[Federal Register Volume 60, Number 90 (Wednesday, May 10, 1995)]
[Proposed Rules]
[Pages 24817-24820]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11286]



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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 25

[IB Docket No. 95-41; FCC 95-146]


Fixed Satellite Systems

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Commission is hereby proposing rules that would eliminate 
the distinction between our Transborder Policy and Separate 
International Satellite Systems (Separate Systems) Policy and to treat 
all U.S.-licensed geostationary fixed-satellites under a single 
regulatory scheme. Our action is in response to applications from 
[[Page 24818]] domestic and international satellite system operators 
for authority to provide both domestic and international services. In 
addition, the Executive Branch has recommended that all U.S.-licensed 
fixed-satellites be subject to the same regulatory scheme. Permitting 
U.S. operators to provide the widest range of service offerings 
technically feasible will allow them to use their satellites more 
efficiently and to provide innovative and customer-tailored services.

DATES: Comments must be submitted on or before June 8, 1995 and reply 
comments must be submitted on or before June 23, 1995.

ADDRESSES: Comments and reply comments should be submitted to Federal 
Communications Commission, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: John M. Coles, Attorney, Satellite 
Policy Branch, International Bureau (202) 739-0731.

SUPPLEMENTARY INFORMATION: 

Notice of Proposed Rulemaking

    Adopted: April 5, 1995.
    Released: April 25, 1995.

    By the Commission:
    1. The Commission is hereby proposing rules that would eliminate 
the distinction between our Transborder Policy and Separate 
International Satellite Systems (Separate Systems) Policy and to treat 
all U.S.-licensed geostationary fixed-satellites under a single 
regulatory scheme.

II. Background

    2. The Transborder and Separate Systems Policies both involve the 
use of non-Intelsat satellites for the provision of international 
services. Both policies are based on the Communications Satellite Act 
of 1962 (``Satellite Act'') which provides for U.S. participation in 
the global commercial communications satellite organization that became 
Intelsat, but also specifically provides that additional satellite 
systems may be authorized if ``required to meet unique governmental 
needs or if otherwise required in the national interest.''\1\ The 
Transborder and Separate Systems Policies evolved from these general 
principles at different times and in response to different 
circumstances.

    \1\See 47 U.S.C. 701(d). Additionally, Congress has declared it 
to be U.S. policy ``to make available to consumers a variety of 
communications satellite services utilizing the space segment 
facilities of Intelsat and any additional such facilities which are 
found to be in the national interest'' and which are technically 
compatible with and avoid significant economic harm to the Intelsat 
system. Pub. L. 99-93, 99 Stat. 425 (1985) (quoted in Historical and 
Statutory Notes to 47 U.S.C.A. 701).
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A. Transborder Policy

    3. The Transborder Policy was established in 1981 and permits 
domestic fixed-satellite operators (``domsats'') to provide 
international public telecommunications services within the coverage 
areas (``footprints'') of their satellites where: (1) Intelsat cannot 
provide the service; or (2) it would be clearly uneconomical or 
impractical to use Intelsat facilities.\2\ Most of the applications 
approved for transborder services have involved instances where use of 
the Intelsat system would be clearly uneconomical or impractical, i.e. 
use of Intelsat facilities would require multiple satellite hops, 
terrestrial facilities, and co-located domestic and international earth 
stations, which would significantly increase the cost of providing the 
service.\3\ Typically, services authorized under the uneconomical or 
impractical standard have been characterized as ``incidental'' to 
domestic services already being provided.

    \2\Letter from James L. Buckley, Under Secretary of State for 
Security Assistance, Science and Technology, to F.C.C. Chairman Mark 
Fowler (July 23, 1981) (``Buckley Letter'') (printed in Appendix to 
Transborder Satellite Video Services, 88 F.C.C.2d 258, 287 (1981)).
    \3\Id. at 280.
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    4. U.S. domsats have provided more extensive services (i.e., point-
to-point and two-way services) between the U.S. and Mexico and between 
the U.S. and Canada because Intelsat has not traditionally provided 
service between the U.S. and these points. Thus, a wider range of 
services was permitted between the U.S. and contiguous locations (i.e., 
Canada and Mexico) than between the U.S. and non-contiguous locations.
    5. Another significant feature of the Transborder Policy is that it 
does not prohibit voice services through the public switched network 
(``PSN''), as did our Separate Systems Policy initially. Until recent 
modifications in the Separate Systems Policy permitting interconnection 
with the PSN, the ability of domsats to provide public switched 
services under the Transborder Policy was the main distinguishing 
feature between the two policies.

