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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 ) ) ) COLUMBIA COMMUNICATIONS ) 3-SAT-P/LA-96 CORPORATION ) ) For Authority to Construct, Launch and) 44-SAT-P/LA-96 Operate a C-Band Satellite at 47ø West Longitude) ) For Authority to Construct, Launch and) Operate a Hybrid C-Ku-Band Satellite) at 172ø East Longitude ) ) ) ORDER AND AUTHORIZATION Adopted: January 11, 1999 Released: January 11, 1999 By the Chief, International Bureau: I. Introduction 1. By this Order, we grant Columbia Communications Corporation ("Columbia") authority to launch and operate a C-Band satellite at 47ø West Longitude (W.L.) and a hybrid C- and Ku-Band satellite at 172ø East Longitude (E.L.). This grant will serve the public interest by allowing Columbia to expand the range and scope of its video, voice and data service capabilities and providing continuity of service to Columbia's existing customers while enhancing competition in the market for international satellite services. II. Background 2. Columbia requests authority to construct, launch, and operate international satellites at 47ø W.L. and 172ø E.L. to provide continuity of service to Columbia's existing customers and to expand its international satellite service offerings. Columbia currently offers international video, voice, and data communications services using leased satellite capacity on two National Aeronautics and Space Administration ("NASA") satellites, the Tracking and Data Relay Satellite Systems ("TDRS"-5) satellite and TDRS-6 satellite. The TDRS-5 satellite at 174.3ø W.L. provides service to the Pacific Ocean Region and the TDRS-6 satellite at 47ø W.L. provides service to the Atlantic Ocean Region. In addition, Columbia provides service to the Atlantic Ocean Region on a satellite of its own, Columbia 515, at 37.7ø W.L. 3. In its applications, Columbia states that there is a demand for satellite services in the Atlantic Ocean Region and the Pacific Ocean Region that Columbia is unable to fill with its existing transponder capacity. In addition, according to Columbia, the TDRS-5 and the TDRS-6 satellites are expected to reach the end of their useful lives by the year 2000. PanAmSat Licensee Corp. (PanAmSat) filed comments on Columbia's applications and Hughes Communications Galaxy, Inc. (Hughes) filed a petition to deny against them. Generally, PanAmSat asserts that the applications raise serious coordination problems, while Hughes argues that the orbital location at 47ø W.L. is subject to a Commission "freeze" and that the Commission should not lift the freeze for a single applicant. 4. At the time Columbia filed its applications for authority to launch and operate two new "international" satellites, the Commission's "Separate Systems Policy" was in effect. This policy, adopted in 1985, permitted the establishment of U.S. international satellite systems separate from INTELSAT. Under the separate systems policy both domestic satellite system (domsat) applicants and international system applicants were required to demonstrate sufficient financing to cover construction, launch and first year operating costs. Domsat applicants were required to make the showing in one stage, while separate satellite system applicants were permitted to do so in two stages. The Domsat applicants had to demonstrate financial ability upfront, and upon successful showing, were granted a full license. By contrast, separate system applicants were permitted to make a preliminary showing and thereafter receive a conditional grant. The purpose of the two-step showing for separate systems was the unique circumstances applicable to separate systems. Separate satellite system operators had to complete the INTELSAT Article XIV(d) consultation process before being permitted to provide international service. To initiate the consultation process, the operator had to obtain an agreement with a foreign country to operate with its proposed systems. The Commission found that an operator would need some type of preliminary authorization from the Commission in order to procure these agreements and for this reason, adopted the two-step process. Once an operator completed the INTELSAT consultation process, it would make its second stage financial showing and apply for final authorization. 5. In January 1996, the Commission adopted its DISCO I Report and Order eliminating the distinction between separate systems and domsat systems. As a result of the DISCO I Report and Order, all U.S.-licensed satellite operators (domsats and separate systems) could provide whatever mix of domestic and international services they chose and would be treated under a single regulatory framework. To this end, the Commission also eliminated the two-step financial showing for separate systems and instead, adopted the one-step domsat financial showing for all U.S.