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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 Loral CyberStar, Inc. ) ) Applications for Authority to Construct, ) File Nos. 205/206-SAT-AMEND-95 Launch, and Operate a Ka-band Satellite ) System in the Fixed-Satellite Service ) IBFS File Nos. SAT-AMD-19950929-00157/158 ORDER AND AUTHORIZATION Adopted: December 19, 2000 Released: December 20, 2000 By the Chief, International Bureau: I. INTRODUCTION 1. With this Order and Authorization, we authorize Loral CyberStar, Inc. ("Loral") to launch and operate two satellites in the geostationary-satellite orbit ("GSO") to provide fixed- satellite service ("FSS") in the Ka-band. Specifically, Loral is authorized to launch and operate Orion F11 at the 67 W.L. orbit location, and to launch and operate Orion F12 at the 126.5 E.L. orbit location. These satellites will be part of Loral's global system, allowing Loral to provide a variety of communications services to consumers in the United States and around the world. II. BACKGROUND 2. In July 1996, the Commission adopted a band arrangement for U.S. commercial operations in the Ka-band. This band arrangement designates discrete band segments in the 17.7-20.2 GHz (the "18 GHz band") and 27.5-30.0 GHz (the "28 GHz band") frequency bands for several services, including the GSO FSS service, the non-geostationary-satellite orbit ("NGSO") FSS service, Local Multipoint Distribution Service, and feeder links for certain NGSO mobile satellite systems ("MSS"). Recently, the Commission modified the rules for the deployment of services in the 18 GHz band. As revised, the Ka-band arrangement designates the following frequencies for U.S. commercial GSO FSS systems: GSO FSS-Designated Band Segment Other Co-Primary Designations 18.3-18.58 GHz (downlink) Fixed Services 18.58-18.8 GHz (downlink) 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. The applications at issue were originally filed separately by Loral's predecessors in interest, Orion Network Systems, Inc. ("Orion Network") and its wholly owned subsidiary, Orion Asia Pacific Corporation ("Orion Asia"). These applications were filed by the cut- off date established for consideration in the first processing group of Ka-band applications. Orion Network's application requested authorization to add a Ka-band payload to a pending Ku-band application, and to operate this hybrid satellite at the 127 W.L. orbit location. Similarly, Orion Asia asked for authority to add Ka-band capacity to a pending Ku-band application, and to operate this hybrid satellite at the 126 E.L. orbit location. During the pendency of these applications, discrepancies arose between the requested Ku-band orbit locations and the requested Ka-band orbit locations. As a result, the International Bureau ("Bureau") deferred action on these applications until Orion Network and Orion Asia resolved the discrepancies. Both Orion Network and Orion Asia subsequently notified the Bureau that they intended to construct, launch and operate stand- alone Ka-band satellites, rather than the hybrid satellites proposed. Orion Network sought to operate Ka-band satellite Orion F11 at the 127 W.L. orbit location, and Orion Asia sought to operate Ka-band satellite Orion F12 at the 126.5 E.L. orbit location. 4. In May 1997, the Bureau adopted an orbital assignment plan implementing an agreement among the Ka-band GSO FSS applicants that successfully resolved their conflicts over worldwide satellite orbit locations. The May 1997 Assignment Order listed Orion Asia at the 126.5 E.L. orbit location and reserved the 127 W.L. orbit location for Orion Network. The May 1997 Assignment Order also provided that any licensees could present alternative arrangements provided that any affected parties agreed. Several licensees, including Orion Network, requested new locations, and reached an agreement among themselves with respect to this reassignment. As a result, the Bureau issued a revised orbital assignment plan, reserving the 67 W.L. orbit location for Orion Network. 5. In February 1998, the Bureau authorized Orion Network and Orion Asia to transfer control of their authorizations and applications to Loral Space & Communications Ltd. ("Loral Ltd."). Initially, Loral Ltd. structured the transaction so that the authorizations and applications were separately held by its subsidiaries. Thereafter, as the result of an internal restructuring process, Loral Ltd. requested and was granted authority for a pro forma assignment of these authorizations and applications, including the instant applications, to Loral CyberStar, Inc. 6. Loral proposes to operate its Orion F11 and Orion F12 satellites in the 28.35-28.6 GHz and 29.25-30.0 GHz bands for uplink transmissions, and the 18.55-18.8 GHz, 19.45-19.7 GHz and 19.7-20.20 GHz bands for downlink transmissions. Loral proposes to offer a variety of digital services on a non-common carrier basis, including video for teleconferencing and entertainment, and computer data networks. Each satellite will have 32 active transponders, each having a usable bandwidth of 114 megahertz. The satellites will support primarily high speed digital transmissions using 25 fixed and two steerable spot beams. Loral states that both satellites will be an integral part of its global satellite network, with Orion F11 providing transcontinental services and intra-regional services in the United States, and Orion F12 providing high speed digital transmissions and intra-regional services throughout the Asia Pacific region. III. DISCUSSION A. Qualifications 7. The Commission's goal is to license satellites in a manner that promotes open entry, competition, maximum flexibility, technical innovation, and seamless networks. When possible, we seek to afford all applicants an opportunity to compete in the marketplace. Before the Commission authorizes any space station applicant, however, we first determine whether an applicant is legally, technically and financially qualified to hold a Commission license. 