Attachment opposition

opposition

OPPOSITION submitted by TMI/TerreStar

opposition

2006-02-16

This document pretains to SAT-AMD-20051116-00221 for Amended Filing on a Satellite Space Stations filing.

IBFS_SATAMD2005111600221_484107

Before the RECEIVED FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 FeB 1 6 zons FetenlCommuncaton Comnizion orce ofSecntay ) In the Matter of ) ) Use of Returned Spectrum in the ) 1B Docket Nos, 05—220 and 05—221 2 GHz Mobile Satellite Service ) Frequency Bands ) ) Inmarsat Global Limited, Petition for ) ECC File Nos. SAT—PPL—20050926—00184, Declaratory Ruling to Provide Mobile ) SAT—PDR—20050926—00184, Satellite Service to the United States ) SAT—AMD—20051116—00221 Using the 2 GHz and Extended Ku—Bands ) inrenimcmmineieacn CONSOLIDATED OPPOSITION OF TMI AND TERRESTAR To PETITIONS FOR RECONSIDERATION OF GLOBALSTAR AND INMARSAT Gregory C. Staple Jonathan D. Blake Seott Woodworth Kurt A. Wimmer Vimison & Euns Matthew S. DelNero 1455 Pennsylvania Avenue N.W. Robert M. Sherman Washington, D.C. 20004—1008 Covnoton & Burumo 1201 Pennsylvania Avenue N.W. Counselfor TMI Communications and Washington, D.C. 20004—2401 Company Limited Partnership Counselfor TerreStar Networks Inc. February 16, 2006

SUMMARY On December 9, 2005, after an exhaustive, well—documented proceeding, the Commission modified the spectrum reservations of TMITerreStar and ICO to provide each Hicensee 20 MHz of spectrum in the 2 GHz MSS band. Two of TMITerreStar‘s competitors, Inmarsat and Globalstar (the "Petitioners"), now seek reconsideration ofthe Commission‘s Order, erroneously arguing that the Commission failed to address certain oftheir arguments. In fact,the Commission did consider these arguments; it just chose to reject them because they did not advance the public interest. The Commission‘s well—reasoned decision advances competition in the mobile telecommunications market and permits TMITerreStar to invest the resources necessary to serve the crucially important needs of first responders, bring broadband services to underserved rural areas and offer advanced services tothe American public. Notwithstanding Petitioners‘ arguments t the contrary, the Commission considered ample record evidence and properly concluded that the public interest would be best served by providing TMUTerreStar and ICO with sufficient spectrum to provide revolutionary new communications services to public safety end users and to Americans in rural and other underserved communities. Moreover, the Commission‘s decision will enhance competition in the mobile communications market. Specifically, as Petitioners concede, MSS operators in other frequency bands will provide a competitive check on the 2 GHz: band MSS offerings ofTMUTerreStar and 1CO. The Commission‘s decision in this proceeding properly distributed to TMI/TerreStar and 1C0O the spectrum resources necessary to compete in that market. Finally, although Petitioners complain that the Commission did not consider their comments in reaching its decision, the Order demonstrates that the FCC considered, and rejected, Petitioners‘ arguments. The FCC found that each of Petitioners‘ "altematives" for distribution of"

this spectrum did not further the public interest, and therefore declined to adopt them. The Commission also rejected Petitioners‘ similarly baseless assertion that the FCC was powerless to distribute spectrum to TMITerreStar and ICO unless those licensees provided a subjective "demonstration® of need for the spectrum. The Commission fully considered and soundly rejected each of the arguments raised here by the Petitioners, Neither Petitioner provides new grounds for the Commission to alter its prior decision. Accordingly, both Petitions should therefore be denied. i

TABLE OF CONTENTS SUMMARY. TABLE OF CONTENTS .. L THE FCC APPROPRIATELY FOUND THAT REDISTRIBUTION OF SPECTRUM TO TMUTERRESTAR AND ICO Is THE BEST WAY TO ADVANCE THE SUBSTANTIAL PUBLIC SAFETY, HOMELAND SECURITY, AND RURAL BROADBAND GOALS A.—— The Commission‘s Public Safety and Homeland Security Conclusions Are Well Supported By The Record.. B. The Commission‘s Rural Broadband Conclusions Are Well Supported By The Record. 1t THE ORDER WILL ENHANCE COMPETITION IN THE MOBILE TELECOMMUNICATIONS MARKET... A.—— The Commission Properly Recognized That MSS Operators In Other Frequency Bands Will Provide A Competitive Check On the 2 GHe Band MSS Offerings Of TMUTerreStar and ICO. B. The Commission Properly Distributed to TMUTerreStar and 1CO the Spectrum Resources Necessary to Compete In the Mobile Telecommunications Market... iL THE ORDER DOBS NOT SUPPORT PETITIONERS® CONTENTION THAT THE FCC DID NOT CONSIDER THEIR COMMENTS.. A. The "Altematives" For Spectrum Distribution Urged By Petitioners Are Not In The Public Interest... B. Inmarsat‘s Other Proposals Are Equally Unfounded.. €. The Remaining 2 GHz MSS Licensees Had No Obligation To Specifically Demonstrate Their Need For The Redistributed Spectrum. IV. CONCLUSION.. i

Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 ) In the Matter of ) ) Use of Returned Spectrum in the ) 1B Docket Nos, 05—220 and 05—221 2 GHz Mobile Satellite Service ) Frequency Bands ) ) Inmarsat Global Limited, Petition for ) FCC File Nos. SAT—PPL—20050926—00184, Declaratory Ruling to Provide Mobile ) SAT—PDR—20050926—00184, Satellite Service to the United States ) SAT—AMD—20051116—00221 Using the 2 GHz and Extended Ku—Bands ) en CONSOLIDATED OPPOSITION OF TMI AND TERRESTAR T PETITIONS FOR RECONSIDERATION OF GLOBALSTAR AND INMARSAT On December 9, 2005, after an exhaustive, well—documented proceeding, the Commission modified the spectrum reservations of TMI Communications and Company Limited Partnership and TerreStar Networks Inc. ("TMUTerreStar®)and ICO Satellite Services ("ICO"®) to provide each licensee 20 MHz of spectrum in the 2 GHz Mobile Satellte Service (°MSS") band.* The Commission‘s well—reasoned decision advances competition in the mobile telecommunications market and permits TM‘TerreStar to invest the resources necessary to serve the cruciallyimportant needs offrst responders, bring broadband services to underserved rural areas and offer advanced services to the American public." ‘ TerreStaris the prospective assignee ofTMI‘s 2 GHz MSS authorization and, pursuant to an agreement with TMI, has contracted with Space Systems/Loral Inc. for a sutellite that will operate in this band. * Use ofReturned Spectrum in the 2 GHz Mobile Satellite Service Frequency Bands, Order, TB Docket Nos. 05—220 and 05—221, FCC 05—204 (rel. Dec. 9, 2005) (the "Order"). * K4 atff 1, 2.

Two of TMITerreStar‘s competitors, Inmarsat and Globalstar (the "Petitioners"), now seek reconsideration of the Order:" The Petitioners erroncously argue that the Commission failed to address certain arguments they offered in these proceedings. The Commission did consider the arguments;it just chose toreject them because they did not advance the public interest. As TMUTerreStar demonstrates in this Consolidated Opposition, the Commission fully considered and soundly rejected each ofthe arguments raised here by the Petiioners. Neither Petiioner provides new grounds for the Commission to alterits prior decision. Accordingly, the Order provides a sufficient and compelling explanation of the public interest grounds for modifying the TMI and ICO 2 GHtz MSS authorizations based on the record in these dockets." It therefore must be affirmed. 1. THE FCC APPROPRIATELY FOUND THAT REDISTRIBUTION OF SPECTRUM TO TMITERRESTAR AND ICO 1 THE BEST WAY To ADVANCE SUBSTANTIAL PUBLIC SAFETY, HOMELAND SECURITY, AND RURAL BROADBAND GOALS. A. The Commission‘s Public Safety and Homeland Security Conclusions Are Well Supported By The Record. The Commission‘s decision to redistribute the 2 GHz MSS spectrum to TMUTerreStar and ICO was predicated, in significant part, on the benefits likely to accrue to public safety and homeland security agencies throughout the country.. Inmarsat nevertheless asserts that"there is no analysis in the Order, nor any demonstrationin the record, how * Petition of Globalstar for Reconsideration, IB Docket Nos. 05—220 & 05—221 (filed Jan. 9, 2006) ("Globalstar Petition"); Consolidated Petition for Reconsideration of Inmarsat Ventures Lid. & Inmarsat Global Ltd., IB Docket Nos. 05—220 & 05—221 (filed Jan. 9, 2006) (*Inmarsat Petition®). * See Order at 88 1, n.3, and 18. The public interest standard applied by the Commission in the Order reflected the agency‘s decision totreat modification ofthe TMU‘TerreStar and ICO spectrum reservations in a manner that was no less favorable to the reservation holders than like proposals to modify a license under Section 316 of the Communications Act.

