, 
 to  mean  executing  a  non-  contingent  construction  contract.  In  this  Order,  we  adopt  the  term  "contract  execution"  for  the  first  milestone,  and  define  "construction  commencement"  to  mean  the  beginning  of  the 


 physical  construction  of  a  satellite. 
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 Commence  Construction  2.5  3  Launch  408  3.5 
 Bring  Entire  System  Into  Operation  6 
 Launch  and  Operate  5 
 (Milestones  are  stated  in  number  of  years  after  authorization.) 
 Further,  we  invited  comment  on  whether  we  should  adopt  interim  or  additional  milestone  requirements.  409 


 175.  We  adopt  the  milestones  proposed  in  the  Notice,  in  addition  to  the  30-  day  bond-posting  requirement  adopted  above.  Milestones  remain  an  important  tool  to  prevent  warehousing 
 of  scarce  orbit  and  spectrum  resources.  In  addition,  strict  enforcement  of  milestones  will  help  safeguard  against  speculative  satellite  applications,  because  the  value  of  the  license  decreases  as 
 the  contract  execution  milestone  approaches.  410  Moreover,  licensees  must  work  with  the  financial  community  to  find  the  financing  necessary  to  enter  a  contract  to  construct  a  satellite  system 
 within  one  year  of  the  grant  of  the  license.  Therefore,  licensees  must  develop  a  viable  business  plan  to  obtain  that  financing,  and  so  milestones  introduce  a  market-  based  mechanism  into  our 
 licensing  process.  Our  reasons  for  adopting  the  milestones  proposed  in  the  Notice  are  explained  in  more  detail  below. 


 2.  General  Comments  on  Milestone  Proposals 
 176.  Background.  Teledesic  proposes  that,  rather  than  relying  solely  on  "generic"  milestones,  the  Commission  should  develop  milestones  for  each  service  and  licensee.  411  SES 
 Americom  opposes  Teledesic's  proposal,  claiming  it  could  create  uncertainty  and  the  potential  for  litigation.  412  Teledesic  also  opposes  the  Commission  imposing  stricter  milestone  requirements  on 
 NGSO  than  on  GSO  satellites.  413 
 177.  Discussion.  We  adopt  our  proposal  to  establish  generic  milestones  in  our  rules.  As  an  initial  matter,  although  we  have  adopted  milestone  schedules  on  a  case-  by-  case  basis  in  the 
 past,  we  have  generally  adopted  contract  execution  and  launch  milestones  consistent  with  those 


 408  Non-  geostationary  satellite  systems  must  launch  their  first  two  satellites  within  3.  5  years 
 of  authorization.  Geostationary  satellite  systems  must  launch  their  first  satellite  within  5  years  of  authorization.  2  GHz  Order,  15  FCC  Rcd  at  16177-  78  (para.  106). 


 409  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3882  (para.  104). 
 410  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3886  (para.  116). 
 411  Teledesic  Comments  at  43-  44. 
 412  SES  Americom  Reply  at  13. 
 413  Teledesic  Comments  at  43. 
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 previously  used,  which  track  those  we  proposed  in  the  Notice.  414  Moreover,  the  milestone  schedule  we  include  in  each  license  has  generally  not  varied  from  license  to  license.  Thus, 
 codifying  generic  milestones  is  not  a  great  departure  from  our  current  practice.  Alternatively,  Teledesic's  proposal  to  adopt  different  milestones  for  each  service  would  be  a  departure  from 
 current  practice,  and  Teledesic  does  not  provide  an  adequate  justification  for  such  a  departure. 
 178.  We  disagree  with  Teledesic  that  longer  milestone  deadlines  for  NGSO  licenses  are  warranted.  As  an  initial  matter,  both  NGSO  licensees  and  GSO  licensees  are  required  to  meet  the 
 same  milestone  schedule,  except  for  commencement  of  physical  construction  and  launch.  Therefore,  the  NGSO  milestone  schedule  is  not  substantially  stricter  than  the  GSO  schedule. 
 Further,  the  NGSO  milestones  that  we  proposed  in  the  Notice  are  consistent  with  those  the  Commission  adopted  for  NGSO  licenses  in  the  2  GHz  Proceeding,  415  which  are  similar  to  the 
 schedules  established  for  previously  licensed  NGSO  satellite  systems.  416  Moreover,  the  Commission  observed  that  GSO  satellite  licensees  need  a  longer  period  in  which  to  launch  their 
 first  satellite  because  individual  GSO  satellites  may  take  more  time  to  construct  than  an  NGSO  satellite  within  a  larger  constellation  of  technically  identical  satellites.  417  Thus,  we  see  no  reason 
 to  extend  the  milestones  for  other  NGSO  licenses  in  this  proceeding. 


 3.  Contract  Execution  Milestone 
 179.  Background.  CTIA  recommends  setting  the  contract  execution  milestone  at  nine  months  after  the  license  is  issued,  rather  than  one  year.  418  SES  Americom  replies  that  nine 
 months  does  not  take  into  account  the  need  to  mesh  satellite  design  with  business  plans.  419 
 180.  Discussion.  We  will  not  adopt  CTIA's  proposal  to  set  the  contract  execution  milestone  at  nine  months.  The  Commission  has  historically  set  this  milestone  at  one  year  after 
 the  license  is  granted.  Our  experience  has  shown  that  this  time  period  represents  a  reasonable  balance  between  ensuring  that  licensees  are  moving  forward  with  their  business  plans  and 
 allowing  licensees  adequate  time  to  negotiate  satellite  construction  contracts  with  manufacturers.  CTIA  has  not  provided  sufficient  reason  at  this  time  to  question  the  reasonableness  of  this 
 balance.  We  may  revisit  this  issue  in  the  future,  however,  if  our  experience  shows  that  a  more  stringent  contract  execution  milestone  is  warranted. 


 414  PanAmSat  Licensee  Corp.,  Memorandum  Opinion  and  Order,  Order  and  Authorization, 
 13  FCC  Rcd  1405  (Intl  Bur.  1997)  (PanAmSat  Second  Round  Ka-  band  Authorization  Order). 
 415  See  2  GHz  Order,  15  FCC  Rcd  at  16177  (para.  106). 


 416  See  2  GHz  NPRM,  14  FCC  Rcd  at  4881  (para.  85)  (discussing  milestone  schedules  for 
 Big  LEO  and  NVNG  MSS  systems). 
 417  2  GHz  NPRM,  14  FCC  Rcd  at  4881-  82  (para.  85). 


 418  CTIA  Comments  at  5. 
 419  SES  Americom  Reply  at  22. 
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 4.  Standard  for  Determining  Compliance  with  Contract  Execution  Milestone  Requirement 
 181.  Background.  The  Commission  invited  comment  on  several  issues  related  to  enforcement  of  its  milestones.  420  First,  the  Commission  explained  that  the  test  it  now  uses  for 
 determining  whether  a  licensee  has  met  its  contract  execution  milestone  is  whether  the  licensee  has  a  binding,  non-  contingent  satellite  construction  contract  with  the  manufacturer.  421  We  have 
 defined  "non-  contingent  contract"  as  one  where  there  will  be  neither  significant  delays  between  the  execution  of  the  contract  and  the  actual  commencement  of  construction,  nor  conditions 
 precedent  to  construction.  422  The  Commission  noted  that  this  test  can  require  interpretation  of  construction  contracts,  and  so  can  take  time  to  administer,  and  can  raise  issues  regarding  requests 
 for  confidential  treatment  of  construction  contracts.  423  The  Commission  invited  proposals  for  streamlining  our  enforcement  of  contract  execution  milestones.  424  It  also  invited  proposals  for 
 bright-  line,  easily  administered  tests  for  other  milestones.  425 
 182.  Pleadings.  Teledesic  asserts  that  basing  the  contract  execution  milestone  on  a  "non-  contingent  contract"  is  problematic  because  all  contracts  include  some  contingencies.  426 
 SES  Americom  replies  that  the  concept  of  "non-  contingent  contract"  is  not  as  difficult  as  Teledesic  asserts.  427 


 183.  SIA  criticizes  the  Commission  for  alleged  delay  in  enforcing  contract  execution  milestones  in  the  past,  and  recommends  establishing  fixed  procedures  for  contract  execution 
 inquiries  and  a  set  time  limit  for  the  submission  of  copies  of  non-  contingent  satellite  construction  contracts.  428  Similarly,  PanAmSat  suggests  requiring  that  licensees  submit  their  construction 


 420  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3882-  83  (paras.  105-  06). 
 421  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3882-  83  (para.  105),  citing  PanAmSat 
 Licensee  Corp.  Memorandum  Opinion  and  Order,  15  FCC  Rcd  18720,  18723  (para.  9)  (Int'l  Bur.  2001)  (PanAmSat  Ka-  band  License  Cancellation  Order). 


 422  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3882-  83  (para.  105),  citing  Norris  Satellite 
 Communications,  Inc.,  Memorandum  Opinion  and  Order,  12  FCC  Rcd  22299,  22303-  04  (para.  9)  (1997)  (Norris  Review  Order),  PanAmSat  Ka-  band  License  Cancellation  Review  Order,  16  FCC  Rcd  at  11539  (para. 


 16). 
 423  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3882-  83  (para.  105). 


 424  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3882-  83  (para.  105). 
 425  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3882-  83  (para.  105). 
 426  Teledesic  Comments  at  42-  43. 
 427  SES  Americom  Reply  at  12-  13,  citing  PanAmSat  Licensee  Corp.  Application  for 
 Authority  to  Construct,  Launch,  and  Operate  a  Ka-  Band  Communications  Satellite  System  in  the  Fixed-Satellite  Service  at  Orbital  Locations  58  W.  L.  and  125  W.  L.,  Memorandum  Opinion  and  Order,  15  FCC 


 Rcd  18720  (Int'l  Bur.  2000),  aff'd  16  FCC  Rcd  11534  (2001). 
 428  SIA  Comments  at  30-  32. 
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 contracts,  rather  than  simply  certifying  that  they  have  entered  into  non-  contingent  contracts.  429  Intelsat  proposes  that  the  Commission  require  licensees  to  certify  under  penalty  of  perjury  that 
 they  have  entered  into  a  binding,  non-  contingent  construction  contract  by  the  milestone  date,  or  provide  a  copy  of  the  contract.  430  Teledesic  proposes  that,  instead  of  requiring  licensees  to  submit 
 confidential  corporate  information,  the  Commission  should  require  licensees  to  certify  that  they  have  met  each  of  their  milestones.  431 


 184.  Discussion.  As  an  initial  matter,  we  retain  our  practice  of  requiring  a  "non-contingent  contract"  to  demonstrate  compliance  with  the  one-  year  contract  execution  milestone. 
 This  does  not  mean  that  the  contract  cannot  contain  any  contingencies.  Rather,  a  "non-  contingent  contract"  is  one  that  allows  neither  significant  delays  between  the  execution  of  the  contract  and 
 the  actual  commencement  of  construction,  nor  conditions  precedent  to  construction.  432  We  have  also  held  that  a  sufficient  contract  is  one  that  contains  no  unresolved  contingencies  that  could 
 preclude  construction  of  the  satellite.  433  In  addition,  a  contract  that  allows  the  licensee  to  cancel  construction  of  the  satellite  without  significant  penalty  is  not  sufficient  to  meet  the  construction 
 commencement  milestone.  434 
 185.  We  adopt  SIA's  and  PanAmSat's  proposal  to  require  satellite  licensees  to  submit  their  contracts  to  the  Commission  on  or  before  the  date  of  the  contract  execution  milestone.  In 
 particular,  by  placing  this  requirement  in  our  rules,  we  will  eliminate  the  need  to  send  a  letter  to  licensees  requesting  them  to  submit  their  contracts,  and  so  we  will  be  able  to  begin  review  of 
 those  contracts  sooner.  We  have  found  that  the  contracts  are  needed  to  allow  us  to  determine  whether  the  licensee  has  met  the  milestone.  The  licensee's  certification  has  not  always  proven  to 
 be  dispositive  in  the  past.  435 


 429  PanAmSat  Comments  at  45-  46. 
 430  Intelsat  Comments  at  20. 
 431  Teledesic  Comments  at  42-  43. 
 432  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3882  n.  142,  citing  Norris  Satellite 
 Communications,  Inc.,  Memorandum  Opinion  and  Order,  12  FCC  Rcd  22299,  22303-  04  (para.  9)  (1997)  (Norris  Review  Order),  PanAmSat  Ka-  band  License  Cancellation  Review  Order,  16  FCC  Rcd  at  11539  (para. 


 16). 
 433  Tempo  Enterprises,  Inc.,  Memorandum  Opinion  and  Order,  1  FCC  Rcd  20,  21  (para.  7) 
 (1986)  (Tempo  Order).  Although  the  Commission  used  this  standard  to  review  DBS  due  diligence  requirements,  it  is  also  applicable  to  FSS  contract  execution  determinations. 


 434  Furthermore,  a  contract  to  construct  only  part  of  a  satellite  system,  by  itself,  cannot 
 satisfy  the  construction  commencement  milestone.  In  cases  where  a  licensee  chooses  not  to  construct  the  satellite  system  as  licensed,  we  expect  the  licensee  to  file  a  modification  application  prior  to  the  date  of  the 


 construction  commencement  milestone,  rather  than  simply  submitting  a  contract  to  construct  a  different  satellite  system. 


 435  See  Mobile  Communications  Holdings,  Inc.,  Memorandum  Opinion  and  Order,  17  FCC 
 Rcd  11898,  11901  (paras.  9-  10)  (Int'l.  Bur.,  Sat.  Div.,  2002).  In  this  proceeding,  the  licensee  was  required  to  commence  construction  of  the  first  two  satellites  in  a  16-  satelite  Big  LEO  system  by  July  1998,  and  the 


 remaining  satellites  by  July  2000.  The  licensee  asserted  that  its  contract  to  construct  the  first  two  satellites  together  with  testing  plans  for  the  remaining  14  satellites  constituted  a  non-  contingent  construction  contract 
 for  all  16  satellites.  See  also  Morning  Star  Satellite  Company,  L.  L.  C.,  Memorandum  Opinion  and  Order,  15  FCC  Rcd  11350,  11352  (para.  6)  (Int'l.  Bur.  2000).  In  this  Order,  the  licensee's  president  submitted  an 
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 5.  Confidential  Information 
 186.  Teledesic  opposes  submission  of  construction  contracts  in  part  because  it  claims  that  the  Commissions  procedures  for  protection  of  confidential  commercial  information  in  those 
 contracts,  including  our  procedures  for  protective  orders,  are  inadequate.  436  Teledesic  does  not  make  any  concrete  proposals  for  improving  our  procedures,  nor  does  it  explain  how  any  greater 
 protection  could  be  extended  to  construction  contracts  within  the  bounds  of  the  Freedom  of  Information  Act  (FOIA).  437  These  comments  lack  specificity  and  do  not  provide  a  reasonable 
 basis  for  rejecting  SIA's  proposal  to  require  submission  of  construction  contracts.  As  noted,  we  cannot  necessarily  rely  on  a  licensee's  assessment  of  its  contract  as  proof  that  it  has  met  the 
 required  milestone. 
 187.  We  take  this  opportunity,  however,  to  explain  generally  how  we  plan  to  treat  requests  for  confidential  treatment  of  satellite  construction  contracts  on  a  going-  forward  basis.  If 
 a  licensee  seeks  confidential  treatment  of  its  construction  contract,  we  will  require  it  to  submit  an  unredacted  version  of  their  contracts,  and  as  well  as  a  redacted  version  to  be  made  publicly 
 available.  In  addition,  we  will  expect  it  to  provide  all  the  information  needed  to  justify  that  request  for  confidentiality,  including  the  information  specified  in  Section  0.459(  b)  of  the 
 Commission's  rules.  438  Generally,  we  have  recognized  that  specific  dollar  amounts  and  some  of  the  detailed  technical  specifications  of  satellites  warrant  confidential  treatment.  439  We  anticipate 
 continuing  that  policy. 
 6.  Critical  Design  Review 
 188.  Background.  SIA  questions  the  benefits  of  adding  a  milestone  date  for  CDR.  440  If  the  Commission  decides  to  adopt  such  a  milestone,  SIA  and  Intelsat  encourage  the  Commission 
 to  allow  licensees  to  develop  their  own  CDR  deadlines,  based  upon  the  licensees  submission  of  a  reasonable  CDR  completion  date.  441  PanAmSat  generally  opposes  the  proposal  to  add  a  new 
 milestone  for  CDR.  442 
 affidavit  representing  that  its  construction  contract  was  sufficient  to  meet  the  construction  commencement  milestone,  even  though  the  contract  contained  no  terms  governing  construction  schedules,  payment 
 schedules,  or  any  other  evidence  of  a  binding  commitment  to  build  a  satellite.  See  also  EchoStar  Satellite  Corporation,  Memorandum  Opinion  and  Order,  17  FCC  Rcd  8827,  8829  (para.  7)  (Int'l.  Bur.  2002) 
 (documents  submitted  by  licensee  purporting  to  show  compliance  with  Ka-  band  milestone  did  not  include  any  commitment  to  construct  a  satellite  with  Ka-  band  capacity). 


 436  Teledesic  Comments  at  42-  43. 
 437  5  U.  S.  C.    552. 
 438  47  C.  F.  R.    0.459(  b). 
 439  We  note,  however,  that  certain  technical  details  are  required  to  be  included  in  an 
 application  for  a  Commission  space  station  license.  See  47  C.  F.  R.    25.  114(  c).  We  do  not  believe  that  information  of  this  general  nature  should  be  routinely  withheld  from  public  inspection. 


 440  SIA  Comments  at  32-  33. 
 441  SIA  Comments  at  32-  33;  Intelsat  Comments  at  21. 
 442  PanAmSat  Comments  at  17-  18. 
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 189.  Discussion.  We  conclude  that  we  should  apply  the  milestone  schedule  we  adopted  for  licensees  in  the  2  GHz  proceeding,  including  the  CDR  milestone  requirement,  to  all  satellite 
 licensees  on  a  going-  forward  basis.  Without  a  CDR  milestone,  there  would  be  an  unacceptable  amount  of  time  for  scarce  orbit  and  spectrum  resources  to  lie  fallow  in  cases  where  the  existing 
 licenses  is  not  proceeding  and  the  spectrum  could  be  reassigned  to  an  entity  willing  and  able  to  construct  a  satellite  system  in  a  timely  manner.  443  The  2  GHz  proceeding  concluded  that  a  CDR 
 milestone  will  aid  us  in  determining  whether  licensees  are  taking  immediate,  concrete  steps  toward  system  implementation  after  meeting  the  first  milestone,  and  allows  us  to  identify  any 
 failure  in  system  progress.  444  We  have  not  found  anything  in  our  experience  with  2  GHz  licensees  that  would  weigh  against  applying  that  milestone  schedule  to  all  satellite  licensees. 


 190.  Further,  we  will  not  set  CDR  milestones  on  a  case-  by-  case  basis  in  individual  licenses.  Making  those  determinations  on  a  case-  by-  case  basis  would  add  to  the  time  needed  to 
 process  satellite  applications.  Furthermore,  neither  Intelsat  nor  SIA  explain  why  licensees  should  be  given  more  flexibility  than  is  included  in  the  CDR  milestone  requirement  we  adopt  here. 
 Specifically,  nothing  precludes  a  licensee  from  meeting  the  CDR  milestone  earlier  than  the  deadline  we  adopt  in  this  Order,  and  we  know  of  no  reason  why  a  licensee  that  is  committed  to 
 constructing  and  launching  its  satellite  system  would  not  be  able  to  commit  to  completing  the  spacecraft  CDR  within  the  time  provided  in  the  milestone  schedule. 


 191.  In  the  2  GHz  Order,  we  defined  "CDR"  as  the  stage  in  the  spacecraft  implementation  process  at  which  the  design  and  development  phase  ends  and  the  manufacturing 
 phase  starts.  445  Generally,  well  before  the  CDR  stage,  the  licensee  should  not  anticipate  making  any  modifications  to  its  spacecraft  design  that  would  require  Commission  approval,  absent 
 unusual  circumstances.  We  will  not  prescribe  a  particular  method  for  licensees  to  show  that  they  have  met  their  milestone,  but  emphasize  that  licensees  will  bear  the  burden  of  demonstrating  that 
 they  have  met  this  milestone.  Evidence  of  compliance  with  this  milestone  may  include:  (1)  evidence  of  a  large  payment  of  money,  required  by  most  construction  contracts  at  the  time  of  the 
 spacecraft  CDR;  (2)  affidavits  from  independent  manufacturers;  and  (3)  evidence  that  the  licensee  has  ordered  all  the  long  lead  items  needed  to  begin  physical  construction  of  the  spacecraft. 
 Finally,  it  may  be  necessary  or  appropriate  to  supplement  the  record  on  occasion.  In  such  cases,  the  Commission  retains  discretion  to  require  licensees  to  provide  further  information,  or  to 
 conduct  physical  inspections. 


 443  See  2  GHz  Order,  15  FCC  Rcd  at  16179  (para.  108)  (noting  concerns  about  three-  year 
 gap  between  first  and  second  milestones).  See  also  National  Exchange  Satellite,  Inc.,  Memorandum  Opinion  and  Order,  7  FCC  Rcd  1990,  1991  (para.  8)  (Com.  Car.  Bur.  1992)  (Nexsat  Order);  MCI 


 Communications  Corporation,  Memorandum  Opinion  and  Order,  2  FCC  Rcd  233  (1987)  (MCI  Order);  Columbia  Communications  Corporation,  Memorandum  Opinion  and  Order,  15  FCC  Rcd  15566,  15571 
 (para.  11)  (Int'l  Bur.  2000)  (First  Columbia  Milestone  Order);  PanAmSat  Licensee  Corp.,  Application  for  Authority  to  Construct,  Launch,  and  Operate  a  Ka-  Band  Communications  Satellite  System  in  the  Fixed-Satellite 
 Service  at  Orbital  Locations  58  W.  L.  and  125  W.  L.,  Memorandum  Opinion  and  Order,  16  FCC  Rcd  11534,  11537-  38  (para.  12)  (2001)  (PanAmSat  Ka-  Band  License  Revocation  Review  Order)  (noting 
 that  milestones  are  intended  to  limit  warehousing). 
 444  2  GHz  Order,  15  FCC  Rcd  at  16179  (para.  108). 


 445  2  GHz  Order,  15  FCC  Rcd  at  16178  (para.  108). 
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 7.  Commencement  of  Physical  Construction 
 192.  The  Notice  observed  that  the  milestone  schedule  adopted  in  the  2  GHz  Order,  included  a  separate  milestone  for  the  physical  construction  of  the  satellite,  and  invited  comment 
 on  including  this  milestone  for  all  future  licensees.  446  No  one  commented  on  this  proposal.  We  conclude  that  this  milestone  will  provide  additional  assurance  that  licensees  are  making  adequate 
 progress  towards  constructing  and  launching  their  satellite  systems,  and  so  protects  against  warehousing.  Accordingly,  we  adopt  it. 


 193.  Neither  the  Notice  nor  the  2  GHz  Order  specified  in  detail  what  showing  would  be  required  to  demonstrate  compliance  with  this  milestone.  Therefore,  we  will  not  establish  a 
 specific  test  in  this  Order.  Rather,  we  will  require  licensees  to  provide  sufficient  information  to  demonstrate  to  a  reasonable  person  that  they  have  commenced  physical  construction  of  their 
 licensed  spacecraft.  We  emphasize  that,  as  with  other  milestones,  the  burden  of  proof  for  this  showing  is  with  the  licensee. 


 8.  Milestones  for  Satellite  Systems  Using  Feeder  Links 
 194.  Above,  we  establish  licensing  procedures  for  systems  using  feeder  links  and  intersatellite  links,  that  may  result  in  issuing  operating  authority  for  parts  of  a  satellite  system  at 
 different  times.  447  In  those  cases,  we  will  apply  the  milestone  schedule  included  in  the  first  grant  of  authority  to  the  entire  satellite  system.  In  the  past,  the  Commission  determined  that  requests 
 for  ISL  authority  and  feeder  link  authority  do  not  warrant  a  milestone  extension.  448  There  is  nothing  in  the  Notice  to  suggest  that  we  would  revisit  those  conclusions  in  this  proceeding. 


 9.  Other  Interim  or  Additional  Milestones 
 195.  Background.  CTIA  also  states  that  the  Commission  should  adopt  other,  interim  milestones  based  on  six-  month  intervals,  but  does  not  make  any  specific  recommendations  for 
 these  milestones.  449  SES  Americom  replies  that  constructing  a  satellite  system  is  more  technically  complex  than  constructing  a  terrestrial  wireless  network,  and  cannot  be  tied  to  a  strict 
 schedule.  450 
 196.  Discussion.  By  adopting  new  CDR  and  physical  construction  commencement  milestones,  we  find  that  we  will  have  sufficient  assurance  throughout  the  construction  stage  that 
 the  licensee  is  building  its  system.  We  see  no  reason  to  adopt  additional  six-  month  milestones,  nor  do  we  wish  to  limit  licensees'  flexibility  to  negotiate  manufacturing  contracts  that  best  serve 
 their  needs  within  our  general  milestone  framework.  Furthermore,  CTIA  does  not  provide  sufficient  detail  for  its  six-  month  milestone  suggestion  to  enable  us  to  adopt  it  here. 


 446  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3881  (para.  103),  citing  2  GHz  Order,  15 
 FCC  Rcd  at  16177-  78  (para.  106). 
 447  Section  VI.  E.  1.  f. 


 448  See,  e.  g.,  PanAmSat  Ka-  Band  License  Revocation  Review  Order,  16  FCC  Rcd  at  11541 
 (para.  21);  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860-  61  (para.  38). 
 449  CTIA  Comments  at  5-  6. 


 450  SES  Americom  Reply  at  21-  22. 
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 10.  Enforcement  of  Milestone  Requirements 
 197.  Background.  The  Commission  also  proposed  several  measures,  in  addition  to  its  current  milestone  policies,  to  strengthen  its  milestone  requirements.  Currently,  failure  to  meet  a 
 milestone  results  only  in  cancellation  of  the  license.  451  The  Commission  sought  comment  on  imposing  forfeiture  penalties  for  failure  to  meet  milestones.  452  It  also  sought  comment  on 
 whether,  and  to  what  extent,  we  should  prohibit  licensees  who  miss  a  milestone  from  applying  for  other  satellite  licenses.  453  For  example,  the  Commission  invited  comment  on  prohibiting  the 
 licensee  from  applying  for  another  satellite  license,  or  applying  for  a  license  to  operate  a  space  station  in  that  band,  or  to  operate  at  that  orbit  location  in  the  case  of  GSOs,  either  permanently, 
 for  a  certain  number  of  years,  or  until  the  licensee  has  shown  that  it  would  meet  all  its  milestone  requirements  if  it  were  granted  another  space  station  license.  454 


 198.  Discussion.  SIA  claims  that  imposing  penalties  other  than  the  loss  of  the  license  in  question  on  licensees  that  fail  to  meet  their  milestones  could  discourage  applicants  from  filing 
 licenses  for  new  or  innovative  satellite  systems.  455  Intelsat  opposes  prohibiting  a  licensee  from  applying  for  another  satellite  license  in  the  same  band  or  orbital  location  if  a  milestone  is  missed, 
 and  it  argues  that  such  a  penalty  would  discourage  licensees  from  taking  necessary  risks  and  could  overly  penalize  such  licensees.  456 


 199.  We  are  sensitive  to  SIA's  and  Intelsat's  concerns.  Accordingly,  we  will  not  impose  additional  penalties  on  all  satellite  licensees  who  miss  milestones.  Nevertheless,  we  believe  that 
 such  penalties  might  be  warranted  in  possible  cases  of  speculation.  In  this  Order  below,  we  eliminate  the  satellite  anti-  trafficking  rule,  and  adopt  new  safeguards  against  speculation.  One  of 
 those  safeguards  is  a  limit  on  the  number  of  pending  applications  and  unbuilt  satellites  an  applicant  may  have.  That  limit  is  five  GSO-  like  satellites  and  one  NGSO-  like  satellite  system  in 
 any  frequency  band.  457  For  the  reasons  discussed  below,  we  find  that  our  proposed  limits,  in  addition  to  the  milestone  revisions  and  bond  requirement  we  adopt  here,  will  be  adequate  to 
 discourage  speculation  in  most  cases.  458  In  unusual  cases  in  which  the  limits  do  not  discourage  an  applicant  from  filing  speculative  applications,  however,  those  speculative  filings  could  lead  to 
 "warehousing"  orbital  locations.  459  In  warehousing  cases,  we  have  removed  authority  from 


 451  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3883  (para.  106),  citing,  Morningstar 
 Satellite  Company,  L.  L.  C.,  Memorandum  Opinion  and  Order,  15  FCC  Rcd  11350  (Int'l  Bur.,  2000);  PanAmSat  Ka-  band  License  Cancellation  Order,  15  FCC  Rcd  18720. 


 452  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3883  (para.  106). 
 453  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3883  (para.  106). 
 454  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3883  (para.  106). 
 455  SIA  Comments  at  33. 
 456  Intelsat  Comments  at  21. 
 457  Section  VII.  E.  3. 
 458  Section  VII.  E.  3. 
 459  Section  VII.  E.  3.,  Pegasus  Comments  at  5. 
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 licensees  who  have  not  met  their  satellite  construction  and  launch  schedules,  so  that  those  licensees  are  not  permitted  to  waste  scarce  orbital  locations  and  channels.  460  In  other  words, 
 warehousing  occurs  when  a  licensee  has  not  shown  an  adequate  commitment  to  move  forward  with  its  business  plan.  461  Warehousing  prevents  other  potential  licensees  willing  and  able  to 
 move  forward  with  their  business  plans  from  attempting  to  provide  service  to  the  public  in  a  timely  manner.  Therefore,  ensuring  that  we  have  adequate  means  to  prevent  warehousing  is 
 crucial  to  achieving  the  goals  of  this  proceeding.  As  a  logical  outgrowth  of  the  Commission's  proposal  to  prohibit  a  licensee  from  filing  future  satellite  applications  upon  failure  to  meet  a 
 milestone,  we  will  apply  a  more  strict  limit  on  the  number  of  pending  applications  and  unbuilt  satellites  for  a  licensee  that  has  established  a  pattern  of  failure  to  meet  milestones. 


 200.  This  stricter  limit  should  enable  us  to  address  instances  of  warehousing,  while  also  addressing  SIA's  and  Intelsat's  concern  about  discouraging  parties  from  applying  for  satellite 
 licenses  regardless  of  their  intent  to  proceed  with  their  business  plans.  We  base  this  more  strict  limit  on  a  variation  of  Pegasus's  proposal  of  two  unbuilt  satellites.  462  We  will  apply  this  limit  to 
 both  GSO-  like  and  NGSO-  like  systems,  in  all  frequency  bands.  In  other  words,  applicants  who  have  established  a  pattern  of  missing  milestones  with  two  or  more  applications  pending,  or  with 
 two  licensed-  but-  unbuilt  satellite  systems  of  any  kind,  will  not  be  permitted  to  file  another  GSO-like  application  or  NGSO-  like  application  in  any  frequency  band.  463  We  adopt  a  presumption  that 
 missing  three  milestones  in  any  three  year  period  would  constitute  a  "pattern  of  failure  to  meet  milestones"  for  these  purposes.  At  the  time  any  licensee  misses  three  milestones  in  three  years, 
 we  will  presume  that  the  licensee's  applications  were  speculative,  and  the  lower  limit  on  pending  applications  and  unbuilt  satellites  will  remain  in  effect  unless  and  until  the  licensee  provides 
 adequate  information  to  rebut  that  presumption,  or  to  demonstrate  that  it  is  very  likely  to  construct  its  licensed  facilities  if  it  were  allowed  to  file  more  applications. 


 201.  We  have  ample  authority  for  adopting  this  additional  milestone  enforcement  measure.  The  Notice  advised  interested  parties  that  the  Commission  was  contemplating  an 
 additional  sanction  of  this  kind.  464  In  addition,  the  Communications  Act  gives  the  Commission  authority  to  establish  qualification  requirements  for  license  applicants.  465  By  applying  for  a 


 460  See  Advanced  Communications  Corporation,  Memorandum  Opinion  and  Order,  10  FCC 
 Rcd  13337,  13342  (para.  19)  (Intl  Bur.  1995),  affd  11  FCC  Rcd  3399  (1995);  Volunteers  in  Technical  Assistance,  Order  and  Authorization,  11  FCC  Rcd  1358,  1363  (para.  15)  (Intl  Bur.  1995);  Norris  Satellite 


 Communications,  Inc.,  Order,  11  FCC  Rcd  5402  (Intl  Bur.  1996). 
 461  Nexsat  Order,  7  FCC  Rcd  at  1991  (para.  8),  citing  MCI  Communications  Corporation, 
 Memorandum  Opinion  and  Order,  2  FCC  Rcd  233  (1987). 
 462  Pegasus  Comments  at  5. 


 463  We  will  also  presume  that  a  licensee  that  creates  a  pattern  of  obtaining  licenses  and  then 
 surrendering  them  before  a  milestone  deadline  is  also  engaging  in  speculative  activity,  and  will  impose  the  stricter  limits  unless  and  until  the  licensee  rebuts  this  presumption. 


 464  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3883  (para.  106). 
 465  Section  308(  b)  of  the  Communications  Act,  47  U.  S.  C.    308(  b):  "All  applications  for 
 station  licenses,  or  modifications  or  renewals  thereof,  shall  set  forth  such  facts  as  the  Commission  by  regulation  may  prescribe  as  to  the  citizenship,  character,  and  financial,  technical,  and  other  qualifications  of 


 the  applicant  to  operate  the  station;  ...." 
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 satellite  license,  an  applicant  implicitly  states  that  it  does  not  intend  to  hold  the  license  merely  to  preclude  others  from  going  forward  with  their  business  plans.  It  is  reasonable  to  impose  a 
 sanction  on  licensees  that  do  not  meet  this  implicit  promise. 
 202.  In  light  of  our  decisions  to  establish  milestones  for  spacecraft  CDR  and  commencement  of  physical  construction  of  a  spacecraft,  to  include  milestone  requirements  in  the 
 rules,  to  require  licensees  to  post  bonds,  and  to  limit  the  right  to  file  applications  of  parties  who  establish  a  pattern  of  missing  milestones,  we  find  that  rules  specifying  additional  forfeiture 
 penalties  are  not  warranted  at  this  time.  Section  1.80  of  the  Commission's  rules  already  provides  adequate  authority  for  the  Commission  to  impose  forfeiture  penalties  upon  failure  to  comply  with 
 a  rule  or  a  license  condition.  466  Accordingly,  in  the  event  that  a  party  applies  for  satellite  licenses  without  the  intent  to  construct  or  launch  a  satellite,  we  will  determine  whether  starting  a 
 proceeding  to  consider  forfeiture  penalties  is  warranted. 
 11.  Incentives  for  Early  Launch 
 203.  Background.  We  sought  comment  on  establishing  incentives  for  implementing  satellite  systems  before  the  launch  milestone  deadline,  such  as  extending  the  satellite  license  term 
 by  two  years  if  the  licensee  launches  its  first  satellite  by  at  least  a  certain  number  of  months  before  the  applicable  launch  milestone.  467  We  invited  parties  to  propose  other  incentives.  468 


 204.  Discussion.  No  one  commented  on  this  proposal.  We  find  that  the  other  proposals  we  adopt  in  this  proceeding  should  be  sufficient  to  ensure  compliance  with  milestone 
 requirements  in  most  cases.  We  may  consider  revisiting  this  proposal  if  our  experience  reveals  that  additional  incentives  to  comply  with  milestone  requirements  are  necessary. 


 12.  Alternative  Milestone  Mechanism 
 205.  Background.  As  an  alternative  to  the  milestone  requirements  proposed  in  the  Notice,  the  Commission  invited  comment  on  requiring  that  licensees  spend  a  certain  amount  of 
 money  on  the  construction  of  its  satellite  system  each  year.  469 
 206.  Discussion.  CTIA  supports  this  proposal.  470  Teledesic  agrees  that  the  proposal  to  require  expenditure  of  a  certain  amount  of  money  each  year  would  improve  the  current  system, 
 but  it  encourages  the  Commission  to  entertain  other,  more  creative,  improvement  options.  471  On 
 466  "A  forfeiture  penalty  may  be  assigned  against  any  person  found  to  have:  (1)  Willfully  or 
 repeatedly  failed  to  comply  substantially  with  the  terms  and  conditions  of  any  license,  permit,  certificate,  or  other  instrument  of  authorization  issued  by  the  Commission;  (2)  Willfully  or  repeatedly  failed  to  comply 


 with  any  of  the  provisions  of  the  Communications  Act  of  1934,  as  amended;  or  of  any  rule,  regulation,  or  order  issued  under  that  Act  by  the  Commission  ..."  47  C.  F.  R.    1.80(  a)(  1),  (2). 


