******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of NetSat 28 Company, L.L.C. Application for Authority to Launch and Operate a Ka-Band Communications Satellite in the Fixed-Satellite Service File No. 194-SAT-P/LA-95 ORDER AND AUTHORIZATION Adopted: May 8, 1997 Released: May 9, 1997 By the Chief, International Bureau: Introduction 1. With this Order, we authorize NetSat 28 Company, L.L.C. ("NetSat 28") to launch and operate a satellite system in geostationary satellite orbit ("GSO") to provide fixed- satellite services ("FSS") in the Ka-band. This will provide NetSat 28 the opportunity to provide consumers access to a variety of satellite-based communication services. Background 2. NetSat 28, a Delaware limited liability company, is a new entity formed to pursue the development of this satellite system. It filed an application for its system in September 1995. In its application, NetSat 28 proposes to construct, launch, and operate one GSO FSS satellite to be located at 103ø West Longitude (W.L.). 3. NetSat 28 requests use of spectrum in the 28.35-28.6 and 29.25-30.0 GHz bands for service uplink operations and the bands 18.55-18.8, 19.45-19.7, and 19.7-20.2 GHz for service downlink operations. NetSat 28 also proposes to operate its tracking, telemetry and command ("TT&C") operations in the C- and/or Ku-bands. 4. The NetSat 28 satellite will carry 48 transponders, each of which is to be 40 MHz in bandwidth. NetSat 28 proposes to provide various high data rate services from 64 kbps to 1.544 Mbps with bandwidth assigned on demand. It also acts as a "bent-pipe" satellite utilizing an optical cross bar switch. 5. Several other GSO FSS applicants filed petitions to deny and other pleadings in response to NetSat 28's application. As further discussed below, these pleadings were subsequently withdrawn by all of the GSO FSS applicants. Motorola Satellite Communications, Inc. also filed a petition to deny all of the GSO FSS Ka-band applications, arguing that grant would conflict with its requested frequencies for feeder links for its "Big LEO" system. These concerns are resolved by the 28 GHz band plan. Relevant Domestic Decisions 1. DISCO I 6. In January 1996, the Commission, in the DISCO I Report and Order, abolished all distinctions between U.S. domestic satellites and international separate system satellites. This allows all U.S.-licensed satellites to provide any mix of domestic or international satellite services they choose, subject only to the licensee obtaining all applicable international approvals and authorizations by other administrations to provide service to, from, or within their respective territories. Therefore, all FSS licensees in the Ka-band are permitted to provide any combination of domestic and international services without obtaining separate approval from the Commission for specific service areas. 2. 28 GHz Band Segmentation Decision 7. In July 1996, the Commission adopted a band plan for U.S. commercial operations in the Ka-band. This band plan designates discrete band segments in the 17.7-20.2 GHz and 27.5-30.0 GHz frequency bands for the Local Multipoint Distribution Service ("LMDS"), the fixed service, the GSO FSS service, the non-geostationary satellite orbit ("NGSO") FSS service, and feeder links for certain NGSO mobile satellite service ("MSS") systems. Of the total 2.5 GHz of spectrum available in each transmission direction, we concluded, based on the representations of the GSO FSS applicants, that 1 GHz of spectrum in both transmission directions was needed to support GSO FSS systems. The 28 GHz band plan designates the following frequencies for GSO FSS systems. We have also noted any other services that are designated in the band plan to share the band on an equal basis: GSO FSS - Designated Band Segments Other Co-Primary Designations 17.7-18.8 GHz (downlink) Fixed 19.7-20.2 GHz (downlink) 28.35-28.6 GHz (uplink) 29.25-29.5 GHz (uplink) NGSO MSS feeder links 29.5-30.0 GHz (uplink) 3. Orbital Assignments 8. In May 1996, the International Bureau, acting on delegated authority, assigned orbit locations to those 28 GHz GSO FSS applicants in the first processing round that proposed to provide international FSS from their GSO systems. This assignment plan was the result of the GSO FSS applicants' successful efforts to resolve their conflicts over orbit locations for satellites in the 62ø W.L. to 175.25ø E.L. region of the orbital arc. 9. In February 1997, the first-round GSO FSS applicants, due to their continued efforts, reached an agreement regarding conflicts over locations