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A. a.(1)(a) i) a)DocumentgPleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:63.` ` The commenters in DISCO I argued that the privileges and immunities available to Intelsat and Inmarsat could give Comsat an unfair competitive advantage in the U.S. market and recommended that Comsat not be permitted to serve the U.S. domestic market prior to a restructuring  T-of Intelsat and Inmarsat. 1Xq xP-ԍXSee Comments of Orion Network Systems, Inc. at 4 (filed June 8, 1995); Comments of AT&T Corp. at 16 (filed June 8, 1995); and Comments of Columbia Communications Corporation at 6 (filed June 8, 1995).(#  We determined that these issues would best be addressed in the context of a review of Commission policies concerning whether and under what conditions we will permit the use of nonU.S. satellites to serve the U.S. market.  T-?64. ` ` Intergovernmental satellite organizations present at least three analytical problems within the framework we propose. First, these organizations do not have a single "home" market in the same sense that a private or even a strictly national satellite operator does. This fact makes it unclear what type of analysis we should conduct in order to determine whether, for example, Intelsat or Inmarsat should be permitted to provide purely domestic service in the United States. Second, intergovernmental satellite organizations already serve virtually every country from the United States. Indeed, they were created to provide ubiquitous service. This fact may make it inappropriate ever to apply the route market portion analysis discussed above to an application involving an IGO. Finally," 10*((," Inmarsat has already created a private affiliate to provide newer commercial services, and both Inmarsat and Intelsat are considering the option of spinning off additional subsidiaries. Although private as a matter of form, these affiliates have a treatybased heritage and may continue to have at least some governmental ownership. These features could result in privileged access to national markets around the world and diminish effective competition in the U.S. market. It is therefore a fair question whether these organizations should be treated as intergovernmental or private. We discuss each of these three questions in detail below.  T-`1.XDomestic U.S. Service via Intergovernmental Satellite Organizations(#  Tp-@65. ` ` As explained above, our ECOSat test ordinarily begins with an analysis of U.S. satellite` opportunities for competition in the home market of whatever nonU.S. system seeks access to the U.S. market. Intelsat and Inmarsat are headquartered in the United States and the United Kingdom, respectively, and the United States and United Kingdom forward these organizations' space station information to the ITU for registration and coordination purposes. However, the highest authority in each organization is an Assembly of "Parties," or national governments. At the time of  T -this Notice, 136 national governments are members of Intelsat and 78 are members of Inmarsat. For this reason, we tentatively conclude that it would be unrealistic to treat the United States or the United Kingdom, respectively, as the "home market" of either intergovernmental organization for purposes of  T-our ECOSat analysis. Indeed, we further conclude that it would be unrealistic to treat any single nation as the home market of an intergovernmental satellite organization.  T-A66. ` ` One alternative is to base access to the U.S. domestic market on the openness of all the various route markets served by the intergovernmental organization or at least all the markets of the organization's members. This approach could, however, unduly and perhaps unfairly restrict service from Intelsat, Inmarsat, or another IGO on the basis of market barriers in what may be a small number of nations. Attributing such national market barriers to the supranational organization would be appropriate only if the national market barriers were so pervasive as to constitute to some extent the consensus position of the entire organization.  TP-B67. ` ` Another alternative to the aggregation of these sometimes conflicting national policies might be based upon the minimum level of concurrence that is required for any official action of the organization. Article XVII(d)(i) of Intelsat Agreement, for example, requires approval by twothirds of the Parties representing twothirds of the organization's total investment shares to amend the  T-Agreement.82Xq xP-ԍXSee Article XVII(d) of the Agreement Relating to the International Telecommunications Satellite Organization (Intelsat). Article 34(2) of the Convention on the International Maritime Satellite Organization (Inmarsat) contains a similar requirement.