 467  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3883  (para.  107). 
 468  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3883  (para.  107). 
 469  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3882  (para.  104). 
 470  CTIA  Comments  at  6. 
 471  Teledesic  Comments  at  44. 
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 the  other  hand,  Hughes  criticizes  mandatory  expenditure  milestones  as  having  the  potential  to  encourage  licensees  to  project  unrealistically  low  total  costs.  472  Hughes  and  SES  Americom  also 
 worry  that  such  a  milestone  could  alter  the  relationship  between  operators  and  manufacturers.  473  SES  Americom  also  asserts  that  this  proposal  would  limit  operators'  flexibility  to  allocate 
 resources  among  different  projects  during  the  construction  period.  474 
 207.  We  decide  against  replacing  milestones  with  a  requirement  that  licensees  spend  a  certain  amount  of  money  on  the  construction  of  their  satellite  systems  each  year.  We  agree  with 
 Hughes  that  mandatory  expenditure  milestones  could  encourage  licensees  to  project  unrealistically  low  costs.  In  those  cases,  meeting  cost-  based  milestones  would  not  necessarily 
 show  that  the  licensee  is  progressing  towards  implementation  of  its  system.  In  addition,  to  protect  against  this  possibility,  we  would  need  to  develop  methods  for  determining  whether  a 
 licensee's  cost  projections  are  reasonable,  which  could  prove  overly  complex.  On  the  other  hand,  the  milestones  we  adopt  in  this  Order  will  provide  a  reasonable  basis  for  assessing  progress  of 
 system  implementation.  Moreover,  to  a  certain  extent,  the  payment  of  money  is  already  a  factor  in  our  milestones,  in  that  we  examine  the  payment  schedule  to  determine  whether  payments  are 
 spread  evenly  throughout  the  term  of  the  contract  term  rather  than  deferred  to  the  end  of  the  term.  475  Mandating  a  payment  schedule  with  any  more  specificity  might  not  reflect  the  best 
 schedule  for  the  particular  satellite  being  built. 
 13.  On-  site  Inspections 
 208.  CTIA  proposes  that  the  Commission  make  on-  site  inspections  to  verify  milestone  completion.  476  SES  Americom  maintains  that  this  would  delay  the  satellite  licensing  process.  477 
 We  believe  that  the  milestone  rule  revisions  we  adopt  in  this  Order  should  be  sufficient  in  most  cases  to  determine  whether  a  licensee  has  met  a  particular  milestone.  In  particular,  in  cases  where 
 a  licensee  has  not  adequately  demonstrated  that  it  has  met  a  milestone,  we  have  authority  to  revoke  the  license  without  inspecting  an  on-  site  facility.  Nevertheless,  an  on-  site  inspection  of 
 manufacturing  facilities  is  one  reasonable  method  to  supplement  the  record  in  a  milestone  review  proceeding,  in  cases  where  it  may  be  necessary  or  appropriate  to  supplement  the  record.  The 
 Commission  retains  discretion  to  make  such  inspections. 
 D.  Trafficking  in  Licenses 
 1.  Elimination  of  Satellite  Anti-  Trafficking  Rule 


 472  Hughes  Comments  at  45-  46. 
 473  Hughes  Comments  at  45-  46;  SES  Americom  Reply  at  13. 
 474  SES  Americom  Reply  at  22. 
 475  See  Tempo  Order,  1  FCC  Rcd  at  21  (para.  7). 
 476  CTIA  Comments  at  6. 
 477  SES  Americom  Reply  at  22. 
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 209.  Background.  The  Commission  prohibits  licensees  from  selling  "bare"  satellite  licenses  for  profit.  478  This  "anti-  trafficking  rule"  is  intended  to  discourage  speculators  and 
 prevent  unjust  enrichment  of  those  who  do  not  implement  their  proposed  systems.  479  On  the  other  hand,  the  existing  satellite  anti-  trafficking  rules  may  prevent  a  satellite  license  from  being 
 transferred  to  the  entity  that  would  put  it  to  its  highest  valued  use  in  the  shortest  amount  of  time.  480  Accordingly,  the  Notice  invited  comment  on  whether  we  should  eliminate  the  anti-trafficking 
 rule  for  satellite  licenses.  481 
 210.  The  Commission  adopted  this  restriction  on  sales  of  licenses  to  address  two  concerns.  First,  an  entity  might  obtain  a  license  without  any  intention  of  building  facilities  or 
 providing  service,  but  rather  only  to  sell  the  license  for  profit.  This  would  benefit  the  seller,  but  would  not  necessarily  provide  any  benefit  to  the  public.  482  Another  concern  is  that,  if  a  licensee 
 directs  its  attention  to  selling  its  license  to  the  exclusion  of  constructing  facilities,  the  spectrum  assigned  through  the  license  would  not  be  put  to  any  use  until  after  the  license  were  sold.  In  this 
 case,  during  the  time  before  the  sale,  the  public  would  be  deprived  of  whatever  valuable  service  might  have  otherwise  been  provided  by  some  other  entity.  483 


 211.  On  the  other  hand,  the  Commission  noted  that  there  may  be  many  situations  in  which  it  would  be  efficient  to  allow  an  entity  that  applied  for  and  received  a  satellite  license  to 
 resell  that  license  at  any  time,  provided  that  the  purchaser  meets  the  milestones  in  the  original  license.  484  In  particular,  allowing  a  licensee  whose  business  plan  is  no  longer  viable  to  sell  its 
 license  to  another  entity  with  another  business  plan  or  adequate  financial  resources  would  benefit  the  public  by  putting  scarce  orbit  and  spectrum  resources  sooner  than  would  be  possible 
 otherwise.  485  In  addition,  allowing  the  sale  of  licenses  would  reduce  the  risk  associated  with  constructing  and  launching  a  satellite  system,  by  giving  licensees  the  option  of  selling  their 
 licenses  if  they  find  that  their  business  plans  are  not  viable,  and  so  could  encourage  satellite  deployment.  486  These  factors  weigh  in  favor  of  removing  the  restriction  on  sales  of  licenses. 


 478  Space  Station  Licensing  Reform  NPRM,  17  FCC  Rcd  at  3883-  84  (paras.  109-  10).  See 
 also,  e.  g.,  Rulemaking  to  Amend  Parts  1,  2,  21,  and  25  of  the  Commissions  Rules  to  Redesignate  the  27.  5-29.  5  GHz  Frequency  Band,  to  Reallocate  the  29.  5-  30.0  GHz  Frequency  Band,  to  Establish  Rules  and 


 Policies  for  Local  Multipoint  Distribution  Service  and  for  Fixed  Satellite  Services,  Third  Report  and  Order,  CC  Docket  No.  92-  297,  12  FCC  Rcd  22310,  22339-  40  (para.  74)  (1997)  (Ka-  Band  Service  Rules  Order). 
 A  "bare"  license  is  a  license  to  operate  a  communications  facility  when  no  facility  has  been  constructed.  Space  Station  Licensing  Reform  NPRM,  17  FCC  Rcd  at  3883  n.  144. 


 479  Ka-  band  Service  Rules  Order,  12  FCC  Rcd  at  22339  (para.  74). 
 480  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3884  (para.  111). 
 481  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3883-  86  (paras.  109-  17). 
 482  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3884  (para.  110). 
 483  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3884  (para.  110). 
 484  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3884  (para.  111). 
 485  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3884  (para.  111). 
 486  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3884-  85  (paras.  112-  13). 
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 212.  In  the  Notice,  the  Commission  also  requested  comment  on  whether  the  satellite  licensing  process  itself  might  tend  to  discourage  parties  from  applying  for  a  license  merely  to  sell 
 it.  First,  the  Commission  proposed  requiring  the  purchaser  to  meet  the  milestones  in  the  original  license,  which  would  also  serve  to  discourage  speculation  because  the  license  would  lose  value  as 
 the  milestone  date  drew  near  unless  the  licensee  had  made  sufficient  progress  in  constructing  its  satellite.  487  In  addition,  the  Commission  noted  that  preparing  a  satellite  license  application  and 
 filing  it  with  the  Commission  is  a  technically  complex  and  costly  undertaking,  and  that  those  costs  might  help  to  limit  purely  speculative  applications.  488  Based  on  all  these  considerations,  we 
 proposed  to  eliminate  the  anti-  trafficking  rule  and  invited  comment  on  whether  we  had  struck  the  correct  balance  between  the  competing  goals  of  preventing  unjust  enrichment  and  expediting 
 service  to  the  public.  489 
 213.  Pleadings.  Some  parties  maintain  that  eliminating  the  anti-  trafficking  rule  would  increase  the  incentives  for  filing  speculative  applications.  490  Inmarsat  asserts  that  if  there  is  an 
 increase  in  speculation,  satellite  operators  would  face  an  increase  in  costs  that  could  be  passed  on  to  consumers.  491  Inmarsat  claims  further  that  eliminating  the  anti-  trafficking  rule  would  delay 
 service  to  the  public.  492  Hughes  maintains  that  it  is  unreasonable  to  make  a  public  interest  determination  that  an  applicant  is  qualified  to  hold  a  license,  and  then  allow  it  to  sell  the  license 
 to  another  party  without  any  Commission  review.  493 
 214.  Alternatively,  ICO  supports  elimination  of  the  anti-  trafficking  rule,  arguing  that  it  would  be  consistent  with  the  Commission's  efforts  to  allow  secondary  markets  to  develop  for 
 spectrum  in  other  services.  494  ICO  argues  that  the  Commission  has  relaxed  its  anti-  trafficking  rules  for  other  Commission  licensees,  and  that  there  is  no  reason  to  hold  satellite  licensees  to  a 
 higher  standard.  495  ICO  maintains  that  implementing  reasonable  milestone  requirements  would 


 487  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3886  (para.  116). 
 488  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3886  (para.  117). 
 489  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3886  (para.  117). 
 490  Hughes  Comments  at  28;  SES  Americom  Comments  at  5;  Inmarsat  Comments  at  11; 
 SES  Americom  Reply  at  12. 
 491  Inmarsat  Comments  at  11. 


 492  Inmarsat  Comments  at  11. 
 493  Hughes  Comments  at  49-  50. 
 494  ICO  Reply  at  2-  3,  citing  Principles  for  Promoting  the  Efficient  Use  of  Spectrum  by 
 Encouraging  the  Development  of  Secondary  Markets,  Policy  Statement,  15  FCC  Rcd  24178,  24181  (para.  10)  (2000)  (Spectrum  Secondary  Markets  Policy  Statement);  Promoting  Efficient  Use  of  Spectrum  Through 


 Elimination  of  Barriers  to  the  Development  of  Secondary  Markets,  Notice  of  Proposed  Rulemaking,  WT  Docket  No.  00-  230,  15  FCC  Rcd  24203  (para.  10)  (2000)  (Spectrum  Secondary  Markets  NPRM). 


 495  ICO  Reply  at  3,  citing,  e.  g.,  Amendment  of  Section  73.  3597  of  the  Commission's  Rules 
 (Applications  for  Voluntary  Assignments  or  Transfers  of  Control),  Report  and  Order,  BC  Docket  No.  81-  897,  FCC  82-  519,  52  Rad.  Reg.  2d  1081,  1086  (para.  21)  (1982)  (Broadcast  Trafficking  Report  and  Order) 


 (elimination  of  "three-  year  rule"  for  broadcast  stations). 
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 provide  adequate  protection  against  unjust  enrichment.  496  ICO  disagrees  that  the  anti-  trafficking  rule  is  needed  to  discourage  speculation.  497  Finally,  ICO  points  out  that  allowing  sales  of  licenses 
 can  help  mitigate  risk  and  so  helps  attract  investors.  498  Teledesic  argues  that,  in  the  past,  anti-trafficking  rules  have  generally  not  discouraged  speculation  in  licenses,  but  rather  added 
 unnecessary  complication  to  legitimate  business  transactions.  499 
 215.  Discussion.  We  eliminate  the  anti-  trafficking  policy  for  satellite  licenses.  We  conclude  that,  while  preventing  unjust  enrichment  and  expediting  service  to  the  public  are  both 
 important  policy  goals,  expediting  service  to  the  public  warrants  more  weight.  The  issue  raised  in  the  Notice  is  not  whether  eliminating  the  restriction  on  satellite  license  sales  might  increase  the 
 incentives  for  speculation.  The  Commission  recognized  that  eliminating  the  rule  would  increase  the  incentives  for  speculation.  500  Rather,  the  relevant  issue  is  whether  the  public  interest  benefits 
 of  eliminating  the  satellite  anti-  trafficking  rule  outweigh  the  benefits  of  keeping  the  rule.  501  For  reasons  discussed  below,  we  find  that  the  benefits  of  keeping  the  anti-  trafficking  rule  are 
 relatively  small  given  the  other  safeguards  against  speculation  we  adopt  in  this  Order,  while  the  benefits  of  eliminating  the  rule  are  fairly  substantial.  Therefore,  we  are  adopting  several 
 safeguards  against  speculation  in  this  Order  below.  In  addition,  we  retain  our  authority  to  review  transfer  of  control  applications  to  determine  whether  the  proposed  transfer  will  further  the  public 
 interest,  convenience,  and  necessity. 
 216.  Moreover,  the  licensing  procedures  we  adopt  today  should  discourage  speculation  by  themselves  to  some  extent.  Because  we  will  require  buyers  to  meet  the  milestone  schedule  in 
 the  original  license,  the  value  of  the  license  will  decrease  rapidly  as  each  milestone  deadline  approaches.  Because  milestone  enforcement  will  reduce  the  profits  a  speculator  can  make  from 
 its  sale,  it  will  discourage  some  speculation.  In  addition,  we  use  a  first-  come,  first-  served  procedure  for  GSO-  like  satellites  because  awarding  licenses  to  the  first  qualified  applicant,  by 
 itself,  will  not  preclude  us  from  licensing  other  applicants  at  other  orbit  locations.  Thus,  in  cases  in  which  there  are  other  orbit  locations  available,  applicants  are  unlikely  to  purchase  a  license 
 from  a  "speculator"  because  they  can  simply  apply  for  one.  502  Also,  as  the  Commission  observed  in  the  Notice,  there  are  significant  costs  associated  with  filing  a  satellite  application.  503  These 
 costs  include  the  technical  analyses  required  to  prepare  a  satellite  application,  the  application 


 496  ICO  Reply  at  3-  4. 
 497  ICO  Reply  at  4. 
 498  ICO  Reply  at  4-  5. 
 499  Teledesic  Comments  at  35-  38;  Teledesic  Reply  at  28-  30. 
 500  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3884  (para.  110). 
 501  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3884-  85  (paras.  111-  15). 
 502  We  realize  that  a  GSO-  like  applicant  may  have  an  incentive  to  purchase  a  license  from  a 
 speculator  rather  than  apply  for  another  location  with  the  Commission  in  cases  where  its  business  plans  require  a  specific  orbit  location.  In  most  cases,  however,  orbit  locations  close  to  each  other  in  the  GSO 


 orbit  are  close  substitutes  for  each  other,  so  that  there  will  be  less  incentive  to  purchase  a  license  from  a  speculator  when  another  close  orbit  location  is  available. 


 503  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3886  (para.  117). 
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 fee,  504  annual  regulatory  fees,  505  and  ITU  cost  recovery  fees.  Finally,  we  adopt  other  safeguards  against  speculation  in  this  Order,  such  as  a  bond  requirement,  and  limits  on  the  number  of 
 pending  applications  and  unbuilt  satellites  a  licensee  may  have  in  each  frequency  band.  Further,  our  procedure  for  NGSO-  like  satellite  systems,  where  we  divide  the  available  spectrum  equally 
 among  the  qualified  applicants  in  a  processing  round,  also  establishes  disincentives  against  speculative  applications.  Because  the  speculator's  spectrum  rights  would  be  redistributed  to  the 
 other  licensees  if  and  when  the  speculator  misses  the  first  milestone,  other  licensees  have  some  incentive  to  acquire  spectrum  through  this  process  rather  than  to  buy  spectrum  rights  from  the 
 speculator.  506  Although  none  of  these  factors  by  themselves  would  be  sufficient  to  prevent  speculation,  they  provide  enough  protection  when  combined  with  the  speculation  safeguards 
 discussed  below  507  to  make  the  anti-  trafficking  rule  for  satellites  superfluous. 
 217.  Thus,  while  the  benefits  of  retaining  the  current  restriction  on  sales  of  satellite  licenses  are  relatively  small,  the  benefits  of  eliminating  the  restriction  are  substantial. 
 Eliminating  the  restriction  on  sales  expedites  provision  of  satellite  service  to  the  public  by  facilitating  the  transfer  of  licenses  in  the  secondary  market  to  those  parties  that  have  the  greatest 
 incentive  and  ability  to  construct  a  satellite  system  within  the  required  time  frame.  508  In  addition,  easing  unnecessary  restrictions  on  post-  licensing  transactions  will  enable  satellite  spectrum  to 
 move  more  efficiently  to  its  highest  and  best  use  without  the  need  for  relicensing  procedures.  It  helps  satellite  licensees  mitigate  their  business  risk,  and  so  encourages  investment  in  the  satellite 
 industry.  509 
 218.  In  addition,  we  agree  with  ICO  that  eliminating  the  restriction  on  sales  of  satellite  services  could  help  a  secondary  market  to  develop  for  satellite  capacity.  510  Secondary  markets 


 504  The  Commission  listed  the  satellite  application  fees  in  the  Notice,  but  those  fees  have 
 since  been  increased.  The  application  fees  are  now  $98,645  for  each  GSO  space  station,  and  $339,730  for  each  NGSO  satellite  system.  Amendment  of  the  Schedule  of  Application  Fees  Set  Forth  in  Section  1.1102 


 through  1.  1107  of  the  Commission's  Rules,  Order,  GEN  Docket  No.  86-  285,  17  FCC  Rcd  13948,  13982-  83  (2002).  These  fees  took  effect  on  December  5,  2002.  See  Notice  of  Publication  in  the  Federal  Register  and 
 Announcement  of  Effective  Date  of  Schedule  of  Charges  for  Application  Fees,  Public  Notice,  DA  02-  3080  (released  Nov.  7,  2002). 


 505  Currently,  the  regulatory  fee  is  $99,700  per  space  station  for  GSO  licensees  and  $103,200 
 per  licensed  NGSO  satellite  system  for  NGSO  licensees.  47  C.  F.  R.    1.  1156.  The  Commission  has  proposed  increasing  these  fees  to  $115,  625  and  $108,375,  respectively.  Assessment  and  Collection  of 


 Regulatory  Fees  for  Fiscal  Year  2003,  Notice  Of  Proposed  Rulemaking,  MD  Docket  No.  03-  83,  FCC  03-  64  (released  Mar.  26,  2003). 


 506  In  this  Section  below,  we  adopt  the  proposal  in  the  Space  Station  Reform  NPRM  to 
 maintain  the  current  milestone  schedule  when  a  license  is  sold.  See  also  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3886  (para.  116). 


 507  Section  VII.  E. 
 508  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3884  (para.  111).  We  note  that  this 
 approach  is  consistent  with  the  recommendations  of  the  Spectrum  Policy  Task  Force  Report.  SPTF  Report  at  38-  39. 


 509  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3884-  85  (paras.  112-  13). 
 510  ICO  Reply  at  2-  3. 
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 can  provide  benefits  to  satellite  users  and  consumers  not  only  through  the  outright  transfer  of  licenses,  but  also  through  partial  redistribution  or  transfer  of  unused  spectrum.  By  encouraging 
 satellite  licensees  to  sell  unused  spectrum  to  other  parties  willing  to  put  the  spectrum  into  use,  we  allow  parties  flexibility  to  transfer  satellite  bandwidth  to  more  efficient  uses  in  response  to 
 changing  market  conditions  and  consumer  demands,  and  we  allow  marketplace  forces  to  determine  which  companies  succeed.  511  Furthermore,  as  ICO  notes,  we  have  relaxed  our 
 restrictions  on  sales  of  other  licenses  for  this  reason.  512  For  example,  we  have  recently  eliminated  anti-  trafficking  restrictions  in  the  cellular  service,  513  and  in  most  other  terrestrial  services,  we 
 allow  the  full  or  partial  transfer  of  licenses  without  holding  requirements.  Similarly,  we  abolished  our  three-  year  holding  rule  514  for  broadcast  licenses  20  years  ago,  concluding  that  the 
 public  interest  is  usually  best  served  by  allowing  station  sales  transactions  to  be  regulated  by  marketplace  forces.  515  We  also  held  that  our  previous  concerns  about  speculation  in  broadcast 
 licenses  were  outweighed  by  the  public  interest  benefits  of  removing  restrictions  on  sales  of  licenses.  516  We  find  this  reasoning  as  persuasive  today  as  it  was  in  1982.  517 


 219.  We  also  note  that  there  are  other  factors  that  weigh  in  favor  of  eliminating  the  restriction  on  sales  of  licenses.  First,  as  we  noted  above,  eliminating  the  restriction  greatly 
 facilitates  post-  licensing  negotiations  among  licensees.  518  Given  that  we  adopt  procedures  in  this  proceeding  to  expedite  satellite  licensing  by  avoiding  the  need  for  pre-  licensing  negotiations,  it  is 
 important  that  we  do  not  discourage  post-  licensing  negotiations.  In  light  of  those  measures,  the  restriction  on  sales  of  licenses  will  not  be  needed  as  much  as  it  was  in  the  past. 


 220.  As  we  noted  above,  the  relevant  issue  is  whether  the  public  interest  benefits  of  eliminating  the  satellite  anti-  trafficking  rule  outweigh  the  benefits  of  keeping  the  rule.  519 


 511  Spectrum  Secondary  Markets  Policy  Statement,  15  FCC  Rcd  at  24182  (para.  11). 
 512  ICO  Reply  at  3. 
 513  Year  2000  Biennial  Regulatory  Review    Amendment  of  Part  22  of  the  Commissions 
 Rules  to  Modify  or  Eliminate  Outdated  Rules  Affecting  the  Cellular  Radiotelephone  Service  and  other  Commercial  Mobile  Radio  Services,  Report  and  Order,  WT  Docket  No.  01-  108,  17  FCC  Rcd  18401, 


 18436-  38  (paras.  70-  74)  (2002). 
 514  The  three-  year  holding  rule  prohibited  transfers  of  broadcast  licenses  unless  the  licensee 
 had  held  the  license  for  a  minimum  of  three  years. 
 515  Broadcast  Trafficking  Report  and  Order,  52  Rad.  Reg.  2d  at  1087  (para.  23). 


 516  Broadcast  Trafficking  Report  and  Order,  52  Rad.  Reg.  2d  at  1087-  88  (paras.  24-  25). 
 517  Courts  have  also  upheld  past  Commission  efforts  to  replace  government  regulation  with 
 reliance  on  market  forces  in  appropriate  circumstances.  FCC  v.  WNCN  Listeners  Guild,  450  U.  S.  582  (1981)  (affirming  Commission  conclusion  that  promoting  diversity  in  broadcasting  through  market  forces 


 and  competition  among  broadcasters  is  in  the  public  interest);  WOLD  Communications,  Inc.,  v.  FCC,  735  F.  2d  1465,  1475  (D.  C.  Cir.,  1984)  ("  But  the  public  interest  touchstone  of  the  Communications  Act,  beyond 
 question,  permits  the  FCC  to  allow  the  market  place  to  substitute  for  direct  Commission  regulation  in  appropriate  circumstances"). 


 518  Section  V.  C.  2. 
 519  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3884-  85  (paras.  111-  15). 
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 Therefore,  parties  arguing  merely  that  the  anti-  trafficking  rule  is  needed  to  discourage  speculation  do  not  provide  a  sufficient  basis  for  retaining  the  rule.  520  Of  the  parties  arguing  in  favor  of  the 
 anti-  trafficking  rule,  only  Inmarsat  comments  on  whether  the  benefits  of  the  restriction  outweigh  the  benefits  of  removing  the  restriction.  Specifically,  Inmarsat  asserts  that  removing  the 
 restriction  might  cause  delay  in  provision  of  satellite  services  to  the  public,  and  might  increase  the  cost  of  satellite  services.  521  We  disagree  with  both  of  Inmarsat's  assertions.  We  disagree  that 
 removing  the  restriction  will  delay  provision  of  satellite  services  to  the  public.  In  fact,  we  conclude  that  eliminating  the  restriction  on  satellite  license  sales  on  balance  should  expedite 
 service  to  the  public.  As  we  noted  in  the  Notice,  the  purchaser  will  often  be  able  to  implement  the  project  when  the  original  licensee  finds  it  cannot.  522  In  addition,  because  we  require  buyers  to 
 meet  the  milestone  schedule  in  the  original  license,  the  sale  of  a  license  should  not  delay  service  to  the  public.  523  We  also  disagree  with  Inmarsat  that  removing  the  restriction  will  result  in  any 
 significant  increase  in  the  cost  of  satellite  services.  The  Commission  observed  in  the  Notice  that  it  can  cost  millions  of  dollars  to  design,  build,  and  launch  a  satellite  system.  524  If  speculators 
 were  able  to  sell  the  licenses  at  excessive  prices,  the  excessive  price  paid  becomes  part  of  the  operators  fixed  cost,  and  would  not  affect  the  price  of  satellite  services  in  a  competitive  market, 
 where  prices  are  determined  by  the  marginal  cost  of  the  highest  cost  operator  rather  than  fixed  costs. 


 221.  Finally,  contrary  to  Hughes's  assertion,  the  rule  revisions  we  adopt  here  will  not  allow  licensees  to  sell  their  licenses  without  Commission  review.  525  Section  310(  d)  of  the  Act 
 requires  prior  Commission  review  of  all  transfers  of  licenses,  526  and  Section  25.119(  a)  of  the  Commission's  rules  prohibits  transfers  of  satellite  licenses  unless  the  Commission  determines  that 
 the  public  interest,  convenience,  and  necessity  will  be  served  thereby.  527  The  Commission  did  not  propose  any  revision  to  that  requirement,  nor  do  we  adopt  any  such  revision  here.  Thus,  by 
 eliminating  the  anti-  trafficking  rule,  we  will  no  longer  review  each  satellite  transfer  of  control  application  to  determine  whether  the  proposed  transaction  is  the  sale  of  a  bare  license  for  profit, 
 but  we  will  continue  to  review  transfer  of  control  applications  to  determine  whether  the  proposed  transaction  furthers  the  public  interest,  convenience,  and  necessity.  As  part  of  that  determination, 
 we  will  consider  whether  the  transferee  is  qualified  to  hold  a  satellite  license,  and  whether  the  proposed  transaction  is  likely  to  facilitate  provision  of  service  to  the  public.  We  also  note  that  the 


 520  Hughes  Comments  at  28;  SES  Americom  Comments  at  5;  SES  Americom  Reply  at  12. 
 521  Inmarsat  Comments  at  11. 
 522  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3885  (para.  114). 
 523  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3884  (para.  111),  citing  MCI  Order,  2  FCC 
 Rcd  at  234  (para.  7);  First  Columbia  Milestone  Order,  15  FCC  Rcd  at  15571  n.  35;  Columbia  Communications  Corporation,  Memorandum  Opinion  and  Order,  15  FCC  Rcd  16496,  16500-  01  (para.  12) 


 (Int'l  Bur.  2000)  (Second  Columbia  Milestone  Order),  PanAmSat  Ka-  band  License  Cancellation  Review  Order,  16  FCC  Rcd  at  11538  (para.  13). 


 524  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3886  (para.  117). 
 525  Hughes  Comments  at  49-  50. 
 526  47  U.  S.  C.    310(  d). 
 527  47  C.  F.  R.    25.  119(  a). 
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 Commissions  public  interest  authority  is  broad  enough  to  cover  certain  specific  sensitivities  that  have  been  raised  in  this  proceeding,  as  well  as  concerns  of  the  Commission.  Thus,  we  note  that 
 we  may  also  examine,  if  appropriate,  whether  the  seller  obtained  the  license  in  good  faith  or  for  the  primary  purpose  of  selling  it  for  a  profit,  whether  the  licensee  makes  serious  efforts  to 
 develop  a  satellite  or  constellation,  and/  or  whether  the  licensee  faces  changed  circumstances. 
 222.  Allowing  those  with  no  intention  of  building  a  satellite  system  to  profit  from  the  Commission's  regulatory  process  would  be  contrary  to  the  public  interest.  We  do  not  expect  this 
 situation  to  arise  very  often,  however.  528  In  addition,  the  Commission  always  has  the  option  to  consider  initiating  a  rulemaking  proceeding  to  determine  whether  the  available  spectrum  should 
 be  reallocated.  Finally,  we  emphasize  that  a  license  purchaser  will  be  required  to  comply  with  all  the  rules  applicable  to  the  original  licensee,  including  but  not  limited  to  milestones,  the 
 performance  bond,  and  the  limits  on  pending  applications  and  unbuilt  satellites.  We  do  not  anticipate  that  such  a  review  will  slow  down  the  processing  of  transfer  requests. 


 223.  In  summary,  we  adopt  the  proposal  in  the  Notice  to  eliminate  the  prohibition  on  sales  of  bare  satellite  licenses  for  profit.  We  find  that  the  public  interest  benefits  of  retaining  this 
 restriction  are  significantly  outweighed  by  the  benefits  of  eliminating  the  restriction. 
 2.  Revision  of  Anti-  Trafficking  Rule 
 224.  Background.  Intelsat  proposes  revising  the  anti-  trafficking  rule  rather  than  eliminating  it.  Intelsat  observes  that  the  Commission's  broadcast  rules  prohibit  parties  from 
 accepting  payments  for  withdrawing  petitions  to  deny  broadcast  licenses  unless  the  payments  are  less  than  the  petitioner's  legitimate  and  prudent  out-  of-  pocket  expenses,  except  in  cases  of  bona 
 fide  merger  transactions.  529  Intelsat  proposes  applying  this  standard  to  transfers  of  both  licenses  and  pending  applications,  claiming  that  it  is  a  "more  relaxed  approach"  than  our  current  anti-trafficking 
 rule.  530  PanAmSat  recommends  retaining  the  current  anti-  trafficking  policy,  but  applying  it  flexibly  to  allow  ownership  changes  that  are  part  of  legitimate  business  transactions, 
 or  are  entered  into  for  financing  purposes.  531 
 225.  Discussion.  We  do  not  adopt  Intelsat's  or  PanAmSat's  proposals.  Above,  we  determined  that  eliminating  the  restriction  on  sales  of  satellite  licenses  will  yield  fairly  substantial 
 public  interest  benefits,  with  relatively  few  negative  effects.  In  particular,  we  found  that  any 


 528  While  substantial  evidence  that  a  satellite  license  was  obtained  exclusively  for  purposes 
 of  selling  for  profit  will  weigh  heavily  against  finding  that  a  subsequent  transfer  of  the  license  would  further  the  public  interest,  bald  allegations  or  weakly  supported  claims  of  speculation  will  not  be  afforded 


 this  weight  in  our  public  interest  determination.  We  initiated  this  proceeding  to  expedite  our  satellite  licensing  process,  in  part  to  enable  licensees  to  provide  service  to  the  public  faster  than  is  now  possible. 
 Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3852-  53  (paras.  12-  14).  Eliminating  the  anti-  trafficking  rule  helps  further  that  policy  goal.  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3885  (para.  115).  It  would 
 undercut  that  goal  to  allow  commenters  to  use  our  speculation  concerns  primarily  for  anti-  competitive  purposes  to  delay  approval  of  other  parties'  transactions. 


 529  Intelsat  Comments  at  17-  18,  citing  47  C.  F.  R.    73.  3525,  73.  3588. 
 530  Intelsat  Comments  at  18-  19. 
 531  PanAmSat  Comments  at  18-  19.  See  also  Hughes  Comments  at  50-  51  (retain  rule  but 
 grant  waivers  in  cases  of  "genuine  cases  of  business  transfers.") 
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 increase  in  speculation  resulting  from  the  eliminating  the  restriction  should  not  result  in  an  increase  in  the  price  of  satellite  services.  Therefore,  we  do  not  see  any  public  interest  benefit 
 from  restricting  the  sales  of  some  licenses  based  on  whether  the  sale  is  part  of  a  "legitimate  business  transaction"  or  "bona  fide  merger  transaction."  Furthermore,  as  Teledesic  points  out, 
 anti-  trafficking  rules  in  the  past  have  generally  not  eliminated  speculation  and  have  hindered  legitimate  business  transactions.  532 


 E.  Safeguards  Against  Frivolous  or  Speculative  Applications 
 1.  Safeguards  in  First-  Come,  First-  Served  Procedure 
 226.  In  the  Notice,  the  Commission  proposed  several  measures  to  discourage  frivolous  or  speculative  applications  in  the  first-  come,  first-  served  procedure.  First,  the  Commission  proposed 
 placing  a  limit  on  the  number  of  satellite  license  applications  any  one  entity  can  have  on  file.  533  In  conjunction  with  this  proposed  limit,  the  Commission  proposed  an  attribution  rule  to  determine 
 the  applicant  for  purposes  of  this  rule.  534  Further,  the  Commission  proposed  prohibiting  applicants  from  transferring  their  place  in  any  queue  to  another  party.  535  For  reasons  discussed 
 below,  we  adopt  these  proposals. 
 2.  Safeguards  in  Modified  Processing  Rounds 
 227.  The  Notice  did  not  propose  any  specific  rule  revisions  to  limit  speculative  applications  in  processing  rounds.  Teledesic,  however,  maintains  that  processing  rounds  create 
 an  incentive  for  speculation.  536  We  agree.  By  announcing  a  cut-  off  date  in  a  processing  round,  the  Commission  gives  both  speculative  and  legitimate  applicants  an  opportunity  to  file,  and  to 
 have  their  applications  considered  concurrently  with  the  lead  application.  Furthermore,  announcing  a  cut-  off  date  can  cause  a  sense  of  scarcity  to  develop,  when  applicants  recognize  that 
 this  may  be  their  only  opportunity  to  secure  access  to  that  orbit/  spectrum  resource.  Consequently,  we  will  adopt  the  same  safeguards  against  speculation  in  modified  processing  rounds  that  we 
 adopt  for  the  first-  come,  first-  served  procedure.  537  We  discuss  these  safeguards  below. 
 3.  Limit  on  Number  of  Pending  Applications 
 228.  Background.  The  Notice  proposed  limiting  the  number  of  satellite  license  applications  any  one  applicant  can  have  pending  in  a  frequency  band  to  five  GSO  orbital 


 532  Teledesic  Comments  at  35-  38;  Teledesic  Reply  at  28-  30. 
 533  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3864-  65  (para.  51). 
 534  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3865  (para.  52). 
 535  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3865-  66  (para.  53). 
 536  Teledesic  Comments  at  5-  8. 
 537  The  Commission  proposed  these  safeguards  for  both  GSO  and  NGSO  applications.  See 
 Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3864-  66  (paras.  51-  53). 
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 locations  and  one  NGSO  system.  538  The  Notice  observed  that  the  Commission  placed  a  limit  on  the  number  of  pending  broadcast  applications  in  the  TV  and  FM  Broadcast  Order.  539 
 Furthermore,  our  rules  currently  limit  the  number  of  additional  GSO  orbital  locations  that  may  be  assigned  in  each  frequency  band  for  satellite  operators  with  previously  authorized  but  unlaunched 
 satellites  in  that  band.  540  The  Commission  asked  in  the  Notice  whether  the  limit  should  include  authorized  but  unlaunched  satellites  in  addition  to  pending  applications.  541 


 229.  Discussion.  Teledesic  argues  that  limiting  pending  satellite  applications  is  a  reasonable  way  to  limit  speculation  without  restricting  applicants'  business  plans.  542  Teledesic 
 also  maintains  that  adopting  this  proposal  would  give  licensees  an  incentive  to  turn  in  licenses  for  satellite  systems  that  they  do  not  intend  to  build.  543  Hughes,  however,  asserts  that  this  proposal  is 
 too  restrictive  because  it  could  preclude  legitimate  applications  from  consideration.  544  Alternatively,  SES  Americom  asserts  that  limiting  the  number  of  pending  satellite  applications  is 
 not  restrictive  enough.  SES  Americom  argues  that  such  a  limit  would  not  prevent  speculative  applications  because  there  could  be  an  unlimited  number  of  speculative  applicants.  545 


 230.  We  adopt  our  proposed  limits  on  pending  applications.  We  agree  with  Teledesic  that  limiting  pending  applications  to  five  GSO  orbit  locations  or  one  NGSO  satellite  system  per 
 frequency  band  will  restrain  speculation  without  restricting  applicants'  business  plans.  In  addition,  five  orbit  locations  is  reasonable  because  it  gives  licensees  the  option  of  providing  a 
 global  service  with  good  look  angles  for  each  satellite.  We  further  agree  that  limiting  pending  applications  gives  licensees  an  incentive  to  turn  in  licenses  for  satellite  systems  that  they  do  not 
 intend  to  build.  This  in  turn  should  make  orbital  locations  available  for  reassignment  more  quickly  than  they  would  be  if  licensees  waited  until  a  milestone  deadline.  We  disagree  that  this 
 limit  on  pending  applications  will  preclude  legitimate  applications  from  consideration.  Rather,  it  simply  requires  satellite  operators  to  prioritize  their  business  plans.  Although  SES  Americom  is 
 correct  that  this  does  not  totally  prevent  speculation,  it  does  provide,  together  with  strict  milestone  enforcement  and  the  new  bond  requirement  we  adopt  above,  some  protection  against 
 speculation. 
 231.  We  also  adopt  our  proposal  to  include  authorized  but  unlaunched  satellites  in  the  five  GSO-  like  orbit  location  limit.  546  Adopting  our  proposal  to  limit  unlaunched  satellites 


 538  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3864-  65  (para.  51). 
 539  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3864-  65  (para.  51),  citing  TV  and  FM 
 Broadcast  Order,  50  Fed.  Reg.  at  19940  (para.  24). 
 540  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3864-  65  (para.  51),  citing  47  C.  F.  R.   
 25.  140(  f). 
 541  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3864-  65  (para.  51). 


