[Federal Register Volume 62, Number 222 (Tuesday, November 18, 1997)]
[Rules and Regulations]
[Pages 61448-61457]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-30205]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 25

[CC Docket No. 92-297; FCC 97-378]


Ka-Band Satellite Application and Licensing Procedures

AGENCY: Federal Communications Commission.

ACTION: Final rule with request for comments.

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SUMMARY: With this Report and Order, the Commission adopts licensing 
qualification requirements and service rules for a new generation of 
fixed-satellite service (``FSS'') systems in the Ka-band.<SUP>1</SUP> 
These systems have the potential to provide a wide variety of broadband 
interactive digital services in the United States and around the world 
including: voice, data, and video; videoconferencing; facsimile; 
computer access and telemedicine. The systems can provide direct-to-
home services, potentially allowing customers to participate in 
activities from distance learning to interactive home shopping. The 
rules established here provide guidelines for the new Ka-band satellite 
systems to commence operation.

    \1\ 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, or the ``28 GHz 
band.'' This Report and Order pertains only to U.S. commercial 
satellite systems in the Ka-band.
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DATES: The adopted rule changes will become effective January 20, 1998, 
except Sec. 25.145(g), which will become effective upon OMB approval. 
The Commission will publish a document announcing the effective date of 
Sec. 25.145(g) following approval of the information collection request 
by OMB. Comments are requested on the information collection concerning 
Section 25.145(g) and may be filed on or before January 20, 1998.

FOR FURTHER INFORMATION CONTACT: Jennifer Gilsenan, International 
Bureau, Satellite Policy Branch, (202) 418-0757; Kathleen Campbell, 
International Bureau, Satellite Policy Branch (202) 418-0753. For 
additional information concerning the information collection contained 
in this Report and Order contact Judy Boley at (202) 418-0214, or via 
the Internet at <a href="/cdn-cgi/l/email-protection#2c464e434049556c4a4f4f024b435a"><span class="__cf_email__" data-cfemail="513b333e3d3428113732327f363e27">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order in CC Docket No. 92-297; FCC 97-378, adopted October 9, 1997, 
and released October 15, 1997. The complete text of this Report and 
Order is available for inspection and copying during normal business 
hours in the

[[Page 61449]]

FCC Reference Center (Room 239), 1919 M Street, N.W. Washington, D.C., 
and also may be purchased from the Commission's copy contractor, 
International Transcription Service, (202) 857-3800, 2100 M Street, 
N.W., Suite 140, Washington, D.C. 20037.

Paperwork Reduction Act

    Section 25.143(g) contains an information collection which requires 
OMB approval. In compliance with the Paperwork Reduction Act (44 U.S.C. 
3501 et seq. (PRA)), the Commission is planning to submit an 
information collection request to the Office of Management and Budget 
for review and approval and is soliciting comments on the information 
collection. The PRA requires the Commission to seek comment on new or 
modified information collections for a sixty day period. Therefore, the 
Commission is soliciting comment on the information collection 
described below. Comments should address: (a) whether the collection of 
information is necessary for the proper performance of the functions of 
the Commission, including whether the information shall have practical 
utility; (b) the accuracy of the Commission's burden estimates; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology.
    OMB Approval No.: 3060-XXXX.
    Title: Section 25.145(g)--Reporting Requirements.
    Form No.: N/A.
    Type of Review: New.
    Respondents: Businesses or other for profit, including small 
businesses.
    Number of Respondents: 20.
    Estimated Time Per Response: The Commission estimates all 
respondents will hire an attorney or legal assistant to complete the 
form. The time to retain these services is 2 hours per respondent.
    Total Annual Burden: 40 hours.
    Estimated Costs Per Respondent: $300. This includes the charges for 
hiring an attorney, legal assistant, or engineer at $150 an hour to 
complete the submissions.
    Needs and Uses: In accordance with the Communications Act, the 
information collected will be used by the Commission to insure that 
licensees are in compliance with the Commission's rules and policies 
and will assist the Commission in determining whether operations are in 
the public interest.

Summary of Report and Order

    1. The Ka-band is allocated for fixed service, FSS, and mobile 
service.<SUP>2</SUP> In July 1995, the Commission adopted a Third 
Notice of Proposed Rulemaking proposing, among other things, a band 
segmentation plan that was designed to accommodate both terrestrial and 
satellite communication systems.<SUP>3</SUP> Specifically, we proposed 
discrete band segments for the operation of terrestrial Local 
Multipoint Distribution Service (``LMDS''), GSO FSS, NGSO FSS, and 
feeder links for certain ``Big LEO'' mobile-satellite service (``MSS'') 
satellite systems. We also proposed to apply the existing rules for GSO 
FSS systems in part 25 of the Commission's rules <SUP>4</SUP> to GSO 
FSS systems that will use the 28 GHz band. We requested comment, 
however, on whether specific rules, such as financial qualification 
requirements, should be altered for Ka-band satellite systems and 
whether any additional rules should be created for either GSO FSS 
systems or NGSO FSS systems operating at Ka-band.
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    \2\ See 47 CFR 2.106. The 29.5-30.0 GHz band is also allocated 
on a primary basis to the Mobile-Satellite Service (MSS); however, 
in accordance with the International Telecommunication Union (ITU) 
Radio Regulation S5.529, use of the 29.5-30.0 GHz band by the MSS in 
Region 2 is limited to satellite networks which are both in the FSS 
and MSS.
    \3\ See Rulemaking to Amend parts 1, 2, 21, and 25 of the 
Commission's 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 Notice of Proposed Rulemaking, 11 FCC Rcd 
53 (1995), 60 FR 43470 (August 23, 1995) (Third NPRM).
    \4\ See 47 CFR 25.114, 124.140, and 25.210.
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    2. In July 1996, the Commission issued a First Report and Order and 
Fourth Notice of Proposed Rulemaking adopting, among other things, a 
final band plan for the Ka-band.<SUP>5</SUP> This plan was the 
culmination of months of discussions with interested parties and 
filings in the proceeding since the release of the Third NPRM. The band 
plan adopted provides a framework that accommodates all commercial 
proposed services in discrete band segments and provides the 
opportunity to offer innovative communications services to the public. 
The plan designates 1000 MHz of primary and co-primary uplink spectrum 
and 1600 MHz of primary and co-primary downlink spectrum to GSO FSS 
systems; 500 MHz of primary uplink and 500 MHz of primary downlink 
spectrum to NGSO FSS systems; and 1000 MHz of primary and co-primary 
spectrum to LMDS. The Fourth NPRM proposing an additional 300 MHz for 
LMDS at 31.0-31.3 GHz was also adopted.<SUP>6</SUP>
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    \5\ See In the Matter of Rulemaking to Amend parts 1, 2, 21, and 
25 of the Commission's 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, First Report and Order and 
Fourth Notice of Proposed Rulemaking, 11 FCC Rcd 19005 (1996), 61 FR 
39425 (July 29, 1996) (Fourth Notice), 61 FR 44177 (August 28, 1996) 
(Final Rule), (28 GHz First Report and Order). This decision is 
subject to petitions for reconsideration. The band plan is depicted 
graphically and discussed in more detail in para. para. 39-49, 
infra.
    \6\ See 28 GHz First Report and Order at Paras. 95-104.
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    3. The provisions set forth in part 25 of the Commission's rules, 
in general, govern the licensing of the fixed-satellite service 
systems. This includes commercial FSS systems in the Ka-band. The rules 
impose fairly rigorous financial and technical requirements on 
commercial FSS applicants. In this Report and Order, we modify these 
rules to incorporate technical operations at the Ka-band. Further, the 
part 25 FSS rules were developed in an environment where we regularly 
receive more applications than we can accommodate. Here the GSO FSS 
licensees have agreed to an orbital assignment arrangement that will 
support them all, and we were able to accommodate one NGSO FSS system 
with room for future entry. Accordingly, as discussed below, we believe 
it is in the public interest to waive the financial qualification rule 
sections in processing this round of Ka-band applications in order to 
allow for maximum entry.