B. Separate Systems Policy

    6. The Separate Systems Policy was established in response to a 
1984 Presidential Determination that satellite systems separate from 
Intelsat, providing service between the U.S. and international points, 
``are required in the national interest.''\4\ In response to the 
Presidential Determination, the Secretaries of State and Commerce 
jointly advised the Commission to authorize separate systems provided 
that (1) each system be restricted to providing services through the 
sale or long-term lease of capacity for communications not 
interconnected with public switched message networks (except for 
emergency restoration service);\5\ and (2) each system gain approval 
from the foreign authority with which communications links are being 
established and enter into consultation procedures in accordance with 
Article XIV(d) of the Intelsat Agreement to ensure technical 
compatibility and to avoid significant economic harm to Intelsat.\6\

    \4\Presidential Determination No. 85-2 (Nov. 28, 1984), 49 F.R. 
46,987. The Separate Systems Policy is written into law as part of 
the Foreign Relations Authorization Act, Fiscal Years 1986 and 1987, 
Pub. L. 99-93, section 146(g), 99 Stat. at 426.
    \5\At the time, the restriction against interconnection with the 
PSN was deemed necessary to protect the core revenue base of 
Intelsat which consisted of switched voice and other services.
    \6\Letter from George P. Shultz, Secretary of State, and Malcolm 
Baldridge, Secretary of Commerce, to F.C.C. Chairman Mark S. Fowler 
(Nov. 28, 1984).
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    7. In 1985, we authorized several applicants to build separate 
satellite systems to provide international public telecommunications 
services under these condition.\7\ Since many of the orbital positions 
requested by separate systems applicants were deemed to be critical, 
limited resources for the provision of particular international 
services, we decided we would not permit separate systems operators to 
divert this capacity for domestic communications. However, we decided 
that separate system licensees could provide domestic service within 
the U.S. on an ``ancillary'' basis, which permits licensees to use 
their separate system facilities for domestic communications that are 
reasonably related to their use of the facilities for international 
communications. This was intended to accommodate those international 
customers who have limited domestic communications needs related to 
their international uses.

    \7\Establishment of Satellite Systems Providing International 
Communications, 50 FR 42266 (1985) (``Separate Systems Dicision''), 
recon., 61 RR2d 649 (1986), further recon., 1 F.C.C. Rcd 439 (1986).
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C. Recent Developments

    8. Since we first began to license separate systems, Intelsat has 
continued to evaluate the risk of economic harm posed by these systems 
and has concluded that the provision of limited switched services over 
systems consulted under Article XIV(d) would [[Page 24819]] not cause 
it significant economic harm.\8\ The Executive Branch advised us to 
modify our Separate Systems Policy accordingly. The cumulative effect 
of these modifications is a phased relaxation of the restrictions 
against interconnection with the PSN--from no circuits in 1985 to 8,000 
circuits today--with a goal of complete elimination of all 
interconnection restrictions by January 1997.\9\