(#8 We could conceivably incorporate this standard into a rule that U.S. earth stations would be permitted to provide U.S. domestic service over Intelsat if twothirds of Intelsat's member countries, representing twothirds of the organization's total investment shares on the date of application, permitted U.S. satellites to provide analogous services in their markets. Analogous rules could be adopted for each IGO.  T!-C68. ` ` A final alternative might be to apply a much less structured standard that focuses directly on the competitive consequences of an IGO providing domestic service within the United States. Under such an approach, the Commission could simply ask whether the IGO, in light of its"p#20*((o'" intergovernmental status and global dominance, would be in a position to diminish effective competition in the United States. This approach would provide a high degree of flexibility, but might not provide sufficient guidance to interested parties. We request comment on all these proposals, as well as the submission of other alternatives.  T8-2.XApplication of the ECOSat Route Market Analysis(#  T-D69. ` ` We have already stated that we do not intend generally to apply the standard we propose today to existing authorizations or to earth station applications that are already pending. Whatever standard we adopt for the intergovernmental satellite organizations should also apply only prospectively. In the case of Intelsat and Inmarsat, that means that virtually every market in the world is already served from the United States. However, it would be theoretically possible to apply the route market portion of our ECOSat test to Comsat and other prospective earth station operators of the intergovernmental organizations as they file their earth station applications for expanded Intelsat or Inmarsat services. That, indeed, might be the most forceful way to promote competition in all markets around the world.  TX-E70. ` ` However, we have serious doubts that such an approach would be consistent with the  T0-statutes governing U.S. participation in Intelsat and Inmarsat,30q xP-ԍXSee Communications Satellite Act of 1962, 47 U.S.C.  701; International Maritime Satellite Telecommunications Act, 47 U.S.C.  753(c)(3)(A).(# and we tentatively conclude that it would not be in the public interest. There are still many nations in the world that are connected to the United States only by satellite, and any policy that makes it more difficult to reach these points over Intelsat would unduly constrain the already limited service to these points. Similarly, Inmarsat remains the only twoway satellite communications system recognized today by the International Maritime Organization as a Global Maritime Distress and Safety System provider, and we believe international service over Inmarsat should remain robust until global maritime distress and safety services are provided by multiple private systems. We therefore propose to continue licensing international communications over the Intelsat and Inmarsat systems without application of the ECOSat test. We also seek comment on what our policy should be toward intergovernmental organizations other than Intelsat and Inmarsat.  TP-3.XRegulatory Treatment of the Intergovernmental Organizations' Subsidiaries, Affiliates, or  T(-Successors(#  T-F71. ` ` Both Intelsat and Inmarsat are currently studying various restructuring proposals to streamline the organizations and enable them to respond to competitive pressures better and faster. Their desire to become more efficient is understandable, since the decisionmaking process in an IGO is inherently less dynamic than in private industry. However, if IGOs are to provide services in competitive markets, they cannot be permitted to leverage the benefits of their intergovernmental status to unfairly distort competition. For this reason, the U.S. government has generally supported privatization efforts that would enhance competition worldwide, but not privatization for its own sake. To date, both Inmarsat and Intelsat have rejected outright privatization, opting instead for the creation of private subsidiaries or affiliates to provide defined services. ICO Global Communications is the"" 30*((&" first such affiliate and the extent to which it is truly independent of Inmarsat is currently the subject  T-of another proceeding.4Xq xP@-ԍXApplication of Comsat Corp. for Authority to Participate in the Procurement of Facilities of the ICO Global Communications Limited System, File No. 106 SATMISC95., Public Notice No. SPB8 (May 10, 1995).(#  T-G72. ` ` Since structural change is supported, albeit in varying degrees, by many IGO members, some type of change is likely in the near to medium term. To the extent that the IGOs continue creating subsidiaries or affiliates, we will have to consider repeatedly whether the newly created entities should be permitted to provide service in the United States. Since we have proposed a somewhat different ECOSat analysis for IGOs than we have for other nonU.S. systems, we must determine what standard should apply to these newly created entities.  