Financial Qualifications

    4. Historically, the Commission has fashioned financial 
requirements for satellite services on the basis of entry opportunities 
in the particular service being licensed. In cases where we can 
accommodate all pending applications and future entry is possible, we 
have not looked to current financial ability as a prerequisite to a 
license grant. This is because the grant of an authorization to one 
applicant will not prevent another qualified applicant from advancing 
with a proposal for the same service.<SUP>7</SUP> We ensure that 
licensees timely build their systems by requiring them to meet 
specified implementation milestones. In contrast, where applications 
for satellites exceed the number of satellites

[[Page 61450]]

we can accommodate, we have adopted a standard that requires applicants 
to demonstrate evidence of internal assets or committed financing 
sufficient to cover construction, launch, and first year operating 
costs of its entire system.<SUP>8</SUP> This is based on our experience 
that under-financed applicants have significant difficulty in the 
capital markets in raising hundreds of millions of dollars needed to 
construct and launch a satellite system, even with a license in 
hand.<SUP>9</SUP> Requiring evidence of full financing therefore 
prevents a licensee from holding spectrum while it attempts to procure 
financing, to the detriment of qualified applicants that can 
immediately go forward with systems and provide service to the public. 
We require FSS operators to meet this strict standard because the 
number of applications we receive in the traditional C- and Ku-band FSS 
frequencies regularly exceeds the number we can authorize.<SUP>10</SUP>
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    \7\ See, e.g., Radiodetermination Satellite Service, 104 FCC 2d 
650 (1986), 51 FR 18444 (May 20, 1986), as corrected, 51 FR 20975 
(June 10, 1986) (Because all pending RDSS applicants could be 
accommodated and future entry was possible, the Commission required 
applicants to provide only a detailed business plan). See generally 
Amendment of the Commission's Rules to Establish Rules and Policies 
Pertaining to a Mobile Satellite Service in the 1610-1626/2483.5-
2500 MHz Frequency Bands, Report and Order, at para. 26, 9 FCC Rcd 
5936 (1994), 59 FR 53294 (October 21, 1994) (Big LEO Report and 
Order).
    \8\ See 47 CFR 25.140(b)-(e).
    \9\ See, e.g., National Exchange Satellite, Inc., 7 FCC Rcd 1990 
(Com. Car. Bur. 1992); Rainbow Satellite, Inc., Mimeo No. 2584 
(Com.Car. Bur., released Feb. 14, 1985); United States Satellite 
Systems, Inc., Mimeo No. 2583 (Com.Car. Bur., released Feb. 14, 
1985) (domestic satellite licenses declared null and void for 
failure to begin implementation as required by license). In 
addition, Geostar Corporation, a start-up company licensed in the 
radiodetermination satellite service, declared bankruptcy nearly 
five years after its licenses were issued. It had not built any of 
its dedicated satellites.
    \10\ Licensing Space Stations in the Domestic Fixed-Satellite 
Service, FCC 85-395, CC Docket No. 85-135 (released August 29, 
1985), 50 FR 36071 (September 5, 1985).
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    5. When we proposed to apply the existing FSS financial requirement 
to 28 GHz FSS systems, the GSO applicants had not yet agreed to an 
orbital assignment arrangement that would accommodate them all. In 
light of their plan, we can grant all of the first round GSO FSS 
applications, with other ``clear'' orbit locations remaining available 
for additional GSO FSS satellites. Further, granting Teledesic's NGSO 
FSS system application does not preclude future Ka-band NGSO FSS 
systems. Thus, authorizing all proposed first-round systems does not 
preclude use of this band by other applicants for FSS systems. We 
therefore will waive the FSS financial requirement for first-round 
applicants, as reflected in their individual licenses. We intend to 
enforce system milestone schedules strictly to ensure that any 
licensees who are not able to proceed do not continue to hold valuable 
orbit and spectrum resources. Further, we emphasize that this waiver 
applies to this processing group only, and that the application of our 
financial requirements to any future Ka-band processing round will be 
addressed in the context of that processing round.

Technical Qualifications

    6. Applicants for satellite systems must also meet certain 
technical qualification standards. The Ka-band offers several technical 
advantages that allow for the implementation of broadband, high 
capacity FSS applications that otherwise could not be provided in the 
C- or Ku-bands. For example, the shorter wavelengths in this higher 
frequency band support the use of transmit-receive earth station 
antennas significantly smaller than those now in use. They also support 
significantly smaller satellite spot beams that facilitate frequency 
reuse, and wider bandwidth and high data rate services.<SUP>11</SUP> 
However, operations at the Ka-band frequencies are also very 
susceptible to rain fade and other atmospheric attenuations.
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    \11\ See, e.g., Comments of Hughes at 7.
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    7. Many commenters urge the Commission to confirm that the 
Commission's existing FSS technical requirements and policies apply to 
satellite systems in the Ka-band.<SUP>12</SUP> As indicated previously, 
we will, in general, apply existing FSS rules, including technical 
qualifications requirements, to commercial satellite systems in the Ka-
band. In the following text, we discuss modifications or clarifications 
to several rules that we adopt to accommodate efficient and state-of-
the art use of the Ka-band.
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    \12\ See, e.g., Comments of GE at 20-21 and Hughes at 35-36.
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GSO Specific Requirements

    8. The Commission's rules currently require that an applicant for a 
GSO FSS space station authorization demonstrate how the proposed space 
station complies with 2 degree orbital spacing requirements. 47 CFR 
25.140. In the Third NPRM, we proposed to apply 2 degree spacing to the 
Ka-band and requested comment on this proposal. This proposal was 
supported by several commenters.<SUP>13</SUP> GE, in fact, suggested 
that the Commission explore the possibility of 1 degree spacing in the 
Ka-band.<SUP>14</SUP> NetSat28, in contrast, argued that the 
characteristics of this higher frequency band and the innovative 
technology proposed for this band support a different approach to 
orbital spacing, specifically, 8 degree spacing.<SUP>15</SUP> However, 
the orbit assignment plan submitted by the GSO applicants, including 
NetSat28, spaces their satellites at 2 degree intervals.
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    \13\ See, e.g., Comments of Hughes at 35-36; GE Americom at 20.
    \14\ Comments of GE at 20.
    \15\ Reply Comments of NetSat28 at 2.
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    9. We believe it is in the public interest, as we establish the Ka-
band satellite service, to continue our policy of maximizing the number 
of satellites that can be accommodated in orbit. If we were to move to 
GSO orbital arc spacing greater than 2 degrees at this time, we would 
not be able to accommodate all potential service providers in this 
first processing round. By submitting a plan using 2 degree spacing, 
the GSO satellite applicants suggest they can implement viable systems 
with these spacings. Further, there is nothing in the record to support 
a finding that one degree spacing, with its increased potential for 
interference, is feasible at this time. Consequently, we will apply the 
existing 2 degree spacing policy to U.S. licensed non-Government Ka-
band orbital assignments.
    10. To accommodate maximum entry while facilitating efficient use 
of in-orbit resources, we limit, in part 25, the number of orbit 
locations a qualified FSS applicant may be initially 
assigned.<SUP>16</SUP> Historically, this limitation pertained to the 
provision of domestic FSS in the United States, the objectives being to 
avoid prematurely assigning an excessive number of orbital locations to 
an existing licensee for expansion of its domestic system and to 
promote entry opportunity in the bands.<SUP>17</SUP> Many of the 
systems proposed in the Ka-band propose to serve geographic areas 
around the world. In addition, the applicants have also agreed to an 
arrangement that accommodates all proposed satellites. We also licensed 
thirteen different GSO FSS system providers in the band and expect that 
there will be a mix of competitors for services in the band. We believe 
it is in the public interest to allow these systems, especially those 
proposing to serve different geographic areas, to proceed as proposed 
at this point. Therefore, we will waive, for this processing round 
only, any rules that limit the number of orbit locations that may be 
assigned to any applicant.
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    \16\ See 47 CFR 25.140(f).
    \17\ See Licensing Space Stations in the Domestic Fixed-
Satellite Service, 50 FR 36071 (September 5, 1985).
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    11. We have long recognized the cost benefits in implementing 
several service bands on a single space platform. Consequently, as we 
do with C- and Ku-band satellites, we will permit Ka-band licensees to 
build hybrid satellites where they are assigned to corresponding C- and 
Ka-band, or Ku-band and Ka-band orbit locations,

