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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 Application of ) ) LEO ONE USA CORPORATION) File Nos. ) 57-DDS-P/LA-94(48) For Authorization to Construct, ) 27-SAT-AMEND-95 Launch and Operate a Non-Voice, ) 10-SAT-AMEND-98 Non-Geostationary Mobile Satellite ) 64-SAT-AMEND-98 System in the 137-138, 148-150.05 and ) 400.15-401 MHz Frequency Bands ) ORDER AND AUTHORIZATION Adopted: February 13, 1998 Released: February 13, 1998 By the Chief, International Bureau: I. Introduction 1. By this order and authorization ("Order"), we authorize Leo One USA Corporation ("Leo One") to construct, launch and operate a 48 satellite non-voice, non- geosynchronous mobile satellite service ("NVNG MSS") system in low Earth orbit in the 148-150.05 MHz uplink and the 137-137.025 MHz and 400.15-401 MHz downlink frequency bands. Leo One's NVNG MSS system will offer data communications services including two-way data messaging, vehicle tracking, remote meter reading and other services ("Little Leo services") to users in the United States and around the world. Grant of Leo One's application will serve the public interest, convenience and necessity because it will promote the entry of new Little Leo service providers in the emerging Little Leo service markets. II. Background 2. In 1990, Orbital Communications Corporation ("Orbcomm") filed an application to construct, launch and operate a NVNG MSS system. Subsequently, Starsys Global Positioning, Inc. ("Starsys") and Volunteers In Technical Assistance, Inc. ("VITA") filed applications for NVNG MSS systems. The Commission considered these three applications together in what is referred to as the first NVNG MSS processing round (the "first processing round"). In the first processing round, the Commission instituted a negotiated rulemaking committee to consider sharing proposals and technical rules to govern NVNG MSS service. During these negotiations, Orbcomm, Starsys and VITA reached agreement on a spectrum sharing plan that would enable all three applicants to implement their systems in the available spectrum. The negotiated rulemaking committee used this spectrum sharing plan to issue a report that became the basis for the rules and policies adopted by the Commission (the "First Processing Round Report and Order") to govern the licensing of NVNG MSS systems in the first processing round. Orbcomm was issued the first NVNG MSS license in October 1994. The first processing round concluded when VITA and Starsys were issued NVNG MSS licenses in July and November 1995, respectively. 3. Before the conclusion of the first processing round, Leo One USA, L.P. filed an application requesting authority to construct and operate a 12 satellite NVNG MSS system in the 148-150.05 MHz uplink and the 137-138 MHz downlink frequency bands to provide Little Leo services to customers world-wide. In April 1994, Leo One USA, L.P. amended its application to increase the number of satellites in its proposed system to 48, operating with inter-satellite links in the 22.55-23.55 GHz and 24.45-24.75 GHz frequency bands and downlinks in the 400.15-401 MHz downlink frequency band. The name and form of the applicant also was changed from Leo One USA, L.P. to Leo One USA Corporation. However, the beneficial owner of Leo One, The David A. Bayer Trust, remained unchanged. 4. In September 1994, we placed Leo One's application on public notice. The public notice established a "cut-off" date for filing applications to be considered concurrently with that of Leo One. This action commenced the second NVNG MSS processing round (the "second processing round"). Several parties filed applications for new NVNG MSS systems in response to this public notice. In addition, Orbcomm and VITA filed modifications to their proposed first processing round NVNG MSS systems. We accepted the new applications, and modification applications filed by Orbcomm and VITA, in the second processing round. We also deferred to the second processing round consideration of a Starsys amendment to its original application, filed April 25, 1994, after the "cut-off" date for filing applications in the first processing round. Leo One also amended its application before the "cut-off" date for filing applications in the second processing round. As a result, a total of eight applications were included in the second processing round. 5. Unlike the first processing round, where sufficient spectrum existed to accommodate the requests of all the applicants, insufficient spectrum existed to accommodate the eight NVNG MSS systems proposed by second processing round applicants. Portions of the available spectrum, the 148-150.05 MHz uplink and 137-138 MHz and 400.15-401 MHz downlink frequency bands, were licensed to Orbcomm, Starsys and VITA in the first processing round. In addition, the downlink frequency bands were shared with United States Government users. Specifically, the National Oceanic and Atmospheric Administration ("NOAA") was operating a meteorological satellite system in the 137-138 MHz downlink frequency band. Also, the Department of Defense's ("DoD") Department of Air Force was planning to implement a meteorological satellite system in the 400.15-401 MHz downlink frequency band for national security purposes. Because the government meteorological satellite service was allocated on a primary or co-primary basis in these bands, second processing round NVNG MSS licensees would be required to share these bands with the NOAA and DoD meteorological satellite systems. In light of the limited spectrum available to second processing round applicants after the conclusion of the first processing round, and the required sharing between the NOAA and DoD meteorological satellite systems and the second processing round NVNG MSS systems, we initiated a Notice of Proposed Rulemaking (the "Notice") to develop rules and policies to govern the licensing and operation of second processing round NVNG MSS systems in this sharing environment. 