8. Financial Qualifications. Historically, the Commission has fashioned financial requirements for satellite services on the basis of entry opportunities in the particular service being licensed. Under Commission precedent, the purpose of financial qualification rules is to prevent warehousing and ensure quick deployment of service where there may be more applicants than available licenses. In cases where we can accommodate all pending applications and future entry is possible, however, we have not looked to financial ability as a prerequisite to a license grant. Because all of the first round applicants agreed to orbit locations, and other orbit locations remain available for GSO FSS satellites, the Commission waived the FSS financial requirements for Ka-band first round applicants. To ensure licensees do not hold valuable orbit and spectrum resources, we intend to enforce the milestone schedule strictly. 9. Technical Qualifications. Applicants for space station authorizations also must meet certain technical qualification requirements. After review of Loral's applications, we find that, based on the proposed system designs, Loral can will operate under the Commission's technical rules for FSS licensees in Part 25. We condition Loral's authorization on complying with our rules concerning technical qualifications for the FSS in the Ka-bands. B. Spectrum Issues 10. Service Uplinks. The 28 GHz band arrangement designates 1000 MHz of spectrum in the 28.35-28.6 GHz band and the 29.25-30.0 GHz band for GSO FSS uplink 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 applications, Loral proposes to use spectrum at the 28.35-28.6 GHz and 29.25-30.0 GHz bands for its service uplinks to each of its orbit locations. We grant Loral's proposal, as it is consistent with the band arrangement. Operations in the shared 250 megahertz at 29.25-29.5 GHz are, of course, subject to the sharing rules adopted in the Ka-Band First Report and Order. 11. Service Downlinks. The revised 18 GHz band arrangement designates 1000 MHz of spectrum in the 18.3-18.8 GHz band and the 19.7-20.2 GHz band for GSO FSS downlink operations. Two-hundred eighty megahertz of this spectrum at 18.3-18.58 GHz is to be shared on a co-primary basis with the fixed services. In adopting this band arrangement, the Commission stated that the total 720 megahertz of unshared downlink spectrum at 18.58-18.8 GHz and 19.7-20.2 GHz, plus the flexible rules that permit sharing of 280 megahertz at 18.3-18.58 GHz, will enable each system to have ample spectrum and allow multiple systems to operate. As mentioned in the 18 GHz Report and Order, the Commission recognizes that some GSO FSS systems have already been designed, and that we expect that current system designs of the GSO FSS can proceed with some modification, or that sharing agreements can be reached to permit the use of these designs. 12. In its applications, Loral requests 1000 megahertz of spectrum in the 18.55-18.8 GHz, 19.45-19.7 GHz and 19.7-20.2 GHz bands for downlink transmissions from each of its assigned orbit locations. We grant that portion of its request that is consistent with the 18 GHz band arrangement. Consequently, we authorize Loral to operate its satellites with service downlinks in the 18.55-18.8 GHz and 19.7-20.2 GHz bands. We cannot give Loral operating authority in its other proposed downlink band, 19.45-19.7 GHz, as that request is inconsistent with the 18 GHz band arrangement. On our own motion, however, we are in a position to grant Loral's original request for a full 1000 megahertz of downlink spectrum by authorizing Loral to operate in the 18.3-18.55 GHz band, which is available for GSO FSS downlink operations, shared on a co-primary basis with the fixed services. Operations in the shared 280 megahertz at 18.3-18.58 GHz are, of course, subject to the sharing rules adopted in the 18 GHz Report and Order. In addition, Loral must coordinate with the U.S. Government systems operating in the 17.7-18.8 GHz and 19.7-20.2 GHz bands in accordance with footnote US 334 to the Table of Frequency Allocations. C. Regulatory Treatment 13. In the DISCO I Report and Order, the Commission 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. In the Ka-band Third Report and Order, the Commission stated there was no reason to treat satellite operators in the Ka-band any differently. Loral proposes to operate its proposed FSS 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 non-common 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. Dozens of FSS satellites are now operating in the C- and Ku-band, and at least nine FSS operators other than Loral and its subsidiaries are authorized in the Ka-band. 