[[Page 61451]]

provided all other technical and service requirements for the 
particular band are met. Any licensee that wishes to consolidate co-
located satellites into a hybrid satellite must file an application to 
modify its underlying licenses.

NGSO Specific Requirements

    12. In the Third NPRM, we asked whether spectrum efficiency or 
service availability standards should be adopted for NGSO FSS systems 
in the Ka-band. Teledesic was the only party who filed timely comments 
regarding NGSO FSS service rule issues.
    13. Teledesic suggests that the Commission consider adopting some 
minimum domestic and international geographic coverage requirements to 
ensure that NGSO FSS satellite systems, which are inherently global in 
nature, provide universal access throughout the U.S. and the 
world.<SUP>18</SUP> We agree that NGSO FSS systems are capable of 
fostering a seamless global communications network and we believe that 
it serves the public interest to adopt a coverage area requirement for 
these systems. Consequently, we are adopting the same coverage 
requirements for 28 GHz systems that we apply to ``Big LEO'' systems 
operating in the 1610-1626.5 / 2483.5-2500 MHz bands.<SUP>19</SUP> 
Specifically, we will require 28 GHz NGSO FSS systems to be capable of 
serving locations as far north as 70 degrees latitude and as far south 
as 55 degrees latitude for at least 75% of every 24-hour period. We 
will also require 28 GHz NGSO FSS systems to be capable of providing 
FSS on a continuous basis throughout the fifty states, Puerto Rico, and 
the U.S. Virgin Islands.
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    \18\ Comments of Teledesic at 28.
    \19\ See Big LEO Report and Order at para. 24; 47 CFR 
25.143(b)(2)(ii); (b)(2)(iii).
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    14. As always, we seek to foster a climate that maximizes 
competition and promotes multiple entry of systems. Resolution 118 
(WRC-95) requests that the ITU-R study, among other things, the sharing 
between NGSO FSS networks in the Ka-band. ITU-R Working party-4A 
studies have identified, and the Commission recognizes, two sharing 
scenarios: (1) sharing between or among ``homogeneous'' NGSO FSS 
systems, and (2) sharing between or among ``non-homogeneous'' NGSO FSS 
systems. ``Homogeneous'' NGSO FSS systems are assumed to have orbits 
with approximately the same altitude and high inclination angle. 
Similar technical parameters are not assumed for ``non-homogeneous'' 
NGSO FSS systems. Under scenario (1), sharing between multiple 
``homogeneous'' NGSO FSS systems is feasible by interleaving the 
orbital planes of different NGSO FSS constellations. It may also be 
possible to interleave satellites from different constellations within 
the same orbital plane. Because each constellation's satellites are 
separated spatially under scenario (1), there is no ``in-line'' 
interference between NGSO FSS systems, except near the polar regions. 
This particular sharing scenario requires minimum interaction between 
the different NGSO FSS systems. ITU-R studies assert that multiple 
``homogeneous'' NGSO FSS systems can be accommodated using these 
methods. However, it is important to note that sharing between or among 
``homogeneous'' systems imposes similar uniform design constraints on 
subsequent NGSO FSS systems implemented in the same frequency 
bands.<SUP>20</SUP>
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    \20\ Design constraints include limitations on the number of 
orbital planes, orbital plane inclination, orbit altitude, and earth 
station antenna patterns.
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    15. A second sharing scenario exists between or among ``non-
homogeneous'' NGSO FSS systems. Because of the inherently large number 
of orbital plane crossings, it is not possible to maintain spatial 
separation between satellites in multiple NGSO FSS 
constellations.<SUP>21</SUP> Consequently, other types of mitigation 
techniques (e.g., exclusion zones, satellite diversity, or high gain 
antennas) would need to be employed by each NGSO FSS system. The 
Commission also recognizes that further division of the spectrum, which 
would result in a reduction of each system's capacity, is also a 
feasible alternative if sharing proves to be unacceptable to any 
particular NGSO FSS system.
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    \21\ ``In-line'' interference occurs when satellites from 
separate NGSO FSS systems operate in the region where each system's 
orbital planes cross.
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    16. We are not now in a position to determine exactly how many non-
Government NGSO FSS systems, and in particular, how many ``non-
homogeneous'' type systems, will be able to operate in the 18.8-19.3/
28.6-29.1 GHz bands. Further, we note that many satellites undergo 
design changes during implementation that could facilitate sharing 
among systems. Additionally, second generation systems usually become 
more efficient, further facilitating the operation of multiple systems. 
Consequently, we will not now mandate any specific sharing principles 
or mitigation techniques to be used in coordination between or among 
non-Government NGSO FSS systems. However, we expect all non-Government 
NGSO FSS systems to be responsible for some portion of the burden-
sharing. Specifically, we expect all NGSO FSS licensees to bear some 
portion of the technical and operational constraints necessary to 
accommodate multiple ``non-homogeneous'' NGSO FSS systems. In 
apportioning burden, it may be appropriate to consider factors such as 
whether a particular NGSO FSS satellite is already in-orbit and 
operational. If NGSO FSS non-Government systems are unable to share 
spectrum, another feasible alternative is to further divide the 
spectrum designated in the United States for non-Government NGSO FSS 
systems, between or among licensed operators. We will evaluate all 
applications for NGSO FSS systems on a case-by-case basis, revisiting 
the multiple entry issue, as necessary, as we gain more experience with 
NGSO FSS systems.

