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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 ) ) Application of ) Columbia Communications Corporation ) for Modification of Authorization to ) File No. SAT-MOD-19990128-00017 Permit Operation of Ku-band Satellite ) Capacity on the Columbia 515 Satellite ) Located at 37.7° West Longitude ) ) MEMORANDUM OPINION AND ORDER Adopted: June 18, 2001 Released: June 19, 2001 By the Chief, International Bureau: I. INTRODUCTION 1. By this Order, we deny Columbia Communications Corporation's (Columbia's) application to activate the Ku-band transponders on its Columbia 515 satellite located at 37.7° W.L., to provide service to the Southern Hemisphere on a permanent basis. We do so because another U.S. company, Loral Space & Communications Ltd. (Loral) is licensed to operate a Ku- band satellite at the 37.5 orbital location. On our own motion, however, we grant Columbia conditional authority to offer Ku-band service from that orbital location until Loral's next- generation Ku-band satellite, which Loral intends to use to provide service to the Southern Hemisphere, is ready to be launched, or when Loral coordinates Ku-band service to the Southern Hemisphere and signifies its intent to provide such service from its existing satellite, whichever is first. These actions will increase the service options for Ku-band customers in the Southern Hemisphere, without impacting the operations of the satellite operator regularly licensed to provide Ku-band service from 37.5 W.L. II. BACKGROUND 2. In 1991, under the "separate system" framework in effect prior to the DISCO I Order, Columbia was authorized to offer international C-band service in the Northern Hemisphere via leased capacity on the National Aeronautics and Space Administration's (NASA's) TDRS-4 satellite located at 41° W.L., subject to coordination with INTELSAT. As part of the coordination agreement it reached with INTELSAT in December 1997, INTELSAT transferred its hybrid C-band/Ku-band INTELSAT 515 satellite to Columbia. This satellite, renamed Columbia 515, was to operate at 37.5 W.L. In September 1998, the Bureau granted Columbia authority to move Columbia 515 to 37.7 W.L., and to operate it in the C-band. 3. Loral holds a license to operate a Ku-band satellite at the 37.5 W.L. orbit location to provide service to the Northern Hemisphere. Loral has been operating this satellite since 1994. In May 1998, Loral filed an application for authority to launch and operate a replacement satellite at 37.5 W.L. that would provide service in both the Northern and Southern Hemispheres. It also sought authority to add C-band capacity to this satellite. We address Loral's application in a separate Order adopted today. 4. On January 28, 1999, Columbia filed a modification application seeking regular authority to use the Columbia 515 satellite to provide Ku-band service to the Southern Hemisphere for the remainder of its license term. Loral filed a petition to deny this application, citing its pending application as evidence of its future interests at 37.5 W.L., and asserting that Columbia's application for regular Ku-band authority conflicts with those interests. III. DISCUSSION A. Columbia's Modification Application 5. We deny Columbia's modification application to provide Ku-band service to South America. Granting Columbia's application would be inconsistent with Loral's license to operate a Ku-band satellite at 37.5 W.L., and the Commission's policy adopted in the DISCO I Order allowing all licensees to provide any mix of domestic and international services they desire. Further, Loral intends to provide service to the Southern Hemisphere from its next-generation Ku-band satellite at 37.5 W.L. when that satellite replaces its currently operating satellite at that location in 2003. We discuss these issues below. 1. Relevant Commission Policy 6. Prior to the DISCO I Order in 1996, the Commission required U.S. domestic satellites (domsats) to provide primarily domestic services and U.S. international satellites, referred to as "separate systems" because they were separate from INTELSAT, to provide primarily international services. In the DISCO I Order, the Commission adopted a single regulatory regime for domsats and international separate systems that allowed all U.S. satellite operators to provide any mix of domestic or international services they desire, without prior Commission approval. Thus, U.S.-licensed satellites providing service to North America could immediately provide service to South America, and vice versa, provided that any new services were successfully coordinated with both U.S. and foreign satellites that could receive technical interference from the expanded operations. Because satellites designed and launched prior to the DISCO I Order were configured to best operate under the service constraints then in place, the Commission recognized that the DISCO I Order might not result in full competition in the near term. Rather, the Commission expected full competition to develop gradually as satellite operators design their next generation satellites to provide optimal coverage to the areas they wish to serve. 