-licensed satellites. In the DISCO I Report and Order the Commission also noted that INTELSAT had streamlined its Article XIV(d) consultation process and removed most of the uncertainty for separate system applicants with respect to gaining consent from foreign countries and completing consultation successfully. As a result, the Commission found the two-step financial qualification showing for separate systems applicants unnecessary given the changes in the INTELSAT consultation process and the Commission's own decision to permit separate satellite system applicants to provide both domestic and international service. 6. In the DISCO I Report and Order, however, the Commission also recognized that in some situations a two-step financial showing would be more appropriate and allowed a waiver of the one-step financial showing requirement. Specifically, the Commission found that operators that apply for orbit locations in uncontested portions of the arc may need additional time to obtain financing, and that allowing for such would not block entry by financially able applicants, nor delay service to the public. Consequently, in the DISCO I Report and Order, the Commission stated that for requests involving uncongested portions of the orbital arc, it would entertain waiver requests of the one-step financial showing and, in those cases allow the applicant to make a two-step financial showing under the previous separate systems policy. The Commission directed all separate system applicants that filed after the release date of the DISCO I NPRM and whose applications were still pending to meet the one-step financial requirement or to request a waiver of the new financial qualification rules. 7. Thereafter, Columbia requested the Bureau to waive the one-step financial qualification rules and permit it to make a two-step financial showing. Columbia argued that its request for orbital locations at 47ø W.L. and 172ø E.L. were in uncongested portions of the arc and were not sought by other applicants. On July 25, 1997, Columbia filed a second waiver request ("1997 Waiver Request"). In the 1997 Waiver Request, Columbia requests waiver of the one-step domsat financial qualification rule (thereby requesting waiver of all of the financial qualification rules). Columbia argues that the Bureau has, in the past few years, articulated new precedent with regard to waiver requests of the financial qualification rules. According to Columbia, the precedent requires the Bureau to waive the rules and grant Columbia final authorization to construct, launch and operate its satellites at 47ø W.L. and 172ø E.L. PanAmSat filed comments opposing the 1997 Waiver Request. 8. In this Order, we address Columbia's 1997 Waiver Request of the financial qualification rule, the 1985 freeze on the acceptance of new applications for orbital locations between 30ø and 60ø W.L., and the technical issues regarding the extended C-Band frequency range and co ordination with satellite systems. III. Discussion 9. Under Section 309 of the Communications Act the Commission shall determine whether the public interest, convenience and necessity will be served by the granting of such application. Thus, in order to grant Columbia's applications to launch and operate satellites in the 47ø W.L. and 172ø E.L. orbital locations, we must find that the grant would serve the public interest. In addition, Section 25.140 of the Commission's rules requires an application for space station authorization in the fixed satellite service to demonstrate that it is financially, legally, technically and otherwise qualified to proceed expeditiously with the construction, launch, and/or operation of each proposed space station facility immediately upon grant of the requested authorization. Alternatively, an applicant may request a waiver of the financial qualification requirement and must demonstrate that a waiver is warranted. Financial Qualifications 10. The financial qualification rules require an applicant for a fixed-satellite service space station authorization to demonstrate that it is financially able to meet construction, launch, and first-year operating costs. The purpose of this rule is to ensure that applicants have the financial resources to implement a satellite system. In its 1997 Waiver Request, Columbia contends that since the filing of its 1996 Waiver Request, the Bureau has granted several waivers of the one-step financial showing for satellite services. Specifically, Columbia cites cases involving Mobile Communications Holdings, Inc. (MCHI), Constellation Communications, Inc. (Constellation), and Teledesic Corporation (Teledesic). In these cases, the Bureau waived the financial qualification rules because it could accommodate all pending applicants in the available spectrum and orbital locations at issue and additional entry was possible. 