Tp-H73. ` ` As a general matter, we believe that genuinely procompetitive privatization should result in a commensurate reduction in the burdens that go with intergovernmental status. Privatization that is only a matter of form should not. In order to maintain the flexibility necessary to resolve each case on its own facts, we tentatively conclude that IGO subsidiaries, affiliates, or successors should be treated just like any other nonU.S. systems that seek access to the U.S. market, with the understanding that public interest factors are likely to play an unusually important role in making these determinations. Thus, for example, in considering applications to operate within the U.S. using the space segment of an IGO affiliate, we will apply our normal ECOSat test to both the home and route markets of the affiliate, for each proposed service segment. We will then examine the usual public interest factors and the affiliate's independence from any IGO or its Signatories. Prominent in our public interest consideration will be any views expressed by the Executive Branch regarding the extent to which the affiliate's structure is consistent with U.S. policy. There will undoubtedly be other factors that should be considered in any particular case.  T@-I74.` ` Although we do not intend to revisit existing authorizations to use Intelsat or Inmarsat, we do not believe that such authorizations should automatically transfer to these organizations' subsidiaries, affiliates, or successors. Thus, if space segment is transferred from an IGO to an affiliate, we propose to require affected earth station operators to request a license modification to reflect the transfer, in order to ensure that operation with the affiliate is consistent with U.S policy. Obviously, the disruption that would be caused by terminating existing services would be an additional public interest factor to consider at that time. Moreover, we propose to apply the framework we announce today to new earth station applications to provide international service via an IGO affiliate and to applications seeking to provide domestic U.S. service via an IGO or IGO affiliate. We seek comment on these proposals.  T-`G.ReceiveOnly Earth Stations  T8-J75.` ` In light of the policies proposed in this Notice, we revisit a 1993 Commission proposal to` eliminate licensing requirements and establish a voluntary registration program for receiveonly earth stations in the fixed satellite service operating with Intelsat space stations, nonU.S." 40*(($"  T-space stations, and space stations for the reception of service from foreign countries._5Xq xPh-ԍXSee Amendment of Section 25.131 of the Commission's Rules and Regulations to Eliminate the Licensing Requirement for Certain International ReceiveOnly Earth Stations, Notice of Proposed  xP-Rulemaking, 8 F.C.C. Rcd. 1720 (1993) ("1993 NPRM"); 47 C.F.R.  25.131.(#_ Currently, no license is required in order to use a receiveonly earth station to receive U.S.originated signals over a U.S.licensed FSS satellite. Voluntary registration of such earth stations is available for users who wish to be protected from harmful interference. In frequency bands shared with terrestrial services, receiveonly earth station operators who wish to be protected from terrestrial interference must coordinate each earth station location in accordance with current domestic practice in the particular frequency band. A license is still required for use of a receiveonly earth station to receive a foreignoriginated signal, or any signal transmitted over a nonU.S. satellite.  T-K76.` ` The 1993 NPRM was initiated in response to a petition filed by Comsat to repeal the licensing requirement for receiveonly earth stations operating with satellites of Intelsat. Since Comsat's petition was consistent with the Commission's ongoing effort to eliminate unnecessary regulation and speed processing, the Commission decided to treat the pleading as a petition for  T -rulemaking and incorporated it into the 1993 proceeding.g6 q xP-ԍX1993 NPRM, 8 F.C.C. Rcd. at 1720  1.(#g The 1993 NPRM proposed to complete the deregulation of receiveonly earth stations by eliminating the licensing requirement still in place  T -for receipt of foreignoriginating signals or use of nonU.S. satellites. In its place, the 1993 NPRM proposed a voluntary registration process which required applicants first to complete frequency  TX-coordination, then to submit a Form 493 and a certification that coordination had been completed.k7Xxq xPp-ԍX1993 NPRM, 8 F.C.C. Rcd. at 172223  15.(#k If no objections were received, the station would be automatically authorized 30 days after the application had been placed on public notice as accepted for filing. If an objection was received within 30 days, the application would not be automatically granted and would be subjected to further public notices informing the public of its status.  