7. Further, while the Commission has not adopted a definitive "replacement expectancy" that guarantees satellite operators will be able to replace a satellite at its end-of-life with a new satellite, it has recognized the importance of giving satellite operators some assurance that they will be able to continue serving their customers from the originally authorized location. To do otherwise would discourage satellite operators from making large capital investments in satellite systems, and could cause service disruptions to customers. Consequently, the Commission has said that it will generally authorize follow-on satellites provided that the location remains available for assignment to a U.S. satellite with the technical specifications of the proposed replacement. 8. Columbia does not dispute that Loral has a replacement expectancy for a follow-on Ku-band satellite at 37.5 W.L. Rather, it claims that Loral's replacement expectancy does not include service to the Southern Hemisphere, because Loral is not authorized to provide Ku-band service to this region. Consequently, Columbia argues that its application to serve the Southern Hemisphere from the Ku-band transponders on the Columbia 515 satellite at 37.7 W.L. does not conflict with Loral's replacement expectancy for its Ku-band satellite at 37.5 W.L. Loral replies that a licensee's replacement expectancy should accommodate its changing business plans, and should permit a replacement satellite with state-of-the-art technology to serve new customers in new geographic areas. 9. We disagree with Columbia that Loral's current license does not authorize it to serve the Southern Hemisphere. Although Columbia correctly observes that Loral's original Ku-band authorization at the 37.5 location was limited to the Northern Hemisphere, the DISCO I Order permits all U.S. satellite operators to serve any geographic region without prior Commission approval. Thus, if Loral wished to serve the Southern Hemisphere using its in-orbit satellite, it was free to do so under the terms of its license. That it did not choose to do so could be based on a variety of factors, including its initial business plan, which was developed before DISCO I, and the satellite's configuration. The Commission recognized in DISCO I that licensees could build next-generation satellites to maximize the satellite's capabilities to new areas that they may wish to serve. Loral represents that it plans to serve the Southern Hemisphere with its next- generation satellite. We see no reason to prohibit it from doing so. 10. In addition, the DISCO I Order gave satellite operators flexibility to offer service in the manner they deem most efficient, based on market forces or their business plans rather than government-imposed service requirements. This flexibility would be undercut if a satellite operator choosing not to provide service to a particular region risks losing the right to provide service to that region before the operator launches a replacement satellite. 3. Other Issues a. Need for Processing Round 11. Even if Loral had not filed its license application under its reasonable expectation of replacement, we could not grant Columbia's application for regular Ku-band authority to the Southern Hemisphere without first conducting a processing round. Loral's application to serve South America with a satellite at 37.5 W.L. is mutually exclusive application with Columbia's application. Thus, under Ashbacker, the Commission is required to give comparative consideration to the requests. In the satellite area, we have concurrently considered mutually exclusive applications by establishing processing rounds. It is not clear based on the record before us now whether Columbia or Loral would be granted Ku-band authority in such a processing round. 12. According to Columbia, Loral's application for hybrid C/Ku-band authority at 37.5 W.L. is not a bona fide application, but rather the application was filed merely to preclude Columbia from obtaining any Ku-band authority at the 37.7 W.L. location. Columbia argues further that an application filed in bad faith does not trigger any right to a processing round under Ashbacker. We conclude, for reasons set forth above, that Loral's application for Ku-band authority is a bona fide request. As a result, we conclude that, if Loral had not sought replacement authority at the 37.7 W.L. location, we could not grant either Columbia's or Loral's application outside of a processing round. b. Warehousing 13. Contrary to Columbia's assertion, our decision today is distinguishable from actions in previous Orders to prevent "warehousing" of orbital locations. In "warehousing" cases, we have removed authority from licensees who have not shown "due diligence" in meeting their satellite construction and launch schedules, so that those licensees are not permitted to waste scarce orbital locations and channels. In other words, warehousing occurs when a licensee has not shown an adequate commitment to move forward with its business plan. Loral