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$112,500 Penalty Proposed Against Intelsat in Queue Jumping Probe

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Released: December 12, 2013

Federal Communications Commission

FCC 13-159


Before the

Federal Communications Commission

Washington, DC 20554


In the Matter of
)
File No. EB-11-IH-1376

)

Intelsat License LLC
)
NAL/Acct. No. 201432080001
f/k/a Intelsat North America, LLC
)


)
FRN 0009308008

)




NOTICE OF APPARENT LIABILITY FOR FORFEITURE


Adopted:

December 12, 2013




Released:

December 12, 2013

By the Commission: Commissioner Pai dissenting and issuing a statement.

I.

INTRODUCTION

1.
In this Notice of Apparent Liability for Forfeiture (NAL), we find that Intelsat License
LLC, f/k/a Intelsat North America, LLC (Intelsat or Company),1 apparently willfully violated Section
25.158(c) of the Commission’s rules (Rules) by permitting another entity to assume Intelsat’s position in
the processing queue for a geostationary orbit (GSO)-like satellite license, and Section 1.65(a) of the
Rules by failing to maintain the continuing accuracy and completeness of information furnished in an
application pending before the Commission.2 Based on our review of the facts and circumstances
surrounding this matter, and for the reasons discussed below, we find that Intelsat is apparently liable for
a forfeiture penalty of one hundred and twelve thousand five hundred dollars ($112,500).

II.

BACKGROUND

2.
Intelsat currently holds a license to operate the Galaxy 28 satellite at the 89.0º W.L.
orbital location utilizing 500 megahertz (MHz) of Ka-band spectrum in each transmission direction to
serve North America.3 On February 27, 2009, Intelsat filed an application for a license to operate a new
satellite (to be called Galaxy KA) at 89.1º W.L. that would utilize the same Ka-band spectrum used by
Galaxy 28, plus an additional 500 MHz of Ka-band spectrum in each transmission direction.4 Intelsat

1 On January 18, 2011, Intelsat North America, LLC notified the Commission that it had changed its corporate name
to Intelsat License LLC. See Letter to Marlene H. Dortch, Secretary FCC, from Jennifer D. Hindin, Counsel for
Intelsat License LLC (Jan. 18, 2011).
2 47 C.F.R. §§ 1.65(a), 25.158(c). A GSO-like space station is a space station in geostationary orbit that
communicates with earth stations with non-omnidirectional antennas. See Amendment of the Commission’s Space
Station Licensing Rules and Policies
, IB Docket. No. 02-34, First Report and Order and Further Notice of Proposed
Rulemaking, 18 FCC Rcd 10760, 10773, para. 21 (2003) (Space Station Licensing Reform Order).
3 The Commission licensed the Galaxy 28 satellite in 2003 to Loral Space and Communications, Inc. (Loral).
Intelsat acquired the Galaxy 28 license from Loral in 2004 and launched the satellite on June 25, 2005. See
Applications for Consent to Assignments of Space Station Authorizations and Petition for Declaratory Ruling Under
Section 310(b)(4) of the Communications Act of 1934, as Amended
, Order and Authorization, 19 FCC Rcd 2404
(2004). Galaxy 28 is authorized to operate in the 29.5-30.0 GHz (Earth-to-space) and the 19.7-20.2 GHz (space-to-
Earth) Ka-band frequency bands. In addition, Galaxy 28 is authorized to operate in other frequency bands not
relevant to this proceeding.
4 See FCC Form 312, Satellite License Application of Intelsat North America, LLC, IBFS File No. SAT-LOA-
20090227-00029. Intelsat proposed to operate Galaxy KA in the 29.5-30.0/19.7-20.2 GHz bands authorized for
(continued….)






Federal Communications Commission

FCC 13-159




11.
At issue in this case is whether Intelsat violated the Rules by willfully or repeatedly
permitting another entity to assume its place in a GSO-like satellite licensing queue30 and failing to
maintain the continuing accuracy and completeness of information furnished in an application pending
before the Commission.31
12.
We answer these questions in the affirmative. As set forth below, we conclude that
Intelsat is apparently liable for forfeiture for the willful or repeated violation of Section 25.158(c) of the
Rules. We further conclude that Intelsat willfully and repeatedly violated Section 1.65(a) of the Rules but
decline to find it liable for a forfeiture for this violation. Based on the facts and circumstances before us,
we therefore conclude that Intelsat is apparently liable for forfeiture penalties totaling one hundred and
twelve thousand five hundred dollars ($112,500).

A.