 542  Teledesic  Comments  at  28-  29. 
 543  Teledesic  Comments  at  44. 
 544  Hughes  Comments  at  28-  29. 
 545  SES  Americom  Comments  at  4. 
 546  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3865  (para.  51). 
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 provides  additional  protection  against  speculation,  without  substantially  restricting  licensees'  flexibility.  No  one  commented  on  this  proposal.  We  will  apply  this  limit  on  a  frequency  band-by- 
 frequency  band  basis.  This  is  consistent  with  the  Commission's  current  practice  of  limiting  additional  orbital  locations  for  satellite  operators  with  previously  authorized  but  unlaunched 
 satellites  on  a  frequency  band  basis.  547 
 232.  PanAmSat  and  Pegasus  do  not  comment  directly  on  the  proposed  limit  on  pending  satellite  applications.  In  the  context  of  the  Commission's  proposal  to  include  a  system  of 
 preferences  in  its  processing  round  rules,  however,  PanAmSat  supports  a  two-  orbit-  location  limit,  with  one  additional  orbit  location  allowed  in  subsequent  processing  rounds,  as  is  permitted 
 currently  in  the  Commission's  rules.  548  Pegasus  advocates  the  current  limit  of  two  unbuilt  satellites,  but  allowing  applicants  to  exceed  that  limit  upon  a  showing  of  a  firm  commitment  to 
 spend  funds  for  constructing  the  additional  satellites.  549  Pegasus  is  concerned  that  parties  applying  for  licenses  for  more  than  two  locations  are  likely  going  to  "warehouse"  the  additional 
 locations.  550  In  this  Order  above,  we  reject  proposals  for  systems  of  preferences  intended  to  streamline  processing  rounds.  551  Here,  we  reject  a  two-  unbuilt-  satellite  limit  as  a  general 
 proposition.  Currently,  the  Commission's  policy  is  to  permit  initial  applicants  in  processing  rounds  to  request  two  orbital  locations  per  frequency  band  per  ocean  region,  plus  two  over  the 
 continental  United  States  (CONUS)  region,  for  a  total  of  eight  per  frequency  band.  Reducing  the  limit  to  five  orbit  locations  provides  additional  protection  against  speculation,  but  still  allows 
 licensees  to  develop  global  satellite  systems.  If  we  were  to  reduce  the  limit  to  two,  we  would  agree  with  Hughes  that  such  a  limit  is  likely  to  preclude  legitimate  applications  from 
 consideration.  Moreover,  considering  requests  for  more  than  two  pending  GSO-  like  applications  upon  a  case-  by-  case  showing  could  result  in  licensing  delay.  Unlike  the  case-  by-  case  showing 
 proposed  by  Pegasus,  we  expect  the  five-  pending-  application  rule  to  be  an  easily  administered,  bright-  line  rule.  Reviewing  those  case-  by-  case  showings  might  delay  our  review  of  other 
 applications  in  the  queue,  which  in  turn  would  delay  service  to  the  public.  Accordingly,  we  will  not  adopt  Pegasus's  proposal  to  impose  a  two-  application  limit  on  all  GSO-  like  satellite 
 applicants.  Nevertheless,  to  address  Pegasus's  concern  that  allowing  more  than  two  pending  satellite  applications  could  lead  to  warehousing,  we  adopt  in  this  Order  above  a  limit  of  two 
 pending  applications  and  unbuilt  satellites  for  licensees  that  have  established  a  pattern  of  missing  milestones.  552 


 233.  In  summary,  we  will  not  accept  any  additional  applications  from  entities  which  have  more  than  five  pending  GSO-  like  satellite  license  applications  or  previously  authorized  but 
 unlaunched  GSO-  like  satellite  systems,  in  any  frequency  band.  Nor  will  we  accept  applications  from  entities  with  more  than  one  pending  application  for  an  NGSO-  like  system,  or  more  than  one 
 NGSO  system  where  no  satellites  have  been  launched,  in  any  frequency  band.  We  emphasize 


 547  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3865  n.  59;  47  C.  F.  R.    25.  140(  f). 
 548  PanAmSat  Comments  at  10-  11. 
 549  Pegasus  Comments  at  5. 
 550  Pegasus  Comments  at  5. 
 551  Section  V.  C.  2. 
 552  Section  VII.  C.  10. 
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 that  these  limits  apply  only  to  applications  for  U.  S.  licenses  for  new  GSO-  like  and  NGSO-  like  satellite  systems.  These  limits  do  not  apply  to  applications  for  replacement  satellites,  renewals  of 
 NGSO-  like  constellation  licenses,  modifications,  transfers  of  control,  or  any  other  satellite-  related  application.  Nor  will  we  include  a  U.  S.  applicant's  foreign-  licensed  satellites  in  these  limits.  553 
 We  find  that  these  limits  should  discourage  speculative  satellite  applications  in  most  cases.  In  the  event  that  our  experience  with  these  limits  do  not  discourage  a  particular  applicant  from  filing 
 speculative  applications,  we  will  impose  more  stringent  limits  on  the  number  of  pending  applications  and  unbuilt  satellites  on  that  applicant.  554 


 4.  Attributable  Interest 
 234.  Background.  In  the  Notice,  the  Commission  observed  that  limiting  the  number  of  orbit  locations  or  constellations  that  an  applicant  can  have  pending  requires  it  to  determine  who  is 
 an  "applicant"  for  purposes  of  this  limit.  555  Therefore,  the  Commission  proposed  attribution  rules  prohibiting  a  party  from  filing  a  satellite  application  if  it  holds  more  than  33  percent  of  the  total 
 asset  value  of  applicants  with  applications  for  five  GSO  orbital  locations,  and  one  NGSO  satellite  system,  in  any  frequency  band,  pending  before  the  Commission.  556  We  also  noted  that  we 
 adopted  an  attribution  rule  of  33  percent  in  the  context  of  determining  eligibility  for  the  "new  entrant"  bidding  credit  in  auctions  for  commercial  broadcast  service  licenses.  557 


 235.  Discussion.  Teledesic  supports  this  proposal.  558  Hughes  claims  that  the  Commission's  proposal  is  too  restrictive  for  separate  operating  companies  that  have  overlapping 
 stock  ownership,  and  to  joint  ventures.  559  Boeing  claims  that  the  proposed  limit  could  be  evaded  by  speculative  applicants.  560 


 236.  We  adopt  our  proposed  attribution  rule  in  a  modified  form.  To  limit  speculative  applications,  we  adopted  a  limit  to  the  number  of  satellite  applications  an  applicant  can  have 
 pending  before  the  Commission  in  this  Order  above.  561  This  necessitates  some  attribution  rule.  Otherwise,  applicants  could  evade  the  limit  simply  through  corporate  restructuring. 


 553  We  adopt  limits  for  non-  U.  S.-  licensed  satellite  operators  seeking  access  to  the  U.  S. 
 market  in  Section  VIII.  F.  below. 
 554  Section  VII.  C.  10.  above. 


 555  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3865  (para.  52). 
 556  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3865  (para.  52). 
 557  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3865  (para.  52),  citing  47  C.  F.  R.   
 73.  5008(  c);  Implementation  of  Section  309(  j)  of  the  Communications  Act  --  Competitive  Bidding  for  Commercial  Broadcast  and  Instructional  Television  Fixed  Service  Licenses,  Memorandum  Opinion  and 


 Order,  MM  Docket  No.  97-  234,  14  FCC  Rcd  12541  (1999)  (Broadcast  New  Entrant  Credit  Order). 
 558  Teledesic  Comments  at  29. 


 559  Hughes  Comments  at  29. 
 560  Boeing  Comments  at  7. 
 561  Section  VII.  E.  3. 
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 237.  Consequently,  the  issue  is  not  whether  to  adopt  an  attribution  rule,  but  what  attribution  rule  to  adopt.  Neither  Hughes  nor  Boeing  persuades  us  that  our  proposed  attribution 
 rule  is  unreasonable.  Hughes  claims  that  the  proposed  rule  is  too  restrictive  for  satellite  operators  with  overlapping  stock  ownership  or  involved  in  joint  ventures.  We  use  the  33  percent  standard 
 for  the  "new  entrant"  credit  in  auctions  for  commercial  broadcast  licenses.  In  that  context,  the  Commission  found  that  33  percent  was  sufficient  to  avoid  undercutting  the  policy  goal  of 
 promoting  competitive  entry  into  the  broadcast  industry,  without  unreasonably  limiting  broadcasters'  efforts  to  obtain  financing.  562  The  same  concerns  apply  here.  In  contrast,  Boeing 
 contends  that  this  standard  is  not  restrictive  enough,  because  it  could  be  evaded  by  speculative  applicants.  563  Therefore,  to  provide  additional  protection  against  speculation,  we  adopt  two  new 
 provisions.  First,  we  will  revise  our  proposed  attribution  rule  to  include  a  controlling  interest,  and  any  other  subsidiaries  of  that  controlling  interest.  564  Second,  we  will  calculate  ownership 
 interests  on  a  fully  diluted  basis.  All  agreements,  such  as  warrants,  stock  options,  and  convertible  debentures,  will  generally  be  treated  as  if  the  rights  thereunder  already  have  been  fully  exercised. 
 This  will  provide  additional  protection  against  speculation  by  precluding  parties  from  evading  the  limits  by  using  stock  options.  The  Commission  has  adopted  a  substantially  similar  measure  to 
 define  "designated  entities,"  which  are  small  businesses  and  minority-  owned  businesses  that  have  been  eligible  for  bidding  credits  in  certain  license  auctions.  565 


 238.  Accordingly,  if  one  applicant  has  an  interest  in  another  applicant,  in  which  the  equity  (including  all  stockholdings,  whether  voting  or  non-  voting,  common  or  preferred)  and  debt 
 interest  or  interests,  in  the  aggregate,  exceed  33  percent  of  the  total  asset  value  (defined  as  the  aggregate  of  all  equity  plus  all  debt)  of  that  applicant,  the  pending  applications  and  unbuilt 
 satellites  of  both  applicants  will  be  counted  together  for  purposes  of  the  limits.  566  Also,  if  an  applicant,  or  the  subsidiary  of  an  applicant,  has  a  controlling  interest  in  another  applicant,  the 
 pending  applications  and  unbuilt  satellites  of  both  applicants  will  be  counted  together  for  purposes  of  the  limits.  567  We  will  calculate  ownership  interests  on  a  fully  diluted  basis,  i.  e.,  all 
 agreements,  such  as  warrants,  stock  options,  and  convertible  debentures,  will  generally  be  treated  as  if  the  rights  thereunder  already  have  been  fully  exercised.  568 


 239.  We  explained  above  that  the  limits  do  not  apply  to  applications  other  than  new  satellite  applications.  Similarly,  this  attribution  rule  does  not  preclude  a  participant  in  a 


 562  Broadcast  New  Entrant  Credit  Order,  14  FCC  Rcd  at  12545-  47  (paras.  9-  11). 
 563  Boeing  Comments  at  7. 
 564  Specifically,  we  adopt  here  the  "controlling  interest"  standard  the  Commission  adopted  in 
 Amendment  of  Part  1  of  the  Commissions  Rules    Competitive  Bidding  Procedures,  Order  on  Reconsideration  of  the  Third  Report  and  Order,  Fifth  Report  and  Order,  and  Fourth  Further  Notice  of 


 Proposed  Rule  Making,  WT  Docket  No.  97-  82,  15  FCC  Rcd  15293,  15323-  27  (paras.  59-  67)  (2000)  (Part  1  Fifth  Report  and  Order).  See  also  47  C.  F.  R.    1.2110(  b)(  2). 


 565  47  C.  F.  R    25.  2110(  c)(  2)(  ii)(  A). 
 566  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3865  (para.  52),  citing  47  C.  F.  R.   
 73.  5008(  c);  Broadcast  New  Entrant  Credit  Order,  14  FCC  Rcd  12541. 
 567  47  C.  F.  R    1.2110(  b)(  2). 


 568  47  C.  F.  R    1.2110(  c)(  2)(  ii)(  A). 
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 processing  round  from  purchasing  the  spectrum  rights  of  another  NGSO-  like  licensee  in  that  processing  round.  A  licensee  with  five  pending  GSO-  like  applications  or  unbuilt  satellites  in  a 
 frequency  band,  however,  would  not  be  allowed  to  acquire  a  license  for  another  GSO-  like  satellite  in  that  band.  Similarly,  in  a  merger  transaction,  the  resulting  entity  would  be  required  to 
 abandon  some  of  its  pending  applications  if  it  exceeds  the  applicable  limits. 
 5.  Selling  Place  in  Queue 
 240.  Background.  The  Commission  proposed  prohibiting  applicants  from  allowing  other  entities  to  assume  their  place  in  any  queue.  569  The  Commission  explained  that,  without  this 
 prohibition,  it  is  possible  that  some  parties  would  file  satellite  applications  simply  to  obtain  a  place  in  a  queue  to  sell  to  another  party  willing  and  able  to  implement  its  proposed  satellite 
 system.  570 
 241.  Discussion.  Hughes  notes  that  the  Commission  also  proposed  to  eliminate  the  anti-trafficking  rule,  and  argues  that  it  is  inconsistent  to  prohibit  sales  of  places  in  the  queue  while 
 eliminating  the  anti-  trafficking  rule.  571  Teledesic  argues  that  the  arguments  in  favor  of  eliminating  the  anti-  trafficking  rule  also  support  allowing  the  sale  of  places  in  the  queue.  572 
 Teledesic  also  questions  whether  this  safeguard  is  necessary  if  the  first-  come,  first-  served  approach  enables  the  Commission  to  act  on  applications  as  quickly  as  Teledesic  expects.  573  SES 
 Americom  claims  that  allowing  applicants  to  sell  their  place  in  line  would  facilitate  speculation.  574 


 242.  We  prohibit  applicants  from  transferring  their  places  in  the  queue.  As  the  Commission  explained  in  the  Notice,  without  this  prohibition,  it  is  possible  that  some  parties 
 would  file  satellite  applications  simply  to  obtain  a  place  in  a  queue  to  sell  to  another  party  willing  and  able  to  implement  its  proposed  satellite  system.  575  Accordingly,  we  must  adopt  this 
 safeguard  to  avoid  facilitating  speculation. 
 243.  Contrary  to  Hughes's  contention,  this  decision  is  consistent  with  our  decision  above  to  eliminate  the  anti-  trafficking  rule.  In  the  case  of  a  license  sale,  the  Commission  has  reviewed 
 the  licensee's  application,  and  has  determined  that  the  licensee  is  qualified  to  hold  a  satellite  license.  In  the  case  of  a  sale  of  a  place  in  the  queue,  however,  the  Commission  has  not  yet 
 reviewed  the  application  or  reached  any  conclusion  regarding  the  applicant's  qualifications.  There  would  be  no  way  to  determine  whether  the  application  is  substantially  complete,  or  filed 
 merely  to  obtain  a  place  in  line  to  try  to  sell  to  other  parties.  By  requiring  applicants  to  demonstrate  their  qualifications  before  they  are  permitted  to  offer  any  spectrum  rights  or  potential 


 569  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3865-  66  (para.  53). 
 570  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3865-  66  (para.  53). 
 571  Hughes  Comments  at  29-  31,  50. 
 572  Teledesic  Comments  at  29-  31. 
 573  Teledesic  Comments  at  29. 
 574  SES  Americom  Reply  at  17-  18. 
 575  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3865-  66  (para.  53). 
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 spectrum  rights  for  sale,  it  is  more  likely  that  the  applicant  intends  to  construct  the  satellite  system  for  which  it  has  applied.  Thus,  we  decrease  the  likelihood  that  the  applicant  has  sought  a 
 license  merely  for  speculation. 


 6.  Hard  Look  Doctrine 
 244.  In  the  Notice,  the  Commission  emphasized  that  it  requires  satellite  applications  to  be  substantially  complete  when  they  are  filed.  576  The  Commission  reasoned  further  that  any 
 relaxation  of  the  requirement  that  satellite  applicants  submit  substantially  complete  applications  could  encourage  speculative  applications.  577  The  Commission  also  observed  that  it  relied  on  a 
 substantially  complete  application  requirement  to  deter  speculative  applications  in  its  broadcast  first-  come,  first-  served  procedure.  578  None  of  the  commenters  responded  to  this  discussion  in  the 
 Notice.  Here,  we  find  that  continuing  to  require  substantially  complete  satellite  applications  will  also  continue  to  provide  some  additional  protection  against  speculative  satellite  applications. 


 F.  Mandatory  Electronic  Filing  of  Space  Station  Applications 
 245.  Background.  In  the  Notice,  we  requested  comment  on  requiring  most  satellite  applicants  to  file  license  applications  electronically.  579  We  observed  that  electronically  filed  earth 
 station  applications  can  be  processed  in  about  half  the  time  as  paper  earth  station  applications.  580  In  addition,  we  assumed  that  Internet  access  has  become  sufficiently  common  that  few  if  any 
 U.  S.-  licensed  satellite  operators  will  be  disadvantaged  by  mandatory  electronic  filing.  581  In  addition,  the  Commission  observed  that  mandatory  electronic  filing  would  facilitate  a  first-  come, 
 first-  served  procedure,  by  enabling  the  Commission  to  record  application  filing  times  to  the  nearest  thousandth  of  a  second.  582 


 246.  Discussion.  Intelsat  supports  mandatory  electronic  filing  so  that  we  can  place  applications  in  the  queue  based  on  the  date  and  time  of  filing.  583  SIA  advocates  mandatory 
 electronic  filing,  noting  that  it  expedites  Commission  review  of  earth  station  applications, 


 576  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3875  (para.  84). 
 577  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3878  (para.  93). 
 578  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3878  n.  123,  citing  TV  and  FM  Broadcast 
 Order,  50  Fed.  Reg.  at  19939-  40  (paras.  19-  24). 
 579  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3886  (para.  118).  The  Commission 
 proposed  mandatory  electronic  filing  for  all  satellite  applicants  except  DBS  and  DARS  applicants.  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3850  n.  4. 


 580  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3886  (para.  118),  citing  Part  25  Earth 
 Station  Streamlining  NPRM,  15  FCC  Rcd  at  25153  (para.  76). 
 581  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3886  (para.  118). 


 582  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3862-  63  (para.  45). 
 583  Intelsat  Comments  at  12. 
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 including,  on  occasion,  100-  page  long  applications.  584  Hughes  argues,  however,  that  the  Commission  should  allow,  but  not  mandate,  electronic  filing.  Hughes  maintains  that  space 
 station  applications  are  complex  and  cannot  be  handled  routinely  as  many  earth  station  applications  can.  Therefore,  Hughes  doubts  whether  mandatory  electronic  filing  for  space  station 
 applications  would  yield  time  savings  comparable  to  electronic  filing  for  earth  station  applications.  585  Hughes  further  contends  that  an  electronic  filing  system  might  not  handle  hybrid 
 satellite  applications  or  "unusual"  applications  very  well.  586 
 247.  We  adopt  our  proposal  to  require  space  station  applications  to  be  filed  electronically.  The  Commission  requires  mandatory  electronic  filing  in  other  areas,  587  including 
 requests  for  special  temporary  authority  (STA)  for  wireless  telecommunications  services.  588  Furthermore,  the  International  Bureau  Filing  System  (IBFS)  can  record  filing  times  to  the  nearest 
 thousandth  of  a  second.  Thus,  mandatory  electronic  filing  will  facilitate  the  first-  come,  first-served  procedure  for  GSO-  like  satellite  systems,  without  giving  any  particular  applicant  an 
 advantage  over  any  other  applicant.  589  In  fact,  as  the  Commission  explained  in  the  Notice,  a  mandatory  electronic  filing  requirement  for  satellite  applications  is  potentially  more  fair  to  all 
 potential  applicants  than  a  process  that  permits  paper  applications.  590  This  is  because  paper  applications  must  be  submitted  to  the  Commission  in  person  or  by  mail,  and  these  procedures 
 clearly  disadvantage  applicants  located  outside  of  Washington,  D.  C.  None  of  the  commenters  in  this  proceeding  questioned  this  statement.  Moreover,  we  specifically  invited  commenters  to 


 584  SIA  Comments  at  18. 
 585  Hughes  Comments  at  51-  52. 
 586  Hughes  Comments  at  51-  52. 
 587  See  Wireline  Competition  Bureau  Initiates  Electronic  Filing  of  Automated  Reporting 
 Management  Information  System  (ARMIS)  Data  and  Associated  Documents  By  Incumbent  Local  Exchange  Carriers,  Public  Notice,  18  FCC  Rcd  3245  (Wireline  Comp.  Bur.,  2003);  Amendment  of  the 


 Commission's  Rules  for  Implementation  of  its  Cable  Operations  And  Licensing  System  (COALS)  to  Allow  for  Electronic  Filing  of  Licensing  Applications,  Forms,  Registrations  and  Notifications  in  the  Multichannel 
 Video  and  Cable  Television  Service  and  the  Cable  Television  Relay  Service,  Report  and  Order,  CS  Docket  No.  00-  78,  FCC  No.  03-  55  (released  Mar.  19,  2003);  Wireless  Telecommunications  Bureau  (WTB) 
 Extends  Mandatory  Electronic  Filing  Date  for  Microwave  Licensees  to  Coincide  with  Availability  of  Electronic  Filing  Via  the  Internet,  Public  Notice,  15  FCC  Rcd  15692  (Wireless  Tel.  Bur.,  2000);  1998 
 Biennial  Review    Streamlining  of  Mass  Media  Applications,  Rules  and  Processes,  Report  and  Order,  MM  Docket  No.  98-  43,  13  FCC  Rcd  23056,  23060  (para.  8)  (1998);  Electronic  Tariff  Filing  System  (ETFS), 
 Order,  13  FCC  Rcd  12335  (Com.  Car.  Bur.  1998). 
 588  47  C.  F.  R.    1.931(  a). 


 589  The  Internet  is  a  packet-  switching  network,  which  splits  up  data  into  "packets."  Each 
 router  in  the  network  calculates  the  best  routing  for  a  packet  at  a  particular  moment,  given  current  traffic  patterns,  rather  than  transmitting  over  a  dedicated  end-  to-  end  transmission  path.  If  congestion  arises  at  a 


 particular  point  in  the  network,  an  almost  infinite  array  of  alternative  paths  could  be  employed  without  the  user  knowing  it.  Digital  Tornado:  The  Internet  and  Telecommunications  Policy,  OPP  Working  Paper  No. 
 29  ((  Mar.  1997)  at  1-  3;  Internet  Over  Cable:  Defining  the  Future  in  Terms  of  the  Past,  OPP  Working  Paper  No.  30  (Aug.  1998)  at  13-  15.  Thus,  if  applicants  in  Washington,  DC  and  California  submit  a  satellite 
 application  at  the  same  time,  it  is  possible  that  the  California  application  will  reach  the  Commission  first. 
 590  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3862-  63  (para.  45). 
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 discuss  whether  basing  priority  on  thousandths  of  a  second  might  disadvantage  applicants  based  further  away  from  Washington,  D.  C.  because  of  the  time  needed  to  route  applications  through  the 
 Internet.  591  None  of  the  parties  address  this  issue. 
 248.  We  are  sympathetic  to  Hughes's  concerns  about  "unusual"  satellite  applications,  but  we  are  confident  that  our  electronic  filing  system  can  accept  unusual  satellite  applications  without 
 any  problem.  We  have  accepted  electronically  filed  space  station  applications  for  several  years  now.  That  experience  has  enabled  us  to  refine  our  electronic  filing  system  as  needed.  As  SIA 
 observes,  our  electronic  filing  system  can  accept  100-  page  long  earth  station  applications.  592  Furthermore,  70  percent  of  the  satellite  applications  filed  in  2002  were  electronic.  Therefore,  we 
 conclude  that  our  electronic  filing  system  will  be  sufficient  to  support  our  satellite  application  mandatory  electronic  filing  requirement.  In  the  unlikely  event  that  an  applicant  brings  to  our 
 attention  any  problems  with  filing  an  unusual  application,  we  will  work  to  resolve  those  problems. 


 249.  Although  we  agree  with  Hughes  that  we  do  not  have  "routine"  processing  standards  for  space  station  applications,  we  find  that  mandatory  electronic  filing  is  still  warranted  to 
 facilitate  our  first-  come,  first-  served  procedure  for  GSO-  like  satellite  applications.  593  The  first-come,  first-  served  procedure  will  enable  us  to  act  on  GSO-  like  satellite  applications  much  faster 
 than  is  now  possible,  594  and  this  procedure  will  be  expedited  further  if  we  minimize  the  number  of  satellite  applications  that  must  be  considered  simultaneously.  595  Thus,  mandatory  electronic 
 filing  will  expedite  our  actions  on  satellite  applications,  regardless  of  whether  we  can  process  any  satellite  applications  "routinely." 


 G.  Replacement  Satellites 
 1.  Streamlined  Procedure 
 250.  Background.  In  the  Notice,  we  explained  our  replacement  satellite  policy  for  GSO  satellites.  596  Given  the  huge  costs  of  building  and  operating  GSO  space  stations,  we  have  found 


 591  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3862-  63  (para.  45). 
 592  SIA  Comments  at  18. 
 593  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3862-  63  (para.  45).  See  also  Intelsat 
 Comments  at  12. 
 594  Section  VI.  B. 


 595  See  Teledesic  Comments  at  22-  24. 
 596  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3887  (para.  119).  We  have  a  different 
 policy  for  replacements  of  satellites  in  NGSO  constellations.  Generally,  NGSO  authorizations  cover  all  construction  and  launches  necessary  to  implement  the  complete  constellation  and  to  maintain  it  until  the  end  of 


 the  license  term,  including  any  replacement  satellites  necessitated  by  launch  or  operational  failure,  or  by  retirement  of  satellites  prior  to  the  end  of  the  license  period.  All  replacement  satellites  must  be  technically 
 identical  to  those  in  service,  including  the  same  frequency  bands  and  orbital  parameters,  and  may  not  cause  a  net  increase  in  the  number  of  operating  satellites  in  the  authorized  orbital  planes  or  an  additional  orbital  plane. 
 See  Amendment  of  the  Commission's  Rules  to  Establish  Rules  and  Policies  Pertaining  to  a  Mobile  Satellite  Service  in  the  1610-  1626.5/  2483.  5-  2500  MHz  Frequency  Bands,  Report  and  Order,  CC  Docket  No.  92- 
 166,  9  FCC  Rcd  5936,  6006  (para.  182)  (1994)  (Big  LEO  Order);  The  Establishment  of  Policies  and  Service  Rules  for  the  Non-  Geostationary  Satellite  Orbit,  Fixed  Satellite  Service  in  the  Ku-  band,  Report  and 
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 that  there  should  be  some  assurance  that  operators  will  be  able  to  continue  to  serve  their  customers.  597  Therefore,  the  Commission  has  stated  that,  when  an  orbit  location  remains 
 available  for  a  U.  S.  satellite  with  the  technical  characteristics  of  the  proposed  replacement  satellite,  it  will  generally  authorize  the  replacement  satellite  at  the  same  location.  598  It  has  also 
 acted  on  applications  for  replacement  satellites  as  they  are  filed,  without  consolidating  them  into  a  processing  group.  599 


 251.  The  Commission  usually  acts  on  replacement  satellite  applications  in  Orders,  however.  We  requested  comment  on  two  alternatives  for  streamlining  this  process.  First,  we 
 proposed  grant-  stamping  unopposed  replacement  satellite  applications  with  technical  characteristics  consistent  with  those  of  the  satellite  to  be  retired.  600  We  stated  that  this  process 
 would  be  similar  to  that  we  use  for  unopposed  earth  station  applications.  We  would  simply  stamp  the  application  as  "granted"  and  return  a  copy  to  the  applicant.  601 


 252.  As  an  alternative,  we  proposed  deeming  unopposed  replacement  satellite  applications  granted  after  a  specific  amount  of  time  after  the  date  for  petitions  to  deny  has  passed, 
 unless  we  issue  a  public  notice  stating  that  we  need  more  time  to  review  the  application.  602  Under  this  proposal,  once  we  have  decided  to  allow  the  application  to  be  deemed  granted,  we  would 
 issue  a  public  notice  announcing  that  fact.  603  The  Commission  noted  that  it  used  a  similar  procedure  for  certain  international  Section  214  applications,  and  for  certain  submarine  cable 
 landing  license  applications.  604  We  also  invited  comment  on  the  timing  of  such  grants  and  suggested  a  "deemed  granted"  date  of  at  least  60  days  after  the  date  for  filing  petitions  to  deny.  605 


 Order  and  Further  Notice  of  Proposed  Rulemaking,  IB  Docket  No.  01-  96,  17  FCC  Rcd  7841,  7861-  62  (para.  68)  (2002). 
 597  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3887  (para.  119),  citing  Assignment  of 
 Orbital  Locations  to  Space  Stations  in  the  Domestic  Fixed-  Satellite  Service,  Memorandum  Opinion  and  Order,  3  FCC  Rcd  6972,  6976  n.  31  (1988)  (1988  Orbit  Assignment  Order);  Hughes  Communications 


 Galaxy,  Inc.,  Order  and  Authorization,  6  FCC  Rcd  72,  74  n.  7  (1991)  (Hughes  Replacement  Order);  GE  American  Communications,  Inc.,  Order  and  Authorization,  10  FCC  Rcd  13775,  13775-  76  (para.  6)  (Int'l 
 Bur.  1995)  (GE  Americom  Replacement  Order). 
 598  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3887  (para.  119),  citing  1988  Orbit 
 Assignment  Order,  3  FCC  Rcd  at  6976  n.  31;  GE  Americom  Replacement  Order,  10  FCC  Rcd  at  13775-  76  (para.  6). 


 599  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3887  (para.  119),  citing  GE  Americom 
 Replacement  Order,  10  FCC  Rcd  at  13775-  76  (para.  6);  Loral  Spacecom  Corp.,  Order  and  Authorization,  13  FCC  Rcd  16348,  16440  (para.  5)  (Int'l  Bur.,  Sat.  and  Rad.  Div.,  1995). 


 600  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3887  (para.  120). 
 601  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3887  (para.  120). 
 602  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3887  (para.  120). 
 603  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3887  (para.  120). 
 604  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3887  n.  159. 
 605  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3887  (para.  120). 
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 253.  Discussion.  Hughes  and  Teledesic  support  grant-  stamping  unopposed  replacement  satellite  applications.  606  SIA  and  Intelsat  support  the  "deem  granted"  proposal.  607  PanAmSat 
 supports  both  alternatives,  but  it  prefers  the  deemed  granted  procedure  because  the  public  notice  would  make  it  easier  for  the  public  to  keep  track  of  the  Commission's  satellite  licensing 
 actions.  608  We  adopt  the  "grant-  stamp"  proposal.  We  have  used  the  grant-  stamp  procedure  for  unopposed  earth  station  applications,  and  find  that  this  experience  is  more  comparable  to  space 
 station  applications  than  the  international  Section  214  applications  and  cable  landing  license  applications  subject  to  a  "deemed  granted"  procedure.  Nevertheless,  we  are  sensitive  to 
 PanAmSat's  concerns  about  keeping  track  of  the  Commission's  satellite  licensing  actions.  Accordingly,  we  will  issue  public  notices  announcing  when  we  have  grant-  stamped  unopposed 
 replacement  satellite  applications. 
 254.  Intelsat  asserts  that  a  petition  to  deny  a  replacement  satellite  application  should  not  render  the  application  ineligible  for  a  "deemed  granted"  procedure.  609  SES  Americom  contends 
 that  the  Communications  Act  requires  that  any  "deemed  granted"  procedure  should  be  limited  to  uncontested  applications.  610  We  have  traditionally  addressed  petitions  to  deny  satellite 
 applications  in  the  context  of  an  Order,  so  that  we  could  provide  a  reasoned  explanation  for  denying  or  granting  the  petition  to  deny.  Intelsat  has  not  persuaded  us  to  depart  from  this  policy. 


 2.  Technical  Characteristics  of  Replacement  Satellites 
 255.  Background.  In  the  Notice,  the  Commission  proposed  making  the  streamlined  procedure  for  replacement  satellites  available  for  applications  for  replacement  satellites  with 
 technical  characteristics  consistent  with  those  of  the  satellite  to  be  retired.  611 
 256.  Pleadings.  Several  commenters  ask  the  Commission  to  explain  in  more  detail  the  extent  to  which  replacement  satellites  must  be  technically  consistent  with  the  satellites  they  are 
 intended  to  replace  for  purposes  of  the  replacement  satellite  policy.  612  For  example,  these  commenters  argue  that  satellite  operators  should  be  allowed  to  increase  power  from  one 
 generation  of  satellites  to  the  next  without  losing  their  replacement  expectancy.  613  They  further 


 606  Hughes  Comments  at  51;  Teledesic  Comments  at  44. 
 607  SIA  Comments  at  39-  41;  Intelsat  Comments  at  21-  23. 
 608  PanAmSat  Comments  at  13-  14. 
 609  Intelsat  Comments  at  22. 
 610  SES  Americom  Reply  at  18,  citing  47  U.  S.  C.    309(  d)(  2). 
 611  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3887  (para.  120). 
 612  SIA  Comments  at  40-  41;  Intelsat  Comments  at  22-  23;  PanAmSat  Comments  at  14-  15; 
 PanAmSat  Reply  at  4;  SES  Americom  Reply  at  23.  See  also  Hughes  Comments  at  51. 
 613  SIA  Comments  at  40-  41;  Intelsat  Comments  at  22-  23;  PanAmSat  Comments  at  14-  15; 
 PanAmSat  Reply  at  4;  SES  Americom  Reply  at  23. 
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 contend  that  satellite  operators  should  be  allowed  to  expand  their  coverage  areas.  614  Finally,  these  parties  request  that  the  Commission  allow  replacement  satellite  applications  to  include 
 "expansion  frequency"  requests,  such  as  a  request  for  authority  to  operate  in  extended  Ku-  band  frequencies  when  the  existing  satellite  license  includes  conventional  Ku-  band  authority.  615 


 257.  Discussion.  When  we  stated  in  the  Notice  that  we  would  use  a  streamlined  licensing  process  for  replacement  satellites  that  are  technically  consistent  with  the  satellites  they 
 are  replacing,  we  did  not  intend  to  require  the  satellites  to  be  technically  identical.  We  do  not  require  replacement  satellites  to  be  technically  identical  to  the  existing  satellite.  616  We  recognize 
 that  next-  generation  satellites  will  incorporate  satellites  with  technical  advancements  made  since  the  previous  generation  satellite  was  launched.  We  do  not  intend  to  change  this  policy,  which 
 facilitates  state-  of-  the-  art  systems.  Rather,  we  will  continue  to  assess  only  whether  operations  of  the  replacement  satellite  will  be  consistent  with  our  international  coordination  obligations 
 pursuant  to  regulations  promulgated  by  the  International  Telecommunication  Union.  617  Thus,  we  will  continue  to  consider  applications  for  replacement  satellites  with  higher  power  capabilities 
 relative  to  the  applicant's  existing  satellites.  618 
 258.  In  the  past,  we  have  considered  applications  for  replacement  satellites  with  greater  coverage  areas  than  the  original  satellites.  619  We  have  also  considered  requests  for  replacement 
 conventional  C-  band  or  Ku-  band  satellites  seeking  authority  to  operate  in  the  extended  C-  band  or  extended  Ku-  band,  respectively.  620  We  find,  however,  that  we  must  revisit  these  aspects  of  our 
 replacement  satellite  policy  in  light  of  our  new  first-  come,  first-  served  procedure.  Under  our  new  procedure,  parties  are  free  to  apply  for  licenses  to  operate  only  in  the  extended  C-  band  or 


 614  SIA  Comments  at  40-  41;  Intelsat  Comments  at  22-  23;  PanAmSat  Comments  at  14-  15; 
 PanAmSat  Reply  at  4;  SES  Americom  Reply  at  23. 
 615  SIA  Comments  at  40-  41;  Intelsat  Comments  at  22-  23;  PanAmSat  Comments  at  14-  15; 
 PanAmSat  Reply  at  4;  SES  Americom  Reply  at  23.  SIA  recommends  limiting  this  "expansion  frequency"  policy  to  frequencies  that  are  not  shared  between  GSO  and  NGSO  satellite  operators,  such  as  the  Ka-  band. 


 SIA  Comments  at  41  n.  95. 
 616  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3888  n.  160,  and  sources  cited  therein. 


