Attachment 11-205.pdf

11-205.pdf

ORDER

Order

2012-05-16

This document pretains to ITC-T/C-20111123-00355 for Transfer of Control on a International Telecommunications filing.

IBFS_ITCTC2011112300355_952028

Federal Communications Commission DA 12-768 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Intelsat Global Holdings, S.A. ) IB Docket No. 11-205 ) Applications to Transfer Control of Intelsat ) Licenses and Authorizations from BC Partners ) Holdings Limited to Public Ownership ) ORDER Adopted: May 16, 2012 Released: May 16, 2012 By the Chief, International Bureau: I. INTRODUCTION 1. In this Order, we consider a series of applications (the “Application”) filed by Intelsat Global Holdings, S.A. (“Intelsat”) to transfer control of all the licenses and authorizations held by Intelsat License LLC, Intelsat New Dawn Company, Ltd., Intelsat USA License LLC, and Intelsat General Corporation (“Intelsat Licensees”) pursuant to a public offering of newly issued voting shares by Intelsat, subsequent voting share sales by current shareholders and possible private placements of newly issued voting shares.1 Based on the record established in this proceeding, we find that grant of the Application will serve the public interest, convenience, and necessity.2 II. BACKGROUND A. Description of the Applicants 1. Prior to the Proposed Transaction 1 Intelsat License LLC and Intelsat New Dawn Company, Ltd., Application for Transfer of Control, Narrative, IBFS File Nos. SAT-T/C-20111123-00225, SAT-T/C-20111123-00226, SES-T/C-20111123-01403, SES-T/C-20111206- 01427, ITC-T/C-20111123-00354, and ITC-T/C-20111123-00355. In October 2011, the Commission granted authority for the pro forma transfer of control of all space and earth station licenses held by Intelsat Licensees. These transactions involved the creation of new holding companies and removal of certain other holding companies. Satellite Communications Services Information, re: Actions Taken, Public Notice, Report No. SES-01390 (rel. Oct. 19, 2011); Policy Branch Information, Actions Taken, Public Notice, DA 11-1713, Report No. SAT-00815 (rel. Oct. 14, 2011). We granted an extension of the deadline for consummation of these transactions to April 10, 2012 on December 13, 2011. On March 16, 2012, Intelsat filed a request for a further 120 day extension request, ending on August 8, 2012 to consummate these transactions but subsequently closed on the transactions. Intelsat consummated the transactions on April 10, 2012 and filed the consummation notice on April 23, 2012. Letter from Jennifer D. Hindin, Counsel for Intelsat to Marlene H. Dortch, Secretary, Federal Communications Commission, Apr. 23, 2012. 2 Intelsat Global Holdings, S.A. also filed a transfer of control application for its Private Land Mobile Radio Licenses in File No. 0004961083, which will be addressed separately.

Federal Communications Commission DA 12-768 2. Intelsat, a Luxembourg company, is the indirect parent company of the Intelsat Licensees.3 Intelsat’s controlling parent company is BC Partners Holdings Limited (“BCP”), a United Kingdom- based investment firm organized under the laws of Guernsey.4 BCP is owned by seventeen individual shareholders5 and currently indirectly owns approximately 71.9 percent voting equity interests in Intelsat and has the power to elect a majority of the six members of the Intelsat Board of Directors.6 Silver Lake Group, L.L.C. (“SLP”), a U.S.-based investment firm, controls entities which indirectly own approximately 15.87 percent of the voting interests in Intelsat.7 The managing members of SLP are three U.S. citizens: James Davidson, Glenn Hutchins and David Roux.8 Other investors, including Credit Suisse, Ridgemont Equity Partners and members of Intelsat’s management hold the remaining equity interests in Intelsat.9 2. After the Proposed Transaction 3. Upon the closing of the transaction, Intelsat10 will be owned by its existing owners plus the owners of the newly issued shares.11 At that point, the shares of Intelsat will be publicly traded and Intelsat’s current owners will have the option of further reducing their ownership interests. The percentage of voting interest each shareholder will have will depend on the number of common shares issued and sold. Intelsat believes that no one entity or individual will hold 50 percent or more of the voting shares in Intelsat after the transaction is completed. BCP would no longer have voting control through a majority of stock.12 4. Intelsat states that the Board of Directors will continue to be its governing body after the transaction. Intelsat envisions that the Board of Directors will have eight members who will be elected by shareholders, who will be given one vote per common share, at a general meeting. Intelsat believes there is a significant chance that BCP will no longer be empowered to elect a majority of directors.13 B. Description of the Transaction 5. Intelsat will offer newly issued voting shares to the public and may sell additional shares through private placements. Subsequently, current owners may reduce their shareholdings through 3 Application at 2. 4 Id. at 3. 5 Intelsat Holdings, Ltd., Transferor, and Serafina Holdings Limited, Transferee, Consolidated Application for Consent to Transfer Control of Holders of Title II and Title III Authorizations, Memorandum Opinion and Order, 22 FCC Rcd 22151, 22154, ¶ 8 (2007) (“Intelsat-Serafina Order”). The shareholders are citizens of: the United States (one); the United Kingdom (four); Germany (three); Italy (four); France (four); and Greece (one). Id. 6 Application at 3. 7 Id at 3, and Exhibit 1. See Appendix B for an organization chart showing Intelsat’s ownership before the transaction. 8 Intelsat-Serafina Order, 22 FCC Rcd at 22155, ¶ 11. 9 Application at 3. 10 Prior to the closing of the transaction, Intelsat Global Holdings, S.A will be renamed Intelsat S.A. 11 Application at 4. 12 Intelsat also believes that none of the current owners of Intelsat, other than BCP, will retain more than a ten percent interest after the transactions. Id. at 5. Intelsat anticipates that holders of the publicly-traded shares will own more than 40 percent of Intelsat. Id. Intelsat indicates that it will provide exact ownership percentages for all ten percent or greater shareholders in its notice of consummation following the transfer of control. Id. 13 Id. 2