Th-L77.` ` We seek comment on whether, in light of the framework we propose in this Notice, the rules proposed in 1993 are still appropriate. At this time, we believe it would be more appropriate to continue to require a license for the use of receiveonly earth stations to receive signals from nonU.S. FSS satellite systems, including Intelsat. As we have said, the absence of a U.S. space station license in these circumstances creates both technical and competitive concerns. Unless we license the earth stations that communicate with nonU.S. satellites, we will have no way to ensure that these radio communications, conducted within the United States, are consistent with U.S. policy concerning competition and spectrum management.  T-M78.` ` However, we propose to eliminate the licensing requirement for receiveonly earth stations operating with U.S.licensed FSS satellite systems for the reception of services from other countries. In this situation, our technical concerns will be taken into account when we license the  T-space station. Moreover, since DISCO I authorizes U.S. satellites to provide both domestic and international service and we now propose to apply our ECOSat analysis when allowing nonU.S satellite systems access to the U.S. market, we no longer find it necessary to base our regulatory treatment of receiveonly earth stations operating with U.S. satellites on whether the communications" 70*((#" in question are international or domestic. For these reasons, we adhere to our 1993 proposal to  T-create a voluntary registration process for this class of receiveonly earth stations.f8q zP@-ԍXSee 47 C.F.R.  25.131(b)(i).(#f  T-N79.` ` At present, receiveonly earth stations may operate with the Intelsat K satellite9 Zq xP-ԍXCommunications Satellite Corp. Request for Waiver of Section 25.131(j) of the Commission's Rules as it Applies to Services Provided via the Intelsat K Satellite, 7 F.C.C. Rcd. 6028 (1992) (granting  xP-waiver), application for review pending. The pending application for review will be addressed in the Report and Order in this proceeding.(#ƣ and  T`-receive Intelnet I services from Intelsat satellites without obtaining a license.R:`Bq xPB -ԍX47 C.F.R.  25.131(j).(#R We ask for comment on whether to continue to exempt such receiveonly earth stations from obtaining a license or to begin requiring that any new provision of such service be subject to the licensing process including an  T-ECOSat analysis.   T-O80.` ` We recognize that requiring a license for each earth station in the United States presents a significant burden for some service providers. For example, receiveonly DTH receivers  TH -might number in the millions. In an attempt to eliminate unnecessary regulation and speed processing, we propose to allow anyone wishing to operate a receiveonly earth station with either a U.S. or nonU.S. satellite to request blanket authority to operate multiple technically identical receiveonly earth stations in a particular service. Such a request might be made, for example, by a satellite operator, a user, an equipment manufacturer, or even an electronics retailer. A blanket request for authority will minimize the regulatory burden on applicants and expedite processing. Applicants would pay application fees associated with a blanket earth station license. We request comments on these proposals.  T- ă  S-J V. CONCLUSION Đ\  T-P81.` ` In this Notice, we tentatively conclude that the public interest requires that we adopt a uniform standard to determine whether a nonU.S. licensed satellite system should be permitted to enter the U.S. satellite services market. In proposing this standard, we wish to enhance effective competition in the global market for communications services while preventing anticompetitive conduct in the provision of satellite services and encouraging foreign governments to open their communications markets. We propose to open our market to nonU.S. satellite systems and foreign originating transmissions through the earth station application process if the competitive opportunities for U.S. satellites abroad are robust enough to prevent any distortion of competition in the U.S. market. The United States supports a competitive market based on private investment to achieve the most efficient delivery of satellite services to the public and advocates principles that will facilitate a more competitive environment for all satellite services. A global competitive satellite services market will provide U.S. customers with increased service options, improved quality, and lower rates.  T-Q82.