Attachment 1996Motorola letter

This document pretains to SAT-A/O-19901107-00066 for Authority to Operate on a Satellite Space Stations filing.

IBFS_SATAO1990110700066_1081784

STEPTOE &JOHNSON utp _ ___ _ e £1 1 } ATTORNEYS AT LAW is tmfi dG} Sb id PR TibES 1330 CONNECTICUT AVENUE, N.W. WASHINGTON, D.C. 20036—1795 PHOENIX, ARIZONA STEPTOE & JOHNSON INTERNATIONAL TWO RENAISSANCE SQUARE AFFILIATE IN MOSCOW, RUSSIA (202) 429—3000 TELEPHONE: (602) 257—5200 FACSIMILE: (202) 429—3902 TELEPHONE: (011—7—501) 258—5250 FACSIMILE: (86O2) 257—5299 TELEX: 89—2503 FACSIMILE: (011—7—501) 258—5251 PHILIP L. MALET Received RECEIVED (202) 429—6239 MAY 1 61996 MAY .=.8 1996 3 Sateilite and is DiMsioflMay 8. 1996 FEDERAL COMMUNICATIONS CoMMISSIO® OFFICE OF sconerany international eumu PARIE Mr. William F. Caton. Acting Secretary Federal Communications Commission Room 222 1919 M Street, N.W. Washington, DC 20554 Re: In re Application of Mobile Communications Holdings, Inc. for Authority to Construct, Launch, and Operate a Low Earth Orbit Satellite System in the 1610—1626.5 MHz/2483.5—2500 MHz Band, File Nos. 18—DSS—P—91(18), 11—SAT—LA—95, 12-SAT-AMEND95 Dear Mr. Caton: This letter responds to the April 24, 1996 letter from the Small Business Administration ("SBA") to Chairman Reed E. Hundt concerning the low—earth orbit mobile satellite service ("Big LEO MSS") applicant, Mobile Communications Holding, Inc. ("MCHI"), and its appeal of the Bureau‘s Order deferring the MCHI application.© Motorola Satellite Communications ("Motorola") is an interested party in this proceeding because it has already been & In re Application of Mobile Communications Holdings, Inc. for Authority to Construct, Launch. and Operate a Low Earth Orbit Satellite System in the 1610—1626.5 MHz/2483.5—2500 MHz Band, DA 95—132 (rel. Jan. 31, 1995) ("MCHI Order").

Mr. William F. Caton, Acting Secretary Federal Communications Commission May 8, 1996 Page 3 promptly and efficiently." As the Commission correctly noted in its Big LEO 4 Report and Order, smaller firms unable to satisfy the financial standard for satellite systems are not precluded from entering the satellite market because "ownership of a space station is not mandatory," but it can "be leased or bought, and earth stations can be acquired at relatively low costs."* Second, the MCHI Order correctly rejected each of the external financing commitments presented by MCHI in support of its application. SBA insists, however, that the Bureau was somehow discriminatory in its treatment of MCHI and unfairly "diminish{ed] [the] value of every single financing source cited by MCHI."* As the Bureau correctly recognized, however, each of MCHI‘s external financing commitments were unsatisfactory because they only included "general statements of support for MCHI‘s application. . .{and] do not establish management commitments to expend the funds necessary to construct, launch, and operate the space segment of MCHI‘s proposed system."* The Big LEO Report and Order specifically requires external financing to be "irrevocably committed" and "not rest on contingencies."!* Despite MCHI‘s deficient showings, the SBA believes that MCHI‘s external financing commitments should somehow be "deserving of the credibility vested in it by MCHI."* The Commission‘s financial standards for Big LEO MSS systems, however, were crafted precisely to avoid having to rely upon an applicant‘s "word" that it has the necessary financing to proceed with its system. & For example, the inability of Norris Satellite Communications ("Norris") to raise sufficient capital for its Ka—band satellite system allowed Norris to "warehouse" an orbital slot for over four years. The International Bureau quite appropriately withdrew this orbital slot from Nortis just under two months ago. See Norris Satellite Communications. Inc., DA 96—363 (rel. March 14, 1996). 4 Big LEO Report and Order, 9 FCC Red at [ 26 n.36. & SBA Letter at 2. 2 MCHI Order at ( 11. 18. Big LEO Report and Order at § 32. Indeed, even the SBA admits that the judgment of the Bureau "may be correct" with respect to the external financing commitments of MCHI. See SBA Letter at 2. iL SBA Letter at 2.