increasing TMI‘s and ICO[‘s] spectrum assignments .. . would benefit frst responders."" This is simply wrong. The Order expressly finds that "the firstresponders‘ assessment oftheir MSS needs [for more spectrum] to be compelling in this regard"" and then describes at ength the basis for this conclusion.® In addition, the Order explains that the preservation ofthe full remaining 2 GHz spectrum allocation for MSS "will serve as an invaluable avenue for the provision of communications services to first responders because ofthe inherent advantages that satellte— delivered services have over other technologies during wide—scale emergency situations where the terrestrial—based infrastructure is compromised."" In reaching these conclusions, the Commission explicily relied not only upon the comments of TMUTerreStar‘® and 1CO, but also upon comments filed by the Mobile Satellte Users Association, "SkyTerra Communications, Inc., and four national police organizations." These comments explained how the provision of adequate spectrum for 2 GHz MSS operators, particularly for systems with an Ancillary Terrestrial Component ("ATC®), will advance the * Inmarsat Petition at 9 (emphasis in original). " Order , a 1 28. * 1d. at 1 28, n.74. * Order at§ 44. "* Reply Comments of TMI and TerreStar, B Docket No. 05—221, at 22—25 (filed Aug. 15, 2008) ("TMITerreStar Second Reply Comments"). ‘" Reply Comments of ICO Satellite Servs.,IB Docket No. 05—221, at3 (fled Aug. 15, 2005). "" Reply Comments ofthe Mobile Satellte Users Ass‘n, IB Docket No. 05—221, at 3 (filed Aug. 15, 2005). " Reply Comments of SkyTerra Communications, Inc.,IB Docket No. 0—221, 4—5 (filed Aug. 15,2005). !* Letter fom ChiefJoseph G. Estey, President, Int‘l Ass‘n of Chiefs of Police, e al., to Kevin Martin, Chaiman, FCC, IB Docket No. 05—221, at 1 (Aug. 15, 2003).

needs of public safety and homeland security end users."" For example, with the additional spectrum requested in this proceeding, TMI/TereStar advised that ts system would have the specialized capability to provide "spot beams," which will allow it to concentrate existing capacity into a specific geographic area affected by an emergency, thereby increasing the level of service to that region."* In addition, TMUTerreStar explained that, with sufficient spectrum, "[a) hybrid MSS/ATC service also will be able to introduce redundancy into the system in a manner that will greatly increase its reliabilit, capacity and utilty for public safety uses.""" To buttress its own claim to a portion ofthe spectrum at issue in these proccedings, Globalstar‘s Petition discusses its efforts to provide support to public safety personnel responding tothe Hurricane Katrina disaster."" TMUTerreStar acknowledges, of course, the benefits that satellte communications provide to emergenty responders. The record demonstrates, however, that TMUTerreStar will offer innovative and advanced telecommunications services to public safety personnel that are simply unavailable from current legacy service providers."" " Order at 1 44, n. 119. ‘* TMITerreStar Second Reply Comments at25. ‘" TMITerreStar Second Reply Comments at 22—25. "* Globalstar Petition at 6—7. Similarly,in a recent ex parte meeting at the Commission, Globalstar offered the misleading observation that "only Globalstar (and not TMI or ICO) provided the essential services forfrst responders" in that incident. Plainly, because they have not yet launched their services, TMITerreStar and ICO were not in a position to provide emergency service during the Katrina disaster. TMI/TerreStar has committed, however, to going far beyond the public safety efforts of existing MSS providers by providing homeland security agencies with the technical characteristics ofits system for use as planning guidelines for wireless—based application development and by serving as a catalyst for development of new public safety communications applieations. See TMI‘TerreStar Second Reply Comments at 22— 23. ‘* For example, the Commission reviewed a letter from Senators Burns and Clinton to Secretary of Homeland Security Michael Chertof® which explained that "a ubiquitous, nationwide wireless (continued...)

The unparalleled public safety benefits of the hybrid MSS/ATC system proposed by TMI/TerreStar provide additional justifications for the Commission‘s recognition that providing sufficient spectrum to TMITerreStar and ICO was the best way to ensure that the public safety community has access to state—of the—art satelite services in the fature, without denying the benefits now provided by the current generation of MSS operators. In view ofthe foregoing discussion in the Order and the Commission‘s related citations to numerous submissions by public safety and other commenters, the Commission was right to conclude that ts decision would serve the publicinterest by furthering public safety and homeland security goals. B. The Commission‘s Rural Broadband Conclusions Are Well Supported By The Record. Similarly, the Commission thoroughly explained and documented its conclusion thatthe assignment of additional spectrum to TMUTerreStar and ICO would help promote broadband service in rural areas." The Commission acknowledged, for example, that "satellite services,"such as those that will be provided by TMUTerreStar using a full complement of 2 x 10 MHz ofspectrum, will "employ cost—effective technology to serve communities with low pentration rates, especially those in remote areas.""". As the Commission stated: communications network with both a satellte and terrestrial component" such as TMUTerreStar‘s MSS/ATC network could fll the nation‘s need for a flexible,iteroperable, next—generation communications system. Letter from Hon. Conrad R. Burns and Hon. Hillary Rodham Clinton, United States Senate, to Hon. Michael Chertoff, Secretary, Dep‘t of Homeland Security (Aug. 4, 2005), attached to TMITerreStar Second Reply at Exh. 2. ® The Commission has long emphasized its commitment to encouraging competition and investment in technologies which will support the proliferation of broadband. See, eg. Interational Bureau, "Global Vision Local Action," 2006 Annual Report, FCC Open Meeting, at 24 (Jan. 20, 2006), available at httpswwrwifec.govrealaudio/presentations/2006/ 012006/ib.pdf. *‘ Order at 130.