6. Generally, the Notice proposed to: (a) exclude first processing round licensees from participation in the second processing round in order to open Little Leo service markets to new entrants; (b) license up to three new NVNG MSS systems in the second processing round; (c) establish procedures that would require second processing round licensees to protect the operations of the NOAA and DoD meteorological satellite systems; and (d) use auctions to resolve mutual exclusivity among second processing round applicants. All eight applicants and other interested parties commented on the proposals in the Notice. Subsequently, two applicants withdrew from the second processing round and another applicant acquired the satellite operations of a third applicant. 7. On September 22, 1997, the remaining applicants filed with the Commission a mutually agreed upon spectrum sharing plan (the "Joint Proposal") that accommodated all remaining second processing round applicants in the available spectrum. Generally, the spectrum sharing plan requires that the applicants share the 148-150.05 MHz uplink frequency band with the proposed French satellite system S80-1 ("S80-1"), the Russian radionavigation satellite service system ("TSYKADA") and terrestrial users of the band. The applicants agreed to share the 137-138 MHz downlink frequency band with NOAA, S80-1, the proposed Russian Meteor satellite system and terrestrial users of the band. Finally, the applicants agreed to share the 400.15-401 MHz frequency band with DoD. The Joint Proposal expressly recognized that the second processing round applicants will be required to coordinate their operations with the other users of these frequency bands. As part of the Joint Proposal, the applicants agreed to withdraw all petitions and objections against each other's pending applications. 8. On October 15, 1997, the Commission released a Report and Order (the "Report and Order") in which it concluded that with use of appropriate transmission techniques, proper system coordination, time-sharing of frequencies and the adoption of the Joint Proposal, there was sufficient spectrum to license the five remaining second processing round applicants. The Report and Order directed second processing round applicants to amend their applications to conform to the rules and policies adopted in the Report and Order. 9. In response to this requirement, Leo One filed an amendment conforming its application to the rules and policies adopted in the Report and Order (the "Conforming Amendment"). In its Conforming Amendment, Leo One reiterated that it intended to operate its 48 satellite NVNG MSS system in the 148-150.05 MHz uplink and the 137- 137.025 MHz and 400.15-401 MHz downlink frequency bands, consistent with the spectrum plan adopted in the Report and Order for System 1 ("System 1"). Leo One also stated that it had demonstrated that it could fund the $8.2 million total cost of the construction, launch and operation for one year of two satellites in its constellation as required by Section 25.142(a)(4) of the Commission's Rules. 9. Leo One's Conforming Amendment, together with the conforming amendments of the other second processing round applicants, were placed on public notice. In response, FAI and Orbcomm filed comments. III. Discussion 10. No person shall use or operate any apparatus for the transmission of energy or communications or signals by radio within the jurisdiction of the United States, except pursuant to a license granted by Federal authority under the Communications Act of 1934, as amended (the "Act"). The Commission is authorized to grant radio licenses to qualified persons upon written application therefor. In order to grant Leo One's application to construct, launch and operate the space segment of its NVNG MSS system, the Commission must find that the public interest, convenience and necessity will be served by such grant. Before we can make this finding, Leo One must demonstrate that the company is legally, technically and financially qualified to hold a Commission license 11. Leo One's Conforming Amendment is consistent with the technical parameters established for System 1 in the Report and Order. Specifically, System 1 would operate in the 148-150.05 MHz uplink frequency band and the 137-137.025 MHz and 400.15-401 MHz downlink frequency bands. Leo One's proposal contemplates use of frequency division multiple access/time division multiple access ("FDMA/TDMA") system transmission techniques, consistent with the spectrum efficiency requirements in the Report and Order. A. Procedural Issues 1. V-Band Application 12. Prior to the release of the Report and Order, Leo One filed an application to provide service in the 36-51.4 GHz frequency bands (the "V-band") in response to a Commission public notice requesting applications and establishing a cut-off for acceptance of additional applications for V-band service. If authorized by the Commission in the V-band proceeding, Leo One intends to include a V-band communications payload on each of its 48 NVNG MSS satellites so that it can provide V-band service. The company characterized its V-band application as an amendment to its pending NVNG MSS application instead of as a proposal to modify its second processing round NVNG MSS system authorized by the Commission. 13. According to FAI, because implementation of Leo One's V-band application would require a design modification to Leo One's NVNG MSS proposal and it identifies frequencies different from those contained in its NVNG MSS application, the V-band application constitutes a major amendment to Leo One's NVNG MSS application under Section 25.116(b) of the Commission's Rules. As a result, FAI concludes, Leo One's NVNG MSS application should not be considered in the second processing round. FAI also claims that Leo One fails to demonstrate the financing required to complete the V-band design modification. 