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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 ) ) Dominion Video Satellite, Inc. ) ) Application for Minor Modification of) File No.: 12-SAT-ML-97 Authority to Construct and Launch and to) IBFS File No.: SAT-MOD-19961108-00132 Continue Construction and Launch of ) Planned Satellite at 61.5ø W.L. ) ) Application for Additional Time to) File No.: 13-SAT-MP/ML-97 Construct and Launch Direct Broadcast) IBFS File No.: SAT-MOD-19961108-00133 Satellites ) ) Application for Launch Authority) File No.: 108-SAT-LA-97 ) IBFS File No.: SAT-L/A-19970814-00074 ORDER AND AUTHORIZATION Adopted: May 14, 1999 Released: May 17, 1999 By the Acting Chief, International Bureau: I. INTRODUCTION 1. By this Order and Authorization, we grant Dominion Video Satellite, Inc. ("DVSI") authority to commence operation of a direct broadcast satellite ("DBS") service on its assigned channels (25 - 32) at the 61.5o W.L. orbital location, using the EchoStar III satellite which is currently operating at that location. Grant of this authorization will permit DVSI to commence DBS service to the public immediately. We grant DVSI, on our own motion, a waiver of the satellite construction and launch requirement of the DBS due diligence rules. We also dismiss as moot DVSI's requests for (1) minor modification of its authority to construct and launch a satellite at 61.5ø W.L., (2) additional time to construct and launch DBS satellites, and (3) launch authority at 61.5o W.L. II. BACKGROUND 2. In 1982, DVSI was granted a DBS system construction permit. DVSI was not, however, assigned DBS channels or authorized to launch and operate a DBS system at the time it was granted its construction permit. In 1988, DVSI was granted a four-year extension to commence operation. Five years later, in 1993, the Commission granted DVSI a second extension of time to begin operation of its DBS system which expired on December 4, 1996. In 1995, the International Bureau found DVSI had satisfied the first component of due diligence and assigned it eight DBS channels at the 61.5o W.L. orbital location. Those eight channels are the subject of this Order. 3. In July 1996, according to DVSI's applications, DVSI and EchoStar entered into a "Direct Broadcast Service Transponder Lease, Channel Use and Programming Agreement" ("Agreement"). Among other things, the Agreement gives DVSI the right to lease eight transponders on EchoStar III, located at 61.5ø W.L., in order to commence DBS service on its authorized channels that location. 4. In its pending applications, DVSI asks us to rule that its lease of transponder capacity on the EchoStar III satellite colocated at 61.5ø W.L. satisfies its due diligence requirements for its channels at that location. Tempo Satellite, Inc. ("Tempo") opposes all three of DVSI's related applications. III. DISCUSSION 5. Under Section 309 of the Communications Act of 1934, as amended ("Communications Act"), the Commission shall determine whether the public interest, convenience and necessity will be served by granting of license applications. The Commission also may, on its own motion, grant a waiver of its rules in a particular case when the relief requested would not undermine the policy objective of the rule in question and would otherwise serve the public interest. The issue raised in this case is whether waiving the DBS due diligence rule (Section 100.19), requiring construction and launch of a satellite, is in the public interest in this particular situation. A. The DBS Due Diligence Rules 6. The Commission's DBS due diligence rules are contained in Section 100.19 of the Rules and contain two prongs. The first prong requires a DBS permittee to complete contracting for its satellite(s) within a year of receiving its construction permit. The second prong states, in pertinent part, "[t]he satellite stations shall also be required to be in operation within six years of the construction permit grant." The due diligence rules also provide that "DBS permittees and licensees shall be required to proceed consistent with all applicable due diligence obligations, unless otherwise determined by the Commission upon proper showing in any particular case." The purpose of the due diligence rules is to ensure that permittees are committed to implementing service to the public as quickly as possible and to prevent speculative warehousing of spectrum. 