Implementing the Band Plan Domestically

    17. The 28 GHz band plan designates domestic licensing priority for 
certain non-Government services or systems in specific band segments. 
We designated co-frequency sharing between services or systems only in 
band segments where the Commission and the parties concluded it is 
technically feasible. In the 28 GHz Band First Report and Order we 
further designated domestic licensing priority for certain types of 
fixed-satellite services with respect to other types of fixed-satellite 
services in specific band segments. For example, in the 28.35-28.60 GHz 
band segments, GSO FSS systems have licensing priority over NGSO FSS 
systems, and in the 28.6-29.1 GHz segment, NGSO FSS systems have 
licensing priority over GSO FSS systems. This licensing priority 
between systems in the same service has a similar interpretation as a 
``secondary'' service with respect to a ``primary'' 
service.<SUP>22</SUP> Accordingly, we will require any service provider 
proposing to operate in a band segment in which it does not have 
licensing priority, to operate on an unprotected non-interference basis 
to the priority service. To ensure non-interfering operations, we will 
require all secondary operators to submit to the

[[Page 61452]]

Commission a technical demonstration that it can operate on a non-
harmful interference basis to the type of satellite system with 
licensing priority. This technical demonstration will be subject to 
public comment before we authorize any secondary operations in the 
bands. In addition, we will require secondary users to immediately 
cease operations upon notification of harmful interference into any 
service or system that has superior status or licensing priority in a 
particular band segment.
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    \22\ ``Secondary'' generally refers to a category of service 
with respect to other radio services. Stations of a secondary 
service shall not cause harmful interference to stations of primary 
or permitted services; cannot claim protection from harmful 
interference from stations of a primary or permitted service, but 
can claim protection from harmful interference from stations of the 
same or other secondary service(s) to which frequencies may be 
assigned at a later date. See 47 CFR 2.104(d); 47 CFR 2.105(c)(3). 
As a general matter, the Commission does not coordinate secondary 
operations with respect to primary or permitted services.
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    18. Further, all licensees must coordinate with the U.S. Government 
systems authorized in the 17.80-20.20 GHz band, in accordance with U.S. 
footnote 334 in the Table of Frequency Allocations. U.S. footnote 334 
reads as follows: ``In the band 17.80-20.20 GHz, Government space 
stations and associated earth stations in the fixed-satellite (space-
to-Earth) service may be authorized on a primary basis. For a 
Government geo-stationary satellite network to operate on a primary 
basis, the space station shall be located outside the arc measured from 
East to West, 70 deg. W to 120 deg. W. Coordination between Government 
fixed-satellite systems and non-Government systems operating in 
accordance with the United States Table of Frequency Allocations is 
required.'' <SUP>23</SUP>
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    \23\ See 47 CFR 2.106 U.S. footnote 334.
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    19. The 18.8-19.3 GHz band is designated for non-Government NGSO 
FSS use on a co-primary basis with the fixed service and with 
Government services. We require NGSO FSS systems to coordinate with any 
existing and future point-to-point fixed systems in the 
band.<SUP>24</SUP> We also designated NGSO FSS on a secondary priority 
basis in the 17.7-18.8 and 19.7-20.2 GHz band segments. As a secondary 
user, NGSO FSS operators shall not cause harmful interference to 
stations of a primary service, or higher priority FSS system, nor can 
they claim protection from harmful interference from stations of a 
primary service, or higher priority FSS system. NGSO FSS systems must 
also coordinate with the Government systems operating in the band 18.8-
19.3 GHz in accordance with U.S. footnote 334.
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    \24\ We note, however, that in a separate proceeding we have 
relocated a fixed service, the Digital Electronic Message Service 
(``DEMS'') from the 18.82-18.92 and 19.16-19.26 GHz bands to the 
24.25-24.45 and 25.05-25.25 GHz bands. See Amendment of the 
Commission's Rules to Relocate the Digital Electronic Message 
Service From the 18 GHz band to the 24 GHz band and To Allocate Band 
For Fixed Service, 12 FCC Rcd 3471 (1997), 62 FR 24576 (May 6, 
1997). This Order is subject to petitions for reconsideration.
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Earth Station Licensing

    20. We anticipate making changes to our existing part 25 
requirements for earth stations in the C- and Ku-bands to take into 
account operations at Ka-band. In fact, four GSO satellite applicants 
have submitted a petition for rulemaking to the 
Commission.<SUP>25</SUP> The Petitioners request that the Commission 
institute a rulemaking proceeding to revise part 25 of the Commission's 
rules, 47 CFR Sec. 25.101, in order to provide for the routine 
licensing of large numbers of small antenna earth stations operating in 
the 19.7-20.2/29.5-30.0 GHz bands for GSO FSS. Teledesic supports the 
Petition and further suggests the scope of the rulemaking be expanded 
to include the entire available Ka-band frequencies.<SUP>26</SUP>
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    \25\ See Routine Licensing of Large Numbers of Small Antenna 
Earth Stations Operating in the Ka-Band, Petition for Rulemaking, 
RM-9005, submitted December 20, 1996, by: GE, Loral, Lockheed Martin 
and Hughes.
    \26\ See Comments of Teledesic at 3.
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Inter-Satellite Service

    21. Many system proponents in the Ka-band propose to use inter-
satellite service (ISS) frequencies to interconnect satellites within 
their respective networks.<SUP>27</SUP> These proposed bands include 
the 22.55-23.55 GHz/32.0-33.0 GHz/54.25-58.2 GHz and 59-64 GHz bands.
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    \27\ See Applications of EchoStar, Ka-Star, Lockheed Martin, 
Hughes, Loral, Comm. Inc., and Teledesic.
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    22. One licensee, Hughes, proposes to use the 22.55-23.55 GHz and 
32.0-33.0 GHz bands for some of its inter-satellite links. These bands 
are shared on a co-equal basis with U.S. Government operations. In 
addition, one of the ``Big LEO'' systems is licensed to operate inter-
satellite links in the 22.55-23.55 GHz band. Any 28 GHz systems 
licensed to operate inter-satellite links in these bands would be 
required to coordinate with U.S. Government systems through the 
Frequency Assignment Subcommittee (FAS) of the Inter-Governmental Radio 
Advisory Committee (IRAC) and with other non-Government licensees in 
the band. At this time, we defer action on any authorizations in the 
22.55-23.55 and 32.0-33.0 GHz bands until we receive more information 
on the specific frequencies Hughes needs for its system and we have 
coordinated with the Government.
    23. The Commission and the National Telecommunications and 
Information Administration (NTIA), which has primary jurisdiction over 
Government use of spectrum, have had discussions regarding the 
potential for interference that would be associated with non-Government 
GSO or NGSO FSS operations in the 54.25-58.2 GHz and 59-64 GHz bands. 
The 54.25-58.25 GHz band appears more promising for the inter-satellite 
service to support non-Government GSO FSS operations. We are also 
working with NTIA to develop a U.S. proposal to WRC-97 for an 
allocation in the 65-71 GHz band for inter-satellite service links for 
both GSO and NGSO FSS systems.<SUP>28</SUP> We are optimistic that we 
will obtain sufficient spectrum internationally to support Ka-band 
system inter-satellite link operations. Nevertheless, we did not delay 
issuing licenses pending the allocation of suitable spectrum for inter-
satellite links. Once suitable spectrum is available, we will require 
licensees to apply for operating authority on specific operating 
frequencies. Further, because licensees will not be able to proceed 
beyond the initial phases of construction until the inter-satellite 
link issues are resolved, we did not impose any system implementation 
milestones until we grant authority to launch and operate individual 
systems using specific inter-satellite link spectrum. We will hold all 
licensees to the strict milestone schedule discussed above, once the 
respective inter-satellite frequencies are authorized. In the interim, 
all licensees are free to begin construction at their own risk. We 
recently waived the construction permit requirement for space stations. 
This decision, effective April 21, 1997, means that applicants no 
longer need Commission authorization in order to build their proposed 
satellites. Any construction prior to obtaining an operating license 
is, however, solely at the applicant's own risk and will not predispose 
the Commission to grant it launch and operating authority.<SUP>29</SUP>
---------------------------------------------------------------------------

    \28\ See ``United States Proposals No. 209 and No. 210 for the 
Work of the Conference'' (August 1997).
    \29\ See Streamlining the Commission's Rules and Regulations for 
Satellite Application and Licensing Procedures, Report and Order, 11 
FCC Rcd 21581 (1996), 62 FR 5924 (February 14, 1997) (Part 25 
Streamlining).
---------------------------------------------------------------------------

Service Rules

    24. In our DISCO I Order, we determined that all fixed-satellite 
operators in the C-band and Ku-band could elect to operate on a common 
carrier or non-common carrier basis.<SUP>30</SUP> We see no reason to 
treat satellite