in the remainder of the orbital arc. Specifically, this agreement covered locations between 67ø W.L. to 148ø E.L., which are best suited for providing service to the United States. As part of this agreement, the GSO FSS applicants also agreed to withdraw their petitions to deny and other pleadings filed with respect to each others' 28 GHz band applications. This agreement effectively eliminated all obstacles to quick grant of the GSO FSS applications. By a separate Order issued today, we adopt an Assignment Plan implementing the orbital assignment agreement. The Assignment Plan assigns one location to NetSat 28 at 95ø W.L. Discussion A. Qualifications 10. Before the Commission authorizes any space station applicant, we first need to determine whether an applicant is legally, technically, and financially qualified to hold a Commission license. The rules set forth in Part 25 of the Commission's rules governing the FSS apply, in general, to FSS systems in the Ka-band. We recognize we will need to modify these rules, to some extent, to incorporate operations at 28 GHz. Such modifications are the subject of an ongoing rulemaking. We expect to release a Report and Order in this proceeding shortly. Nevertheless, because NetSat's system is not mutually exclusive with any other U.S. commercial satellite application on file, and can be evaluated under current Part 25 rules, we do not view the rulemaking as a bar to considering NetSat's license now. Rather, we will condition any grant to NetSat on it complying with all rules adopted in the 28 GHz Band Satellite Report and Order. Financial Qualifications 11. Although financial qualification requirements for GSO FSS systems will be discussed in greater detail in the forthcoming 28 GHz Band Satellite Report and Order, the Commission has in the past, based 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 where there is sufficient remaining capacity to address additional requests that may arise, 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 going forward with a proposal in the same service. 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 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. This is based on our experience that under-financed licensees have significant difficulty in raising the requisite financing. 12. Because all of the first-round 28 GHz GSO applicants agreed to orbit locations, and because other orbit locations remain available for additional GSO FSS satellites, authorization of all proposed systems does not preclude use of this band by other applicants for GSO FSS systems. Consequently, it is not necessary to rule on any of the first-round 28 GHz applicants' financial qualifications. We previously granted a similar waiver to Norris Satellite, Inc., which was awarded a license to provide satellite services in the 28 GHz band in 1992. We intend to rigorously enforce the system milestone schedule to ensure that NetSat proceeds in a timely manner and does not tie up valuable orbital locations and spectrum to the exclusion of other qualified applicants. Technical Qualifications 13. Applicants for space station authorization also must meet certain technical qualification requirements. As noted, however, we will need to modify these rules somewhat, to incorporate operations in the 28 GHz band. For example, we envision that we will need to modify the definition of full frequency reuse for systems employing circular polarization. In its application, NetSat represents that it intends to operate under the existing technical rules for the FSS in Part 25 of the Commission's rules. Rather than delaying action on NetSat's application until these modifications are adopted, we condition NetSat's authorization on it complying with the forthcoming rules concerning technical qualifications for GSO FSS systems in the 28 GHz band. B. Spectrum Issues 14. In the following text we discuss specific issues related to the frequencies NetSat proposes for its service uplinks, service downlinks, and TT&C during transfer orbit operations. Service Uplinks 15. As noted, the 28 GHz band plan designates 1000 MHz of spectrum in the 28.35- 28.6 and the 29.25-30.0 GHz band for uplink GSO FSS operations. Two hundred fifty megahertz of this spectrum at 29.25-29.5 GHz is to be shared on a co-primary basis with NGSO MSS feeder links. In its application, NetSat 28 proposes to use spectrum at 28.35-28.6 and 29.25-30.0 GHz for its service uplinks. 