14. Although Leo One's V-band application is characterized as an amendment to its pending NVNG MSS application, we will treat this filing as a new application for V-band service that incorporates technical and financial data from its NVNG MSS application, rather than as an amendment to its pending NVNG MSS application. Leo One's V-band application was filed independent of its second processing round NVNG MSS application to be considered by the Commission in the context of the V-band licensing proceeding. In that proceeding, we will consider Leo One's V-band application as a request for modification of the company's second processing round NVNG MSS authorization to include V-band service capability. Also in that proceeding, we will assess Leo One's financial capability to implement its proposed V-band application and to comply with the milestones in its NVNG MSS authorization. Consequently, Leo One's V-band application does not alter its second processing round application. We, therefore, do not consider Leo One's V-band application as a major amendment of its existing second processing round NVNG MSS application. By granting Leo One's second processing round NVNG MSS authorization, however, in no way are we prejudging any future action the Commission might take in connection with Leo One's V-band application. 2. Change of Ownership Amendment 15. On December 5, 1997, Leo One filed an amendment to its NVNG MSS application to effect a transfer of ownership of Leo One from The David A. Bayer Trust to Bayer Satellite Investments -- B, L.P. ("BSI") for tax purposes. According to Leo One, BSI is a limited partnership, The David A. Bayer Corporation holds a 49.5 percent limited partnership interest and a one percent general partnership interest in BSI, and The Karen W. Bayer Trust holds a 49.5 percent limited partnership interest in BSI. The David A. Bayer Trust, a revocable trust, holds 100 percent of the outstanding stock of The David A. Bayer Corporation. After giving effect to the transfer, Leo One states that BSI will hold all of the outstanding stock of Leo One. However, David A. Bayer, as the grantor, sole trustee and sole lifetime beneficiary of The David A. Bayer Trust, will retain full control of BSI and will continue to have majority ownership and 100 percent control of Leo One. 16. Section 25.116 of the Commission's Rules permits application amendments. An exception to this general rule is that "major" amendments made after a "cut-off" date applicable to an application will cause an application to be considered newly filed. A substantial change in the beneficial ownership or control of an applicant is considered a major amendment. 17. Although Leo One's amendment was filed after the "cut-off" date applicable to second processing round NVNG MSS applications, we find that Leo One's amendment does not constitute a major amendment. After giving effect to the transfer, David A. Bayer, the grantor and sole beneficiary of The David A. Bayer Trust, will continue to be the beneficial owner of Leo One. As the grantor of The David A. Bayer Trust, a revocable trust, he can revoke the trust and own its assets at any time during his life. Therefore, he, beneficially owns and controls The David A. Bayer Trust, which indirectly owns 50.5 percent of BSI and wholly-owns BSI's general partner, The David A. Bayer Corporation. BSI owns 100 percent of Leo One. Consequently, David A. Bayer continues to be the beneficial owner of 50.5 percent of Leo One and to control Leo One. The amendment, therefore, does not effect a substantial change in beneficial ownership or control of Leo One. Accordingly, the amendment is not a major amendment under Section 25.116 of the Commission's Rules. B. Qualifications 1. Technical Qualifications 18. Applicants seeking authority to construct, launch and operate second processing round NVNG MSS systems must meet the technical requirements adopted in the Report and Order. Leo One proposes to operate in the frequency bands assigned to System 1: 148-150.05 MHz uplink and the 137-137.025 MHz and 400.15-401 MHz downlink bands. Consistent with the Report and Order, System 1 is required to operate a FDMA/TDMA system. Leo One agrees to operate its NVNG MSS system as an FDMA/TDMA system in the frequency bands assigned to System 1 in the Report and Order. 19. Generally, FAI and Orbcomm have raised concerns about Leo One's technical qualifications to operate a NVNG MSS system. Below we address these concerns and analyze Leo One's technical qualifications to operate its NVNG MSS system in each of the uplink and downlink frequency bands in which it proposes to operate its system. a. Operations in 148-149.9 MHz Uplink Band 20. The Report and Order permits Leo One to operate service uplinks in the 148- 149.90 MHz frequency band, subject to the following restrictions: 148-148.250 MHz Band Leo One must share this band with two FDMA/TDMA systems (System 2 and Orbcomm) and CDMA systems (including System 3); 148.750-148.855 MHz Band Leo One must share this band with two FDMA/TDMA systems (System 2 and Orbcomm) and CDMA systems (including System 3); 148.855-148.905 MHz Band 148.905-148.955 MHz Band Leo One may operate in this band if System 3 does not use this band for feeder uplinks and, in such event, Leo One must share this band with two FDMA/TDMA systems (System 2 and Orbcomm); Leo One may operate in this band if S80-1 does not use this band for feeder uplinks and, in such event, Leo One must share this band with two FDMA/TDMA systems (System 2 and Orbcomm); 148.955-149.810 MHz Band Leo One must share this band with two FDMA/TDMA systems (System 2 and Orbcomm). The 149.585-149.635 MHz portion of this band is reserved exclusively for Orbcomm for feeder uplink use until Orbcomm relocates its feeder uplinks to the 150-150.05 MHz band. Leo One's NVNG MSS operations in these bands will be subject to the above-described restrictions. 