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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 ) ) The Establishment of Policies ) IB Docket No. 99-81 and Service Rules for the Mobile ) Satellite Service in the 2 GHz Band ) REPORT AND ORDER Adopted: August 14, 2000 Released: August 25, 2000 By the Commission: Chairman Kennard, Commissioners Ness and Tristani, issuing separate statements; Commissioners Furchtgott-Roth and Powell approving in part, dissenting in part, and issuing a joint statement. TABLE OF CONTENTS Topic Paragraph Number I. INTRODUCTION 1 II. BACKGROUND 3 III. DISCUSSION A. Service Link Licensing Procedures 1. Spectrum Sharing Plan a. Spectrum Authorization Methodologies Proposed in the Notice and Alternatives Considered 8 b. Orbit Considerations and Regional Spectrum 13 c. The 2 GHz MSS Band Arrangement 16 d. Service to Unserved Areas 31 e. System Amendments 45 2. Financial Qualifications 46 3. Technical Qualifications 49 a. Frequency Agility 51 b. Coverage Requirements 55 c. Provision of AMS(R)S 61 B. Non-Service Link Issues 68 1. Feeder Links 72 a. Extended C-band 74 b. 5, 7 and 15 GHz bands 76 c. Ku-band 78 d. Ka-band 81 2. Non-U.S.-Based Gateway Operations 86 3. Inter-Satellite Service (ISS) Links 88 4. Radionavigation Frequencies 90 C. Service Rules 1. Regulatory Classification of Providers 92 2. System Licenses and Terms 99 3. Implementation Milestones 106 4. Reporting Requirements 112 5. Distress and Safety Communications and Enhanced 9-1-1 117 6. Trafficking 128 7. Orbital Debris Mitigation 135 8. Exclusionary Arrangements 139 D. Mobile Earth Station Licensing 141 E. International Coordination 145 F. Interservice Sharing 1. Sharing in 1990-2025 MHz and 2165-2200 MHz bands (In-band sharing) 151 2. Adjacent Band Sharing 154 IV. CONCLUSION 164 V. PROCEDURAL MATTERS 165 VI. ORDERING CLAUSES 169 Appendix A List of Parties Appendix B Final Regulatory Flexibility Analysis Appendix C Final Rules I. INTRODUCTION 1. In this Report and Order, the Commission takes the next step toward authorizing a new generation of mobile satellite services (MSS). These satellite systems will provide new and expanded regional and global data, voice, and messaging services using the 2 GHz frequency band (2 GHz MSS). The 2 GHz MSS systems also will enhance competition in mobile satellite and terrestrial communications services, and complement wireless service offerings through expanded geographic coverage. 2 GHz MSS systems will thereby promote development of regional and global communications to unserved communities in the United States, its territories and possessions, including rural and Native American areas, as well as worldwide. The policies and rules we adopt in this Report and Order are designed to expedite the authorization process and encourage utilization of 2 GHz spectrum for delivery of the benefits of MSS to all U.S. consumers nationwide. 2. Pursuant to a 2 GHz MSS processing round initiated in 1997, nine parties filed proposals to operate 2 GHz MSS systems in the United States. Specifically, the Boeing Company (Boeing), Celsat America, Inc. (Celsat), Constellation Communications, Inc. (Constellation), Globalstar, L.P. (Globalstar), Iridium LLC (Iridium), and Mobile Communications Holding, Inc. (MCHI) filed applications for U.S. space station licenses; and ICO Services Limited (ICO) (a United Kingdom company), Inmarsat Horizons (Inmarsat) (an inter-governmental satellite organization), and TMI Communications and Company, Limited Partnership (TMI) (a Canadian entity) filed letters of intent (LOIs) seeking reservation of spectrum to serve the U.S. market from non-U.S.-licensed systems. All system proponents must amend their applications or LOIs to conform their proposed systems to the requirements and policies we adopt today. Given the enormous potential benefits these systems offer, and the public interest in their timely deployment, amendments to applications or LOIs must be filed no later than 30 days after a summary of this Report and Order is published in the Federal Register to receive continued consideration. II. BACKGROUND 3. The 1992 World Administrative Radio Conference (WARC-92) allocated the 1980-2010 MHz and 2170-2200 MHz bands to MSS worldwide, and the 2165-2170 MHz band to MSS in Region 2, each on a co-primary basis with fixed and mobile services, effective January 1, 2000. The 1995 World Radiocommunication Conference (WRC-95) allocated the 2010-2025 MHz band to MSS in Region 2, effective January 1, 2005. A footnote to this allocation provides that the 2010-2025 MHz band will be usable by MSS in the United States and Canada, effective January 1, 2000. In 1997, the Commission reallocated the 1990-2025 MHz (uplink) and 2165-2200 MHz (downlink) bands to MSS in the United States, effective January 1, 2000. 4. In a Notice of Proposed Rulemaking (Notice) released on March 25, 1999, we proposed licensing and service rules governing operation of 2 GHz MSS systems. To accomplish our goal of expediting licensing of 2 GHz MSS systems, we sought comment on spectrum assignment options that would permit the authorization of all qualified 2 GHz MSS system proponents. To integrate our service rules for MSS systems, we proposed to amend the existing MSS Above 1 GHz (Big LEO) service rules to incorporate service rules for the 2 GHz MSS. We sought comment on earth station licensing proposals, international coordination requirements, interservice sharing, and several other substantial issues. In addition, we sought comment on specific incentives to encourage 2 GHz MSS operators to provide service to rural and unserved communities. 5. In the Notice, we also reserved the option of adopting an alternative engineering solution or band sharing arrangement that would allow us to accommodate all qualified system proponents, including any hybrid solution arising from the proposed spectrum assignment alternatives. On February 7, 2000, the International Bureau released a Public Notice seeking supplemental comments on authorizing the 2 GHz MSS systems using a processing alternative that combines elements of the options proposed in the Notice. This additional band arrangement was intended to provide incentives for MSS operators to expedite implementation of their systems, while maximizing their operational flexibility during the incumbent relocation process. 6. We recently finalized the incumbent relocation process for the 2 GHz MSS band. The incumbent licensees in the 2 GHz MSS uplink band from 1990-2025 MHz are the broadcast auxiliary service, cable television relay service, and local television transmission service (collectively, "BAS"). Prior to the reallocation, BAS licensees were licensed to use seven channels of 17 or 18 megahertz each, spanning the 120 megahertz of spectrum from 1990 MHz to 2110 MHz (the "original BAS band"). In the reallocation of the 1990-2025 MHz band to 2 GHz MSS, the BAS band has been reduced from 120 megahertz to a total of 85 megahertz at 2025-2110 MHz (the "future BAS band"). In order to minimize the upfront relocation costs that 2 GHz MSS systems will pay, ensure that valuable spectrum does not lie fallow for several years, and allow advances in design and manufacture of new BAS equipment, we decided to adopt a two-phase BAS licensee relocation process. Because the highly integrated nature of BAS nationwide makes isolated, link-by-link relocation infeasible, an entire BAS channel must be cleared nationwide before one 2 GHz MSS system can operate in that spectrum. Thus, in Phase I, 2 GHz MSS operators will clear the lower 18 megahertz of the MSS uplink spectrum (1990-2008 MHz), primarily through BAS equipment retuning and filtering, narrowing the seven BAS channels to 14.5 or 15 megahertz each, occupying 2008-2110 MHz. In Phase II, which will begin when the 18 megahertz of Phase I spectrum is no longer sufficient to meet 2 GHz MSS requirements, 2 GHz MSS operators will clear the upper 17 megahertz of the MSS uplink spectrum (2008-2025 MHz) by narrowing the seven BAS channels to approximately 12 megahertz each, at 2025-2110 MHz. 7. The incumbent licensees in the 2 GHz MSS downlink band from 2165-2200 MHz are the commercial and private wireless fixed services ("FS"). Pursuant to the 2 GHz Second R&O and Second MO&O, MSS will relocate incumbent FS microwave licensees upon determination that unacceptable interference would be caused to the incumbent operations, based on the standards set by the Telecommunications Industry Association (TIA) in its publication TSB86. Should relocation of FS microwave licensees be necessary, the 2 GHz Second R&O and Second MO&O sets forth a relocation policy designed to allow early entry for new technology providers by allowing providers of new services to negotiate arrangements for reaccommodation of incumbent licensees, consistent with the policy established in the Emerging Technologies Proceeding, and refined in the Microwave Relocation Proceeding. III. DISCUSSION A. Service Link Licensing Procedures 1. Spectrum Sharing Plan a. Spectrum Authorization Methodologies Proposed in the Notice and Alternatives Considered 8. In the Notice, we sought comment on four spectrum authorization methodologies that could accommodate all proposed 2 GHz MSS systems. The first is a "flexible band arrangement," in which the Commission would grant each proposed system 2.5 megahertz in uplink and downlink spectrum, group systems into segments based on modulation technology (i.e., code division multiple access (CDMA) or time division multiple access (TDMA)) and orbital geometry (i.e., non-geostationary orbit (NGSO) or geostationary orbit (GSO)), and provide expansion spectrum between the assigned segments for additional system requirements. In the second option, called the "negotiated entry" approach, the Commission would license all proposed systems across the entire band and allow the operators themselves to coordinate their operations; the Commission would be available to resolve disputes. In the third proposal, the "traditional band arrangement," the Commission would assign or designate equal spectrum blocks to the proposed systems using system design as a function of spectrum allocation (i.e., a CDMA-NGSO block, a TDMA-GSO block, etc.). Under the fourth proposal, the Commission would auction the spectrum in the event that none of the preceding three options is viable. Two additional alternatives arose in the comments filed in response to the Notice: ICO USA Service Group (IUSG) offers a variation of negotiated entry it calls the "ICO Negotiated Entry Arrangement (INEA)," and Globalstar proposes an "all shared band arrangement." 9. IUSG designed the INEA plan primarily to facilitate cost-effective relocation of the terrestrial incumbents, assuming that MSS operators would clear only as much spectrum as necessary for new operators to commence service on a rolling basis. Under the INEA plan, early entrants would be permitted to operate anywhere in the bands, subject to negotiation and coordination with later arrivals that have filed a request for ITU coordination, met the Commission's milestones, signed an unconditional launch contract, and are within one year of launch. In addition, the INEA plan would guarantee spectrum for later entrants through good faith intersystem coordination and dispute resolution mechanisms. Commenters supporting the INEA argue that it accounts for divergent service implementation timetables, and addresses international coordination concerns. Commenters opposing INEA argue that early entrants can anti-competitively delay coordination negotiations with subsequent entrants, and that the lack of a guaranteed spectrum assignment would disadvantage later entrants, making it difficult to obtain financing. To address some of these criticisms, IUSG revised the INEA in its reply comments. Under the revised INEA plan, if negotiations between MSS entrants prove unsuccessful, the earlier entrant would be required to relinquish 2.5 megahertz of cleared spectrum to the later entrant, subject to cost-sharing reimbursement. 10. Globalstar calls its "all shared band arrangement" an "engineered solution" for assigning spectrum. Globalstar believes all systems should be authorized across the available spectrum and share all the spectrum based on mutual agreement regarding basic system parameters. Before any system begins service, all systems would adopt a sharing architecture, and as each system becomes ready to initiate service, all operational systems would be required to coordinate with the new system pursuant to the pre-negotiated sharing design. Globalstar adds that no system should be assigned exclusive spectrum unless it can convince other systems that it should receive exclusive frequencies prior to any system being licensed. At a minimum, Globalstar asks the Commission to assign spectrum to those systems that are capable of sharing in a separate segment of the band from those that cannot share spectrum. Globalstar contends that its "all shared band" is the superior proposal as it would increase the potential for competition by authorizing all applicants, facilitate international coordination by giving global systems more flexibility to obtain spectrum assignments from other administrations, provide certainty by ensuring that each system can use the entire spectrum to maximum capability, and discourage warehousing because delay increases the complexity of entry coordination. Alternatively, Globalstar proposes a hybrid plan under which the Commission would allow any system to operate anywhere within the band until a date certain, for instance, January 1, 2005, when a four- way band division NGSO shared, NGSO exclusive, GSO shared, GSO exclusive would take effect and all operational systems would be required to conform. 