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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 ) ) Assignment of Orbital Locations ) to Space Stations in the Ka-band ) MEMORANDUM OPINION AND ORDER Adopted: April 16, 2001 Released: April 17, 2001 By the Chief, International Bureau: I. INTRODUCTION 1. In December 1997, the International Bureau ("Bureau") issued a revised assignment plan for space stations in the first Ka-band processing round ("Reassignment Order"). The Reassignment Order was issued without opinion to clarify the orbit locations that were available to parties filing applications in the second Ka-band processing round. With this Memorandum Opinion and Order, we issue the requisite opinion, and dismiss a pending request to stay the Ka-band orbital assignment plan. II. MEMORANDUM OPINION Background 2. In May 1997, the Bureau acted on the first group of applications proposing to provide fixed-satellite service ("FSS") from geostationary-satellite orbit ("GSO") in the Ka-band. Specifically, the Bureau issued the Assignment Order, assigning orbit locations pursuant to an agreement reached by all fourteen GSO system proponents participating in the first Ka- band processing round. The Assignment Order also reflected that, after the parties reached the assignment agreement, one of the first round applicants, AT&T Corp. ("AT&T"), withdrew its applications for seven orbit locations (103 W.L, 93 W.L., 55 W.L., 2 E.L., 42 E.L., 97 E.L. and 116.5 E.L.). As a result, the Bureau did not assign these locations, but stated that it would entertain requests for changes to the agreed-upon orbital assignments: if all of the commercial GSO satellite applicants affected by the change agree. If all affected applicants do not agree, the burden is on the applicant proposing the change to demonstrate that its alternative is preferable to the adopted plan. Any alternative assignment arrangement must be presented to the Commission for approval within 30 days of the release of [the Assignment Order]. 3. The Bureau received four timely-filed requests for reassignment to orbital locations vacated by AT&T. Lockheed Martin Corporation ("Lockheed") (now, Astrolink International LLC) requested the 2 E.L. orbit location in lieu of the 38 E.L. orbit location it received in the Assignment Order. Loral Space & Communications Ltd. ("Loral Ltd.") (now, CyberStar Licensee LLC) requested the 93 W.L. orbit location in lieu of the 28 E.L. location. PanAmSat Licensee Corp. ("PanAmSat") (now PanAmSat Corporation) requested the 103 W.L. location in lieu of the 67 W.L. location originally assigned to Hughes Communications Galaxy, Inc. ("Hughes"). Orion Network Systems, Inc. ("Orion") (now, Loral CyberStar, Inc.) also requested the 103 W.L. location, in this case, in lieu of the 127 W.L. location. Orion and PanAmSat agreed to continue negotiating a resolution to their conflicting requests for the 103 W.L. orbit location, and notified the Commission accordingly. 4. The Bureau placed the four reassignment requests on Public Notice. PanAmSat and Orion filed comments, each arguing that it should receive the 103 W.L. orbit location, or alternatively, Loral Ltd.'s requested orbit location, 93 W.L., and for that reason, we should deny Loral Ltd.'s request to use 93 W.L. CAI Data Systems, Inc. ("CAI"), an applicant in the second Ka-band processing round, filed a petition to deny the proposed reassignments. Lockheed, Loral Ltd., and PanAmSat filed oppositions or reply comments. CAI, Lockheed, and PanAmSat filed responses or further comments. 5. Loral Ltd., PanAmSat, and Orion subsequently reached an agreement with respect to their conflicting orbital reassignments ("Reassignment Agreement"), with Loral Ltd. requesting the 93 W.L. orbit location, PanAmSat requesting the 103 W.L. orbit location, and Orion requesting the Hughes/PanAmSat orbit location at 67 W.L. The companies indicated that, upon the Commission's acceptance of their proposed reassignments, they would withdraw any objections made with respect to each others' orbital reassignment requests, leaving only their arguments with respect to CAI's Petition to Deny. CAI filed letters opposing the Reassignment Agreement, to which the parties to the Reassignment Agreement replied. 6. The Bureau accepted the Reassignment Agreement, and issued the Reassignment Order, which revised the assignment plan to reflect the Reassignment Agreement. This Memorandum Opinion details the Bureau's rationale for that decision, and addresses CAI's Petition to Deny and related filings. Discussion 7. The Commission encourages and prefers that satellite operators resolve coordination difficulties, because they can best weigh the technical and economic tradeoffs involved in changes in orbit locations and operating parameters. Consistent with this policy, the Bureau revised the first Ka-band processing round assignment plan to reflect the affected satellite operators' agreement. CAI asserts that we should not reassign AT&T's vacated orbit locations to licensees within the first Ka-band processing round; rather, according to CAI, we should consider these locations for assignment in the second Ka-band processing round. CAI raises several arguments in support of this assertion. 