[[Page 61453]]

operators in the Ka-band any differently. The Commission traditionally 
has evaluated requests to operate on a non-common carrier basis using 
the analysis set forth in National Association of Regulatory Utility 
Commissioners v. FCC,<SUP>31</SUP> (NARUC I). Under NARUC I, we may 
regulate an entity as a private carrier unless: (1) there is or should 
be any legal compulsion to serve the public indifferently; or (2) there 
are reasons implicit in the nature of the service to expect that the 
entity will in fact hold itself out indifferently to all eligible 
users.
---------------------------------------------------------------------------

    \30\ See In the Matter of Amendment to the Commission's 
Regulatory Policies Governing Domestic Fixed Satellites and Separate 
International Satellite Systems and DBSC Petition for Declaratory 
Rulemaking Regarding the Use of Transponders to provide 
international DBS Service, 11 FCC Rcd 2429, 2436 (1996), 61 FR 9946 
(March 12, 1996) (DISCO I Order).
    \31\ National Ass'n of Regulatory Utility Commissioners v. FCC, 
525 F.2d 630 (D.C. Cir.), cert. denied, 425 U.S. 992 (1976); 47 
U.S.C. Sec. 153(44).
---------------------------------------------------------------------------

    25. Several of the Ka-band FSS applicants propose to operate all 
services on a non-common carrier basis.<SUP>32</SUP> Regarding the 
first prong of NARUC I, we do not see any legal compulsion to require 
any space station licensee in the Ka-band to operate on a non-common 
carrier basis. We have already determined there is sufficient 
competitive capacity available in the C-and Ku-bands to assure the U.S. 
public ample access to fixed-satellite services.<SUP>33</SUP> In 
addition, we have licensed thirteen GSO FSS systems and one NGSO FSS 
system in the Ka-band which propose to offer a wide variety of 
broadband voice, data and video services to the U.S. domestic consumer.
---------------------------------------------------------------------------

    \32\ But see EchoStar Satellite Corporation Application for 
Authority to Construct, Launch, and Operate a Ka-Band Satellite 
System in the Fixed-Satellite Service, Order and Authorization, DA 
97-969, (released May 9, 1997). EchoStar proposes to operate its 
system on a common carrier basis.
    \33\ See DISCO I Order at para. 46.
---------------------------------------------------------------------------

    26. Regarding the second prong of NARUC I, we find there is little 
likelihood that such Ka-band licensees will hold themselves out 
indifferently to serve the public. New Ka-band offerings can be 
tailored to provide a broad array of specialized communications 
services ranging from videoconferencing to telemedicine; and these 
services may be styled to accommodate highly individualized methods of 
operation and demands of potential customers. We believe permitting Ka-
band licensees to offer services on a non-common carrier basis is in 
the public interest.

Implementation Milestones

    27. We will require each GSO FSS licensee to begin construction of 
its first satellite within one year of grant, to begin construction of 
the remainder within two years of grant, to launch at least one 
satellite into each of its assigned orbit locations within five years 
of grant, and to launch the remainder of its satellites by the date 
required by the International Telecommunication Union to assure 
international recognition and protection of these 
satellites.<SUP>34</SUP> For NGSO FSS systems, we adopt the same 
implementation schedule as we did for the Big LEOs.<SUP>35</SUP> 
Specifically, we will require NGSO FSS licensees to begin construction 
of its first two satellites within one year of the unconditional grant 
of its authorization, and complete construction of those first two 
satellites within four years of that grant. Construction for the 
remaining authorized operating satellites in the constellation must 
begin within three years of the initial authorization, and the entire 
authorized system must be operational within six years.
---------------------------------------------------------------------------

    \34\ ITU Regulations require that all satellites must be brought 
into use no later than six years from the date on which the Appendix 
4 information for that satellite was filed. However, a request for a 
three-year extension of time may be granted. The Appendix 4 
information for 28 GHz GSO systems was filed in November 1995. 
Therefore, all satellites we have authorized to operate in the 28 
GHz spectrum must be launched by November 2004.
    \35\ See Big LEO Report and Order at para. 189.
---------------------------------------------------------------------------

Reporting Requirements

    28. We will also follow the new part 25 rules for reporting 
requirements for FSS systems.<SUP>36</SUP> Specifically, a licensee 
will be required to file an annual report with the Commission 
describing: the status of satellite construction and anticipated launch 
dates, including any major problems or delays encountered; a listing of 
any non-scheduled transponder (GSO FSS) or satellite (NGSO FSS) outages 
for more than 30 minutes; and the cause(s) of such outages; and a 
detailed description of the utilization made of each transponder (GSO 
FSS) or satellite (NGSO FSS) on each of the in-orbit 
satellites.<SUP>37</SUP>
---------------------------------------------------------------------------

    \36\ See Part 25 Streamlining, supra, n. 29.
    \37\ See 47 CFR Sec. 25.210(j)(1)(2)(3).
---------------------------------------------------------------------------

International Operations

    29. The United States is under a treaty obligation, in connection 
with its membership in the ITU, to coordinate all U.S. authorized 
services internationally. The ITU's coordination procedures are 
intended to ensure that the operations of one country's satellites do 
not cause or receive harmful interference to or from the operations of 
another country's satellites. The procedure for effecting coordination 
of a satellite system is a three-step process consisting of (1) advance 
publication, where a country makes known its plans to implement a 
satellite system at particular frequencies and orbital parameters 
(e.g., location), (2) coordination, where technical agreements are 
negotiated and reached among countries to ensure interference-free 
operations of the planned satellites, and (3) notification, where the 
frequency assignment is recorded in the ITU's Master International 
Frequency Register. Once these processes have been completed, a 
satellite system is entitled to international recognition and is 
protected against interference from all existing and future satellites.
    30. We have advance published GSO and NGSO FSS systems and have 
initiated coordination with the ITU. We have also submitted 
notification information for a NGSO FSS system.<SUP>38</SUP> To 
facilitate these processes, we will continue to require licensees to 
provide us with all of the information required to complete the 
coordination and notification process.
---------------------------------------------------------------------------

    \38\ Because coordination procedures were not in place for NGSO 
FSS satellite systems at the time the Appendix 3 information was 
filed, it was possible for certain NGSO FSS and NGSO MSS feeder link 
systems to move from the advance publication (step 1) process to the 
notification (step 3) process.
---------------------------------------------------------------------------

    31. The NTIA may authorize Government GSO FSS and NGSO FSS 
operations on a primary basis in the band 17.8-20.2 GHz in accordance 
with US footnote 334. Where international coordination is required for 
these Government systems, the NTIA will separately coordinate the 
Government GSO and NGSO operations in accordance with the appropriate 
ITU regulations.
    32. Because the 28 GHz band is allocated and used worldwide for a 
variety of technically incompatible terrestrial and satellite services, 
we expect that international coordination of our 28 GHz band non-
Government systems will be complex. Specifically, the 27.5-30.0/17.7-
20.2 GHz bands are allocated domestically and internationally to the 
fixed service, which includes LMDS, and to the FSS, which includes both 
GSO and NGSO operations. MSS system feeder link operations may also be 
provided under FSS allocations. As we discussed previously in paragraph 
6, we have determined the only way to address these conflicting 
allocations and proposed usage was to adopt a band plan that, in 
essence, divides the 27.5-30.0/17.7-20.2 GHz band into several band 
segments, each of which is to be used primarily for LMDS, GSO FSS, NGSO 
FSS, or MSS feeder link operations.<SUP>39</SUP> As explained below, we 
believe it is in the public interest to use this plan as the basis for 
coordinating U.S. licensed 28 GHz band satellite systems 
internationally. We outline herein the procedures we intend to