11. Columbia contends that there are no other applicants for the 47ø W.L. and 172ø E.L. orbital locations. As a result, Columbia argues that its applications are similar to those in the MCHI Order, Constellation Order, and Teledesic Order and that therefore, the Commission should waive its financial qualification rule for Columbia. 12. PanAmSat argues that the Bureau should not grant Columbia's waiver request. PanAmSat contends that the Bureau has waived the financial qualification rules only where applicants proposed to use "innovative technology" or system designs that were "substantially different from the designs of other proposed systems" and that neither factors are present in Columbia's case. In addition, PanAmSat maintains that if the Commission were to waive the financial qualification rules for Columbia and grant Columbia a license but ultimately Columbia was not able to finance its system, during Columbia's license term, other qualified applicants would be precluded from being licensed. In essence, PanAmSat argues that the Commission should not allow "paper satellites" to hold-up use of scarce spectrum resources by other systems. PanAmSat further argues that it is important to prevent warehousing involving satellites that provide international service where the particular orbital location dictates the satellite's service area because doing so may prevent qualified applicants from serving customers in various countries while an under-financed licensee unsuccessfully attempts to obtain financing. 13. Financial ability to construct, launch, and operate a satellite system is a significant consideration in the Commission's determination of whether the applicant is qualified to hold a license. This consideration stems from repeated experiences that licensees without sufficient available financial resources spend a significant amount of time attempting to raise the necessary capital and those attempts often end unsuccessfully. Consequently, where a grant to an under-financed applicant may preclude a fully capitalized applicant from implementing its plans, and service to the public may be delayed, the Commission has required a stringent financial showing to ensure that the public interest would be served. 14. The Commission, however, may consider granting a waiver when the relief requested would not undermine the policy objective of the rule in question and would otherwise serve the public interest. In the context of the financial qualification rules, the Commission has granted waivers where grant of the authorizations would not prevent qualified applicants from implementing systems. Specifically, in the "Big LEO" proceeding the Bureau waived the financial qualification standard for the two remaining applicants, MCHI and Constellation, after another "Big LEO" applicant had withdrawn its application, making it possible to accommodate both MCHI and Constellation. Further, the Bureau noted that reasonably comparable, unassigned spectrum, such as the 2 GHz spectrum, was available for new entrants. Similarly, the Bureau waived the financial standard for Teledesic which was, at the time, the only pending applicant for a non- geostationary orbit satellite (NGSO) system in the 28 GHz frequency band. The Bureau noted that granting Teledesic's request to waive the financial qualification rules would not prevent a qualified applicant from proceeding with another NGSO system because additional applicants could be accommodated in the spectrum. 15. Columbia's application for the orbital location at 172ø E.L. is the only pending application for an orbit assignment in that portion of the arc. Columbia's waiver request is consistent with the Bureau's reasoning in the MCHI Order, Constellation Order, and Teledesic Order because no other applicant has requested an orbital location in the portion of the arc where Columbia plans to operate the 172ø E.L. satellite. In addition, future applicants may use other frequency bands to provide FSS service, such as the extended C- and Ku- bands. Thus, as Columbia asserts, granting Columbia's application to launch and operate a hybrid C-and Ku-band satellite at the 172ø E.L. orbit location will promote the public interest by enabling Columbia to provide needed space segment services in the Pacific Ocean Region, while not preventing other qualified applicants from implementing new FSS systems. 