8. CAI first claims that by filing orbit location reassignment requests, Lockheed, Loral Ltd., PanAmSat, and Orion declined their Ka-band authorizations and submitted "major amendments" to their underlying satellite applications. Section 25.116(c) of the Commission's rules provides generally that if a major amendment to an application being considered in a processing round is submitted after a cut-off date, the application is considered to be newly filed, and loses its status in the processing group. Section 25.116(b)(1) provides that amendments to change requested orbit locations are considered major amendments. CAI argues that the amended Lockheed, Loral Ltd., PanAmSat and Orion applications should therefore be considered in the second Ka-band processing round. Lockheed, Loral Ltd., and PanAmSat deny that they have declined their authorizations; instead, they argue that their requests to modify the orbital assignment plan were made at the Bureau's invitation and consistent with Commission precedent regarding orbital reassignments. 9. Historically, the Commission has given satellite licensees a limited opportunity to suggest alternatives to an adopted orbit assignment plan, provided that the changes are consistent with the basic structure of the assignment plan and are agreed to by all, or at least most, of the satellite operators affected by the change. Contrary to CAI's assertion, the Commission has never deemed such a reassignment request as a licensee declining its authorization, nor has Commission considered a reassignment request as a major amendment to the underlying application. Rather, the Commission clearly has stated that "[o]perators may propose exchanges or small adjustments of their orbital assignments without necessarily becoming part of the next processing group." Consistent with this precedent, the Bureau invited the first round Ka-band licensees to request reassignments, and viewed the timely-filed requests as extensions of the first Ka-band processing round. 10. Building on its argument that the reassignment requests should be considered in the second Ka-band processing round, CAI contends that Orion's and PanAmSat's reassignment requests are mutually exclusive with CAI's second round Ka-band application seeking to operate at the same orbit locations. Our rejection of CAI's contention that the reassignment requests should be considered in the second Ka-band processing round moots this argument. 11. CAI next argues that, even if the reassignment requests are considered an extension of the first Ka-band processing round, the fact that both PanAmSat and Orion requested the same orbital location (103 W.L.) creates mutual exclusivity requiring denial of their requests. Specifically, CAI asserts that any reassignments made as a result of the Reassignment Agreement violates the terms of the Assignment Order, because all of the satellite applicants affected by the change did not "agree" concerning the orbital reassignments within thirty days after the release of the Assignment Order. In that regard, CAI asserts that the plain language of the Assignment Order indicates that any agreed-upon alternative assignment arrangement should have been filed by June 9, 1997. CAI contends that, by filing the Reassignment Agreement in October 1997, the licensees did not comply with the terms of the Assignment Order, and therefore, the disputed orbital positions are properly considered only in the second Ka-band processing round. 12. As an initial matter, we have consistently found that requests for the same orbit location do not necessarily give rise to mutual exclusivity. Rather, as noted, we attempt to accommodate orbit locations agreements reached by the applicants, when possible, because applicants are in the best position to develop a compromise solution that best meets their business plans. In this case, the first round Ka-band applicants spent the better part of a year negotiating the orbital plan reflected in the Assignment Order. These successful negotiations included AT&T's applications for seven orbit locations. Shortly after the applicants submitted their agreed-upon orbit plan, but before the Bureau issued the Assignment Order, AT&T withdrew its applications. Accordingly, in the Assignment Order, AT&T's orbit locations remained unassigned, and we provided the licensees with thirty days in which to request changes to the Assignment Order. 13. Four licensees requested reassignment to three of AT&T's locations within this thirty-day period. Among other requests, Loral Ltd. requested reassignment to the 93 W.L. orbit location and both PanAmSat and Orion requested reassignment to the 103 W.L. orbit location. At this time, CAI had not yet filed its application, in which it sought assignment to either 93 W.L. or 103 W.L. In the Reassignment Public Notice seeking comment on the first-round reassignment requests, we acknowledged Loral Ltd.'s request for 93 W.L. and the two requests for 103 W.L. While the first-round licensees did not resolve their conflicting interest in 103 W.L. during the initial thirty day period following release of the Assignment Order, they kept us apprised of their ongoing negotiations, and resolved their disputes within a reasonable amount of time. Significantly, the first-round licensees reached the agreement on October 23, 1997, two months before the cut-off date established for filing applications to be considered in the second Ka-band processing round. Consequently, we viewed the Reassignment Agreement regarding AT&T's vacated locations as the logical conclusion of the initial negotiations among the first round Ka-band applicants. The Reassignment Order accommodated the Reassignment Agreement and allowed us to complete action on the first-round GSO assignments before the cut-off date established for filing second-round applications. 