[[Page 61454]]

follow for coordinating U.S.-licensed non-Government satellite systems 
with each other in other parts of the world. In addition, we outline 
the procedures we will generally follow when coordinating U.S.-licensed 
non-Government 28 GHz satellite systems with both satellite and 
terrestrial systems licensed by other countries. At the same time, we 
recognize that other countries are able to implement their systems in 
accordance with their domestic requirements and the International Radio 
Regulations.
---------------------------------------------------------------------------

    \39\ See Report and Order, Paras. 39-49.
---------------------------------------------------------------------------

    33. Because we have licensed multiple non-Government 28 GHz 
satellite systems and several of these systems are designed to operate 
on a global basis, we will likely be faced with the responsibility of 
coordinating the international operations of two or more non-Government 
satellite systems with each other.<SUP>40</SUP> The record in this 
proceeding does not support a finding that sharing between ubiquitous 
non-Government GSO and NGSO FSS systems is technically feasible at this 
time without mitigation.<SUP>41</SUP> This was the impetus for adopting 
a band sharing plan at 28 GHz that designated separate band segments 
for primary GSO FSS, NGSO FSS and feeder link operations. Due to the 
potential coordination difficulties that may lead to delay of services, 
we believe it is in the public interest to require U.S. non-Government 
licensees to operate in accordance with our 28 GHz band plan throughout 
the world, with certain exceptions as described below. Without such a 
requirement, we believe we would jeopardize the successful operation of 
these systems outside of the United States.
---------------------------------------------------------------------------

    \40\ This does not include the coordination of earth stations 
accessing U.S.-licensed systems, since these earth stations belong 
to the administration where the earth station is located.
    \41\ However, satisfactory ways of co-frequency sharing by NGSO 
FSS and GSO FSS networks can be found where the burden is placed on 
either the GSO or NGSO network. Mitigation techniques to reduce 
interference can be evaluated through the coordination process.
---------------------------------------------------------------------------

    34. In the Big LEO proceeding, where we also adopted service rules 
for U.S. global satellite systems, we did not require non-Government 
licensees to operate in accordance with the domestic band plan outside 
the United States.<SUP>42</SUP> This approach resulted in significant 
delay in the implementation of their systems, however. Eventually, the 
Big LEO licensees determined that in order for each system to operate 
on a global basis without coordination conflicts amongst themselves, 
the best way was to conform their international operations to the 
domestic band plan set out in the Big LEO Report and Order. Our 
experience in the Big LEO proceeding leads us to believe that it is in 
the public interest to adopt a policy now for coordination of these 
U.S. licensed global non-Government systems in the 28 GHz band to 
ensure that coordination can proceed and services can be provided to 
the public in a timely manner.<SUP>43</SUP>
---------------------------------------------------------------------------

    \42\ See Big LEO Report and Order at para. 231.
    \43\ See ex parte filing of Lockheed Martin filed (May 7, 1997) 
at 8, supporting this policy: ``Now that the 28 GHz band plan has 
been adopted in the United States, the Commission staff is 
considering applying the same frequency plan, including specific 
licensing priorities (i.e., ``primary'' and ``secondary'' 
designation), to the operation of U.S. licensed satellites abroad. 
Lockheed Martin supports the adoption of such measures.''
---------------------------------------------------------------------------

    35. While we envision coordinating U.S. licensed non-Government 
systems in accordance with the 28 GHz band segmentation plan throughout 
the world, we recognize that there will be some exceptions. For 
example, due to the need to accommodate non-U.S. satellite systems that 
had entered into the ITU advance publication, coordination and 
notification processes before the U.S. systems, the United States has 
negotiated agreements with other administrations to permit operation of 
specific satellite systems in certain geographic areas in frequency 
bands that are not entirely in conformance with the U.S. 28 GHz band 
plan. Accordingly, we will adhere to any coordination or consultation 
agreements that were initiated before the 28 GHz band plan was adopted 
in July 1996. In addition, these non-conforming arrangements could 
potentially impact how we decide to coordinate U.S. non-Government 
satellite systems in other portions of the 28 GHz band. For example, we 
may seek to make up for some of the spectrum ``lost'' to these systems 
in the agreement in other portions of the band. We anticipate that 
these deviations from our band plan will be the rare exception for the 
implementation of the U.S. band plan by U.S. non-Government satellite 
system licensees worldwide.
    36. Last, the U.S. band plan does not distinguish between GSO and 
NGSO FSS systems as secondary users to LMDS in the 27.5 to 28.35 GHz 
uplink band. Rather, generic FSS is designated as the secondary service 
in the U.S. We envision only limited FSS uplink operations, such as 
gateway operations, will be able to operate on a non-interference basis 
to LMDS in the United States. In those cases where other countries use 
the 27.5-28.35 GHz band segment for FSS, we intend to provide U.S. non-
Government GSO FSS systems with coordination priority over U.S. non-
Government NGSO FSS systems in this band. This is because the U.S. band 
plan designates the corresponding downlink frequency band at 17.7-18.8 
GHz on a priority basis to the GSO FSS, with NGSO FSS operations on a 
non-interference basis only to any service or system that has superior 
status or licensing priority. If the uplink frequencies are not treated 
in a similar manner, the downlink designation would be meaningless. We 
do not believe this to be the intended result of the band plan. We will 
therefore give priority to U.S. GSO systems vis-a-vis U.S. NGSO systems 
at 27.5-28.35 GHz.
    37. Therefore, as the coordinating administration for these 
systems, we will require any U.S. non-Government satellite system 
operating inconsistently with the U.S. 28 GHz band plan--and, by 
definition, its coordinated parameters--to cease operations if it 
causes harmful interference to any U.S. non-Government system operating 
in conformance with the U.S. band plan for non-Government systems, or 
to any U.S. Government system operating in accordance with US footnote 
334. (The non-Government band plan is not applicable for GSO and NGSO 
Government operations which are authorized on a primary basis across 
the 17.8-20.2 GHz band.)
    38. In coordinating U.S.-licensed non-Government systems with 
systems of other Administrations, we will, as always, follow the 
applicable coordination procedures set out in the ITU Radio Regulations 
for the particular band segment being coordinated. For example, 
satellite system coordination may implicate ITU Radio Regulation No. 
S22.2 (2613) for instances where NGSO FSS systems and GSO FSS systems 
are proposed. This regulation applies in certain segments of the 28 GHz 
band and requires, in those bands, that NGSO FSS systems cease or 
reduce to a negligible level their operations whenever there is 
unacceptable interference caused to a GSO FSS system. Consequently, in 
coordinating and consulting U.S. non-Government FSS systems with other 
countries' FSS systems in bands where this provision applies, we expect 
that consultations or coordinations between administrations will result 
in operational or technical considerations which will prevent 
unacceptable interference to GSO FSS systems. In bands where there is a 
primary allocation to the fixed service and FSS, we will coordinate 
U.S. satellite system operations on an equal basis to the fixed 
stations, consistent with established ITU Radio Regulations and 
Recommendations.

