******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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 Orion Network Systems, Inc. Application for Authority to Construct, Launch, and Operate a Ka-Band Satellite System in the Fixed-Satellite Service File Nos. 195-197-SAT-P/LA-95 205-SAT-AMEND-95 ORDER AND AUTHORIZATION Adopted: May 8, 1997 Released: May 9, 1997 By the Chief, International Bureau: Introduction 1. With this Order, we authorize Orion Network Systems, Inc. ("Orion Network") to launch and operate a satellite system in geostationary satellite orbit ("GSO") to provide fixed- satellite services ("FSS") in the Ka-band. This will afford Orion Network the opportunity to provide a variety of communication services to consumers in the United States and around the world. Background 2. Orion Network, a Delaware corporation, is the parent corporation of Orion Satellite Corporation, which is the general partner of International Private Satellite Partners, L.P. (known as "Orion Atlantic"). Orion Network proposes to construct, launch, and operate three satellites at the following orbital locations: 78ø W.L.; 93ø W.L.; and 83ø W.L. It also filed an amendment to add a Ka-band payload to a Ku-band satellite it had proposed to operate at 127ø W.L. 3. Orion Network proposes to use 1000 MHz at 28.35-28.6 and 29.25-30.0 GHz for service uplinks and 1000 MHz at 18.55-18.80 and 19.45-20.2 GHz bands for service downlink operations. It proposes to offer services such as: digital audio, digitally compressed video, high definition video and audio, voice and multimedia services. Orion Network proposes to operate on a non-common carrier basis. 4. Each of Orion Network's proposed satellites will incorporate 25 fixed and two steerable spot beams. The satellites will employ a total of 32 traveling wave tube amplifiers each with 60 Watts of power. The uplink to the satellite will be by frequency division multiple access (FDMA) and the downlink transmission for each transponder channel will use a single time division multiplexed (TDM) carrier. 5. Two other entities controlled by Orion Network also filed 28 GHz band applications in this processing round. These are Orion Atlantic, L.P. and Orion Asia Pacific Corporation. Orion Atlantic holds Commission licenses to operate two Ku-band satellites in the Atlantic Ocean Region. Orion Atlantic filed a modification to one of these satellites in this processing round seeking to add Ka-band capacity. Orion Asia Pacific, another entity controlled by Orion Network, also filed an amendment in this processing round, to add a Ka-band payload to a proposed Ku-band satellite. All applicants represent that their proposed satellites will operate as part of the Orion global satellite network. 6. Several other GSO FSS applicants filed petitions to deny and other pleadings in response to Orion Network's application, Orion Atlantic's application, and Orion Asia Pacific application. As further discussed below, the GSO FSS applicants later withdrew these petitions to deny and other pleadings. Motorola Satellite Communications, Inc. also filed a petition to deny all of the GSO FSS Ka-band applications, arguing that grant would conflict with its requested frequencies for feeder links for its "Big LEO" system. These concerns are resolved by the 28 GHz band plan. Relevant Domestic Decisions 1. DISCO I 7. In January 1996, the Commission, in the DISCO I Report and Order, abolished all distinctions between U.S. domestic satellites and international separate system satellites. This allows all U.S.-licensed satellites to provide any mix of domestic or international satellite services they choose, subject only to the licensee obtaining all applicable international approvals and authorizations by other administrations to provide service to, from, or within their respective territories. Therefore, all FSS licensees in the Ka-band are permitted to provide any combination of domestic and international services without obtaining separate approval from the Commission for specific service areas. 2. 28 GHz Band Segmentation Decision 8. In July 1996, the Commission adopted a band plan for U.S. commercial operations in the Ka-band. This band plan designates discrete band segments in 17.7-20.2 GHz and 27.5-30.0 GHz frequency bands for the Local Multipoint Distribution Service ("LMDS"), the GSO FSS service, the non-geostationary satellite orbit ("NGSO") FSS service, and feeder links for certain NGSO mobile satellite service ("MSS") systems. Of the total 2.5 GHz of spectrum available in each transmission direction, we concluded, based on the representations of the GSO FSS applicants, that 1 GHz of spectrum in both transmission directions was needed to support GSO FSS systems. The 28 GHz band plan designates the following frequencies for U.S. commercial GSO FSS systems. We note any other services that are designated