Federal Communications Commission DA 12-768 market transactions or secondary offerings. Intelsat will time the offering based upon a variety of conditions including industry and company factors and general market conditions. After the offerings, Intelsat intends to list its shares on a major U.S. stock exchange. The proceeds of the public offering will be used for general corporate purposes, including the repayment of portions of Intelsat’s indebtedness.14 C. Application and Review Process 6. The Application was placed on Public Notice on December 20, 2011.15 On January 6, Intelsat submitted a letter stating that the application does not contemplate any modification to the Intelsat Licenses or conditions and states that approval of the application will have no effect on the license conditions imposed by the Commission to promote compliance with the provision of the International Telecommunications Satellite Organization Agreement.16 On January 18, 2012, the Department of Justice (DOJ), including the Federal Bureau of Investigation with the concurrence of the Department of Homeland Security (“Executive Branch Agencies”) filed a letter requesting that the Commission defer judgment regarding this matter until DOJ had finished reviewing the matter for any national security, law enforcement, and public safety issues.17 On February 14, 2012, the Executive Branch Agencies filed a Petition to Adopt Conditions to Authorizations and Licenses.18 No other comments were filed. III. PUBLIC INTEREST ANALYSIS 7. Pursuant to sections 214 and 310(d) of the Communications Act, we must determine whether the Applicants have demonstrated that the proposed assignment and transfer of control of licenses and authorizations will serve the public interest, convenience, and necessity.19 In making this assessment, we first assess whether the proposed transaction complies with the specific provisions of the Communications Act,20 other applicable statutes, and the Commission’s rules.21 Our public interest 14 Application at 4. 15 Intelsat Global Holdings S.A. Files to Transfer Control of Intelsat Licenses and Authorizations from BC Partners Holdings Limited to Public Ownership, IB Docket No. 11-205, Public Notice, DA 11-2038 (Dec. 20, 2011). 16 Letter from Kalpak Gude, Intelsat Corporation, to Marlene H. Dortch, Federal Communications Commission, Jan. 6, 2012. See also 47 U.S.C. § 316(a); Petition of the International Telecommunications Satellite Organization under Section 316 of the Communications Act, as Amended, IB Docket No. 06-137, Order of Modification, 23 FCC Rcd 2764 (Int’l Bur., 2008). 17 Letter from U.S. Department of Justice, National Security Division, to Marlene H. Dortch, Federal Communications Commission, Jan. 18, 2012. 18 Department of Justice, National Security Division, Petition to Adopt Conditions to Authorizations and Licenses, IB Docket No. 11-205 (Feb. 14, 2012). 19 47 U.S.C. §§ 214, 310(d). 20 Section 310(d), 47 U.S.C. § 310(d), requires that we consider the applications as if the proposed transferee were applying for the licenses directly under section 308 of the Act, 47 U.S.C. § 308. See, e.g., AT&T Inc. and Cellco Partnership d/b/a Verizon Wireless Seek FCC Consent To Assign or Transfer Control of Licenses and Authorizations and Modify a Spectrum Leasing Arrangement, WT Docket No. 09-104, Memorandum Opinion and Order, 25 FCC Rcd 8704, 8716 ¶ 22 (2010) (“AT&T-Verizon Wireless Order”); Applications of AT&T Inc. and Centennial Communications Corp. For Consent to Transfer Control of Licenses, Authorizations, and Spectrum Leasing Arrangements, WT Docket No. 08-246, Memorandum Opinion and Order, 24 FCC Rcd 13915, 13927 ¶ 27 (2009) (“AT&T-Centennial Order”); Applications of Cellco Partnership d/b/a Verizon Wireless and Atlantis Holdings LLC For Consent to Transfer Control of Licenses, Authorizations, and Spectrum Manager and De Facto Transfer Leasing Arrangements and Petition for Declaratory Ruling that the Transaction is Consistent with Section 310(b)(4) of the Communications Act, WT Docket No. 08-95, Memorandum Opinion and Order and Declaratory Ruling, 23 FCC Rcd 17444, 17460 ¶ 26 (2008) (“Verizon Wireless-ALLTEL Order”); Sprint Nextel Corporation and Clearwire Corporation Applications for Consent to Transfer Control of Licenses, Leases, and Authorizations, WT Docket No. 08-94, Memorandum Opinion and Order, 23 FCC Rcd 17570, 17578 ¶ 19 (2008) (“Sprint Nextel- (continued....) 3