21. Consistent with the Negotiated Rulemaking Report, the Report and Order requires second processing round licensees to coordinate their systems to avoid causing harmful interference to the satellite and terrestrial systems operating in the 148-149.90 MHz band. Leo One proposes to implement the dynamic channel activity assignment system ("DCAAS") technique to avoid causing harmful interference to other authorized systems and to increase spectrum utilization efficiency. Orbcomm, however, is concerned that Leo One's implementation of DCAAS in the uplink band will be incapable of detecting Orbcomm's brief data transmissions on uplink channels. It notes, for example, that during the peak period 12:16 p.m. to 12:28 p.m. the number of available channels in this band drops from approximately 500 to 80. This raises a substantial risk, according to Orbcomm, that Leo One's transmissions in this band, particularly during peak times, are likely to occur on the same channels that Orbcomm is using thereby causing harmful interference to Orbcomm. Orbcomm recommends that pre-licensing coordination be conducted to reduce this risk. Leo One contends that Orbcomm's insistence on conducting such pre-licensing coordination is a violation of the Joint Proposal and is intended to delay Orbcomm's NVNG MSS competitors from entering the market. 22. The Report and Order requires Orbcomm, Leo One and the other FDMA/TDMA NVNG MSS licensees operating in the 148-149.9 MHz frequency band to share the use of the channels in this band. This shared use was also contemplated by the parties to the Joint Proposal and the parties agreed to undertake such coordinations in good faith. 23. Orbcomm's concern about the potential for interference during peak periods is best resolved through post-licensing coordination. Historically, we have left inter-system coordination of satellite systems to the satellite licensees themselves, because they are in the best position to weigh the technical and economic trade-offs inherent in any coordination agreement. Based on our experience, this approach has proven to be successful in minimizing interference issues. As Orbcomm points out, possible solutions exist to avoid the potential for interference in this band, for example by using pre-defined algorithms. Because all parties have agreed to share and coordinate in good faith their use of the 148- 149.9 MHz uplink band, we would expect the second processing round licensees operating in this band to be able to address this interference concern. Post-licensing coordination is also desirable because until licenses are granted, second processing round applicants will not know with whom to coordinate the operational parameters of their satellite systems. 24. Orbcomm's reliance on Section 25.142(a) to support its pre-licensing coordination request is misplaced. It asserts that Section 25.142(a) of the Commission's Rules requires Leo One to demonstrate that it will not cause unacceptable interference to Orbcomm, a first processing round licensee. Although the Notice proposed excluding first processing round licensees from participation in the second processing round, Orbcomm and VITA were able to join by negotiating and concluding a spectrum sharing plan with the new entrant second processing round applicants. As part of the Joint Proposal, Orbcomm agreed to permit other second processing round applicants to operate in the channels comprising the 148-149.9 MHz uplink band, including those frequencies licensed to Orbcomm in the first processing round, in exchange for modifying its first processing round license to, among other things, add 12 satellites to its constellation and operate on new frequencies in the lower part of the 148-149.9 MHz band (148-148.855 MHz band) and in the 137-138 MHz band. Neither the Joint Proposal nor the Report and Order preserved Orbcomm's right to avail itself of the protection afforded by Section 25.142(a) to first processing round licensees. We find that the Joint Proposal, as adopted in the Report and Order, and not Section 25.142(a) of the Commission's Rules, reflects all of the material terms and conditions of the spectrum sharing plan mutually agreed to by Orbcomm and the other second processing round applicants. Orbcomm, as a second processing round applicant, cannot now accept the benefits gained from its participation in the second processing round, yet reject the burdens that it assumed in order to receive those benefits. 25. Recognizing that the entire uplink spectrum available to NVNG MSS second processing round licensees is restricted to the 148-149.9 MHz band, it is critical that all second processing round licensees coordinate the operations of their systems in this band in good faith. Consistent with the Report and Order and Section 25.142(b)(3) of the Commission's Rules requiring coordination among NVNG MSS systems, we condition Leo One's authorization to operate on coordinating its co-frequency/co-channel operations in the 148-149.9 MHz band with the other second processing round licensees. b. Operations in 149.9-150.05 MHz Uplink Band 26. The Report and Order permits Leo One to operate in 50 kHz (149.95-150.0 MHz) of spectrum for its feeder uplink operations. This spectrum is shared on a primary basis with the Radio Navigation Satellite Service ("RNSS"). Section 2.106 of the Commission's Rules requires that land MSS service shall not constrain the development and use of the RNSS service in the 149.9-150.05 MHz band. This requirement is intended to benefit existing and future RNSS systems. Therefore, we will require Leo One to coordinate the use of this band with RNSS systems worldwide for the term of this license. 27. Currently the Russian TSYKADA system operates downlinks in the 149.9- 150.05 MHz band. In order to protect TSYKADA's operations from harmful interference, Leo One shall locate its gateways a sufficient distance away from coastal areas to provide for geographic separation. Further, Leo One shall limit the elevation angle for its gateway antennas to minimize emissions near the horizon. Because we do not have adequate information regarding the TSYKADA system to quantify these restrictions, we condition Leo One s authorization to operate feeder uplinks in the 149.95-150 MHz band on the completion of coordination with the TSYKADA system. c. Operations in 137-137.025 MHz Downlink Band 28. In its Conforming Amendment, Leo One states its intent to use the 137- 137.025 MHz band for feeder and service downlinks. FAI asserts that Leo One's operations in this band should be limited to feeder links only. The Report and Order permits Leo One to operate in the 137-137.025 MHz band but noted concerns regarding Little Leo user terminal emissions causing interference to civil and military aeronautical safety and navigation communications in the adjacent 108-137 MHz band. Because of these concerns regarding user terminal out-of-band emissions, we find the 137-137.025 MHz band is better suited for gateway feeder downlinks and not service downlinks. We will not preclude Leo One's use of this spectrum for service downlinks, but it must comply fully with Section 25.135(b) of the Commission s Rules prohibiting the operation of mobile user terminals on civil aircraft. 