in the band plan to share the band with GSO FSS systems on an equal basis: GSO FSS-Designated Band Segment Other Co-Primary Designations 17.7-18.8 GHz (downlink) Fixed 19.7-20.2 GHz (downlink) 28.35-28.6 GHz (uplink) 29.25-29.5 GHz (uplink) NGSO MSS feeder links 29.5-30.0 GHz (uplink) 3. Orbital Assignments 9. In May 1996, the International Bureau, acting on delegated authority, assigned orbit locations to those 28 GHz GSO FSS applicants in the first processing round that proposed to provide international FSS from their GSO systems. This assignment plan was the result of the GSO FSS applicants' successful efforts to resolve their conflicts over orbit locations for satellites in the 62ø W.L. to 175.25ø E.L. region of the orbital arc. In the Assignment Order, we indicated that the assignments were conditioned on the grant of assignments in the orbital arc capable of providing U.S. domestic service. Specifically, the May 1996 Orbital Assignment Order assigned one location to Orion Network at 78ø E.L., one location to Orion Atlantic at 47ø W.L. and one location to Orion Asia Pacific at 126.5ø E.L. 10. In February 1997, the first-round GSO FSS applicants, due to their continued efforts, reached an agreement regarding conflicts over locations in the remainder of the orbital arc. Specifically, this agreement covered locations between 67ø W.L. to 148ø E.L., which are best suited for providing service to the United States. As part of this agreement, the GSO applicants also agreed to withdraw their petitions to deny and other pleadings filed with respect to each others' 28 GHz band applications. This agreement effectively eliminated all obstacles to quick grant of the GSO FSS applications. By a separate Order issued today, we adopt an Assignment Plan implementing the orbital assignment agreement. The Assignment Plan assigns two additional locations to Orion Network at 89ø W.L and 81ø W.L. Discussion A. Qualifications 11. Before the Commission authorizes any space station applicant, we first need to determine whether an applicant is legally, technically, and financially qualified to hold a Commission license. The rules set forth in Part 25 of the Commission's rules governing the FSS apply, in general, to FSS systems in the Ka-band. We recognize we will need to modify these rules, to some extent, to incorporate operations at 28 GHz. Such modifications are the subject of an ongoing rulemaking. We expect to release a Report and Order in this proceeding shortly. Nevertheless, because Orion Network's application is not mutually exclusive with any other U.S. commercial satellite application on file, and can be evaluated under current Part 25 rules, we do not view the rulemaking as a bar to considering Orion Network's license now. Rather, we will condition any grant to Orion Network on it complying with all rules adopted in the 28 GHz Band Satellite Report and Order. Financial Qualifications 12. Although financial qualification requirements for GSO FSS systems will be discussed in greater detail in the forthcoming 28 GHz Band Satellite Report and Order, the Commission has in the past, based financial requirements for satellite services on the basis of entry opportunities in the particular service being licensed. In cases where we can accommodate all pending applications and where there is sufficient remaining capacity to address additional requests that may arise, we have not looked to current financial ability as a prerequisite to a license grant. This is because the grant of an authorization to one applicant will not prevent another qualified applicant from going forward with a proposal in the same service. We ensure that licensees timely build their systems by requiring them to meet specified implementation milestones. In contrast, where applications for satellites exceed the number of satellites we can accommodate, we have adopted a standard that requires applicants to demonstrate evidence of internal assets or committed financing sufficient to cover construction, launch, and first year operating costs. This is based on our experience that under-financed licensees have significant difficulty in raising the requisite financing. 