16. Similarly, Columbia's application for 47ø W.L is the only pending application in that portion of the arc. Furthermore, other frequency bands, such as the extended C- and Ku- bands, are available to accommodate entry by additional applicants to provide fixed satellite services. Waiving the financial qualification rule for Columbia's application at 47ø W.L will enable Columbia to increase capacity and significantly expand its service offerings without preventing additional entry, thereby enhancing competition in the market for international satellite services. In addition, Columbia is currently providing needed space segment services to satellite customers from the TDRS satellite at 47ø W.L orbit location. Thus, as Columbia urges, granting Columbia's application for a satellite at the 47ø W.L. orbit location, will enable continuity of service to Columbia's current satellite customers. 17. We disagree with PanAmSat's argument that we have granted waiver requests of the financial qualification rules only in cases where applicants proposed to use innovative technology or system designs. The Bureau did not base the waivers granted in the Teledesic Order, MCHI Order, and Constellation Order on these factors. Rather, the Bureau considered only whether other financially qualified applicants may be precluded from launching and operating satellite systems and concluded that grant of a waiver to one applicant would not prevent another applicant from going forward. 18. We also recognize PanAmSat's concern that grant of an authorization to an applicant that ultimately may lack financial ability to construct, may prevent future financially-qualified applicants from implementing a system. Consistent with our public interest authority under Section 309, to ensure that Columbia launches and operates its system and does not hold the orbital locations that it cannot use in a timely way, we impose strict construction milestones on Columbia's licenses. These milestones, which are consistent with similar cases, will ensure that Columbia makes timely progress toward implementing the launch and operation of its system. Specifically, Columbia must commence construction of the first satellite by September, 1999 and the second satellite by December, 1999. We expect Columbia to complete construction of the first satellite by March, 2002 and the second satellite by June 2002. Finally, we expect Columbia to launch the first satellite by May, 2002 and the second satellite by August, 2002. We will carefully monitor Columbia's progress in meeting these milestone requirements and will not hesitate to cancel the licenses should Columbia fail to meet the prescribed milestone schedule. The Freeze 19. In 1985, the Commission imposed a freeze on the acceptance of satellite applications involving orbital locations between 30ø and 60ø W.L. in the 4, 6, 11, 12 and 14 GHz bands. The freeze was intended to address congestion between 30ø and 60ø W.L. by suspending the processing of new applications involving these locations. 20. Hughes contends that absent lifting the freeze and allowing any qualified applicant to apply for a satellite license, the Commission should dismiss or deny Columbia's application for a C-band satellite at 47ø W.L. 21. We find that the freeze does not prohibit consideration or grant of Columbia's application for 47ø W.L because Columbia's request is not for a new orbital location but rather, for a replacement satellite. Therefore, as a request for a replacement satellite, Columbia's application does not implicate the freeze. In any event, we have waived the freeze in the past. Indeed, in the past five years, we granted PanAmSat, a subsidiary of Hughes, licenses for satellite locations subject to the freeze. Thus, even if Columbia were seeking to occupy a new orbital location we would have waived the freeze in any case. Technical Qualifications Frequency Bands 22. Applicants for space station authorizations must meet certain technical qualification requirements. At both the 47o W.L. and 172o E.L. orbital positions, Columbia proposes to use the conventional C-band frequencies of 3.7-4.2 GHz for downlinks and 5.925-6.425 GHz for uplinks. Columbia also proposes, at both orbital locations, to use "extended C-Band" frequencies of 3.4-3.7 GHz for downlinks and 6.425-6.725 GHz for uplinks. In addition, at the 172o E.L. location, Columbia plans to use Ku-Band frequencies. Specifically, Columbia proposes to use the conventional 14.0-14.5 GHz frequency bands for uplinks. For downlinks, the bands will vary based on the service area. In ITU Region 2 (the Americas, including the United States), Columbia proposes to use the conventional 11.7-12.2 GHz frequency band for downlinks. In ITU Region 3 (Asia), Columbia proposes to use the 10.95-11.2 GHz, 11.45-11.7 GHz, and 12.25-12.75 GHz frequency bands for downlinks. 