Attachment 1995Opposition to Co

1995Opposition to Co

OPPOSITION TO PETITION FOR RECONSIDERATION submitted by Motorola

Opposition To Constellation Petition for Reconsideration

1995-03-16

This document pretains to SAT-L/A-19941116-00075 for Launch Authority on a Satellite Space Stations filing.

IBFS_SATLA1994111600075_1061675

RECEIVED MAR 1 6 1995 PMnfics FEDERAL COMMUNICATIONS COMMISSIONFevemn.coubnicaTons comissioN oempeor secnemiey Washington, DC 20554 iAc@ivyed MAR 2 0 1995 In re Application of CONSTELLATION COMMUNICATIONS, INC. File Nos. 17—DSS—P—91(48) CSS—91—013 For Authority to Construct, Launch, 9— SAT LA—95 and Operate a Low Earth Orbit Satellite 10—SAT—AMEND—95 System in the 1610—1626.5 MHz/ 2483.5—2500 MHz Bands To the International Bureau: OPPOSITION TO CONSTELLATION COMMUNICATION‘S PETITION FOR RECONSIDERATION Motorola Satellite Communications, Inc. ("Motorola") hereby opposes Constellation Communications, Inc.‘s ("Constellation") Petition for Reconsideration* of the International Bureau‘s Order finding Constellation not financially qualified and deferring further consideration of the above—captioned Application until January 31, 1996.4 Motorola is an interested party in this proceeding having previously petitioned the Commission to deny Constellation‘s Application on financial grounds,* and having 4 See Constellation Petition for Reconsideration (Mar. 2, 1995). U In re Application of Constellation 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, Order, DA 95—129 (rel. January 31, 1995) ("Constellation Order"). 3 See Motorola‘s Consolidated Comments and Petition to Defer and/or Deny, at 14—17 (Dec. 22, 1994). At this time, Motorola takes no position as to the Application for Review submitted on March 2, 1995, by Loral/Qualcomm Partnership, L.P. ("LQP") of the Constellation Order.

been granted authority to construct, launch and operate a Big !_EO mobile satellite service ("MSS") system which would compete with the one proposed by Constellation in its Application.* Constellation‘s reconsideration request is procedurally defective and substantively flawed. First, the Constellation Order deferring Constellation‘s Application, but not denying it, is not a "final action" of the Bureau subject to reconsideration under the Commission‘s Rules. Second, contrary to Constellation‘s protestations, the Bureau correctly concluded that Constellation‘s Application, as amended, did not satisfy the Commission‘s strict financial requirements established in the Big LEO Report and Order." Constellation‘s belated attempts to clarify the so—called management "commitment" letters from two of its shareholders do not demonstrate sufficient financial support for its proposed Big LEO satellite system. Third, Constellation has completely misconstrued the Bureau‘s reliance upon the National Exchange® decision as a basis for finding it financially unqualified. The Bureau did not apply a new or different standard to Constellation when it contrasted its financial showing with the one made by National Exchange. Rather, it merely distinguished that case —— first brought to its attention by Constellation itself —— from the facts presented by Constellation in applying the financial standard established in the Big LEO Report and Order. Under such circumstances, there is absolutely no basis for the Bureau to reconsider its well—reasoned Order in this proceeding. 4 See Order and Authorization, DA 95—131 (rel. Jan. 31, 1.995). S See In the Matter of Amendment of the Commission‘s Rule to Establish Rules and Policies Pertaining to a Mobile Satellite Service in the 1610—1626.5 MHz/2483.5—2500 MHz Frequency Bands, 9 FCC Red. 5936, 5948—54 (1994) ("‘Big LEO Report and Order"). C 3 FCC Red. 6992 n.5 (1988).

1. THE ORDER DEFERRING CONSTELLATION‘S APPLICATION IS NOT A FINAL BUREAU ACTION SUBJECT TO RECONSIDERATION Under Section 1.106 of the Commission‘s Rules, a petition for reconsideration can only be submitted by a party in response to a final action of the Commission or a final action taken pursuant to delegated authority." This Rule further provides that petitions for reconsideration of all "other interlocutory actions will not be entertained."* As the Commission has stated: .. . the threshold question [is] whether there has, in fact, been "final action" under delegated authority as envisioned by Section 1.106 of our Rules and Regulations and Section 551(13) of the Administrative Procedure Act.* The International Bureau‘s decision to defer consideration of Constellation‘s Application until a later date is not a "final action," and, therefore, not subject to reconsideration at this time. The concept of "finality" with respect to agency action has been well defined in the courts. As the Supreme Court has stated: [T]he relevant considerations in determining finality are whether the process of administrative decisionmaking has reached a stage where judicial review will not disrupt the orderly process of adjudication and whether rights or obligations have been determined or legal consequences will flow from the agency action."* L See 47 C.F.R. §1.106(a)(1) (1994). 8 ld. i# AT&T Co., Long Lines Department, 65 F.C.C.2d 621, 622—23 (1977)(footnotes omitted). ‘ 10 Port of Boston Marine Terminal Ass‘n v. Rederiaktiebolaget Transatlantic, 400 U.S. 62, 71 (1970) (citing ICC v. Atlantic Coast Line R.R., 383 U.S. 576, 602 (1966); Rochester Telephone Corp. v. United States, 307 U.S. 125, 143 (1939)); see also, Honicker v. NRC, 590 F.2d 1207, 1209 (D.C. Cir. 1978), cert. denied, 441 U.S. 906 (1979) (An order is final if it "imposes an obligation, denies a right, or fixes some legal relationship, usually at the consummation of an administrative process"); Intercity —3 _