29. Leo One certifies that the maximum power flux density ("PFD") produced at the Earth s surface by each of its satellites in the 137-137.025 MHz band will not exceed -125 dB(W/m2/4 kHz). Because Leo One's satellites will not exceed the PFD threshold requirement for coordination with terrestrial services under the Commission's Rules, such coordination will not be required. 30. FAI contends that its adjacent band operations may be adversely affected by out-of-band emissions from Leo One's NVNG MSS system operating in the 137-137.025 MHz band. Leo One states that FAI's out-of-band emissions concerns are resolvable through coordination. Thus, we condition Leo One s authorization to operate in the 137- 137.025 MHz band on completion of adjacent channel frequency sharing coordination with FAI, NOAA and foreign systems operating in this frequency band. 31. Also, as required by the Report and Order, Leo One shall notify the Commission within 30 days of discontinuing its use of the 137-137.025 MHz band. This notice requirement is consistent with the parties agreement in the Joint Proposal. d. Operations in 400.15-401 MHz Downlink Band 32. The spectrum sharing plan adopted in the Report and Order permits Leo One to share the 400.15-400.505 MHz and 400.645-401 MHz bands with DoD's Defense Meteorological Satellite Program (the "DMSP system") by utilizing frequency hopping and time-sharing techniques. These techniques require Leo One to avoid transmitting into the geographic region on the surface of the Earth that is receiving a DMSP satellite transmission (the "protection area") by transmitting on a different frequency from the one the DMSP satellite is transmitting on or, if a different frequency is not available, to cease transmitting into the protection area. Operating on a non-interference basis requires Leo One to avoid causing harmful interference to the DMSP system and precludes Leo One from claiming protection from interference caused by the DMSP system in these bands. In its application, Leo One proposes implementing frequency avoidance and time-sharing techniques to avoid causing interference and capacity loss to the DMSP system. 33. Time-sharing spectrum with the DMSP system on a non-interference basis requires precise ephemeris data (which permits calculation of a satellite's location at specific times during a given period of time) in order to predict the contours of a DMSP satellite's protection area in advance of its encounter with a Leo One satellite footprint operating on the same frequency channel. We require Leo One to obtain ephemeris data from DoD so it can accurately predict the future location and frequency emissions of each DMSP satellite. As we explained in the Report and Order, we allow Leo One and DoD the flexibility to determine the most appropriate means for transferring ephemeris data. 34. The Report and Order did not specify a particular orbital propagator algorithm to be used for computing the time and location of a DMSP satellite's protection area, however, it does adopt a rule requiring an NVNG licensee operating in the 400.15-401 MHz band to use an orbital propagator algorithm with an accuracy equal to or greater than the NORAD propagator used by NOAA. Leo One proposes employing an orbital propagator using a Cowell numerical intergrator with an accuracy greater than the NORAD propagator. Because the Cowell numerical intergrator has greater accuracy than the NORAD propagator, we permit Leo One to use the orbital propagator algorithm proposed in its application, subject to its compliance with Section 25.260(a) of the Commission's Rules. 35. The Report and Order adopts a rule defining the protection area of a DMSP satellite as the geographic region on the surface of the Earth where DMSP earth stations are receiving signals from low Earth orbiting DMSP satellites. The protection area of a DMSP satellite is computed on the basis of a five degree elevation angle for the DMSP receiving earth station. Leo One will be required to comply with the rules adopted in the Report and Order including, but not limited to, ceasing transmissions into a protection area prior to a Leo One satellite footprint, computed using a zero degree elevation angle for its earth station, overlapping the DMSP satellite's protection area. Leo One certifies that it will comply with these requirements. 36. The rules adopted in the Report and Order also require that each satellite in Leo One's system have the capability to change the transmit frequency in the 400.15-401 MHz downlink band within 125 minutes of receiving notification from DoD of a frequency change in this band. Leo One shall use its best efforts to reduce this time to 90 minutes as it adds command earth stations located outside of North and South America. Leo One states that it will fully comply with these requirements. Leo One shall promptly notify the Commission, in addition to the National Telecommunication and Information Administration ("NTIA"), of any decrease in the time it requires to implement the frequency change. 