Satelites have large coverage areas and, in many cases, can reach an entire nation, thereby spreading the costs of deployment across a number of communities. Satelltes also provide communications opportunities for communities in geographically isolated areas, such as mountainous regions and deep valleys, where rugged and impassable terrain may make service via terrestrial wireless or wireline telephony economically impractical." The submissions of TMUTerreStar also described how its hybrid MSS/ATC system will provide innovative high—speed broadband services that are not available now from Petitioners or from any other satellte communications provider."" Other commenters agreed that providing sufficient spectrum to TMITerreStar and ICO would be the best option for faciitating the provision of high—speed broadband service to rural and other underserved communities. Hughes Network Systems, for instance, stated, "As the demand for sophisticated technologies and services continues to expand, including for global broadband access, the 2 GHz MSS spectrum will assume an increasingly critical role in ensuring that consumers in underserved regions ofthe United States ... have access to state—of—the—art communications and information technologies.""" Likewise, the Satellite Industry Association, an organization of which Petitioners are members, explained that "mobile satellite services are of particular benefit to consumers in traditionally underserved areas [because] [a] robust MSS/ATC network can * 14. Although satellites‘ wide area footprints make them ideal for bringing broadband service to rural markets, it appears that Globalstar does not intend to take full advantage of those capabiliies. The company recently announced that it plans to sellits ATC services to itsexisting customer base instead of appealing to a mass market. See Communications Daily (Jan. 23, 2006p.7. ® Reply Comments ofTMI and TerreStar, IB Docket No. 05—220, at 5 (filed Jul. 25, 2005) ("TMUTerreStar First Reply Comments"); TMITerreStar Comments at 14—16; TMI/TerreStar Second Reply Comments at 20—22. * Comments of Hughes Network Systems, LLC, 1B Docket No. 05—221, at 4—5 (filed Jul. 29, 2003).

provide advanced mobile voice and data services from the moment t is launched in all parts of the United States."" For citizens in the country‘s many rural and underserved areas, the status quo is simply unacceptable in today‘s high—tech environment. The unavailability of wireline or terrestrial wireless service in these areas, coupled with the limited services and high cost of today‘s satelite communications providers, creates a digitaldivide that is untenable. The American Farm Bureau Federation, an organization with over S million members, aptly explained in its comments to the Commission: When first—responders, emergency personnel and even government officials were unable to talk to one another in Katrina‘s aftermath, the whole country witnessed the importance of reliable access to mobile communications. This is something with which millions of rural Americans are especially familior. In rural communities across the country, people are forced to rely on ground—based systems with intermittent, poor—quality coverage that cuts out between mountains, in isolated areas, and during storms. Ameriga‘s farmers and ranchers and all rural Americans deserve better Taking into account the foregoing, the Commission‘s decision to redistribute additional 2 GHz MSS spectrum to TMUTerreStar and ICO to advance broadband connectivity in ural portions ofthe U.S. is fully supported by the record. More importantly, however,it was the right decision to avoid continued disenfranchisement of the many Americans living in underserved areas. * Comments of te Satellite Industry Ass‘n, 1B Docket No. 05—221, at3 (filed Jul. 29, 2005). * Letter from Bob Stallman, President, Am. Farm Bureau Fed.,to Kevin Martin, Chairman, FCC, IB Docket No. 05—221 (Nov. 4, 2005).

11. THE ORDER WILL ENHANCE COMPETITION IN THE MOBILE TELECOMMUNICATIONS MARKET. A« The Commission Properly Recognized That MSS Operators In Other Frequency Bands Will Provide A Competitive Check On the 2 GHz Band MSS Offerings Of TMUTerreStar and 1CO. The Petitioners have asked the Commission to reconsider its Order, in large part, because they will face additional competition ifTMUTerreStar and ICO‘s voice and broadband data services are assigned sufficient spectrum to meet consumer demand. Petitioners therefore concede, as they must, that the 2 GH:: MSS licensees will create effective competition for MSS providers in other bands."" Yet, paradoxically, Petitioners simultancousty challenge the competiive analysis underlying the Order by asserting that the reassignment of spectrum solely to TMITerreStar and ICO has created a new de facto duopoly in the 2 GHz band."" The Commission properly rejected the Petitioners‘ attempt to mischaracterize the competitive impact of its action. It flatly "disagree(d) thatreassigning the 2 GHz MSS spectrum to 1CO and TMI results in a duopoly.""" Rather, the Commission found "that ICO‘s and TMI‘s 2 GHz: MSS offerings will compete in the same product market as the offerings oflicensees in other MSS bands""" and determined that, "bly assigning this spectrum to 1CO and TML, we will *" See Inmarsat Petiion at 6—7 ("The Commission correctly acknowledged that 2 GHz MSS systems would be able to compete with existing and forthcoming MSS offerings in other bands...."); Globalstar Petition at 14 (conceding that "MSS services at 2 GHz will no doubt compete to some extent with MSS services in other bands," but claiming that unspecified regulatory "uncertainties" mean that 2 GHz MSS services‘ market presence is not relevant to the competition analysis). "" See Globalstar Petition at 10—15. ®* Order at 133. *i