Mr. William F. Caton, Acting Secretary Federal Communications Commission May 8, 1996 Page 2 granted authority to construct, launch, and operate a Big LEO MSS system which would directly compete with the system proposed by MCHI in its application.* Although Motorola respects the SBA‘s advocacy on behalf of small businesses, its letter is misguided, and should be rejected by the Commission in deciding upon MCHI‘s appeal of the MCHI Order. First, the SBA‘s letter demonstrates a fundamental misunderstanding of the scarce public resources that are being assigned to Big LEO MSS applicants. The Commission‘s adoption of financial standards is not "overly" stringent or intended to erect market entry barriers to small competitors.*® Instead, as the Commission correctly indicated in its Big LEO Report and Order: [T}he sharing plan we proposed in the Notice, and which we adopt today, does not accommodate all pending applicants and leaves little or no spectrum available for expansion of existing systems or the development of future MSS systems within the United States.* Accordingly, the Commission adopted a financial standard stringent enough to ensure that a license was not granted to an underfinanced applicant who would delay service to the public, and would "preclude an applicant that possesses the necessary financial resources from implementing its plans."* The stringent standard was not adopted to deprive small businesses of market opportunities in the satellite industry, but to ensure that the public resource of satellite spectrum is used 2 In re Application of Motorola Satellite Communications, Inc. for Authority to Construct, Launch, and Operate a Low Earth Orbit Satellite System in the 1610—1626.5 MHz/2483.5—2500 MHz Band, 10 FCC Red 2268 (1995). 4 See Letter from Jere W. Glover to Chairman Reed E. Hundt at 2 (April 24, 1996) ("SBA Letter"). 4 Amendment of the Commission‘s Rules to Establish Rules and Policies Pertaining to a Mobile Satellite Service in the 1610—1626.5/2483.5—2500 MHz Frequency Bands, 9 FCC Red 5936, [ 27 (1994) ("Big LEO Report and Order"). 3. Big LEO Report and Order, 9 FCC Red at «[ 30.

Mr. William F. Caton. Acting Secretary Federal Communications Commussion May 8, 1996 Page 4 Instead, by demonstrating either through its balance sheets that the applicant has enough internal resources, or with irrevocable external commitments, the Commission will have reasonable assurances that an applicant is be able to proceed immediately with implementing its system if granted a license.‘* The Commission should deny MCHI‘s appeal of the International Bureau‘s MCHI Order because MCHI has failed to meet the Commission‘s financial standard for Big LEO MSS systems. In contrast to the claims of the SBA. the Commussion‘s financial standard for Big LEO MSS applicants is not "overly stringent." but precisely tailored to ensure that an applicant does not "tie up scarce spectrum resources while preventing other qualified entities from providing service to the public.‘"* Sincerely, \/fif(@p f /L/dml P Philip L. Malet Counsel for Motorola Satellite Communications, Inc. /sth—m cc: See Certificate Of Service i= The different standards for internal and external financing are (contrary to the statements 12 of the SBA) not an effort by the Commussion to favor more highly capitalized applicants over less capitalized ones. Instead, the different standards merely reflect the Commission‘s experience in satellite licensing which demonstrates that a balance sheet showing is sufficient for internal financing, while the tenuous nature of external financing requires fully negotiated irrevocable commitments. See Big LEO Report and Order at "| 26. Big LEO Report and Order, 9 FCC Red at 28. [z

CERTIFICATE OF SERVICE I, Sandra R. Hammond—Murdico, do hereby certify that a copy of the foregoing Ex Parte Letter to William F. Caton have been sent, via first class mail, postage prepaid (or as otherwise indicated), on this 8th day of May, 1996 to the following: Chairman Reed E. Hundt Scott Blake Harris, Bureau Chief Federal Communications Commission International Bureau Room 814 Federal Communications Commission 1919 M Street, NW. Room 800, Stop Code 0800A Washington, DC 20554 2000 M Street, NW. Washington, DC 20554 Commissioner James H. Quello Federal Communications Commission Donald Gips Room 802 International Bureau 1919 M Street, NW. Federal Communications Commission Washington, DC 20554 Room 800, Stop Code 0800A 2000 M Street, NW. Commissioner Rachelle B. Chong Washington, DC 20554 Federal Communications Commission Room 844 Tom Tycz 1919 M Street, NW. International Bureau Washington, DC 20554 Federal Communications Commission Room 6010 Commissioner Susan B. Ness 2025 M Street, NNW. Federal Communications Commission Washington, DC 20554 Room 832 1919 M Street, NW. Cecily C. Holiday Washington, DC 20554 International Bureau Federal Communications Bureau Karen Brinkman Room 6324 Special Assistant 2025 M Street, NW. Office of the Chairman Washington, DC 20554 Federal Communications Commission Room 814 Fern Jarmulnek 1919 M Street, NW. International Bureau Washington, DC 20554 Federal Communications Commission Room 658 — Mail Stop 16001 2000 M. Street, NW. Washington, DC 20554 * Via Hand Delivery