 617  See  Hughes  Communications  Galaxy,  Inc.,  Order  and  Authorization,  6  FCC  Rcd  72,  74 
 n.  7  (1991)  (Hughes  Replacement  Order);  cited  in  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3887  n.  158. 
 618  See  American  Telephone  and  Telegraph  Company,  Order  and  Authorization,  10  FCC 
 Rcd  12132,  13133  (para.  7)  (Int'l  Bur.  1995)  (authorizing  replacement  satellite  capable  of  operating  in  a  "'non-  routine'  high  power  mode,"  but  cautioning  licensee  that  it  is  responsible  for  coordinating  the  higher 


 power  with  adjacent  satellite  operators).  See  also  Hughes  Communications  Galaxy,  Inc.,  Memorandum  Opinion  and  Order,  5  FCC  Rcd  1653  (Com.  Car.  Bur.  1990)  (granting  modification  of  replacement  satellite 
 license  to  increase  transponder  amplifier  power). 
 619  See  Application  of  Columbia  Communications  Corporation  for  Modification  of 
 Authorization  to  Permit  Operation  of  Ku-  band  Satellite  Capacity  on  the  Columbia  515  Satellite  Located  at  37.  7  West  Longitude,  Memorandum  Opinion  and  Order,  16  FCC  Rcd  12480,  12483-  84  (para.  9)  (Int'l 


 Bur.  2001). 
 620  PanAmSat  Licensee  Corporation,  Application  for  Authority  to  Launch  and  Operate  a 
 Hybrid  Replacement  Fixed  Satellite  Service  Space  Station,  Order  and  Authorization,  15  FCC  Rcd  22156,  22157-  58  (para.  5)  (Int'l  Bur.,  Sat.  and  Rad.  Div.,  2000). 
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 extended  Ku-  band  at  a  particular  orbit  location  if  no  one  has  previously  been  authorized  to  provide  that  service.  It  would  be  contrary  to  the  public  interest  to  preclude  a  party  from  providing 
 such  a  service  merely  because  a  current  licensee  might  request  that  authority  in  a  future  replacement  satellite  application.  We  will  consider  replacement  satellite  applications  that  request 
 greater  coverage  areas  and/  or  extended  band  authority,  but  only  if  no  other  applicants  have  been  licensed  to  provide  those  services.  In  other  words,  satellite  operators  may  request  such  operating 
 authority,  but  this  authority  is  not  included  in  their  replacement  expectancies. 
 H.  Full  Frequency  Reuse 
 259.  Background.  In  the  Notice,  we  stated  that  our  two-  degree-  spacing  policy  621  for  GSO  satellite  systems  includes  full  frequency  reuse  requirements.  622  Currently,  the  full  frequency 
 reuse  requirements  require  FSS  satellite  operators  to  use  both  vertical  and  horizontal  polarization.  623  Essentially,  full  frequency  reuse  doubles  the  capacity  of  a  space  station.  Thus, 
 our  full  frequency  reuse  requirements  are  important  for  ensuring  that  scarce  orbit  and  spectrum  resources  are  used  efficiently.  624 


 260.  Our  full  frequency  reuse  policy  for  GSO  satellites  operating  in  the  conventional  C-band  and  Ku-  band  625  is  codified  in  Sections  25.210(  e),  (f),  and  (g)  of  our  rules.  626  We  proposed 
 clarifications  to  these  rules  in  the  Notice.  First,  we  proposed  clarifying  that  these  requirements  apply  to  the  conventional  C-  band  and  Ku-  band.  627  Second,  we  proposed  revising  Section 
 25.210(  f)  based  on  the  language  we  used  for  Ka-  band  full  frequency  reuse  requirements  in 


 621  Part  25  includes  several  "2  spacing"  requirements  for  geostationary  satellite  orbit 
 satellites.  The  Commission  instituted  its  2  orbital  spacing  policy  in  1983  to  maximize  the  number  of  satellites  in  orbit.  Licensing  of  Space  Stations  in  the  Domestic  Fixed-  Satellite  Service  and  Related 


 Revisions  of  Part  25  of  the  Rules  and  Regulations,  Report  and  Order,  CC  Docket  No.  81-  704,  FCC  83-  184,  54  Rad.  Reg.  2d  577  (released  Aug.  16,  1983);  reprinted  at  Licensing  Space  Stations  in  the  Domestic 
 Fixed-  Satellite  Service,  48  F.  R.  40233  (Sept.  6,  1983)  (Two  Degree  Spacing  Order).  Under  the  2  spacing  framework,  the  Commission  assigns  adjacent  in-  orbit  co-  frequency  satellites  to  orbit  locations  2  apart  in 
 longitude.  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3879  (para.  95),  citing  Part  25  Earth  Station  Streamlining  NPRM,  15  FCC  Rcd  at  25132  (para.  7). 


 622  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3879  (para.  96). 
 623  "For  fixed-  satellite  space  stations  providing  domestic  service,  full  frequency  re-  use  is 
 defined  as  re-  use  of  the  frequency  bands  by  polarization  discrimination  in  both  the  uplink  and  downlink  directions  using  state-  of-  the-  art  equipment  and  techniques."  47  C.  F.  R.    25.  210(  f). 


 624  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3879  (para.  96),  citing  Systematics  General 
 Corporation,  Memorandum  Opinion  and  Order,  103  FCC  2d  879,  881-  82  (paras.  6-  9)  (1985);  Columbia  Communications  Corporation,  Memorandum  Opinion,  Order,  and  Authorization,  7  FCC  Rcd  122,  123 


 (para.  15)  (1991);  First  Columbia  Milestone  Order,  15  FCC  Rcd  at  15572  (para.  13). 
 625  The  conventional  Ku-  band  is  the  11.  7-  12.2  GHz  and  14.  0-  14.  5  GHz  bands. 


 626  47  C.  F.  R.    25.  210(  e),  (f),  (g).  Section  25.  210(  e)  creates  the  full  frequency  reuse 
 requirement  for  GSO  FSS  space  stations.  Section  25.  210(  f)  defines  full  frequency  reuse  for  domestic  satellite  service,  and  Section  25.  210(  g)  defines  full  frequency  reuse  for  international  satellite  service. 


 627  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3879-  80  (para.  97). 
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 Section  25.210(  d).  628  Specifically,  we  proposed  revising  Section  25.210(  f)  to  read  as  follows:  "All  space  stations  in  the  Fixed  Satellite  Service  in  the  3700-  4200  MHz,  5925-  6425  MHz,  11.7- 
 12.2  GHz,  and  14.  0-  14.5  GHz  bands  shall  employ  state-  of-  the-  art  full  frequency  reuse  either  through  the  use  of  orthogonal  polarizations  within  the  same  beam  and/  or  the  use  of  spatially 
 independent  beams."  629  We  asked  whether  this  proposal  effectively  takes  account  of  the  current  state  of  the  art  in  satellite  technology  and  expected  future  developments.  630  We  also  asked 
 whether  we  should  apply  these  full  frequency  reuse  requirements  to  extended  C-  band  and  extended  Ku-  band  satellites.  631 


 261.  Discussion.  Teledesic  supports  the  Commissions  proposal  to  clarify  its  full  frequency  reuse  policies.  632  Teledesic  agrees  that  the  Commission  should  revise  Section 
 25.210(  f)  based  on  the  language  it  used  for  Ka-  band  full  frequency  reuse  requirements  in  Section  25.210(  d).  633  No  one  opposed  this  proposal. 


 262.  We  hereby  adopt  all  the  revisions  to  the  full  frequency  reuse  rules  that  were  proposed  in  the  Notice.  When  we  adopted  full  frequency  reuse  requirements  for  Ka-  band  GSO 
 satellite  systems,  we  noted  that  new  satellites  are  capable  of  generating  multiple  narrow-  beam  spot  beams.  634  We  also  noted  that  such  space  stations  reuse  frequencies  in  spatially  independent 
 beams  rather  than  by  using  orthogonally  polarized  signals  within  a  single  beam.  635  By  revising  Section  25.210(  f),  we  encourage  deployment  of  new,  technologically  innovative  spot-  beam 
 satellites  in  the  C-  band  and  Ku-  band.  636 
 263.  We  also  conclude  that  GSO  satellite  operations  in  the  extended  C-  and  Ku-  bands  should  be  subject  to  full  frequency  reuse  requirements  as  well.  There  is  no  policy  justification  for 


 628  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3879-  80  (para.  97),  citing  47  C.  F.  R. 
 25.210(  d).  The  term  "Ka-  band"  generally  refers  to  the  space-  to-  earth  (downlink)  frequencies  at  17.  7-  20.2  GHz  and  the  corresponding  earth-  to-  space  (uplink)  frequencies  at  27.5-  30.0  GHz. 


 629  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3879-  80  (para.  97). 
 630  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3879-  80  (para.  97). 
 631  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3879-  80  (para.  97). 
 632  Teledesic  Comments  at  40-  41. 
 633  Teledesic  Comments  at  40-  41. 
 634  Ka-  Band  Service  Rules  Order,  12  FCC  Rcd  at  22321-  22  (para.  28). 
 635  Ka-  Band  Service  Rules  Order,  12  FCC  Rcd  at  22321-  22  (para.  28). 
 636  When  the  Commission  first  adopted  full  frequency  reuse  requirements,  the  requirement 
 was  defined  in  terms  of  minimum  use  of  bandwidth  allocated  to  the  service.  For  example,  a  space  station  operating  in  the  conventional  C-  band  was  required  to  have  a  capacity  equivalent  to  that  provided  by  a  space 


 station  having  transponders  that  use  864  MHz  of  a  1000  MHz  (with  two-  times  frequency  reuse)  assignment  and  provide  a  total  power  of  192  watts.  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3879  (para.  96), 
 citing  Two-  Degree  Spacing  Order,  54  RR  2d  at  598  n.  67;  Separate  Systems  Order,  101  FCC  2d  at  1168-  69  (para.  248).  Here,  we  emphasize  that  we  now  define  full  frequency  reuse  in  terms  of  use  of  dual 
 polarization,  not  minimum  bandwidth  usage. 
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 allowing  satellite  operators  to  operate  inefficiently,  without  full  frequency  reuse,  in  extended  bands.  Therefore,  we  will  revise  Section  25.210(  f)  to  include  the  extended  C-  and  Ku-  bands. 
 264.  SES  Americom  recommends  revising  Section  25.210(  e)  to  be  consistent  with  Section  25.210(  d),  and  our  proposed  revisions  Section  25.210(  f).  637  Section  25.210(  f)  establishes 
 full  frequency  reuse  requirements  for  all  conventional  and  extended  C-  band  and  Ku-  band  satellite  services.  Therefore,  rather  than  revise  Section  25.210(  e)  as  SES  Americom  recommends,  we 
 remove  it  from  Part  25.  Similarly,  we  remove  Section  25.210(  g)  as  unnecessary  in  light  of  our  revisions  to  Section  25.210(  f). 


 I.  Miscellaneous 
 1.  Space  Station  License  Terms 
 265.  Background.  Together  with  the  Notice,  the  Commission  adopted  a  First  Report  and  Order  in  another  proceeding,  in  which  it  adopted  rules  to  enable  it  to  issue  space  station  and  earth 
 station  licenses  with  15-  year  terms,  an  increase  from  the  10-  year  terms  in  the  previous  rules.  638  The  Commission  stated  that  the  new  earth  station  license  term  rule  applies  only  to  earth  station 
 licenses  granted  after  the  new  rules  take  effect.  639  The  Commission  did  not  state  clearly  whether  existing  space  station  licenses  were  subject  to  the  revised  rule.  640 


 266.  Discussion.  SIA  argues  that  the  terms  of  existing  satellite  licenses  should  be  extended  to  15  years,  to  be  consistent  with  the  license  terms  of  satellites  granted  under  the  revised  rules.  641 
 We  find  that  the  license  terms  of  existing  space  station  licenses  should  be  extended  to  15  years.  We  did  not  adopt  this  proposal  for  earth  station  licenses  because  it  would  be  potentially  burdensome  for 
 licensees  and  the  Commission  to  reissue  thousands  of  earth  station  licenses.  642  This  reason  does  not  apply  to  space  station  licenses,  which  number  in  the  dozens.  Accordingly,  we  adopt  SIA's  proposal. 
 All  space  station  licenses  are  deemed  automatically  modified  by  extending  the  license  term  of  the  satellite,  or  satellite  constellation  in  the  case  of  NGSO  systems,  an  additional  five  years,  to  15  years, 
 from  the  date  the  first  satellite  is  successfully  placed  into  orbit. 
 267.  We  also  revise  Section  25.121(  e).  Currently,  Section  25.  121(  e)  requires  NGSO  satellite  licensees  requesting  replacement  authority  for  next-  generation  satellites  to  file  their 
 applications  about  eight  years  after  the  beginning  of  the  license  term  of  the  current-  generation  system.  643  As  a  logical  outgrowth  of  our  decision  to  extend  the  license  term  for  all  satellite 


 637  SES  Americom  Comments  at  9-  10. 
 638  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3894-  96  (paras.  139-  43). 
 639  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3895  (para.  142). 
 640  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3895-  96  (para.  143). 
 641  SIA  Comments  at  22. 
 642  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3895  (para.  142). 
 643  "Applications  for  space  station  system  replacement  authorization  for  non-  geostationary 
 orbit  satellites  shall  be  filed  no  earlier  than  90  days,  and  no  later  than  30  days,  prior  to  the  end  of  the  seventh  year  of  the  existing  license  term."  47  C.  F.  R.    25.  121(  e). 
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 licensees,  we  also  extend  the  deadline  for  all  NGSO  licensees  to  file  their  replacement  satellite  applications  until  about  two  years  before  the  end  of  their  15-  year  license  terms,  as  extended  in  this 
 Order. 
 2.  Spectrum  Reallocations 
 268.  Background.  In  the  Notice,  the  Commission  proposed  a  procedure  to  expedite  reassignment  of  licenses  to  other  satellite  operators  if  the  licensee  loses  its  license  for  any 
 reason.  644  CTIA  recommends  extending  that  concept.  For  example,  if  an  initial  group  of  satellite  licensees  does  not  make  sufficient  progress  in  constructing  their  systems,  CTIA  recommends  that 
 the  Commission  stop  considering  additional  applications  pending  reallocation  of  the  spectrum  to  another  service.  645  CTIA  suggests  that  the  Commission  consider  reallocating  satellite  spectrum  to 
 another  service  whenever  no  "credible"  satellite  license  application  is  filed  within  a  year  of  the  time  the  spectrum  is  allocated  to  satellite  service.  646  CTIA  also  recommends  considering  reallocating 
 satellite  spectrum  to  another  service  whenever  a  satellite  license  is  revoked.  647 
 269.  SES  Americom  argues  that  CTIA's  proposals  are  inconsistent  with  sound  spectrum  policy.  648  Several  commenters  point  out  that  the  Table  of  Frequency  Allocations  is  based  on  long-term 
 spectrum  planning  and  should  not  be  altered  because  some  operators  have  tried  and  failed  to  provide  service.  649  ICO  argues  that  CTIA's  proposals  would  have  eliminated  DBS,  cellular,  UHF, 
 and  FM  services  if  they  were  applied  to  those  services.  650  PanAmSat  also  contends  that  this  proposal  is  beyond  the  scope  of  this  proceeding.  651 


 270.  Discussion.  We  will  not  adopt  CTIA's  proposals.  Adopting  CTIA's  proposals  would  be  equivalent  to  assuming  that  spectrum  should  be  reallocated  whenever  a  single  satellite 
 operator  or  group  of  operators  fails  to  meet  a  milestone,  or  whenever  satellite  license  applicants  do  not  meet  CTIA's  proposed  credibility  standard.  Under  our  current  procedure,  when  we  decide 
 to  allocate  spectrum  to  a  particular  use,  we  base  our  decision  on  specific  principles  and  policy  goals.  652  These  goals  are  not  thwarted  because  particular  satellite  licensees  are  unable  to  move 


 644  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3860  (para.  34). 
 645  CTIA  Comments  at  6-  7. 
 646  CTIA  Comments  at  8. 
 647  CTIA  Comments  at  8. 
 648  SES  Americom  Reply  at  19-  21. 
 649  SES  Americom  Reply  at  20;  PanAmSat  Reply  at  5;  ICO  Reply  at  5-  6. 
 650  ICO  Reply  at  6-  8. 
 651  PanAmSat  Reply  at  4-  5. 
 652  Redesignation  of  the  17.7-  19.7  GHz  Frequency  Band,  Blanket  Licensing  of  Satellite  Earth 
 Stations  in  the  17.7-  20.2  GHz  and  27.5-  30.0  GHz  Frequency  Bands,  and  the  Allocation  of  Additional  Spectrum  in  the  17.3-  17.8  GHz  and  24.75-  25.25  GHz  Frequency  Bands  for  Broadcast  Satellite-  Service  Use,  First  Order 


 on  Reconsideration,  IB  Docket  No.  98-  172,  16  FCC  Rcd  19808,  19811  (para.  6)  (2001)  ("  Based  on  the  extensive  record  in  the  proceeding,  on  June  8,  2000,  the  Commission  adopted  the  18  GHz  Order  that  made 
 several  important  decisions  with  the  goal  of  permitting  more  efficient  use  of  the  radio  spectrum  for  existing  and  future  operators  and  facilitating  deployment  of  new  services  in  the  band.") 
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 forward.  Furthermore,  CTIA's  proposed  automatic  mechanism  to  initiate  a  spectrum  reallocation  proceeding  when  a  satellite  licensee  fails  to  go  forward  limits  our  flexibility  to  determine  how  the 
 public  interest  will  be  best  served.  In  cases  where  reallocating  spectrum  from  one  service  to  another  would  further  the  public  interest,  we  can  reallocate  that  spectrum  in  a  rulemaking 
 proceeding.  653  In  addition,  if  we  adopted  an  automatic  mechanism  for  reallocating  spectrum  when  satellite  operators  fail  to  meet  a  milestone,  without  another  mechanism  for  reallocating 
 spectrum  in  cases  where  other  operators  in  other  services  fail  to  meet  milestones,  we  would  be  declaring  by  government  fiat  that  other  services  provide  a  higher  and  better  use  of  spectrum  than 
 satellite  service  under  all  circumstances. 
 3.  Special  Temporary  Authority 
 271.  Background.  SIA  requests  that  we  specify  in  the  rules  the  extent  to  which  we  will  grant  applicants  special  temporary  authority  (STA)  without  placing  the  STA  request  on  public 
 notice.  654  SIA  further  recommends  treating  STA  requests  as  granted  as  of  seven  business  days  after  they  are  filed  for  STA  requests  less  than  30  days,  or  five  business  days  after  the  end  of  the  public 
 notice  period  for  STA  requests  greater  than  30  days.  655 
 272.  Discussion.  We  adopt  SIA's  proposal  to  revise  the  Commission's  rules  to  spell  out  more  completely  the  requirements  for  STAs.  These  requirements  are  now  set  forth  in  Section  309 
 of  the  Communications  Act.  Section  309(  c)(  2)(  G)  governs  STA  requests  that  are  not  placed  on  public  notice.  656  Under  that  provision,  the  Commission  may  grant  STAs  for  no  more  than  30  days 
 in  cases  where  an  application  for  regular  authority  is  not  contemplated,  or  for  60  days  otherwise.  Under  Section  309(  f),  the  Commission  may  grant  STA  requests  for  up  to  180  days  if  they  are 
 placed  on  public  notice.  657  In  this  Order,  we  revise  Section  25.120  of  our  rules  to  include  these  provisions.  658 


 273.  We  will  not  adopt  rules  that  automatically  grant  an  STA  request  if  we  do  not  act  on  the  request  within  a  certain  number  of  days,  however.  In  other  cases  where  we  have  allowed  filings 
 by  regulated  companies  to  take  effect  after  a  certain  number  of  days,  the  procedure  was  established  by  the  Communications  Act,  659  or  we  adopted  safeguards  sufficient  to  ensure  that  allowing  the 
 filing  to  take  effect  would  not  be  inconsistent  with  the  public  interest.  660  SIA's  proposal  does  not 


 653  See  Reallocation  and  Service  Rules  for  the  698-  746  MHz  Spectrum  Band  (Television 
 Channels  52-  59),  Report  and  Order,  GN  Docket  No.  01-  74,  17  FCC  Rcd  1022  (2002). 
 654  SIA  Comments  at  21-  22. 


 655  SIA  Comments  at  21-  22. 
 656  47  U.  S.  C.    309(  c)(  2)(  G). 
 657  47  U.  S.  C.    309(  f). 
 658  47  C.  F.  R.    25.  120. 
 659  47  U.  S.  C.    204(  a)(  3)  (common  carrier  tariff  filings  are  "deemed  lawful"  unless 
 Commission  takes  action  within  specified  time). 
 660  See  1998  Biennial  Regulatory  Review  --  Review  of  International  Common  Carrier 
 Regulations,  Report  and  Order,  IB  Docket  No.  98-  118,  14  FCC  Rcd  4909,  4913-  14  (para.  12)  (1999)  (the 
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 include  any  such  safeguards.  In  addition,  the  Communications  Act  specifies  that  we  grant  STAs  only  when  there  are  "extraordinary  circumstances."  661  There  is  nothing  in  the  Communications  Act 
 that  suggests  that  Congress  contemplated  allowing  STA  requests  to  be  routinely  granted.  Moreover,  in  emergency  cases,  the  Commission  can  grant  STAs  orally,  to  be  memorialized  later  by 
 letter.  662 
 4.  Petitions  for  Reconsideration 
 274.  Teledesic  proposes  a  stamp-  based  procedure  for  denying  meritless  petitions  for  reconsideration.  663  Teledesic  does  not  propose  a  definition  for  "meritless."  We  see  no  need  to 
 adopt  this  procedure  at  this  time,  especially  with  no  dividing  line  between  "meritless"  petitions  and  other  petitions.  In  addition,  this  proposal  seems  unnecessary.  If  a  petition  for  reconsideration  truly 
 has  no  merit,  it  can  be  dismissed  in  a  timely  manner  under  the  Commission's  current  procedure.  664  This  is  particularly  true  for  petitions  for  reconsideration  that  do  not  raise  any  new  arguments.  665 


 5.  Pending  Satellite  Applications 
 275.  There  are  several  satellite  license  applications  currently  pending  before  the  Commission,  including  applications  for  NGSO  and  GSO  satellites  that  would  operate  in  the  V-band, 
 666  and  for  NGSO  satellites  that  would  operate  in  the  Ka-  band.  667  For  reasons  set  forth  in  this 


 class  of  international  Section  214  applications  that  qualify  for  streamlined  treatment  are  subject  to  regulations  and  safeguards  sufficient  to  prevent  anticompetitive  effects  in  the  U.  S.  market). 
 661  47  U.  S.  C.    309.  Convenience  to  the  applicant,  such  as  marketing  considerations  or 
 meeting  scheduled  customer  in-  service  dates,  will  not  be  deemed  sufficient  for  this  purpose.  47  C.  F.  R.    25.  120(  b). 


 662  See  Letter  from  Jennifer  M.  Gilsenan,  Chief,  Policy  Branch,  Satellite  Division, 
 International  Bureau,  to  Nancy  J.  Eskanazi,  Vice  President  and  Associate  General  Counsel,  SES  Americom,  Inc.  (dated  June  25,  2002)  (memorializing  oral  STA  grant  to  relocate  satellite  from  79  W.  L.  to 


 37.  5  W.  L.). 
 663  Teledesic  Comments  at  44-  46. 


 664  See  Texcom,  Inc.,  d/  b/  a  Answer  Indiana,  Complainant,  v.  Bell  Atlantic  Corp.,  d/  b/  a 
 Verizon  Communications,  Defendant,  Order  on  Reconsideration,  17  FCC  Rcd  6275  (2002);  Joy  Public  Broadcasting  Corporation,  Radio  Station  WJTF-  FM,  Panama  City,  Florida,  Memorandum  Opinion  and 


 Order,  16  FCC  Rcd  11971  (Enf.  Bur.  2001);  Applications  of  Warren  Price  Communications,  Inc.,  Memorandum  Opinion  and  Order,  MM  Docket  No.  87-  246,  7  FCC  Rcd  6850  (1992)  (examples  of 
 dismissals  of  petitions  for  reconsideration  because  they  had  no  merit). 
 665  See  47  C.  F.  R.    1.106(  b)(  3). 


 666  The  Commission  adopted  the  current  band  plan  for  non-  government  operations  in  the  V-band 
 in  December  1998.  Allocation  and  Designation  of  Spectrum  for  Fixed-  Satellite  Services  in  the  37.5-  38.  5  GHz,  40.  5-  41.5  GHz,  and  48.  2-  50.  2  GHz  Frequency  Bands;  Allocation  of  Spectrum  to  Upgrade  Fixed 


 and  Mobile  Allocations  in  the  40.  5-  42.5  GHz  Frequency  Band;  Allocation  of  Spectrum  in  the  46.  9-  47.  0  GHz  Frequency  Band  for  Wireless  Services;  and  Allocation  of  Spectrum  in  the  37.  0-  38.  0  GHz  and  40.  0- 
 40.  5  GHz  for  Government  Operations,  Report  and  Order,  IB  Docket  No.  97-  95,  13  FCC  Rcd  24649  (1998)  (36-  51  GHz  Order),  aff'd  15  FCC  Rcd  1766  (1999)  (36-  51  GHz  Reconsideration  Order).  The  Commission 
 is  currently  considering  revising  these  allocations.  See  Allocation  and  Designation  of  Spectrum  for  Fixed-Satellite  Services  in  the  37.  5-  38.5  GHz,  40.  5-  41.  5  GHz,  and  48.  2-  50.2  GHz  Frequency  Bands;  Allocation 
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 section  below,  we  will  apply  the  rules  and  procedures  we  adopt  in  this  Order  to  pending  applications,  in  cases  where  doing  so  will  help  further  the  goals  of  this  proceeding  to  expedite 
 service  to  the  public  and  discourage  speculation. 
 276.  The  Commission  is  allowed  to  apply  new  procedures  to  pending  applications  under  limited  circumstances.  Specifically,  the  Commission  can  apply  new  procedures  to  pending 
 applications  if  doing  so  does  not  impair  the  rights  an  applicant  possessed  when  it  filed  its  application,  increase  an  applicant's  liability  for  past  conduct,  or  impose  new  duties  on  applicants 
 with  respect  to  transactions  already  completed.  668  Applying  our  new  procedures  to  pending  satellite  applications  as  discussed  below  would  not  have  any  of  these  results. 


 277.  Applying  new  procedures  to  pending  satellite  applications  would  not  impair  the  rights  that  any  applicant  possessed  when  it  filed  its  application,  nor  impose  any  new  duty  with 
 respect  to  a  transaction  already  completed.  Courts  have  explained  that  applicants  do  not  gain  any  vested  right  merely  by  filing  an  application.  669  Similarly,  merely  filing  an  application  cannot  be 
 considered  a  "transaction  already  completed"  for  purposes  of  this  analysis.  In  addition,  the  pending  applications  were  filed  under  the  current  processing  round  procedures  described  in  this 
 Order  above.  670  The  current  processing  round  procedure  included  the  fungibility  policy  eliminated  in  the  Order  above.  671  Thus,  at  the  time  applicants  filed  their  applications,  they  had  no  reasonable 
 basis  for  assuming  that  they  would  receive  the  operating  authority  they  requested,  or  that  they 


 of  Spectrum  to  Upgrade  Fixed  and  Mobile  Allocations  in  the  40.  5-  42.5  GHz  Frequency  Band;  Allocation  of  Spectrum  in  the  46.  9-  47.  0  GHz  Frequency  Band  for  Wireless  Services;  and  Allocation  of  Spectrum  in 
 the  37.  0-  38.0  GHz  and  40.  0-  40.  5  GHz  for  Government  Operations,  Further  Notice  of  Proposed  Rulemaking,  IB  Docket  No.  97-  95,  16  FCC  Rcd  12244  (2001)  (36-  51  GHz  Further  Notice). 


 667  For  more  on  Ka-  band  NGSO  service,  see  The  Establishment  of  Policies  and  Service 
 Rules  for  the  Non-  Geostationary  Satellite  Orbit,  Fixed-  Satellite  Service  in  the  Ka-  Band,  Notice  of  Proposed  Rulemaking,  IB  Docket  No.  02-  19,  17  FCC  Rcd  2807  (2002)  (Ka-  band  NGSO  NPRM). 


 668  DirecTV,  Inc.,  v.  FCC,  110  F.  3d  816,  825-  26  (D.  C.  Cir.,  1997)  (DirecTV);  Landgraf  v. 
 USI  Film  Products,  511  U.  S.  244,  280  (1994)  (Landgraf). 
 669  Chadmoore  Communications,  Inc.  v.  FCC,  113  F.  3d  235,  240-  41  (D.  C.  Cir.  1997) 
 (Chadmoore)  ("  In  this  case  the  Commission's  action  did  not  increase  [the  applicant's]  liability  for  past  conduct  or  impose  new  duties  with  respect  to  completed  transactions.  Nor  could  it  have  impaired  a  right 


 possessed  by  [the  applicant]  because  none  vested  on  the  filing  of  its  application.");  Hispanic  Info.  &  Telecomms.  Network  v.  FCC,  865  F.  2d  1289,  1294-  95  (D.  C.  Cir.  1989)  ("  The  filing  of  an  application 
 creates  no  vested  right  to  a  hearing;  if  the  substantive  standards  change  so  that  the  applicant  is  no  longer  qualified,  the  application  may  be  dismissed.");  Schraier  v.  Hickel,  419  F.  2d  663,  667  (D.  C.  Cir.  1969)  (filing 
 of  application  that  has  not  been  accepted  does  not  create  a  legal  interest  that  restricts  discretion  vested  in  agency).  See  also  United  States  v.  Storer  Broadcasting  Co.,  351  U.  S.  192  (1952)  (pending  application  for 
 new  station  dismissed  due  to  rule  change  limiting  the  number  of  licenses  that  could  be  held  by  one  owner);  Bachow  Communications,  Inc.  v.  FCC,  237  F.  3d  683,  686-  88  (D.  C.  Cir.  2001)  (Bachow)  (upholding  freeze 
 on  new  applications  and  dismissal  of  pending  applications  in  light  of  adoption  of  new  licensing  scheme);  PLMRS  Narrowband  Corp.  v.  FCC,  182  F.  3d  995,  1000-  01  (D.  C.  Cir.  1999)  (applicant  did  not,  by  virtue 
 of  filing  application,  obtain  the  right  to  have  it  considered  under  the  rules  then  applicable). 
 670  Section  III.  A.  above.  See  also  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3850-  52 
 (paras.  5-  10). 
 671  Section  V.  E.,  above. 
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 would  be  granted  any  operating  authority  at  all  if  other  mutually  exclusive  applications  were  filed.  In  other  words,  no  applicant  had  any  right  to  rely  on  our  former  procedures  for  a  grant,  and 
 applying  new  procedures  does  not  impose  any  burden  on  any  applicant.  672  Accordingly,  applying  our  new  procedures  to  pending  satellite  applications  does  not  impair  the  rights  any  applicant  had 
 at  the  time  it  filed  its  application. 
 278.  We  recognize  that  the  authorizations  issued  under  our  new  procedures  may  not  be  exactly  what  applicants  expected.  This  by  itself  does  not  make  our  decision  to  rely  on  the  new 
 procedures  unreasonable,  however.  Courts  have  determined  that  any  statute  may  unsettle  expectations  and  impose  burdens  on  past  conduct.  For  example,  a  new  property  tax  or  zoning 
 regulation  may  upset  the  reasonable  expectations  that  prompted  those  affected  to  acquire  property.  673  Just  as  such  new  property  taxes  or  zoning  regulations  are  not  inherently 
 unreasonable,  we  conclude  that  reviewing  satellite  applications  under  procedures  adopted  after  the  applications  were  filed  is  not  inherently  unreasonable. 


 279.  The  Commission's  primary  goals  in  this  proceeding  include  adopting  licensing  procedures  that  will  allow  faster  service  to  the  public,  while  maintaining  adequate  safeguards 
 against  speculation.  674  Continuing  to  consider  pending  applications  under  the  existing  processing  round  procedure  would  frustrate  these  goals  in  the  case  of  the  V-  band.  675  Accordingly,  we  direct 
 the  International  Bureau  to  treat  all  pending  V-  band  applications  filed  in  a  timely  manner  in  the  current  processing  round  as  though  they  were  filed  at  the  same  time.  The  V-  band  will  be  divided 
 between  GSO-  like  service  and  NGSO-  like  service  based  on  the  proportion  of  qualified  GSO-  like  applicants  and  NGSO-  like  applicants.  Qualified  GSO-  like  applicants  will  be  licensed  to  the  orbit 
 locations  they  requested.  In  cases  in  which  two  GSO-  like  applicants  requested  mutually  exclusive  orbit  locations,  the  applicants  will  be  given  an  opportunity  to  amend  their  applications  to  request 
 another  location.  In  cases  where  the  applicants  choose  not  to  amend  their  applications,  the  Bureau  will  divide  the  GSO-  like  portion  of  the  V-  band  at  that  location  equally  between  the  two  applicants. 
 Also,  the  Bureau  will  divide  the  NGSO-  like  portion  of  the  V-  band  equally  among  the  qualified  NGSO-  like  applicants.  The  Commission  is  in  the  process  of  considering  revisions  to  the  V-  band 
 band  plan.  676  We  direct  the  International  Bureau  to  release  a  public  notice  shortly  after  the  pending  V-  band  Report  and  Order  is  released,  to  explain  this  V-  band  procedure  in  more  detail,  and  to  give 
 V-  band  applicants  an  opportunity  to  amend  their  applications  if  necessary. 
 280.  In  the  Notice  of  Proposed  Rulemaking  in  the  Ka-  band  licensing  proceeding,  we  proposed  a  method  that  would  enable  multiple  Ka-  band  NGSO  systems  to  share  the  same 
 spectrum.  677  The  pleading  cycle  in  that  proceeding  has  closed  and  we  have  developed  a  full 
 672  See  Cassell  v.  FCC,  154  F.  3d  478,  486-  87  (D.  C.  Cir.,  1998). 
 673  Langraf,  511  U.  S.  at  269-  70;  DirecTV,  110  F.  3d  at  826,  citing  Bell  Atlantic  Telephone 
 Cos.  v.  FCC,  79  F.  3d  1195,  1207  (D.  C.  Cir.,  1996);  Black  Citizens  for  a  Fair  Media  v.  FCC,  719  F.  2d  407,  411  (D.  C.  Cir.,  1983). 


 674  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3852-  56  (paras.  11-  23);  3864-  66  (paras.  51-53). 


 675  Chadmoore,  113  F.  3d  at  242;  Bachow,  237  F.  3d  at  686. 
 676  36-  51  GHz  Further  Notice,  16  FCC  Rcd  12244. 
 677  Ka-  band  NGSO  NPRM,  17  FCC  Rcd  at  2807  (para.  2). 
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 record  on  our  licensing  proposal.  At  this  stage  in  the  proceeding,  we  see  no  reason  to  impose  a  band-  splitting  approach  on  the  Ka-  band  NGSO  applicants  if  they  believe  that  they  can  share  the 
 spectrum.  Considering  the  comments  will  allow  us  to  determine  which  licensing  method  is  best  suited  for  the  Ka-  band  NGSO  applications,  without  delaying  grant  of  the  licenses.  Therefore,  we 
 direct  the  International  Bureau  to  award  Ka-  band  licenses  pursuant  to  the  processing  mechanism  adopted  in  the  forthcoming  Report  and  Order  in  the  Ka-  band  NGSO  licensing  proceeding. 


 281.  In  the  case  of  both  V-  band  and  Ka-  band  NGSO  applications,  however,  we  find  that  eliminating  the  anti-  trafficking  rule  is  likely  to  expedite  provision  of  service  to  the  public,  and  that 
 application  of  the  safeguards  against  speculation  would  help  limit  speculation  and  warehousing.  Accordingly,  V-  band  and  Ka-  band  NGSO  licensees  will  be  subject  to  the  bond-  posting  requirement 
 and  new  milestones  adopted  above.  678  Finally,  V-  band  applicants  will  be  required  to  withdraw  all  but  five  GSO-  like  orbit  location  requests  and  one  NGSO-  like  satellite  system  request.  It  is  at  best 
 unlikely  that  the  applicants  requesting  more  than  five  GSO-  like  orbit  locations  will  successfully  complete  construction  of  all  the  satellites  they  have  requested.  Thus,  granting  all  those  applicants' 
 requests  could  result  in  warehousing  spectrum  until  we  cancel  licenses  at  the  time  of  the  first  milestone. 


 282.  Finally,  we  will  not  consider  fee  refunds  under  the  rule  we  adopt  in  this  Order  in  the  event  that  an  applicant  withdraws  its  application.  The  fee  refund  provision  adopted  in  this  Order  is 
 intended  to  enable  an  applicant  in  a  first-  come,  first-  served  procedure  to  obtain  a  fee  refund  in  cases  where  an  earlier-  filed  application  would  make  it  impossible  to  grant  its  application.  679  There  are  no 
 such  pending  applications  here  that  we  would  consider  pursuant  to  a  first-  come,  first-  served  procedure. 