Federal Communications Commission DA 12-768 evaluation also necessarily encompasses the “broad aims of the Communications Act,” which include, among other things, a deeply rooted preference for preserving and enhancing competition in relevant markets, accelerating private sector deployment of advanced services, promoting a diversity of license holdings, and generally managing the spectrum in the public interest.22 Among the factors the Commission considers in its public interest review is whether the applicants to the proposed transaction meet the requisite qualifications requirements to hold and transfer licenses under section 310(d) of the Communications Act and the Commission’s rules.23 8. We find that the Application complies with the Communications Act and the Commission’s rules. The transaction also raises no competitive issues because Intelsat seeks to transfer control of licenses and authorizations pursuant to a public offering of newly issued voting shares and will not alter the scope of Intelsat’s operations. We also find that the Intelsat Licensees are qualified to remain Commission licensees, and that granting the Application will serve the public interest, convenience and necessity. 9. On February 14, 2012, the Executive Branch Agencies filed a Petition to Adopt Conditions to Authorizations and Licenses. The petition states that the Executive Branch Agencies have no objection to the grant of the Applications provided that the Commission condition the grant on Intelsat abiding by the commitments and undertakings contained in a February 14, 2012 Letter to the Executive Branch Agencies.24 The petition also states that the parties to the Applications do not object to the grant of the petition. The Commission considers national security, law enforcement, foreign policy, and trade policy concerns when analyzing a transfer of control or assignment application in which foreign ownership is involved. Under Commission precedent, we defer to the Executive Branch’s expertise on national security and law enforcement issues.25 In accordance with the request of the Executive Branch Agencies, and in the absence of objection from the Applicants, we condition the grant of the Applications on Intelsat’s compliance with the commitments and undertakings in the February 14, 2012 Letter. IV. PROCEDURAL MATTERS 10. Applicants ask that a grant of this transfer of control apply to: (1) all licenses and (...continued from previous page) Clearwire Order”); Applications of AT&T Wireless Services, Inc. and Cingular Wireless Corporation, WT Docket No. 04-70, Memorandum Opinion and Order, 19 FCC Rcd 21522, 21542 ¶ 40 (2004) (“Cingular-AT&T Wireless Order”). 21 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8716 ¶ 22; AT&T-Centennial Order, 24 FCC Rcd at 13927 ¶ 27; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17460 ¶ 26; Sprint Nextel-Clearwire Order, 23 FCC Rcd at 17578-79 ¶ 19; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21542-43 ¶ 40. 22 See, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8717 ¶ 23; AT&T-Centennial Order, 24 FCC Rcd at 13928 ¶ 28; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17461 ¶ 27; Sprint Nextel-Clearwire Order, 23 FCC Rcd at 17580 ¶ 20; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21544 ¶ 41. 23 See 47 U.S.C. §§ 214(a), 310(d); 47 C.F.R. § 1.948; see also, e.g., AT&T-Verizon Wireless Order, 25 FCC Rcd at 8718 ¶ 26; AT&T-Centennial Order, 24 FCC Rcd at 13930 ¶ 31; Verizon Wireless-ALLTEL Order, 23 FCC Rcd at 17464 ¶ 31; Sprint Nextel-Clearwire Order, 23 FCC Rcd at 17582 ¶ 23; Cingular-AT&T Wireless Order, 19 FCC Rcd at 21546 ¶ 44. 24 Letter from Intelsat to Lisa O. Monaco and David F. Heyman, dated February 14, 2012 (“February 14, 2012 Letter”). The Petition, with the February 14, 2012 Letter attached, is publicly available on the FCC web site by searching the record for this proceeding, IB Docket 11-205, through the Electronic Comment Filing System, available at http://fjallfoss.fcc.gov/prod/ecfs/comsrch_v2.cgi. 25 See Foreign Participation Order, 12 FCC Rcd at 23918 ¶ 59, 23919-21 ¶¶ 61-66; Amendment of the Commission’s Regulatory Policies to Allow Non-U.S. Licensed Space Stations to Provide Domestic and International Satellite Service in the United States, Report and Order, 12 FCC Rcd 24094, 24170, ¶ 178 (1997). 4

Federal Communications Commission DA 12-768 authorizations issued or assigned to Intelsat Licensees during the pendency of the Application and prior to consummation of any approved transaction; and (2) applications pending at the time of consummation of the proposed transaction.26 We grant this request to transfer control of the relevant licenses and authorizations issued or assigned to Intelsat Licensees. Consistent with section 1.65 of the Commission’s rules,27 Intelsat indicates that it will also amend as necessary any currently pending applications to reflect the consummation of the transaction approved by this Order. Additionally, to the extent that Appendix A to this Order does not include all authorizations issued to the Intelsat Licensees during the period between the filing of the Applications and the consummation of the proposed transaction, the Applicant should file with the Commission, within 30 days of consummation of the transaction, a section 1.65 letter referencing IB Docket No. 11-205 and each applicable file number and providing an updated version of Appendix A that includes all relevant authorizations and call signs. V. CONCLUSION 11. There is no evidence in the record to suggest that the proposed transaction would harm competition or otherwise contravene any Commission rule or policy. We therefore find that the applicant has met its burden and that the grant of the Applications, as conditioned herein, will serve the public interest convenience and necessity. Accordingly, we consent to BCP’s relinquishment of control through reduction of its ownership of voting shares below the 50 percent level. VI. ORDERING CLAUSES 12. Accordingly, IT IS ORDERED that, pursuant to sections 4(i) and (j), 214, 309, and 310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), 214, 309, 310(d), the applications for the transfer of control of licenses and authorizations set forth in Appendix A are granted, to the extent specified and as conditioned in this Order. 13. IT IS FURTHER ORDERED that, pursuant to sections 4(i) and (j), 214, 309, and 310(d) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 154(j), 214, 309, 310(d), the Petition to Adopt Conditions to Authorizations and Licenses filed jointly by the U.S. Department of Justice, the Federal Bureau of Investigation, and the U.S. Department of Homeland Security on October 15, 2007 IS GRANTED. Grant of the Applications IS CONDITIONED UPON compliance with the commitments and undertakings set forth in the February 14, 2012 letter from Intelsat, attached to this Order in Appendix C. 14. IT IS FURTHER ORDERED that this Order is granted without prejudice to any future action taken by the Enforcement Bureau in connection with IBFS File Nos. SAT-LOA-20090227-00029, SAT- AMD-20100302-00038, SAT-LOA-20100217-00029, SAT-AMD-20100602-00120, and SAT-AMD- 20100831-00186. 15. IT IS FURTHER ORDERED that, pursuant to section 1.65 of the Commission’s rules, 47 C.F.R. § 1.65, the Applicants are afforded 30 days from the date of release of this Order to amend as necessary any pending applications to reflect the transfer of control approved in this Order. 16. IT IS FURTHER ORDERED that the deadline for consummating the transactions consented to by this Order is August 16, 2012. 26 Application at 8-9. 27 47 C.F.R. § 1.65. 5