` ` As required by Section 603 of the Regulatory Flexibility Act, the Commission has prepared an Initial Regulatory Flexibility Analysis ("IRFA") of the expected impact on small entities of the proposals suggested in this document. The IRFA is set forth in Appendix A. Written public"8:0*(("" comments are requested on the IRFA. These comments must be filed in accordance with the same  T-filing deadlines as comments on the rest of the Notice, but they must have a separate and distinct heading designating them as responses to the Initial Regulatory Flexibility Analysis. The Secretary shall send a copy of this Notice of Proposed Rulemaking, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration in accordance with paragraph 603(a) of the Regulatory Flexibility Act, Pub. L. No. 96354, 94 Stat. 1164, 5 U.S.C.   T-601 et seq (1981).   T-R83.` ` Pursuant to applicable procedures set forth in Sections 1.415 and 1.419 of the Commission's Rules, 47 C.F.R.  1.415 and 1.419, interested parties may file comments on or before July 15, 1996, and reply comments on or before August 16, 1996. 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 should file five additional copies. Send comments and reply comments to the Office of the Secretary, Federal Communications Commission, Washington, D.C. 20554. Comments and reply comments will be available for public inspection during regular business hours in the Federal Communications Commission, Reference Center, Room 239, 1919 M Street, N.W. Washington, D.C. 20554.  T-S84.` ` Written comments by the public on the proposed and/or modified information  T-collections are due to Commission on or before July 15, 1996. In addition to filing comments with the Secretary, a copy of any comments on the information collections contained herein should be submitted to Dorothy Conway, Federal Communications Commission, Room 234, 1919 M Street, N.W., Washington, DC 20554, or via the Internet to dconway@fcc.gov and to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725 17th Street, N.W., Washington, DC 20503 or via the Internet to fain_t@al.eop.gov. Written comments on the proposed and/or modified information collections must be submitted to the Office of Management and Budget (OMB) on or before 60 days after date of publication in the Federal Register.  Tx-T85.` ` This is a nonrestricted notice and comment rulemaking proceeding. Ex parte presentations are permitted, except during the Sunshine Agenda period, provided they are disclosed  T*-as provided in the Commission's rules. See generally 47 C.F.R.  1.1202, 1.1203, and 1.1206(a). The Sunshine Agenda period is the period of time that commences with the release of public notice that a matter has been placed on the Sunshine Agenda and terminates when the Commission (1) releases the text of a decision or order in the matter; (2) issues a public notice stating that the matter has been deleted from the Sunshine Agenda; or (3) issues a public notice stating that the matter has been returned to the staff for further consideration, whichever occurs first. 47 C.F.R.  1.1202(f).  T:-During the Sunshine Agenda period, no presentations, ex parte or otherwise, are permitted unless specifically exempted. 47 C.F.R.  1.1203.  T!-U86.` ` In general, an ex parte presentation is any communication directed to the merits or outcome of the proceeding made to decisionmaking personnel that (1) if written, is not served on the parties to the proceeding, or (2) if oral, is made without advance notice to the parties to the proceeding and without opportunity for them to be present. 47 C.F.R.  1.1202(b). Any person  T&%-who makes or submits a written ex parte presentation shall provide on the same day it is submitted, two copies of the same under separate cover to the Commission's Secretary for inclusion in the public record. The presentation (as well as any transmittal letter) must clearly indicate on its face the docket"&:0*(( +" number of the particular proceeding and the fact that two copies of it have been submitted to the  T-Secretary, and must be labeled or captioned as an ex parte presentation. 47 C.F.R.  1.1206(a)(1).  T-V87.` ` Any person who is making an oral ex parte presentation including data or arguments not already reflected in the person's written comments, memoranda, or other previous filings in that proceeding shall provide on the day of the oral presentation an original and one copy of a written memorandum to the Secretary (with a copy to the Commissioner or staff member involved) that summarizes the data and arguments. The memorandum (as well as any transmittal letter) must clearly indicate on its face the docket number of the particular proceeding and the fact that an original and  T-one copy of it have been submitted to the Secretary, and must be labeled or captioned as an ex parte presentation, 47 C.F.R.  1.1206(a)(2).  T& -W88.` ` For further information concerning this rulemaking contact Paula Ford (202) 4180760 or Virginia Marshall (202) 4180778 of the International Bureau, Federal Communications Commission, Washington, D.C. 20554.  S - 0V. ORDERING CLAUSES ׃  T6-X89.