William Kennard Edward R. Alderson General Counsel Vice President Federal Communications Commission Industry Activities Room 614 Aeronautical Radio, Inc. 1919 M Street, NNW. 2551 Riva Road Washington, DC 20554 Annapolis, MD 21401—7465 Bruce D. Jacobs Richard G. Gould Fisher, Wayland, Cooper, Leader Telecommunications Systems & Zaragoza, LLP. Suite 600 Suite 400 1629 K Street, NNW. 2001 Pennsylvania Avenue, NW. Washington, DC 20006 Washington, DC 20006 Abdul Tahir Lon C. Levin Director, GPS Development Vice President & Regulatory Counsel Litton Systems, Inc. AMSC Subsidiary Corporation 6101 Condor Drive 10802 Parkridge Boulevard Moorpark, CA 93021 Reston, VA 22091 M. Worstell Robert A. Mazer Vice President, Contracts Vinson & Elkins Litton Aero Products Suite 700 6101 Condor Drive 1455 Pennsylvania Avenue, NW. Moorpark, CA 93021 Washington, DC 20004 Linda C. Sadlier Leslie Taylor Manager, Government Affairs Leslie Taylor Associates Rockwell International Corp. 6800 Carlynn Court 1745 Jefferson Davis Highway Bethesda,. MD 20817—4302 Arlington, VA 22202 Robert Halperin Guy M. Gooch John T. Scott, I!I Director, Systems Engineering William D. Wallace Mobile Communications Satellite Crowell & Moring Systems 1001 Pennsylvania Avenue, NW. Rockwell International Corp. Washington, DC 20004—2505 400 Collins Road, N.E. Cedar Rapids, IA 52498 John L. Bartlett Wiley, Rein & Fielding Paul J. Sinderbrand 1776 K Street, NW. Dawn G. Alexander Washington, DC 20006 Sinderbrand & Alexander Suite 610 888 16th Street, N.W. Washington, DC 20006—4103 L9 L

Robert A. Frazier Arun Bhumitra Spectrum Engingeering & Planning Vice President Division —— ASM—500 ARJAY Telecommunications Federal Aviation Administration 20669 Hawthorne Boulevard 800 Independence Avenue, S.W. Torrance, CA 90503 Washington, DC 20591 J. Ellis McSparran B.E. Morriss 385 Navigation Deputy Manager 23141 Plaza Pointe Drive National Communications System Laguana Hills, CA 92653 Washington, DC 20303—2010 Thomas Trimmer R.A. Davis U.S. Army Vice President, Engineering Hoffman II, Room 9565 Boeing Commercial Airplane Group 200 Stovall Street P.O. Box 3703, MS GR—UT Alexandria, VA 22332 Seattle, WA 98124—2207 Gary M. Epstein Dr. Robert L. Reimer John P Janka CORF James F. Rogers HA—562 Kevin C. Boyle National Research Council Latham & Watkins 2101 Constitution Avenue, NW. Suite 1300 Washington, DC 20418 1001 Pennsylvania Avenue, NW. Washington, DC 20004 Victor J. Toth, P.C. 2719 Soapstone Drive Walter H. Somnnenfeldt Reston. VA 22091 Walter H. Sonnenfeldt & Associates 4904 Ertter Drive David Struba Rockville, MD 20852 NASA Headquarters Code O E. William Henry Washington, DC 20546 Henry M. Rivera Ginsburg, Feldman and Bress William K. Keane 1250 Connecticut Avenue, N.W. Winston & Strawn Washington, DC 20036 1400 L Street, NW. Washington, DC 20005 Cheryl L. Schneider COMSAT Jeffrey L. Sheldon 6560 Rock Spring Drive General Counsel Bethesda, MD 20817 Utilities Telecommunictions Council Suite 1140 1140 Connecticut Avenue, NW. Washington, DC 20036

Bruce L. Bucklin Jill Stern, Esq. Acting Chief Shaw, Pittman, Potts & Trowbridge Technical Operations Section 2nd Floor Drug Enforcement Administration 2300 N Street, NW. U.S. Department of Justice Washington, DC 20037 Washington, DC 20537 Gerald Heliman Terri B. Natoli Vice President Regulatory and Industry Relations Policy & International Programs Manager Mobile Communications Holdings, Inc. GTE Spacenet 1120 19th Street, NW. 1700 Old Meadow Road Washington, DC 20036 McLean, VA 22102 Jere W. Glover Tedson J. Myers Chief Counsel Reid & Priest U.S. Small Business Administration 701 Pennsylvania Avenue, NW. Room 7800 Washington, DC 20004 409 3rd Street, S.W. Washington, DC 20416 Dale Gallimore Loral Qualcomm Michael R. Gardner Suite 101 Charles Milkis 7375 Executive Place William J. Gildea, III Seabrook, MD 20706 Suite 710 1150 Connecticut Avenue, NW. Norman P. Leventhal, Esq. Washington, DC 20036 Raul R. Rodriguez, Esq. Stephen D. Baruch, Esq. International Transcription Service Leventhal, Senter & Lerman Suite 140 Suite 600 2100 M Street, NW. 2000 K Street, NW. Washington, DC 20036 Washington, DC 20006—1809


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Document Modified: 2015-03-26 16:10:36
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