Federal Communications Commission DA 12-768 FEDERAL COMMUNICATIONS COMMISSION Mindel De La Torre Chief, International Bureau 6

Federal Communications Commission DA 12-768 APPENDIX A Licenses and Grants A. Space Station Applications: File No. File Name: Call Signs: SAT-T/C-20111123-00225 Intelsat New Dawn Company, S2751 Ltd SAT-T/C-20111123-00226 Intelsat License LLC S2715, S2404, S2391, S2396, S2398, S2401, S2388, S2400, S2399, S2389, S2789, S2785, S2414, S2411, S2410, S2409, S2408, S2407, S2406, S2687, S2387, S2385, S2386, S2422, S2253, S2381, S2804, S2814, S2237, S2368, S2801, S2750, S2160, S2469, S2154, S2647, S2733, S2817, S2423, S2382, S2380, S2229, S2704, S2460, S2405, S2831, S2846 B. Earth Stations Licenses: File No. File Name: Call Signs: SES-T/C-20111123-01403 Intelsat License LLC E030073, E030072, E010112, E000488, E000364, E010019, E000048, E000049, E990365, E990092, E990214, E990323, E040174, E030012, E900757, E881304, KA391, KL92, KA71, E050311, E010133, E000063, E010113, E990223, E000363, E980467, E990334, E980460, E990024, E970080, E860175, E4132, E010206, E2178, E990551, E110100, E950502, E950267, E110095, E110120, E950307, E010118, E950067, E990055, E920519, E040286, KA450, E060388, E030182, E070230, E970391, E060384, KA251, E970319, E030020, E040343, E060198, E000274, KB26, KA262, E100118, E040125, E070050, E960186, E020126, E030106, E060029, E080006, E020315, E030096, E050049, E070139, E020314, E020309, E050048, E020191, E980503, E050009, E040414, E980501, E030100, E040141, E090186, E030082, E040140, E090167, E030071, E080170, E030103, E030051, E080172, E080011, E960187, KA261, WN52, KA260, KA275, KA259, KA264, KA258, E000296, E000355, E980200, E990131, E980526, KA270, E980510, KA269, KA268, KA267, E940532, KA266, E940333, KA265, E7465, E950508, 7

Federal Communications Commission DA 12-768 E090093, E881286, E010334, E990433, E970392, E990091, E980485, E030307, KA263, E030101, E060108, E970091, E030232, E070221, E020169, E990224, E970051, E980502, E030306, E030175, E120008, E120009 SES-T/C-20111206-01427 Intelsat License LLC E080108, E070223, E080224, E080147, E110013, E050169, E050174, E070278, E070234 C. International Section 214 Authorizations: File No. Authorization Holder: Authorization File Nos. ITC-T/C-20111123-00354 Intelsat General Corporation ITC-MOD-20050329-00170 ITC-T/C-20111123-00355 Intelsat USA License ITC-MOD-20051007-00445, ITC-214- 20051031-00443, ITC-214-19930829- 00248, ITC-214-19920318-00117 8

fion FCC Form 603 Attachment Exhibit 1: Intelsat Licensees Current Ownership‘ Silver Lake Funds Other Investors & Intelsat (U.S.) Management (U.S.AWTO} SLP lII Investment Serafina S.A. Holding S.a r.l. (Luxembourg) (Luxembourg) Approx. 13% lApprox. 71.9% Approx, 15.87% Intelsat Global Holdings S.A. Luxembour ’7 Intelsat Ir it Holdings 5.4 r.l. (Luxembourg) (Gibraltar) Intelsat Haldings S.A. (Luxembourg) Intelsat (Luxembourg) Finance Company S.a r.1, Intelsat S.A. (Luxembourg) (Luxembourg} Intelsat (Luxembourg) S.A. Intelsat (Poland) Sp. z 0.0. (Luxembourg) (Poland) Intelsat Jackson Intelsat Corporation Holdings S.A. (Delaware) (Luxembourg) Intelsat Global Service LLC (Delaware} Intelsat Operations S.A. (Luxembourg) Intelsat License Holdings LLC 15.6%> Intelsat USA Sales LLC (Delaware} Intelsat New Dawn (Delaware) (Gibraltar) Limited (Gibraltar) Intelsat License LLC (Delaware} Intelsat New Dawn Intelsat General Corporation Intelsat USA License LLC Company, Ltd. (Delaware) (Delaware) All subsidiaries are wholly owned unless otherwise noted. (Bermuda) Intelsat Global Holdings S.A. is the entity recently approved by the FCC to control indirectly the Intelsat Licensees pursuantto a pro forma corporate reorganization. This corporate reorganization has not yet been completed, but will be consummated prior to the Transactions contemplated by this application. Intelsat Corporation and Intelsat Global Service LLC hald a 15.6% and a 0.02% economic interest, respectively, in Intelsat Operations S.A. They hold no voting interests or common shares in Intelsat Operations S.A. Previously, seventeen Delaware corporations (the "Sat HoldCos") that were wholly owned subsidiaries of Intelsat Corporation owned preferred equity certificates of Intelsat Operations S.A. All of the Sat HoldCos: were merged into Intelsat Corporation on September 30, 2011.. Intelsat Global Services LLC continues to hold 0.02%of the preferred equity certificates and Intelsat Corporation now holds the remaining preferred equity certificates.