11. ICO and Inmarsat oppose Globalstar's proposal. According to ICO, despite Globalstar's statement that the Commission should be "neutral toward the marketplace" and "let the marketplace decide which systems achieve greater demand for spectrum," Globalstar's "all shared" approach would force all operators to use CDMA technology. In addition, ICO claims Globalstar's plan would delay 2 GHz MSS implementation because lengthy negotiations would result in order to come to agreement regarding the sharing technology. According to Inmarsat, Globalstar's "all shared" proposal is contrary to ITU technical studies and would require all operators to modify their systems to share spectrum, contrary to Commission policy promoting innovation. 12. Although none of the proposed band arrangements generated support from a majority of the commenters, all system proponents believe that the Commission can develop a technical sharing solution to accommodate all qualified system proponents. In that regard, certain themes emerged: the Commission should (1) authorize a guaranteed minimum amount of spectrum, (2) permit flexible spectrum use, (3) allow flexibility not to choose any technology schemes prematurely, (4) set a mechanism for systems to increase their amount of authorized spectrum when needed, (5) provide disincentives for warehousing, (6) prevent anti-competitive conduct by early entrants, (7) avoid lengthy inter-system coordination negotiations, (8) ease international coordination, and (9) facilitate cost- effective relocation of the terrestrial incumbents. To further explore these themes, the International Bureau released a Public Notice on February 7, 2000, seeking supplemental comments on authorizing the 2 GHz MSS systems using a processing alternative that combines the leading ideas on the record. b. Orbit Considerations and Regional Spectrum 13. The system proponents in this proceeding propose both NGSO and GSO mobile satellite systems. Each type of system has technical advantages and disadvantages. For example, because NGSO satellites orbit close to the earth's surface, time delays during radio transmissions from the Earth to the satellite and back are shorter than for GSO systems. Conversely, because GSO satellites are at high altitudes, approximately 22,300 miles, a single GSO satellite has a very large potential coverage area, compared to a single NGSO satellite. Our goal is to provide an opportunity for both types of systems to compete in the marketplace to provide users with the best combination of services and prices. We proposed, therefore, to authorize both NGSO and GSO MSS systems for operations in the 2 GHz MSS bands. The comments support our proposal to authorize both NGSO and GSO 2 GHz MSS systems. Consequently, we will accommodate both types of systems in our band plan. 14. Another difference between the two types of satellite systems is that NGSO systems can provide complete and continuous global coverage, whereas, a single GSO satellite, while capable of providing continuous coverage, typically only can provide regional service. In the Notice, we explained that because a single GSO satellite is inherently restricted to serving a particular geographic area, GSO systems may be better suited for regional spectrum than NGSO systems. At that time, we had tentatively concluded that the transition from the current BAS band to the future BAS band would take place simultaneously on a date certain. We therefore assumed that the authorized 2 GHz MSS systems would have immediate access to any portion of the 2 GHz MSS uplink band (1990-2025 MHz). Thus, given that portions of the 2 GHz MSS spectrum allocation are not uniformly available throughout the world, the flexible and traditional band arrangements proposed in the Notice grouped GSO systems in that portion of the 2 GHz band allocated for MSS only in Region 2 (i.e., the 2010-2025 MHz uplink band and the 2165-2170 MHz downlink band) ("regional spectrum"). 15. The two-phase transition from the current BAS band to the future BAS band described in the 2 GHz Second R&O and Second MO&O requires us to revisit our assumptions about relocation, and develop a modified MSS authorization approach that will provide greater flexibility for MSS operators to implement service. Specifically, the lower 18 megahertz of the MSS uplink spectrum (1990-2008 MHz), which roughly aligns with that portion of the uplink band allocated for global operations (1990-2010 MHz), will be cleared first. Consequently, the upper 17 megahertz of the MSS uplink spectrum (2008-2025 MHz), and thus, the regional uplink spectrum (2010-2025 MHz), will be cleared at a later date. We expect that the first 2 GHz MSS systems launched, whether NGSO or GSO, may wish to begin operations in the spectrum cleared in the first phase of the relocation in the uplink portion of the band (1990-2008 MHz). Though the Notice proposed to authorize NGSO and GSO systems in separate global and regional portions of the bands, based on the 2 GHz relocation policy we adopted since the Notice, we now do not believe it would be fair to prohibit GSO satellite operators from seeking access to the spectrum that is cleared in the first phase of the uplink relocation. Instead, we permit both GSO and NGSO system operators to use spectrum anywhere in the 2 GHz MSS bands. We believe that by eliminating distinctions between spectrum allocated for MSS in Region 2 and spectrum allocated for MSS globally, we are providing the most equitable mechanism for assigning the available spectrum in light of the incumbent relocation process. In addition, we expect that, because of differing regional spectrum assignments for MSS, many of the proposed systems may have to operate in different bands in different regions of the world, reducing the significance of any distinctions between regional and global 2 GHz MSS spectrum in the U.S. allocation. c. The 2 GHz MSS Band Arrangement 16. We adopt a hybrid band arrangement that includes features of the various proposals in the record. Under this arrangement, first we divide the 2 GHz MSS uplink (1990-2025 MHz) and downlink (2165-2200 MHz) bands into distinct segments of equal bandwidth ("Selected Assignments") based on the number of system proponents at the time that we authorize the 2 GHz MSS systems, or the first of these systems, whichever occurs sooner. We also will reserve an additional segment of spectrum equal to the other segments for expansion of system(s) by operators meeting certain criteria for service to unserved areas. The band arrangement, including the segment reserved for service to unserved areas, can be described as follows: 35 megahertz ¸ (Number of System Proponents + One) = Total Size of Spectrum Segments. The segments will consist of adjacent blocks stretching from one end of the band to the other. Each segment will represent an operator's potential selected spectrum assignment in each of the uplink and downlink bands. This arrangement is similar to the Traditional Band Arrangement proposal in the Notice in that we are dividing the spectrum into distinct segments for assignment. Unlike the Traditional Band Arrangement, however, we do not mandate a particular system orbit (that is, GSO or NGSO) for a given segment. Each 2 GHz MSS operator voluntarily will identify its selected spectrum at the time that the first satellite in its system reaches its intended orbit. Operators must notify the Commission in writing regarding their Selected Assignment. The Commission staff will then issue a Public Notice to provide notification of the operator's selected segment. We adopt this arrangement to provide the certainty of a specific spectrum assignment that many commenters observed is critical to obtaining financing and thus ultimately to market success. 17. As the Notice explained, our experience has demonstrated that five megahertz of spectrum assigned to one system, 2.5 megahertz in either direction, is sufficient for commencement of service. Under the band arrangement we adopt today, if all nine proponents are authorized, each system would choose Selected Assignments of 3.5 megahertz bandwidth in both the uplink and the downlink, with the remaining spectrum available for assignment based on service to unserved areas. Several commenters supported our Flexible Band Arrangement in the Notice that would have provided for 2.5 megahertz of initial spectrum in both the uplink and downlink bands. Still others favored our traditional band arrangement as a viable second choice because it offered a minimum amount of 3.75 megahertz of spectrum. Thus, we believe that providing for 3.5 megahertz for each system is sufficient to commence operations. In addition, although we are hopeful that all proposed systems proceed toward authorization, it is possible that not all will do so before we first authorize a 2 GHz MSS system. In such case, the remaining system proponents would receive more than 3.5 megahertz of spectrum upon authorization. For example, if at that time there are seven remaining proposals, each system authorized from that point would receive 4.375 megahertz of spectrum. 18. Furthermore, as explained in the Notice, although we are hopeful that all authorized systems will be built, we recognize that this might not occur. Thus, there is a probability that additional spectrum will become available as some authorized systems are not able to implement service. Spectrum abandoned by authorized systems may be available for expansion of systems that are operational and require additional spectrum. We do not, however, establish a policy or rule for redistribution of abandoned spectrum here. Instead, we will evaluate whether to redistribute such spectrum or make it available to new entrants after achievement of each of our system implementation milestones. We will also consider whether to designate abandoned spectrum for award to operators meeting our unserved area service criterion, described below. 19. In addition to authorizing each operational system to use a Selected Assignment, each operator may provide service anywhere else in the 2 GHz MSS spectrum on a secondary basis as to other MSS operators, with respect to the unoccupied spectrum assignments available for selection by other 2 GHz MSS operators. For example, one operator may utilize spectrum in another operator's selected spectrum, but must vacate that spectrum if the operator that has selected that spectrum wishes to occupy it. In addition, each operator may coordinate with any other 2 GHz MSS operator also seeking to use spectrum outside of its Selected Assignment. In that case, both such operators would operate on a secondary basis with respect to the system that has selected the spectrum. Thus, if two systems desire to operate on the same frequencies outside each of their Selected Assignments, neither has priority over the other. If those operators cannot coordinate secondary spectrum use in the desired portion of secondary spectrum, then they both must vacate those frequencies and operate elsewhere. In other words, systems can claim priority use of only Selected Assignments, and must operate outside of selected spectrum subject to appropriate intersystem coordination. The sharing aspects of this band arrangement are similar to the negotiated entry alternative proposed in the Notice in that operators will coordinate spectrum usage among themselves. Operators using spectrum on a secondary basis must comply with all applicable incumbent relocation requirements before commencing service. Later entrants selecting spectrum as their Selected Assignment that has been cleared by an earlier entrant for secondary use will be required to reimburse the earlier entrant for relocation costs. 20. System operators will be required to comply with the rules adopted for negotiations with and transition of terrestrial incumbents in the 2 GHz MSS uplink and downlink bands. Operators that intend to use spectrum designated as Phase II spectrum in the uplink portion of the band must comply with all negotiation periods and transition requirements, unless they can share the spectrum. We recognize that system proponents may not be able to predict the segment of the uplink band they intend to select until late in the implementation process. This could make negotiations with incumbents more difficult under the two-year time periods established for negotiations for Phase II spectrum and in the downlink portion of the band. We believe, however, that 2 GHz MSS operators will have sufficient incentives to conclude negotiations in order to begin service. In addition, we believe that it will become clear once 2 GHz MSS systems begin implementing which operators will be in Phase II spectrum and which portions of the downlink spectrum remain available for Selected Assignments. 21. We do not limit the amount of spectrum available to 2 GHz MSS operators on a secondary basis outside of their Selected Assignments. In order to limit the potential for strategic delays, such as those raised by commenters, system operators will be required to inform service providers and subscribers in writing that service provided using spectrum outside of the Selected Assignment is subject to preemption. In the event that a later entrant selects spectrum for its Selected Assignment that is being used by an earlier entrant, the earlier entrant will be required to move to other available spectrum or return to its Selected Assignment. This part of the arrangement is designed to allow MSS systems to begin providing service in any available frequencies during the incumbent transition process, to encourage use of spectrum, and to facilitate inter-system coordination in the band when later entrants begin operations. 22. The comments received in response to the February 7, 2000 Public Notice generally support this band arrangement with several commenters raising specific concerns or recommending minor modifications. Many of the commenters express concern about the ability of operators to access spectrum beyond the amount assigned for each Selected Assignment by sharing with other operators or other means. For similar reasons, several commenters urge us to adopt a policy that would redistribute spectrum obtained from abandoned or revoked authorizations to the remaining operators. We agree that our licensing arrangement should maximize spectrum sharing efficiencies. We recognize that some technologies may benefit from spectrum sharing techniques. Therefore, we permit operators to aggregate Selected Assignments by reaching agreement for sharing of those assignments among themselves. For example, several CDMA operators could agree to select and operate in adjacent Selected Assignments and design their spectrum use to overlap each other. This feature balances the needs of operators capable of using overlapping frequencies with those of systems that may not be designed to share co- frequency by providing incentives for shared technology proponents to cooperate during system implementation. 