13. Because all of the first round applicants agreed to orbit locations, and because other orbit locations remain available for additional GSO FSS satellites, authorization of all proposed systems does not preclude use of this band by other applicants for GSO FSS systems. Consequently, it is not necessary rule on any of the first round 28 GHz applicants' financial qualifications. We previously granted a similar waiver to Norris Satellite, Inc., which was awarded a license to provide satellite services in the 28 GHz band in 1992. We intend to rigorously enforce the system milestone schedule to ensure that Orion Network proceeds in a timely manner and does not tie up valuable orbit locations and spectrum to the exclusion of other qualified applicants. Technical Qualifications 14. Applicants for space station authorizations also must meet certain technical qualification requirements. In its application, Orion Network represents that it intends to operate under the Commission's existing technical rules for the FSS in Part 25 of the Commission's rules. These rules include a full frequency re-use requirement. As noted, however, we will need to modify these rules somewhat, to incorporate operations in the 28 GHz band. For example, we envision that we will need to modify the definition of full frequency reuse for systems employing circular polarization, as many 28 GHz GSO FSS systems will. Although Orion Network does not plan to employ frequency reuse, it will be required to do so as a Commission licensee. Rather than delaying action on Orion Network's application until the 28 GHz Satellite Report and Order is issued, however, we condition this authorization on Orion Network complying with the forthcoming rules concerning technical qualifications for GSO FSS systems in the 28 GHz band. Failure to meet these requirements, including any full frequency reuse standard, is grounds for revoking the authorization. B. Spectrum Issues 15. In the following text we discuss specific issues related to the frequency bands Orion Network proposes for its service uplinks and service downlinks. Service Uplinks 16. As noted, the 28 GHz band plan designates 1000 MHz of spectrum in the 28.35- 28.6 and the 29.25-30.0 GHz band for uplink GSO FSS operations. Two hundred fifty megahertz of this spectrum at 29.25-29.5 GHz is to be shared on a co-primary basis with NGSO MSS feeder links. In its application, Orion Network proposes to use spectrum at 28.35-28.6 and 29.25-30 GHz for its service uplinks. 17. Orion Network's request is consistent with the band plan and we therefore grant Orion Network authority to operate in those bands in the United States. Operations in the shared 250 megahertz are, of course, subject to the sharing rules adopted in the 28 GHz Band First Report and Order. Service Downlink Bands 18. The 28 GHz band plan designates the 17.7-18.8 GHz and 19.7-20.2 GHz bands for GSO FSS operations, with the entire 17.7-18.8 GHz band to be shared on a co-primary basis with the fixed service. In adopting the band plan, we noted that GSO FSS operations in the 17.7- 18.8 GHz band will be restricted by: the need to protect the broadcast satellite service in the 17.7-17.8 GHz band segment (after April 2007), power flux density limits to protect the earth exploration-satellite service in the 18.6-18.8 GHz band and the need to coordinate with fixed services throughout the band. We concluded that the GSO FSS systems should be able to coordinate sufficient spectrum with other users within this 1.1 GHz band, to give them, together with the 500 MHz designated at 19.7-20.2 GHz, access to sufficient downlink spectrum to correspond with the 1000 MHz of uplink spectrum designated for GSO FSS in the 27.5-30.0 GHz range. 19. In its application, which it filed before the final band plan was adopted, Orion Network proposes to use 1000 MHz of spectrum at 18.55-18.8 and 19.45-20.2 GHz for its service downlinks. 20. In the interest of expediting the licensing process, we grant here that portion of Orion Network's downlink request that is consistent with the 28 GHz band plan and where specific operating frequencies can be assigned. Specifically, we authorize Orion Network to operate a system with service downlinks in the 19.7-20.2 GHz band. We will not give Orion Network operating authority in its other requested downlink bands at this time. First, its request to use 19.45-19.7 GHz is inconsistent with the Band Plan and will be denied. Second, although its request to use 18.55-18.8 GHz is compatible with the plan, it is premature to grant operating authority in any portion of the GSO FSS designated 17.7-18.8 GHz band. As noted, this 1.1 GHz of spectrum is to be shared on a co-primary basis with other services, constraining GSO FSS operations in this band. Nevertheless, we anticipate that GSO FSS licensees will be able to identify and coordinate 500 MHz in this band, to give these systems a total of up to 1000 MHz in each transmission direction. Orion Network has asked for 1000 MHz of downlink spectrum. We have already authorized it operating authority for 500 MHz at 19.7-20.2 GHz. Once Orion Network has determined exactly which 500 MHz it wishes to operate on in the 17.7-18.8 GHz band, it should file a modification application to operate in these frequencies. In the interim, Orion Network is, of course, free to begin construction in these bands at its own risk. 21. In addition, Orion Network must coordinate with the U.S. Government systems operating in the 17.7-18.8 and 19.7-20.2 GHz bands in accordance with footnote US 334 to the Table of Frequency Allocations. This footnote requires coordination of commercial systems with U.S. Government systems in the 17.8-20.2 GHz band. C. Regulatory Treatment 22. In our DISCO I Report and Order, we determined that all fixed-satellite operators in the C-band and Ku-band could elect to operate on a common carrier or non-common carrier basis. As we will discuss in more detail in the 28 GHz Satellite Report and Order on service rules, we see no reason to treat Ka-band FSS licensees differently. 