FCC Form 603 Attachment Exhibit 2: Intelsat Licensees Ownership Following The Transactions‘ Silver Lake Funds Other Investors & Intelsat BCP Funds Hotders of New Publicly (U.S.) Management (UK/Guernsey!France) Traded Shares (U.S.NTO) SLP IIl Investment Holding S.& r.1. Serafina S.A. (Luxembourg) (Luxembourg} Less than 10% More than 40% Less than 50% Less than 10%o intelsat Global Holdings S.A. ? (Luxembourg} Intelsat investment Holdings S.4 r.. (Luxembourg) Intelsat (Gibraltar) Limited Intelsat Holdings S.A. (Gibraltar) (Luxembourg) Intelsat (Luxembourg) Intelsat S.A. Finance Company S.a r.J. (Luxembourg) (Luxembourg) Intelsat (Luxembourg) S.A. Intelsat (Poland) Sp. z 0.0. {Luxembourg) (Poland) Intelsat Jackson Holdings S.A. Intelsat Corporation {Luxembourg) (Delaware) Intelsat Global Service LLC (Delaware) Intelsat Operations S.A Intelsat License Holdings LLC (Luxembourg) (Delaware} 15.6%° intelsat USA Sates LLC Intelsat New Dawn (Delaware} (Gibraltar) Limited Intelsat License LLC (Gibralter) (Delaware) Intelsat General Corporation Intelsat USA License LLC Intelsat New Dawn (Delaware) (Delaware) Company, Ltd. All subsidiaries are wholly owned unless otherwise noted. (Bermuda) 2. Intelsat Globat Holdings S.A. is the entity recently approved by the FCC to control indirectly the Intelsat Licensees pursuant to a pro forma corporate reorganization. This corporate reorganization has not yet been completed, but will be consummated prior to the sale transactions contemplated by this application. 3. Intelsat Corporation and Intelsat Global Service LLC hold a 15.6% and a 0.02% economic interest, respectively, in Intelsat Operations S.A. They hold no voting interests or commonshares in Intelsat Operations S.A. Previously, seventeen Delaware corporations (the "Sat HoldCos®) that were wholly owned subsidiaries of Intelsat Corporation owned preferred equity certificates of Intelsat Operations S.A. All of the Sat HoldCos were merged into Intelsat Corporation on September 30, 2011. Intelsat Global Services LLC continues to hold 0.02% of the preferred equity certificates and Intelsat Corporation now holds the remaining preferred equity certificates.

Federal Communications Commission DA 12-768 Appendix C Letter to Department of Justice, Federal Bureau of Investigation, Department of Defense and Department of Homeland Security 11

CC. Christopher Hale National Security Division Departmentof Justice John Delmore Office of General Counsel Federal Bureau of Investigation Richard Hagar Office of Policy Department of Homeland Security Hillary Morgan Defense Information Systems Agency Department of Defense Matthew Kemph Office of the: Chief Information Officer Department of Defense Susan H. Crandall Intelsat Richard S. Elliott Paul, Weiss, Rifkind, Wharton & Garrisen LLP Jennifer D. Hindin Wiley Rein LLP

October 9, 2007 Mz. Kenneth L. Wainstein Assistant Attorney General National Security Division United States Department of Justice 950 Peansylvania Avenue, N. W. Washington, DC 20530 Elaing N. Lammert Deputy General Counsel Federal Bureau of Investigation 935 Pennsylvania Avenue, N.W, Washington, DC 20530 Stewart A. Baker Assistant Secretary for Policy U.S. Department of Homeland Security 3801 Nebraska Avenue, N.W. Washington, DC 20528 Re: Proposed Acquisition of Intelsat Holdings, Ltd. by Serafina Holdings Limited Dear Mr. Wainstein. Ms. Lammert, and Mr: Baker: Serafina Holdings Limited (Serafing") and Intelsat Holdings, Ltd. (“Intclsm"")l appreciate the opportunity to confer with representatives of the Department ofJustice ("DOJ"), the Federal Bureau of Investigation ("FBI"), and the Department of Homeland Security ("DHS") (collectively, the "Agencies") regarding the proposed acquisition of Intelsat by Serafina (the "Proposed Transaction"), This letteris intended to confirm that Serafina and Intelsat will continue:to honor the commitments set forth in Intelsat‘s November 24, 2004 letterto the Agencies (the "Intelsat/Zeus Commitment Letter") and Intelsat‘s December 5, 2005 letter to the Agencies (the "Intelsat/PanAmSat Commitment Letter") once the Proposed Transaction is consummated. Infelsat Holdings, Ltd. was formerly known as Zous Holdings Limited ("Zeus"). is See Intelsat, Ltd., Transferor, and Zeus Holdings Limited, Transferee, Consolidated Application for Consent to Transfers ofControl ofHolders of Title Th—and Title HL Authorizations.and Petition for Declaratory Ruling Under Section 310 ofthe Communications Aet of 1934, As Amended, Order.and Authorization, 19 FCC Red 24820, at App. D (2004), See Constellation, LLC, Carlyle PanAmSat 4, LLC, Carlyle PanAmSat 14. LLC, PEP PAS, LLC, and PEOP PAS, LLC, Transferors and Intelsat Holdings. Ltd., Transferee Consolidated Appli¢ation for Authority.to Transfer Control of PanAmSat Licensee