23. ICO and IUSG seek clarification as to whether our band arrangement will require operators to select paired Selected Assignments in the service link bands. That is, whether we will pair uplink Selected Assignments with downlink Selected Assignments. We do not require operators to select paired assignments of spectrum in the service links. We permit operators to request segments that are independent of each other. We agree with IUSG that this approach could reduce the burden of incumbent transitions during the initial phases of MSS deployment. 24. Similarly, in discussing how our band arrangement could reduce incumbent transition costs, Celsat requests that we clarify our position with regard to 2 GHz MSS systems sharing spectrum with BAS in the 1990-2025 MHz band. In the 2 GHz Second R&O and Second MO&O, we generally applied our relocation policy in the Emerging Technologies Proceeding to the relocation obligations facing the 2 GHz MSS system proponents. This policy permits new licensees that can share spectrum with incumbents to do so without incurring relocation obligations. Therefore, if a particular 2 GHz MSS system proponent can demonstrate conclusively that its proposed system is capable of sharing spectrum with all types of BAS operations in the 2 GHz band, that system will be exempt from relocation obligations. 25. Because an entire BAS channel must be cleared nationwide before an MSS system can operate in that spectrum, the first 2 GHz MSS system to begin service in that portion of the uplink will have to clear more spectrum than it will be authorized to use. As a result, the first entrant will clear BAS spectrum for later entering systems. That operator is thus entitled to relocation cost reimbursement from those systems using the cleared BAS spectrum. It would be grossly unfair to allow a system claiming it can share spectrum with BAS to take advantage of spectrum cleared by an earlier entrant. If that system can share with BAS to avoid relocation obligations, it must do so. Therefore, a 2 GHz MSS operator will be exempt from relocation obligations only if it chooses its Selected Assignment in an uncleared portion of the band. Furthermore, to maintain its relocation exemption, this 2 GHz MSS operator may not operate on a secondary basis in spectrum outside of its Selected Assignment that has been cleared by earlier entrants. For example, assuming the Phase I spectrum has been cleared, the 2 GHz MSS operator claiming it can share with BAS must choose its Selected Assignment in the Phase II portion of the band, and only operate in the Phase II portion of the band. If the system, once operational, discovers that it cannot share with BAS, or otherwise desires to operate in cleared spectrum in Phase I, it may do so, subject to compliance with the relocation procedures established in our relocation order. 26. The only system opposing the band approach proposed in the Public Notice, Globalstar, reiterates its recommendation that we adopt its "all shared" band arrangement. Under that arrangement, immediately upon licensing all eligible systems would share the entire available 2 GHz MSS spectrum through coordination. Globalstar's "all shared" band arrangement is premised on completion of coordination among all eligible 2 GHz MSS operators. Globalstar admits in its comments, however, that "[n]egotiations do not always succeed, or can drag on for years." We agree with Globalstar on that point and are concerned that if we were to adopt its proposal, deployment of all 2 GHz MSS systems could be delayed indefinitely. Such delay would significantly compromise our objective of expediting the delivery of 2 GHz MSS service to consumers. We also are troubled by the prerequisite under Globalstar's proposal that would potentially require the Commission to mandate that all 2 GHz MSS operators use the same technology or to coordinate (e.g., modulation schemes) in order to facilitate co-frequency sharing among the 2 GHz MSS providers. It has been our policy to allow licensees to optimize system designs within our regulatory framework in order to promote innovation. Given that most of the 2 GHz MSS proponents, including Globalstar, have not committed to implementing a particular technology, we find no justification for adopting Globalstar's proposal and believe that the band arrangement adopted here best addresses the various system proposals. 27. We also recognize, as stated by Globalstar, the ITU International Mobile Telecommunications for the Year 2000 ("IMT-2000") Project's progress on standardization of personal communication services technologies and its relevance to the MSS industry. All but one of the IMT-2000 radio transmission technologies can be implemented within 3.5 megahertz of selected spectrum. The implementation of IMT-DS (Wideband CDMA) requires more spectrum than may be available to a single operator under our band approach. The band approach we adopt today, however, provides sufficient flexibility for operators convinced of the efficiencies of using Wideband CDMA in shared spectrum to use spectrum outside of their Selected Assignment on a secondary basis or aggregate their spectrum assignments. 28. Several commenters raise other concerns about our band arrangement in their supplemental comments. Inmarsat suggests that authorized systems be entitled to select spectrum six months before launch to allow sufficient time to finalize plans and procedures for in-orbit testing. We are not convinced by Inmarsat's assertion. We do not believe that launch dates are reliable deadlines. For instance, launch dates for any type of satellite GSO or NGSO can be delayed indefinitely or cancelled. TMI contends that triggering spectrum selection at the time of launch of a system's first satellite would disadvantage GSOs, as compared to NGSOs, because it takes longer to build and launch GSO satellites. It is accurate that construction and launch of GSO satellites typically takes longer than that of individual NGSO satellites. On balance, however, we believe it is best to allow spectrum selection at the time the first satellite in a system reaches its intended orbit. It is at that moment that a 2 GHz MSS satellite system will need to identify spectrum and begin to operate there. In addition, though NGSO systems usually can be built faster, they require more launches to implement a constellation and conditions often vary and, thus, it is not certain what systems will be the first to be deployed. Moreover, allowing the first system that launches to select its spectrum, and each subsequent system to do so sequentially provides market-based incentives to launch systems. Thus, this approach furthers the Commission's strong policies favoring competition, efficient use of spectrum resources and quick deployment of services for the benefit of U.S. consumers. 29. MCHI raises the concern that operators may resort to "gaming" under our band arrangement by selecting an assignment based on its value to another applicant and requests that the Commission be prepared to address such problems on an ad hoc basis. We do not intend to intervene unless the parties are unable to resolve an issue after first attempting to negotiate in good faith. We will be available to address specific concerns if an operator presents sufficient evidence to demonstrate that another operator has violated our rules. TMI raises a similar concern about preventing "squatting" by early entrants that use spectrum outside of their selected assignment on a secondary basis. We address the potential for early entrants to abuse their negotiating position with later entrants by only allowing secondary use of spectrum outside of the Selected Assignment and requiring written notice to service providers and subscribers that service can be preempted. Furthermore, we will enforce our rules if the need arises. 30. We adopt the band arrangement discussed above for assignment of the 2 GHz MSS spectrum to accommodate all proposed systems with adequate spectrum to launch service, and thus, we resolve mutual exclusivity among the system proponents. This approach, which essentially consists of a combination of our Traditional Band Arrangement and Negotiated Entry Approach, provides certainty for qualified operators to pursue financing and design systems. At the same time, it provides sufficient flexibility to maximize the use of the 2 GHz MSS spectrum and minimize the burdens of incumbent relocation. In addition, the band arrangement adopted here promotes our goals of encouraging technical innovation, facilitating deployment of service, maximizing the efficient use of spectrum, and using market-based incentives. d. Service to Unserved Areas 31. Section 151 of the Communications Act mandates that the Commission "make available, so far as possible, to all the people of United States without discrimination on the basis of race, color, religion, national origin, or sex, a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges . . . ." In fulfilling this mandate, the Commission has had a long history of encouraging the deployment of basic and advanced telecommunications services to all U.S. consumers throughout the entire United States and associated geographic areas. For example, in 1994 in the Big LEO Report & Order, the Commission explained that the "new mobile satellite service [Big LEO] will offer Americans in rural areas that are not otherwise linked to the communications infrastructure immediate access to a feature-rich communications network." On August 5, 1999, this Commission commenced two additional proceedings intended to foster the delivery of telecommunications services, including satellite services, to unserved areas. On June 8, 2000, we adopted the first two Orders arising from these proceedings. 32. We believe that access to telecommunications services is essential to ensuring that persons residing in unserved or geographically isolated areas are able to participate in today's fast- changing information economy. If access is not provided, persons residing in these areas will have less opportunity to seek or access educational, medical, economic or other important resources. As we stated in the Notice, we believe satellites are an excellent technology for delivering basic and advanced telecommunication services to unserved, rural, insular or economically isolated areas, including Native American communities, Alaska, Hawaii, and Puerto Rico, and U.S. territories and possessions such as communities within the U.S. Virgin Islands, Guam and American Samoa ("unserved areas"). In the Notice, we sought guidance as to the policies or rules we could implement (or forbear from) to encourage provision of 2 GHz MSS to unserved areas. For example, we asked whether one criterion for awarding expansion spectrum and resolving coordination disputes should be whether a licensee is providing service to unserved areas. We noted that we have thus far not adopted such policies or rules for Big LEO licensees or other MSS providers. We therefore sought comment on whether we should, in a separate proceeding, adopt similar policies or rules for unserved areas for Big LEO and other satellite licensees. 33. We remain committed to encouraging the expeditious delivery of telecommunications services, via satellite services, to unserved communities. The comments in this proceeding support our belief that satellites are an excellent technology for delivering these services. Indeed, the record shows that many of the 2 GHz MSS system proponents claim that providing service to unserved and rural areas is a major part of their business plans. For example, Celsat explains that it envisions being able to bring service to these communities for as little as eight cents per minute, including long-distance voice telephony service. Celsat agrees with our proposal to award expansion spectrum based on providing service to unserved areas as an incentive to provide such service. Moreover, ICO states that its technology and business plan are uniquely suited to serving remote areas. 34. We agree with the commenters who state that satellites are an excellent method for quickly extending basic and advanced telecommunications services to rural and unserved areas. We believe that the incentives we adopt below are an efficient method for deploying service in unserved areas. We find that it is more appropriate to create a spectrum-based incentive mechanism, rather than to adopt specific and detailed requirements, as an efficient means to more closely approximate a market-based mechanism for ensuring that unserved areas receive needed services in a timely manner. In other words, firms that choose to deploy service to unserved areas will obtain additional guaranteed spectrum as a result of providing such service, but will have the option of choosing not to deploy such service and therefore not avail themselves of the opportunity to obtain additional guaranteed spectrum. 