is not wasting its orbit location; it has launched its satellite and is now providing service. Rather, Loral has not completed the implementation of its satellite network at this orbital location under the expanded flexibility available following DISCO I. Under DISCO I, Loral is not required to implement this expanded flexibility until it launches a replacement satellite to the 37.5 W.L. orbit location. c. Interference Issues 14. Finally, Columbia argues that we should grant its application because its service would not cause harmful interference with Loral's existing Ku-band service to the Northern Hemisphere, and that it can start providing service to the Southern Hemisphere before Loral. As explained further below, Columbia raises a persuasive argument for granting it temporary, conditional authority. This reasoning does not provide a basis for granting Columbia permanent Ku-band authority at this location, however, for the reasons stated above. B. Conditional Authorization 15. Nevertheless, and on our own motion, we grant Columbia conditional authority to use its Columbia 515 satellite to provide Ku-band service to the Southern Hemisphere from the 37.7 W.L. orbital location, or until the Ku-band satellite regularly assigned to that location or the adjacent 37.5 W.L. orbital location is ready to be launched, or until Loral reorients its existing satellite at 37.5 W.L. towards the Southern Hemisphere. The coverage pattern of the satellite currently located at 37.5 W.L. in its current orientation precludes Loral from providing Ku-band service to the Southern Hemisphere from that location. Loral could provide service to the Southern Hemisphere with its current satellite at 37.5 W.L. only if it redirected the satellite beams to cover the Southern Hemisphere. However, Loral has not to date coordinated that Southern Hemisphere service with other affected satellite networks. Loral would be required to complete international coordination before providing service to the Southern Hemisphere. Furthermore, Loral's replacement satellite with Southern Hemisphere capability is not planned to come into service until 2003. Therefore, granting conditional authority to Columbia will increase the service options currently available to Ku-band customers in the Southern Hemisphere. Although, as discussed above, Loral makes a persuasive case against granting Columbia permanent Ku-band authority at the 37.7 W.L. location, Loral provides no reason to preclude Columbia from offering Ku-band service before Loral's replacement satellite comes into service, or before Loral reorients its existing satellite towards the Southern Hemisphere. 16. Under these circumstances, we see no reason to prevent Columbia from providing Ku-band service from 37.7 W.L. to the Southern Hemisphere on a temporary basis. The Commission has often permitted satellite operators to provide service on a temporary basis from orbit locations that are not regularly assigned to them, provided the temporary operations do not adversely impact regularly licensed satellite systems. Rather than issuing a series of 180-day grants of special temporary authority, however, we find it simpler to issue a conditional grant to Columbia that will automatically terminate when its operations impact those of regularly- licensed adjacent satellite operators. 17. We require Columbia to terminate operations on its Columbia 515 satellite at least 30 days before a regularly-licensed satellite is launched to the adjacent 37.5 W.L. orbit location, or 30 days before Loral completes international satellite coordination and starts to provide service to the Southern Hemisphere with its existing satellite at 37.5 W.L. To facilitate any termination of service that may be required, we require Columbia to inform its Southern Hemisphere customers, in writing, that service from 37.7 W.L. is being provided pursuant to a grant of conditional authority. Further, within seven days of receiving notification from Loral of the launch date of an adjacent regularly-authorized satellite, Columbia must inform its customers that service will terminate 30 days before the launch. Similarly, within seven days of receiving notification from Loral that Loral has completed coordination of service to the Southern Hemisphere with its existing satellite at 37.5 W.L., Columbia must inform its customers that service will terminate 30 days before Loral's Southern Hemisphere service becomes available. We hold Columbia responsible for ensuring that all end-users receive this notification, including those that are not directly served by Columbia but are served by resellers that access capacity on the Columbia satellite at 37.7 W.L. In granting Columbia this conditional authorization, we emphasize that this authority is limited to the Columbia 515 satellite and does not convey to Columbia, or any successor in interest, any authority to operate another satellite or lease capacity on another satellite at 37.7 W.L., or at any other location 18. Finally, we require Columbia to operate on a non-harmful interference basis to other lawfully authorized satellite operators. Columbia proposes this condition in its modification application. Columbia must not cause harmful interference to, and is required to accept harmful interference from, any other lawfully operating radio station. In addition, all complaints of radio interference shall be forwarded immediately to the Commission, in writing. 