23. The 3.4-3.6 GHz frequency band is not allocated to the fixed-satellite service (FSS) in the United States and its possessions. Accordingly, we will not authorize earth stations operating in this band within the United States and its possessions. We recognize, however, that the 3.4-3.6 GHz extended C-band is allocated to the FSS on a worldwide basis in the ITU Radio Regulations. Therefore, we will permit Columbia to incorporate the frequency band on its satellite to serve earth stations outside the United States and its possessions consistent with Columbia's ability to acquire appropriate authorization to use these frequency bands in other countries. However, we also note that the U.S. government utilizes the 3.4-3.6 GHz band on a worldwide basis as part of its military operations, including high-powered, highly mobile, shipborne and airborne radar systems. Because Columbia will be operating satellites in this band for service to non-U.S. earth stations, we require Columbia to inform the recipients of services from its satellites to non-U.S. earth stations that such services could be subject to interference from worldwide U.S. government operations. 24. FSS operations in the United States in the 3.6-3.7 GHz frequency band are limited by footnote US245 to the U.S. domestic table of allocations, which states, "the fixed satellite service is limited to international inter-continental systems and subject to case-by-case electromagnetic compatibility analysis." In February 1995, NTIA, pursuant to the Omnibus Budget Reconciliation Act of 1993, identified the 3650-3700 MHz band for transfer, effective January 1999, from a Government/non-Government shared-use status to a mixed-use status. The Commission has since adopted a Notice of Proposed Rulemaking and Order proposing to allocate the 3650-3700 MHz band to the non-Government fixed service on a primary basis. Any future use of this band by Columbia or any other entity in the United States will be subject to the provisions adopted in this rulemaking proceeding. 25. In addition, the uplink portion of the extended C-band, 6.425-6.725 GHz, will be subject to coordination. The frequency range 6.425-6.525 GHz is shared in the United States on a primary basis with the mobile service, including auxiliary broadcast, cable TV, domestic public fixed and private operational fixed microwave applications. The frequency range 6.525-6.725 GHz is shared on a primary basis with the fixed service, including domestic public fixed and private-operational fixed microwave applications. Any future applicants for earth stations located within the United States to access the Columbia satellite must coordinate with these services prior to receiving an earth station license. Coordination with other Systems 26. PanAmSat operates a hybrid C/Ku band satellite, PAS-1, at the 45ø W.L. orbital location, two degrees away from the proposed location for Columbia's satellite at 47ø W.L. Columbia states that it has designed its satellite to be fully compliant with the Commission's two-degree orbital spacing policy, and will coordinate its satellite's operations with PanAmSat at the earliest opportunity. Nevertheless, PanAmSat is concerned that its ability to coordinate with Columbia will be severely constrained by existing coordination agreements with INTELSAT, and by the presence of another PanAmSat satellite at 43ø W.L. 27. Furthermore, PanAmSat argues that it is virtually impossible for C-band satellites to operate certain services such as TV/FM services and narrow-to-medium bandwidth digital services on the same frequencies on satellites that are two degrees apart. PanAmSat contends that in its transponder frequency plan, Columbia proposes to provide services incompatible with those that PanAmSat is now carrying on its satellite. PanAmSat notes that Columbia could reduce its interference potential to PAS-1 by moving an additional one-half degree away, to 47.5ø W.L., making its proposed satellite equidistant from PAS-1 and INTELSAT, which operates a hybrid C/Ku band satellite located at 50ø W.L. 28. Columbia also contends that it has designed its satellite to be compatible with the Commission's two-degree orbital spacing policy and will operate its proposed satellite at 172ø E.L. in a manner that is compatible with adjacent satellite operations. Columbia recognizes that INTELSAT is operating a satellite at 174ø E.L. and PanAmSat is operating a satellite at 169ø E.L. Nevertheless, Columbia requests that we provide it flexibility to adjust the exact orbital location of the satellite, within one-degree range, in order to optimize coordination with the adjacent satellites. 29. The Commission's two-degree spacing policy is the cornerstone of our domestic orbital assignment plan for FSS satellites in geostationary satellite orbits. Adopted in 1983, this policy was designed to maximize the number of satellites that could be accommodated in orbit at C-and Ku-bands so as to meet the increasing demand for satellite services in these bands. We repeatedly have stated that we expect licensees to bear the responsibility of coordinating adjacent satellites pursuant to the two-degree spacing requirement because they are in the best position to determine the technical and economic tradeoffs inherent in reaching a coordination agreement. We do not become involved in these coordination efforts unless the parties are unable to reach an agreement and request that we participate. Here, all of the U.S.