35. Therefore, we will make available a separate segment of spectrum for assignment as expansion spectrum in both the uplink and the downlink portions of the service band. In the Flexible Band Arrangement section in the Notice, we proposed the concept of expansion spectrum by which additional spectrum would be assigned to an entity when it demonstrated that its commercial operations were exceeding the capacity of its original spectrum assignment. The expansion spectrum as adopted here will be available to authorized 2 GHz MSS systems that first demonstrate they will offer MSS capacity directed at providing service to consumers in unserved areas. Authorized systems will be eligible for the expansion spectrum whether or not they are operational. The expansion segment will be available in any assignment available for selection in the Phase I portion of the uplink band (1990-2008 MHz), as long as sufficient spectrum remains available to accommodate at least one additional entrant. If there is not sufficient spectrum to accommodate an additional authorized system in the Phase I spectrum, the expansion spectrum will be located in the Phase II portion of the uplink band (2008-2025 MHz). The expansion spectrum will be available in any assignment available for selection in the downlink portion of the MSS spectrum (2165-2200 MHz) that has not already been selected. 36. In order to be eligible for assignment of the expansion spectrum, authorized 2 GHz MSS systems must demonstrate that at least ten percent of their contracted U.S. capacity is committed to service providers that offer 2 GHz MSS services in unserved or rural service areas. For purposes of this incentive, we will adopt as the definition of unserved area any area falling within a Rural Service Area (RSA). RSAs closely fit the unserved areas we identified as areas that could most benefit from 2 GHz MSS in the Notice, and provide a well-established geographic designation. We will determine the amount of unserved or rural capacity contributed by each individual capacity contract by multiplying the total amount of capacity covered by that contract by the percentage of the relevant retail carrier's service area that falls within an RSA. We will then add up the aggregate amount of rural capacity provided by all contracts and divide that figure by the total amount of the 2 GHz provider's contracted-for capacity. 37. We believe that ten percent of an authorized 2 GHz MSS system's contracted U.S. capacity represents a reasonable approximation of the capacity that is necessary to provide meaningful service to unserved areas. RSAs cover approximately 20 percent of the U.S. population, a significant percentage of potential subscribers. Thus, we believe that a ten percent RSA contracted-capacity service offering incentive is an appropriate and reasonable voluntary incentive that would not create an undue burden on operators. We also note that the spectrum available for expansion is optional, and is merely available as an incentive for those interested in providing service to unserved areas. 38. Authorized 2 GHz MSS systems that seek to establish eligibility for the expansion spectrum must submit copies of service contracts evidencing such eligibility. To maximize the opportunity for all 2 GHz MSS operators to obtain service contracts, we will accept requests for expansion spectrum beginning one year from the date the first 2 GHz MSS system is authorized. When a request for the expansion spectrum is filed, Commission staff will issue a Public Notice announcing that the Commission is accepting competing requests for the expansion spectrum from authorized 2 GHz MSS systems. As stated above, authorized 2 GHz MSS systems do not have to be operational to qualify for the expansion spectrum. Once the deadline for requests closes, we will evaluate the requests based on the criterion described above, and issue an order assigning or designating the spectrum to those authorized 2 GHz MSS systems meeting or exceeding the criterion. A successful entity for expansion spectrum will be required to contribute all applicable incumbent relocation costs under our incumbent relocation rules and the 2 GHz MSS band arrangement adopted here. In addition, satellite operators receiving expansion spectrum under this process will be required to report on the actual number of subscriber minutes originating or terminating in unserved areas as a percentage of the actual U.S. system use, as part of their annual system-utilization reporting requirement. 39. The benefits of 2 GHz MSS, including two-way voice, data, and Internet services, should be available to U.S. customers in all parts of the United States, including unserved areas. We have carefully designed this incentive to complement the band arrangement we adopt today. We believe that assigning or designating additional spectrum to authorized 2 GHz MSS systems demonstrating concrete progress toward making satellite capacity available to unserved areas, as verified by reports of the number of subscriber minutes in these areas, will advance our objective of achieving universal access to telecommunications services as early as possible. 40. Some commenters urge us not to create incentives for 2 GHz operators to target their services to unserved areas. These commenters believe that the Commission's geographic coverage requirements and multiple licensing scheme already create market-based incentives for providing service to unserved areas. Many of these commenters argue that the earth station or handset licensees, as opposed to the space station operators, are more appropriate entities for incentives because they will be Commercial Mobile Radio Service (CMRS) operators offering service on a non-discriminatory common-carrier basis. These commenters argue that changes to the satellite system designs or business plans will not increase access to 2 GHz MSS in unserved areas. By contrast, Celsat asserts that satellite system operators design the space segment of the network to meet business plan and service pricing objectives. We believe that Celsat's assertion has merit. By providing a spectrum-based incentive beyond a provider's selected assignment, we can encourage systems to consider deployment of service to unserved areas in the early business planning and system design phases. We also note that ICO has recently made a commitment to provide telephone and Internet service to non-commercial locations on Native American tribal lands at a discount of up to 50 percent from applicable retail rates. 41. The commenters that oppose incentives for space segment operators suggest that the Commission may want to take positive steps to encourage access to Universal Service Funds by mobile earth station service providers by forbearing from regulations that make it difficult for these groups to obtain such funds. As described above, the Commission recently adopted two Orders addressing issues regarding deployment of terrestrial and satellite telecommunications services to unserved areas, including tribal and insular areas. In addition to our action here today, we recently adopted an order in which we stated that we will entertain waiver requests as necessary to overcome possible technical and administrative hurdles to facilitate deployment of service to certain unserved areas (i.e., tribal lands). Our recent Order with respect to universal service elaborated on the process of designating eligible telecommunications carriers to receive specific Federal universal service support. Consequently, it is unnecessary to take any further action in this item with respect to Universal Service Funds. 42. Several commenters also suggest that the Commission can actively support deployment of MSS to unserved areas by ensuring low-cost entry by minimizing relocation costs of 2 GHz incumbents. Under our relocation policy, the costs to 2 GHz MSS entrants have been reduced to the extent we believed possible, and we have provided maximum flexibility to MSS operators to provide service until the incumbents are relocated through the band arrangement we adopt today. These measures will significantly reduce any costs or burdens to MSS operators and should make availability of 2 GHz MSS capacity for service to unserved areas more economically viable. 43. Because it plans to provide aeronautical services, Boeing is concerned that its system may not qualify for any adopted incentive mechanism, depending on the definition of the term "unserved communities." We cannot guarantee that Boeing would be in the position to satisfy the criterion for expansion spectrum or to be granted it. As described above, however, all authorized 2 GHz MSS systems, including Boeing, will be entitled to file requests demonstrating that they have satisfied the requisite criterion for seeking authority to use the unserved area spectrum. In addition, under the adopted band arrangement, Boeing will be able to obtain its selected spectrum unrelated to eligibility for the unserved area expansion spectrum. 44. Iridium expresses concern that any adopted incentives for service to unserved areas should apply equally to 2 GHz U.S.-licensees and LOI filers and must exclude Big LEO (1.6/2.4 GHz) licensees. In response to Iridium, we clarify that the policies we adopt today for unserved area expansion spectrum apply equally to U.S. and foreign-licensed operators. In addition, we will not adopt any incentives concerning Big LEO spectrum at 1610-1626.5 MHz and 2483.5-2500 MHz as this proceeding is limited to 2 GHz MSS. e. System Amendments 45. We have repeatedly emphasized that 2 GHz MSS system proponents will be afforded an opportunity to amend their applications and LOIs, if necessary, to bring them into conformity with the requirements and policies adopted for systems in these bands. Although we did not seek comment on amendment procedures, Celsat requests that we dispense with an amendment period entirely to expedite the spectrum authorization process, while MCHI requests a minimum three months to amend applications or LOIs as necessary. Based on our decisions today, system proponents will need to amend their applications or LOIs in order to receive continued consideration, even if the only amendment is an orbital debris narrative statement. We also believe, however, that a three-month amendment period would unnecessarily delay our goal of expediting authorization of these systems, some of which have been on file since 1994. Therefore, we will provide 30 days after a summary of this Report and Order is published in the Federal Register for system proponents to amend their filings, which is comparable to the length of time the Commission gave to the proposed Big LEO systems to file application amendments after release of the Big LEO Report & Order. 2. Financial Qualifications 46. Historically, the Commission has fashioned financial requirements for satellite services on the basis of entry opportunities in the particular service being licensed. Under Commission precedent, the purpose of financial qualification rules is to prevent warehousing and ensure quick deployment of service where there may be more applicants than available licenses. In cases where we can accommodate all pending applications and future entry is possible, however, we have not looked to financial ability as a prerequisite to a license grant. In the Notice, we tentatively concluded that analysis of financial qualifications would not be necessary in this 2 GHz MSS processing round because we believed the proposed 2 GHz MSS band arrangements could accommodate all proposed systems, and provide opportunities for future entry. In addition, we sought comment on whether strict enforcement of milestones would better serve the goals on which financial qualification requirements are based. 47. Many of the 2 GHz MSS system proponents oppose financial qualifications on the ground that implementation milestones alone will provide adequate assurances of project completion. Several observe that financial standards are inappropriate because they are a barrier to entry, impede innovation, and substitute a flawed method for predicting success for the rigors of the marketplace. Globalstar points out that it is common industry practice to acquire funding over an extended period of time, which suggests that milestones are more meaningful indicators than one-time financial qualifications. Boeing and Inmarsat, however, stress the need for financial qualification standards, in order to eliminate delay caused by applicants not prepared to deploy services rapidly. 48. We adopt our tentative conclusion not to impose financial qualification requirements for the current 2 GHz MSS processing round. As explained above, our adopted band arrangement accommodates all eligible systems with adequate spectrum to launch service. We also believe that future entry is possible, given our decision today to defer automatic redistribution of spectrum returned to the Commission as a result of missed milestones. Moreover, our decision to impose and strictly enforce milestone requirements will ensure timely construction of systems and deployment of service. BellSouth Corporation (BellSouth) contends that financial qualification requirements are necessary to ensure that MSS system proponents can meet obligations concerning incumbent relocation. We disagree. Paying relocation costs is a necessary prerequisite to beginning service (unless the system's ability to share spectrum exempts it from paying relocation costs). If a 2 GHz MSS system proponent does not have the funds to relocate incumbents, it cannot operate, and thus, the incumbent can continue operating in its original spectrum. We believe that this relocation process provides adequate marketplace incentives for 2 GHz MSS systems to obtain the necessary financing to commence and complete relocation in a timely fashion. 3. Technical Qualifications 49. The Commission traditionally has established threshold technical requirements for satellite systems to maximize use of the limited spectrum/orbit resource. All 2 GHz applicants and LOI filers must meet our threshold qualification criteria to be eligible for licensing or spectrum reservation. In this section, we describe the minimum requirements, if any, for frequency agility, geographic coverage, and provision of Aeronautical Mobile-Satellite Route Service ("AMS(R)S"). 