 283.  We  emphasize  that  some  of  the  rules  we  apply  to  pending  applications  do  not  apply  to  licenses  granted  before  this  Order  was  adopted.  Thus,  licensees  will  not  be  required  to  post  a 
 bond  for  licenses  they  have  been  granted  in  the  past.  Similarly,  nothing  in  this  Order  affects  the  milestones  of  licenses  granted  before  we  adopted  this  Order.  However,  we  eliminate  the  anti-trafficking 
 rule  for  current  satellite  licensees  as  well  as  for  satellite  license  applications  granted  after  this  Order  takes  effect. 


 284.  In  summary,  we  will  rely  on  procedures  adopted  in  this  Order  in  reviewing  currently  pending  satellite  applications,  where  appropriate,  as  discussed  above.  We  direct  the  International 
 Bureau  to  review  pending  satellite  applications  consistently  with  our  discussion  in  this  Order,  and  to  adopt  licensing  Orders  acting  on  those  pending  satellite  applications  consistent  with  rules  and 
 policies  governing  the  spectrum,  and  in  coordination  with  other  potentially  affected  Bureaus  and  Offices. 


 VIII.  NON-  U.  S.-  LICENSED  SATELLITES 
 A.  Background 


 678  The  milestones  adopted  in  this  Order  above  are  consistent  with  those  proposed  by  the 
 Commission  in  the  Ka-  band  NGSO  NPRM,  17  FCC  Rcd  at  2820  (paras.  40-  41). 
 679  See  Section  VI.  E.  1.  c.  above.  We  note,  however,  that  applicants  who  withdraw  their 
 applications  will  avoid  the  bond  requirement.  Moreover,  there  are  currently  provisions  in  the  Commission's  rules  by  which  an  applicant  may  apply  for  a  fee  refund.  The  new  fee  refund  provision  we 


 adopt  in  this  Order  does  not  affect  those  provisions. 
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 285.  Under  the  terms  of  the  World  Trade  Organization  (WTO)  Agreement  on  Basic  Telecommunications  Services  (WTO  Telecom  Agreement),  680  78  WTO  signatories,  including  the 
 United  States,  have  made  binding  commitments  to  open  their  markets  to  foreign  competition  in  satellite  services.  681  Providing  opportunities  for  non-  U.  S.-  licensed  satellites  to  deliver  services  in 
 the  United  States  brings  U.  S.  consumers  the  benefits  of  enhanced  competition.  682  This  policy  also  promotes  greater  opportunities  for  U.  S.  companies  to  enter  previously  closed  foreign  markets, 
 thereby  stimulating  a  more  competitive  global  satellite  services  market.  683 
 286.  In  the  Notice,  the  Commission  described  the  framework  it  uses  for  considering  requests  for  access  to  the  U.  S.  market  by  non-  U.  S.-  licensed  satellite  operators  for  satellite 
 services.  684  The  Commission's  framework  provides  two  procedures  by  which  a  non-  U.  S.-  licensed  satellite  may  provide  service  in  the  United  States.  685  The  first  procedure  allows  the  non-  U.  S. 
 satellite  operator  to  participate  in  a  space  station  processing  round  through  an  earth  station  application  seeking  to  communicate  with  the  satellite  or  through  a  "letter  of  intent"  to  use  its  non-U. 
 S.  satellite  to  provide  service  in  the  United  States.  The  non-  U.  S.  licensed  satellite  must  meet 


 680  The  WTO  came  into  being  on  January  1,  1995,  pursuant  to  the  Marrakesh  Agreement 
 Establishing  the  World  Trade  Organization  (the  Marrakesh  Agreement).  33  I.  L.  M.  1125  (1994).  The  Marrakesh  Agreement  includes  multilateral  agreements  on  trade  in  goods,  services,  intellectual  property, 


 and  dispute  settlement.  The  General  Agreement  on  Trade  in  Services  (GATS)  is  Annex  1B  of  the  Marrakesh  Agreement.  33  I.  L.  M.  1167  (1994).  The  WTO  Telecom  Agreement  was  incorporated  into  the 
 GATS  by  the  Fourth  Protocol  to  the  GATS  (April  30,  1996),  36  I.  L.  M.  354  (1997)  (Fourth  Protocol  to  the  GATS). 


 681  Fourth  Protocol  to  the  GATS,  36  I.  L.  M.  at  363.  See  also  DISCO  II,  12  FCC  Rcd  at 
 24102  (para.  19).  The  United  States  made  market  access  commitments  for  fixed  and  mobile  satellite  services.  It  did  not  make  market  access  commitments  for  Direct-  to-  Home  (DTH)  Service,  Direct  Broadcast 


 Satellite  Service  (DBS),  and  Digital  Audio  Radio  Service  (DARS),  and  took  an  exemption  from  most-favored  nation  (MFN)  treatment  for  these  services  as  well.  See  Fourth  Protocol  to  the  GATS,  36  I.  L.  M.  at 
 359.  Generally,  GATS  requires  WTO  member  countries  to  afford  most-  favored  nation  (MFN)  treatment  to  all  other  WTO  member  nations.  "With  respect  to  any  measure  covered  by  this  Agreement,  each  Member 
 shall  accord  immediately  and  unconditionally  to  services  and  service  suppliers  of  any  other  Member  treatment  no  less  favourable  than  that  it  accords  to  like  services  and  service  suppliers  of  any  other  country." 
 GATS  Article  II,  paragraph  1.  Member  nations  are  permitted  to  take  "MFN  exemptions,"  however,  under  certain  circumstances  specified  in  an  annex  to  GATS.  See  GATS  Annex  on  Article  II  Exemptions. 


 682  DISCO  II,  12  FCC  Rcd  at  24097  (para.  4). 
 683  DISCO  II,  12  FCC  Rcd  at  24099  (para.  10). 
 684  We  adopted  this  framework  in  DISCO  II,  12  FCC  Rcd  24094,  recon.  15  FCC  Rcd  7207 
 (1999)  (DISCO  II  First  Reconsideration  Order),  recon.  denied  16  FCC  Rcd  19794  (2001)  (DISCO  II  Second  Reconsideration  Order).  For  a  detailed  summary  of  the  DISCO  II  framework,  we  refer  the  reader 


 to  DISCO  II  First  Reconsideration  Order,  15  FCC  Rcd  at  7209-  10  (paras.  4-  5).  In  evaluating  requests  by  foreign-  licensed  satellites  to  serve  the  U.  S.  market,  the  Commission  adopted  a  public  interest  framework 
 that  considers  the  effect  on  competition  in  the  United  States,  spectrum  availability,  eligibility  and  operating  (e.  g.,  technical)  requirements,  and  national  security,  law  enforcement,  foreign  policy,  and  trade  concerns. 
 See,  e.  g.,  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3889  n.  165,  citing  DISCO  II  First  Reconsideration  Order,  15  FCC  Rcd  at  7209-  10  (paras.  4-  5). 


 685  DISCO  II,  12  FCC  Rcd  at  24174  (para.  188). 
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 all  Commission  requirements  that  apply  to  U.  S.-  licensed  satellites  before  we  will  authorize  it  to  provide  service  in  the  United  States.  686 
 287.  The  second  procedure  is  applicable  in  cases  where  the  non-  U.  S.-  licensed  satellite  operator  seeks  immediate  access  to  the  U.  S.  market  through  an  in-  orbit  satellite,  and  has  initiated 
 international  coordination  negotiations  for  that  satellite  network  pursuant  to  the  International  Telecommunication  Union's  (ITU's)  international  Radio  Regulations.  687  Under  this  procedure,  a 
 prospective  U.  S.  earth  station  operator  seeking  to  communicate  with  the  in-  orbit  non-  U.  S.  -licensed  space  station  must  file  an  application  for  an  initial  earth  station  license  or  a  modification 
 of  an  existing  license,  listing  the  non-  U.  S.-  licensed  space  station  as  a  "point  of  communication,"  and  demonstrating  that  the  space  station  meets  all  applicable  Commission  requirements.  688 


 288.  Under  both  of  these  procedures,  each  request  for  initial  U.  S.  market  access  must  contain  the  information  required  in  Section  25.114  of  the  Commission's  rules,  which  governs 
 applications  for  space  station  authorizations,  with  two  exceptions.  689  The  Commission  does  not  require  the  non-  U.  S.-  licensed  space  station  operator  to  submit  technical  information  if  it  has 
 completed  the  international  coordination  process,  or  to  submit  financial  information  if  the  satellite  has  been  launched.  690 


 289.  In  the  Notice,  the  Commission  proposed  to  modify  the  procedures  and  information  requirements  applicable  to  operators  of  non-  U.  S.-  licensed  satellites  seeking  access  to  the  U.  S. 
 market,  to  make  them  consistent  with  any  revisions  to  the  procedures  for  U.  S.-  licensed  satellites  that  the  Commission  might  adopt  in  this  proceeding.  691  The  Commission  also  proposed 
 additional  rule  revisions  to  clarify  the  information  requirements  of  non-  U.  S.-  licensed  satellite  operators  seeking  access  to  the  U.  S.  market.  692  We  address  these  issues  below. 


 B.  Revision  of  Framework 
 1.  NGSO-  Like  Satellites 
 290.  Background.  In  the  Notice,  the  Commission  stated  that,  in  the  event  that  it  continued  to  use  processing  rounds  as  a  vehicle  for  licensing,  it  would  not  need  to  modify  the 
 current  Letter  of  Intent  procedure.  693  As  we  explained  above,  we  have  adopted  a  modified 


 686  DISCO  II,  12  FCC  Rcd  at  24173-  74  (paras.  184-  85,  188). 
 687  DISCO  II,  12  FCC  Rcd  at  24174  (para.  186). 
 688  See  generally  47  C.  F.  R.    25.  137. 
 689  See  generally  47  C.  F.  R.    25.  137;  DISCO  II,  12  FCC  Rcd  at  24174  (para.  188). 
 690  See  47  C.  F.  R.    25.  137(  b);  DISCO  II,  12  FCC  Rcd  at  24175-  76  (para.  191). 
 691  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3890  (para.  125). 
 692  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3890  (para.  125). 
 693  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3890  (para.  126). 
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 processing  round  procedure  for  NGSO-  like  systems  that  awards  licenses  by  dividing  the  available  spectrum  evenly  among  the  qualified  applicants.  694 
 291.  Discussion.  We  will  continue  to  treat  Letters  of  Intent  filed  by  non-  U.  S.-  licensed  NGSO-  like  system  operators  as  we  have  in  the  past.  That  is,  a  Letter  of  Intent  will  be  treated  as  a 
 request  for  reservation  of  spectrum  in  a  processing  round.  695  If  authorized  to  serve  the  United  States,  the  foreign  system  will  be  allowed  to  provide  service  in  the  United  States  using  1/  n  of  the 
 available  spectrum,  just  as  U.  S.-  licensed  satellite  operators  in  that  processing  round. 
 2.  GSO-  Like  Satellites 
 292.  Background.  The  Commission  also  solicited  comment  on  treating  Letters  of  Intent  and  earth  station  applications  for  authority  to  access  a  non-  U.  S.-  licensed  satellite  as  a  satellite 
 application  for  purposes  of  determining  priority  in  the  queue,  in  the  event  that  we  adopt  a  first-come,  first-  served  procedure.  696  In  other  words,  Letters  of  Intent  and  earth  station  applications 
 would  be  placed  in  the  queue  together  with  U.  S.  applications,  and  considered  at  the  time  the  Letter  of  Intent  or  earth  station  application  reaches  the  head  of  the  queue. 


 293.  Discussion.  Telesat  maintains  that  foreign  entities  seeking  to  operate  GSO-  like  satellites  in  the  United  States  should  not  be  required  to  file  Letters  of  Intent.  Rather,  because  the 
 U.  S.  licensing  process  does  not  supercede  the  ITU  date  priority  process,  Telesat  argues  that  the  only  relevant  issue  should  be  whether  the  non-  U.  S.-  licensed  satellite  operator  has  ITU  date 
 priority.  697  If  the  foreign  satellite  has  ITU  date  priority,  a  U.  S.  operator  seeking  to  operate  in  the  same  bands  will  not  be  able  to  coordinate  with  the  foreign-  licensed  system  and  will  therefore  be 
 unable  to  operate  in  any  event.  Telesat  argues  that  we  should  allow  non-  U.  S.-  licensed  satellite  operators  to  provide  service  in  the  United  States  upon  a  showing  of  (1)  a  valid  authorization  from 
 another  administration;  (2)  the  applicable  ITU  filings,  and  (3)  a  list  of  the  relevant  coordination  agreements.  698 


 294.  We  disagree  that  we  should  change  the  methods  by  which  foreign  satellite  operators  request  U.  S.  access  for  their  GSO-  like  satellites  as  Telesat  suggests.  Letters  of  Intent  or  earth 
 station  applications  will  continue  to  be  the  vehicle  for  non-  U.  S.-  licensed  satellite  operators  to  request  access  to  the  United  States.  These  vehicles  provide  information  needed  to  address  issues 
 such  as  spectrum  availability,  699  and  compliance  with  U.  S.  technical  requirements.  700  In  other  proceedings,  we  have  considered  and  rejected  arguments  that  obtaining  a  satellite  license  from 
 another  administration  is  sufficient  to  show  that  the  satellite  system  will  comply  with  U.  S. 


 694  Section  V.  above. 
 695  DISCO  II  Order,  12  FCC  Rcd  at  24173-  74  (para.  185). 
 696  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3890  (para.  126). 
 697  Telesat  Comments  at  4;  Telesat  Reply  at  2-  3. 
 698  Telesat  Comments  at  6. 
 699  DISCO  II,  12  FCC  Rcd  at  24158-  59  (paras.  147-  50). 
 700  DISCO  II,  12  FCC  Rcd  at  24161-  63  (paras.  154-  59). 
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 technical  requirements.  701  Here,  we  conclude  that  ITU  date  priority  is  also  not  sufficient  to  show  that  a  non-  U.  S.-  licensed  satellite  operator  will  meet  all  the  public  interest  factors  we  weigh  when 
 evaluating  requests  for  access  to  the  U.  S.  satellite  market.  Given  that  we  will  continue  to  consider  public  interest  factors  in  reviewing  requests  for  market  access,  we  must  determine  the 
 procedures  for  reviewing  Letters  of  Intent  in  conjunction  with  the  first-  come,  first-  served  procedure  for  GSO-  like  satellite  applications  we  adopt  in  this  Order.  We  conclude  that  Letters  of 
 Intent  should  be  treated  the  same  as  satellite  applications.  This  is  consistent  with  our  WTO  commitments  to  treat  non-  U.  S.  satellite  operators  no  less  favorably  than  we  treat  U.  S.  satellite 
 operators. 
 295.  In  addition,  the  first-  come,  first-  served  procedure  we  adopt  today  affords  sufficient  opportunity  to  address  ITU  priority  issues.  702  Moreover,  ITU  date  priority  does  not  preclude  us 
 from  licensing  the  operator  of  a  U.  S.-  licensed  GSO  satellite  on  a  temporary  basis  pending  launch  and  operation  of  a  satellite  with  higher  priority  in  cases  where  the  non-  U.  S.-  licensed  satellite  has 
 not  been  launched  yet.  703  When  we  have  authorized  a  U.  S.  licensee  to  operate  at  an  orbit  location  at  which  another  Administration  has  ITU  priority,  we  have  issued  the  license  subject  to  the 
 outcome  of  the  international  coordination  process,  and  emphasized  that  the  Commission  is  not  responsible  for  the  success  or  failure  of  the  required  international  coordination.  704 


 296.  Furthermore,  in  the  first-  come,  first-  served  procedure,  when  considering  requests  for  U.  S.  market  access  from  two  or  more  non-  U.  S.-  licensed  satellite  operators  licensed  by 
 different  Administrations,  we  will  continue  to  take  into  account  the  impact  of  the  ITU  coordination  process.  Under  the  ITUs  international  Radio  Regulations,  it  is  the  responsibility  of 
 Administrations  with  lower  ITU  priority  to  coordinate  their  networks  with  the  networks  of  Administrations  with  higher  priority.  In  the  event  that  a  non-  U.  S.-  licensed  satellite  operator  is 
 authorized  to  provide  service  in  the  United  States,  and  that  network  is  "affected,"  within  the  meaning  of  the  ITUs  international  Radio  Regulations,  by  a  satellite  network  with  lower  priority 
 seeking  access  to  the  U.  S.  market,  we  would  permit  the  lower  priority  network  to  access  the  U.  S.  market  if  the  higher  priority  satellite  has  not  been  launched.  In  that  case,  the  lower  priority 
 satellite  would  be  authorized  to  access  the  U.  S.  market  subject  to  proof  of  coordination  with  the  higher  priority  satellite.  Absent  such  a  demonstration,  the  lower  priority  satellite  would  be 
 required  to  cease  service  to  the  U.  S.  market  immediately  upon  launch  and  operation  of  the  higher 


 701  DISCO  II,  12  FCC  Rcd  at  24161-  63  (paras.  154-  59);  DISCO  II  Second  Reconsideration 
 Order,  16  FCC  Rcd  at  19798-  99  (paras.  11-  14). 
 702  Section  VI.  D.  7.  above. 


 703  Section  VI.  C.  9.  above.  See  also  PanAmSat  Corporation,  Request  for  Special  Temporary 
 Authority  to  Operate  a  Space  Station  at  60  W.  L.,  Order  and  Authorization,  15  FCC  Rcd  21802,  21804-  05  (para.  11)  (Int'l  Bur.,  1999);  Application  of  Columbia  Communications  Corporation  for  Modification  of 


 Authorization  to  Permit  Operation  of  Ku-  band  Satellite  Capacity  on  the  Columbia  515  Satellite  Located  at  37.  7  West  Longitude,  Memorandum  Opinion  and  Order,  16  FCC  Rcd  12480,  12486  (para.  16)  (Int'l  Bur. 
 2001)(  The  Commission  has  often  permitted  satellite  operators  to  provide  service  on  a  temporary  basis  from  orbit  locations  that  are  not  regularly  assigned  to  them,  provided  the  temporary  operations  do  not  adversely 
 impact  regularly  licensed  satellite  systems). 
 704  See  KaStarCom  World  Satellite,  LLC,  Application  for  Authority  to  Construct,  Launch, 
 and  Operate  a  Ka-  band  Satellite  System  in  the  Fixed-  Satellite  Service,  Order  and  Authorization,  16  FCC  Rcd  14322,  14330  (para.  25)  (Intl  Bur.  2001)  (KaStarCom  Authorization  Order). 
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 priority  satellite,  or  be  subject  to  further  conditions  designed  to  address  potential  harmful  interference  to  a  satellite  with  ITU  date  precedence.  705 
 297.  In  summary,  we  reject  Telesat's  proposal  to  consider  requests  for  U.  S.  market  access  based  only  on  a  showing  of  ITU  date  precedence  and  foreign  authorization,  because  that 
 would  not  enable  us  to  determine  whether  the  satellite  meets  our  Part  25  technical  requirements.  Furthermore,  nothing  in  the  procedures  we  adopt  today  precludes  us  from  considering  ITU  date 
 precedence  issues  when  reviewing  requests  from  non-  U.  S.-  licensed  satellite  operators  for  U.  S.  market. 


 C.  Information  Requirements  of  Non-  U.  S.-  Licensed  Satellite  Operators 
 1.  Information  Requirements  for  Coordinated  Non-  U.  S.  Satellites 
 298.  Background.  Under  the  DISCO  II  framework,  we  do  not  require  operators  of  non-U.  S.-  licensed  satellites  to  submit  technical  information  concerning  the  satellite  if  they  have 
 completed  international  coordination.  706  We  did  so  because  we  assumed  that,  through  the  coordination  process,  we  would  have  obtained  all  the  information  necessary  to  make  a  finding  as 
 to  whether  the  non-  U.  S.  satellite  complies  with  all  Commission  technical  requirements.  In  the  Notice,  we  noted  that  it  can  be  very  time-  consuming  or,  in  some  cases,  impossible  to  derive  that 
 technical  information  from  international  coordination  agreements.  707  We  also  explained  that  the  coordination  process  may  not  provide  us  with  any  technical  information  in  those  cases  in  which 
 we  do  not  need  to  obtain  space  station  data  from  the  foreign  administration  because  the  foreign  satellite  will  not  be  close  enough  to  any  in-  orbit  or  planned  U.  S.  satellites  to  raise  potential 
 interference  concerns.  708  We  observed,  however,  that  in  these  cases,  we  still  need  to  determine  whether  the  foreign  space  station  meets  our  technical  requirements  to  determine  whether  allowing 
 the  foreign  satellite  to  access  the  United  States  could  interfere  with  other  countries'  compliant  satellites  that  are  authorized  to  serve  the  United  States  or  with  future  U.  S.  satellites  that  may  be 
 authorized  at  orbit  locations  adjacent  to  the  foreign  satellite.  709  We  therefore  proposed  modifying  our  rules  to  require  all  non-  U.  S.-  licensed  space  stations  seeking  initial  access  to  the  United  States 


 705  New  Skies  Networks,  Inc.,  Order,  18  FCC  Rcd  896,  899  (para.  10)  (Int'l  Bur.,  Sat.  Div., 
 2003). 
 706  47  C.  F.  R.    25.  137(  b);  DISCO  II,  12  FCC  Rcd  at  24175-  76  (para.  191),  cited  in  Space 
 Station  Reform  NPRM,  17  FCC  Rcd  at  3891  (para.  130).  Specifically,  we  do  not  require  those  satellite  operators  to  provide  the  information  specified  in  Sections  25.  114(  c)(  5)  through  (11)  and  (14).  See  47 


 C.  F.  R.    25.  137(  b). 
 707  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3891  (para.  130).  We  also  explained  that, 
 when  a  non-  U.  S.-  licensed  satellite  operator  has  relied  on  a  coordination  agreement  and  we  cannot  determine  that  a  non-  U.  S.-  licensed  satellite  can  operate  interference-  free  in  a  two-  degree-  spacing 


 environment,  we  have  required  U.  S.-  licensed  earth  stations  operating  with  that  satellite  to  do  so  on  a  non-harmful  interference  basis.  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3891  (para.  130),  citing  Telesat 
 Canada,  Request  for  Declaratory  Ruling  or  Petition  for  Waiver  on  Earth  Stations'  Use  of  ANIK  E1  and  ANIK  E2  Satellite  Capacity  to  Provide  Basic  Telecommunications  Service  in  the  United  States,  Order,  15 
 FCC  Rcd  3649,  3654  (para.  14)  (Intl  Bur.,  1999)  (First  ANIK  E1  and  E2  Permitted  List  Order). 
 708  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3891-  92  (para.  131). 


 709  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3891-  92  (para.  131). 
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 to  submit  all  satellite-  related  technical  information  specified  in  Part  25,  regardless  of  coordination  status.  710 
 299.  Discussion.  Telesat  and  Inmarsat  oppose  the  proposal  that  all  non-  U.  S.-  licensed  operators  submit  all  satellite-  related  technical  information  specified  in  Part  25,  regardless  of 
 coordination  status.  711  Inmarsat  argues  that  such  a  requirement  would  be  unduly  burdensome,  and  constitute  an  additional  licensing  requirement.  712  Inmarsat  alternatively  proposes  that  the 
 Commission  obtain  required  information  through  the  international  coordination  process.  713  Telesat  suggests  requiring  non-  U.  S.-  licensed  satellite  operators  seeking  U.  S.  market  access  to 
 provide  only  the  following  technical  information:  (1)  evidence  of  an  authorization  from  the  relevant  administration;  (2)  the  applicable  coordination  or  notification  ITU  filing(  s);  and  (3)  a 
 listing  of  the  relevant  coordination  agreements.  714  Finally,  Telesat  assumes  the  Commission's  proposal  may  indicate  that  the  Commission  plans  to  "verify"  that  non-  U.  S.-  licensed  satellite 
 operators  have  coordinated  with  adjacent  satellites,  and  opposes  any  such  plans  that  the  Commission  may  have.  715 


 300.  We  conclude  that  non-  U.  S.-  licensed  satellite  operators  seeking  access  to  the  U.  S.  market  should  provide  the  same  information  as  U.  S.  satellite  license  applicants,  regardless  of 
 whether  they  have  completed  international  coordination.  Based  on  our  experience  with  requests  for  U.  S.  market  access  from  non-  U.  S.-  licensed  satellite  operators,  we  have  found  that  it  is  often 
 difficult  or  impossible  to  determine  whether  a  non-  U.  S.-  licensed  satellite  complies  with  our  technical  requirements  based  on  international  coordination  agreements.  716  Furthermore,  when  a 
 non-  U.  S.-  satellite  operator  has  relied  on  a  coordination  agreement  and  we  cannot  determine  that  a  non-  U.  S.-  licensed  satellite  can  operate  interference-  free  in  a  two-  degree-  spacing  environment,  we 
 have  required  U.  S.-  licensed  earth  stations  operating  with  that  satellite  to  do  so  on  a  non-  harmful  interference  basis.  717  In  at  least  one  of  those  cases,  the  non-  U.  S.-  licensed  satellite  operator  later 
 provided  adequate  information  to  show  that  its  satellites  can  operate  interference-  free  in  a  two-degree-  spacing  environment.  718  Thus,  both  the  foreign  operator  and  Commission  staff  were 
 forced  to  expend  unnecessary  time  respectively  preparing  and  processing  multiple  applications.  By  revising  our  rules,  we  should  avoid  this  in  the  future. 


 710  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3891-  92  (para.  131). 
 711  Telesat  Comments  6-  7;  Inmarsat  Comments  at  13-  14. 
 712  Inmarsat  Comments  at  13-  14. 
 713  Inmarsat  Comments  at  13-  14. 
 714  Telesat  Comments  at  6;  Telesat  Reply  at  3. 
 715  Telesat  Comments  at  7. 
 716  See  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3891-  92  (para.  131). 
 717  See,  e.  g.,  First  ANIK  E1  and  E2  Permitted  List  Order,  15  FCC  Rcd  at  3654  (para.  14). 
 718  Telesat  Canada,  Request  to  Eliminate  Conditions  On  ANIK  E1  and  E2's  Inclusion  on  The 
 Permitted  Space  Station  List,  Order,  16  FCC  Rcd  15979  (Sat.  and  Rad.  Div.,  Int'l  Bur.,  2001). 
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 301.  Neither  Telesat  nor  Inmarsat  persuade  us  to  take  a  different  approach.  To  the  extent  that  they  recommend  continuing  to  extract  the  necessary  technical  information  from  coordination 
 agreements,  neither  commenter  addresses  our  experience  that  this  procedure  can  delay  granting  U.  S.  market  access  to  non-  U.  S.-  licensed  satellite  operators  while  we  attempt  to  cull  relevant 
 information  from  the  agreements,  or  that  doing  so  will  even  provide  us  with  all  the  information  we  need  to  make  a  determination  as  to  whether  the  non-  U.  S.  satellite  complies  with  our  technical 
 rules.  719  To  the  extent  that  they  maintain  that  requiring  Part  25  technical  information  constitutes  a  U.  S.  licensing  requirement,  we  have  previously  considered  and  rejected  these  arguments.  720 


 302.  Finally,  we  have  no  plans  or  intent  to  use  the  technical  information  provided  by  non-  U.  S.-  licensed  satellite  operators  to  verify  international  coordination  agreements.  Rather,  we 
 will  use  this  information  to  determine  whether  the  satellite  complies  with  the  technical  requirements  of  Part  25.  This  is  the  same  review  we  conduct  when  a  U.  S.-  licensed  satellite 
 operator  seeks  authority  to  provide  satellite  service  in  the  U.  S.  market. 
 2.  Amendments  of  Letters  of  Intent 
 303.  Background.  With  respect  to  non-  U.  S.-  licensed  satellite  operators  that  wish  to  amend  a  proposal  for  a  satellite  system  described  in  a  Letter  of  Intent,  the  Commission  proposed 
 requiring  an  additional  Letter  of  Intent  describing  the  changes.  721  We  also  proposed  treating  such  letters  as  we  would  treat  amendments  filed  by  a  U.  S.  satellite  applicant.  In  other  words,  if  the 
 planned  changes  constitute  a  "major  amendment,"  the  non-  U.  S.  satellite  operator  would  lose  its  status  relative  to  later-  filed  applications.  722  We  also  invited  comment  on  the  effects,  if  any,  of  the 
 process  for  filing  modifications  of  ITU  filings  on  our  proposal  for  amendments  of  Letters  of  Intent.  723 


 304.  Discussion.  Telesat  supports  the  proposal  to  treat  amendments  to  Letters  of  Intent  in  the  same  way  as  amendments  filed  by  a  U.  S.  applicant.  724  We  find  that  doing  so  will  place 
 non-  U.  S.-  licensed  satellite  operators  on  an  equal  footing  relative  to  U.  S.  satellite  license  applicants.  We  therefore  adopt  the  proposal  and  will  revise  Section  25.137  accordingly. 


 305.  Telesat  further  argues  that  amendments  of  Letters  of  Intent  should  be  consistent  with  and  contingent  upon  modifications  of  the  relevant  ITU  filing.  725  Telesat  also  maintains  that 
 some  ITU  filings  may  not  affect  the  service  the  satellite  operator  plans  to  offer  in  the  United  States.  We  agree.  Just  as  U.  S.  license  applicants  are  required  to  ensure  that  the  information  in 


 719  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3891-  92  (para.  131). 
 720  DISCO  II,  12  FCC  Rcd  at  24175  (para.  190)  (Part  25  information  requirements  do  not 
 constitute  a  licensing  requirement). 
 721  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3894  (para.  137). 


 722  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3894  (para.  137).  See  also  Section  VI.  E.  3. 
 above  (treatment  of  major  amendments  in  first-  come,  first-  served  procedure). 
 723  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3894  (para.  137). 


 724  Telesat  Comments  at  8. 
 725  Telesat  Comments  at  8. 
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 pending  satellite  applications  is  current  and  complete,  726  non-  U.  S.-  licensed  satellite  operators  should  also  ensure  that  the  information  in  pending  Letters  of  Intent  is  current  and  complete.  This 
 includes  ensuring  that  the  information  in  the  Letter  of  Intent  is  consistent  with  that  on  file  with  the  ITU.  We  will  revise  Section  25.137  accordingly.  Nothing  in  the  record  suggests  that  any 
 other  revisions  to  Section  25.137  are  necessary  to  reflect  ITU  filing  amendment  procedures. 
 D.  Financial  Qualifications  of  Non-  U.  S.-  Licensed  Satellite  Operators 
 1.  Eliminating  the  Financial  Qualification  Requirement 
 306.  Background.  Currently,  non-  U.  S.-  licensed  satellite  operators  who  have  not  launched  their  satellites  must  meet  our  financial  qualification  rules  when  requesting  access  to  the 
 U.  S.  market.  727  In  the  Notice,  however,  we  proposed  to  eliminate  the  financial  qualification  rules  for  both  U.  S.-  licensed  satellites  and,  similarly,  for  non-  U.  S.-  licensed  satellites  seeking  to  access 
 the  U.  S.  market.  728 
 307.  Discussion.  Telesat  supports  the  proposal  to  eliminate  financial  qualifications  for  non-  U.  S.-  licensed  satellites,  consistent  with  any  decision  to  eliminate  the  requirement  for  U.  S.  -licensed 
 satellites.  729  We  have  eliminated  the  financial  requirement  for  U.  S.-  licensed  space  station  applicants  in  this  Order.  730  We  eliminate  this  requirement,  as  well,  for  non-  U.  S.-  licensed 
 space  stations. 
 2.  Posting  of  Bonds 
 308.  In  the  Notice,  the  Commission  proposed  to  modify  the  procedures  applicable  to  operators  of  non-  U.  S.-  licensed  satellites  seeking  access  to  the  U.  S.  market,  to  make  them 
 consistent  with  any  revisions  to  the  procedures  for  U.  S.-  licensed  satellites  that  the  Commission  might  adopt  in  this  proceeding.  731  Such  provisions  are  consistent  with  our  WTO  commitments  to 
 treat  non-  U.  S.-  licensed  satellite  operators  no  less  favorably  that  we  treat  U.  S.  satellite  operators.  732  The  policy  concern  underlying  our  decision  to  require  licensees  to  post  bonds, 
 discouraging  speculative  satellite  applications,  also  applies  to  requests  for  access  to  the  U.  S.  market.  In  other  words,  when  a  satellite  operator  seeks  a  license  for  speculative  purposes  rather 
 than  to  construct  a  satellite  system,  it  creates  a  risk  that  the  spectrum  assigned  through  the  license 


 726  47  C.  F.  R.    1.65. 
 727  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3891  (para.  129),  citing  47  C.  F.  R.   
 25.  137(  b);  DISCO  II,  12  FCC  Rcd  at  24175-  76  (para.  191).  This  information  requirement  does  not  apply  to  non-  U.  S.-  licensed  satellite  operators  seeking  access  to  the  U.  S.  market  with  an  in-  orbit  satellite. 


 728  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3891  (para.  129). 
 729  Telesat  Comments  at  5. 
 730  Section  VII.  B. 
 731  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3890  (para.  125). 
 732  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3890  (para.  127). 
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 would  not  be  put  to  any  use  until  after  the  license  were  sold.  733  This  potential  for  warehousing  exists  regardless  of  whether  the  satellite  operator  has  a  U.  S.  license  or  a  non-  U.  S.  license. 
 309.  Therefore,  non-  U.  S.-  licensed  satellite  operators  filing  letters  of  intent  to  request  U.  S.-  market  access  with  a  satellite  that  is  not  in  orbit  and  operating  also  be  required  to  post  a 
 bond  in  the  amount  of  $7.5  million  (U.  S.)  for  NGSO-  like  satellite  systems,  or  $5  million  for  GSO-  like  satellites,  at  the  time  they  are  granted  access  to  the  U.  S.  market.  This  bond  will  be 
 payable  if  a  non-  U.  S.-  licensed  satellite  operator  misses  a  milestone,  and  the  operator  will  be  allowed  to  reduce  the  bond  amount,  as  are  U.  S.  licensees,  at  the  time  it  meets  each  milestone.  We 
 will  also  consider  waivers  of  the  bond  requirement  to  the  same  extent  that  we  consider  waiver  requests  of  U.  S.  licensees.  We  will  not  require  non-  U.  S.-  licensed  satellite  operators  to  post  bonds 
 if  they  request  U.  S.  market  access  with  an  in-  orbit  satellite,  because  such  operators  are  generally  ready  to  begin  offering  service  immediately,  and  such  a  request  could  not  be  speculative  in  those 
 circumstances. 
 E.  Milestone  Requirements  of  Non-  U.  S.-  Licensed  Satellite  Operators 
 310.  Background.  We  proposed  requiring  non-  U.  S.-  licensed  satellite  operators  to  meet  all  milestone  requirements  we  adopt  for  U.  S.-  licensed  satellite  operators  in  this  proceeding.  734 


 311.  Discussion.  Telesat  agrees  that  milestone  requirements  should  apply  to  U.  S.  -licensed  and  non-  U.  S.-  licensed  satellites  alike.  735  We  will  require  non-  U.  S.-  licensed  satellite 
 operators  to  meet  the  same  milestone  requirements  we  adopt  in  this  Order  for  U.  S.  licensees.  736  This  is  consistent  with  our  current  policy.  737 


 312.  Telesat  also  notes  that  non-  U.  S.-  licensed  satellites  are  bound  by  ITU  bringing-  into-use  requirements.  738  U.  S.  satellite  operators  are  also  bound  by  ITU  bringing-  into-  use 
 requirements,  and  so  Telesat's  observation  does  not  warrant  any  revision  to  our  procedures  for  requesting  access  to  the  U.  S.  market.  In  the  event  that  a  U.  S.  licensee's  ITU  bringing-  into-  use 
 date  occurred  before  its  launch  milestone,  it  would  be  required  to  launch  its  satellite  within  the  ITU  date,  or  it  would  lose  its  ITU  date  precedence.  If  the  licensee  loses  its  ITU  date  precedence, 
 it  would  be  free  to  submit  a  new  ITU  filing  and  continue  construction  of  its  satellite  if  it  so  desired.  If  a  non-  U.  S.-  licensed  satellite  operator  were  in  this  situation,  its  licensing 
 Administration  has  discretion  to  decide  whether  to  allow  its  licensee  to  submit  a  new  ITU  filing. 


 733  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3884  (para.  110). 
 734  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3891  (para.  129),  citing  Pacific  Century 
 Group,  Inc.,  Letter  of  Intent  as  a  Foreign  Satellite  Operator  to  Provide  Fixed  Satellite  Services  in  the  Ka-band  in  the  United  States,  Order,  16  FCC  Rcd  14356,  14364  (paras.  25-  26)  (Int'l  Bur.,  2001)  (PCG  Ka-band 


 Licensing  Order)  (requiring  non-  U.  S.  satellite  operator  filing  a  Letter  of  Intent  in  a  processing  round  to  meet  same  milestones  as  U.  S.  participants  in  the  processing  round). 