-licensed satellites impacted are in compliance with the Commission's technical requirements. No party has presented any potential problems that appear insurmountable or that otherwise would require allowing Columbia to operate its satellite outside of two-degree spacing intervals. With respect to both proposed Columbia satellites, we expect that with good faith efforts, the affected operators should be able to reach an agreement. If, after conclusion of strong good faith efforts, they are unable to reach agreement, the parties may request us to participate. IV. Conclusion 30. Upon review of Columbia's applications to launch and operate satellites at 47ø W.L. and 172ø E.L., we find Columbia is financially, legally and technically qualified to be a Commission licensee and that pursuant to Section 309 of the Communications Act, grant of Columbia's applications will serve the public interest, convenience and necessity. V. Ordering Clauses 31. Accordingly, IT IS ORDERED that, the application covered by File No. 3-SAT-P/LA-96 IS GRANTED, and that Columbia IS AUTHORIZED to launch and operate a geostationary satellite at 47ø W.L. for the purpose of providing satellite services in the conventional frequency ranges of 5.925-6.425 GHz uplink and 3.7-4.2 GHz downlink; and the extended C-band frequency range of 6.425-6.725 GHz uplink and 3.4-3.7 GHz downlink. Use of the frequency band must be consistent with the technical specifications set forth in Columbia's space station application and with the Commission's Part 25 rules governing satellite operations. 32. IT IS FURTHER ORDERED that, the application covered by File No. 44-SAT-P/LA/96 IS GRANTED and that Columbia IS AUTHORIZED to launch and operate a geostationary satellite at 172ø E.L. for the purpose of providing satellite service in the conventional FSS C-band frequency ranges of 5.925-6.425 GHz uplink and 3.7-4.2 GHz downlink; the extended C-band frequency range of 6.425-6.725 GHz uplink and 3.4-3.7 GHz downlink; the Ku-band uplink frequency range of 14.0-14.5 GHz; the downlink range of 11.7- 12.2 GHz in ITU Region 2; and the frequency bands 10.95-11.2 GHz, 11.45-11.7 GHz and 12.25-12.75 GHz in ITU Region 3. 33. IT IS FURTHER ORDERED that Columbia Communications shall prepare the necessary information, as may be required, for submission to the International Telecommunications Union ("ITU") to initiate and complete the advance publication, international coordination, and notification process of 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). 34. IT IS FURTHER ORDERED that Columbia shall not permit any earth station in the United States and its possessions to operate with these satellites in the frequency band 3.4 GHz to 3.6 GHz band. 35. IT IS FURTHER ORDERED, that Columbia shall inform its customers and operators using the frequency band 3.6 to 3.7 GHZ in the United States and its possessions, that their earth stations operations are limited, in accordance with footnote US245, to international inter-continental systems and subject to case- by-case electromagnetic compatibility analysis. 36. IT IS FURTHER ORDERED that Columbia shall inform its customers and operators using the frequency band 3.4 to 3.6 GHz of the potential for interference from U.S. Government operations worldwide. 37. IT IS FURTHER ORDERED that the Petition to Deny filed by Hughes IS DENIED. 38. IT IS FURTHER ORDERED that Columbia is obligated to comply with the applicable laws, regulations, rules, and licensing procedures for those countries it proposes to serve. 39. IT IS FURTHER ORDERED that the license for each space station is ten years and will begin on the date Columbia certifies to the Commission that each satellite has been successfully placed into orbit and the operations fully conform to the terms and conditions of this authorization. 40. IT IS FURTHER ORDERED that Columbia's authorization is conditioned upon timely completion of the following construction milestones. This authorization shall become NULL AND VOID in the event that the space stations are not launched and operated in accordance with this authorization by the following dates: Commence Construction Complete Construction Launch first satellite September 1999 March 2002 May 2002 second satellite December 1999 June 2002 August 2002 41. IT IS FURTHER ORDERED that 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 its adoption. 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. 47 C.F.R.  1.4(b)(2). FEDERAL COMMUNICATIONS COMMISSION Regina M. Keeney Chief International Bureau