50. As we recognized in the Notice, the 2 GHz MSS system proponents have proposed different types of satellite system designs. We remain committed to giving satellite system operators the flexibility to design and implement systems that will best meet the needs of their customers. At the same time, we remain committed to facilitating competition by maximizing the number of potential service suppliers. The technical rules adopted here are intended to further both these goals. a. Frequency Agility 51. In the Notice, we proposed to require that 2 GHz MSS satellites and ground terminals be capable of operating across all portions of the 2 GHz MSS band (1990-2025 MHz and 2165-2200 MHz) in order to ensure flexibility in system coordination and operations. TMI agrees with the proposal. ICO and IUSG suggest that we adopt a requirement that NGSO systems should be capable of operating anywhere within 70 percent of the band and GSO operators should be capable of operating anywhere within 70 percent of the regional spectrum. Inmarsat estimates that current technology would permit deployment of equipment that operates over a maximum of 30 megahertz in each direction. Inmarsat opposes any requirement contending that the market will dictate whether manufacturers design their equipment to communicate over large portions of the band. ICO and IUSG also urge the Commission to adopt a rule requiring that system operators design their systems to be capable of unpaired frequency operation between the uplink and the downlink assignment segments; that is, the ability of satellite systems to change frequencies used to transmit from earth stations to the satellite(s) and back. ICO and IUSG argue that this requirement is necessary to facilitate frequency coordination with other MSS operators. These commenters also assert that requiring unpaired operation will reduce the burden of deployment during the transition with terrestrial incumbents. 52. We do not adopt a requirement that 2 GHz MSS systems must be able to operate across the entire 2 GHz MSS band. Such a requirement is unnecessary given that, as a result of our band arrangement, regional allocation variations for international coordination, and incumbent relocation, systems must be capable of operating across large portions of the band anyway. We do adopt a more limited requirement. Based on the comments, we believe that it is appropriate to require operators to be capable of operating across at least 70 percent of the U.S. 2 GHz MSS allocation (1990-2025 MHz and 2165-2200 MHz). We believe that it is important to design and launch 2 GHz MSS systems with sufficient flexibility to address coordination and band arrangement contingencies. This requirement comports with the current technical capabilities of system operators. We encourage system proponents to design their systems to be able to operate across more than 70 percent of the 2 GHz MSS bands in order to be able to provide the maximum amount of flexibility for spectrum use in the future. 53. With regard to unpaired frequency operation, we agree with ICO and IUSG and therefore adopt a requirement that 2 GHz MSS systems must be designed to be capable of changing the frequencies used to operate between the uplink and the downlink frequencies in their systems. This will provide for maximum flexibility in systems designs and assist in coordination of spectrum use among operators and with the transition of terrestrial incumbents in the bands. 54. Constellation requests that the Commission recognize that NGSO systems should be capable of operating in the 1980-1990 MHz band outside of the United States and that we authorize such systems for service outside the United States subject to protection of terrestrial systems in the United States. Although the global systems here may be capable of operating in bands not available in the United States, and the ITU allocations in the 1980-1990 MHz portion of the band may be available in other regions of the world, we do not have the authority to license operations in other Regions. Operators will be required to obtain authorization from administrations in other regions in order to operate in those countries' territories. We recognize that 2 GHz MSS operators, particularly those proposing global systems, may be required to use the 1980-1990 MHz band in other countries and the 2015-2025 MHz band only in Region 2. We remind these operators that they will have to design their systems to be capable of meeting the requirements of spectrum coordination in all parts of the world in which they expect to provide service. We do not, however, mandate that systems be capable of operating in the 1980-1990 MHz band outside of the United States. b. Coverage Requirements 55. NGSO systems. In the Notice, we proposed adoption of the same coverage requirements for 2 GHz MSS NGSO systems as we did for Big LEO systems. We explained that we believed that the rationale for adopting coverage requirements in the Big LEO proceeding also applies here. We believe that balancing system cost against projected need and alternative service options favors requiring service only to areas sufficient to cover the majority of the populated areas on the Earth. We proposed 2 GHz MSS systems operating NGSO constellations be capable of serving locations as far north as 70§ North latitude and as far south as 55§ South latitude for at least 75 percent of every 24-hour period in order to cover the majority of the world's population. We also proposed a specific coverage requirement for the United States. Specifically, we proposed that NGSO MSS operators be required to provide continuous coverage throughout all 50 states, Puerto Rico, and U.S. territories and possessions, and specifically that at least one NGSO satellite must be visible above the horizon at an elevation angle of at least five degrees at all times, as we did for Big LEOs. 56. The commenters support our proposed NGSO coverage requirement. We, therefore, adopt our proposals and amend the Big LEO rules to require 2 GHz MSS systems to provide global coverage. This requirement is consistent with our Big LEO rules and will provide sufficient coverage for service to the majority of the populated areas on the Earth. We also amend our rules to require 2 GHz MSS operators to provide continuous coverage of the United States, as described above. This requirement will create service opportunities for all of the United States. 57. Constellation requests that we clarify that the coverage requirements will apply equally to LOI filers. As we have said in DISCO II and throughout this proceeding, we will apply our 2 GHz MSS operating requirements to all system operators. Therefore, LOI filers that will serve the United States, whether proposing NGSO or GSO systems, will be required to comply with the U.S. and worldwide coverage requirements. 58. GSO systems. In the Notice, we explained that individual GSO satellites have a fixed coverage area that is inherently regional. Because of this characteristic, we did not propose a global coverage requirement for systems that use only GSO satellites. While we could have required GSO satellite system operators to provide global coverage such coverage would require additional satellites without providing any additional capabilities or capacity in the United States. Rather, we proposed to require such systems to provide coverage to all 50 states, Puerto Rico, and the U.S. Virgin Islands, unless the system operator can demonstrate that such coverage is technically infeasible. 59. We adopt our proposal. We recognize that the commenters may have been confused by slightly different language in the text of the Notice and the proposed rule section of the Notice. The proposed rule proposes that operators be required to provide service to all 50 states, Puerto Rico, and the U.S. Virgin Islands, if technically feasible. We adopt our proposal as drafted in the proposed rule and require GSO system operators to provide service to all 50 states, Puerto Rico, and the U.S. Virgin Islands, if technically feasible. This requirement is the same as our geographic service requirement for direct broadcast satellite operators. This requirement also provides reasonable parity with the NGSO coverage requirement. We recognize that GSO satellites located below a five degree elevation angle may not be capable of providing national coverage and do not require GSO operators to provide the geographic coverage specified above where a GSO satellite is located below a five degree elevation angle. 60. In its comments, Globalstar asserts that the coverage requirements for hybrid NGSO/GSO systems should be aggregated. We disagree with Globalstar. We believe that hybrid NGSO/GSO systems should be required to meet the same coverage requirements established for other satellite systems. For instance, the NGSO portion of a hybrid system will be required to comply with the coverage requirements for NGSO systems and the GSO portion will be required to comply with the coverage requirements for GSO systems. c. Provision of AMS(R)S 61. Aeronautical Mobile-Satellite Route Service (AMS(R)S) is a radio communication service providing communications between aircraft earth stations via satellite and ground stations or other aircraft stations, reserved for communications pertaining to safety and regularity of flight along civil air routes. Prior to the Notice, in the application phase of this proceeding, several parties argued that there are no specific international or national frequency allocations for AMS(R)S in the 2 GHz MSS bands. In the comments, Aeronautical Radio, Inc. (ARINC) contends that an exclusive allocation is required for the provision of AMS(R)S in generic MSS spectrum. Boeing contends, however, that the Commission's rules and the ITU Radio Regulations permit the provision of AMS(R)S in MSS spectrum. Boeing asserts that domestic and international rules define AMS(R)S as a type of Aeronautical Mobile-Satellite Service (AMSS) and that AMSS is a sub-category of MSS. 62. In the Notice, we sought comment on the feasibility of permitting Boeing to provide AMS(R)S in the 2 GHz MSS bands. We stated that although we agree with Boeing's assertion that the absence of a specific AMS(R)S allocation does not prohibit the provision of AMS(R)S in MSS bands, there are additional domestic and international regulatory issues that must be addressed prior to commencing service. We also explained that the domestic and international 2 GHz MSS allocations do not include any regulatory provisions for AMS(R)S, especially for intra-network priority and preemptive access. 63. Constellation, Inmarsat, and Iridium argue that the 2 GHz MSS allocation is for commercial mobile voice and personal communications services and that AMS(R)S is not compatible with this allocation. ICO believes that it is premature to decide whether AMS(R)S should be permitted and that FCC action should be deferred until after the next World Radiocommunication Conference addressing the issue. Constellation believes that the Commission should prohibit AMS(R)S operations in the 2 GHz bands. In response, Boeing states that its system would serve the intended purpose of the allocation because it will serve the rural aviation community and provide global aviation safety benefits. 64. As the Commission has stated in the past, AMSS is an example of MSS. The Commission has also stated that AMSS includes AMS(R)S. Therefore, we believe that Boeing can enter into contracts with members of the aviation community to provide AMS(R)S in the generic MSS allocation, with appropriate intra-network priority and preemption, without the need for any priority and preemption provision in the U.S. Table of Allocations. Therefore, we adopt our decision not to propose any rule changes specifically to accommodate Boeing's proposal, and will consider Boeing's proposal as an MSS system in the licensing phase of this proceeding. 65. In addition, the Notice explained that the Commission's rules have specific requirements concerning licensing of terminals for aviation distress and safety communications. These rules explicitly state which frequency bands may be used for aircraft-to-satellite AMS(R)S transmissions and do not include the 1990-2025/2165-2200 MHz bands. Iridium and ARINC state that Part 87.187 and the U.S. Table of Frequency Allocations would need to be amended to permit the operation of Boeing's terminals, yet no rulemaking is pending. Boeing states that it intends to file a petition for rulemaking with the Commission seeking a revision of Part 87 to permit aeronautical Earth stations to operate in the 2 GHz MSS frequency bands but does not believe that this should delay licensing of the satellite portion of the proposed system. 66. We agree with the commenters stating that Part 87 will have to be amended or waived to permit Boeing to operate AMS(R)S earth stations in the United States. We do not, however, undertake those regulatory changes here because it involves issues outside the scope of this proceeding and will require a separate notice and comment process. 67. The commenters raise other domestic and international regulatory issues related to Boeing's application. While we recognize that there are remaining issues concerning provision of AMS(R)S in the 2 GHz MSS bands, we believe that the appropriate place to address these system-specific concerns is in the licensing phase of this proceeding. Therefore, we will address such and any public comments on the system application and amendments at that time. B. Non-Service Link Issues 68. To this point, we have discussed rules and policies regarding the service link portion of an MSS system, i.e., the transmission path between the MSS satellite and a customer's Mobile Earth Terminal (MET). In addition to service links, MSS networks require separate frequencies for feeder links, tracking, telemetry, and command (TT&C), and in some cases, inter-satellite links (collectively, "non-service links"). Feeder links are the radio links that transmit a user's messages in both directions between the system's satellites and its gateway earth station(s) that connect the MSS network with the public switched telephone network. Tracking, telemetry, and command (TT&C) communications provide data on a satellite's functions via a two-way telemetry link between the satellite and a controlling earth station, or control center. Some system designs also use frequencies in the inter- satellite service (ISS) to provide links by which satellites in a constellation may communicate with each other. The 2 GHz MSS system proponents seek feeder link, TT&C and ISS frequencies in a variety of bands, and in one case, radionavigation frequencies not germane to the operation of the MSS system. 