37. To ensure adequate protection of the DMSP satellite system, the Report and Order adopted a rule that requires Leo One to demonstrate to DoD that it is capable of implementing a DoD imposed frequency change. After a successful initial demonstration, Leo One shall demonstrate successfully its capability to implement a DoD imposed frequency change only once per year thereafter, at DoD's instruction. To minimize the impact on Leo One's operations, such demonstrations shall be conducted during off-peak hours unless Leo One and DoD agree otherwise. Leo One shall define off-peak hours and coordinate with DoD in establishing a plan for such demonstrations. In the event Leo One fails to implement a DoD required frequency change and upon our receipt of a written notification from NTIA describing such failure, we reserve the right to impose additional conditions or requirements on Leo One s authorization as may be necessary to protect the DMSP system's operations in the 400.15-401 MHz downlink band. 38. The Report and Order adopted Section 25.260(c), which requires each Leo One satellite to be capable of instantaneous and automatic shutdown if after 72 consecutive hours no reset signal is received and verified by the satellite. Leo One's NVNG MSS satellites shall comply with this requirement. Leo One confirms that its satellites will comply with this requirement. 39. Leo One shall also establish a 24-hour per day contact person to facilitate the report and resolution of claims of harmful interference to DMSP system earth station users. Leo One states that it will comply with this requirement by designating a point of contact available 24 hours a day, 7 days a week with authorization to resolve or address in an expeditious manner claims of harmful interference to the DMSP system caused by Leo One's NVNG MSS system. Leo One is required to provide this contact information to NTIA, DoD and the Commission at least three months prior to the launch of the first satellite in Leo One's system. 40. Leo One states that the maximum PFD produced at the Earth s surface by each of its satellites in the 400.15-401 MHz band will not exceed -125 dBW/m2/4kHz. Because Leo One's satellites do not exceed the PFD threshold requirement for coordination with terrestrial services under the Commission's Rules, such coordination will not be required. 41. FAI and Orbcomm express concern that Leo One's operations in the 400.15- 401 MHz band may cause unacceptable interference to their operations in adjacent bands. As discussed above, we find that these out-of-band emissions concerns are resolvable through coordination. Accordingly, we condition Leo One s authorization to operate in the 400.15- 401 MHz frequency band on Leo One's completion of adjacent channel frequency sharing coordination with FAI, Orbcomm and DoD. 42. In light of the significant national security interests involved, it is important to emphasize that Leo One's operations in the 400.15-401 MHz band must avoid causing harmful interference into the DMSP system worldwide. To protect the DMSP system, if Leo One is causing harmful interference to the DMSP system, the Commission will require that Leo One immediately terminate its interfering operations, wherever located, and the Commission will not hesitate to impose sanctions on Leo One, including monetary forfeitures and license revocations if appropriate. If NTIA notifies the Commission that the DMSP system is receiving unacceptable interference from Leo One, we will require that Leo One terminate its interfering operations immediately unless it demonstrates to our satisfaction, and that of NTIA, that it is not responsible for causing the harmful interference into the DMSP system. If Leo One's system operates in the 400.15-401 MHz band, Leo One assumes the risk of any liability or damage that it and its directors, officers, employees, affiliates, agents and subcontractors may incur or suffer in connection with an interruption of its NVNG MSS service, in whole or in part, arising from or relating to its compliance or noncompliance with this condition. e. Summary 43. Based on our review of Leo One's application and subject to the conditions discussed herein, we find Leo One technically qualified to operate the NVNG MSS system proposed in its application. 2. Financial Qualifications 44. Consistent with Section 25.142(a)(4) of the Commission's Rules, applicants for a space station authorization in the second processing round must demonstrate that they have the finances necessary to construct, launch and operate two satellites in their systems for at least one year. Leo One asserts that it has the finances necessary to construct, launch and operate for one year two satellites in its NVNG MSS system. FAI raises concerns that Leo One's financial estimates are outdated and underestimated. 45. Leo One certifies that the cost of construction, launch and operation for one year of two satellites in its NVNG MSS system is approximately $8.2 million. It represents that its assets equal $724,590. In addition, the company certifies that its beneficial owner, The David A. Bayer Trust, maintains current assets in the form of cash and marketable securities of approximately $10,000,000 and is capable of providing approximately $9,000,000 of funding to Leo One. With respect to FAI's concerns, Leo One updated its financial estimates in its Conforming Amendment stating that there have been no material changes in estimated construction, launch and operation costs. In addition, recent advances in satellite design and production and increasing competition among satellite manufacturers and service suppliers are reducing satellite construction, launch and operation costs. Consequently, Leo One's cost estimates are plausible in view of the innovation and competition present in the satellite industry. When considered together, Leo One's and The David A. Bayer Trust's current assets are sufficient to finance the estimated $8.2 million construction, launch and operation costs for one year of two satellites in Leo One's NVNG MSS system. We, therefore, find Leo One financially qualified under Section 25.14(a)(4) of the Commission's Rules. C. Operations in Other Spectrum 46. The spectrum sharing plan adopted in the Report and Order permits Leo One to operate in the 148.855-148.905 MHz frequency band on a shared basis with the System 2 NVNG MSS licensee and Orbcomm, if System 3 does not use this band for feeder uplink. Upon the Commission's determination that the System 3 NVNG MSS licensee will not use the 148.855-148.905 MHz spectrum for feeder uplink, the Commission shall permit Leo One to share this spectrum with the System 2 NVNG MSS licensee and Orbcomm for service links, under the same conditions that are applicable to Leo One's operations