7. DVSI acknowledges it has not built its satellites within the Commission's due diligence deadline. DVSI, however, seeks authority to use EchoStar III in lieu of constructing and launching its own satellite in order to commence service from its assigned channels at 61.5ø W.L. Nothing in the Commission's rules, however, suggests that leasing capacity on another space station licensed to another DBS operator satisfies this due diligence requirement. Thus, we cannot find that DVSI has met the DBS due diligence construction and launch requirement. B. Waiver of the Due Diligence Rules 8. We believe a waiver of Section 100 is appropriate here and waive the rule. As to the public interest prong of Wait Radio, a waiver will serve the public interest in several respects. First, it will facilitate deployment of service to the public. In 1991, the Commission authorized joint use of a satellite by United States Satellite Broadcasting ("USSB") and DirecTV, which was then under construction by DirecTV, to implement their respective DBS systems. Under the USSB/DirecTV arrangement, USSB was authorized to provide DBS service transmitting on its five assigned channels at 101ø W.L. using a portion of a DBS satellite -- five transponders -- purchased from DirecTV. In the USSB case, the Commission held that because of USSB's efforts, the difficulties overcome, the rights of all parties, and the ultimate goal of service to the public, grant of the USSB request would serve the public interest. The Commission recently approved DirecTV's acquisition of USSB's DBS licenses. In doing so, the Commission waived the DBS due diligence rule requiring satellite construction for USSB's assigned channels at the 110ø W.L. orbital location. 9. DVSI states that it currently has 50,000 subscribers through its program offering on one of EchoStar's channels at 61.5ø W.L. DVSI is prepared to commence expanded DBS service on its assigned channels at 61.5ø W.L. using EchoStar's satellite. DVSI states that it would sell the EchoStar receiving equipment to its subscribers who would then be able to receive DVSI's service. EchoStar's subscribers also would be able to receive DVSI's service. In addition, DVSI has been authorized to construct an earth station in Naples, Florida that would be capable of transmitting programming directly to transponders DVSI would use on the EchoStar III satellite. EchoStar's satellite has a total of forty-four transponders -- more than the number of transponders necessary to provide service on its eleven assigned channels -- which permits EchoStar to offer its extra transponder capacity to DVSI. Therefore, DVSI's use of these transponders to transmit on its assigned channels would not interfere with any other licensee's operations. 10. Second, authorizing DVSI to commence service will expand programming choices for DBS subscribers. For instance, USSB's DBS service, until the recent approval of the transfer of control to DirecTV, was available to the public as a stand-alone DBS service. USSB's service provides innovative alternative programming to subscribers as a compliment to DirecTV's service or on its own. Similarly, DVSI's programming will provide another alternative for EchoStar subscribers, as the receiving equipment is the same, and a separate stand-alone service to DVSI's subscribers. Thus, waiving the due diligence rule will serve the public interest by increasing the choices available to consumers. 11. Third, the use of the EchoStar III satellite by DVSI at 61.5øW.L. will also make efficient use of existing DBS infrastructure. By allowing DVSI to use extra transponders on EchoStar III, rather than requiring DVSI to construct and launch another DBS satellite, the spectrum/orbit resource will be put to use more quickly and efficiently than if we were to revoke DVSI's authorization and re-license the channels, either by auction or another licensing mechanism. Taking advantage of the transponder capacity that is already in orbit will avoid the enormous expense and delay involved in constructing and launching a separate satellite. For these reasons, we believe that joint use of the EchoStar III satellite by EchoStar and DVSI promotes the public interest. 12. As to the second prong of Wait Radio, we also find that the policy objectives of the due diligence rules are not undermined by grant of a waiver in this case. The Commission has previously suggested that permittees may seek approval of cooperative ventures if existing assignments prove insufficient to commence an independent service. In light of the underlying purpose of the Commission's due diligence rules to facilitate service to the public, the experience of permitting USSB and DirecTV to combine facilities, and the Commission's encouragement of permittees to seek approval of cooperative ventures, waiver of the construction requirement of the due diligence rules is appropriate in this particular case. Waiving the satellite construction requirement of the due diligence rules will not undermine, but rather, advance the policy objective of getting service to the public because it will permit DVSI to offer DBS service immediately. As a result, it also will encourage further competition in the multi-channel video programming distribution market. 