69. While we are optimistic that sufficient spectrum will be available to support 2 GHz MSS non-service link operations, at this time, we are not certain when that will occur. As described in more detail below, authorization of these requested frequency bands for non- service links remain subject to resolution in other proceedings. We agree with PanAmSat Corporation (PanAmSat) and Society of Broadcast Engineers, Inc. (SBE) that we should not resolve the parties' non-service link requests in this proceeding if such resolution would pre-ordain the outcome of related, pending proceedings. Therefore, this Report and Order only identifies the bands we believe will be available for 2 GHz MSS non-service links. Specific issues such as the amount of spectrum each system will be assigned in the relevant band will be decided in the subsequent 2 GHz MSS authorization instruments, and through inter-system coordination. 70. In the Notice, we sought comment as to what weight, if any, we should give to non-service link potential delaying factors in developing authorization methods and service rules for the 2 GHz MSS service links, especially with regard to system implementation milestones. We agree with the majority of commenters that we should award 2 GHz MSS licenses as quickly as possible, and thus, the Commission's milestone schedules should commence on the service link grant date. Of the nine system proponents, only Boeing proposes deferral of milestone schedules for 2 GHz MSS operators until the Commission finalizes all critical spectrum allocation decisions. Boeing observes that satellite operators have limited influence over the ITU Radiocommunication Bureau's satellite coordination procedure, or the pace at which the Commission makes non-service link assignments. On the other hand, commenters observe that system proponents could use these inherent delays to warehouse service link spectrum until such time as requested non-service link spectrum is allocated and assigned. We believe that it is the responsibility of the system operators to seek unencumbered non-service link spectrum, and milestones will provide the necessary incentive for system operators to seek attainable non-service links in a reasonable time or risk the loss of service link spectrum. We find that the benefits to the public of expediting implementation of 2 GHz MSS outweigh the burden this requirement may place on system operators to design systems in accordance with the proposed milestone rules. Therefore, we will initiate milestones upon authorization of service link spectrum, irrespective of the non-service link issues extant. 71. We intend to allow 2 GHz MSS system proponents to modify their non-service link proposals if it becomes apparent, based on the outcome of the relevant rulemakings and proceedings, that the frequencies (or substantial portions of those frequencies) for which they have sought assignment will not be available for timely non-service link use. Furthermore, we will treat such modifications as minor modifications, provided that the alternative frequency band will expedite deployment of that system's service (i.e., the spectrum is usable for non-service links without further administrative proceedings, and the addition of those non-service links to the band will not cause unnecessary congestion, make it difficult to obtain coordination, or otherwise increase the potential for interference to other systems in the frequency bands selected for non-service links). System proponents that do not amend their applications or LOIs so as to utilize accessible non-service link frequencies are advised that they proceed at their own risk that the regulatory issues surrounding their request may delay implementation, resulting in a missed milestone and cancellation of its authorization. Contrary to Globalstar's suggestion, we do not contemplate approval of requests for waiver of milestones based on a system's inability to access non-service link frequencies. 1. Feeder Links 72. As a general rule, because MSS feeder links operate with gateway stations at fixed locations, feeder links use frequencies allocated to the FSS. We tentatively concluded in the Notice that there is sufficient feeder link spectrum currently or imminently available to accommodate the spectrum needs of the 2 GHz MSS system proponents. The comments we received on this issue generally support this conclusion. Although the record is inconclusive with regard to any calculable relationship between service link spectrum and feeder link spectrum, a relationship does exist. Therefore, in light of the band arrangement we adopt today, which authorizes the 2 GHz MSS systems for significantly less service link spectrum than each has requested, we affirm our finding that there is sufficient feeder link spectrum for the 2 GHz MSS system proponents to provide commercial service. Given our past reliance on MSS operators to coordinate conflicting frequency uses in shared feeder link bands, and based on the record before us, we require the 2 GHz MSS operators, and their associated gateway earth station licensees, to comply with the coordination requirements of Section 25.203(k) of the Commission's rules. This requirement should further enhance the 2 GHz MSS providers' ability to access adequate feeder link spectrum to provide service. 73. The Notice also generated considerable comment from the Fixed Wireless Communications Coalition (FWCC) and its membership regarding allocation of MSS feeder links in frequencies that are heavily used by the fixed services. FWCC advocates that, should the Commission license MSS feeder links in FS bands, it must promulgate sharing and coordination rules that adequately protect FS operation and expansion. United Telecom Council (UTC), perceiving a spectrum shortage faced by fixed users, recommends that the Commission initiate a new rulemaking to identify additional spectrum for FS. In response, Inmarsat objects to FWCC's coordination suggestions as being biased on the side of FS, and claims that there is no need to impose spectrum efficiency standards on MSS because the MSS operators are aware of spectrum scarcity, and it is in their best interest to use spectrum as efficiently as technically feasible. Globalstar states that FWCC's proposals regarding protection for terrestrial systems from MSS feeder links in these bands are inappropriate for this proceeding, as are requests to find allocations of additional spectrum for FS. We agree that the allocation and technical matters FWCC and its members raise are not appropriate for this authorization and service rules proceeding, and are more appropriate for discussion in pending proceedings addressing MSS feeder link allocations in FS spectrum, and in a proceeding initiated by FWCC, designated RM-9649. a. Extended C-band 74. Inmarsat seeks GSO MSS feeder links in the extended C-band frequencies. In the Notice, we stated that Inmarsat's requested feeder downlinks in the United States would be limited to potentially available spectrum between 3600-3650 MHz, because the 3550-3600 MHz band is not allocated in the United States for FSS, and the 3650-3700 MHz band is proposed to be reallocated from FSS to FS in an ongoing proceeding. Inmarsat believes that it should be able to access the 3650-3700 MHz band for its feeder links because the reallocation is not yet final, and in any case, its feeder link use of that spectrum would be fully compatible with any new FS services in the band, and its maximum of two gateways in the United States would make terrestrial coordination feasible. Should Inmarsat pursue extended C-band feeder downlinks in the 3650-3700 MHz band, its earth station receive sites must be within close proximity (i.e., 10 miles or less) of an existing extended C-band earth station receive site authorized to use these frequencies. We also reiterate that FSS operations in the United States in the 3600-3700 MHz band are limited by footnote US245 to the U.S. domestic table of allocations, which restricts FSS to international, inter- continental systems, subject to a case-by-case electromagnetic compatibility analysis. 75. Inmarsat's requested feeder uplinks in the United States may also be limited because it potentially would share the 6425-6525 MHz portion of the band on a primary basis with the Local Television Transmission Service (LTTS). Commenters generally object to allowing MSS feeder links in the LTTS band. Inmarsat replies that since its system proposes to use a maximum of two gateways in the United States, it would be feasible to find appropriate locations, with proper shielding if necessary, from which to operate the feeder uplinks without mutual interference. We need not address these issues here. Inmarsat will have the opportunity to make such a showing when applying for its U.S.- based gateway earth station licenses, which require coordination under Part 25 of our rules. b. 5, 7 and 15 GHz bands 76. The Commission has a pending proceeding proposing to allocate the 5091-5250 MHz ("5 GHz"), 6700-7075 MHz ("7 GHz") and 15.43-15.63 GHz ("15 GHz") frequency bands to NGSO MSS feeder links (the 5, 7, 15 GHz Allocation Proceeding). Constellation, Globalstar and MCHI already hold authorizations to operate Big LEO feeder links in these same bands, although Constellation and Globalstar seek different feeder link frequencies for their 2 GHz MSS systems than those authorized for their respective Big LEO systems. Thus, the only 2 GHz MSS system seeking feeder link access in these bands for the first time is ICO. In the Notice, we sought comment on whether we could accommodate all of these systems in the potential 5, 7 and 15 GHz feeder link spectrum, as well as other authorized satellite users of the band. Globalstar agrees with the Commission that at least two systems can coordinate with each other to share spectrum for co-directional feeder link transmissions. MCHI states that it can coordinate its requested 2 GHz MSS feeder links with all other authorized Big LEO feeder links, including its own, but is concerned that additional feeder link sharing would require it to incur high costs to prevent interference. Similarly, Constellation requests that Big LEO systems be given priority when accommodating 2 GHz systems in feeder link spectrum. In response, ICO proffers that it is already coordinating its feeder links with other NGSO MSS systems and has encountered no claims that its feeder links cannot be accommodated. Globalstar states that it is premature for the Commission to judge feeder link intersystem sharing issues at least until all of the Big LEO systems are operational. In light of the unresolved issues with the use of these bands, we expect all operational MSS systems proposing feeder links in the 5, 7 and 15 GHz bands to coordinate use of feeder link spectrum, subject to the outcome of any allocation and licensing proceedings related to these frequencies. 77. The National Telecommunications and Information Administration (NTIA) is the Federal spectrum manager and the principal Executive Branch advisor on telecommunications policy. NTIA requests that NGSO MSS feeder uplink and TT&C authorizations in the 5 GHz and 15 GHz bands be conditioned to protect aeronautical radionavigation services (ARNS). The Commission has proposed such protections in the 5, 7, 15 GHz Allocation Proceeding, and therefore, we will address NTIA's request in that proceeding. In addition, NTIA requests that gateways using the 5 GHz and 15 GHz bands be subject to coordination through the Frequency Assignment Subcommittee (FAS) of the Interdepartment Radio Advisory Committee (IRAC) to ensure that harmful interference between the MSS feeder links and government operations is minimized. IRAC coordination is standard procedure in such circumstances. Thus, if feeder link earth stations are authorized to operate in the 5 GHz or 15 GHz bands, IRAC coordination would be required. NTIA also recommends that, to the extent practicable, any 2 GHz MSS operator using the 5091-5150 MHz band for feeder links locate its TT&C signal at the upper edge of the band, to reduce the likelihood of interference to the adjacent International Civil Aviation Organization (ICAO) Standard Microwave Landing System (MLS) operations at 5030-5091 MHz. Assuming that MSS operators are authorized to operate feeder links in the 5 GHz band, they likely would choose TT&C frequencies in accordance with NTIA's recommendation on their own accord, to ease coordination with MLS operations and reduce constraints placed on feeder link earth station transmissions. Therefore, we do not need to regulate placement of the TT&C signal in the 5 GHz band at this time. c. Ku-band 78. NGSO MSS Feeder Links. The "conventional Ku-band" refers to the Earth-to-space (uplink) frequencies at 14.0-14.5 GHz and the corresponding space-to-Earth (downlink) frequencies at 11.7-12.2 GHz. The "lower Ku-band" refers to the space-to-Earth (downlink) frequencies at 10.7-11.7 GHz. Boeing requests NGSO MSS feeder links in these bands, and the Commission has a pending proceeding proposing to allocate these bands to NGSO FSS systems. In the Notice, we sought comment as to whether NGSO MSS feeder links would be an efficient use of the proposed Ku-band NGSO FSS spectrum. Boeing claims it has demonstrated that its proposed NGSO feeder links would not cause unacceptable interference to GSO satellites and terrestrial networks in the band, and that it can operate its feeder links on a shared basis with other proposed NGSO FSS systems. PanAmSat and GE American Communications, Inc. (GE Americom) express concern over the feasibility of NGSO/GSO sharing in the Ku-band. In addition, PanAmSat suggests there is no need to act on Boeing's feeder link request at least until the NGSO/GSO sharing issues are resolved, because fundamental policy questions pertaining to Boeing's proposed AMS(R)S service likely will delay Boeing's ability to operate in the 2 GHz band. We agree that Boeing's feeder link request is intertwined with the issue of whether NGSO FSS links can operate co-frequency with GSO FSS and terrestrial systems in these Ku-band frequencies. Therefore, as proposed in the Notice, we will address Boeing's feeder link request in the pending rulemaking and application proceedings addressing the NGSO/GSO sharing issue. 