 735  Telesat  Comments  at  5. 
 736  Section  VII.  C. 
 737  PCG  Ka-  band  Licensing  Order,  16  FCC  Rcd  at  14364  (paras.  25-  26). 
 738  Telesat  Comments  at  5. 
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 F.  Safeguards  Against  Speculation 
 313.  Above,  we  adopted  limits  on  the  number  of  pending  applications  and  unbuilt  satellites  for  U.  S.  satellite  licensees.  739  To  make  the  procedures  for  U.  S.  and  non-  U.  S.  satellite 
 operators  consistent,  and  to  discourage  non-  U.  S.  satellite  operators  from  speculating  in  the  U.  S.  market,  we  extend  those  limits  to  requests  by  non-  U.  S.-  licensed  satellite  operators  for  U.  S. 
 market  access.  In  other  words,  if  a  non-  U.  S.-  licensed  satellite  operator  files  a  Letter  of  Intent,  and  obtains  a  reservation  of  spectrum  for  a  satellite  to  enter  the  U.  S.  market  with  a  satellite  that 
 has  not  been  built  yet,  that  unbuilt  satellite  will  be  counted  against  that  satellite  operator.  We  will  also  apply  the  rule  of  attribution  to  non-  U.  S.  satellite  operators.  If  a  non-  U.  S.  satellite  operator 
 has  more  than  a  33  percent  interest  in  another  entity  with  satellite  applications  pending  before  the  Commission,  that  other  entity's  requests  will  be  included  in  the  limits. 


 G.  Mandatory  Electronic  Filing  for  Non-  U.  S.-  Licensed  Satellite  Operators 
 314.  In  the  Notice,  the  Commission  proposed  requiring  non-  U.  S.-  licensed  satellite  operators  seeking  access  to  the  U.  S.  market  to  submit  their  requests  electronically,  in  the  event 
 that  we  adopt  a  mandatory  electronic  filing  requirement  for  U.  S.  satellite  applicants.  740  Telesat  supports  a  mandated  electronic  filing  requirement.  741  We  adopt  our  proposal,  so  that  our 
 treatment  of  non-  U.  S.-  licensed  satellite  operators  is  consistent  with  our  treatment  of  U.  S.-  licensed  satellite  operators.  742 


 H.  Procedures  for  Modifications  of  Permitted  List  Satellite  Parameters 
 1.  Background 
 315.  One  of  the  procedures  adopted  in  DISCO  II  for  non-  U.  S.-  licensed  satellite  operators  seeking  access  to  the  U.  S.  market  was  to  require  the  satellite  operator  to  file  a  new  earth  station 
 application  identifying  the  non-  U.  S.-  licensed  satellite  as  a  point  of  communication,  or  to  ask  a  U.  S.  earth  station  operator  to  modify  its  license  to  add  the  non-  U.  S.-  licensed  satellite  as  a  point  of 
 communication.  743  In  the  DISCO  II  First  Reconsideration  Order,  the  Commission  streamlined  this  process  in  two  ways.  First,  it  allowed  the  operators  of  in-  orbit  non-  U.  S.-  licensed  satellites 
 offering  fixed-  satellite  service  to  request  authority  to  provide  space  segment  capacity  service  to  U.  S.-  licensed  earth  stations  in  the  United  States.  Under  DISCO  II,  this  request  could  be  made 
 only  by  an  earth  station  operator.  Second,  it  created  the  Permitted  Space  Station  List  (Permitted  List)  to  facilitate  access  by  the  foreign  satellite.  Once  a  non-  U.  S.-  licensed  space  station  is 
 permitted  to  access  the  U.  S.  market  pursuant  to  a  complete  DISCO  II  analysis,  it  is  placed  on  the 
 739  Section  VII.  E.  3. 
 740  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3891  (para.  128). 
 741  Telesat  Comments  at  5. 
 742  The  Commission  also  invited  comment  on  requiring  non-  U.  S.-  licensed  satellite  operators 
 to  submit  requests  for  U.  S.  market  access  on  Schedule  S.  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3890  (para.  127).  We  defer  this  issue  to  a  future  Order.  We  will  also  consider  Telesat's  proposal  for 


 "validation  software"  in  that  Order.  See  Telesat  Comments  at  5. 
 743  DISCO  II,  12  FCC  Rcd  at  24174  (para.  186).  See  also  Space  Station  Reform  NPRM,  17 
 FCC  Rcd  at  3892  (para.  132). 
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 Permitted  List  upon  the  applicant's  request.  This  list  includes  all  satellites  with  which  U.  S.  earth  stations  with  routinely-  authorized  technical  parameters  in  the  conventional  C-  and  Ku-  band 
 (known  as  "ALSAT"  earth  stations)  are  permitted  to  communicate  without  additional  Commission  action,  provided  that  those  communications  fall  within  the  same  technical 
 parameters  and  conditions  established  in  the  earth  stations'  original  licenses.  744  The  Permitted  List  is  maintained  on  our  website,  and  is  also  available  via  fax  or  e-  mail.  745 


 316.  In  the  Notice,  we  pointed  out  that  we  have  received  a  number  of  requests  from  non-U.  S.-  licensed  satellite  operators  to  reflect  changes  in  the  operating  parameters  of  satellites  on  the 
 Permitted  List.  746  Some  of  these  revisions  would  require  a  license  modification  if  the  satellite  were  licensed  in  the  United  States.  747  We  have  also  received  a  request  to  place  a  replacement 
 satellite  on  the  Permitted  List,  748  and  to  reflect  a  transfer  of  control  of  the  satellite  on  the  Permitted  List.  749  Accordingly,  in  the  Notice  we  proposed  procedures  to  address  revisions 
 satellites  on  the  Permitted  List.  750  We  address  each  of  these  proposals  below. 
 2.  Permitted  List  Satellite  Modifications 
 317.  Background.  We  pointed  out  in  the  Notice  that  placing  a  satellite  on  the  Permitted  List  has  the  legal  effect  of  modifying  all  ALSAT-  designated  earth  station  licenses  so  that  those 
 earth  stations  are  authorized  to  communicate  with  that  satellite  at  that  orbit  location  under  the 


 744  DISCO  II  First  Reconsideration  Order,  15  FCC  Rcd  at  7214-  16  (paras.  16-  20). 
 "ALSAT"  means  "all  U.  S.-  licensed  space  stations."  Originally,  under  an  ALSAT  earth  station  license,  an  earth  station  operator  providing  fixed-  satellite  service  in  the  conventional  C-  and  Ku-  bands  could  access 


 any  U.  S.  satellite  without  additional  Commission  action,  provided  that  those  communications  fall  within  the  same  technical  parameters  and  conditions  established  in  the  earth  stations'  licenses.  See  DISCO  II  First 
 Reconsideration  Order,  15  FCC  Rcd  at  7210-  11  (para.  6).  The  DISCO  II  First  Reconsideration  Order  expanded  ALSAT  earth  station  licenses  to  permit  access  to  any  satellite  on  the  Permitted  List.  DISCO  II 
 First  Reconsideration  Order,  15  FCC  Rcd  at  7215-  16  (para.  19). 
 745  DISCO  II  First  Reconsideration  Order,  15  FCC  Rcd  at  7215-  16  (para.  19). 


 746  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3893  (para.  133). 
 747  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3893  (para.  133),  citing  Telesat  Canada, 
 Petition  for  Declaratory  Ruling  For  Inclusion  of  ANIK  F1  on  the  Permitted  Space  Station  List,  Order,  15  FCC  Rcd  24828  (Intl.  Bur.,  2000)  (ANIK  F1  Permitted  List  Order). 


 748  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3893  (para.  133),  citing  European 
 Telecommunication  Satellite  Organization  (EUTELSAT);  Petitions  for  Declaratory  Ruling  To  Add  EUTELSAT  Satellites  ATLANTIC  BIRD  1  at  12.  5  W.  L  and  ATLANTIC  BIRD  2  at  8  W.  L  to  the 


 Commission's  Permitted  Space  Station  List,  Order,  16  FCC  Rcd  15961  (Intl  Bur.,  Sat.  and  Rad.  Div.,  2001). 


 749  On  March  1,  2001,  Empresa  Brasileira  de  Telecomicaes  S.  A.  filed  a  letter  with  the 
 Commission  indicating  that  19.9  percent  of  its  company  had  been  purchased  by  Societe  Europeenne  des  Satellites  S.  A.,  and  the  company  was  renamed  "STAR  ONE  S.  A."  See  Space  Station  Reform  NPRM,  17 


 FCC  Rcd  at  3893  (para.  133),  citing  Satellite  Policy  Branch  Information,  Public  Notice,  Report  No.  SAT-00076  (released  July  20,  2001). 


 750  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3893  (para.  133). 
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 terms  and  conditions  on  the  Permitted  List  and  in  the  earth  station  licenses.  751  We  explained  further  that,  if  a  Permitted  List  satellite  operator  relocates  its  satellite  to  a  new  orbital  location,  it 
 must  request  a  revision  of  its  Permitted  List  entry  to  enable  ALSAT  earth  stations  to  continue  communicating  with  that  satellite  after  the  relocation.  752  Furthermore,  we  must  be  able  to 
 determine  that  operation  of  the  satellite  at  the  new  location  would  not  cause  harmful  interference  to  other  satellite  systems  after  the  relocation.  753 


 318.  Therefore,  we  invited  comment  on  a  procedure  for  cases  in  which  a  non-  U.  S.  -licensed  satellite  operator  plans  to  modify  its  operations  in  a  way  that  would  require  prior 
 Commission  authorization  in  the  case  of  a  U.  S.-  licensed  satellite  operator.  754  Specifically,  we  proposed  requiring  the  non-  U.  S.-  licensed  satellite  operator  to  file  a  petition  for  declaratory  ruling 
 that  would  supply  the  information  required  of  U.  S.  satellite  operators  seeking  license  modifications.  755  In  other  words,  the  non-  U.  S.-  licensed  satellite  operator  would  be  required  to 
 provide  the  same  information  as  required  in  a  new  space  station  application,  but  only  those  items  of  information  that  change  need  to  be  submitted,  provided  the  applicant  certifies  that  the 
 remaining  information  has  not  changed.  756 
 319.  Discussion.  Telesat  opposes  requiring  that  non-  U.  S.-  licensed  satellite  operators  modifying  their  operations  file  the  relevant  changes  in  technical  information.  757  Rather,  Telesat 
 proposes  that  the  Commission  simply  require  the  applicant  to  amend  the  authorization  with  an  attestation  that  the  modification  has  been  carried  out  in  accordance  with  the  appropriate 
 coordination  process  with  the  adjacent  operators.  758 
 320.  We  conclude  that  we  must  consider  the  revised  technical  parameters  in  order  to  determine  whether  the  changes  to  the  non-  U.  S.-  licensed  satellite  will  affect  the  operations  of 
 other  satellites  authorized  to  serve  the  United  States.  We  require  U.  S.-  licensed  operators  to  provide  this  information  for  this  reason.  Moreover,  merely  requiring  non-  U.  S.-  licensed  space 
 station  operators  to  attest  that  they  have  completed  coordination  may  not  be  sufficient  in  all  cases  to  determine  whether  the  satellite  as  modified  will  comply  with  the  technical  requirements  of  Part 
 25.  Accordingly,  we  will  revise  Section  25.137  to  require  non-  U.  S.-  licensed  satellite  operators  modifying  their  operations  to  provide  the  same  information  as  required  in  a  new  space  station 


 751  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3894  (para.  137). 
 752  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3893  (para.  134). 
 753  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3893  (para.  134). 
 754  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3893  (para.  134). 
 755  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3893  (para.  134). 
 756  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3893  (para.  134),  citing  47  C.  F.  R.   
 25.  117(  d). 
 757  Telesat  Comments  at  7. 


 758  Telesat  Comments  at  7. 
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 application,  but  only  those  items  of  information  that  change  need  to  be  submitted,  provided  the  applicant  certifies  that  the  remaining  information  has  not  changed.  759 
 3.  Replacements  of  Permitted  List  Satellites 
 321.  Background.  In  the  Notice,  we  proposed  a  procedure  for  replacements  of  non-  U.  S.  -licensed  satellites  on  the  Permitted  List  that  is  similar  to  our  proposal  for  U.  S.  replacement 
 satellite  applications.  760  Specifically,  if  the  non-  U.  S.-  licensed  satellite  operator's  orbit  location  remains  available  for  a  satellite  licensed  by  the  same  Administration  that  licensed  the  currently 
 operating  satellite,  and  the  proposed  replacement  satellite  will  have  the  same  technical  characteristics  as  the  currently  operating  satellite,  we  would  allow  this  satellite  to  access  the 
 United  States.  761  If  the  petition  for  declaratory  ruling  seeking  to  put  the  replacement  satellite  on  the  Permitted  List  is  unopposed,  we  proposed  applying  the  same  procedure  we  adopt  for  U.  S. 
 replacement  satellites.  762 
 322.  Discussion.  Telesat  supports  streamlining  the  procedures  for  non-  U.  S.-  licensed  replacement  satellites,  and  it  specifically  supports  the  "grant-  stamp"  approach.  763  Telesat 
 encourages  the  Commission  to  apply  the  grant-  stamp  approach  regardless  of  whether  the  technical  characteristics  of  the  replacement  satellite  are  the  same  as  those  of  the  currently-operating 
 satellite.  764  Also,  Telesat  argues  that  the  Commission  need  not  wait  until  the  satellite  is  in  orbit  to  place  the  replacement  satellite  on  the  Permitted  list.  765 


 323.  We  adopt  our  proposed  procedure  for  considering  placement  of  non-  U.  S.-  licensed  replacement  satellites  on  the  Permitted  List.  This  is  substantially  similar  to  the  procedure  for 
 replacements  of  U.  S.-  licensed  satellites  we  adopt  in  this  Order.  766  We  will  revise  Section  25.137  accordingly. 


 324.  We  afford  non-  U.  S.-  licensed  satellites  the  same  replacement  expectancy  as  we  do  U.  S.-  licensed  satellites.  That  is,  we  will  permit  the  proposed  replacement  satellite  to  access  the 
 U.  S.  market  provided  that  the  location  remains  available  to  a  satellite  authorized  by  the  Administration  that  authorized  the  existing  satellite,  and  the  technical  characteristics  of  the 
 proposed  replacement  allow  it  to  be  assigned  to  the  location.  We  note  that  operators  of  non-  U.  S.  - 


 759  In  a  future  Order,  we  will  consider  proposals  for  a  streamlined  procedure  for  some  space 
 station  modification  requests.  In  the  event  we  adopt  any  of  those  proposals,  we  will  also  determine  at  that  time  how  best  to  extend  that  procedure  to  non-  U.  S.-  licensed  satellite  operators. 


 760  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3893-  94  (para.  135). 
 761  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3893-  94  (para.  135). 
 762  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3893-  94  (para.  135). 
 763  Telesat  Comments  at  7-  8. 
 764  Telesat  Comments  at  7-  8. 
 765  Telesat  Comments  at  7-  8. 
 766  Section  VII.  G. 
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 licensed  satellites  that  do  not  meet  these  criteria  may  still  request  access  to  the  U.  S.  market  through  the  standard  DISCO  II  framework. 
 325.  Finally,  contrary  to  Telesat's  assertion  otherwise,  we  do  not  require  satellites  to  be  in  orbit  before  placing  them  on  the  Permitted  List.  We  require  that  all  non-  U.  S.-  licensed 
 satellites,  including  replacements,  be  licensed  by  the  host  Administration  before  they  are  placed  on  the  Permitted  List,  but  we  do  not  require  that  the  satellite  be  in  orbit. 


 4.  Changes  of  Ownership  of  Satellites  on  the  Permitted  List 
 326.  Background.  The  Commission  proposed  a  very  simple  procedure  for  considering  changes  in  ownership  of  non-  U.  S.-  licensed  satellites  on  the  Permitted  List.  767  We  proposed 
 issuing  a  public  notice  announcing  that  the  transaction  has  taken  place,  and  inviting  comment  on  whether  the  transaction  affects  any  of  the  considerations  made  when  the  original  satellite  operator 
 was  allowed  to  enter  the  U.  S.  market.  768  We  would  review  any  comments  filed,  and  determine  whether  any  commenter  raised  any  concern  that  would  warrant  precluding  the  new  operator  from 
 entering  the  U.  S.  market,  including  concerns  relating  to  national  security,  law  enforcement,  foreign  policy,  or  trade  issues.  769  In  addition,  if  control  of  the  satellite  were  transferred  to  a  non-WTO- 
 country-  based  operator,  we  invited  comment  on  whether  we  should  require  the  purchaser  to  meet  the  ECO-  Sat  test.  770 


 327.  Discussion.  Telesat  supports  our  proposed  procedure  for  changes  in  ownership  of  non-  U.  S.-  licensed  satellites  on  the  Permitted  List.  771  We  adopt  our  proposed  procedure  for 
 considering  transfers  of  control  of  non-  U.  S.-  licensed  satellites  on  the  Permitted  List,  which  provides  a  reasonable  framework  for  considering  any  issues  that  might  be  raised  by  such  a 
 transfer.  Furthermore,  none  of  the  commenters  in  this  proceeding  have  recommended  any  other  procedure.  We  will  revise  Section  25.137  accordingly.  Permitted  List  satellites  that  have  been 
 transferred  to  new  owners  may  continue  to  provide  service  in  the  United  States  unless  and  until  the  Commission  determines  otherwise. 


 5.  Procedures  for  Non-  U.  S.-  Licensed  Satellites  That  Are  Not  on  the  Permitted  List 
 328.  Background.  We  observed  in  the  Notice  that  non-  U.  S.-  licensed  satellite  operators  do  not  need  to  place  their  satellites  on  the  Permitted  List  to  gain  access  to  the  U.  S.  market.  They 
 can  also  gain  access  by  being  added  as  a  point  of  communication  to  one  or  more  U.  S.  earth 


 767  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3894  (para.  136).  The  considerations  we 
 weigh  when  reviewing  requests  for  U.  S.  market  access  include  the  effect  on  competition  in  the  United  States,  spectrum  availability,  eligibility  and  operating  (e.  g.,  technical)  requirements,  and  national  security, 


 law  enforcement,  foreign  policy,  and  trade  concerns.  DISCO  II,  12  FCC  Rcd  at  24107-  24172  (paras.  30-182). 


 768  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3894  (para.  136). 
 769  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3894  (para.  136),  citing  DISCO  II,  12  FCC 
 Rcd  at  24170-  72  (paras.  178-  82). 
 770  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3894  (para.  136). 


 771  Telesat  Comments  at  8. 
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 station  licenses.  772  This  procedure  is  available  for  all  non-  U.  S.-  licensed  satellites,  not  just  conventional  C-  band  and  Ku-  band  satellites.  We  did  not  propose  any  new  procedures  for 
 modifying  such  satellites.  Instead,  we  proposed  continuing  to  rely  on  our  existing  procedures  for  earth  station  modification  procedures.  773 


 329.  Discussion.  No  one  commented  on  this  issue.  We  conclude  that  our  existing  procedure  for  earth  station  license  modification  provides  a  sufficient  means  for  reflecting 
 modifications  of  non-  U.  S.-  licensed  space  station  operations.  In  addition,  the  earth  station  license  modification  procedure  is  very  important  in  cases  in  which  the  non-  U.  S.-  licensed  satellite  operator 
 plans  to  operate  in  the  extended  C-  band  or  extended  Ku-  band,  because  those  operations  often  require  coordination  with  terrestrial  service  providers  and  other  service  providers.  Accordingly,  as 
 we  proposed  in  the  Notice,  we  will  not  adopt  any  revisions  to  that  procedure  at  this  time. 
 IX.  CONCLUSION 
 330.  In  this  Order,  we  adopt  substantial  improvements  to  our  satellite  licensing  procedures.  For  NGSO-  like  satellite  system  applications,  we  will  continue  to  use  processing 
 rounds,  and  divide  the  available  spectrum  evenly  among  the  qualified  applicants  in  the  processing  round.  For  GSO-  like  satellite  applications,  we  replace  processing  rounds  with  a  first-  come,  first-served 
 procedure.  In  both  procedures,  we  adopt  safeguards  to  limit  speculative  or  frivolous  applications.  To  help  implement  these  procedures,  we  eliminate  the  anti-  trafficking  rule  for 
 satellites.  In  addition,  eliminating  the  anti-  trafficking  rules  yields  other  significant  public  interest  benefits,  such  as  expediting  the  transfer  of  licenses  to  entities  that  are  more  likely  to  provide 
 service  to  the  public  in  a  timely  manner.  We  also  strengthen  our  milestone  requirements,  to  expedite  reassignment  of  satellite  licenses  in  cases  where  a  licensee  is  unable  or  unwilling  to 
 construct  its  satellite  system.  We  also  streamline  the  satellite  licensing  process,  by  replacing  the  requirement  to  provide  financial  information  with  a  bond  requirement,  and  by  creating  a  new 
 procedure  for  replacement  satellite  applications.  Finally,  we  revise  the  framework  for  considering  requests  from  non-  U.  S.-  licensed  satellite  operators  for  access  to  the  U.  S.  market. 


 331.  All  the  procedural  revisions  we  adopt  today  will  greatly  benefit  both  satellite  service  customers  and  satellite  operators,  because  the  new  procedures  will  enable  the 
 Commission  to  issue  satellite  licenses  significantly  more  quickly  than  was  possible  in  the  past.  Expediting  licensing  procedures  will  lead  to  greater  choice  among  satellite  service  providers.  It 
 will  also  allow  satellite  operators  to  begin  operating  much  sooner  than  is  often  possible  under  our  current  satellite  licensing  procedures.  Moreover,  allowing  negotiations  to  take  place  after 
 licenses  are  issued  should  allow  market  forces  to  drive  the  business  discussions  with  a  minimum  of  Commission  involvement. 


 332.  In  addition,  strengthening  milestone  requirements  will  reduce  the  time  scarce  orbit  and  spectrum  resources  lie  fallow.  Thus,  our  procedures  will  allow  more  efficient  use  of  that 
 resource.  More  importantly,  orbit  and  spectrum  assignments  will  be  based  more  on  market  forces  and  less  on  the  Commission's  administrative  procedures,  which  in  turn  will  result  in  more 
 efficient  orbit  and  spectrum  assignments. 
 X.  FURTHER  NOTICE  OF  PROPOSED  RULEMAKING:  BOND  ISSUES 
 772  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3894  (para.  138). 
 773  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3894  (para.  138). 
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 333.  In  the  First  Report  and  Order  in  this  proceeding,  the  Commission  required  satellite  licensees  to  post  a  bond,  payable  upon  failure  to  meet  a  milestone,  and  without  facing 
 circumstances  outside  the  licensee's  control  that  warrant  extension  of  the  milestone.  774  We  base  this  requirement  on  Intelsat's  proposed  bond  requirement.  775  The  purpose  of  this  bond 
 requirement  is  to  create  a  disincentive  for  parties  to  apply  for  satellite  licenses  for  speculative  reasons.  On  an  interim  basis,  we  adopted  a  bond  amount  of  $5  million  for  GSO-  like  licenses,  and 
 $7.5  million  for  NGSO-  like  licenses. 
 334.  Here,  we  seek  comment  on  some  of  the  details  of  the  bond  requirement.  First,  we  invite  comment  on  the  appropriate  bond  amount.  This  amount  should  be  high  enough  to  deter 
 speculative  applications,  without  discouraging  new  or  innovative  satellite  applications.  It  is  unlikely  that  we  would  find  that  bonds  less  than  the  interim  amounts  we  adopted  in  the  First 
 Report  and  Order  above  would  be  sufficient  to  deter  speculation,  unless  a  commenter  provides  a  convincing  showing  to  the  contrary.  Intelsat  proposed  $10  million  for  all  satellite  applications. 
 Commenters  advocating  a  different  amount  should  recommend  a  specific  dollar  amount,  and  explain  in  detail  why  they  believe  that  the  amount  they  recommend  will  deter  speculation  without 
 discouraging  new  or  innovative  satellite  applications.  In  particular,  parties  contending  that  a  $10  million  bond  requirement  would  discourage  new  or  innovative  satellite  applications  should 
 explain  why,  in  detail. 
 335.  Second,  we  invite  comment  on  whether  we  should  allow  licensees  to  establish  an  escrow  account,  as  an  alternative  to  posting  a  bond.  In  the  Private  Paging  Exclusivity  Order,  on 
 which  we  in  part  base  the  bond  requirement,  the  Commission  gave  licensees  the  option  of  posting  a  performance  bond  or  establishing  an  escrow  account.  776  We  seek  comment  on  whether  to  give 
 satellite  licensees  this  option  as  well.  If  we  were  to  adopt  an  escrow  account  option,  licensees  selecting  that  option  would  be  required  to  establish  an  escrow  account  equal  to  the  final  bond 
 amount  adopted  by  the  Commission.  Licensees  would  be  required  to  turn  over  the  escrow  account  to  the  U.  S.  Treasury  upon  missing  a  milestone  without  an  adequate  basis  for  extending 
 the  milestone.  They  would  also  be  permitted  to  withdraw  interest  from  the  account  at  any  time,  and  withdraw  principle  upon  meeting  each  milestone,  just  as  licensees  posting  bonds  may  reduce 
 the  amount  of  the  bond.  Parties  supporting  this  option  must  explain  how  an  escrow  account  will  discourage  speculative  satellite  applications. 


 336.  Finally,  we  invite  comment  on  revising  the  bond  requirements  applicable  to  non-U.  S.-  licensed  satellite  operators  seeking  access  to  the  U.  S.  market,  to  be  consistent  with  any  other 
 revisions  to  the  bond  requirement  the  Commission  adopts  in  this  proceeding. 
 XI.  PROCEDURAL  MATTERS 
 337.  Final  Regulatory  Flexibility  Analysis.  As  required  by  the  Regulatory  Flexibility  Act  (RFA),  777  an  Initial  Regulatory  Flexibility  Analysis  (IRFA)  was  incorporated  into  the 


 774  Section  VII.  C.  10. 
 775  Intelsat  Comments  at  10-  12. 
 776  Private  Paging  Exclusivity  Order,  8  FCC  Rcd  at  8326. 
 777  See  5  U.  S.  C.  603. 
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 Notice.  778  The  Commission  sought  written  public  comments  on  the  possible  significant  economic  impact  of  the  proposed  policies  and  rules  on  small  entities  in  the  Notice,  including  comments  on 
 the  IRFA.  No  one  commented  specifically  on  the  IRFA.  Pursuant  to  the  RFA,  779  a  Final  Regulatory  Flexibility  Analysis  is  contained  in  Appendix  D. 


 338.  Initial  Regulatory  Flexibility  Analysis.  Appendix  E  to  this  document  contains  the  analysis  required  for  the  proposals  in  this  Notice  of  Proposed  Rulemaking  by  the  Regulatory 
 Flexibility  Act  of  1980,  see  5  U.  S.  C.    603. 
 339.  Paperwork  Reduction  Act  Analysis.  Except  for  the  information  collections  associated  with  the  contract  execution  and  CDR  milestones,  and  the  bond  requirement,  the 
 actions  contained  herein  has  been  analyzed  with  respect  to  the  Paperwork  Reduction  Act  of  1995  and  found  to  impose  new  or  modified  reporting  and  recordkeeping  requirements  or  burdens  on 
 the  public.  Approval  of  the  Office  of  Management  and  Budget  (OMB)  pursuant  to  the  Paperwork  Reduction  Act  has  been  obtained  for  many  of  those  requirements.  (OMB  Control  Nos.  3060- 
 0678,  3060-  1007  and  3060-  1013). 
 340.  This  Order  contains  new  and  modified  information  collections  subject  to  the  Paperwork  Reduction  Act  of  1995  (PRA),  Public  Law  104-  13.  It  will  be  submitted  to  the 
 Office  of  Management  and  Budget  (OMB)  for  review  under  Section  3507(  d)  of  the  PRA.  OMB,  the  general  public,  and  other  Federal  agencies  are  invited  to  comment  on  the  new 
 or  modified  information  collection(  s)  contained  in  this  proceeding.  Implementation  of  these  new  or  modified  reporting  and/  or  recordkeeping  requirements  will  be  subject  to  approval 
 by  the  OMB,  as  prescribed  by  the  Act,  and  will  go  into  effect  upon  announcement  in  the  Federal  Register  of  OMB  approval. 


 341.  Ex  Parte  Presentations.  This  is  a  permit-  but-  disclose  rulemaking  proceeding.  Ex  parte  presentations  are  permitted,  provided  they  are  disclosed  as  provided  in  Sections  1.1202, 
 1.1203,  and  1.1206(  a)  of  the  Commissions  Rules,  47  C.  F.  R.  Sections  1.1202,  1.1203,  and  1.1206(  a). 


 342.  Comment.  Pursuant  to  Sections  1.415  and  1.419  of  the  Commissions  Rules,  47  C.  F.  R.  Sections  1.415  and  1.419,  interested  parties  may  file  comments  on  or  before  30  days 
 following  publication  in  the  Federal  Register,  and  reply  comments  on  or  before  60  days  following  publication  in  the  Federal  Register.  Comments  may  be  filed  using  the  Commissions  Electronic 
 Comment  Filing  System  (ECFS)  or  by  paper  copies.  See  Electronic  Filing  of  Documents  in  Rulemaking  Proceedings,  63  Fed.  Reg.  24,121  (1998). 


 343.  Comments  filed  through  the  ECFS  can  be  sent  as  an  electronic  file  via  the  Internet  to  <http://  www.  fcc.  gov/  e-  file/  ecfs.  html>.  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.  Parties  may  also  submit  an  electronic  comment  by  Internet  e-  mail.  To  obtain  filing  instructions  for  e-  mail  comments,  commenters  should  send  an  e-  mail  to 


 778  Space  Station  Reform  NPRM,  17  FCC  Rcd  at  3915-  17  (App.  D). 
 779  See  5  U.  S.  C.  604. 
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 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. 
 344.  Parties  who  choose  to  file  by  paper  must  file  an  original  and  four  copies  of  each  filing.  If  more  than  one  docket  or  rulemaking  number  appears  in  the  caption  of  this  proceeding, 
 commenters  must  submit  two  additional  copies  for  each  additional  docket  or  rulemaking  number.  All  filings  must  be  sent  to  the  Commission's  Secretary,  Marlene  H.  Dortch,  Office  of  the 
 Secretary,  Federal  Communications  Commission,  The  Portals,  445  Twelfth  Street,  S.  W.,  Room  TW-  A325,  Washington,  D.  C.  20554. 


 345.  Parties  who  choose  to  file  by  paper  should  also  submit  their  comments  on  diskette.  These  diskettes  should  be  submitted  to:  Commission's  Secretary,  Marlene  H.  Dortch,  Office  of 
 the  Secretary,  Federal  Communications  Commission,  The  Portals,  445  Twelfth  Street,  S.  W.,  Room  TW-  A325,  Washington,  D.  C.  20554.  Such  a  submission  should  be  on  a  3.5-  inch  diskette 
 formatted  in  an  IBM  compatible  format  using  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,  the  docket  number  of  this  proceeding,  type  of  pleading  (comment  or  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,  Qualex  International,  Portals  II,  445  12th  Street,  S.  W.,  Room  CY-  B402,  Washington, 
 D.  C.  20554. 
 346.  To  request  materials  in  accessible  formats  for  people  with  disabilities  (braille,  large  print,  electronic  files,  audio  format),  send  an  e-  mail  to  fcc504@  fcc.  gov  or  call  the  Consumer  & 
 Governmental  Affairs  Bureau  at  202-  418-  0531  (voice),  202-  418-  7365  (tty). 
 347.  Additional  Information.  For  general  information  concerning  this  rulemaking  proceeding,  contact  Steven  Spaeth,  International  Bureau,  at  (202)  418-  1539,  International  Bureau; 
 Federal  Communications  Commission,  Washington,  D.  C.  20554. 
 XII.  ORDERING  CLAUSES 
 348.  Accordingly,  IT  IS  ORDERED,  pursuant  to  Sections  1,  2,  4(  i),  4(  j),  7(  a),  11,  301,  303(  c),  303(  f),  303(  g),  and  303(  r)  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.   
 151,  152,  154(  i),  154(  j),  157(  a),  161,  301,  303(  c),  303(  f),  303(  g),  303(  r),  that  this  First  Report  and  Order  in  IB  Docket  Nos.  02-  34  and  02-  54  is  hereby  ADOPTED. 


 349.  IT  IS  FURTHER  ORDERED  that  Part  1  and  Part  25  of  the  Commissions  rules  ARE  AMENDED  as  set  forth  in  Appendix  B. 
 350.  IT  IS  FURTHER  ORDERED  that  the  provisions  of  this  First  Report  and  Order  in  IB  Docket  Nos.  02-  34  and  02-  54,  other  than  the  adoption  of  Sections  25.137(  d)(  4),  25.  149, 
 25.164(  c),  25.164(  d),  and  25.164(  e),  will  be  effective  upon  publication  of  a  summary  of  this  First  Report  and  Order  in  IB  Docket  Nos.  02-  34  and  02-  54  in  the  Federal  Register. 


 351.  IT  IS  FURTHER  ORDERED  that  Sections  25.  137(  d)(  4),  25.  149,  25.164(  c),  25.164(  d),  and  25.164(  e),  as  adopted  in  this  First  Report  and  Order  and  set  forth  in  Appendix  B, 
 will  be  effective  60  days  after  publication  of  a  summary  of  this  First  Report  and  Order  in  IB 
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 Docket  Nos.  02-  34  and  02-  54  in  the  Federal  Register,  pending  approval  by  the  Office  of  Management  and  Budget. 
 352.  IT  IS  FURTHER  ORDERED  that,  effective  upon  the  adoption  date  of  this  First  Report  and  Order  in  IB  Docket  Nos.  02-  34  and  02-  54,  no  applications  for  space  station  licenses 
 for  any  satellite  service  addressed  in  this  First  Report  and  Order  will  be  accepted  for  filing.  This  freeze  will  continue  until  the  rule  revisions  adopted  in  this  First  Report  and  Order  in  IB  Docket 
 Nos.  02-  34  and  02-  54,  other  than  the  adoption  of  Sections  25.137(  d)(  4),  25.  149,  25.  164(  c),  25.164(  d)  ,  and  25.  164(  e),  take  effect. 


 353.  IT  IS  FURTHER  ORDERED  that  the  license  term  of  each  space  station  license  issued  on  or  before  April  17,  2002,  and  in  effect  on  the  release  date  of  this  Order,  IS  HEREBY 
 EXTENDED  to  15  years,  starting  on  the  date  the  licensee  certified  to  the  Commission  that  the  space  station  was  successfully  placed  in  orbit  and  its  operations  fully  conform  to  the  terms  and 
 conditions  of  its  authorization. 
 354.  IT  IS  FURTHER  ORDERED  that  the  Consumer  Information  Bureau,  Reference  Information  Center,  SHALL  SEND  a  copy  of  this  First  Report  and  Order  in  IB  Docket  Nos.  02- 
 34  and  02-  54,  including  the  Final  Regulatory  Flexibility  Analysis,  to  the  Chief  Counsel  for  Advocacy  of  the  Small  Business  Administration. 


 355.  Accordingly,  IT  IS  ORDERED,  pursuant  to  Sections  4(  i),  7(  a),  303(  c),  303(  f),  303(  g),  and  303(  r)  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    154(  i),  157(  a), 
 303(  c),  303(  f),  303(  g),  303(  r),  that  this  Further  Notice  of  Proposed  Rulemaking  in  IB  Docket  No.  02-  34  is  hereby  ADOPTED. 


 356.  IT  IS  FURTHER  ORDERED  that  the  Consumer  Information  Bureau,  Reference  Information  Center,  SHALL  SEND  a  copy  of  this  Further  Notice  of  Proposed  Rulemaking  in  IB 
 Docket  No.  02-  34,  including  the  Initial  Regulatory  Flexibility  Analysis,  to  the  Chief  Counsel  for  Advocacy  of  the  Small  Business  Administration. 