make it asier for them to become effective competitors in the MSS segment ofthe mobile telecommunications services market.....""" The Commission‘s conclusion that the MSS marketis not defined by any one frequency band is amply supported by the record."" The record includes, among other support, a declaration by Professor Peter Cowhey which explained that, "t}o consumers, the spectrum band in which an MSS provider operates is imelevant.""" Similarly, Dr. Bruce M. Owen, a member of the faculty at Stanford University and a leading telecommunications economist, explained that "neither frequency bands nor other regulatory categories are markets," because markets are defined by the similarity of competitors‘ services to one another, rather than on whether the competitors use the same frequency band."" These and other submissions** provided an ample record basis for the FCC to conclude that the "relevant product market [for TMUTerreStar and 1CO] includes all MSS services.""" Petiioners‘ contrary claims must be rejected. ty "" See,e., TMITerreStar Second Reply Comments at 9—12. * Supplemental Declaration of Peter Cowhey, TMUTerreStar Comments, Exhibit C, at3. *‘ Bruce M. Owen, "Economic Issues Related to the Number of Firms Licensed to Use 2 GHz: Spectrum for MSS Services," TMUTerreStar Second Reply Comments, Exhibit 4, at 2. * See eg., Order, 1 32, n.87. * Order at1 34. Globalstar is equally misguided in claiming that the Order reversed a settled FCC policy presumption regarding the number of competitors in the 2 GHz MSS band that are required to provide adequate competition. See Globalstar Petition at 13—14. As the FCC explained, the First Space Station Licensing Reform Order did not limit the FCC‘s options with respect to the 2 GHz MSS band (%e., Section 25.157(g)ofthe Rules was inapplicable) and the agency remained free to decide on a case—by—case basis,following each construction milestone, how best t redistribute spectrum forfeited by any given 2 GHz: MSS licensee. Order, 1 15. Thus, the FCC was entitled to decide the competition issue de novo in the dockets t issue here based upon the record before it.

B. The Commission Properly Distributed to TMITerreStar and ICO the Spectrum Resources Necessary to Compete In the Mobile Telecommunications Market. The Petitioners also suggest that the Commission was wrong to distribute the 2 GHz MSS spectrum to TMI/TerreStar and ICO because the 2 GHz MSS spectrum is "unique" and that the Commission was obligated to set aside some ofthis spectrum for them."" Because Petitioners‘ purported entitlement to 2 GHz spectrum is illusory, however,they resort to arguments of spectrum parity which are refuted by both Commission precedent and assertions made by Globalstar in past proceedings." In the Order, the Commission considered, and dismissed as irrelevant, Petitioners‘ asserted need to obtain spectrum at 2 GHz. Specifically, the Commission noted, "[WJe do not consider [Petitioners‘ interest in 2 GHz MSS spectrum] to be relevant to our determination ... that ICO and TMI need spectrum reservations of 10 megahertz of spectrum in each direction to be roughly comparable with the average spectrum assignment oftheir competitors in the market for mobile communications services.""" The Commission reached that conclusion because, even if Petitioners® purported interest in the 2 GHz MSS band as "expansion" spectrum"©or for use as a "safety valve""" were pertinent,the benefits ofallowing the growth of a robust and feature—rich next—generation MSS/ATC system far outweigh any * Inmarsat Petition at 5; Globalstar Petition at 16. * Globalstar Petition at 18—21; Inmarsat Pettion at 7—9. ® Order at 1 56. * Reply Comments of Inmarsat Ventures Ltd., TB Docket No. 05—220, at3 (filed Jul. 25, 2005) (‘Inmarsat... stands ready to use the 2 GHz band to deploy an expansion MSS system....."). *‘ Comments of Globalstar LLC, IB Docket No. 0—221, at 4 (filed Jul. 29, 2005) ("Globalstar Second Comments"). 10