23. Orion Network proposes to operate its proposed fixed-satellite services on a non- common carrier basis. The Commission traditionally has evaluated requests to operate on a non- common carrier basis using the analysis set forth in National Association of Regulatory Utility Commissioners v. FCC, (NARUC I). Under NARUC I, we may regulate an entity as a private carrier unless: (1) there is or should be any legal compulsion to serve the public indifferently; or (2) there are reasons implicit in the nature of the service to expect that the entity will in fact hold itself out indifferently to the eligible user public. 24. We have already authorized one 28 GHz FSS operator in the United States. Today we are authorizing thirteen more. Dozens of FSS satellites are now operating in the C-and Ku-band. In addition, the recent World Trade Organization agreement will open the U.S. market to foreign licensed satellites. Thus, with respect to the first prong of NARUC I, sufficient competitive capacity is and will continue to be available to assure the U.S. public access to FSS. With regard to the second prong of NARUC I, we see no reasons why 28 GHz operators will hold themselves out indifferently to the public. We will therefore allow Orion Network to operate as a non-common carrier. D. Milestone Schedules 25. As in all other satellite services, and as discussed in more detail in the forthcoming 28 GHz Band Satellite Report and Order, all licensees will be required to adhere to a strict timetable for system implementation. This ensures that licensees are building their systems in a timely manner and that the orbit-spectrum resource is not being held by licensees unable or unwilling to proceed with their plans. The implementation schedules for 28 GHz systems will generally track the schedules imposed in other satellite services. For GSO satellites, this means that construction must be commenced within one to two years of grant and the satellite must be launched and operational within five years of license grant. Nevertheless, we recognize, that several 28 GHz systems are designed with multiple satellites at each of several orbit locations and that construction of these large numbers of satellites may take additional time. We must balance this, however, against our goal of preventing warehousing. Consequently, we will require each GSO licensee to begin construction of its first satellite within one year of grant, to begin construction of the remainder within two years of grant, to launch at least one satellite into each of its assigned orbit locations within five years of grant, and to launch the remainder of its satellites by the date required by the International Telecommunication Union to assure international recognition and protection of these satellites. The milestones specified in paragraph 31 of this Order and Authorization are consistent with this framework. E. International Coordination 26. In general, we will follow the applicable advance-publication, coordination, and notification procedures as set forth in the ITU Radio Regulations in coordinating Orion Network's satellites with other affected administrations. We will discuss in more detail international coordination procedures among U.S.-licensed FSS Ka-band systems, both GSO and NGSO, in the 28 GHz Band Satellite Report and Order. F. Exclusive Arrangements 27. To facilitate global competition, we are planning to adopt limitations on 28 GHz FSS licensees' ability to enter into exclusive arrangements with other countries. These restrictions will be discussed in more detail in the 28 GHz Band Satellite Report and Order. We intend to construe these arrangements bearing in mind that spectrum coordination and availability in particular countries may limit the ability of 28 GHz licensees to provide service to those countries. Accordingly, Orion Network must comply with any such restrictions adopted. Conclusion 28. Accordingly, upon review of Orion Network's application to implement three 28 GHz GSO satellites to provide FSS, we find that Orion Network is qualified to be a Commission licensee and that, pursuant to Section 309 of the Communications Act of 1934, as amended, 47 U.S.C.  309, grant of this application will serve the public interest, convenience, and necessity. As specified in the Assignment of Orbital Locations to Space Stations in the Ka-Band, we have