Attachment DA 99 2849

DA 99 2849

ORDER & AUTHORIZATION submitted by IB,FCC

DA 99 2849

1999-12-17

This document pretains to SAT-AMD-19990125-00016 for Amended Filing on a Satellite Space Stations filing.

IBFS_SATAMD1999012500016_643390

Federal Communications Commission DA 99-2849 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of Application of ) AFRISPACE, INC. ) File No. CSS-90-017; ) IBFS File Nos. SAT-LOA- For Authority to Construct, Launch, and 1 19900723-00002; S AT- Operate a Subregional Africa and 1 AMD-19990125-00016 Middle Eastern S atellite Sound ) Broadcasting Transmission System 1 ORDER AND AUTHORIZATION Adopted: December 17, 1999 Released: December 17, 1999 By Chief, Satellite and R adiocommunication Division, International Bureau: Introduction 1. With this Order, we authorize AfriSpace, Inc. (“AfriSpace”) to launch and operate a satellite (“ AfriStar”) in the geostationary-satellite orbit (“ GSO”) in order to provide Broadcasting-Satellite Service (Sound) (“BSS(Sound)”) on a non-common carrier basis to Africa and the Middle East in the 1452-1492 M Hz frequency band. This satellite will distribute multiple channels of radio programming originating in Africa, Europe, and the United States that can be received by simple, handheld radio sets by individuals in Africa and the Middle East. The ne w service has the potenti a1 to increas e the variety of programming available in areas that already have service and to provide service to rural areas that have previous1 y had no programming available. Background 2. On July 23, 1990, AfriSpace, Inc. (“AfriSpace”) filed an application fo r a private international sat ellite system to provide BSS(Sound) service. On June 21, 1991, AfriSpace was granted an experimental license fo r the AfriS tar satellite to locate at the 12” W.L. orbital location and to use the 2310-2360 MHz band. Since 1991, the experimental license has been renewed every two years. Various amendments and modifications have be en made by AfriSpace, including amendments to bring its requested operating frequencies into compliance with the ou tcome of the World Administrative Radio Conference 1992 (WARC-92) of the International Telecommunication Union. 3. On March 3, 1992, W ARC-92 allocated the b and 1452-1492 for facilities downlinking BSS(Sound) in Region 1. WARC-92 allocated other frequencies in the S -

Federal Communications Commission DA 99-2849 band, 23 10-2360 MHz, to provide that servic e in the United States and India.’ The S- Band was chosen for BSS-Sound in the United S tates because its operation in the L-band would have c aused unacceptable interference to Mobile Aeronautic a1 Telemetry Service (“MATS”). In order to address those conc erns, AfriSpace reached an agreement with the National Telecom munications and Information Administration (“NTIA”) and the Department of Defense to change the orbital locat ion of its AfriS tar satellite from 12” W.L. to 21” E.L. The Commission granted the requested modifications in orbital location and downlink fr equency and AfriSpace successfully launched its AfriS tar satellite under the m odified experimental license o n October 28, 1998. 4. On January 22, 1999, AfriSpace amended its pending application for a permanent licens e to bring its requested orbital loc ation into conform ance with the FC C experimental license granted in 1991, as am ended, as well as with its actua 1 operating location, and to modify its application to include the use of the low er frequencies allocated to the BSS(Sound) service in Region 1, specifically 1452- 1467 M Hz. On March 4, 1999, the C ommission issued a P ublic Notice, requesting comment on that amendment. 5. In addition, in its am endment, AfriSpace describes its satellite operations and ownership and s ystem structure. For example, AfriSpace states that a R egional Operations Center (“ROC”) in Washington, D.C. will manage the performance and operation of all Af riStar satellite systems, including the on-board communications payload. The Washington, D.C. center will contro 1 and facilitate the d elivery and quality of the signals to the satellite and route them through the onboard communications payload to their approp riate downlink carriers. Because the orbital location of the satellite was moved to 2 1 E.L., the locations of the e arth station uplinks had to be m oved offshore. The Washington, D.C. control center is currently connected to earth stations in Bangalore, India and Port Luis, Maritius by dedicated telephone lines. 4 AfriSpace states that these stations are “largely unmanned and controlled directly from the ROC in Washington, D.C. and that local contractors provide maintenance of these stations on an “as needed” basis? AfriSpace further states that the ROC in Washington, D.C. is the control center for all operations of the satellite, it can turn off an y transponder if there is a I In 1997, Mexico was added to the footnote to use the S-Band for BSS(Sound). See Article 55.393 of Chapter S I 1 of the ITU Radio Regulations. 1 The experimental license authorizes AfriSpace to operate in the 1 467- 1492 MHz band, a portion of the 1452-1492 MHz. frequency band allocated for BBS(Sound) services in Region 1. See Amendment to AfriSpace Application at 10, n.29. AfriSpace initially requested these frequencies in the upper portion of the band because they were immediately available. When the technical issues surrounding the use of the lower portion of the band were resolved, AfriSpace amended its application to request all allocated frequencies, i.e., 1452-1492 MHz. Id. at iii. 3 Application of AfriSpace, Inc. for Authority to Launch and Operate a Satellite Sound Broadcasting Transmission System, File No. CSS-90-017, [ IBFS File N o . SAT-LOA- 19900723-00002]; Amendment File No. SAT-AMD-19990125-00016 (Call Sign 52367), Report No. SPB-149 (Mar. 4, 1999). 4 Amendment to AfriSpace application at 20. 5 Response of WorldSpace, Inc. and AfriSpace, Inc. to the Comments of Aerospace and Flight Test Radio Coordinating Council, at 10 (filed May 3, 1999). 2