16. NetSat 28's request is consistent with the band plan and we therefore grant NetSat 28 authority to operate in those bands in the United States. Operations in the shared 250 megahertz are, of course, subject to the sharing rules adopted in the 28 GHz Band First Report and Order. Service Downlink Bands 17. The 28 GHz band plan designates the 17.7-18.8 GHz and 19.7-20.2 GHz bands for GSO FSS operations, with the entire 17.7-18.8 GHz band to be shared on a co-primary basis with the fixed service. In adopting the band plan, we noted that GSO FSS operations in the 17.7- 18.8 GHz band will be restricted by: the need to protect the broadcast satellite service in the 17.7-17.8 GHz band segment (after April 2007), power flux density limits to protect the earth exploration satellite service in the 18.6-18.8 GHz band, and the need to coordinate with fixed services throughout the band. We concluded that the GSO FSS systems should be able to coordinate sufficient spectrum with other users within this 1.1 GHz band, to give them, together with the 500 MHz designated at 19.7-20.2 GHz, access to sufficient downlink spectrum to correspond with the 1000 MHz of uplink spectrum designated for GSO FSS in the 27.5-30.0 GHz range. 18. In its application, which it filed before the final band plan was adopted, NetSat 28 proposes to use 1000 MHz of spectrum at 18.55-18.8 and 19.45-20.2 GHz for its service downlinks. 19. In the interest of expediting the licensing process, we grant here that portion of NetSat 28's downlink request that is consistent with the 28 GHz band plan and where specific operating frequencies can be assigned. Specifically, we authorize NetSat 28 to operate a system with service downlinks in the 19.7-20.2 GHz band. We will not give NetSat 28 operating authority in its other requested downlink bands at this time. First, its request to use 19.45-19.7 GHz is inconsistent with the band plan and will be denied. Second, although its request to use 18.55-18.8 GHz is compatible with the plan, it is premature to grant operating authority in any portion of the GSO FSS-designated 17.7-18.8 GHz band. As noted, this 1.1 GHz of spectrum is to be shared on a co-primary basis with other services, constraining GSO FSS operations in this band. Nevertheless, we anticipate that GSO FSS licensees will be able to identify and coordinate 500 MHz in this band to give these systems a total of up to 1000 MHz in each transmission direction. NetSat 28 has asked for 1000 MHz of downlink spectrum. We have already authorized it operating authority for 500 MHz at 19.7-20.2. Once NetSat 28 has determined exactly which 500 MHz it wishes to use in the 17.7-18.8 GHz band, it should file a modification application to operate in these frequencies. In the interim, NetSat 28 is of course free to begin construction in these bands at its own risk. 20. In addition, NetSat 28 must coordinate with the U.S. Government systems operating in the 17.7-18.8 and 19.7-20.2 GHz bands in accordance with footnote US 334 to the Table of Frequency Allocations. This footnote requires coordination of commercial systems with U.S. Government systems in the 17.8-20.2 GHz band. Tracking, Telemetry, and Command (TT&C) 21. NetSat 28's TT&C frequencies during transfer orbit are proposed in the C- and /or Ku - bands. Once successfully at the assigned orbit location, NetSat 28 proposes to conduct TT&C operations solely in the Ka-band. 22. Under the U.S. Table of Frequency Allocations, TT&C operations may be provided in frequency bands allocated to the Space Operations Service or within the bands in which the particular satellite system will be providing service. NetSat 28 proposes to conduct transfer orbit TT&C functions for its 28 GHz system in the C-and/or Ku-band, neither of which is allocated to the Space Operations Service nor is the system's service band. Consequently, the proposed TT&C operations would constitute a non-conforming use of the Table of Frequency Allocations. The Commission has, however, permitted non-conforming uses in situations where the non-conforming use would not interfere with any conforming service and grant would otherwise serve the public interest. Here, NetSat 28 would make only temporary use of the C- and/or Ku-band, and would do so because there is no Ka-band global network yet in place by which it can monitor a satellite's launch and early operations. Nevertheless, NetSat 28 has not provided a technical showing that it can conduct C- and/or Ku-band TT&C operations on a non- interference basis. Thus, we will not grant NetSat 28's request. If NetSat 28 wishes to pursue C- and/or Ku-band transfer orbit operations, it must file a modification application in which to do so, accompanied by either (1) an exhibit demonstrating NetSat 28's operations will not interfere with other conforming operations in the band; or (2) a showing that it has successfully coordinated its proposed operations with all affected operators in the band. C. Regulatory Treatment 23. In our DISCO I Report and Order, we determined that all FSS operators in the C- band and Ku-band could elect to operate on a common carrier or non-common carrier basis. As we will discuss in more detail in the 28 GHz Band Satellite Report and Order, we see no reason to treat Ka-band FSS licensees differently. 