There is no doubt that a final determination with respect to Constellation‘s Application has not been made by the International Bureau. N‘o ultimate or essential rights or obligations have been determined in the Constellation Order, and will not be determined until a final order either granting or denying Constellation‘s Application is issued by the Bureau. The Bureau has not dismissed or denied Constellation‘s Application; nor has it held that this applicant has lost its status in the current processing group.** Rather, the Order merely specifies that, in order to obtain further consideration of its Application, Constellation must submit an adequate financial showing by January 31, 1996.2 If at that time, Constellation fails to demonstrate its financial qualifications, the Bureau would then be in a position to reach a definitive conclusion as to Constellation‘s Application. To entertain a petition for reconsideration now of the Bureau‘s interim Order clearly would disrupt the Commission‘s adjudicatory pro;:esses and waste valuable resources.4* One can envision an endless stream of reconsideration requests 10 ( ... continued) Transp. Co. v. United States, 737 F.2d 103, 106 (D.C. Cir. 1984); Capital Network System, Inc. v. FCC, 3 F.3d 1526, 1530 (D.C. Cir. 1993) ("an agency action is final if it ‘(1) represents a terminal, complete resolution of the case before the agency‘ and (2) ‘determine{[s] rights or obligations, or hals] some legal consequence"") (citations omitted); State of Alaska v. FERC, 980 F.2d 761, 763 (D.C. Cir. 1992)(citation omitted) ("A ‘final order‘ is one that imposes an obligation, denies a right or fixes some legal relationship, usually at the consummation of an administrative process"). 11 Constellation Order at {[ 17. 12 Id. 143 In the same way that courts are reluctant to review interim decisions by a federal agency, the International Bureau should not review its own interim orders. See Rochester Tel. Corp. v. U.S., 307 U.S. 125, 131 (1939) ("[Elver since the first Judiciary Act, Congress has been loath to authorize review of interim steps in a proceeding".). —4—

and applications for review of the Bureau‘s orders with updateq financial information dribbling out along the way. A far better approach would be to await a final determination by the Bureau on Constellation‘s Application before considering any appeals or petitions for reconsideration. Constellation barely addresses this finality question. It maintains that the Constellation Order is appealable as a "final" action because of "the prevailing Big LEO competitive situation" and its uncertain future prospects for obtaining a license.!* Neither of these reasons turns the Bureau‘s deferral order into a "final" action subject to reconsideration. Any uncertainty regarding Constellation‘s licénse prospects are of its own making. A stronger financial showing by it last November would have resulted in a license grant by the Bureau instead of the deferral of its Application. Constellation can still receive a license if it can meet the Commission‘s strict financial qualification standards by January 1996. Reconsideration of the Bureau‘s decision to defer Constellation‘s Application for one year will not alleviate this burden. Constellation‘s right to request reconsideration and/or appeal a decision taken pursuant to delegated authority must await the outright denial of its Application irrespective of the state of competition in the Big LEO market. *#‘ See Constellation Petition, at 1, n.1. —5.

II. THE BUREAU PROPERLY DEFERRED CONSTELLATION‘S APPLICATION BECAUSE OF A LACK OF FINANCIAL QUALIFICATIONS A. The Letters And Declarations From Bell Atlantic And E—Systems Do Not Demonstrate A Sufficient Management Commitment By These Shareholders To Constellation The International Bureau correctly concluded that the letters submitted by Constellation in support of its Application do not meet the Commission‘s strict financial requirements for Big LEO applicants. A Big LEO applicant relying on internal financing must provide the Commission with a balance sheet from its parent corporation and evidence of a commitment from the management of the corporétion that it is prepared to expend the necessary funds "absent a material change in cireumstances.""> Belil Atlantic‘s letter merely states that, on the basis of an "initial review" of Constellation‘s application and business plans, Bell Atlantic "inten[ds] to provide financial support for that satellite project subject to normal business reviews of market conditions and the project‘s progress to assure acceptable levels of risk and return.‘"* This letter is further qualified by subjecting Bell Atlantic‘s commitment "to negotiation of satisfactory agreements; and our customary internal business approval procedures, including, if applicable, approval by the Board of Directors."*" In rejecting the sufficiency of this letter, the Bureau quite properly held that the level of commitment from Beill Atlantic was too tentative, and thus, not sufficient to meet the financial 15 Big LEO Report and Order, 9 FCC Red. at 5952. 16 Constellation Amendment, at Ex. 4. 12 [fol