Federal Communications Commission DA 99-2849 technical problem, can control individual channels on half of the transpond ers and is being equipped to rela y U.S. originated programming.‘ 6. In its 1999 amendment, AfriSpace describes its ownership structur e as follows: AfriSpace is a Washington, D.C. corporation that is 100 percent owned by Worldspace, Inc., a Maryland corporation. Worldspace, Inc. is 97.5 percent owned b y U.S. shareholders and 2.5 percent owned by foreign shareholders. In December, 1996, Worldspace, Inc. sold all its non-AfriSpace assets to an offshore entity, WIN, in exchange for capital and a sixteen percent equit y stake in WIN. The cash proceeds o f the sale are being used to finance AfriSpace’s financial needs through the second quarter of 1999. Simultaneously, the shareholders and holders of options of W orldspace, Inc. were granted rights to exchange their Worldspace, Inc. shares for WIN shares, subject to FCC approval. AfriSpace states that, if all of these ri ghts were to be exercised, Worldspace would become a wholly-owned subsidiary of WIN. AfriSpace acknowledges that, before those rights could be converted, Worldspace would have to file a transfer of control application.’ 7. AfriSpace represented that no party has filed a petition to deny its application.* AfriS pace addressed the interference concerns that NT IA and the U.S. Department of Defense raised by agreeing to move the satellite to a locatio n from which the satellite cannot interfere with MATS operations in the United S tates. Although the Aerospace and Flight Test Radio Coordinating Council (“AFTRCC”) initial1y opposed AfriSpace ’s application b ecause of concerns about the coordination of anot her satellite to be operated by Worldspace in the Caribbean and to be licensed b y T~-inadad,~ AFTRCC has withdrawn its opposition.” S imilarly, the NTIA, Department of Defense and Federal Aviation Administration have withdra wnll their opposition l 2 to the grant of A friSpace’ s license. The Commission issued a special tem porary authority to allow AfriSpace to operate while th ese issues were being resolved. ’ 6 Letter from Counsel for AfriSpace to Staff, Satel lite and Radiotelecommunication Division at 2 (Oct. 15, 1999). 7 Amendment to AfriSpace application at 29. 8 Amendment to AfriSpace application at 6. 9 Letter from AFTRCC to the Secretary, FCC (Apr. 8. 1999). See also Letter from General Aviation Manufacturer’s Association to the Secretary, FCC (“GAMA”) (May 3, 1999) (GAMA endorsed AFTRCC’s April gt” letter). 10 See letter from Rex D. Miller, AFTRCC to Secretary, FCC (Dec. 14, 1999) and letter from Edward M. Bolen, GAMA to Secretary, FCC (Dec. 13, 1999). II See letter from Gregory L. Rohde, Assistant Secretary for Communications and Information, Department of Commerce, to William Kennard, Chairman, FCC (Dec. 14, 1999) (withdraws the objections of all three federal agencies). 12 Letter from Arthur L. Money, Department of Defense, Larry Irving, Assistant Secretary for Communications and Information, Department of Commerce and Steven J. Brown, Associate Administrator for Air Traffic Services, Federal Aviation Administration to William E. Kennard, FCC (May 17, 1999). 13 See letter from Thomas S. Tycz, Chief of the Satellite and Radiotelecommunication Division, International Bureau to Tara Giunta, Counsel for AfriSpace (Oct. 20, 1999) (granted initial 30-day special temporary authority) and letter from Tycz to Giunta (Nov. 19, 1999) (granted 30-day extension of the special temporary authority). 3