in the 148.0- 148.25 MHz band. 47. As adopted in the Report and Order, Leo One, as System 1, shall be permitted to operate in the 400.505-400.5517 MHz, 400.5517-400.5983 MHz and 400.5983-400.645 MHz frequency bands outside of a processing round upon the System 2 NVNG MSS licensee's surrender of its authorization, the System 2 NVNG MSS licensee's notification to the Commission that it is discontinuing its use of these bands, or the Commission's revocation of the System 2 NVNG MSS licensee's authorization, subject to the same conditions imposed upon the System 2 NVNG MSS licensee's operations in these bands (including, but not limited to, permission from the Government of France to operate in the 400.5517-400.5983 MHz band and time-sharing with VITA's authorized system in the adjacent bands). D. Proposed Allocation of 455-456 MHz and 459-460 MHz Bands 48. In its application, Leo One requests that the Commission assign the 455-456 MHz and 459-460 MHz uplink frequency bands for use in Region 2 only. FAI comments that Leo One's request to operate in this spectrum is premature in light of the Commission's pending rulemaking to allocate domestically these frequency bands to the MSS service. As discussed in the Report and Order, the Commission has initiated a rulemaking proceeding proposing to allocate these bands domestically to the MSS service. Until these bands are domestically allocated to the MSS service, we decline to assign them to Leo One or any other second processing round NVNG MSS licensee. E. Exclusive Arrangements 49. As an NVNG MSS licensee, Leo One shall comply with the requirements of Section 25.142(d) of the Commission's Rules adopted in the Report and Order. Section 25.142(d) prohibits a NVNG MSS licensees from entering into exclusive arrangements with other countries concerning communications to and from the United States. The purpose of this rule is to promote competition in the Little LEO service markets in the United States. The prohibition against exclusive arrangements reduces the likelihood that a NVNG MSS licensee can foreclose other NVNG licensees from serving a foreign market, providing a global service, and competing effectively with other systems that serve the United States. 50. At the same time, we recognize that spectrum coordination and availability as well as market size and commercial opportunities in a particular country may limit the number of systems that can serve a foreign country. The prohibition against exclusive arrangements in Section 25.142(d) is not intended to penalize the sole service provider in a particular market if spectrum and market limitations prohibit another system from entering and serving the particular market. Therefore, we do not expect Leo One to forego opportunities for its NVNG MSS system to serve foreign markets based on the possibility that it may be the only service provider in the market. F. Construction and Launch Milestones 51. In the First Processing Round Report and Order, the Commission generally required a licensee to commence construction of the first two satellites in its NVNG MSS system within one year of grant of its construction permit. Construction of the remaining satellites in its system was to be commenced within three years of grant. Construction of the first two satellites was to be completed within four years of grant and the entire system must be launched and operational within six years of grant. The Commission reserves the flexibility, however, to establish different construction, launch and operation milestones for an applicant depending on an applicant's particular circumstances. 52. The First Processing Round Report and Order milestones shall apply to Leo One in connection with the construction, launch and operation of its NVNG MSS system. Leo One indicates that it will comply with these construction, launch and operation milestones. Because we no longer issue construction permits to satellite applicants, the construction, launch and operation milestone periods for Leo One will commence from the effective date of this Order. G. International Coordination 53. In general, we will follow the applicable advance-publication, coordination and notification procedures set forth in the International Telecommunication Union ("ITU") Radio Regulations in coordinating Leo One's satellites and use of the frequency spectrum with other affected administrations and for consultations pursuant to Article 14 of the INTELSAT Agreement and in Article 8 of the Inmarsat Convention. Leo One shall provide the Commission with all information necessary to comply with these processes. In view of Leo One's intention to locate earth stations and operate mobile user terminals in connection with its NVNG MSS system outside of the United States, the Commission will retain jurisdiction to require Leo One to meet both its international obligations and the obligations imposed by other licensing administrations. All authorizations and approvals required by another country in connection with the operation of Leo One's NVNG MSS system including, but not limited to, its earth stations, mobile user terminals and satellites, will remain solely within the host country's jurisdiction. IV. Conclusion 54. We find that Leo One is legally, technically and financially qualified under the Commission's Rules to construct, launch and operate the space segment of its NVNG MSS system in those parts of the 148-150.05 MHz, 400.15-401 MHz and 137-138 MHz frequency bands that are designated for System 1 in the spectrum sharing plan adopted in the Report and Order, subject to the conditions set forth in this Order. Accordingly, Leo One is authorized to be a Commission space segment licensee and, pursuant to Section 309 of the Act, we find that grant of Leo One's application will serve the public interest, convenience and necessity. V. Order ing Clauses 55. Accordingly, IT IS ORDERED, subject to the conditions set forth in this Order, that application File Nos. 57-DDS-P/LA-94(48), 27-SAT-AMEND-95, 10-SAT- AMEND-98 and 64-SAT-AMEND-98 ARE GRANTED, and Leo One IS AUTHORIZED to construct, launch and operate 48 NVNG satellites to provide mobile-satellite service in the United States of America in accordance with the frequency bands designated for System 1 in the spectrum sharing plan adopted in the Report and Order, FCC 97-370 (rel. October 15, 1997), generally including the 148-150.05 MHz, 400.15-401 MHz and 137-137.025 MHz frequency bands, in accordance with the technical specifications set forth in its application and subject to compliance with the provisions of Parts 2 and 25 of the Commission's Rules governing frequency allocations and satellite operations, unless expressly waived by the Commission. 