79. GSO MSS Feeder Links. As the Commission has indicated, GSO MSS feeder links operating on frequencies and at orbital locations that are extensively used could preclude conventional FSS services and inhibit the use of these GSO locations for future FSS assignments. Consequently, the Commission has determined that GSO MSS operators should seek to operate feeder links at frequency bands other than those "conventional" bands that are heavily used for domestic and international FSS services. Nevertheless, the Commission reserves the option of considering GSO MSS feeder link requests in FSS bands on a case-by-case basis, using such factors as existing use of spectrum, orbital locations, potential adverse impact on FSS operations, and the benefits of successfully using these assignments to introduce new and needed satellite services to the public. In the Notice, we sought comment on whether we should consider granting authority for MSS feeder links in the frequencies allocated for FSS where, for example, a 2 GHz MSS system proponent reaches an agreement with an existing FSS licensee to use its licensed spectrum, or if the requested location is in an uncongested portion of the arc. 80. Globalstar is the only 2 GHz MSS applicant that seeks to use "conventional" FSS spectrum for GSO MSS feeder links. Specifically, Globalstar seeks authority to operate GSO MSS feeder links in the conventional Ku-band FSS frequencies from four GSO satellites, including one at the 80 W.L. orbital location. Under our case-by-case analysis, we note numerous obstacles to this request. First, FSS already uses the conventional Ku-band intensively. Second, Globalstar does not indicate how it plans to access its suggested Ku- band orbital locations, whether it be through a processing round, or an agreement with an existing FSS licensee. Most significantly, Globalstar's proposed feeder link operations at the 80 W.L. orbital location are not in conformance with the Commission's GSO orbit location two-degree spacing policy. Therefore, we expect Globalstar to explain how it intends to coordinate the proposed Ku-band GSO MSS feeder links with existing FSS operations, and the public interest benefit of such an assignment, before we would further entertain this request. If Globalstar cannot provide an adequate showing in this regard, we expect it to seek alternative feeder link spectrum. d. Ka-band 81. The Ka-band refers to the Earth-to-space (uplink) frequencies at 27.5-30.0 GHz (the "28 GHz band") and the corresponding space-to-Earth (downlink) frequencies at 17.7- 20.2 GHz (the "18 GHz band"). These bands have been segmented for, and shared by, several types of communications systems, including NGSO MSS feeder links, terrestrial FS, FSS, and the Local Multipoint Distribution Service (LMDS), pursuant to an extensive rulemaking proceeding and the efforts of a negotiated rulemaking committee. We recently modified the sharing arrangements in the 18 GHz band. 82. NGSO MSS Feeder Links. In the Ka-Band First Report and Order, the Commission adopted a band sharing arrangement that designates spectrum for NGSO MSS system feeder links. In the 28 GHz band, the Commission established a co-primary allocation for NGSO MSS feeder uplinks at 29.1-29.5 GHz, subject to the special sharing requirements set forth in Sections 25.257 and 25.258 of the rules. In the 18 GHz band, the Commission designated 19.3-19.7 GHz for NGSO MSS feeder downlinks on a co-primary basis with FS, subject to site and frequency coordination. Globalstar proposes to operate NGSO MSS feeder uplinks on a reverse-band working basis in the 19.3-19.6 GHz band segment, as an alternative to its NGSO MSS feeder uplink request in the 15 GHz band. The Commission stated in the Ka-Band First Report and Order, that requests for reverse-band working operation in this band would be examined on a case-by-case basis. We are not changing any policies concerning this band at this time. In the Ka-Band First Report and Order, the Commission further stated that the 19.3-19.7 GHz band should be able to accommodate at least two systems' feeder links. Therefore, this band may be available to alleviate congestion in other NGSO MSS feeder link bands. 83. GSO MSS Feeder Links. Celsat seeks GSO MSS feeder link bandwidth anywhere in the Ka-band. Although the Commission has not specifically designated Ka-band spectrum for GSO MSS feeder links, we tentatively concluded in the Notice that the GSO FSS designations in the Ka-band are appropriate for GSO MSS feeder link use. GE Americom, Hughes Communications Galaxy, Inc./Hughes Communications, Inc. (Hughes), PanAmSat, and Pegasus Development Corporation (Pegasus) request that the Commission reverse its tentative conclusion in the Notice and not accommodate GSO MSS feeder links within what they call the "core," "conventional" or "primary" GSO FSS Ka-band spectrum. PanAmSat states that the Ka-band faces the same problems of spectrum and orbital location scarcity as do the conventional C- and Ku-bands. Pegasus adds that GSO MSS feeder link use of this spectrum would be a highly inefficient use of the Ka-band orbital resource in the CONUS arc. In addition, Hughes asks us to reject those portions of the 2 GHz MSS applications that are inconsistent with the 28 GHz band plan and Hughes' licensed and proposed Spaceway systems. Celsat claims that the concerns surrounding GSO MSS feeder link use of the conventional C- and Ku-band FSS allocations are not present in the Ka-band, because the Ka-band is not currently heavily used for FSS services. Hughes and PanAmSat reject Celsat's argument, claiming it ignores the near- future roll-out of broadband GSO FSS service, and thus, does not justify Commission departure of precluding feeder link use of conventional FSS spectrum. 84. We see no reason to adopt any rules or policies prohibiting GSO MSS feeder links in Ka-band GSO FSS spectrum in this Report and Order. At this time, the Ka-band does not carry the same heavy level of FSS traffic that the conventional C- and Ku-bands carry. As to Celsat, however, we highlighted in the Notice that Celsat's use of the Ka-band spectrum for feeder links depends on its ability to obtain successfully an appropriate GSO orbital location in the domestic arc, many of which already are assigned. Commenters suggest that Celsat use portions of the GSO FSS allocation where no geostationary orbital slots are currently occupied by first-round Ka-band licensees, or attempt to coordinate the 111 W.L. orbital position with the Canadian administration, which has an ITU filing at that location. This issue, and thus, the related authorization of Celsat's feeder links, will need to be resolved in the context of the Ka-band second processing round. 85. We note that Celsat is committed to cooperating with all interested parties in the Ka-band second processing round to develop an agreeable orbital assignment plan that will accommodate its feeder link request. Furthermore, Celsat's spectrum choices for its feeder links must be consistent with the limitations and related coordination requirements adopted to resolve Ka-band spectrum sharing issues. Thus, should Celsat seek feeder uplink spectrum in the 27.5-28.35 GHz sub-band (designated as primary to LMDS), it only could do so on an unprotected, non-interference basis to LMDS, with LMDS priority applied in all respects to any existing or future use of the band as currently allocated, and no requirement that LMDS licensees coordinate use of this band for MSS feeder links. Should Celsat seek its feeder downlink spectrum in the 18.3-18.58 GHz sub-band (co- primary with FS operators), it only could do so subject to coordination. Finally, should Celsat seek feeder uplink spectrum in the 29.25-29.5 GHz sub-band (designated as co- primary with NGSO MSS feeder links), it would need to comply with the spectrum sharing and coordination rules set forth at Section 25.258 of the Commission's rules. 2. Non-U.S.-Based Gateway Operations 86. In DISCO II, the Commission concluded that systems serving the United States using foreign satellites must meet the same technical requirements as systems using U.S.- licensed satellites. TMI presents a unique situation among the nine 2 GHz MSS systems proponents. Specifically, TMI proposes to serve the United States from a Canadian- licensed satellite, using a Canadian gateway for feeder links and TT&C operations. By contrast, the other system proponents intend to use at least one U.S. gateway for feeder links and TT&C. TMI plans to use frequencies outside its proposed feeder links for TT&C operations, a system design that does not comport with Section 25.202(g) of the Commission's rules. PanAmSat argues that, to be authorized in the United States under the DISCO II LOI process, TMI must comply with the Commission's Part 25 technical rules applicable to U.S.-licensed systems, including Section 25.202(g). Because we do not have jurisdiction over system operations wholly outside of the United States, the DISCO II rule regarding technical requirements only applies to specific system components that operate in the United States. Thus, because TMI's feeder link and TT&C operations will be limited to transmissions between TMI's Canadian-licensed satellite and a Canadian gateway, and will not operate in the United States, the DISCO II rule regarding technical requirements does not apply to TMI's feeder links and TT&C transmissions. Notwithstanding the foregoing, any system proposing to handle communications originating or terminating from mobile terminals in the United States via gateways located outside the United States may need to address law enforcement and national security concerns before licensing or spectrum authorization can be effected. 87. TMI's system design prompted our proposal to require that 2 GHz MSS operators perform TT&C operations within their assigned feeder link frequencies, or within bands allocated to space operations, pursuant to Section 25.202(g) of the Commission's rules. Commenters generally support this proposal, and we adopt this requirement with regard to all 2 GHz MSS operators performing TT&C operations from control centers located in the United States. Should TMI seek Commission authority to operate TT&C from a U.S.- based earth station control center, we would require TMI to perform TT&C operations in compliance with Section 25.202(g). 3. Inter-Satellite Service (ISS) Links 88. Section 25.279 of the Commission's rules sets forth the obligation to coordinate proposed commercial use of the ISS bands with Government agencies in bands co-allocated to Government and non-Government use, as well as existing non-Government permittees and licensees. In the Notice, we proposed that Section 25.279 would apply to the 2 GHz MSS system proponents. NTIA and Globalstar support of our proposal, and we received no objections. We therefore adopt this proposal, so that all parties cooperate fully and make every reasonable effort to resolve technical problems and conflicts that may inhibit effective and efficient use of the radio spectrum. Globalstar notes that Section 25.279 refers to ISS links between only NGSO satellites and other space stations, and should be amended to apply to communications between any space stations. The Commission promulgated Section 25.279 in the Big LEO Report & Order, a processing round limited to NGSO satellites. Since that time, satellite systems are being designed to include inter- satellite communications between GSO satellites, or between satellites in a system incorporating GSO and NGSO architectures. Therefore, we revise Section 25.279 so that it will apply to any space station communicating with another space station using frequencies in the ISS bands. 89. Globalstar seeks ISS links in the 59-64 GHz bands. Currently, the 59-64 GHz bands are available for Government and non-Government ISS. In July 1999, however, we proposed deleting the non-Government ISS allocation from the 59-64 GHz bands, and allocating the 65-71 GHz band for exclusive non-Government ISS use. We made these proposals because there is a well-established and pressing demand for commercial inter-satellite link spectrum and because NTIA asserts that Government ISS operations in the 59-64 GHz bands are not compatible with proposed commercial ISS users of this band. In the event that we adopt these proposals in an upcoming order, Globalstar may amend its proposed ISS frequencies to operate consistent with the U.S. allocation. 