Federal Communications Commission DA 99-2849 Discussion 8. We find that AfriS pace is legally and technic ally qualified to hold a satellite BSS(Sound) license and that it is in the public inte rest to grant such a license. 9. AfriSpace proposes to use satellite technolo gy to bring additional sources of information, entertainm ent and news to the vast1 y underserv ed people and communities of Africa and the Middle East. AfriSpace notes that Afric a has an average of .8 radios per household, compared to 5.4 radios per househ old in the United S tates and 3.0 in Europe. AfriSpace states that most people in the reg ions to be served by AfriStar satellite rely on radio as a primary means of accessing local and national inform ation. AfriSpace further states that a small percentage of the population in these areas h as access to international news and in formation resources through unreliable shortwav e radio.I4 The radio signals from the AfriStar satellite will be cap able of being received by small, inexpensive portable radi os. Spectrum on the AfriStar satellite will be lease d to programmers that will us e it to deliver a mix of commercial and non- commercial programming, including public service info rmation supplied b y international, regional and national health and welfare social agencies. AfriSpace represents that these programmers, including U. S. based programmers, will be able to use the A friS tar satellite to reach over one billion people in Afric a and the Middle East which previ ously have largely been inaccessible to these pr~grarnmers.’~ 10. AfriSpace states that the coordination proc ess in accordance with the International Tel ecommunication Union (“ ITU”) procedures is far along. AfriSpace has followed the ITU requirements by filing the advance publication and coordination information in a timely manner. The advance publication inform ation describes the general parameters of the satellite system, such as orbital location and fr equencies. The coordination inform ation contains detailed techni cal data and provid es other countries an opportunity to comment on how the proposed s ystem may affect existing and future radio facilities. Durin g the last phase of the ITU process, notification, the final technical parameters of the operation are published. S eventeen countries h ave informed the ITU Radiocommunication Bureau that they intend to authorize the use of the A FRIBSS satellite system within their territories. 16 11. Because AfriSpace will offer service on a non-common carrier, non-broadcast basis, it is not subject to t he statutory foreign ownership restrictions in S ection 3 1O(b) of the Communications Act.” In addition, even if S ection 3 lO(b) applied to Af riSpace’s 14 Amendment to AfriSpace application at iii (filed Jan. 22, 1999). 15 Amendment to AfriSpace application at iv. 16 Amendment to AfriSpace application at D-23. (The seventeen countries are Angola, Botswana, Central African Republic, Democratic Republic of the Congo, Egypt, Gabon, Gambia, Ghana, Kenya, Lesotho, Liberia Mauritius, Senegal, Sierra Leone, South Africa, Togo and Uganda.) see also Letter from Richard B. Engleman, FCC to the Director, Radiocommunication Bureau, ITU (June 21, 1999). 17 47 U.S.C. 5 3 1 Ob). See also American Mobile Radio Corporation, Application for Authority to Construct, Launch and Operate Two Satellites in the Satellite Digital Audio Radio Service, Order and 4