incremental benefits from granting Petitioners more spectrum to support their current offerings." As the Commission stated, "the publicinterest weighs in favor ofgiving ICO and TMI the inputs needed to enable them to become strong MSS competitors more than it does allowing other existing service providers to expand their existing services.""". Predictably, Globalstar objects to the Commission‘s decision to give these new entrants sufficient spectrum to compete." But facilitating the provision of service by new entrants is wholly consistent with the Commission‘s policy of favoring competition in communications markets. In reaching its decision, the Commission realized that, like Globalstar‘s" Inmarsat‘s 2 GHz business plan consists of "two ifs away from a maybe," that is, ®IfInmarsat Jocates a strategic partner, and it develops compatible handset technology, then maybe it will * Order at §§ 54—56. As noted above (see n.22), even with a breakthrough opportunity to provide ATC, Globalstar intends to add ATC to its existing niche service rather than seck a consumer market for an integrated satellie—terrestrial service package. Similarly, Inmarsat recently acknowledged that it has no serious plans for 2 GHz MSS spectrum. In an interview, Inmarsat Chief Financial Officer Rick Medlock announced that, although Inmarsat is interested in parsuing a license in the 2 GHz MSS band because "it‘s one ofthe only ways to get a complete transnational band for the U.S." The news report indicated that Inmarsat will not change its business model to accommodate new ATC services, and it has no plans to pay for terrestrialrollout of an ATC network. See Adrianne Kroepsch, "Satellte," 26.25 Comm. Daily 11 (Feb. 7, 2006). * 14. at 1 56; see also Globalstar Second Comments at 4. * See Attachment to Globalstar Ex Parte at 8. * Globalstar was initilly a 2 GHz MSS licensee, but the Commission cancelled Globalstar‘s Hicense based on the company‘s admission that Globalstar‘s construction contract "did not show adequate intention to proceed with construction, and to bring ts satellite system into service within the milestone deadlines specified in the license." Emerg. Applicationfor Review & Requestfor Stay ofGlobalstar, L.P., 19 FCC Red. 11548, 11556—57 9 19 (2004). In fact,the Commission "question{ed] whether Globalstar in fact intended to construct the entire 2 GHz MSS system it proposed in ts original lcense application or ts 2002 modification application." 14. at 11562931. 11

enter the MSS/ATC marketplace by 2010."% In a meeting last October with the staff of the Interational Bureau, TMUTerreStar explained how it, in contrast to Inmarsat, will use the 2 GHz MSS spectrum to serve the public interest: TMUTerreStaris years past the ©if" stage of developmentit wl deploy the next—generation mobile satelite service by 2008, as evidenced by the substantial capitalit has raised, continued milestone complianee, and a well—documented vision for the 2 GHz MSS/ATC service. It would disserve the public for the Commission to withhold adequate spectrum from the 2 GHz authorization holders — TMVTerreStar and ICO ~ who have satisfied the Commission‘s milestones and are spending billions of dollars to back up their 2 GHz authorizations issued in the processing round from which Inmarsat subsequently withdrew — for so iffy an interest as Inmarsat has shown." Faced with no real support for their entitlement argument, Petitioners contend that the Commission‘s competitive rationale for assigning more spectrum to TMUTerreStar is undercut by TMI‘s relationship with Mobile Satellite Ventures (‘MSV")."" Petitioners also seek to rely upon a principle of spectrum parity." Neither of these arguments withstands scrutiny. Regardless of Petitioners‘ protestations, the Order showsthat the Commission considered arguments about the relationship between these companies, but properly concluded that TerreStar and MSV are separately owned and managed, that they will operate separate MSS systems, and that the two companies plan to compete against one another, as well as against * Letter from Jonathan D. Blake, Counsel for TerreStar Networks Inc.,to Marlene H. Dortch, IB Docket Nos, 05—220 and 05—221, at 2 (Oct. 17, 2005) (summarizing October 14, 2005 ex parte meeting with Intemational Bureau). * 14 u23. * See e.g., Globalstar Petition at 18—20. * 1i 12