sicqriodo ue urog; pourrgo sapfftouy pur XAjoudeo ouffares SumpfSeod 4qg popmoid c4pe or coruss opgour poseq=alfffare jo whowk pormuilp t ‘poog *s Jaqorog porep renag 4q Sefouofyr arp pertnojolespoiup Sy ; <ooog)h a ~ddy ir "g9¢r pox 934 [7 yopip pue uordo unpumomapy "dioo sosusory 5o4 juqcuyung pup ‘dioy poj[o.quos spun| justisaaut Arerpisqns aug—4p04 Aeswone go «mar| op Jopun porturiio wur, nownsaaut peseg=sp # COGL.) porculry sSuippop sruned og 4q porjoues Sseun|n Aueduwos spnurog proy—<jgivaud ‘pourrop—Apmou t st ugerg purpriag ‘g ‘soreig pojruy| o1 Ut poseq oir —suopouny foguco pur Anowspo) Bupprn [eljupo pus aaju5e Sugeiedo sromou ‘openbpeoy euontasdo —suonsung jonuoo Xox Je pur ‘soue polig sip ut poreso| cul sisger forpuoo Hoaust 100 $ irsfojuy wiro} wowaSeutonsjrsouy yo stoquiour Xg proy souoqet Stmoa pue Ambe Semmemarog) iife ‘(Stseq poingip»Aipey v uo pomseaur se) yespoavy on roolsdc Aporerurmwordds po spsazojut Sunos pus Ambe stogjuos Aguating dnour fontion Sunsisg oyr Euisudiwoo sdnos woupsoate mmo oo yoeg. {,,doorn foguos Supsmg.. om‘ggp pustogody "xedy im oysfop pue . "Ejiuneg..) 377 vesmpy efurag pur .JOpL.) polun stojsoat| 189009 «ciw ‘C.offody. J aT SA mowsfeuspy opody . xedy..) yp— uomirg xedy pue 7 opiappoa, slouueg yedy 4q popfo:nGoo «fuaimo s1 rsfogu| papuou® st ‘(pgg | Jo joy suopestmuno] alf} Jo 4 [ 5 ofoog 01nsmd saoputes suoprotuniumrodors; apraodd ({a) pur ‘uojes {muourmodxo us eqzredo (a1) suongys orpes orgour pur; speaud oquedo (in) ‘spurq Aouanboyy ssotp U sppiors antonordo/plue pilusird {ep suones uies iavite dcriios —uou arpiado (17) ‘spusg—zy pus—imy >3 oy} Sutsn soffffoins go4 49pues counto—tou sgmodo (1} 01 (..oo4..) uorsstururo—y suoreofunaituo,) [Eopeqg oup moy sconezyogine prog Afaanoe[foo {sacsvsor¢ arsaiuf., oyt) ies|mup jo soperpisgas xig osn We 4901 107 Aqpedvo oseyoind y sxaurojsns se fow se O foudes fposor reyy stomguisrp apmyou) srotuorsns & 365]o10] ‘etopfao(d sopues jothbiu] pim mrroajat ajprodi09s.0etojstoprony pus sJopieo stopeofmunooso|9 s8ief whoey adunt jro) s1aciojsno Supues ‘soujunos o0Z ury} srour uy soja.ros stapyo soy{fores yo jo9ff eatsuspxo s qeefsity . Gfapssution jotuojuy pus ‘mep ‘oopm. ‘aoioA Suipnfout ‘sootuss sopeotiniztos 46 Aexiz apfa® dof posn Arrsoden quotwBos asvds sopmond 1801 wors4s offffajes fegofS t soperodo pue sumo jesfofuf 101098 sourojenc jatureAo® pur ‘ssommes yoavion *etpor o) Supatos ‘spimpliOA (..§9.,.) seomuss oiff{mes poxiy jo sappaotd Surpes| ap si iespoiny isopu} y sSDIRJ L J I e

La by BCP (the "BCP Funds") will collectively hold approximately 71.12 percent ofthe equity interests in Serafina, Thirty—five ofthe BCP Funds are constituted as UK fimited partnerships, five ofthe BCP Fuads are constifuted as French "co—mvest" [muuuships, and the remaining fund is constftuted as a Guernseylimited partnership: C Management H Limited("CIE"), a wholly—owned subsidiary of BCP m‘gamixcd under the law‘s of Guernsey, serves as CGeneral Partner ofeach of the BCP Funds, Through it control of the BCP Funds, BCP will control Serafina and by extension IntelsaL. The economic interests in the BCP Funds are held by over 200 limited partners. «None ofthese investors will have any ability to control, manage, or be involved in the day—to—day business—operations or decision—making ofthe BCP Funds, Serafina, or Intelsat, with the minor exception ofseveral investors holding an aggregate equity interest of approximately 0.86 percent in the BCP Funds who are sharehoiders of BCP or atherwise affiliated with BCP.. Limited partners with their principal place—of business in the U.S. will hold approximately 34.90 percent of the equity in the BCP Funds, while limited partners with their principal place of business in non—U.S. WTO—Member countrigs will hoid approximately 65. 40 percent ofthe—equity in the BCP Funds, No limited partner in the BCP Funds has its principal place ofbusiness in a non—WTO Member country. Two funds (the "Silver Lake Funds") ultimately controlled by Silver Lake Group, L.L.C...a U.S —based investment firm, will coflectively hold npmmmatch 16.85 percent of the equity interests in Serafina, Silver Lake Technology Associates f1 P which is controlled by Silver Lake Group, LL.C., serves as General Partner ofm.,h of the Silver Lake Funds, and holds approximately 2.18 percent ofthe equity in the Sikver Lake Funds. The other economic interests in the Silver Lake Funds are held by over 250 passive limited partners, none of which will have any ability to control, manage, orbe involved in the day—to—day business operatifons or decision—making of the Stiver Lake Funds, Scrafina, or Intelsat. General asd fimited partners with their principal place of business in the United States hold approximately 58.56 percent of the equity in the Sitver Lake Funds; and limited partners with their principal place of business outside ofthe United States hold approximately 4 1 .44 percent ofthe equity in the Sitver Lake Funds. One limited partner, with an equity interest of approximately 0.06 percent in the Stiver Lake Funds, has its principal place of business in a non—WTO Member country (Lebanon): Bane of America Capital Investors V, L.P., which has its principal place of business in the United States, will hold a'}]')l(\mfl'ldlt.l\a 3.37 percent of the equity in Serafina, CSFB Strategic Partners [H, L.P. (indirectly controfled by Credit Suisse}, which has its principal place of business in the United States but is controlied by entities with theirplrincipal place of businiess in Switzerland, will hold approximately 1.35 percent of the equity in Serafian. Twelve—members of Intelsat‘s management team will callectively hold an equity interest in Serafiia ofat least 2.04 percent." These individaals This percentage is based on a minimum equity investment by Intelsat management required by the Agreement and assumes a closing date of January 1, 2008.. The minimum equity investment will fluctuate in immaterial amounts depending upon the