13. The circumstances in this case justify the grant of a waiver of our due diligence rules. The facts before us demonstrate that, overall, DVSI has developed an efficient method of commencing service from its assigned DBS channels at 61.5øW.L. DVSI clearly has demonstrated by its actions that it is attempting to develop a substantial DBS service in the most efficient way possible. C. DVSI's Applications 14. As a result of the foregoing authorization of DVSI to commence service at 61.5øW.L., the outstanding Application for Minor Modification, Application for Additional Time, and Application for Launch Authority are moot. Tempo has raised other issues related to DVSI's applications, however, we do not need to reach those issues given our decision here. Therefore, DVSI's Application for Minor Modification, Application for Additional Time, and Application for Launch Authority are dismissed. Tempo Satellite, Inc.'s opposition to DVSI's applications is granted to the extent described above and denied in all other respects. IV. CONCLUSION 15. We conclude that it would serve the public interest to waive the construction component of the due diligence requirements in this particular case in order to facilitate quick deployment of DBS service to the public to increase choices to U.S. consumers, and to increase competition in the multi-channel video programming distribution market. For these reasons, we authorize DVSI to use the EchoStar satellite located at 61.5øW.L. to commence DBS service on DVSI's assigned channels. As previously stated, DVSI has filed three separate applications and Tempo has filed opposition to those applications. Therefore, the Application for Minor Modification of Authority to Construct and Launch and to Continue Construction and Launch of Planned Satellite (61.5ø W.L.), the Application for Additional Time to Construct and Launch Direct Broadcast Satellites requesting an extension of time until December 4, 2000 to construct and launch its DBS satellites, and the Application for Launch Authority are dismissed as moot. V. ORDERING CLAUSES 16. Accordingly, pursuant to authority delegated by Section 0.261 of the Commission's rules, 47 C.F.R.  0.261, IT IS ORDERED that DVSI is AUTHORIZED to provide DBS service on channels 25-32, inclusive, at the 61.5øW.L. orbital location using EchoStar III. 17. IT IS FURTHER ORDERED that DVSI's authorization is SUBJECT TO THE CONDITION that DVSI comply with all applicable conditions set forth in Direct Broadcast Satellite Corporation, Order & Authorization, 13 FCC Rcd 10080 (1997), as applicable to DVSI's channels. 18. IT IS FURTHER ORDERED that DVSI is responsible for maintaining control over use of and programming on its assigned channels. 19. IT IS FURTHER ORDERED that, subject to the foregoing conditions, DVSI is licensed to provide DBS service on its assigned channels (25-32) until midnight May 14, 2009. 20. IT IS FURTHER ORDERED that this authorization does not and shall not vest in DVSI any right to operate the facilities specified herein, or any right to use the frequencies specified herein, beyond the term of this license. Neither this license nor the rights granted hereunder shall be assigned or otherwise transferred in violation of the Communications Act or the Commission's rules. The facility specified in this license is subject to modification of technical parameters to the extent necessary to accommodate international coordination efforts involving implementation of this system in accordance with the appropriate provisions of the International Telecommunication Union Radio Regulations, including Appendix S30, S30A, and Resolution 42. 21. IT IS FURTHER ORDERED that DVSI's Application for Minor Modification of Authority to Construct and Launch and to Continue Construction and Launch of Planned Satellite (61.5ø W.L.), Application for Additional Time to Construct and Launch Direct Broadcast Satellites, and the Application for Launch Authority are dismissed as moot. Tempo Satellite, Inc.'s opposition to DVSI's applications is granted to the extent described above and denied in all other respects. 22. IT IS FURTHER ORDERED that this order is effective upon release. FEDERAL COMMUNICATIONS COMMISSION Roderick K. Porter Acting Chief, International Bureau