assigned Orion Network to the 89ø W.L, 81ø W.L and 78ø W.L. orbital locations. Ordering Clauses 29. IT IS ORDERED that Application File Nos. 195 through 197-SAT-P/LA-95 ARE GRANTED, and Orion Network Systems, Inc. IS AUTHORIZED to launch and operate three GSO FSS satellites to provide fixed-satellite service in the United States in the frequency bands 19.7-20.2, 28.35-28.6 and 29.25-30.0 GHz, in accordance with the Assignment of Orbital Locations to Space Stations in the Ka-Band, DA 97-967 (adopted May 8, 1997), consistent with the Commission's Part 25 rules governing satellite operations, unless specifically waived herein, and any modifications to our rules that we adopt for 28 GHz GSO FSS systems in the forthcoming 28 GHz Band Satellite Report and Order. 30. IT IS FURTHER ORDERED that Application File No. 205-SAT-AMEND-95 is DEFERRED pending clarification. 31. IT IS FURTHER ORDERED that unless extended by the Commission for good cause shown, each of the authorizations shall become NULL AND VOID in the event the space station is not constructed, launched, and successfully placed into operation in accordance with the technical parameters and terms and conditions of the authorizations by the following dates: Construction Commenced Construction Completed Launch Orion F7 May 1998 April 2002 May 2002 Orion F8 May 1999 April 2002 May 2002 Orion F9 May 1999 April 2002 May 2002 32. IT IS FURTHER ORDERED that Orion Network Systems, Inc. must comply with all rules to be adopted for GSO FSS systems in the 28 GHz Band Satellite Report and Order and must file a letter with the Commission, within 60 days of the effective date of this Report and Order, representing that it will construct its system in compliance with any rules adopted in this Report and Order. Failure to submit such a letter within this time frame is grounds for rendering this authorization null and void. 33. IT IS FURTHER ORDERED that Orion Network Systems, Inc. must coordinate all of its Ka-band downlink operations with the U.S. Government systems in accordance with footnote US334 to the Table of Frequency Allocations, 47 C.F.R.  2.106. 34. IT IS FURTHER ORDERED that the license term for each space station is ten years and will begin to run on the date Orion Network Systems, Inc. certifies to the Commission that the satellite has been successfully placed into orbit and the operations fully conform to the terms and conditions of this authorization. 35. IT IS FURTHER ORDERED that this authorization is subject to the completion of consultations under Article XIV of the INTELSAT Agreement. Upon completion of these consultations, and notification by the Department of State that the United States has fulfilled its international obligations with respect to INTELSAT, no further action by this Commission will be required. 36. IT IS FURTHER ORDERED that Orion Network Systems, Inc. will prepare any necessary submissions to the International Telecommunication Union (ITU) and to affected administrations for the completion of the appropriate coordination and notification obligations for these space stations in accordance with the ITU Radio Regulations. We also remind all licensees that no protection from interference caused by radio stations authorized by other Administrations is guaranteed unless coordination procedures are timely completed or, with respect to individual administrations, by successfully completing coordination agreements. Any radio station authorization for which coordination has not been completed may be subject to additional terms and conditions as required to effect coordination of the frequency assignments of other Administrations, 47 C.F.R.  25.111(b). 37. IT IS FURTHER ORDERED that the temporary assignment of any orbital location to Orion Network Systems, Inc. is subject to change by summary order of the Commission on 30 days' notice and does not confer any permanent right to use the orbit and spectrum. Neither this authorization nor any right granted by this authorization, shall be transferred, assigned or disposed of in any manner, voluntarily or involuntarily, or by transfer of control of any corporation holding this authorization, to any person except upon application to the Commission and upon a finding by the Commission that the public interest, convenience and necessity will be served thereby. 38. IT IS FURTHER ORDERED that Orion Network Systems, Inc. is afforded thirty days from the date of the release of this order and authorization to decline this authorization as conditioned. Failure to respond within that period will constitute formal acceptance of the authorization as conditioned. 39. This 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. 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 public notice of this order (see 47 C.F.R.  1.4(b)(2)). FEDERAL COMMUNICATIONS COMMISSION Peter F. Cowhey Chief, International Bureau