are citizens ofthe following countries: the United States (9); Canada (1); France {1); and the United Kingdom (1). The remaining equity in Serafina, approximately 5.26 percent, is subject to continuing syndication for passive investors by the BCP funds. In the event the full 5.26 percent is not syndicated or acquired by Intelsat management, the Existing Control Group will acquire the unsyndicated amount. IL. The Transaction On June 19, 2007, Serafina and its wholly—owned subsidiary, Serafina Acquisition Limited, also a Bermuda company, entered into a Share Purchase Agreement (CAgreement‘) with Intelsat and its existing sharcholders. Pursuant to the terms ofthe Agreement, and upon consummation ofthe Proposed Transaction, Serafina and Serafina Acquisition Limited will acquire all of the equity and voting interests in Intelsat. The aggregate value of the Proposed Transaction, including the assumption by Serafina of approximately $11.4 billton ofdebt, is $16.4 billion. Consummation ofthe Proposed Transaction is subject to a number of closing conditions, including receipt of requisite regulatory approvals. Among other regulatory filings that have been or will be made, Intelsat and Serafina filed a consolidated application with the FCCon August 10, 2007 seeking approval to transfer control of the Intelsat entities holding PCC authorizations to Serafina. Intelsat and Serafina anticipate closing the Proposed Transaction in the fourth quarter of 2007 or the first quarter of 2008. Following consummation of the Proposed Transaction, the Boards of Intelsat, Serafina, and Serafina Acquisition Limited will be the same and will be comprised offour members, two of whom—will be representatives of BCP, one of whom will be a representative of Silver Lake, and one of whomwill be a memberof Intelsat management. Following consummation of the Proposed Transaction, it is anticipatedthat two members of each Board will be U.S. citizens, and two will be citizens of Western European countfies. date of the closing and the continued employment ofcertain members of management. Individual members of Intelsat‘s management may elect to reinvest additional amounts in the post—transaction Intelsat, To the extent management increases its equity interest, there may be:—consequent small adjustmenits in other investors‘ interests.

th HL Confirmation of Existing Intelsat Commitments A. Security Committee of Intelsat Corporation In the Intelsat/Zeus Commitment Letter and the Intelsat/PanAmSat Commitment Letter, which continued certain commitments made to the Agencies in previous Intelsat transactions, Intelsat agreed to maintain—a Security Committee:—within Intelsat‘s U.S. subsidiary, Intelsat Global Service Corporation. Subsequently, as part of the consolidation ofIntelsat‘s operations with those of PanAmSat, this Security Committee was incorporated into Intelsat Corporation." This Security Committee, which is composed exclusively of U.S. citizens who serve on the board of Intelsat Corporation, has lead responsibility for overseeing security issues related to Intelsat‘s domestic communications network, records related to domestic communications, and electronic surveillance by U.S, federal, state, and local authorities. In addition, the Security Committee.serves as a point of contact for addressing law enforcement, national security, and infrastructure protection issues with U.S. government agencies. The Security Committee has carried out these—responsibilities, and will continue to carry them out after the consummation ofthe Proposed Transaction.‘ In addition, to ensure that the Agencies maintain up—to—date information concerning the Security Comumittee, Intelsat Corporation will continue to inform the Agencies in a timely fashion of changes to the composition of the Committee." B. Proxy Agreement for Intelsat General Corporation In the Intelsat/Zeus Commitment Letter and the Intelsat/PanAmSat Commitment Letter, Intelsat agreed to maintain the proxy agreement structure that covers its cleared U.S, subsidiary, Intelsat General Corporation ("Intelsat General"), so as to ensure that no impermissible foreign ownership, control, or influence is exercised over the business activities of Intelsat General. Following consummation of the Proposed Transaction, Intelsat General will continue to operate under that proxy agreement structure. * Intelsat notified the Agencies of the closing ofits acquisition of PanAmSat, and ofthe related relocation of the Security Committee to Intelsat Corporation, by letter dated July 5, 2006 w In the Intelsat/Zeus Commiutment Letter, Intelsat also committed to provide the Agencies, within 60 days of the closing ofthe Intelsat/Zeus transaction, a copy of the policies and procedutes adopted—and implemented by the Security Committee. Intelsat satisfied that commitment in its letter to the Agencies dated January 27, 2005, and it provided updated copies ofthe— policies and procedures in its letters dated October 28, 2005 and July 5. 2006. Intelsat provided the Agencies with updated information concerning the composition ofthe Security Committee in its letters dated March 29, 2005; October 28, 2005; January 11, 2006; and July 5, 2006.