    \8\Most recently, the Nineteenth Assembly of Parties of Intelsat 
determined that the interconnection of up to 8,000 64-kbps 
equivalent circuits via each separate system satellite would not 
cause significant economic harm to the Intelsat system. The 
Executive Branch has not yet notified the Commission that the 
Separate Systems Policy should be modified accordingly.
    \9\See Letter from Thomas J. Murrin, Deputy Secretary of 
Commerce, and Lawrence S. Eagleburger, Deputy Secretary of State, to 
F.C.C. Chairman Alfred C. Sikes (December 14, 1990)(100 64-kbps 
circuits consistent with U.S. obligations). Letter from James Baker, 
Secretary of State, and Robert Mosbacher, Secretary of Commerce, to 
F.C.C. Chairman Sikes (November 27, 1991) (interconnection of 
private lines to the PSN consistent with U.S. obligations and U.S. 
goal of complete elimination of PSN interconnection restrictions by 
January 1997). Letter from Bradley P. Holmes, United States 
Coordinator for International Communications and Information Policy, 
Department of State, and Gregory L. Chapados, Assistant Secretary, 
Department of Commerce, to F.C.C. Chairman Sikes (January 8, 
1993)(1,250 64-kbps circuits consistent with U.S. obligations). See 
also Permissible Services of U.S. Licensed International 
Communications Satellite Systems Separate from the International 
Telecommunications Satellite Organization (Intelsat), 7 F.C.C. Rcd 
2313 (1992), further modification, 9 F.C.C. Rcd 347 (1994); alpha 
Lyracom d/b/a Pan American Satellite, el at., 9 F.C.C. Rcd 1282 
(1994) (``PAS Modification Order''),
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    9. The Executive Branch has also notified the Commission that the 
conditions identified in the Buckley Letter should be replaced by the 
Separate System Policy.\10\ In addition, we have received applications 
from domestic and international satellite system licensees for 
authority to provide a full range of both domestic and international 
services.

    \10\Letter from Bradley P. Holmes, United States Coordinator for 
International Communications and Information Policy, Department of 
State, and Gregory L. Chapados, Assistant Secretary for 
Communications and Information, Department of Commerce, to F.C.C. 
Chairman Alfred C. Sikes (January 8, 1993).
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Discussion

    10. We propose to eliminate the transborder policy in its entirety 
and to subject all U.S.-licensed geostationary satellite to a modified 
version of the separate systems policy. Under the new policy, all such 
satellites would be able to offer domestic services and any 
international services they can successfully coordinate 
internationally. These changes would allow major U.S. corporations to 
meet their increasingly global communications needs without the delays 
and uncertainties associated with the current policy of waiving parts 
of the transborder or separate systems policies on a case-by-case 
basis.
    11. We tentatively conclude that permitting U.S. operators to 
provide the widest range of service offerings technically feasible and 
consulted by Intelsat will permit them to use their satellites more 
efficiently and to provide innovative and customer-tailored services. 
Domsat licensees will be able to provide these international services 
without regard to whether these services are incidental to an existing 
domestic network or whether Intelsat could provide the service. 
consequently, subject to the approval of the affected foreign country 
and successful consultation with Intelsat and ITU\11\ coordination with 
other administrations with satellite systems that may be affected, 
domsats would be able to provide services between the U.S. and non-
contiguous points on the same basis as separate systems.\12\ In order 
to ensure that domsats and separate systems are subject to the same 
regulatory scheme, we also propose removing the limitation that 
separate systems may only provide domestic service on an ``ancillary'' 
basis.

    \11\The ITU (International Telecommunications Union) is a 
specialized agency of the United States Nations whose goal is to 
promote international cooperation in the efficient use of 
telecommunications, including the use of the radio frequency 
spectrum.
    \12\/Any domsat operators that need to change the technical 
parameters of their proposed or authorized satellites in order to 
provide co-primary international service must file a request to 
amend the application or modify the license under Part 25 
procedures. 47 CFR Part 25.
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    12. We do not expect the proposed policy changes to result in harm 
to Intelsat. Intelsat has consulted more and more international 
services over U.S. separate satellites, suggesting that these services 
have not harmed it economically or technically.
    13. We also request comment on whether the proposed policy changes 
should apply to other U.S. satellite systems, such as mobile-satellite 
service and direct broadcast service systems; whether Comsat, a U.S. 
licensee, should be permitted to provide domestic service using 
intelsat facilities; and whether and under what conditions non-U.S. 
satellites should be permitted to serve the U.S. Domestic market.
    14. The proposed policy changes will require certain changes to 
Part 25 of our rules. Initially, we propose to eliminate all references 
to ``transborder'', ``domestic'', ``separate'' and ``international'' 
satellite systems. These references are found in Secs. 25.110(b), 
25.113 (b) and (d), 25.114(c), 25.115(c), 25.117(a), 25.130(d), 
25.131(b), (g) and (j), 25.140 (a) and (b), 25.202(c), 25.210 (e), (f) 
and (j), 25.211(b) and 25.276(c). We also propose to reconcile 
differences in the financial qualification requirements for domsats and 
separate systems, allow all U.S.-licensed satellite system operators to 
elect whether they will operate on a common carrier or non-common 
carrier basis, and make modifications to our earth station licensing 
procedures. Finally, because the recent changes to Part 25 require 
separate system operators to meet the same technical standards as 
domsat operators, we proposed to eliminate Sec. 25.210(f) which permits 
exceptions to the technical requirements in accordance with the 
Separate Systems Decision.
    15. We also invite all interested parties to comment on any other 
issues raised by the proposed changes, including considerations as to 
how the proposed changes will affect orbital assignments, 2 deg. 
orbital spacing between U.S. satellites in the geostationary orbit, the 
need to reopen coordination with satellite systems from other 
countries, and whether any special requirements should be placed on 
satellite operators providing both domestic and international service.