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 without compelling Loral to serve the public indifferently. With regard to the second prong of NARUC I, based on Loral's proposed services, we see no reasons why Loral would hold itself out indifferently to the public. We will therefore allow Loral to operate as a non-common carrier. D. Implementation Milestones 14. As in all other satellite services, Ka-band licensees are required to adhere to a strict timetable for system implementation. Requiring licensees to adhere to implementation deadlines prevents the valuable orbit-spectrum resource from being held indefinitely by licensees who are unable or unwilling to proceed with their plans. Specifically, Section 25.145(f) of the Commission's rules requires Ka-band GSO FSS licensees "[1] to begin construction of its first satellite within one year of grant, [2] to begin construction of the remainder within two years of grant, [3] to launch at least one satellite into each of its assigned orbit locations within five years of grant, and [4] to launch the remainder of its satellites by the date required by the International Telecommunication Union [ITU] to assure international recognition and protection of those satellites." Failure to meet any of these construction milestones will render those satellite authorizations null and void. 15. We are now in a position to impose system implementation milestones as a condition of Loral's licenses at the 67 W.L. and 126.5 E.L. orbit locations. The dates by which Loral's satellites must be "brought into use" to protect the date priority of the U.S. ITU filings for its orbital locations are in July 2005. We recognize that, in this case, applying these ITU "bringing into use" dates to the last implementation milestone has the incongruous result of our rules requiring Loral to launch its satellites into each of its assigned orbit locations by December 2005, i.e., after the date Loral is required to bring its satellite locations into use to protect the date priority of the U.S. ITU filings for its orbital locations. To address this misalignment, we require Loral to launch its satellites into each licensed orbit location which "brings into use" all of the frequency assignments it plans to operate at that orbit location by the appropriate July 2005 ITU "bringing into use" date. This will protect the United States' and thus, Loral's ability to coordinate and gain international recognition for the satellites at each of its assigned orbit locations. Moreover, we do not anticipate that meeting this milestone will be difficult, as the difference between the ITU "bringing into use" date and December 2005 is de minimis. E. International Coordination 16. In general, we follow the applicable advance-publication, coordination, and notification procedures set forth in the ITU Radio Regulations in coordinating Loral's satellites with other affected administrations. Additional information concerning coordination between U.S. licensed satellite systems and non-U.S. licensed systems is set forth in the Ka-band Third Report and Order. F. Exclusionary Arrangements 17. Exclusionary arrangements can take the form of concessions, contracts, understandings, or working arrangements that offer a particular satellite system as the only permissible facility through which to obtain a particular satellite service between the United States and another country. Prohibiting these type of arrangements facilitates competition by encouraging the use of multiple satellite systems in other countries, and ensures that all parties have an opportunity to provide truly global service, which also facilitates competition in the U.S. market. Congress recently enacted a statutory bar to exclusionary arrangements. Loral must comply with these restrictions. IV. CONCLUSION 18. Accordingly, upon review of Loral's applications to implement Ka-band GSO satellites to provide FSS, we find that Loral 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 these applications will serve the public interest. We have assigned Loral to the 67 W.L. orbit location for Orion F11 and the 126.5 E.L. orbit location for Orion F12. V. ORDERING CLAUSES 19. IT IS ORDERED that Application File Nos. 205/206-SAT-AMEND-95, IBFS File Nos. SAT-AMD-19950929-00157/158 ARE GRANTED and Loral CyberStar, Inc. IS AUTHORIZED to launch and operate one satellite at the 67 W.L. orbit location and one satellite at the 126.5 E.L. orbit location. 20. IT IS FURTHER ORDERED that Loral CyberStar, Inc. IS AUTHORIZED to use service uplinks in the 28.35-28.6 GHz and 29.25-30.0 GHz bands and service downlinks in the 18.3-18.8 GHz and 19.7-20.2 GHz bands, in accordance with the technical specifications set forth in its applications and consistent with our rules. 21. IT IS FURTHER ORDERED that Loral CyberStar, 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 Allocation, 47 C.F.R.  2.106. 22. IT IS FURTHER ORDERED that each of the authorizations shall be become NULL and VOID with no further action required on the Commission's part in the event the space station is not constructed, launched and placed into operation in accordance with the technical parameters and terms and conditions of the authorizations by the following dates: Orbit Location Construction Commenced Launch and Operate ORION F11 67 W.L. December 2001 July 2, 2005 ORION F12 126.5 E.L. December 2001 July 23, 2005 23. IT IS FURTHER ORDERED that the license term for a space station is ten years and will begin to run on the date Loral CyberStar, Inc. certifies to the Commission that the satellites have been successfully placed into orbit and the operations fully conform to the terms and conditions of this authorization. 24. IT IS FURTHER ORDERED that Loral CyberStar, 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 of obligations for these space stations in accordance with the ITU Radio Regulations. 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 the subject of additional terms and conditions as required to effect coordination of the frequency assignments of other Administrations. 47 C.F.R.  25.111(b). 25. IT IS FURTHER ORDERED that the temporary assignment of any orbital location to Loral CyberStar, 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 the 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. 26. IT IS FURTHER ORDERED that Loral CyberStar, Inc. has 30 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. 27. This Order and Authorization 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 and Authorization (see 47 C.F.R.  1.4(b)(2)). FEDERAL COMMUNICATIONS COMMISSION Donald Abelson Chief, International Bureau