Petitioners and others." The FCC properly concluded that any relationship between TerreStar and MSV was irelevant to distribution of 2 GHz MSS spectrum to TerreStar in these proceedings."" Regardless,even ifthe TMI and MSV spectrum holdings were considered together, the spectrum parity argument which follows from Petitioners® argument has previously been rejected by the FCC and does not deserve further consideration now. In the Big LEO proceeding, to which both Petitioners cite extensively,the Commission wrote: We disagree with Iridium‘s contention that the new band plan must ensure "spectrum parity." Iridium failsto persuade us that disproportionate amounts of spectrum in the Big LEO bands prevent Iridium from providing competitive services or that Iridium‘s alleged competitive disadvantage justifies allocating the same amount of spectrum to TDMA and CDMA MSS operators. Indeed, we are not convinced that such "spectrum parity"in the Big LEO bands will better serve the public interest.... [WJereject Iridium‘s proposal that "spectrum parity" be a consideration in our decision today." * For example, the FCC expressly notes (citing an ICO pleading) that MSV had been assigned up to 20 MHz of internationally coordinated spectrum in the L—band. Then, in the very next sentence, the FCC observes that the additional assignment of 10 MHz to each of TME and ICO is "thus fairly conservative when compared with other MSS spectrum assignments." Order at 1 37, 199. The FCC could not have made this statement if t had any reason to believe that TMI would not compete with the beneficiaries of these "other MSS spectrum assignments," including MSV. Hence, contrary to Globalstar‘s claim, Globalstar Petition at 21, it is evident from the Order and the pleadings cited therein that the FCC was aware of and took into account any relationship between TMI and MSV in reaching its decision. *‘ In any case, Petiioners‘ argument has been mooted by the recent announcement by Motient Corporation, TerreStar‘s majority owner, that Motient had abandoned plans to "roll—up" its minority interest in MSV, and that it instead planned to spin off most ofits interest in MSV to its sharcholders. See Press Release, Motient Corp., Motient Corp. Updates Shareholders on MSY Roll—Up (Feb. 2, 2006). "" Review ofhe Spectrum Sharing Plan Among Non—Geostationary Satellite Orbit Mobile Satellite Services Systems in the 1.62.4 GHe Bands, Report & Order, 19 FCC Red 13,356, 13,378 4 49 (2004). 13

The Commission‘s conclusion rejecting the concept of "spectrum parity® was urged in the Big LEO proceeding by Globalstar, which argued, "The Commission may not rely on an unsupported supposition that ‘rebalancing" is needed in the Big LEO spectrum bands, and must recognize that Iridium‘s Petition for additional spectrum was nothing more than an effort to hamper Globalstar‘s ability to compete in the MSS marketplace."" Further, Globalstar urged that "the Commission expressly and properly refected Iridium‘s suggestion that the L—band spectrum be divided on the basis of‘spectrum parity.‘ As the Commission acknowledged, the various segments of the L—band spectrum are not equal in terms ofencumbrances, and the CDMA and TDMA systems use the spectrum differently, making a megahertz—by—megahertz comparison impossible.""" Globalstar‘s statements about the fallaciousness ofthe so—called "spectrum parity" argument in the Big LEO proceeding are equally applicable to the 2 GH: MSS band. The only difference is that, in this proceeding,it is Globalstar which is using its Petition as "nothing more than an effort to hamper® TMUTerreStar‘s and ICO‘s "ability to compete in the MSS marketplace.""" The contrived "spectrum parity" arguments advanced by Globalstarand Inmarsat, like the baseless suppositions which surround them, should be rejected. * Comments of Globalstar LLC, IB Docket No. 02—364, at 16 (filed Sep. 8,2004). * 1d. at 14. * 1d. at 16. 14

11L THE ORDER DOES NOT SUPPORT PETITIONERS® CONTENTION THAT THE FCC DID NOT CONSIDER THEIR COMMENTS. A. The *Alternatives" For Spectrum Distribution Urged By Petitioners Are Not In The Public Interest. Inmarsat‘s Petition urges that the Commission should have adopted one of several alternatives for redistributing 2 GHz MSS spectrum in order to permit Inmarsat to have access to the 2 GHz band, even though it voluntarily dismissed its own 2 GHz MSS application some six years ago."* Inmarsat even suggests that the Commission should have instituted a "race to space"procedure, "whereby spectrum would be made available to the first entities to actually launch a 2 GHz MSS satellite.""" In other words, rather than creating regulatory certainty and encouraging investment in the 2 GHz mobile satellte service, Inmarsat would have the Commission require putative licensees to spend tremendous amounts ofcapital to develop a satellite service without any guarantee that they would ever be permitted to begin service. This is, at ts base, the best way for an incumbent satellite operator to ensure the highest—possible hurdles to new market entrants. Moreover,it is a position that Inmarsat has taken in Europe as European Administrations debate the terms under which ATC might be authorized in those jurisdictions. Inmarsat is at least consistent, therefore, in trying to reduce the number of operators with which it has to compete in any market. This policy continues, however, to be at variance both with the pro—competitive principles by which the Commission is disposed to regulate, and with the treatment that Inmarsat claims for tself n the United States. * Inmarsat Petition at 12—16. Inmarsat‘s Petition also requests reconsideration of the Commission‘s "Inmarsat PDR Order," Petiionfor Declaratory Ruling to Provide Mobile Satellite Service to the United States Using the 2 GHz and Extended Ku—Bands, Order, DA 05— 3170, File Nos. SAT—PPL—20050926—00184, SAT—PDR—20050926—00184 & SAT—AMD— 20051116—00221 (rel. Dec. 9, 2005). Because reconsideration ofthe Commission‘s 2 GHz. Order is unwarranted, reconsideration ofthe /nmarsat PDR Order is also inappropriate. 9 1d. t13. 15