6 C. Cooperation with US. Government Electronic Survefflance Activities In the Intelsat/Zeus Commitment Letter and the Intelsat/PanAmSat Commitment Letter, Intelsat agreed to take all reasonable measures to assist and support the FBlor any other ULS. federal, state, or local agency with law enforcement or national security responsibilities in conducting; in a secure andefficient manner, lawfhully authorized electronic surveillance.. Intelsat also agreed that such assistance would include disctosure, if necessary, of technical and engineering information related to the design, maintenance, or operation ofIntelsat‘s systems. Finglly, Intelsat— agreed that it would work together with the agency seeking electronic surveillance cooperation to determine what is reasonable, taking into account the investigative needs ofthe agency and Intelsat‘s commercial interests. The Proposed Transaction does notalter the commutments.ofIntelsatset forth or continued in the Intelsat/Zeus Commitment Letter and the Intelsat/PanAmSat Commitment Letter, and Serafina and Intelsat hereby reaffirtn those commitments. The nature ofIntelsat‘s business is such that there is no existing or contemplated provision of cormon carrier switched services by Intelsat, Thus, we continue.to believe that Intelsat is, generally speaking, an unlikely target for requests to assist U.S. law enforcement agencies with electronic surveillance. Nonetheless, Intelsat stands ready, and will contifue to stand ready, to assist government agencies with lawfully authotized electronic surveillance. Asnoted above, the Intelsat Corporation Security Committee will continue:to be the primary point of contact for U.S. government agencies in connection with requests for assistance with electronic surveillance. Nothing in this letter is intended to excuse Intelsat from any obligation it may have to comply with 1U.S. legal requirements for the retention, preservation, or production of information, records orfdata, or from any applicable requirements ofthe Communications Assistance for Law Enforcement Act, 47 U.S.C. § 1001, et. seq. D. Proviston of Common Cartier Switched Services in the Future In the Intelsat/Zeus Commitment Letter and the Intefsat/PanAmSat Commitment Leiter, Intelsat agreed to provide the Agencies with advance notice of any provision of commoncarriet switched services byIntelsat, even if no finther FCC authorization is required. In particular, Intelsat agreed that (i) for any common carrier switched service that requires additional Section 214 authorization, Intelsat would provide the Agencies with a copy of any application filed with the FCC; (ii) for any common carrier switched service that may be provided without obtaining a new Section 214 authorization (such as a new domestie switched service), Intelsat would notify the Agencies 30— days before offering the service; and (iti) before using any ofthe equipment subject to Title T licenses transférred in connection with the Intelsat/PanAmSat or Intelsat/Zeus transactions to provide common carrier switched services, Intelsat would notify the Agencies 30 days in advance. Following consummation ofthe Proposed Transaction, Intelsat will continue these commitinents as set forth or continued in the Intelsat/Zeus Commitment

~a Letter and the Intelsat/PanAmSat Commitment Letter. Asnoted above; Intelsat.does not offer, and has no plans to offer, any common carrier switched service. Nonetheless, should Intelsat offer such service in the future, Intelsat will provide advance notice to the Agencies as described in the Intelsat/Zeus Commitment Letter and the Intelsat/PanAmSat Commitment Letter. E. Future Changes to Boards of Directors In the Intelsat/Zeus Commitment Letter and the Intelsat/PanAmSat Commitment Letter, Intelsat agreed to notify the Agencies ofthe initial composition of the boards of directors ofIntelsat, Intelsat, Ltd., and Intelsat {Bermuda), Ltd. (the "Intelsat Boards") and of subsequent changes to the Intelsat RBoards." Following consummation ofthe Proposed Transaction, Serafina will extendthis obligation to cover the boards of Serafina and Serafina Acquisition Limited (the "Serafina Boards"}. We will continue.—to provide the Agencies with updated information conicerning the composition ofthe Serafina Boards and the Intelsat Boards until such time as such notification is no longer neededby operation oflaw or by decision of the Agencies. In addition, we remain willing to provide the Agencies with such other information concerning the Serafina Boards and Intelsat Boards as they may reasonably request. By letter dated February 11, 2005, Intelsat provided the Agencies with information concerning the initial composition ofthe Intelsat Boards. In addition, by letters dlated March 29, 2005, July 5, 2006, and August 24, 2007, Intelsat supplied the Agencies with updated information concerning the composition ofthe Intelsat Boards, and notified the—agencies that Zeus had changedits. name to fntelsat Holdings, Ltd.

If you require any further information regarding these matters, please contact gither of the undersigned. Sincerely, Rind& RaymondSvider PhillipA . Spector President Executive Vice President Serafina Holdings Limited and Genoral Counsel Intelsat Holdings, Ltd. so: John:—Connors National Sgcurity Division Department of Austice Joseph E. Springstsen Criminal Division Department of Justice Jon D. Pifer Office of General Counsel Federal Bureay ofInvestigation Louw W, Brenner, Jr. Office of General Counsel Department of Homeland Security Hillary J. Motgan Defense Information Systems Agency Department of Defonse Teress D. Baer Latham & Watkins LLP Counsel to Rerafina Holdings Limited Richard S, Elliott Paul, Weiss, Rifkind, Wharton & Garrison LLP Counsel to Intelsat Holdings, Ltd.


Document Created: 2019-04-07 23:54:28
Document Modified: 2019-04-07 23:54:28
© 2024 FCC.report
This site is not affiliated with or endorsed by the FCC