 FEDERAL  COMMUNICATIONS  COMMISSION 
 Marlene  H.  Dortch  Secretary 
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 APPENDIX  A 
 I.  IB  Docket  No.  02-  34 
 A.  Comments,  filed  June  3,  2002 
 1.  Boeing  Company  (Boeing)  2.  Cellular  Telecommunications  &  Internet  Association  (CTIA) 
 3.  Final  Analysis  Communication  Services,  Inc.  (Final  Analysis)  4.  Hughes  Network  Systems,  Inc.,  Hughes  Communications,  Inc.,  and  Hughes 
 Communications  Galaxy,  Inc.  (Hughes)  5.  Inmarsat  Ventures  PLC  (Inmarsat) 
 6.  Intelsat  LLC  (Intelsat)  7.  PanAmSat  Corporation  (PanAmSat) 
 8.  Pegasus  Development  Corporation  (Pegasus)  9.  Satellite  Industry  Association  (SIA) 
 10.  SES  Americom,  Inc.  (SES  Americom)  11.  Telesat  Canada  (Telesat) 
 12.  Teledesic  LLC  (Teledesic) 
 B.  Replies,  filed  July  2,  2002 
 1.  ICO  Global  Communications  (Holdings)  Ltd.  (ICO)  2.  Intelsat 
 3.  ORBCOMM  LLC  (Orbcomm)  4.  PanAmSat 
 5.  SES  Americom  6.  Teledesic 
 7.  Telesat 
 II.  IB  Docket  No.  02-  54 
 A.  Comments 
 AON  Space,  Inc.  Arianespace  Inc. 
 Dr.  Constantine  Cassapakis  Jan  King 
 National  Remote  Sensing  and  Space  Law  Center  Nickolaus  E.  Leggett 
 Orbcomm  LLC  PanAmSat  Corp. 
 Radio  Amateur  Satellite  Corp.  Satellite  Industry  Association  (  SIA) 
 Telesat  Canada  Victor  J.  Slabinski 
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 B.  Reply  Comments 
 Radio  Amateur  Satellite  Corp.  SES  Americom,  Inc. 
 Telesat  Canada  Victor  J.  Slabinski 


 C.  Late-  Filed  Comments 
 Massachusetts  Institute  of  Technology  Lincoln  Laboratory 
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 APPENDIX  B 
 Rule  Changes 
 For  the  reasons  discussed  above,  the  Federal  Communications  Commission  amends  title  47  of  the  Code  of  Federal  Regulations,  part  25,  as  follows: 


 PART  1  --  PRACTICE  AND  PROCEDURE 
 1.  The  authority  citation  for  Part  1  continues  to  read  as  follows: 
 Authority:  47  U.  S.  C.  151,  154(  i),  154(  j),  155,  225,  303(  r),  309  and  325(  e). 
 2.  Amend  1.1113  by  adding  paragraph  (d)  to  read  as  follows: 
 1.1113  Return  or  refund  of  charges. 
 *  *  *  *  * 
 (d)  Applicants  for  space  station  licenses  under  the  first-  come,  first  served  procedure  set  forth  in  part  25  of  this  title  will  be  entitled  to  a  refund  of  the  fee  if,  before  the  Commission  has  placed  the 
 application  on  public  notice,  the  applicant  notifies  the  Commission  that  it  no  longer  wishes  to  keep  its  application  on  file  behind  the  licensee  and  any  other  applicants  who  filed  their 
 applications  before  its  application,  and  specifically  requests  a  refund  of  the  fee  and  dismissal  of  its  application. 


 PART  25  --  SATELLITE  COMMUNICATIONS 
 3.  The  authority  citation  for  Part  25  continues  to  read  as  follows: 
 Authority:  47  U.  S.  C.  701-  744.  Interprets  or  applies  Sections  4,  301,  302,  303,  307,  309,  and  332  of  the  Communications  Act,  as  amended,  47  U.  S.  C.  Sections  154,  301,  302,  303,  307,  309,  332, 
 unless  otherwise  noted. 
 4.  Amend    25.112  by  adding  paragraph  (a)(  3)  and  revising  the  introductory  language  in  paragraph  (b)  to  read  as  follows: 


   25.112  Defective  applications. 
 (a)  *  *  *  (3)  The  application  requests  authority  to  operate  a  space  station  in  a  frequency  band  that 
 is  not  allocated  internationally  for  such  operations  under  the  Radio  Regulations  of  the  International  Telecommunication  Union. 
 (b)  Applications  for  space  station  authority  found  defective  under  paragraph  (a)(  3)  of  this  section  will  not  be  considered.  Applications  for  authority  found  defective  under  paragraphs  (a)(  1)  or 
 (a)(  2)  of  this  section  may  be  accepted  for  filing  if:  *  *  *  *  * 


 5.  Amend    25.113  by  revising  paragraph  (g)  to  read  as  follows: 
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   25.113  Construction  permits,  station  licenses  and  launch  authority. 
 *  *  *  *  *  (g)  A  launch  authorization  and  station  license  (i.  e.,  operating  authority)  must  be  applied  for  and 
 granted  before  a  space  station  may  be  launched  and  operated  in  orbit.  Request  for  launch  authorization  may  be  included  in  an  application  for  space  station  license.  However,  an 
 application  for  authority  to  launch  and  operate  an  on-  ground  spare  satellite  will  be  considered  pursuant  to  the  following  procedures: 
 (1)  Applications  for  launch  and  operation  of  an  on-  ground  spare  NGSO-  like  satellite  will  be  considered  pursuant  to  the  procedures  set  forth  in  Section  25.157  of  this  Chapter,  except  as  set 
 forth  in  paragraph  (g)(  3)  of  this  section.  (2)  Applications  for  launch  and  operation  of  an  on-  ground  spare  GSO-  like  satellite  will 
 be  considered  pursuant  to  the  procedures  set  forth  in  Section  25.158  of  this  Chapter,  except  as  set  forth  in  paragraph  (g)(  3)  of  this  section. 
 (3)  Neither  paragraph  (g)(  1)  nor  (g)(  2)  will  apply  in  cases  where  the  space  station  to  be  launched  is  determined  to  be  an  emergency  replacement  for  a  previously  authorized  space  station 
 that  has  been  lost  as  a  result  of  a  launch  failure  or  a  catastrophic  in-  orbit  failure. 
 6.  Amend    25.114  by  revising  paragraphs  (b)  and  removing  and  reserving  paragraph  (c)(  13),  to  read  as  follows: 


   25.114  Applications  for  space  station  authorizations. 
 *  *  *  *  *  (b)  Each  application  for  a  new  or  modified  space  station  authorization  must  constitute  a  concrete 
 proposal  for  Commission  evaluation,  although  the  applicant  may  propose  alternatives  that  increase  flexibility  in  accommodating  the  satellite  in  orbit.  Each  application  must  also  contain  the 
 formal  waiver  required  by  Section  304  of  the  Communications  Act,  47  U.  S.  C.  304.  The  technical  information  for  a  proposed  satellite  system  need  not  be  filed  on  any  prescribed  form  but 
 should  be  complete  in  all  pertinent  details.  Applications  for  new  space  station  authorizations  other  than  authorizations  for  the  Direct  Broadcast  Service  (DBS)  and  Digital  Audio  Radio 
 Satellite  (DARS)  service  must  be  filed  electronically  through  the  International  Bureau  Filing  System  (IBFS). 


 (c)  *  *  *  (13)  [reserved]. 
 *  *  *  *  * 


 7.  Amend    25.116  by  removing  and  reserving  paragraph  (b)(  3);  adding  paragraph  (b)(  5);  revising  the  introductory  language  in  paragraph  (c),  redesignating  paragraph  (d)  as  (e),  and 
 adding  new  paragraph  (d)  to  read  as  follows: 
   25.116  Amendments  to  applications. 
 (b)  *  *  *  (3)  [reserved]. 
 (5)  Amendments  to  "defective"  space  station  applications,  within  the  meaning  of  section  25.112  of  this  Chapter  will  not  be  considered. 
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 *  *  *  *  * 
 (c)  Any  application  for  an  NGSO-  like  satellite  license  within  the  meaning  of  Section  25.157  of  this  chapter  will  be  considered  to  be  a  newly  filed  application  if  it  is  amended  by  a  major 
 amendment  (as  defined  by  paragraph  (b)  of  this  section)  after  a  "cut-  off''  date  applicable  to  the  application,  except  under  the  following  circumstances: 


 *  *  *  *  * 
 (d)  Any  application  for  a  GSO-  like  satellite  license  within  the  meaning  of  Section  25.158  of  this  chapter  will  be  considered  to  be  a  newly  filed  application  if  it  is  amended  by  a  major  amendment 
 (as  defined  by  paragraph  (b)  of  this  section),  and  will  cause  the  application  to  lose  its  status  relative  to  later-  filed  applications  in  the  "queue"  as  described  in  Section  25.158  of  this  Chapter. 


 *  *  *  *  * 
 8.  Amend    25.117  by  redesignating  paragraph  (d)  as  (d)(  1),  and  adding  paragraph  (d)(  2)  to  read  as  follows: 


   25.117  Modification  of  station  license. 
 *  *  *  *  * 
 (d)  *  *  * 
 (2)  Applications  for  modifications  of  space  station  authorizations  will  be  granted  except  under  the  following  circumstances: 


 (i)  Granting  the  modification  would  make  the  applicant  unqualified  to  operate  a  space  station  under  the  Commission's  rules. 
 (ii)  Granting  the  modification  request  would  not  serve  the  public  interest,  convenience,  and  necessity. 
 (iii)  Except  as  set  forth  in  paragraph  (d)(  2)(  iv)  of  this  section,  applications  for  modifications  of  GSO-  like  space  station  authorizations  granted  pursuant  to  the  procedure 
 set  forth  in  Section  25.158  of  this  Chapter,  which  seek  to  relocate  a  GSO  satellite  or  add  a  frequency  band  to  the  authorization,  will  be  placed  in  a  queue  pursuant  to  Section  25.158 
 of  this  Chapter  and  considered  only  after  previously  filed  space  station  license  applications  or  space  station  modification  applications  have  been  considered. 
 (iv)  Applications  for  modifications  of  space  station  authorizations  to  increase  the  authorized  bandwidth  will  not  be  considered  in  cases  in  which  the  original  space  station 
 authorization  was  granted  pursuant  to  the  procedures  set  forth  in  Section  25.157(  e)  or  25.158(  c)(  4)  of  this  Chapter. 


 *  *  *  *  * 
 9.  Amend    25.119  by  adding  paragraph  (g)  to  read  as  follows: 
   25.  119  Assignment  or  transfer  of  control  of  station  authorization. 
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 *  *  *  *  * 
 (g)  The  Commission  retains  discretion  in  reviewing  assignments  and  transfers  of  control  of  space  station  licenses  to  determine  whether  the  initial  license  was  obtained  in  good  faith  with  the  intent 
 to  construct  a  satellite  system. 


 10.  Amend    25.120  by  revising  paragraph  (b)  to  read  as  follows: 
   25.  120  Application  for  special  temporary  authorization. 
 *  *  *  *  * 
 (b)(  1)  The  Commission  may  grant  a  temporary  authorization  only  upon  a  finding  that  there  are  extraordinary  circumstances  requiring  temporary  operations  in  the  public  interest  and  that  delay 
 in  the  institution  of  these  temporary  operations  would  seriously  prejudice  the  public  interest.  Convenience  to  the  applicant,  such  as  marketing  considerations  or  meeting  scheduled  customer 
 in-  service  dates,  will  not  be  deemed  sufficient  for  this  purpose.  (2)  The  Commission  may  grant  a  temporary  authorization  for  a  period  not  to  exceed  180  days, 
 with  additional  periods  not  exceeding  180  days,  if  the  Commission  has  placed  the  special  temporary  authority  (STA)  request  on  public  notice. 
 (3)  The  Commission  may  grant  a  temporary  authorization  for  a  period  not  to  exceed  60  days,  if  the  STA  request  has  not  been  placed  on  public  notice,  and  the  applicant  plans  to  file  a  request  for 
 regular  authority  for  the  service.  (4)  The  Commission  may  grant  a  temporary  authorization  for  a  period  not  to  exceed  30  days,  if 
 the  STA  request  has  not  been  placed  on  public  notice,  and  an  application  for  regular  authority  is  not  contemplated. 


 *  *  *  *  * 
 11.  Amend    25.121  by  revising  paragraph  (e)  to  read  as  follows: 
   25.121  License  term  and  renewals. 


 *  *  *  *  * 


 (e)  Renewal  of  licenses.  Applications  for  renewals  of  earth  station  licenses  must  be  submitted  on  FCC  Form  405  (Application  for  Renewal  of  Radio  Station  License  in  Specified  Services)  no 
 earlier  than  90  days,  and  no  later  than  30  days,  before  the  expiration  date  of  the  license.  Applications  for  space  station  system  replacement  authorization  for  non-  geostationary  orbit 
 satellites  shall  be  filed  no  earlier  than  90  days,  and  no  later  than  30  days,  prior  to  the  end  of  the  twelfth  year  of  the  existing  license  term. 


 12.  Amend    25.137  by  revising  paragraphs  (b),  (c),  and  (d),  and  adding  paragraphs  (e),  (f),  and  (g),  to  read  as  follows: 
   25.137  Application  requirements  for  earth  stations  operating  with  non-  U.  S.  licensed  space  stations. 
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 *  *  *  *  * 
 (b)  Earth  station  applicants,  or  entities  filing  a  "letter  of  intent,  ''  or  "Petition  for  Declaratory  Ruling,  ''  requesting  authority  to  operate  with  a  non-  U.  S.  licensed  space  station  must  attach  to  their 
 FCC  Form  312  an  exhibit  providing  legal  and  technical  information  for  the  non-  U.  S.  licensed  space  station  in  accordance  with  part  25  of  this  Chapter.  Applications  addressed  in  this  paragraph 
 must  be  filed  electronically  through  the  International  Bureau  Filing  System  (IBFS). 
 (c)  A  non-  U.  S.  licensed  NGSO-  like  satellite  system  seeking  to  serve  the  United  States  can  be  considered  contemporaneously  with  other  U.  S.  NGSO-  like  satellite  system  pursuant  to  Section 
 25.157  of  this  Chapter  and  considered  before  later-  filed  applications  of  other  U.  S.  satellite  system  operators,  and  a  non-  U.  S.-  licensed  GSO-  like  satellite  system  seeking  to  serve  the  United  States 
 can  have  its  request  placed  in  a  queue  pursuant  to  Section  25.158  of  this  Chapter  and  considered  before  later-  filed  applications  of  other  U.  S.  satellite  system  operators,  if  the  non-  U.  S.  licensed 
 satellite  system  is:  (1)  In  orbit  and  operating; 
 (2)  Has  a  license  from  another  administration;  or  (3)  Has  been  submitted  for  coordination  to  the  International  Telecommunication  Union. 


 (d)  Earth  station  applicants  requesting  authority  to  operate  with  a  non-  U.  S.  licensed  space  station  must  demonstrate  that  the  space  station  the  applicant  seeks  to  access  has  complied  with  all 
 applicable  Commission  requirements  for  non-  U.  S.  licensed  systems  to  operate  in  the  United  States,  including  but  not  limited  to  the  following: 
 (1)  Milestones,  (2)  Reporting  requirements, 
 (3)  Any  other  applicable  service  rules;  (4)  Posting  a  bond  of  $7.5  million  for  NGSO-  like  satellite  systems,  or  $5  million  for 
 GSO-  like  satellites,  denominated  in  U.  S.  dollars,  compliant  with  the  terms  of  Section  25.149  of  this  Chapter; 
 (5)  Non-  U.  S.  licensed  GSO-  like  space  station  operators  with  a  total  of  five  requests  for  access  to  the  U.  S.  market  in  a  particular  frequency  band,  or  a  total  of  five  previously  granted 
 requests  for  access  to  the  U.  S.  market  with  unbuilt  GSO-  like  space  stations  in  a  particular  frequency  band,  or  a  combination  of  pending  GSO-  like  requests  and  granted  requests  for  unbuilt 
 GSO-  like  space  stations  in  a  particular  frequency  band  that  equals  five,  will  not  be  permitted  to  request  access  to  the  U.  S.  market  with  another  GSO-  like  space  station  license  in  that  frequency 
 band.  In  addition,  non-  U.  S.-  licensed  NGSO-  like  satellite  system  operators  with  one  request  on  file  with  the  Commission  in  a  particular  frequency  band,  or  one  granted  request  for  an  unbuilt 
 NGSO-  like  satellite  system  in  a  particular  frequency  band,  will  not  be  permitted  to  request  access  to  the  U.  S.  market  with  another  NGSO-  like  satellite  system  in  that  frequency  band. 


 (e)  A  non-  U.  S.-  licensed  satellite  operator  that  is  seeking  to  serve  the  United  States  pursuant  to  a  Letter  of  Intent  may  amend  its  request  by  submitting  an  additional  Letter  of  Intent.  Such 
 additional  Letters  of  Intent  will  be  treated  as  amendments  filed  by  U.  S.  space  station  applicants  for  purposes  of  determining  the  order  in  which  the  Letters  of  Intent  will  be  considered  relative  to 
 other  pending  applications. 
 (f)  A  non-  U.  S.-  licensed  satellite  operator  that  has  been  permitted  to  serve  the  United  States  pursuant  to  a  Letter  of  Intent  or  Petition  for  Declaratory  Ruling,  may  modify  its  U.  S.  operations 
 under  the  procedures  set  forth  in  Section  25.117(  d)  of  this  Chapter. 
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 (g)  A  non-  U.  S.-  licensed  satellite  operator  that  has  been  permitted  to  serve  the  United  States  pursuant  to  a  Petition  for  Declaratory  Ruling  must  notify  the  Commission  if  it  plans  to  transfer 
 control  or  assign  its  license  to  another  party,  so  that  the  Commission  can  afford  interested  parties  an  opportunity  to  comment  on  whether  the  proposed  transaction  affects  any  of  the  considerations 
 we  made  when  we  allowed  the  satellite  operator  to  enter  the  U.  S.  market.  If  the  transferee  or  assignee  is  not  licensed  by  or  seeking  a  license  from  a  country  that  is  a  member  of  the  World 
 Trade  Organization  for  services  covered  under  the  World  Trade  Organization  Basic  Telecommunications  Agreement,  the  non-  U.  S.-  licensed  satellite  operator  will  be  required  to  make 
 the  showing  described  in  paragraph  (a)  of  this  Section. 
 13.  Amend    25.140  by  revising  paragraph  (b)  and  removing  and  reserving  paragraphs  (c)  and  (d)  to  read  as  follows: 


   25.140  Qualifications  of  fixed-  satellite  space  station  licensees. 
 *  *  *  *  * 
 (b)  Each  applicant  for  a  space  station  authorization  in  the  fixed-  satellite  service  must  demonstrate,  on  the  basis  of  the  documentation  contained  in  its  application,  that  it  is  legally,  technically,  and 
 otherwise  qualified  to  proceed  expeditiously  with  the  construction,  launch  and/  or  operation  of  each  proposed  space  station  facility  immediately  upon  grant  of  the  requested  authorization.  Each 
 applicant  must  provide  the  following  information:  (1)  The  information  specified  in    25.114;  and 
 (2)  An  interference  analysis  to  demonstrate  the  compatibility  of  its  proposed  system  2  degrees  from  any  authorized  space  station.  An  applicant  should  provide  details  of  its  proposed 
 r.  f.  carriers  which  it  believes  should  be  taken  into  account  in  this  analysis.  At  a  minimum,  the  applicant  must  include,  for  each  type  of  r.  f.  carrier,  the  link  noise  budget,  modulation 
 parameters,  and  overall  link  performance  analysis.  (See,  e.  g.,  appendices  B  and  C  to  Licensing  of  Space  Stations  in  the  Domestic  Fixed-  Satellite  Service  (available  at  address  in  0.445  of  this 
 chapter)). 
 (c)  [reserved].  (d)  [reserved]. 


 *  *  *  *  * 
   25.141  [Amended].  14.  Amend    25.141  by  removing  and  reserving  paragraph  (b). 


 15.  Amend    25.142  by  revising  paragraph  (a)(  1),  and  by  removing  and  reserving  paragraph  (a)(  4)  to  read  as  follows: 
   25.142  Licensing  provisions  for  the  non-  voice,  non-  geostationary  mobile-  satellite  service. 
 (a)  Space  station  application  requirements.  (1)  Each  application  for  a  space  station  system  authorization  in  the  non-  voice,  non-  geostationary  mobile-  satellite  service  shall  describe  in  detail 
 the  proposed  non-  voice,  non-  geostationary  mobile-  satellite  system,  setting  forth  all  pertinent  technical  and  operational  aspects  of  the  system,  and  the  technical  and  legal  qualifications  of  the 
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 applicant.  In  particular,  each  application  shall  include  the  information  specified  in    25.114.  Applicants  must  also  file  information  demonstrating  compliance  with  all  requirements  of  this 
 section,  and  showing,  based  on  existing  system  information  publicly  available  at  the  Commission  at  the  time  of  filing,  that  they  will  not  cause  unacceptable  interference  to  any  non-  voice,  non-geostationary 
 mobile-  satellite  service  system  authorized  to  construct  or  operate. 
 *  *  * 
 (a)(  4)  [reserved.] 
 *  *  *  *  * 


   25.143  [Amended].  16.  Amend    25.143  by  removing  and  reserving  paragraphs  (b)(  3)  and  (g). 
 17.  Amend    25.144  by  revising  paragraph  (b)  to  read  as  follows: 
   25.144  Licensing  provisions  for  the  2.3  GHz  satellite  digital  audio  radio  service. 
 *  *  *  *  * 
 (b)  Milestone  Requirements.  Each  applicant  for  system  authorization  in  the  satellite  digital  audio  radio  service  must  demonstrate  within  10  days  after  a  required  implementation  milestone  as 
 specified  in  the  system  authorization,  and  on  the  basis  of  the  documentation  contained  in  its  application,  certify  to  the  Commission  by  affidavit  that  the  milestone  has  been  met  or  notify  the 
 Commission  by  letter  that  it  has  not  been  met.  At  its  discretion,  the  Commission  may  require  the  submission  of  additional  information  (supported  by  affidavit  of  a  person  or  persons  with 
 knowledge  thereof)  to  demonstrate  that  the  milestone  has  been  met.  The  satellite  DARS  milestones  are  as  follows,  based  on  the  date  of  authorization: 


 *  *  *  *  * 
   25.145  [Amended].  18.  Amend    25.145  by  removing  and  reserving  paragraph  (d). 


   25.146  [Amended].  19.  Amend    25.146  by  removing  and  reserving  paragraph  (i). 
 20.  Amend  part  25  by  adding    25.149  to  read  as  follows: 
   25.149  Posting  of  Bonds. 
 (a)  For  all  satellite  licenses  other  than  DBS  and  DARS  licenses  issued  after  [Insert  effective  date  of  rule],  the  licensee  is  required  to  post  a  bond  within  30  days  of  the  grant  of  its 
 license.  Failure  to  post  the  required  bond  will  render  the  license  null  and  void  automatically.  (1)  NGSO-  like  licensees  are  required  to  post  a  bond  in  the  amount  of  $7.  5 
 million.  (2)  GSO-  like  licensees  are  required  to  post  a  bond  in  the  amount  of  $5  million. 
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 (b)  The  licensee  must  use  a  surety  company  deemed  acceptable  within  the  meaning  of  31  U.  S.  C.    9304  et  seq.  (See,  e.  g.,  Department  of  Treasury  Fiscal  Service,  Companies  Holding 
 Certificates  of  Authority  as  Acceptable  Sureties  on  Federal  Bonds  and  As  Acceptable  Reinsurance  Companies,  57  Fed.  Reg.  29356  (1992).)  The  bond  must  name  the  U.  S.  Treasury  as 
 beneficiary  in  the  event  of  the  licensee's  default.  The  licensee  must  provide  the  Commission  with  a  copy  of  the  performance  bond,  including  all  details  and  conditions. 


 (c)  A  licensee  will  be  considered  to  be  in  default  if  it  fails  to  meet  any  milestone  deadline  set  forth  in  section  25.164  of  this  Chapter,  and,  at  the  time  of  milestone  deadline,  the  licensee  has 
 not  provided  a  sufficient  basis  for  extending  the  milestone. 
 (d)  An  NGSO-  like  licensee  will  be  permitted  to  reduce  the  amount  of  the  bond  by  20  percent  of  the  original  bond  amount  upon  successfully  meeting  a  milestone  deadline  set  forth  in 
 section  25.164(  b)  of  this  Chapter.  A  GSO-  like  licensee  will  be  permitted  to  reduce  the  amount  of  the  bond  by  25  percent  of  the  original  bond  amount  upon  successfully  meeting  a  milestone 
 deadline  set  forth  in  section  25.164(  a)  of  this  Chapter. 
 21.  Revise    25.155  to  read  as  follows: 
   25.155  Mutually  exclusive  applications. 
 (a)  The  Commission  will  consider  applications  to  be  mutually  exclusive  if  their  conflicts  are  such  that  the  grant  of  one  application  would  effectively  preclude  by  reason  of  harmful 
 electrical  interference,  or  other  practical  reason,  the  grant  of  one  or  more  other  applications.  (b)  An  application  for  an  NGSO-  like  space  station  license,  within  the  meaning  of  Section 
 25.157  of  this  Chapter,  will  be  entitled  to  comparative  consideration  with  one  or  more  conflicting  applications  only  if: 
 (1)  The  application  is  mutually  exclusive  with  another  NGSO-  like  space  station  application;  and 
 (2)  The  application  is  received  by  the  Commission  in  a  condition  acceptable  for  filing  by  the  "cut-  off"  date  specified  in  a  public  notice. 
 (c)  An  application  for  a  GSO-  like  space  station  license,  within  the  meaning  of  Section  25.158  of  this  Chapter,  will  be  entitled  to  comparative  consideration  with  one  or  more  conflicting 
 applications  only  if:  (1)  The  application  is  mutually  exclusive  with  another  GSO-  like  space  station 
 application;  and  (2)  The  application  is  received  by  the  Commission  in  a  condition  acceptable  for 
 filing  at  the  same  millisecond  as  another  GSO-  like  space  station  application  with  which  it  is  mutually  exclusive. 


 22.  Amend    25.156  by  adding  paragraph  (d)  to  read  as  follows: 
   25.156  Consideration  of  applications. 
 *  *  *  *  * 
 (d)(  1)  Applications  for  NGSO-  like  satellite  systems  will  be  considered  pursuant  to  the  procedures  set  forth  in  Section  25.  157  of  this  part. 
 (2)  Applications  for  GSO-  like  satellite  systems  will  be  considered  pursuant  to  the  procedures  set  forth  in  Section  25.  158  of  this  part. 
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 (3)  Applications  for  NGSO-  like  satellite  and  GSO-  like  systems  employing  two  or  more  service  bands  will  be  treated  like  separate  applications  for  each  service  band,  and  each  service 
 band  request  will  considered  pursuant  to  Section  25.157  or  Section  25.158,  as  appropriate.  (4)  Applications  for  feeder  link  authority  or  intersatellite  link  authority  will  be  treated 
 like  an  application  separate  from  its  associated  service  band.  Each  feeder  link  request  or  intersatellite  link  request  will  be  considered  pursuant  to  the  procedure  applicable  to  the  associated 
 service  band  request.  (5)  In  cases  where  the  Commission  has  not  adopted  frequency-  band  specific  service 
 rules,  the  Commission  will  not  consider  NGSO-  like  applications  after  it  has  granted  a  GSO-  like  application,  and  it  will  not  consider  GSO-  like  applications  after  it  has  granted  an  NGSO-  like 
 application,  unless  and  until  the  Commission  establishes  NGSO/  GSO  sharing  criteria  for  that  frequency  band.  In  the  event  that  the  Commission  receives  NGSO-  like  applications  and  GSO-like 
 applications  at  the  same  time,  and  the  Commission  has  not  adopted  sharing  criteria  in  that  band,  the  Commission  will  divide  the  spectrum  between  GSO-  like  and  NGSO-  like  licensees 
 based  on  the  proportion  of  qualified  GSO-  like  and  NGSO-  like  applicants.  (6)  An  application  for  DBS  or  DARS  services  will  be  entitled  to  comparative 
 consideration  with  one  or  more  conflicting  applications  only  if:  (i)  The  application  is  mutually  exclusive  with  another  application;  and 
 (ii)  The  application  is  received  by  the  Commission  in  a  condition  acceptable  for  filing  by  the  "cut-  off"  date  specified  in  a  public  notice. 


 23.  Amend  part  25  by  adding    25.157  to  read  as  follows: 
   25.157  Consideration  of  NGSO-  like  satellite  applications. 
 (a)  This  section  specifies  the  Commission's  procedures  for  considering  license  applications  "NGSO-  like  satellite  systems."  For  purposes  of  this  section,  the  term  "NGSO-  like 
 satellite  system"  is  defined  as:  (1)  All  NGSO  satellite  systems,  and 
 (2)  All  GSO  MSS  satellite  systems,  in  which  the  satellites  are  designed  to  communicate  with  earth  stations  with  omni-  directional  antennas. 
 (b)  Each  NGSO-  like  satellite  system  application  will  be  reviewed  to  determine  whether  it  is  acceptable  for  filing  within  the  meaning  of  Section  25.112  of  this  Chapter.  Any  application 
 that  is  not  acceptable  for  filing  would  be  returned  to  the  applicant.  (c)  Each  NGSO-  like  satellite  system  application  that  is  acceptable  for  filing  will  be 
 reviewed  to  determine  whether  it  is  a  "competing  application,"  i.  e.,  filed  in  response  to  a  public  notice  initiating  a  processing  round,  or  a  "lead  application,"  i.  e.,  all  other  NGSO-  like  satellite 
 system  applications.  (1)  Competing  applications  that  are  acceptable  for  filing  will  be  placed  on  public 
 notice  to  provide  interested  parties  an  opportunity  to  file  pleadings  in  response  to  the  application  pursuant  to  Section  25.154  of  this  Chapter. 
 (2)  Lead  applications  that  are  acceptable  for  filing  will  be  placed  on  public  notice.  This  public  notice  will  initiate  a  processing  round,  establish  a  cut-  off  date  for 
 competing  NGSO-  like  satellite  system  applications,  and  provide  interested  parties  an  opportunity  to  file  pleadings  in  response  to  the  application  pursuant  to  Section  25.154  of 
 this  Chapter.  (d)  After  review  of  each  of  the  applications  in  the  processing  round,  and  all  the  pleadings 
 filed  in  response  to  each  application,  the  Commission  will  grant  all  the  applications  that  meet  the  standards  of  Section  25.156(  a)  of  this  Chapter,  and  deny  the  other  applications. 
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 (e)  (1)  In  the  event  that  there  is  insufficient  spectrum  in  the  frequency  band  available  to  accommodate  all  the  qualified  applicants  in  a  processing  round,  the  available 
 spectrum  will  be  divided  equally  among  the  licensees  whose  applications  are  granted  pursuant  to  paragraph  (d)  of  this  Section,  except  as  set  forth  in  paragraph  (e)(  2)  or  (e)(  3) 
 of  this  Section.  (2)  In  cases  where  there  are  only  one  or  two  applications  in  a  processing  round 
 granted  pursuant  to  paragraph  (d)  of  this  Section,  each  applicant  will  be  assigned  1/  3  of  the  available  spectrum,  and  the  remaining  spectrum  will  be  made  available  to  other 
 licensees  in  an  additional  processing  round  pursuant  to  paragraph  (c)  of  this  Section.  (3)  In  cases  where  there  are  three  or  more  applications  in  a  processing  round 
 granted  pursuant  to  paragraph  (d)  of  this  Section,  and  one  or  more  applicants  apply  for  less  spectrum  than  they  would  be  warranted  under  paragraph  (e)(  1)  of  this  Section,  those 
 applicants  will  be  assigned  the  bandwidth  amount  they  requested  in  their  applications.  In  those  cases,  the  remaining  qualified  applicants  will  be  assigned  the  lesser  of  the  amount 
 of  spectrum  they  requested  in  their  applications  and  the  amount  spectrum  that  they  would  be  assigned  if  the  available  spectrum  were  divided  equally  among  the  remaining  qualified 
 applicants. 
 (f)  (1)  Each  licensee  will  be  allowed  to  select  the  particular  band  segment  it  wishes  to  use  no  earlier  than  60  days  before  they  plan  to  launch  the  first  satellite  in  its  system, 
 and  no  later  than  30  days  before  that  date,  by  submitting  a  letter  to  the  Secretary  of  the  Commission.  The  licensee  shall  serve  copies  of  this  letter  to  the  other  participants  in  the 
 processing  round  pursuant  to  Section  1.47  of  this  title.  (2)  The  licensee  shall  request  contiguous  bandwidth  in  both  the  uplink  and 
 downlink  band.  Each  licensee's  bandwidth  selection  in  both  the  uplink  and  downlink  band  shall  not  preclude  other  licensees  from  selecting  contiguous  bandwidth. 
 (3)  If  two  or  more  licensees  in  a  processing  round  request  the  same  band  segment,  all  licensees  other  than  the  first  one  to  request  that  particular  band  segment  will 
 be  required  to  make  another  selection. 
 (g)  (1)  In  the  event  that  an  applicants'  license  is  cancelled  for  any  reason,  the  Commission  will  redistribute  the  bandwidth  allocated  to  that  applicant  equally  among  the 
 remaining  applicants  whose  licenses  were  granted  concurrently  with  the  cancelled  license,  unless  the  Commission  determines  that  such  a  redistribution  would  not  result  in  a 
 sufficient  number  of  licensees  remaining  to  make  reasonably  efficient  use  of  the  frequency  band. 
 (2)  In  the  event  that  the  redistribution  of  bandwidth  set  forth  in  paragraph  (g)(  1)  of  this  section  would  not  result  in  a  sufficient  number  of  licensees  remaining  to  make 
 reasonably  efficient  use  of  the  frequency  band,  the  Commission  will  issue  a  public  notice  initiating  a  processing  round,  as  set  forth  in  paragraph  (c)  of  this  section,  to  invite  parties 
 to  apply  for  an  NGSO-  like  satellite  system  license  to  operate  in  a  portion  of  the  bandwidth  made  available  as  a  result  of  the  cancellation  of  the  initial  applicant's  license. 
 Parties  already  holding  licenses  to  operate  an  NGSO-  like  satellite  system  in  that  frequency  band  will  not  be  permitted  to  participate  in  that  processing  round. 
 (3)  There  is  a  presumption  that  three  satellite  licensees  in  a  frequency  band  are  sufficient  to  make  reasonably  efficient  use  of  the  frequency  band. 