4. Radionavigation Frequencies 90. In addition to requesting service and feeder link spectrum for its 2 GHz MSS system, Boeing seeks Commission authority to use the 1565.42-1585.42 MHz band (the "GPS L1 band") to provide a Navigation Augmentation Service (NAS) for aircraft utilizing the Global Positioning System (GPS). In the Notice, we sought comment on Boeing's proposed use of this band, which is allocated for the Radionavigation Satellite Service (RNSS) and used by the Government for its GPS system within NTIA's jurisdiction. NTIA states that "[d]etailed discussion of the technical parameters of the proposed system will be necessary" with the Department of Defense and the Federal Aviation Administration to ensure protection of GPS "before NTIA could concur on the Boeing proposal." Boeing therefore requests that the FCC authorize its proposed GPS augmentation service conditioned on the agreement of U.S. government users of the band. 91. Boeing's ability to provide MSS is not dependent on receipt of authorization to use the GPS L1 band. There are multiple technical and national policy issues to be resolved before we could authorize any GPS augmentation service in the RNSS. For example, NTIA requests that the Commission conform its rules to reflect the fact that the bandwidth for GPS has been amended to 1563.42-1587.42 MHz, and Boeing asks the Commission to adopt rules requiring that any RNSS operating in the GPS L1 band must provide global coverage. We will address these issues, as well as a similar application submitted by Lockheed Martin Corporation, in a future action. C. Service Rules 1. Regulatory Classification of Providers 92. Space Station Providers. In the Notice, we sought comment on our interpretation that certain provisions of the Communications Act grant us the discretion to impose, or refrain from imposing, common-carrier regulation in the provision of space segment capacity in the 2 GHz MSS. We explained that, in our view, Section 332(c)(5) of the Communications Act, which relates to CMRS, authorizes the Commission "to determine whether the provision of space segment capacity to providers of commercial mobile services shall be treated as common carriage." In addition, we noted that Section 3(44) of the Communications Act states that "the Commission shall determine whether the provision of fixed and mobile satellite service shall be treated as common carriage." We tentatively concluded that we would treat the space segment component of 2 GHz MSS as non-common carriage. 93. We adopt our tentative conclusion. The commenters support our tentative conclusion that the space segment component of the 2 GHz MSS does not have to be regulated on a common carrier basis. In the Notice, we explained that the Commission has used the two- part analysis enunciated by the D.C. Circuit in National Association of Regulatory Utility Commissioners v. FCC, 525 F.2d 630, 642 (D.C. Cir. 1976), cert. denied, 425 U.S. 999 (NARUC I) to determine whether a space station operator offering service to another entity that then offers service to end users should be regulated as a common carrier. NARUC I requires a determination of whether: (1) there is or should be any legal compulsion to serve the public indifferently; or (2) whether the service is such that the provider is likely to hold itself out to serve indifferently all eligible users. 94. We tentatively concluded that, based on the NARUC I analysis, it did not appear that we needed to impose common carrier requirements on 2 GHz MSS space station operators. We explained in the Notice that, with respect to the first prong of the NARUC I analysis, in the context of satellite space station operators, there only would be a need for a legal requirement to serve the public indifferently if there were an insufficient amount of satellite capacity available. Specifically, we explained that the Commission has found that if the barriers to entry for new satellite operators are low and alternative competitive sources of satellite services are available to consumers through service providers, space segment operators will have incentive to offer space segment services efficiently at low wholesale rates. Under these circumstances, the Commission has determined that there is no need to compel operators to offer space segment capacity to service providers or the public indifferently. We also concluded that, under the second prong of the NARUC I analysis, based on the fact that 2 GHz MSS space station applicants propose to offer space segment-only services, they would not be holding themselves out to serve the public indifferently to all eligible users. In this regard, the 2 GHz MSS operators will be in a similar position as Big LEO space station licensees and, thus, we see no reason to treat 2 GHz MSS space segment operators differently than Big LEO space segment licensees. 95. The commenters agree with our NARUC I analysis. Globalstar notes that, with respect to the first prong of the NARUC I analysis, space segment providers will not serve end users directly and that satellite operators offering space segment capacity to other carriers have operated in a competitive environment for many years qualifying as private carriers. As to the second prong of the NARUC I analysis, ICO asserts that there is nothing inherent in the 2 GHz MSS to require that space segment capacity be offered indifferently to the public. ICO and Iridium both assert that because 2 GHz MSS and Big LEO operations are similar, the services should be treated the same for regulatory classification purposes. Based on our analysis and the comments received, we adopt our tentative conclusion and will not require the space segment component of the 2 GHz MSS to be regulated as common carrier service. 96. Earth Station Providers. In the Notice we also sought comment on our tentative conclusion that, to the extent that 2 GHz MSS earth stations, including mobile earth terminals, gateways, and tracking, telemetry and control earth stations, are used to make service available to the public for profit and for interconnection with the public switched network, the service must be regulated as common carriage. We explained that if the service is offered to the public as described in the Communications Act, service to the end user of the service would fall within the statutory definition of CMRS. In addition, we explained that the Commission has determined that each mobile satellite service must be evaluated to determine whether the service offering is CMRS or private mobile radio service (PMRS). More specifically, we pointed out that in discussing Section 332(c)(5) of the Communications Act, Congress indicated that the provision of earth segment capacity to users of CMRS, including by MSS terminals, shall be treated as common carriage. In the Notice, we said, however, that we would reserve the right to review individual applications on a case-by-case basis to determine if this classification is appropriate. We also noted that the Commission has forborne from applying certain provisions of Title II to CMRS providers. We tentatively concluded that under the statutory and NARUC I standards, gateway earth stations and stations that may be used for tracking, telemetry and control should not be required to be licensed for common carriage because those services generally are not used to provide service to the public but rather for backhaul of large amounts of communications traffic and control of the space segment of satellite systems, respectively. 97. We adopt our tentative conclusions with respect to earth station regulatory classifications. We believe, and the commenters agree, that the reasons we provided in the Notice for treating mobile earth terminals differently than gateway and tracking, telemetry and control earth stations for regulatory classification purposes under the statutory definition of CMRS are valid. We will treat the mobile earth terminal component of the 2 GHz MSS as common carriage for regulatory purposes. We will, however, reserve the right to review individual applications on a case-by-case basis to determine if this regulatory classification is appropriate. We note that Globalstar agrees with our conclusion that we should reserve the right to review each application on a case-by-case basis to determine whether a particular classification is appropriate and whether forbearance may be in order. 98. As for gateway and tracking, telemetry and control earth stations, several of the commenters agree with our preliminary analysis and explain that because these services are not offered directly to the public there is no need to regulate these components of the systems as common carriers. We adopt our tentative conclusions with respect to the regulatory classification of earth station terminals in the 2 GHz MSS and will not require that gateways or tracking, telemetry and control earth stations be regulated on a common carrier basis. 2. System Licenses and Terms 99. As we explained in the Notice, the applicants in the 2 GHz MSS propose systems that include non-geostationary constellations of technically identical satellites, geostationary satellites, and a hybrid system with satellites in geostationary and non-geostationary orbits. The Notice proposed granting "blanket" launch and operation licenses for systems of technically identical satellites, which probably will include most NGSO constellations. We proposed to license 2 GHz MSS geostationary satellites by issuing a separate license for each orbital position to account for variations in system design, such as beam patterns, at each geostationary satellite orbital position. We proposed this distinction in licensing between NGSO and GSO satellites because of the design differences between the systems, the beam coverage variations, and our experiences licensing both types of systems. 100. We adopt this proposal. ICO, the only commenter on this issue, supports our proposal. We believe that design differences among GSO satellites in a system affirm the value of our practice of licensing each GSO satellite individually. In addition, each GSO satellite must be internationally coordinated and technical concerns may arise unique to each satellite based on the operations of adjacent satellites. For GSO/NGSO hybrid systems, we will adopt our proposal to license the GSO component on an individual satellite basis and the NGSO constellation portion of the system on a "blanket" license basis. 101. In the Notice, we proposed a ten-year license term for 2 GHz MSS operators in addition to a pre-operational testing authority. We proposed that, like the Big LEO license term, the license term for 2 GHz MSS would end ten years following commencement of satellite operations. Thus, given construction time, the length of the authorization actually would exceed ten years. We also proposed that systems with both NGSO and GSO satellite components would have separate license terms for the NGSO portion of the system and for each GSO satellite. Finally, recognizing statutory authority for the FCC to be able to award a longer license period, as well as the investment required to construct and launch these systems, combined with the development of satellite technology, specifically developments that have given satellites longer life spans up to 15 or more years in some cases for geostationary satellites we sought comment on whether the license term should exceed ten years. We also proposed that the license would include a separate pre- operational testing authority. In addition, we proposed to permit the licensee to replace any satellites lost during launch and older satellites retired before the end of the license period with technically identical satellites. 102. The commenters support our proposal to extend the license term to 15 years. The commenters argue that longer license terms will enhance system proponents' ability to attract the large investments required to start a global MSS system. Boeing, Inmarsat and IUSG point out that longer license terms more accurately reflect the improvements in satellite life span. These commenters agree that the Commission has the statutory authority to extend license terms. 103. We adopt a 15-year license term for the 2 GHz MSS space segment for NGSO constellations, individual GSO satellites, and the equivalent terms for the NGSO constellation and individual GSO satellite portions of hybrid systems. We agree with the commenters that state that the extremely large amount of capital investment required to construct a global MSS system, particularly NGSO systems, is facilitated by the increased degree of certainty provided by a longer license term. We also recognize that GSO satellites are being constructed with longer life-spans of 15 years or more. In this regard, we believe that it is appropriate to have a license term that is more commensurate with the life of geostationary satellites. We also adopt our proposal to start the license term once operations commence and the licensee certifies to the Commission that the first satellite in the system has been successfully placed into orbit and the first transmission to or from that satellite in the authorized frequency bands has occurred, as we required for Big LEO licensees. In addition we will authorize system operators to conduct pre-operational testing in the license grant, to the extent that applicants include such information in their applications. 104. We also adopt our proposal to permit replacement satellites to be launched within the license term of the satellite being replaced without distinction between GSO and NGSO systems. ICO agrees with our proposal and suggests that we adopt a rule to require replacement satellites to conform identically to their operational counterparts. We have found that requiring that replacement satellites launched during the initial license term be technically identical to the authorized satellite has worked well as a policy for Big LEO licensees and will continue this requirement. Most NGSO constellations require satellites to be technically identical. Requiring GSO satellites to be technically identical will assure continued compatibility of the systems with other users of the spectrum. We also adopt our proposal that the technically identical replacement satellite requirement apply to all 2 GHz MSS system designs NGSO, GSO and hybrid systems. As such, we will treat any non- conforming satellites as requests for license modification, as the Commission does with respect to Big LEO satellites. In addition, as to spare satellites, we adopt our proposal to allow system operators to request authority to deploy technically identical in-orbit spare satellites in the case of NGSO constellations and collocated spares for GSO systems. System operators can activate spare satellites as necessary, but will be required to notify the Commission, within ten days after activation, that activation of the satellite did not cause the licensee to exceed the total number of authorized space stations. As proposed, the license term for activated spare satellites will expire with the overall system's authorization term. 105. Where licensees wish to utilize next generation systems, or individual next generation satellites in the case of GSO operators, after the initial license term, they must file applications no earlier than three months befor