requirements of the Commission‘s Rules.4* Clearly, an intent to provide financial support is not a commitment to expend all of the funds necessary to construct, launch and operate the proposed system. Under the terms of its letter, Bell Atlantic remains free to decide not to expend any funds for the project even if there is no "material change" in circumstances. The Bureau also correctly observed that E—Systems‘ management "commitment" letter was inadequate to demonstrate Constellation‘s financial qualification since the financial statements of E—Systems alone were insufficient to establish that Constellation had sufficient current assets and operating income to meet its projected construction, launch and first year operating costs.!* In any event, the Bureau went on to find that the E—Systems letter was unacceptable because it did not indicate the extent to which E—Systems was prepared to ”expehd its internal funds or to use its company‘s assets as a vehicle for raising financing to support Constellation‘s system.""* Constellation suggests that the Bureau committed reversible error by failing to consider explanatory declarations filed by Constellation in an effort to satisfy its financial qualifications.*" Although not mentioned in the Constellation Order, these declarations add nothing of substance to support Constellation‘s financial showing. The Bell Atlantic declaration provides no more financial commitment to Constellation Constellation Order at «[ 14. & us [(a 19 Constellation Order at «[ 16. 20 Constellation Order at «[ 16. 24. Constellation Petition for Reconsideration at 8. _7 .

than the letter originally examined by the Commission in the Constellation Order. The declarant merely asserts Bell Atlantic‘s belief that the earlier letter it submitted was sufficient to meet the Commission‘s financial qualification requirements.**" E—Systems‘ declaration is equally unavailing, again merely indicating the d‘eclarant's belief as to the sufficiency of its earlier letter.* Both declarations simply are wrong in their 24/ assessment of the Commission‘s financial standards.*4* B. Constellation Incorrectly Refers To The National Exchange Decision As Establishing A New Rule For Management Commitments Constellation argues that the Bureau erred when it unfavorably compared Constellation‘s management commitment letters with the approved letter ("BNI letter®") cited in National Exchange Satellite, Inc.*" Contrary to Constellation‘s assertion that the BNI letter has been turned into a "talismanic standard,"** the Bureau merely referred to that letter as an example of the type of letter that can satisfy the Commission‘s Rules regarding management commitments. Thus, the ultimate standard resides in the Commission‘s Rules, not in the BNI letter. 221 Constellation Petition for Reconsideration at Ex. 3. AM Id. at Ex. 4. Ek Constellation attempts to bolster its financial showing by speculating as to the internal approval processes of Motorola, LQP and TRW. There is no record support, however, for this assertion. # 3 FCC Red. 6992 n.5 (1988). 267 Constellation Petition for Reconsideration at 8. —8—

The Bureau merely related the facts in the National Exchange decision to flesh out the applicability and intricacies of the newly adopted rules.*" The problem with Constellation‘s approach was "not that the Bell Atlantic letter failed to reproduce the National Exchange letter verbatim," but that it "clearly started with the National Exchange language but modified it in ways that, without exception, introduce contingencies or limitations into language that had contained none."** Thus, it was not the failure of Constellation to satisfy a new standard established in the National Exchange case, but the use of equivocating language in the letters it submitted which ultimately led to an adverse finding as to Constellation‘s qualifications.*" Constellation would like to have it both ways. It originally brought the National Exchange decision and BNI letter to the attention of the Bureau.** It is, therefore, inconsistent for Constellation now to complain that the Bureau should not have considered the BNI letter in making its determinations of financial commitment. Had the Bureau failed to consider Constellation‘s arguments regarding the National 24 This process of fleshing out the rules is performed consistently by the Commission. See, e.g., In the matter of Amendment of the Commission‘s Rules to Establish New Narrowband Personal Communications Services, 8 FCC Red. 7162, 7184—85 (1993)(Commission finding that it had not rewritten the Pioneer Preference rules by stating that it would consider a variety of factors not in the rules because "these factors are wholly consistent with and do not deviate from the criteria clearly specified in the Commission‘s pioneer‘s preference rule and merely flesh out those standards") (footnote omitted). 28 Constellation Order at «[ 14 (emphasis in original). 29 Id. ata Constellation has apparently forgotten that it first brought the National Exchange case to the Bureau‘s attention and indicated that its management commitment letters were modeled on the BNI letter. Constellation Order at «[ 11. —9