As Inmarsat knows, of course, this and other "altematives" for the 2 GHz MSS spectrum would not promote the rapid deployment of new MSS services to the public. No investor would reasonsbly support a business model that depends in its entirety on having a satellite ready for launch the day before one‘s competitor. Such a policy of uncertainty does not support the public interest. B. Inmarsat‘s Other Proposals Are Equally Unfounded. Notably, the Order also rejected the suggestion that a new rulemaking or processing round was required, and determined that "there are significant public interest benefits to keeping the current MSS allocation, in addition to strengthening competition in the market for mobile telecommunications.""" The Commission also specifically refected as "inherently subjective" a proposal by Inmarsatthat the FCC should "determine the optimal amount of spectrum for each 2 GHz MSS system, and thereby determine the optimal number of2 GHz MSS system operators to permiin the frequency band.""" Inmarsat complains that the Commission did not "give serious consideration" to this proposal.® The Commission clearly did consider the proposal and responded to it specifically in a section of the Order titled "Inmarsat Proposal."®" There the Commission concluded that Inmarsat‘s proposal was unworkable and thus the Commission wisely declined to adopt it®" In so doing, the ageney plainly met its * Order at 1 43. * Order at § 58—60. ® Inmarsat Petition at 14. * Order at 19 58—60. * Order at1 26 (citing Reply Comments of SkyTerra Communications, Inc., IB Docket No. 05— 221, at 9—10 (filed Aug. 15, 2005)) (‘[WJe find that increasing ICO‘s and TMI‘s spectrum assignments to 10 megahertz in each direction would further the public interest by better enabling them to provide crucial communications services during times of national emergencies, and to offer rural broadband services.. In addition, we find that increasing 1CO‘s and TMI‘s (continued...) 16

obligation to consider relevant comments submitted in response toits second Public Notice,® and Inmarsat‘s assertion to the contrary is baseless. C. The Remaining 2 GHz MSS Licensees Had No Obligation Specifically To Demonstrate Their Need For The Redistributed Spectrum. In its comments in the 2 GHz MSS proceedings, as in its Petition for Reconsideration, Globalstar asserts that TMU‘TerreStar and ICO have not conclusively demonstrated that they need additional spectrum."" But,as the Commission properly found, no such showing was required to stisfy the parties® public interest burden. The FCC determined that,"{eJiven the rapidly changing satellite technology and the time needed to construct and Iaunch a satellte, any [needassessment is likely to be obsolete by the time the satellite is ready to provide service."" And, the Commission continued, "given the innovative designs and unique markets targeted by each satellite operator, any proceedings to quantify specific requirements would be lengthy and inherently subjective."" Accordingly, instead ofthe questionable "demonstrations" urged by the Petitioners, the Commission observed that it had successfully relied upon other mechanisms, such as milestone requirements, to "ensure that lcensees make the capital investments necessary to bring their assigned spectrum into use * Itis these mechanisms, not contrived spectrum assignments is in the public interest because ICO and TMI will be able to bring the spectrum into use more quickly —— and thus offer public safety and rural broadband services more quickly —— than would be possible if the spectrum were assigned to another party."). © Commission Invites Comments Conceming Use OFPortions OfReturned 2 GHz Mobile Satellte Service Frequencies, Public Notice, IB Docket No. 05—221, 20 FCC Red. 12,234 (2005). * Globalstar Second Reply at 11—12. * Order at 1 40. ®x 9 1d. (citing precedent). 17

demonstrations of need, which will assure the Commission that the 2 GHz MSS spectrum will be used in the public interest. The Commission has long been successful in relying on them, and its decision to continue to do so in this proceeding was appropriate and well—supported. 18

Iv. CONCLUSION As described above, the Petitions for Reconsideration include no information that has not already been considered and rejected by the Commission in its Order. Moreover, despite Petitioners‘ claims, that decision contains a reasoned explanation for the Commission‘s actions, is consistent with the public interest, and is fully supported by the record. TMUTerreStar therefore respectfully requests that the Commission deny both Petitions. Respectfully submitted, /‘ onas -H 'T/L- $s d&4L Grojloy & Suple athan D. Blake Seott Woodworth urt A. Wimmer Viison & Euin Matthew 8. DelNero 1455 Pennsylvania Avenue N.W. Robert M. Sherman Washington, D.C. 20004—1008 Covivoron & Burumo 1201 Pennsylvania Avenue N.W. Counselfor TMI Communications and Washington, D.C. 20004—2401 Company Limited Partnership Counselfor TerreStar Networks Inc. February 16, 2006 19


Document Created: 2006-02-22 17:08:45
Document Modified: 2006-02-22 17:08:45
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