24. NetSat 28 proposes to operate on a non-common carrier basis through privately negotiated contractual arrangements reflecting individual customer requirements. 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,(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 the eligible user public. 25. We have already authorized one 28 GHz FSS operator in the United States. Today we are authorizing thirteen more. Dozens of FSS satellites are now operating in the C-and Ku-band. In addition, the recent World Trade Organization agreement will open the U.S. market to foreign licensed satellites. Thus, with respect to the first prong of NARUC I, sufficient competitive capacity is and will continue to be available to assure the U.S. public access to FSS. With regard to the second prong of NARUC I, we see no reasons why 28 GHz operators will hold themselves out indifferently to the public. We will therefore allow NetSat 28 to operate as a non- common carrier. D. Milestone Schedules 26. As in all other satellite services, and as discussed in more detail in the forthcoming 28 GHz Band Satellite Report Order, all licensees will be required to adhere to a strict timetable for system implementation. This ensures that licensees are building their systems in a timely manner and that the orbit-spectrum resource is not being held by licensees unable or unwilling to proceed with their plans. The implementation schedules for 28 GHz systems will generally track the schedules already imposed in other satellite services. For GSO satellites, this means that construction must be commenced within one to two years of grant and the satellite must be launched and operational within five years of license grant. We recognize, however, that several 28 GHz systems are designed with multiple satellites at each of several orbit locations and that construction of these large numbers of satellites may take additional time. We must balance this, however, against our goal of preventing warehousing. Consequently, we will require each GSO 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. The milestones specified in paragraph 31 of this Order and Authorization are consistent with this framework. E. International Coordination 27. In general, we will follow the applicable advance-publication, coordination, and notification procedures as set forth in the ITU Radio Regulations in coordinating NetSat's satellites with other affected administrations. We will discuss in more detail international coordination procedures among U.S.-licensed FSS Ka-band systems, both GSO and NGSO, in the 28 GHz Band Satellite Report and Order. F. Exclusive Arrangements 28. To facilitate global competition, we are planning to adopt limitations on 28 GHz FSS licensees' ability to enter into exclusive arrangements with other countries. These restrictions will be discussed in more detail in the 28 GHz Band Satellite Report and Order. We intend to construe these arrangements bearing in mind that spectrum coordination and availability in particular countries may limit the ability of 28 GHz licensees to provide service to those countries. Accordingly, NetSat 28 must comply with any such restrictions adopted. Conclusion 29. Accordingly, upon review of NetSat 28 Company, L.L.C.'s application to implement a 28 GHz GSO satellite system to provide FSS, we find that NetSat 28 Company, L.L.C. is qualified to be a Commission licensee and that, pursuant to Section 309 of the Communications Act of 1934, as amended, 47 U.S.C.  309, that grant of this application will serve the public interest, convenience, and necessity. As specified in the Assignment of Orbital Locations to Space Stations in the Ka-Band, we have assigned NetSat 28 Company, L.L.C.'s to the 95ø W.L. orbital location. Ordering Clauses 30. IT IS ORDERED that Application File No. 194-SAT-P/LA-95, IS GRANTED, and NetSat 28 Company, L.L.C. IS AUTHORIZED to launch and operate one GSO FSS satellite, to provide fixed-satellite service in the United States in the frequency bands 19.7-20.2, 28.35-28.6 and 29.25-30.0 GHz in accordance with the Assignment of Orbital Locations to Space Stations in the Ka-Band DA 97-967, (adopted May 8, 1997), consistent with the Commission's Part 25 rules governing satellite operations, unless specifically waived herein, and any modifications to our rules that we adopt for 28 GHz GSO FSS systems in the forthcoming 28 GHz Band Satellite Report and Order. 