[[Page 61455]]

    39. The Commission can authorize operations of satellite systems in 
the United States only. Operation and use of these systems in 
geographic areas outside the United States requires appropriate 
authorizations from other countries in which the U.S. licensee wishes 
to operate earth stations. In order to ensure that Ka-band satellite 
service is truly global, we adopt limitations on Ka-band licensees' 
ability to enter into exclusive arrangements with other countries 
concerning communications to or from the United States similar to those 
in place for Big LEO systems.<SUP>44</SUP> An exclusive agreement may 
foreclose other FSS licensees from serving a foreign market, preventing 
that licensee from providing global service. Further, such an 
arrangement may be inconsistent with our band plan. We intend to 
construe the restrictions on exclusionary arrangements bearing in mind 
that spectrum coordination and availability in particular countries may 
limit the number of systems that can provide service to that country. 
Nevertheless, our intent will be to further the implementation and use 
of multiple satellite systems in other administrations.
---------------------------------------------------------------------------

    \44\ 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 band, Memorandum Opinion and Order, 
11 FCC Rcd 12861 (1996) at Paras. 54-55, 61 FR 9944 (March 12, 
1996); 47 CFR 25.143(h) (prohibiting Big LEO licensees from entering 
into exclusive arrangements to serve particular countries).
---------------------------------------------------------------------------

Other Requirements

    40. To discourage speculators and to prevent unjust enrichment of 
those who do not implement their proposed systems, we adopt a rule that 
prohibits any Ka-band licensee from selling a bare license for a 
profit. This provision is not intended to prevent the infusion of 
capital by either debt or equity financing. Nevertheless, any such 
transaction will be monitored to ensure that it does not constitute an 
evasion of the anti-trafficking provision.<SUP>45</SUP>
---------------------------------------------------------------------------

    \45\ See Big Leo Report and Order at para. 203; 47 CFR 
Sec. 25.143(h) (prohibits Big LEO licensees from selling a bare 
license for profit).
---------------------------------------------------------------------------

Final Regulatory Flexibility Analysis

    41. As required by the Regulatory Flexibility Act, 
(RFA),<SUP>46</SUP> an Initial Regulatory Flexibility Analysis (IRFA) 
was incorporated in the Third NPRM in this proceeding. The Commission 
sought written public comment on the proposals in the Third NPRM, 
including comment on the IRFA. This Final Regulatory Flexibility 
Analysis (FRFA), concerning the Third Report and Order, conforms to the 
RFA.<SUP>47</SUP>
---------------------------------------------------------------------------

    \46\ See 5 U.S.C. Sec. 603. The RFA, see 5 U.S.C. Sec. 601 et 
seq., has been amended by the Contract with America Advancement Act 
of 1996, Pub. L. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of 
the CWAAA is The Small Business Regulatory Enforcement Fairness Act 
of 1996 (SBREFA).
    \47\ See 5 U.S.C. Sec. 604.
---------------------------------------------------------------------------

I. Need for and Objectives of the Third Report and Order

    42. In this decision, the Commission, adopts licensing 
qualification rules and service rules for fixed-satellite service 
systems in the Ka-band. The purpose of this action is to help launch a 
new broadband satellite service well-suited to compete in the domestic 
and global marketplace. In order to ensure the rapid and successful 
implementation of new FSS systems in the Ka-band, the Commission has 
used the existing FSS system rules as a foundation and has modified 
these rules to the extent necessary to reflect the nature of operations 
at Ka-band. The decision promotes efficiency in licensing and use of 
the electromagnetic spectrum. In addition we expect that the licensing 
framework we have set out for the Ka-band will aid in the development 
of competitive and innovative satellite systems.

II. Summary of Significant Issues Raised by Public Comments in Response 
to the Initial Regulatory Flexibility Analysis

    43. No comments were received specifically in response to the IRFA. 
However, in order to minimize any barriers for entry into this new 
satellite market for small entities, Commission staff spent months 
encouraging and working with all of the commercial GSO FSS applicants 
to reach agreement on an orbital assignment plan to accommodate all 
first-round applicants. As discussed in the Third Report and Order, the 
applicants did reach agreement regarding orbit locations. Therefore we 
are able to waive our financial qualification requirement and not look 
to current financial ability as a prerequisite to a license grant. By 
licensing all current commercial system applicants, we enable small 
entities and start-up companies the opportunity to compete in the 
capital intensive satellite industry.

III. Description and Estimate of the Number of Small Entities to Which 
Rules Will Apply

    44. The Commission has not developed a definition of small entities 
applicable to satellite service licensees. Therefore, the applicable 
definition of small entity is the definition under the Small Business 
Administration (SBA) rules applicable to Communications Services ``Not 
Elsewhere Classified.'' This definition provides that a small entity is 
expressed as one with $11.0 million or less in annual 
receipts.<SUP>48</SUP> According to the Census Bureau data, there were 
a total of 848 communications services in operation in 1992 that fall 
under the category of Communications Services, Not Elsewhere 
Classified. Of those, approximately 775 reported annual receipts of 
$9,999 million or less and qualify as small entities.<SUP>49</SUP> The 
census report does not provide more precise data.
---------------------------------------------------------------------------

    \48\ 13 CFR 121.201, Standard Industrial Classification (SIC) 
Code 4899.
    \49\ 1992 Economic Census Industry and Enterprise Receipts Size 
Report, Table 2D, SIC 4899 (U.S. Bureau of the Census data under 
contract to the Office of Advocacy of the U.S. Small Business 
Administration).
---------------------------------------------------------------------------

    45. Describing and estimating the number of small entities these 
rules will impact is made difficult by a number of factors. First of 
all, information from the Satellite Industry Association and financial 
analysts who specialize in this market indicate there are few firms 
that could be traditionally thought of as small businesses. They point 
to the fact that this is a capital intensive industry that requires 
``significant partner funding and/or contract commitments prior to 
approaching commercial financing sources.'' <SUP>50</SUP> In addition, 
estimates of employment in the commercial satellite service industry, 
another measure of small business status, can vary widely.<SUP>51</SUP>
---------------------------------------------------------------------------

    \50\ See ``Financing the Final Frontier: Funding Commercial 
Space Activities'' Bear Stearns, Global Space & Satellite Finance 
Report.
    \51\ For example, American Mobile Satellite Corp is reported to 
have 45 employees by the Satellite Industry Association; 317 
employees by Satellite Industry Analyst ``BZW.''
---------------------------------------------------------------------------

    46. Space Stations (Geostationary). Commission records reveal that 
there are 37 space station licensees. We do not request nor collect 
annual revenue information, and thus are unable to estimate the number 
of geostationary space stations that would constitute a small business 
under the SBA definition.
    47. Space Stations (Non-Geostationary). There are six Non-
Geostationary Space Station licensees, of which only one system is 
operational. We do not request nor collect annual revenue information, 
and thus are unable to estimate the number of non-geostationary space 
stations that would constitute a small business under the SBA 
definition.
    48. We have also recently authorized thirteen commercial GSO FSS 
satellite systems in the Ka-band and one

[[Page 61456]]

commercial NGSO FSS system to construct, launch, and operate in the Ka-
band, conditioned on compliance with the licensing and service rules we 
adopt in this Third Report and Order. Therefore there are no small 
businesses currently providing these types of broadband interactive 
services in the Ka-band.

IV. Description of Projected Reporting, Recordkeeping and Other 
Compliance Requirements

    49. The Commission's existing rules in part 25 on FSS operations 
contain reporting requirements for FSS systems. In this Third Report 
and Order, we adopt no new reporting requirements for FSS operations in 
the Ka-band and state that we will follow the new part 25 rules for 
reporting requirements for FSS systems.<SUP>52</SUP> These requirements 
are specifically stated in paragraph 60 of the Third Report and Order. 
It is likely that the entities filing the reports will require no 
professional skills for the preparation of such requests.
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    \52\ See Part 25 Streamlining, n. 29, supra.
---------------------------------------------------------------------------

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

    50. As part of our licensing qualifications standard for the FSS, 
the Commission has in the past applied rigorous financial qualification 
standards when the authorization of one applicant will not prevent 
another qualified applicant from going forward with a proposal in the 
same service. In the Third NPRM we proposed to apply the existing FSS 
rules to the Ka-band, including this strict financial standard. Several 
of the experienced and well financed satellite service providers such 
as Hughes Communications, GE Americom and Loral supported this proposal 
as a way to get service to the public in an efficient manner.
    51. In order to minimize any barriers for entry into this new 
satellite market for small entities, Commission staff spent months 
encouraging and working with all of the commercial GSO FSS applicants 
to reach agreement on an orbital assignment plan to accommodate all 
first-round applicants. As discussed in the Third Report and Order, the 
applicants did reach agreement regarding orbit locations. Therefore we 
are able to waive our financial qualification requirement and not look 
to current financial ability as a prerequisite to a license grant. By 
licensing all current commercial system applicants, we enable small 
entities and start-up companies the opportunity to compete in the 
capital intensive satellite industry.