Intelsat Apparently Permitted Another Entity to Assume its Place in a GSO-like
Satellite Licensing Queue

13.
We find that Intelsat apparently violated Section 25.158(c) of the Rules by permitting
ViaSat to assume its place in the GSO-like satellite licensing queue.32 Section 25.158(c) clearly directs
that “[a]n applicant for a GSO-like satellite system license is not allowed to transfer, assign, or otherwise
permit any other entity to assume its place in any queue.”33 In this case, Intelsat established its first-in-
line queue position for the additional Ka-band spectrum and for South American coverage using the
original Ka-band spectrum at the nominal 89° W.L. orbital location on February 27, 2009, when it filed
its application for a license to operate Galaxy KA.34 On February 17, 2010,

ViaSat filed an application for a new satellite
license at the nominal 89º W.L. orbital location utilizing most of the additional 500 MHz of Ka-band
spectrum to serve CONUS and South America, and the original Ka-band spectrum to serve South
America. At the time of its filing, this application was in conflict with Intelsat’s earlier-filed application
for the Galaxy KA satellite and, therefore, second-in-line behind Intelsat’s application in the licensing
queue.
on March 2, 2010, Intelsat amended the Galaxy KA
application by withdrawing its request for the additional Ka-band spectrum and by removing the South
American beams on the original Ka-band spectrum.35 As a result, ViaSat obtained first-in-line processing
queue status at the nominal 89° W.L. orbital location for most of the additional Ka-band spectrum and for
South American coverage using the original Ka-band spectrum. This
is precisely
the type of conduct that Section 25.158(c) was meant to prevent. We conclude that Intelsat’s withdrawal
of its request for the additional Ka-band spectrum,

and removal of the South American beams on the original Ka-band spectrum, therefore, constituted action
to transfer, assign, or otherwise permit ViaSat to assume its place in the GSO-like satellite licensing
queue in apparent violation of the Rules.36

14.
Furthermore, we conclude that this violation continued for the entire period during which
Intelsat vacated its first-in-line position in favor of ViaSat. Intelsat’s apparent violation began no later

30 47 C.F.R. § 25.158(c).
31 47 C.F.R. § 1.65(a).
32 47 C.F.R. § 25.158(c).
33 Id.
34 For purposes of this NAL, we refer to the orbital locations at 88.9° W.L., 89.0° W.L., and 89.1° W.L. as the
“nominal” 89° W.L. orbital location. To facilitate station-keeping among satellites operating at the same “nominal”
orbital location, operators often request authority to operate at locations slightly offset from a nominal location.
35 See supra paras. 2–7.
36 See FCC Form 312, Amendment to Satellite License Application of Intelsat North America, LLC, FCC File No.
SAT-AMD-20100302-00038.

5






Federal Communications Commission

FCC 13-159




IV.

ORDERING CLAUSES

25.

ACCORDINGLY, IT IS ORDERED

that, pursuant to Section 503(b) of the Act,61 and
Section 1.80 of the Rules,62 Intelsat License LLC, f/k/a Intelsat North America, LLC, is hereby

NOTIFIED

of this

APPARENT LIABILITY FOR A FORFEITURE

in the amount of one hundred
and twelve thousand five hundred dollars ($112,500) for willfully or repeatedly violating Section 25.158
of the Rules.63
26.

IT IS FURTHER ORDERED

that, pursuant to Section 1.80 of the Rules, within thirty
(30) calendar days of the release date of this Notice of Apparent Liability for Forfeiture, Intelsat License
LLC SHALL PAY the full amount of the proposed forfeiture or

SHALL FILE

a written statement
seeking reduction or cancellation of the proposed forfeiture.
27.
Payment of the forfeiture must be made by check or similar instrument, wire transfer, or
credit card, and must include the NAL/Account Number and FRN referenced above. Intelsat License
LLC shall send electronic notification on the date said payment is made to Theresa Z. Cavanaugh at
Terry.Cavanaugh@fcc.gov, to Pamela S. Kane at Pamela.Kane@fcc.gov, and to Edward H. Smith II at
Edward.Smith@fcc.gov. Regardless of the form of payment, a completed FCC Form 159 (Remittance
Advice) must be submitted.64 When completing the FCC Form 159, enter the Account Number in block
number 23A (call sign/other ID) and enter the letters “FORF” in block number 24A (payment type
code). Below are additional instructions you should follow based on the form of payment you select:

Payment by check or money order must be made payable to the order of the Federal
Communications Commission. Such payments (along with the completed Form 159) must be
mailed to Federal Communications Commission, P.O. Box 979088, St. Louis, MO 63197-
9000, or sent via overnight mail to U.S. Bank – Government Lockbox #979088, SL-MO-C2-
GL, 1005 Convention Plaza, St. Louis, MO 63101.

Payment by wire transfer must be made to ABA Number 021030004, receiving bank
TREAS/NYC, and Account Number 27000001. To complete the wire transfer and ensure
appropriate crediting of the wired funds, a completed Form 159 must be faxed to U.S. Bank
at (314) 418-4232 on the same business day the wire transfer is initiated.