31. IT IS FURTHER ORDERED that unless extended by the Commission for good cause shown, this authorization shall become NULL AND VOID in the event the space station is not constructed, launched, and successfully placed into operation in accordance with the technical parameters and terms and conditions of the authorizations by the following dates: Construction Construction Commenced Completed Launch NetSat 28 May 1998 April 2002 May 2002 32. IT IS FURTHER ORDERED that NetSat 28 Company, L.L.C. must comply with all rules to be adopted for GSO FSS systems in the 28 GHz Band Satellite Report and Order and must file a letter with the Commission, within 60 days of the effective date of this Report and Order, representing that it will construct its system in compliance with any rules adopted in this Report and Order. Failure to submit such a letter within this time frame is grounds for rendering this authorization null and void. 33. IT IS FURTHER ORDERED that NetSat 28 Company, L.L.C. must coordinate all of its Ka-band downlink operations with the U.S. Government systems in accordance with footnote US334 to the Table of Frequency Allocations, 47 C.F.R.  2.106. 34. IT IS FURTHER ORDERED that the license term for the space station is ten years and will begin to run on the date NetSat 28 Company, L.L.C. certifies to the Commission that the satellite has been successfully placed into orbit and the operations fully conform to the terms and conditions of this authorization. 35. IT IS FURTHER ORDERED that this authorization is subject to the completion of consultations under Article XIV of the INTELSAT Agreement. Upon completion of these consultations, and notification by the Department of State that the United States has fulfilled its international obligations with respect to INTELSAT, no further action by this Commission will be required. 36. IT IS FURTHER ORDERED that NetSat 28 Company, L.L.C. will prepare any necessary submissions to the International Telecommunication Union (ITU) and to affected administrations for the completion of the appropriate coordination and notification obligations for these space stations in accordance with the ITU Radio Regulations. We also remind all licensees that no protection from interference caused by radio stations authorized by other Administrations is guaranteed unless coordination procedures are timely completed or, with respect to individual administrations, by successfully completing coordination agreements. Any radio station authorization for which coordination has not been completed may be subject to additional terms and conditions as required to effect coordination of the frequency assignments of other Administrations, 47 C.F.R.  25.111(b). 37. IT IS FURTHER ORDERED that the temporary assignment of any orbital location to NetSat 28 Company, L.L.C. is subject to change by summary order of the Commission on 30 days' notice and does not confer any permanent right to use the orbit and spectrum. Neither this authorization nor any right granted by this authorization, shall be transferred, assigned or disposed of in any manner, voluntarily or involuntarily, or by transfer of control of any corporation holding this authorization, to any person except upon application to the Commission and upon a finding by the Commission that the public interest, convenience and necessity will be served thereby. 38. IT IS FURTHER ORDERED that NetSat 28 Company, L.L.C. is afforded thirty days from the date of the release of this order and authorization to decline this authorization as conditioned. Failure to respond within that period will constitute formal acceptance of the authorization as conditioned. 39. This Order is issued pursuant to Section 0.261 of the Commission's rules on delegations of authority, 47 C.F.R.  0.261, and is effective upon release. Petitions for reconsideration under Section 1.106 or applications for review under Section 1.115 of the Commission's rules, 47 C.F.R.   1.106, 1.115, may be filed within 30 days of the date of public notice of this order (see 47 C.F.R.  1.4(b)(2)). FEDERAL COMMUNICATIONS COMMISSION Peter F. Cowhey Chief, International Bureau