VI. Report to Congress

    52. The Commission shall send a copy of this Final Regulatory 
Flexibility Analysis, along with this Third Report and Order, in a 
report to Congress pursuant to the Small Business Regulatory 
Enforcement Fairness Act of 1996, 5 U.S.C. Sec. 801(a)(1)(A). A copy of 
this FRFA will also be published in the Federal Register.

Ordering Clauses

    53. Accordingly, It is ordered that part 25 of the Commission's 
rules are amended as set forth below and will become effective January 
20, 1998, with the exception of Sec. 25.145(g), which will become 
effective upon OMB approval. This action is taken pursuant to Sections 
4 and 303 (r) of the Communications Act of 1934, as amended 47 U.S.C. 
Secs. 154, 303(r), and Section 201(c) of the Communications Satellite 
Act of 1962, 47 U.S.C. Sec. 721(c).

List of Subjects in 47 CFR 25

    Satellites.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

Rule Changes

PART--25 SATELLITE COMMUNICATIONS

    1. The authority citation for part 25 continues to read as follows:

    Authority: Secs. 25.101 to 25.601 issued under Sec. 4, 48 Stat. 
1066, as amended; 47 U.S.C. 154. Interpret or apply secs. 101-104, 
76 Stat. 419-427; 47 U.S.C. 701-744; 47 U.S.C. 554.

    2. Section 25.145 is added to read as follows:


Sec. 25.145  Licensing conditions for the Fixed-Satellite Service in 
the 20/30 GHz bands.

    (a) Except as provided in Sec. 25.210(b), in general all rules 
contained in this part apply to Fixed-Satellite Service in the 20/30 
GHz bands.
    (b) System License. Applicants authorized to construct and launch a 
system of technically identical non-geostationary satellite orbit 
satellites will be awarded a single ``blanket'' license covering a 
specified number of space stations to operate in a specified number of 
orbital planes.
    (c) In addition to providing the information specified in 
Sec. 25.114, each non-geostationary satellite orbit applicant shall 
demonstrate the following:
    (1) That the proposed system be capable of providing fixed-
satellite services to all locations as far north as 70 deg. latitude 
and as far south as 55 deg. latitude for at least 75% of every 24-hour 
period; and
    (2) That the proposed system is capable of providing fixed-
satellite services on a continuous basis throughout the fifty states, 
Puerto Rico and the U.S. Virgin Islands, U.S.
    (d) Considerations involving transfer or assignment applications. 
(1) ``Trafficking'' in bare licenses issued pursuant to paragraph (b) 
of this section is prohibited, except with respect to licenses obtained 
through a competitive bidding procedure.
    (2) The Commission will review a proposed transaction to determine 
if the circumstances indicate trafficking in licenses whenever 
applications (except those involving pro forma assignment or transfer 
of control) for consent to assignment of a license, or for transfer of 
control of a licensee, involve facilities licensed pursuant to 
paragraph (b) of this section. At its discretion, the Commission may 
require the submission of an affirmative, factual showing (supported by 
affidavits of a person or persons with personal knowledge thereof) to 
demonstrate that no trafficking has occurred.
    (3) If a proposed transfer of radio facilities is incidental to a 
sale of other facilities or merger of interests, any showing requested 
under paragraph (d)(2) of this section shall include an additional 
exhibit which:
    (i) Discloses complete details as to the sale of facilities or 
merger of interests;
    (ii) Segregates clearly by an itemized accounting, the amount of 
consideration involved in the sale of facilities or merger of interest; 
and
    (iii) Demonstrates that the amount of consideration assignable to 
the facilities or business interests involved represents their fair 
market value at the time of the transaction.
    (e) Prohibition of certain agreements. No license shall be granted 
to any applicant for a space station in the fixed-satellite service 
operating in the 20/30 GHz band if that applicant, or any persons or 
companies controlling or controlled by the applicant, shall acquire or 
enjoy any right, for the purpose of handling traffic to or from the 
United States, its territories or possession, to construct or operate 
space segment or earth stations, or to interchange traffic, which is 
denied to any other United States company by reason of any concession, 
contract, understanding, or working arrangement to which the Licensee 
or any persons or

[[Page 61457]]

companies controlling or controlled by the Licensee are parties.
    (f) Implementation milestone schedule. Each GSO FSS licensee in the 
20/30 GHz band will be required to begin construction of its first 
satellite within one year of grant, to begin construction of the 
remainder within two years of grant, to launch at least one satellite 
into each of its assigned orbit locations within five years of grant, 
and to launch the remainder of its satellites by the date required by 
the International Telecommunications Union to assure international 
recognition and protection of those satellites. Each NGSO FSS licensee 
in the 20/30 GHz band will be required to begin construction of its 
first two satellites within one year of the unconditional grant of its 
authorization, and complete construction of those first two satellites 
within four years of that grant. Construction of the remaining 
authorized operating satellites in the constellation must begin within 
three years of the initial authorization, and the entire authorized 
system must be operational within six years.
    (g) Reporting Requirements. All licensees in the 20/30 GHz band 
shall, on June 30 of each year, file a report with the International 
Bureau and the Commission's Columbia Operations Center, 9200 Farm House 
Lane, Columbia, MD 21046 containing the following information:
    (1) Status of space station construction and anticipated launch 
date, including any major problems or delay encountered;
    (2) A listing of any non-scheduled space station outages for more 
than thirty minutes and the cause(s) of such outages; and
    (3) Identification of any space station(s) not available for 
service or otherwise not performing to specifications, the cause(s) of 
these difficulties, and the date any space station was taken out of 
service or the malfunction identified.
    3. Section 25.210 is amended by redesignating paragraphs (c) 
through (j) as paragraphs (e) through (l); redesignating paragraph (b) 
as paragraph (c); and adding new paragraphs (b) and (d) to read as 
follows:


Sec. 25.210  Technical requirements for space stations in the Fixed-
Satellite Service.

* * * * *
    (b) All space stations in the Fixed-Satellite Service in the 20/30 
GHz band shall use either orthogonal linear or orthogonal circular 
polarization. Those space stations utilizing orthogonal linear 
polarization shall also comply with paragraph (a) of this section.
* * * * *
    (d) All space stations in the Fixed Satellite Service in the 20/30 
GHz band shall employ state-of-the-art full frequency reuse either 
through the use of orthogonal polarizations within the same beam and/or 
through the use of spatially independent beams.
* * * * *
    4. Section 25.204(g) is added to read as follows:


Sec. 25.204  Power limits.

* * * * *
    (g) All earth stations in the Fixed Satellite Service in the 20/30 
GHz band shall employ uplink adaptive power control or other methods of 
fade compensation such that the earth station transmissions shall be 
conducted at the power level required to meet the desired link 
performance while reducing the level of mutual interference between 
networks.

[FR Doc. 97-30205 Filed 11-17-97; 8:45 am]
BILLING CODE 6712-01-P


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