Payment by credit card must be made by providing the required credit card information on
FCC Form 159 and signing and dating the Form 159 to authorize the credit card payment.
The completed Form 159 must then be mailed to Federal Communications Commission, P.O.
Box 979088, St. Louis, MO 63197-9000, or sent via overnight mail to U.S. Bank –
Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO
63101.
28.
Any request for full payment over time under an installment plan should be sent
to: Chief Financial Officer—Financial Operations, Federal Communications Commission, 445 12th
Street, S.W., Room 1-A625, Washington, D.C. 20554.65 Questions regarding payment procedures should
be addressed to the Financial Operations Group Help Desk by phone, 1-877-480-3201, or by e-mail,
ARINQUIRIES@fcc.gov.

61 47 U.S.C. § 503(b).
62 47 C.F.R. § 1.80.
63 27 C.F.R. § 25.158.
64 An FCC Form 159 and detailed instructions for completing the form may be obtained at
http://www.fcc.gov/Forms/Form159/159.pdf.
65 See 47 C.F.R. § 1.1914.

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Federal Communications Commission

FCC 13-159




29.
The written statement seeking reduction or cancellation of the proposed forfeiture, if any,
must include a detailed factual statement supported by appropriate documentation and affidavits pursuant
to Sections 1.16 and 1.80(f)(3) of the Rules.66 Mail the written statement to Theresa Z. Cavanaugh, Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal Communications Commission, 445
12th Street, S.W., Room 4-C330, Washington, D.C. 20554 and include the NAL/Account Number
referenced above. Intelsat License LLC shall also e-mail the written response to Theresa Z. Cavanaugh at
Terry.Cavanaugh@fcc.gov, Pamela S. Kane at Pamela.Kane@fcc.gov, and Edward H. Smith II at
Edward.Smith@fcc.gov.
30.
The Commission will not consider reducing or canceling a forfeiture in response to a
claim of inability to pay unless the petitioner submits: (1) federal tax returns for the most recent three-
year period; (2) financial statements prepared according to generally accepted accounting principles
(GAAP); or (3) some other reliable and objective documentation that accurately reflects the petitioner’s
current financial status. Any claim of inability to pay must specifically identify the basis for the claim by
reference to the financial documentation submitted.
31.

IT IS FURTHER ORDERED

that a copy of this Notice of Apparent Liability for
Forfeiture shall be sent by Certified Mail, Return Receipt Requested, and first class mail, to counsel for
Intelsat License LLC, Jennifer D. Hindin, Esq., Wiley Rein LLP, 1776 K St., NW, Washington, DC
20006.

FEDERAL COMMUNICATIONS COMMISSION




Marlene H. Dortch
Secretary





66 See 47 C.F.R. §§ 1.16, 1.80(f)(3).

11


Federal Communications Commission

FCC 13-159




STATEMENT OF

COMMISSIONER AJIT PAI, DISSENTING

Re:
Intelsat License LLC f/k/a Intelsat North America, LLC, File No. EB-11-IH-1376; NAL/Acct. No.
201432080001; FRN 0009308008.
In cases other than those involving a broadcast licensee, Section 503(b)(6)(B) of the
Communications Act provides that “[n]o forfeiture penalty shall be determined or imposed . . . if the
violation charged occurred more than 1 year prior to the date of issuance of the required notice or notice
of apparent liability.” Here, the Commission alleges that Intelsat violated Section 25.158(c) of our rules
by taking action to “transfer, assign, or otherwise permit ViaSat to assume its place in the GSO-like
satellite licensing queue in apparent violation of the Rules.” Any such action, however, took place no
later than March 2, 2010, when Intelsat amended its application for the Galaxy KA satellite, thus moving
ViaSat to the head of the queue. Accordingly, since more than one year has elapsed since that date, I do
not believe that the Commission may impose a forfeiture penalty consistent with Section 503(b)(6)(B) for
this alleged violation of our rules.
To be sure, the Notice of Apparent Liability claims that Intelsat’s alleged violation of our rules
continued until ViaSat took action that restored Intelsat’s position at the head of the queue, thus curing the
alleged violation. But this stretches the concept of a continuing violation past the breaking point. For
example, under this theory, the statute of limitations for theft would begin to run not when an item is
stolen or even when it is discovered that an item has been stolen, but rather when that item is returned to
its rightful owner. Needless to say, that is not the law and neither do I believe that a court would find our
reasoning in today’s item to be persuasive.
Because I believe that the statute of limitations has expired, I need not reach the question of
whether Intelsat actually violated Section 25.158(c). I will simply note that I am skeptical of the
Commission’s conclusion on that score.


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