14. CAI further contends that the Commission's domestic fixed-satellite service policy limiting providers to only two orbit locations capable of 50 state coverage requires us to deny PanAmSat's and Orion's reassignment requests. Specifically, CAI asserts that approval of the Reassignment Agreement would impair competition due to what it claims to be a significant consolidation of Ka-band orbital resources in the control of Hughes/PanAmSat and Loral/Orion, particularly with regard to the orbital slots capable of serving the continental United States ("full-CONUS"). Thus, CAI argues that it is particularly important for the Commission to continue its policy of limiting the number of orbit locations in resolving their reassignment requests. 15. Historically, the orbital assignment limitation pertained to the provision of domestic FSS in the United States, the objectives being to avoid prematurely assigning an excessive number of orbital locations to an existing licensee for expansion of its domestic system and to promote entry opportunity in the bands. As the Commission noted in adopting service rules for the Ka-band licensees, many of the systems being considered in the first Ka-band processing round proposed to provide global service. The Commission found it was in the public interest to allow the first round Ka-band applicants, especially those proposing to serve different geographic areas, to proceed as proposed. Therefore, the Commission waived any rules and policies limiting the number of orbit locations that may be assigned to any applicant. Consequently, CAI's argument that we violated the two orbit location policy by reassigning PanAmSat and Loral to full-CONUS locations is misplaced. 16. Finally, CAI asserts that grant of the reassignment requests would create barriers to entry for small businesses, contravening Section 257 of the Communications Act. Specifically, CAI requests us to assign the full-CONUS orbital slots withdrawn by AT&T (93 W.L. and 103 W.L.) to small businesses, which would reduce those operators' cost of providing nationwide service and thus, maximize their opportunity to participate in the Ka-band satellite market. We first note that the Commission waived financial qualification requirements for applicants in the first Ka-band processing round because it could accommodate all proposed systems, thereby eliminating the financial barrier to Ka-band entry for small businesses. In fact, small businesses were among those awarded licenses to provide satellite services from full-CONUS orbit locations in the first Ka-band processing round. We therefore find that our actions have been consistent with the goals underlying Section 257. That notwithstanding, we also note that CAI's request to set aside orbit locations for small businesses is no longer relevant to its pursuit of a full-CONUS Ka- band orbital, as its parent company, CAI Wireless Systems, Inc., has become a wholly- owned subsidiary of WorldCom, Inc. III. ORDER 17. In 1996, the Bureau declared Norris Satellite Communications, Inc.'s ("Norris") license to operate a GSO FSS Ka-band satellite at the 90 W.L. orbit location null and void for failure to begin satellite construction by the required date. While Norris's Application for Review of this decision was pending, Norris filed a Request for Stay of the Assignment Order ("Norris Stay Request"). Specifically, Norris argued that it would suffer irreparable harm in its attempt to reinstate its revoked license because the Assignment Order authorized satellites at two orbit locations (89 W.L. and 91 W.L.) that were mutually exclusive with Norris's voided authorization at 90 W.L. The Commission subsequently upheld the Bureau's decision regarding nullification of Norris's license. Accordingly, we dismiss the Norris Stay Request as moot. IV. CONCLUSION AND ORDERING CLAUSES 18. For the reasons discussed above, we find the public interest, convenience and necessity was served when the Bureau adopted the Ka-band Reassignment Order. 19. Accordingly, IT IS ORDERED that the Petition to Deny filed September 25, 1997 by CAI Data Systems, Inc. IS DENIED. 20. IT IS FURTHER ORDERED that the Request for Stay filed May 23, 1997 by Norris Satellite Communications, Inc. IS DISMISSED as moot. 21. This Memorandum Opinion and Order is issued pursuant to Section 0.261 of the Commission's rules on delegations of authority, 47 C.F.R.  0.261, and is effective upon release. FEDERAL COMMUNICATIONS COMMISSION Donald Abelson Chief, International Bureau