Ex Parte Rules--Non-Restricted Proceeding

    This is a non-restricted notice and comment rulemaking proceeding. 
Ex parte presentations are permitted, except during the Sunshine Agenda 
period, provided they are disclosed as provided in Commission rules. 
See generally 47 CFR 1.1202, 1.1203, and 1.1206(a).

Initial Regulatory Flexibility Act

A. Reason for Action

    This rulemaking proceeding is initiated to obtain comment regarding 
proposed elimination of the Commission's Transborder Policy and removal 
of certain restrictions on separate international satellite systems 
with respect to domestic services in order to subject all U.S.-licensed 
fixed-satellites to the same regulatory treatment.

B. Objectives

    The Commission seeks to subject all U.S.-licensed fixed-satellites 
to the same regulatory policy.

C. Legal Basis

    The proposed action is authorized under Sections 4 and 303(r) of 
the Communications Act of 1934, as amended, 47 U.S.C. 154, 303(r), and 
Section 201 of the Communications Satellite Act of 1962, 47 U.S.C. 
721(c). [[Page 24820]] 

D. Reporting, Recordkeeping and Other Compliance Requirements
    The proposed policy changes will not create additional burdens on 
the public.
E. Federal Rules That Overlap, Duplicate or Conflict With These Rules
    None.
F. Description, Potential Impact, and Number of Small Entities Involved
    The proposed policy changes discussed in this Notice of Proposed 
Rulemaking will enhance service options and price competition for any 
small businesses involved in the provision of international 
telecommunications services via U.S.-licensed satellites.
G. Any Significant Alternatives Minimizing the Impact on Small Entities 
Consistent with the Stated Objectives
    The Notice solicits comment on proposed policy changes necessary to 
achieve Commission objectives. Any significant alternatives may be set 
forth in comments to this Notice.
Comment Dates
    Pursuant to applicable procedures set forth in Secs. 1.415 and 
1.419 of the Commission's Rules, 47 CFR 1.415 and 1.419, interested 
parties may file comments on or before June 8, 1995 and reply comments 
on or before June 23, 1995. To file formally in this proceeding, you 
must file an original and four copies of all comments, reply comments, 
and supporting comments. If you want each Commissioner to receive a 
personal copy of your comments, you must file an original plus nine 
copies. You should send comments and reply comments to: Office of the 
Secretary, Federal Communications Commission, Washington, DC 20554. 
Comments and reply comments will be available for public inspection 
during regular business hours in the F.C.C. Reference Center (Room 239) 
of the Federal Communications Commission, 1919 M St., NW., Washington, 
DC 20554.
Ordering Clauses
    16. Accordingly, it is ordered That NOTICE IS HEREBY GIVEN of the 
proposed regulatory action described above and that COMMENT IS SOUGHT 
on the proposals in this Notice.
    17. This action is taken pursuant to Sections 4 and 303(r) of the 
Communications Act of 1934, as amended, 47 U.S.C. 154, 303(r), and 
Section 201(c) of the Communications Satellite Act of 1962, 47 U.S.C. 
721(c).
    18. For further information on this Notice contact John M. Coles, 
Attorney, (202) 739-0731.

List of Subjects in 47 CFR Part 25

    Communications common carriers, Radio, Satellites.
    Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 95-11286 Filed 5-9-95; 8:45 am]
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