 (h)  Services  offered  pursuant  to  an  NGSO-  like  license  in  a  frequency  band  granted  before  the  Commission  has  adopted  frequency-  band-  specific  service  rules  for  that  band 
 will  be  subject  to  the  default  service  rules  in  Section  25.217  of  this  part. 
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 24.  Amend  part  25  by  adding    25.158  to  read  as  follows: 
   25.158  Consideration  of  GSO-  like  satellite  applications. 
 (a)  This  section  specifies  the  Commission's  procedures  for  considering  license  applications  "GSO-  like  satellite  systems."  For  purposes  of  this  section,  the  term  "GSO-  like 
 satellite  system"  is  defined  as  a  GSO  satellite  designed  to  communicate  with  earth  stations  with  directional  antennas.  Examples  of  GSO-  like  satellite  systems  are  those  which  use  earth  stations 
 with  antennas  with  directivity  towards  the  satellites,  such  as  FSS,  and  MSS  feeder  links  which  use  GSO  satellites.  GSO-  like  satellite  systems  are  satellite  systems  that  are  not  NGSO-  like 
 satellite  systems  within  the  meaning  of  Section  25.157(  a).  (b)  Applications  for  GSO-  like  satellite  system  licenses  will  be  placed  in  a  queue  and 
 considered  in  the  order  that  they  are  filed,  pursuant  to  the  following  procedure:  (1)  The  application  will  be  reviewed  to  determine  whether  it  is  acceptable  for 
 filing  within  the  meaning  of  Section  25.112  of  this  Chapter.  If  not,  the  application  will  be  returned  to  the  applicant. 
 (2)  If  the  application  is  acceptable  for  filing,  the  application  will  be  placed  on  public  notice  pursuant  to  Section  25.151  of  this  Chapter,  and  interested  parties  will  be 
 given  an  opportunity  to  file  pleadings  pursuant  to  Section  25.154  of  this  Chapter.  (3)  The  application  will  be  granted  only  if  it  meets  each  of  the  following  criteria: 
 (i)  After  review  of  the  application  and  any  pleadings  filed  in  response  to  that  application,  the  Commission  finds  that  the  application  meets  the  standards  of 
 Section  25.156(  a)  of  this  Chapter;  and  (ii)  The  proposed  satellite  will  not  cause  harmful  interference  to  any 
 previously  licensed  operations.  (c)  An  applicant  for  a  GSO-  like  satellite  system  license  is  not  allowed  to  transfer,  assign, 
 or  otherwise  permit  any  other  entity  to  assume  its  place  in  any  queue.  (d)  In  the  event  that  two  or  more  GSO-  like  satellite  system  license  applications  are 
 mutually  exclusive  within  the  meaning  of  Section  25.155(  c)  of  this  Chapter,  the  Commission  will  consider  those  applications  pursuant  to  the  following  procedure: 
 (1)  Each  application  will  be  reviewed  to  determine  whether  it  is  acceptable  for  filing  within  the  meaning  of  Section  25.  112  of  this  Chapter.  Any  application  not  found 
 acceptable  for  filing  will  be  returned  to  the  applicant.  (2)  All  applications  that  are  acceptable  for  filing  will  be  placed  on  public  notice 
 pursuant  to  Section  25.151  of  this  Chapter,  and  interested  parties  will  be  given  an  opportunity  to  file  pleadings  pursuant  to  Section  25.  154  of  this  Chapter. 
 (3)  Each  application  will  be  granted  if  it  meets  the  criteria  of  paragraph  (b)(  3),  and  otherwise  will  be  denied. 
 (4)  In  the  event  that  two  or  more  applications  are  granted  pursuant  to  paragraph  (e)(  3)  of  this  Section,  the  available  bandwidth  at  the  orbital  location  or  locations  in 
 question  will  be  divided  equally  among  those  licensees.  (5)  Licensees  whose  licenses  are  granted  pursuant  to  paragraph  (c)(  4)  will  be 
 allowed  to  select  the  particular  band  segment  it  wishes  to  use  no  earlier  than  60  days  before  they  plan  to  launch  the  first  satellite  in  its  system,  and  no  later  than  30  days  before 
 that  date,  by  submitting  a  letter  to  the  Secretary  of  the  Commission.  The  licensee  shall  serve  copies  of  this  letter  to  the  other  participants  in  the  processing  round  pursuant  to 
 Section  1.47  of  this  title.  (6)  Licensees  whose  licenses  are  granted  pursuant  to  paragraph  (c)(  4)  shall 
 request  contiguous  bandwidth  in  both  the  uplink  and  downlink  band.  Each  licensee's  bandwidth  selection  shall  not  preclude  other  licensees  from  selecting  contiguous 
 bandwidth. 
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 (7)  If  two  or  more  licensees  whose  licenses  are  granted  pursuant  to  paragraph  (c)(  4)  request  the  same  band  segment,  all  licensees  other  than  the  first  one  to  request  that 
 particular  band  segment  will  be  required  to  make  another  selection. 
 (e)  Services  offered  pursuant  to  a  GSO-  like  license  in  a  frequency  band  granted  before  the  Commission  has  adopted  frequency-  band-  specific  service  rules  for  that  band  will  be  subject  to 
 the  default  service  rules  in  Section  25.217  of  this  part. 
 25.  Amend  part  25  by  adding    25.159  to  read  as  follows: 
   25.159  Limits  on  pending  applications  and  unbuilt  satellite  systems. 
 (a)  Applicants  with  a  total  of  five  applications  for  GSO-  like  space  station  licenses  on  file  with  the  Commission  in  a  particular  frequency  band,  or  a  total  of  five  licensed-  but-  unbuilt  GSO-  like 
 space  stations  in  a  particular  frequency  band,  or  a  combination  of  pending  GSO-  like  applications  and  licensed-  but-  unbuilt  GSO-  like  space  stations  in  a  particular  frequency  band  that  equals  five, 
 will  not  be  permitted  to  apply  for  another  GSO-  like  space  station  license  in  that  frequency  band.  (b)  Applicants  with  an  application  for  one  NGSO-  like  satellite  system  license  on  file  with  the 
 Commission  in  a  particular  frequency  band,  or  one  licensed-  but-  unbuilt  NGSO-  like  satellite  system  in  a  particular  frequency  band,  will  not  be  permitted  to  apply  for  another  NGSO-  like 
 satellite  system  license  in  that  frequency  band.  (c)  If  an  applicant  has  an  attributable  interest  in  one  or  more  other  entities  seeking  one  or  more 
 space  station  licenses,  the  pending  applications  and  licensed-  but-  unbuilt  satellite  systems  filed  by  those  other  entities  will  be  counted  as  filed  by  the  applicant  for  purposes  of  the  limits  on  the 
 number  of  pending  space  station  applications  and  licensed-  but-  unbuilt  satellite  systems  in  this  paragraph.  For  purposes  of  this  paragraph,  an  applicant  has  an  "attributable  interest"  in  another 
 entity  if  (1)  it  holds  equity  (including  all  stockholdings,  whether  voting  or  nonvoting,  common  or 
 preferred)  and  debt  interest  or  interests,  in  the  aggregate,  exceed  thirty-  three  (33)  percent  of  the  total  asset  value  (defined  as  the  aggregate  of  all  equity  plus  all  debt)  of  that  entity, 
 or  (2)  it  holds  a  controlling  interest  in  that  entity,  or  is  the  subsidiary  of  a  party  holding  a 
 controlling  interest  in  that  entity,  within  the  meaning  of  47  C.  F.  R.    1.2110(  b)(  2).  (3)  For  purposes  of  paragraphs  (c)(  1)  and  (c)(  2),  ownership  interests  shall  be  calculated 
 on  a  fully  diluted  basis,  i.  e.,  all  agreements,  such  as  warrants,  stock  options,  and  convertible  debentures,  will  generally  be  treated  as  if  the  rights  thereunder  already  have 
 been  fully  exercised.  (d)  In  the  event  that  a  licensee  misses  three  or  more  milestones  within  any  three-  year  period,  the 
 Commission  will  presume  that  the  licensee  obtained  one  or  more  of  those  licenses  for  speculative  purposes.  Unless  the  licensee  rebuts  this  presumption,  it  will  not  be  permitted  to  apply  for  a 
 GSO-  like  satellite  or  an  NGSO-  like  satellite  system  in  any  frequency  band  if  it  has  two  or  more  satellite  applications  pending,  or  two  licensed-  but-  unbuilt  satellite  systems  of  any  kind.  This 
 limit  will  remain  in  effect  until  the  licensee  provides  adequate  information  to  demonstrate  that  it  is  very  likely  to  construct  its  licensed  facilities  if  it  were  allowed  to  file  more  applications. 
 (e)  For  purposes  of  this  section,  "frequency  band"  means  one  of  the  paired  frequency  bands  available  for  satellite  service  listed  in  Section  25.202  of  this  Chapter. 


 26.  Amend    25.161  by  revising  paragraph  (a)  to  read  as  follows: 
   25.161  Automatic  termination  of  station  authorization. 
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 A  station  authorization  shall  be  automatically  terminated  in  whole  or  in  part  without  further  notice  to  the  licensee  upon: 
 (a)(  1)  Failure  to  meet  any  applicable  milestone  for  implementation  of  the  licensed  satellite  system  specified  in  Sections  25.164(  a)  or  (b)  of  this  Chapter,  without  demonstrating  that 
 the  failure  was  caused  by  circumstances  beyond  the  licensee's  control,  or  (2)  If  there  are  no  applicable  milestones  for  implementation  of  the  licensed  satellite 
 system  specified  in  Sections  25.164(  a)  or  (b)  of  this  Chapter,  the  expiration  of  the  required  date  of  completion  of  construction  or  other  required  action  specified  in  the  authorization,  or  after  any 
 additional  time  authorized  by  the  Commission,  if  a  certification  of  completion  of  the  required  action  has  not  been  filed  with  the  Commission  unless  a  request  for  an  extension  of  time  has  been 
 filed  with  the  Commission  but  has  not  been  acted  on; 
 *  *  *  *  * 


 27.  Amend  part  25  by  adding    25.164  to  read  as  follows: 
   25.164  Milestones. 
 (a)  Licensees  of  geostationary  orbit  satellite  systems  other  than  DBS  and  DARS  satellite  systems,  including  GSO  MSS  satellite  systems,  licensed  on  or  after  [insert  effective  date  of  rule] 
 will  be  required  to  comply  with  the  schedule  set  forth  below  in  implementing  their  satellite  systems,  unless  a  different  schedule  is  established  by  this  Chapter,  or  by  Commission  Order,  or 
 by  Order  adopted  pursuant  to  delegated  authority.  These  dates  are  to  be  measured  from  the  date  the  license  is  issued. 
 One  year:  Enter  into  a  binding  non-  contingent  contract  to  construct  the  licensed  satellite  system.  Two  years:  Complete  the  critical  design  review  of  the  licensed  satellite  system. 
 Three  years:  Begin  the  construction  of  the  satellite.  Five  years:  Launch  and  operate  the  satellite. 


 (b)  Licensees  of  non-  geostationary  orbit  satellite  systems  other  than  DBS  and  DARS  satellite  systems  licensed  on  or  after  [insert  effective  date  of  rule]  will  be  required  to  comply  with  the 
 schedule  set  forth  below  in  implementing  their  satellite  systems,  unless  a  different  schedule  is  established  by  this  Chapter,  or  by  Commission  Order,  or  by  Order  adopted  pursuant  to  delegated 
 authority.  These  dates  are  to  be  measured  from  the  date  the  license  is  issued.  One  year:  Enter  into  a  binding  non-  contingent  contract  to  construct  the  licensed  satellite  system. 
 Two  years:  Complete  the  critical  design  review  of  the  licensed  satellite  system.  Two  years,  six  months:  Begin  the  construction  of  the  first  satellite  in  the  licensed  satellite  system. 
 Three  years,  six  months:  Launch  and  operate  the  first  satellite  in  the  licensed  satellite  system.  Six  years:  Bring  all  the  satellites  in  the  licensed  satellite  system  into  operation. 


 (c)  Licensees  of  all  satellite  systems,  other  than  DBS  and  DARS  satellite  systems,  licensed  on  or  after  [insert  effective  date  of  rule],  will  be  required  to  submit  a  copy  of  their  binding  non-contingent 
 contract  with  the  Commission  on  or  before  the  date  scheduled  for  entering  into  such  a  contract. 
 (d)  Licensees  of  all  satellite  systems,  other  than  DBS  and  DARS  satellite  systems,  licensed  on  or  after  [insert  effective  date  of  rule],  will  be  required  to  submit  information  to  the  Commission 
 sufficient  to  demonstrate  that  the  licensee  has  completed  the  critical  design  review  of  the  licensed  satellite  system  on  or  before  the  date  scheduled  for  entering  into  such  a  contract. 
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 (e)  Licensees  of  all  satellite  systems,  other  than  DBS  and  DARS  satellite  systems,  licensed  on  or  after  [insert  effective  date  of  rule],  will  be  required  to  submit  information  to  the  Commission 
 sufficient  to  demonstrate  that  the  licensee  has  commenced  physical  construction  of  its  licensed  spacecraft. 
 (f)  In  cases  where  the  Commission  grants  a  satellite  authorization  in  different  stages,  such  as  a  license  for  a  satellite  system  using  feeder  links  or  intersatellite  links,  the  earliest  of  the  milestone 
 schedules  shall  be  applied  to  the  entire  satellite  system. 
 28.  Amend    25.210  by  removing  and  reserving  paragraphs  (e)  and  (g),  and  revising  paragraph  (f)  to  read  as  follows: 


   25.210  Technical  requirements  for  space  stations  in  the  Fixed-  Satellite  Service. 
 *  *  *  *  *  (e)  [reserved.] 


 (f)  All  space  stations  in  the  Fixed  Satellite  Service  in  the  3600-  3700  MHz,  3700-  4200  MHz,  5091-  5250  MHz,  5825-  5925  MHz,  5925-  6425  MHz,  6425-  6525  MHz,  6525-  6700  MHz,  6700- 
 7025  MHz,  10.  7-  10.  95  GHz,  10.95-  11.2  GHz,  11.2-  11.  45  GHz,  11.  45-  11.  7  GHz,  11.7-  12.2  GHz,  12.2-  12.  7  GHz,  12.75-  13.  15  GHz,  13.15-  13.2125  GHz,  13.2125-  13.25  GHz,  13.75-  14.  0  GHz, 
 14.0-  14.  5  GHz  and  15.43-  15.63  GHz  bands  shall  employ  state-  of-  the-  art  full  frequency  reuse  either  through  the  use  of  orthogonal  polarizations  within  the  same  beam  and/  or  the  use  of 
 spatially  independent  beams. 
 (g)  [reserved.] 
 *  *  *  *  * 
 29.  Revise  part  25  by  adding  new    25.  217  to  read  as  follows: 
   25.217  Default  Service  Rules. 
 (a)  The  technical  rules  in  this  section  apply  only  to  licenses  to  operate  a  satellite  system  in  a  frequency  band  granted  after  a  domestic  frequency  allocation  has  been  adopted  for 
 that  frequency  band,  but  before  any  frequency-  band-  specific  service  rules  have  been  adopted  for  that  frequency  band. 


 (b)  (1)  For  all  NGSO-  like  satellite  licenses  for  which  the  application  was  filed  pursuant  to  the  procedures  set  forth  in  Section  25.  157  of  this  Chapter  after  [insert 
 effective  date  of  this  rule],  authorizing  operations  in  a  frequency  band  for  which  the  Commission  has  not  adopted  frequency  band-  specific  service  rules  at  the  time  the  license 
 is  granted,  the  licensee  will  be  required  to  comply  with  the  following  technical  requirements,  notwithstanding  the  frequency  bands  specified  in  these  rule  provisions: 
 Sections  25.142(  d),  25.  143(  b)(  2)(  ii),  25.  143(  b)(  2)(  iii),  25.204(  g),  25.210(  c),  25.  210(  d),  25.210(  f),  25.210(  i),  25.210(  k),  and  25.210(  l)  of  this  Chapter. 
 (2)  In  addition  to  the  requirements  set  forth  in  paragraph  (b)(  1)  of  this  paragraph,  the  Commission  will  coordinate  with  the  National  Telecommunications  and  Information 
 Administration  (NTIA)  regarding  the  operations  of  any  licensees  authorized  to  operate  in  a  shared  government/  non-  government  frequency  band,  pursuant  to  the  procedure  set  forth 
 in  Section  25.  142(  b)(  2)(  ii)  of  this  Chapter. 
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 (3)  Earth  station  licensees  authorized  to  operate  with  one  or  more  space  stations  described  in  paragraph  (b)(  1)  of  this  paragraph  shall  comply  with  the  requirements  in 
 Section  25.136  of  this  Chapter.  In  addition,  earth  station  licensees  authorized  to  operate  with  one  or  more  space  stations  described  in  paragraph  (b)(  1)  of  this  paragraph  in 
 frequency  bands  shared  with  terrestrial  wireless  services  shall  comply  with  the  requirements  in  Section  25.  203(  c)  of  this  Chapter. 


 (c)  (1)  For  all  GSO-  like  satellite  licenses  for  which  the  application  was  filed  pursuant  to  the  procedures  set  forth  in  Section  25.  158  of  this  Chapter  after  [insert 
 effective  date  of  this  rule],  authorizing  operations  in  a  frequency  band  for  which  the  Commission  has  not  adopted  frequency  band-  specific  service  rules  at  the  time  the  license 
 is  granted,  the  licensee  will  be  required  to  comply  with  the  following  technical  requirements,  notwithstanding  the  frequency  bands  specified  in  these  rule  provisions: 
 Sections  25.142(  d),  25.143(  b)(  2)(  iv),  25.204(  g),  25.210(  c),  25.210(  d),  25.210(  f),  25.210(  i),  25.  210(  j),  25.210(  k),  and  25.210(  l)  of  this  Chapter. 
 (2)  In  addition  to  the  requirements  set  forth  in  paragraph  (c)(  1)  of  this  paragraph,  the  Commission  will  coordinate  with  the  National  Telecommunications  and  Information 
 Administration  (NTIA)  regarding  the  operations  of  any  licensees  authorized  to  operate  in  a  shared  government/  non-  government  frequency  band,  pursuant  to  the  procedure  set  forth 
 in  Section  25.  142(  b)(  2)(  ii)  of  this  Chapter.  (3)  Earth  station  licensees  authorized  to  operate  with  one  or  more  space  stations 
 described  in  described  in  paragraph  (c)(  1)  of  this  paragraph  shall  comply  with  the  earth  station  antenna  performance  verification  requirements  in  Section  25.132  of  this  Chapter, 
 and  the  antenna  gain  pattern  requirements  in  Sections  25.209(  a)  and  (b)  of  this  Chapter.  In  addition,  earth  station  licensees  authorized  to  operate  with  one  or  more  space  stations 
 described  in  paragraph  (c)(  1)  of  this  paragraph  in  frequency  bands  shared  with  terrestrial  wireless  services  shall  comply  with  the  requirements  in  Section  25.203(  c)  of  this  Chapter. 
 (4)  In  addition  to  the  requirements  set  forth  in  paragraph  (c)(  3)  of  this  paragraph,  earth  station  licensees  with  a  gain  equivalent  or  higher  than  the  gain  of  a  1.2  meter 
 antenna  operating  in  the  14.0-  14.  5  GHz  band,  authorized  to  operate  with  one  or  more  space  stations  described  in  paragraph  (c)(  1)  of  this  paragraph  in  frequency  bands  greater 
 than  14.5  GHz  shall  be  required  to  comply  with  the  antenna  input  power  density  requirements  set  forth  in  Section  25.212(  c)  of  this  Chapter. 


 (d)  Applicants  requesting  authorization  of  a  satellite  subject  to  paragraphs  (b)  or  (c)  of  this  section  must  submit  a  narrative  statement  describing  the  debris  mitigation  design  and 
 operational  strategies,  if  any,  that  they  will  use.  Applicants  are  specifically  required  to  submit  a  casualty  risk  assessment  if  planned  post-  mission  disposal  involves  atmospheric  re-  entry  of  the 
 spacecraft. 
 (e)  In  the  event  that  the  Commission  adopts  frequency  band-  specific  service  rules  for  a  particular  frequency  band  after  it  has  granted  one  or  more  space  station  or  earth  station  licenses 
 for  operations  in  that  frequency  band,  those  licensees  will  be  required  to  come  into  compliance  with  the  frequency  band-  specific  service  rules  within  30  days  of  the  effective  date  of  those  rules, 
 unless  otherwise  specified  by  Commission  or  Bureau  Order. 
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 APPENDIX  C 
 Default  Service  Rules 
 Below  is  a  list  of  current  Part  25  rules  that  we  will  apply  as  default  service  rules  in  cases  where  we  grant  satellite  license  applications  in  frequency  bands  for  which  we  have  not  adopted 
 frequency  band-  specific  service  rules.  These  requirements  are  also  set  forth  in  Section  25.217,  a  new  rule  set  forth  in  Appendix  B  to  this  Order. 


 Default  Service  Rules  for  NGSO-  Like  Satellite  Licenses  Rule  Section  Additional  Provisions 
 25.136  Standards  for  mobile  earth  stations  licensed  to  operate  with  these  satellites.  25.142(  b)(  2)(  ii)  Coordination  in  shared  government/  non-  government  frequency  bands. 
 25.142(  d)  Prohibition  of  certain  agreements.  25.143(  b)(  2)(  ii)  Geographic  service  area  requirements. 
 25.143(  b)(  2)(  iii)  Geographic  service  area  requirements.  25.204(  g)  Power  level  requirements. 
 25.210(  c)  Ability  to  change  saturation  flux  densities  in  4  dB  steps  over  a  12  dB  range.  25.210(  d)  Orthogonal  polarization. 
 25.210(  f)  Full  Frequency  Reuse.  25.210(  i)  Cross-  polarization  isolation  of  at  least  30  dB. 
 25.210(  k)  Co-  polarized  and  cross-  polarized  antenna  measurements  required.  25.210(  l)  Annual  reports. 


 Default  Service  Rules  for  GSO-  Like  Satellite  Licenses  Rule  Section  Additional  Provisions 
 25.132  Earth  station  performance  verification  requirements  for  earth  stations  licensed  to  operate  with  these  satellites. 
 25.142(  b)(  2)(  ii)  Coordination  in  shared  government/  non-  government  frequency  bands.  25.142(  d)  Prohibition  of  certain  agreements. 
 25.143(  b)(  2)(  iv)  Geographic  service  area  requirements.  25.204(  g)  Power  level  requirements. 
 25.209(  a),  (b)  Earth  station  antenna  gain  pattern  requirements.  25.210(  c)  Ability  to  change  saturation  flux  densities  in  4  dB  steps  over  a  12  dB  range. 
 25.210(  d)  Orthogonal  polarization.  25.210(  f)  Full  Frequency  Reuse. 
 25.210(  i)  Cross-  polarization  isolation  of  at  least  30  dB.  25.210(  j)  Station  keeping. 
 25.210(  k)  Co-  polarized  and  cross-  polarized  antenna  measurements  required.  25.210(  l)  Annual  reports. 
 25.212(  c)  EIRP  limits  applicable  to  earth  stations  licensed  to  operate  with  these  satellites  in  frequency  bands  greater  than  14.  5  GHz. 
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 APPENDIX  D 
 FINAL  REGULATORY  FLEXIBILITY  ANALYSIS 
 As  required  by  the  Regulatory  Flexibility  Act  (RFA),  1  an  Initial  Regulatory  Flexibility  Analysis  (IRFA)  was  incorporated  in  the  Notice  of  Proposed  Rule  Making  (Notice)  in  IB  Docket 
 No.  02-  34.  2  The  Commission  sought  written  public  comment  on  the  proposals  in  the  NPRM,  including  comment  on  the  IRFA.  This  Final  Regulatory  Flexibility  Analysis  (FRFA)  conforms  to 
 the  RFA.  3 
 A.  Need  for,  and  Objectives  of,  the  First  Report  and  Order 
 The  objective  of  the  First  Report  and  Order  is  to  develop  satellite  licensing  procedures  that  enable  the  Commission  to  license  satellites  more  quickly  than  is  possible  under  the  current 
 procedure.  We  need  to  adopt  new  satellite  licensing  procedures  because,  among  other  things,  the  current  space  station  licensing  procedure  was  developed  in  1983,  and  it  impedes  U.  S.  satellite 
 operators'  compliance  with  recently  adopted  ITU  rules.  The  need  for  new  satellite  licensing  procedures  is  explained  fully  in  Section  IV.  A.  of  the  First  Report  and  Order. 


 B.  Summary  of  Significant  Issues  Raised  by  Public  Comments  In  Response  to  the  IRFA 
 No  comments  were  submitted  in  response  to  the  IRFA. 
 C.  Description  and  Estimate  of  the  Number  of  Small  Entities  To  Which  Rules  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.  4  The  RFA 
 generally  defines  the  term  "small  entity  "  as  having  the  same  meaning  as  the  terms  "small  business,"  "small  organization,"  and  "small  governmental  jurisdiction."  5  In  addition,  the  term 
 "small  business"  has  the  same  meaning  as  the  term  "small  business  concern"  under  the  Small  Business  Act.  6  A  small  business  concern  is  one  which:  (1)  is  independently  owned  and  operated; 
 (2)  is  not  dominant  in  its  field  of  operation;  and  (3)  satisfies  any  additional  criteria  established  by  the  Small  Business  Administration  (SBA).  7  A  small  organization  is  generally  "any  not-  for-  profit 
 enterprise  which  is  independently  owned  and  operated  and  is  not  dominant  in  its  field."  8 


 1  See  5  U.  S.  C.    603.  The  RFA,  see  5  U.  S.  C.    601    612,  has  been  amended  by  the  Small  Business 
 Regulatory  Enforcement  Fairness  Act  of  1996  (SBREFA),  Pub.  L.  No.  104-  121,  Title  II,  110  Stat.  857  (1996). 
 2  Amendment  of  the  Commission's  Space  Station  Licensing  Rules  and  Policies,  Notice  of  Proposed 
 Rulemaking,  IB  Docket  No.  02-  34,  17  FCC  Rcd  3847  (2002)  (Space  Station  Reform  NPRM  or  Notice).  3  See  5  U.  S.  C.    604. 
 4  5  U.  S.  C.    604(  a)(  3). 
 5  Id.    601(  6). 
 6  5  U.  S.  C.    601(  3)  (incorporating  by  reference  the  definition  of  "small  business  concern"  in  15  U.  S.  C. 


   632).  Pursuant  to  the  RFA,  the  statutory  definition  of  a  small  business  applies  "unless  an  agency,  after  consultation  with  the  Office  of  Advocacy  of  the  Small  Business  Administration  and  after  opportunity  for 


 public  comment,  establishes  one  or  more  definitions  of  such  term  which  are  appropriate  to  the  activities  of  the  agency  and  publishes  such  definition(  s)  in  the  Federal  Register."  5  U.  S.  C.    601(  3). 
 7  Small  Business  Act,  15  U.  S.  C.    632  (1996). 
 8  5  U.  S.  C.    601(  4). 
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 Nationwide,  as  of  1992,  there  were  approximately  275,  801  small  organizations.  9  "Small  governmental  jurisdiction"  generally  means  "governments  of  cities,  counties,  towns,  townships, 
 villages,  school  districts,  or  special  districts,  with  a  population  of  less  than  50,000."  10  As  of  1992,  there  were  approximately  85,006  such  jurisdictions  in  the  United  States.  11  This  number  includes 
 38,978  counties,  cities,  and  towns;  of  these,  37,566,  or  96  percent,  have  populations  of  fewer  than  50,000.  12  The  Census  Bureau  estimates  that  this  ratio  is  approximately  accurate  for  all 
 governmental  entities.  Thus,  of  the  85,006  governmental  entities,  we  estimate  that  81,600  (91  percent)  are  small  entities.  Below,  we  further  describe  and  estimate  the  number  of  small  entity 
 licensees  that  may  be  affected  by  the  proposed  rules,  if  adopted. 
 The  rules  adopted  in  this  First  Report  and  Order  affect  satellite  operators.  The  Commission  has  not  developed  a  definition  of  small  entities  applicable  to  satellite  operators. 
 Therefore,  the  applicable  definition  of  small  entity  is  generally  the  definition  under  the  SBA  rules  applicable  to  Satellite  Telecommunications.  13  This  definition  provides  that  a  small  entity  is 
 expressed  as  one  with  $11.0  million  or  less  in  annual  receipts.  14  1997  Census  Bureau  data  indicate  that,  for  1997,  273  satellite  communication  firms  had  annual  receipts  of  under  $10 
 million.  In  addition,  24  firms  had  receipts  for  that  year  of  $10  million  to  $24,999,990.  15 
 In  addition,  Commission  records  reveal  that  there  are  approximately  240  space  station  operators  licensed  by  this  Commission.  We  do  not  request  or  collect  annual  revenue  information, 
 and  thus  are  unable  to  estimate  of  the  number  of  licensees  that  would  constitute  a  small  business  under  the  SBA  definition.  Small  businesses  may  not  have  the  financial  ability  to  become  space 
 station  licensees  because  of  the  high  implementation  costs  associated  with  satellite  systems  and  services. 


 D.  Description  of  Projected  Reporting,  Recordkeeping,  and  Other  Compliance  Requirements 
 In  this  First  Report  and  Order,  the  Commission  adopts  a  mandatory  electronic  filing  requirement  for  space  station  license  applicants.  The  Commission  believes  that  filing  satellite 
 license  applications  electronically  is  no  more  burdensome  than  submitting  paper  applications,  because  a  majority  of  satellite  applicants  currently  file  their  applications  electronically  on  a 
 voluntary  basis. 
 None  of  the  other  rules  adopted  in  this  First  Report  and  Order  are  expected  to  increase  the  reporting,  record  keeping  and  other  compliance  requirements  of  any  licensee. 


 E.  Steps  Taken  to  Minimize  Significant  Economic  Impact  on  Small  Entities,  and  Significant  Alternatives  Considered 
 9  1992  Economic  Census,  U.  S.  Bureau  of  the  Census,  Table  6  (special  tabulation  of  data  under  contract  to 
 Office  of  Advocacy  of  the  U.  S.  Small  Business  Administration).  10  5  U.  S.  C.    601(  5). 
 11  U.  S.  Dept.  of  Commerce,  Bureau  of  the  Census,  "1992  Census  of  Governments." 
 12  Id. 
 13  "This  industry  comprises  establishments  primarily  engaged  in  providing  point-  to-  point 


 telecommunications  services  to  other  establishments  in  the  telecommunications  and  broadcasting  industries  by  forwarding  and  receiving  communications  signals  via  a  system  of  satellites  or  reselling  satellite 


 telecommunications."  Small  Business  Administration,  1997  NAICS  Definitions,  NAICS  513340.  14  13  C.  F.  R.    120.121,  NAICS  code  513340. 
 15  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Service:  Information,  "Establishment  and  Firm 
 Size,"  Table  4,  NAICS  513340  (Issued  Oct.  2000). 
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 The  RFA  requires  an  agency  to  describe  any  significant  alternatives  that  it  has  considered  in  developing  its  approach,  which  may  include  the  following  four  alternatives  (among  others): 
 (  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  and  reporting  requirements  under  the  rule  for  such  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  such  small  entities.  16 
 In  this  proceeding,  we  adopt  rule  revisions  designed  to  allow  the  Commission  to  issue  satellite  licenses  faster  than  is  now  possible,  which  will  enable  satellite  operators  to  provide 
 service  faster,  and  to  attract  investors  faster.  This  will  have  a  positive  economic  impact  on  all  satellite  licensees,  including  small  entities. 


 In  the  Notice  of  Proposed  Rulemaking,  the  Commission  proposed  applying  a  first-  come,  first-  served  procedure  to  all  satellite  applications,  including  non-  geostationary  satellite 
 applications.  In  the  First  Report  and  Order,  the  Commission  concluded  that  applying  a  first-come,  first-  served  procedure  to  non-  geostationary  satellite  applications  could  enable  one 
 applicant  to  unreasonably  exclude  others,  including  small  entities,  from  the  market.  Accordingly,  the  Commission  rejected  this  proposal.  See  Section  V.  B.  of  the  First  Report  and  Order. 


 Report  to  Congress:  The  Commission  will  send  a  copy  of  the  First  Report  and  Order,  including  this  FRFA,  in  a  report  to  be  sent  to  Congress  pursuant  to  the  Congressional  Review  Act,  see  5 
 U.  S.  C.    801(  a)(  1)(  A).  In  addition,  the  Commission  will  send  a  copy  of  the  First  Report  and  Order,  including  FRFA,  to  the  Chief  Counsel  for  Advocacy  of  the  Small  Business 
 Administration.  A  copy  of  the  First  Report  and  Order  and  FRFA  (or  summaries  thereof)  will  also  be  published  in  the  Federal  Register.  See  5  U.  S.  C.    604(  b). 


 16  5  U.  S.  C.    603(  c)(  1)    (c)(  4). 
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 APPENDIX  E 
 INITIAL  REGULATORY  FLEXIBILITY  ANALYSIS 
 As  required  by  the  Regulatory  Flexibility  Act  (RFA),  1  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  Further  Notice  of  Proposed  Rulemaking.  Written  public  comments  are  requested  on  this  IRFA.  Comments  must  be 
 identified  as  responses  to  the  IRFA  and  must  be  filed  by  the  deadlines  for  comments  on  the  Further  Notice  of  Proposed  Rulemaking  provided  above  in  Section  XI.  The  Commission  will 
 send  a  copy  of  the  Further  Notice  of  Proposed  Rulemaking,  including  this  IRFA,  to  the  Chief  Counsel  for  Advocacy  of  the  Small  Business  Administration.  See  5  U.  S.  C.    603(  a).  In  addition, 
 the  Further  Notice  of  Proposed  Rulemaking  and  IRFA  (or  summaries  thereof)  will  be  published  in  the  Federal  Register.  See  id. 


 A.  Need  for,  and  Objectives  of,  the  Proposed  Rules 
 The  objective  of  the  proposed  rules  is  to  discourage  parties  from  filing  "speculative"  satellite  applications,  i.  e.,  applying  for  a  satellite  license  without  intending  to  construct  the 
 satellite  facilities.  These  rule  revisions  are  needed  because  speculative  satellite  applications  can  delay  or  preclude  other  parties  from  obtaining  a  satellite  license  and  providing  service  to  the 
 public. 
 B.  Legal  Basis 
 The  proposed  action  is  supported  by  Sections  4(  i),  7(  a),  303(  c),  303(  f),  303(  g),  and  303(  r)  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    154(  i),  157(  a),  303(  c),  303(  f), 
 303(  g),  303(  r). 
 C.  Description  and  Estimate  of  the  Number  of  Small  Entities  to  Which  the  Proposed  Rules  May  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.  2  The  RFA 
 generally  defines  the  term  "small  entity  "  as  having  the  same  meaning  as  the  terms  "small  business,"  "small  organization,"  and  "small  governmental  jurisdiction."  3  In  addition,  the  term 
 "small  business"  has  the  same  meaning  as  the  term  "small  business  concern"  under  the  Small  Business  Act.  4  A  small  business  concern  is  one  which:  (1)  is  independently  owned  and  operated; 
 (2)  is  not  dominant  in  its  field  of  operation;  and  (3)  satisfies  any  additional  criteria  established  by  the  Small  Business  Administration  (SBA).  5  A  small  organization  is  generally  "any  not-  for-  profit 


 1  See  5  U.  S.  C.    603.  The  RFA,  see  5  U.  S.  C.    601    612,  has  been  amended  by  the  Small  Business 
 Regulatory  Enforcement  Fairness  Act  of  1996  (SBREFA),  Pub.  L.  No.  104-  121,  Title  II,  110  Stat.  857  (1996). 
 2  5  U.  S.  C.    603(  b)(  3). 
 3  Id.    601(  6). 
 4  5  U.  S.  C.    601(  3)  (incorporating  by  reference  the  definition  of  "small  business  concern"  in  15  U.  S.  C. 


   632).  Pursuant  to  the  RFA,  the  statutory  definition  of  a  small  business  applies  "unless  an  agency,  after  consultation  with  the  Office  of  Advocacy  of  the  Small  Business  Administration  and  after  opportunity  for 


 public  comment,  establishes  one  or  more  definitions  of  such  term  which  are  appropriate  to  the  activities  of  the  agency  and  publishes  such  definition(  s)  in  the  Federal  Register."  5  U.  S.  C.    601(  3). 
 5  Small  Business  Act,  15  U.  S.  C.    632  (1996). 
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 enterprise  which  is  independently  owned  and  operated  and  is  not  dominant  in  its  field."  6  Nationwide,  as  of  1992,  there  were  approximately  275,  801  small  organizations.  7  "Small 
 governmental  jurisdiction"  generally  means  "governments  of  cities,  counties,  towns,  townships,  villages,  school  districts,  or  special  districts,  with  a  population  of  less  than  50,000."  8  As  of  1992, 
 there  were  approximately  85,006  such  jurisdictions  in  the  United  States.  9  This  number  includes  38,978  counties,  cities,  and  towns;  of  these,  37,566,  or  96  percent,  have  populations  of  fewer  than 
 50,000.  10  The  Census  Bureau  estimates  that  this  ratio  is  approximately  accurate  for  all  governmental  entities.  Thus,  of  the  85,006  governmental  entities,  we  estimate  that  81,600  (91 
 percent)  are  small  entities.  Below,  we  further  describe  and  estimate  the  number  of  small  entity  licensees  that  may  be  affected  by  the  proposed  rules,  if  adopted. 


 The  rules  proposed  in  this  Notice  of  Proposed  Rulemaking  would  affect  satellite  operators,  if  adopted.  The  Commission  has  not  developed  a  definition  of  small  entities  applicable 
 to  satellite  operators.  Therefore,  the  applicable  definition  of  small  entity  is  generally  the  definition  under  the  SBA  rules  applicable  to  Satellite  Telecommunications.  11  This  definition 
 provides  that  a  small  entity  is  expressed  as  one  with  $11.0  million  or  less  in  annual  receipts.  12  1997  Census  Bureau  data  indicate  that,  for  1997,  273  satellite  communication  firms  had  annual 
 receipts  of  under  $10  million.  In  addition,  24  firms  had  receipts  for  that  year  of  $10  million  to  $24,999,990.  13 


 In  addition,  Commission  records  reveal  that  there  are  approximately  240  space  station  operators  licensed  by  this  Commission.  We  do  not  request  or  collect  annual  revenue  information, 
 and  thus  are  unable  to  estimate  of  the  number  of  licensees  that  would  constitute  a  small  business  under  the  SBA  definition.  Small  businesses  may  not  have  the  financial  ability  to  become  space 
 station  licensees  because  of  the  high  implementation  costs  associated  with  satellite  systems  and  services. 


 D.  Description  of  Projected  Reporting,  Recordkeeping,  and  Other  Compliance  Requirements 
 In  this  Further  Notice  of  Proposed  Rulemaking,  the  Commission  invites  comment  on  whether  to  revise  the  bond  requirement  adopted  in  the  First  Report  and  Order  in  this  proceeding. 
 None  of  the  proposed  revisions  are  intended  to  increase  the  projected  reporting,  record  keeping,  or  other  compliance  requirements  associated  with  the  bond  requirement. 


 E.  Steps  Taken  to  Minimize  Significant  Economic  Impact  on  Small  Entities,  and  Significant  Alternatives  Considered 


 6  5  U.  S.  C.    601(  4). 
 7  1992  Economic  Census,  U.  S.  Bureau  of  the  Census,  Table  6  (special  tabulation  of  data  under  contract  to 


 Office  of  Advocacy  of  the  U.  S.  Small  Business  Administration).  8  5  U.  S.  C.    601(  5). 
 9  U.  S.  Dept.  of  Commerce,  Bureau  of  the  Census,  "1992  Census  of  Governments." 
 10  Id. 
 11  "This  industry  comprises  establishments  primarily  engaged  in  providing  point-  to-  point 


 telecommunications  services  to  other  establishments  in  the  telecommunications  and  broadcasting  industries  by  forwarding  and  receiving  communications  signals  via  a  system  of  satellites  or  reselling  satellite 


 telecommunications."  Small  Business  Administration,  1997  NAICS  Definitions,  NAICS  513340.  12  13  C.  F.  R.    120.121,  NAICS  code  513340. 
 13  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Service:  Information,  "Establishment  and  Firm 
 Size,"  Table  4,  NAICS  513340  (Issued  Oct.  2000). 
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 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  (among 
 others):  (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.  5  U.  S.  C.    603(  c). 
 We  have  attempted  not  to  foreclose  any  option.  In  addition,  we  invite  comment  on  allowing  licensees  to  create  an  escrow  account  as  an  alternative  to  a  bond  requirement.  We  also 
 invite  interested  parties  to  propose  alternatives  for  a  standard  for  a  waiver  of  the  bond  requirement  for  licensees  providing  public  safety  services,  including  small  entities. 


 F.  Federal  Rules  that  May  Duplicate,  Overlap,  or  Conflict  With  the  Proposed  Rules 
 None. 
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