` ` Accordingly, IT IS ORDERED that pursuant to the authority contained in Sections 1, 4(i), 303, and 308 of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 303, and 308, NOTICE IS HEREBY GIVEN of our intent to adopt the policies and rules set forth in this Notice and that COMMENT IS SOUGHT on all the proposals in this Notice.  Tn-Y90.` ` IT IS FURTHER ORDERED that the Secretary shall send a copy of this Notice of Proposed Rulemaking, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration in accordance with paragraph 603(a) of the  T-Regulatory Flexibility Act, Pub. L. No. 96354, 94 Stat. 1164, 5 U.S.C.  601 et seq. (1981).    X` (#%'0*,.8135@8:the Licensing Requirements for Certain International ReceiveOnly Earth Stations and  v Communications Satellite Corporation Request for Waiver of Section 25.131(j)(1) of the  v kCommission's Rules as it Applies to Services Provided via the INTELSAT K Satellite  Y -# X PjQ XP#(IB Docket No. 96 , CC Docket No. 9323, RM7931, File No. ISP92007). (#  Y -  Yo- v This # Xz&_ x/2Q QXX#Notice of Proposed Rule Making# X PjQ XP#, known as "DISCO II,";oz~ xP-ԍ #d6X@DQ|@#'DISCO' is the acronym for Domestic International Satellite Consolidation  ?<Order.#Xx6X@DQiX@# is the logical outgrowth  YZ- d(#of two recent Commission decisions: (1) The "Foreign Carrier Entry Order,"]<Z z~ xP+<ԍ #d6NhQ~H#Market Entry and Regulation of ForeignAffiliated Entities, Report and  ?<Order#Xx6X@DQiX@#, #d6X@DQ|@#IB Docket No. 9592, FCC 95475 (rel. Nov. 30, 1995).#Xx6X@DQiX@#] in which we  d(#promulgated the "ECOtest" for market entry and regulation of foreignaffiliated entities, and  Y,- d(#L(2) "DISCO I,"=7,xz~ xPU<ԍ #d6NhQ~H#Amendment to the Commission's Regulatory Policies Governing Domestic Fixed  ?<Satellites and Separate International Satellite Systems, Report and Order#Xx6X@DQiX@#, #d6X@DQ|@#IB  r5-Docket No. 9541, FCC 9614 (rel. Jan. 22, 1996).#Xx6X@DQiX@#Ѹ in which we amended the regulatory policies governing domestic fixed satellites and separate satellite systems.  v The policy goal of these three proceedings (the instant matter and its twin progenitors)  d(#Yis to ensure the competitiveness of U.S. communications markets for satellite delivered services  d(#iby employing an explicit effectoncompetition analysis as part of our overall public interest  Y- d(#analysis. Rather than looking to a single factor (# Xz&_ x/2Q QXX#e.g.,# X PjQ XP# "reciprocity") when considering the entry  Y- d(#of foreignowned or affiliated entities, we will weigh the # Xz&_ x/2Q QXX#de facto# X PjQ XP# and# Xz&_ x/2Q QXX# de jure# X PjQ XP# conditions in the  d(#foreign home markets. The United States has advanced this position consistently and forcefully  d(#in several international fora, including trade talks. It is particularly important to facilitate  d(#opening foreign markets in what is the largest growth area of the world economy communications services in this "Information Age".  v Commentors will note that this item is long on questions and short on tentative  Y- d(#conclusions. This is as it should be when we give notice of proposed rules in a complex subject  d(#area. We seek the affected industries' expertise in applying a competitive trade analysis to"#w=0*(( "  d(#inherently global communications services. Let no one doubt, however, this Commission's  Y-resolve to continue to press for access to foreign markets for our domestic providers. 3 | #  PjQP#3 "$=0*((" lMay 9, 1996(#\ <oSEPARATE STATEMENT iOF +kCOMMISSIONER SUSAN NESS \  W -Re: Policies for NonU.S.Licensed Satellite Systems  Y -  d(#,The growth in satellite systems has been phenomenal. Satellites promise to provide us with an  d(#everexpanding |   | array of services and capabilities, offered on a global basis. We are truly becoming a global community.  d(#The active involvement at the World Radio Conference last October by some 140 countries in  d(#the allocation of spectrum for satellites was clear testament to the worldwide expectation that  d(#satellites will be the "Information Skyway" for the world. To make that expectation a reality,  d(#satellite markets everywhere must be open. This has been, and will be, the Commission's  d(#message in international satellite fora and there should be no doubt that this is the message of the Notice we adopt today.  d(#The pressing need for market access for satellite systems underscores the critical need for our  d(#hNotice. Our multilateral discussions on this issue are ongoing and, in the end, promise the best  Y- d(#global resolution of the market access issue. Our Notice sends the clear signal that, in the  d(#Yinterim, we will open the U.S. satellite market to systems licensed in other countries so long as U.S. systems enjoy the same access in foreign markets.  d(#ZMarket access is the key to the successful deployment of satellite systems and the innovative services they promise. The time is right to address this issue.