Exchange decision, it most certainly would be requesting reconsideration on that basis as well. II. CONCLUSION For the foregoing reasons, Motorola opposes Constellation‘s Petition for Reconsideration and requests that it be denied or dismissed. Respectfully submitted, MOTOROLA SATELLITE COMMUNICATIONS, INC. Michael D. Kennedy ho £ MMMV Philip L. Malet Vice President and Director Alfred M. Mamlet Regulatory Relations Pantelis Michalopoulos Barry Lambergman Marc A. Paul Manager, Satellite STEPTOE & JOHNSON Regulatory Affairs 1330 Connecticut Ave., N.W. MOTOROLA INC. Washington, DC 20036 Suite 400 (202) 429—3000 1350 | Street, N.W. Washington, DC 20005 Its Attorneys (202) 37 1—6900 March 16, 1995 —10 —

CERTIFICATE OF SERVICE I, Marc A. Paul, hereby certify that the foregoing Motorola‘s Opposition to Constellation Communications‘ Petition for Reconsideration was served, via first class mail (except where indicated), postage prepaid, this 16th day of March, 1995, on the following: * Chairman Reed E. Hundt Federal Communications Commission Room 814 1919 M Street, NW. Washington, DC 20554 * Commissioner James H. Quello Federal Communications Commission Room 802 1919 M Street, NW. Washington, DC 20554 * Commissioner Rachelle B. Chong Federal Communications Commission Room 844 1919 M Street, NW. Washington, DC 20554 * Commissioner Andrew C. Barrett Federal Communications Commission Room 826 1919 M Street, NW. Washington, DC 20554 * Commissioner Susan B. Ness Federal Communications Commission Room 832 1919 M Street, NW. Washington, DC 20554 * Via Hand Delivery

* Scott Blake Harris, Chief Office of the Bureau Chief International Bureau Federal Communications Commission Room 800, Stop Code 0800 2000 M Street, NW. Washington, DC 20554 * Karl Kensinger Legal Advisor Federal Communications Commission Room 800, Stop Code 0800 2000 M Street, NW. Washington, DC 20554 * William E. Kennard, Esq. General Counsel Federal Communications Commission Room 614B 1919 M Street, N.W. Washington, DC 20554 * Karen Brinkman Special Assistant Office of the Chairman Federal Communications Commission Room 814 1919 M Street, NW. Washington, DC 20554 * Thomas S. Tycz, Chief Satellite & Radiocommunications Division International Bureau Federal Communications Commission Room 800, Stop Code 0800B 2000 M Street, NW. Washington, DC 20554 * Via Hand Delivery —2—

* Cecily C. Holiday, Deputy Chief Satellite & Radiocommunications Division International Bureau Federal Communications Commission Room 800, Stop Code 0800B 2000 M Street, NW. Washington, DC 20554 * Fern J. Jarmulnek, Chief Satellite Radio Branch International Bureau Federal Communications Commission Room 800, Stop Code 0800B 2000 M Street, NW. Washington, DC 20554 * Bruce D. Jacobs, Esq. Glenn S. Richards, Esq. Fisher, Wayland, Cooper, Leader & Zaragoza, LL.P. Suite 400 2001 Pennsylvania Avenue, NW. Washington, DC 20006 * Lon C. Levin Vice President and Regulatory Counsel AMSC Subsidiary Corporation 10802 Park Ridge Boulevard Reston, VA 22091 * Norman P. Leventhal Raul R. Rodriguez Stephen D. Baruch Leventhal, Senter & Lerman Suite 600 2000 K Street, NW. Washington, DC 20006—1809 * Via Hand Delivery —3—

* John T. Scott, III William D. Wallace Stephen M. Byers 10th Floor North 1001 Pennsylvania Avenue, NW. Washington, DC 20004 * Robert A. Mazer Rosenman & Colin Suite 200 1300 19th Street, N.W. Washington, DC 20036 * Jill Stern, Esq. Shaw, Pittman, Potts & Trowbridge 2nd Floor 2300 N Street, NW. Washington, DC 20037 Leslie Taylor Leslie Taylor Associates 6800 Carlynn Court Bethesda, MD 20817—4302 Dale Gallimore Counsel Loral Qualcomm Suite 101 7375 Executive Place Seabrook, MD 20706 Gerald Hellman, Vice President Policy & International Programs Mobile Communications Holdings, Inc. 1120 19th Street, NW. Washington, DC 20036 * Via Hand Delivery —4—

Gary Epstein John P. Janka Latham & Watkins 1001 Pennsylvania Avenue, NW. Washington, DC 20036 Walter H. Sonnenfeldt 4904 Ertter Drive Rockville, MD 20852 John S. Hannon Nancy J. Thompson COMSAT Mobile Communications 22300 COMSAT Drive Clarksburg, MD 20871 Nce Q Taul. Marc A./Paul * Via Hand Delivery —5—


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