19. Columbia notes that the Columbia 515 satellite it acquired from INTELSAT does not meet certain technical requirements of Section 25.210 regarding saturation flux densities, space station antenna cross-polarization isolation, and station-keeping. Columbia requests a waiver of these rules for purposes of its provision of Ku-band service to the Southern Hemisphere. In the Columbia 1998 Modification Order, we granted a waiver of these rules for purposes of Columbia's provision of C-band service, because Columbia's operations would not cause harmful interference to other satellite systems, and because the Columbia 515 satellite has a limited useful life. We find that our justifications for the waiver we granted to Columbia in 1998 for C-band service also apply here for Ku-band service to the Southern Hemisphere. IV. ORDERING CLAUSES 20. Accordingly, IT IS ORDERED that, pursuant to Section 309(a) of the Communications Act, as amended, 47 U.S.C.  309(a), the application filed by Columbia Communications Corporation to operate its Columbia 515 satellite at 37.7 W.L., for the provision of Ku-band service to the Southern Hemisphere, IS DENIED. 21. IT IS FURTHER ORDERED that, pursuant to Section 309(f) of the Communications Act, as amended, 47 U.S.C.  309(f), and Section 25.120(b) of the Commission's Rules, 47 C.F.R.  25.120(b), Columbia Communications Corporation IS GRANTED conditional authority to operate its Columbia 515 satellite at 37.7 W.L., for the provision of Ku-band service to the Southern Hemisphere, to the extent that Loral is not now exercising its current authority to provide Ku-band service to South America from the 37.5 W.L. orbit location, subject to the following conditions: (a) Harmful interference shall not be caused to, and Columbia Communications Corporation is required to accept harmful interference from, any other lawfully operating radio station. Operations shall cease immediately upon notification of such interference, and all complaints of radio interference shall be forwarded immediately to the Commission, in writing. (b) This authorization shall terminate on the earlier of (i) thirty days before the date on which a regularly-authorized satellite capable of providing Ku-band service to the Southern Hemisphere is launched into either the 37.5 W.L. or an adjacent orbit location, or, (ii) thirty days before Loral begins to provide service to the Southern Hemisphere with its existing satellite at 37.5 W.L., in the event that Loral completes coordination of such service. 22. IT IS FURTHER ORDERED that Columbia Communications Corporation is required to inform its Ku-band customers in writing, including end-users receiving service from resellers accessing capacity on the Columbia 515 satellite, that service is being provided pursuant to a grant of temporary authority and will terminate as specified in this Order above. 23. IT IS FURTHER ORDERED that Columbia Communications Corporation is required to inform its customers, including end-users receiving service from resellers accessing Ku-band capacity on the Columbia 515 satellite, within seven days of receiving notification of the launch date of an adjacent regularly-authorized satellite that service will terminate 30 days before the launch occurs. 24. IT IS FURTHER ORDERED that Columbia Communications Corporation is afforded 30 days from the date of release of this Order to decline authorization as conditioned. Failure to respond within that period will constitute formal acceptance of the authorization as conditioned. 25. IT IS FURTHER ORDERED that assignment of any orbital location is subject to change by summary Order of the Commission on 30 days notice and does not confer any permanent location to the use of the orbit or spectrum. 26. IT IS FURTHER ORDERED that Columbia Communications Corporation is obliged to comply with the applicable laws, regulations, rules, and licensing procedures in those countries it proposes to serve. 27. IT IS FURTHER ORDERED that, pursuant to Section 1.3 of the Commission's Rules, 47 C.F.R.  1.3, Columbia Communications Corporation IS GRANTED a waiver of Sections 25.210(c), (i), and (j) of the Commission's rules, 47 C.F.R.  25.210(c), (i), (j), for purposes of provision of Ku-band service to the Southern Hemisphere from the 37.7 orbit location. 28. This Order is issued pursuant to Section 0.261 of the Commission's rules on delegated authority, 47 C.F.R.  0.261, and is effective upon release. Petitions for reconsideration under Section 1.106 or applications for review under Section 1.115 of the Commission's rules, 47 C.F.R.  1.106, 1.115, may be filed within 30 days of the date of the release of this Order. (See 47 C.F.R.  1.4(b)(2).) FEDERAL COMMUNICATIONS COMMISSION Donald Abelson Chief, International Bureau