56. IT IS FURTHER ORDERED that if NTIA notifies the Commission that the DoD DMSP system is receiving unacceptable interference from Leo One's NVNG MSS system, we will require Leo One to terminate its interfering operations immediately unless it demonstrates to our satisfaction, and that of NTIA, that it is not responsible for causing harmful interference into the DoD DMSP system. If Leo One's system operates in the 400.15-401 MHz band, Leo One assumes the risk of any liability or damage that it and its directors, officers, employees, affiliates, agents and subcontractors may incur or suffer in connection with an interruption of its NVNG MSS service, in whole or in part, arising from or relating to its compliance or noncompliance with this condition. 57. IT IS FURTHER ORDERED that Leo One's authorization to operate in the 400.15-401 MHz frequency band is subject to Leo One's successful completion of an initial and subsequent annual demonstrations of its capability to implement a DoD imposed frequency change in the 400.15-401 MHz frequency band. In the event that the Commission receives written notification from NTIA describing Leo One's failure to complete successfully any such demonstration, the Commission shall impose additional conditions or requirements on Leo One's authorization as may be necessary to protect the DoD DMSP system's operations in the 400.15-401 MHz band. 58. IT IS FURTHER ORDERED that, unless extended by the Commission for good cause shown, Leo One's authorization will become NULL AND VOID in the event that the 48 low Earth orbiting non-voice, non-geostationary mobile satellite service space stations are not constructed, launched and successfully placed into operation in accordance with the technical parameters and terms and conditions of this authorization by the following dates: Construction Commenced Construction Completed Launch First Two Satellites February 1999February 2002August 2002 Remaining Satellites February 2001February 2004February 2004 59. IT IS FURTHER ORDERED that Leo One's authorization to operate is subject to the completion of on-channel and/or adjacent channel frequency sharing coordination with the other NVNG MSS second processing round licensees operating in the 148-149.9 MHz, 137-138 MHz and 400.15-401 MHz frequency bands. 60. IT IS FURTHER ORDERED that Leo One IS AUTHORIZED to construct, launch and operate technically identical non-voice, non-geostationary mobile satellite service replacement satellites during the license term for the purpose of replacing the 48 low Earth orbiting non-voice, non-geosynchronous satellites authorized by this Order in accordance with technical specifications set forth in its application and consistent with the Commission's Rules, unless specifically waived by the Commission. At no time shall Leo One operate more than 48 satellites at any given time during the term of this license. 61. IT IS FURTHER ORDERED that the term of operation for each of the 48 space stations authorized by this Order, including any replacement space stations authorized by this Order, is a total of 10 years and will begin to run on the earlier of: (a) the date that Leo One certifies to the Commission that the first satellite has been successfully placed into orbit and the operations fully conform to the terms and conditions of this authorization; or (b) such date as determined by the Commission. 62. IT IS FURTHER ORDERED that 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 and that such transfer, assignment or disposal otherwise complies with the Act and the Commission's Rules. 63. IT IS FURTHER ORDERED that Leo One will prepare, within 90 days of the release of this Order, the necessary information for submission to the ITU to initiate the advance publication, international coordination, and notification process of the Leo One system in accordance with the ITU Radio Regulations and for consultations in accordance with Article XIV of the INTELSAT Agreement and Article 8 of the Inmarsat Convention. Upon completion of these consultations and notification by the Department of State that the United States has fulfilled its obligations with respect to INTELSAT and Inmarsat, no further action by this Commission regarding such consultations will be required. This authorization is subject to completion of coordinations between Leo One's NVNG MSS system and any non-United States licensed systems in the authorized frequency bands. We also remind Leo One 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 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). 64. IT IS FURTHER ORDERED that: (a) this license shall not vest in Leo One any right to operate its NVNG MSS system or any right in the use of the frequencies designated in this license beyond the term thereof nor in any other manner than authorized herein; and (b) this license shall be subject to the provisions of Section 706 of the Communications Act of 1934, as amended, 47 U.S.C.  606. 65. IT IS FURTHER ORDERED that Leo One is afforded 30 days from the date of release of this Order to decline this authorization as conditioned. Failure to respond within that period will constitute formal acceptance of the authorization as conditioned. 66. IT IS FURTHER ORDERED that this Order is issued pursuant to Section 0.261 of the Commission's Rules on Delegations of Authority, 47 C.F.R.  0.261. 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)). 67. IT IS FURTHER ORDERED that this Order is effective upon the date of its release. FEDERAL COMMUNICATIONS COMMISSION Regina M. Keeney Chief, International Bureau