Federal Communications Commission DA 99-2849 application, we would ne vertheless con clude that AfriSpace’s application i s not barred. According to AfriSpace’s application, it is who11 y owned by Worldspace, Inc, a closely held Maryland corporation. All of W orldspace’s shareholders holding more than ten percent of the voting stock are U.S. entities and the total foreign ownership is 2.5 percent of the voting stock. All of the directors o f both Worldspace and AfriSpace are U.S. citizens. AfriSpace’s total disclosed foreign ownership thus amounts to 2.5 percent, w ell below the relev ant twenty-five percent statutory benchmark. Any potential transfer of Worldspace to WIN, a foreign corporation, does not make WIN a real-party-in-interest at this time. Future owners hip rights, such as option s and convertible stock w arrants, are not considered co gnizable until exercised.” Additional1y, AfriSpace has stated that the exercise of options held by Worldspace shareholders would be subje ct to Commission approvals. 19 12. AfriSpace had applied for a pioneer preference as early as 1991.20 Congress subsequent1y enacted a sunset provision, term inating the Commission’s authority to grant pioneer pr eferenc es.2’ The Commission subsequent ly dismissed all pending pioneer preference requests, including AfriSpace’s.22 The court of appeals issued a ruling on the pioneer preference issue that disposed of all pending appeals by granting a pioneer preference only to Q ~ a l c o m m .AfriSpace ~~ is not currently contending that it has any rights to obtain a pione er preference for the AfriStar satellite24and, therefore, that issue is moot. Conclusion 13. We find that AfriS pace is qualified to be a C ommission licensee and, pursu ant to Section 309 of the C ommunications Act, that grant of its application will serve the public interest, convenie nce and necessity. Thus, AfriSpace ’s authorization is granted, subject to the conditions described b elow. Authorization, DA 97-22 10 (rel. Oct. 16, 1997); In re Application of MCI Telecommunications Corporation for Authority to Construct, Launch and Operate a Direct Broadcast Satellite System at 1 10 Degrees W.L., DA 96-1793 (rel. Dec. 6, 1996). 18 American Mobile Radio Corporation, Application for Authority to Construct, Launch, and Operate Two Satellites in the Satellite Digital Audio Radio Service, 13 FCC Rcd 8829, 8836 (IB 1997). 19 Amendment to AfriSpace application at 29. 20 Amendment to AfriSpace application at 9. 21 Uruguay Round Agreements Act, Pub. L. No. 102-465, 80 1, 108 Stat. 4809, 5050-5 1, codified at 47 U.S.C. 6 309(j)( 13)(F) (terminated the Commission’s authority to grant pioneer’s preferences after September 30, 1998). Congress subsequently advanced the sunset date from September 30, 1998 to August 5 , 1997. See Balanced Budget Act of 1997, Pub. L. No. 105-33, 9 3002 (a)(l)(F), 1 1 1 Stat. 251,259 (1 997), amending 47 U.S.C. 9 309 (j)( 13)(F). 22 Dismissal of All Pending Pioneer Preference Requests; Review of the Pioneer’s Preference Rules, Order, 12 FCC Rcd 14006, 14009 (1997); Memorandum Opinion and Order, 13 FCC Rcd 1 1485 (1998). 23 See Qualcomm Zncorporated v. FCC, 181 F. 3d 1370 (D.C. Cir., Jul. 23, 1999). 24 Letter from Counsel for AfriSpace to Staff, Sate1 lite and Radiotelecommunication Division (Nov. 16, 1999). 5

Federal Communications Commission DA 99-2849 Ordering Clauses 14. IT IS ORDERED that the application File No. CSS-90-017, as amended,25IS GRANTED, and A friSpace, Inc. IS AUTHORIZED to launch and ope rate a geostationary satellite at the 2 1" E.L. orbital locati on for the purpose o f providing a satellite dig ita1 audio radi o service to A frica and the Middle East, in the 1452-1492 M Hz (space-to-earth) frequency band in accordance with technical spe cifications set forth in its application and consisten t with our rules, unless specificall y conditioned or waived herein. 15. IT IS FURTHER ORDERED that, with respect to the operations authorized herein, AfriSpace shall prepare the necessary information, as may be required, for submission to the ITU to initiate and com plete the advanced publicatio n, international coordination, and notific ation process of this spac e station in accord ance with the ITU Radio Regulations. W e also remind all licensees that no protection from interference caused b y radio stations authoriz ed by other administrations is guaranteed unless coordination proc edures are timely completed or, with respect to individual administrations, coordina tion agreements are successful1y completed. Any radio station authorization for which c oordination has not been completed may be subject to additional terms and conditions as r equired to effect coordination of the frequ ency assignments of other administrations, 47 C .F.R. tj 25.1 11(b). 16. IT IS FURTHER ORDERED that AfriS pace is ob ligated to comply with the applicable laws, regulations, rules and licensin g procedures for those countries it proposes to serve. 17. IT IS FURTHER ORDERED that the license term for the space station is ten years and will begin on the date AfriSpace, Inc. certifies to the Commission that its operations fully conform to the terms and conditions of this authoriz ation. 18. IT IS FURTHER ORDERED that AfriS pace is afforded thirty days from the date of the release of this Order and authorization to decline this authoriz ation as conditioned. 25 IBFS File Nos. SAT-LOA-] 9900723-00002; as amended by SAT-AMD-I 99901 25-00016. 6

Federal Communications Commission DA 99-2849 19. This Order is issued purs uant to Section 0.26 1 of the C ommission’s rules on delegated authority, 47 C.F.R. 5 0.261, and is effective upon rele ase. Petitions for reconsider ation under S ection I . 106 or applicatio ns for review under Section 1.1 15 of the Commission’s rules, 47 C.F.R. $8 1.106 and 1.115, may be filed within thirty days of the date of public notice of this Order (see 47 C.F.R. 5 1.4 (b)(2)). FEDERAL COMMUNICATIONS COMMISSION Thomas S. Tycz Chief, Satellite and R adiocommunication Division International Bureau 7


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