Attachment FCC-94-77A1.pdf

FCC-94-77A1.pdf

MEMORANDUM OPINION AND AUTHORIZATION submitted by FCC

Authorization

1994-04-22

This document pretains to SAT-LOA-19901116-00072 for Application to Launch and Operate on a Satellite Space Stations filing.

IBFS_SATLOA1990111600072_906390

9 FCC Red No. 9 Federal Communications Commission Record FCC 94-77 2. In issuing PAS conditional authorizations to construct, Before the launch and operate its PAS-4, PAS-2 and PAS-7 satellite Federal Communications Commission systems, the Commission stated that the authorization was Washington, D.C. 20554 conditioned on PAS's subsequent submission of the second stage financial information required under the Separate Systems decision. We stated that, unless otherwise autho In the Matter of rized, PAS could not expend any funds on the proposed system until it could demonstrate sufficient non-contingent PanAmSat File Nos. CSS-88-003(M) funds to meet the construction, launch and first-year oper ational costs it projects for PAS-4, PAS-2 and PAS-7. The Commission required that PAS make its second stage finan Licensee Corp. CSS-91-003 cial showing no later than 60 days following the State Applications for CSS-91-006 Department's notification to the Commission that the Unit Final Authority to ed States has fulfilled its Article XIV(d) obligations and Construct Hybrid Separate that the Commission may proceed with final authorization System International of the proposed system. 3 Communications Satellites 3. On August 19, 1993, PAS submitted its second stage financial showing for its PAS-4, PAS-2 and PAS-7 satellite systems. In its submission, PAS states that its estimated MEMORANDUM OPINION, total costs to construct, launch and operate its three sat ORDER AND AUTHORIZATION ellites are approximately $666.3 million. Of this amount, according to PAS, $104.6 million has already been paid for Adopted: March 30, 1994; Released: April 22, 1994 construction and prelaunch expenses.4 PAS claims that it has a total in cash, noncontingent partnership subscrip tions, and vendor financing of over $607.6 million to cover By the Commission: the remainder of its costs for the three satellites. 5 4. Along with its filing, PAS has submitted a letter from 1. PanAmSat Licensee Corp. (PAS) has filed the above- Chase Manhattan Bank of Connecticut, N.A. confirming captioned application for final authority to construct its receipt by the bank of approximately $425 million into an Pacific Ocean Region satellite system (PAS-4), its second escrow account set up between PAS and the bank. PAS Atlantic Ocean Region satellite system (PAS-2) and its states that it raised $440 million through a public debt Indian Ocean Region satellite system (PAS-7). 1 In support offering which closed on August 5, 1993. According to of its request, PAS has filed information required by the PAS, the offering resulted in two notes: one for $175 Separate Systems decision for its second stage financial million, bearing interest at 9 3/4% per annum and the showing.2 Since we find that PAS has complied with the other for $265 million, bearing interest at 11 3/8% per financial requirements set forth in Separate Systems, we annum. PAS will begin paying interest on the first note grant PAS's request for final authority to construct its beginning in February, 1994, with semi-annual installments PAS-4, PAS-2 and PAS-7 satellite systems. of approximately $8.5 million, and on the second note in February, 1999. PAS states that an additional $10 million represents monies on deposit in several other accounts. In 1 Pan American Satellite Corporation, 101 FCC 2d 1318 (1985) granted to PanAmSat Licensee Corp. (PAS Order). On December 31, 1992, the Common Carrier See Establishment of Satellite Systems Providing International Bureau consented to the assignment by Alpha Lyracom, d/b/a Communications, 101 FCC 2d 1046, 1164 (1985). Pan American Satellite of its international space station au 3 On October 5, 1993, the Commission received notification thorizations, including its conditional authorizations for PAS-4, from the United States Department of State that the United PAS-2 and PAS-7, to PanAmSat, L.P. (PAS, L.P.) See Alpha States had fulfilled its obligations to consult with 1NTELSAT Lyracom, d/b/a Pan American Satellite, Alpha Lyracom Space under Article XIV(d) of the INTELSAT Agreement, and that Communications, Inc., Cygnus Satellite Corp., 8 FCC Red 376 the Commission could proceed with final authorization of the (Com. Car. Bur. 1992). The assignments were consummated on PAS-4 system. See Letter, dated October 5, 1993, from Steven the same day. See Letter, dated December 31, 1992, from Joseph W. Lett, Director for Satellite and Cable Policy, Bureau of A. Oodles, Attorney for PanAmSat, L.P. to Donna R. Searcy, International Communications and Information Policy, U.S. De Secretary, Federal Communications Commission. Alpha partment of State, to George S. Li, Chief, International Facilities Lyracom, d/b/a Pan American Satellite filed amendments to the Division, Common Carrier Bureau, Federal Communications present applications on December 9, 1992, requesting that the Commission. We grant final authority for PAS to launch and name of the applicant be changed to PanAmSat, L.P. See File operate PAS-4 in a separate order. See PanAmSat Licensee Nos. CSS-003-(M), CSS-91-003 and CSS-91-006. On January 28, Corp., FCC 94-78 (adopted March 30, 1994). 1994, the Common Carrier Bureau granted PAS, L.P.'s applica 4 The Commission has permitted PAS to spend up to $185.75 tion for consent to the pro forma assignment of PAS, L.P.'s million for construction and pre-launch expenses for PAS-4. See conditional authorizations for PAS-2, PAS-4 and PAS-7 to PanAmSat, L.P., 8 FCC Red 5120 (1993). In addition, the Bu PanAmSat Licensee Corp. See PanAmSat, L.P., 9 FCC Red 668 reau has given PAS permission to spend up to $103.25 million (Com. Car. Bur. 1994). The assignment was consummated on and $90.75 million on construction and pre-launch expenses for January 31, 1994. See Letter, dated February 1, 1994, from PAS-2 and PAS-7, respectively. Joseph A. Oodles, Attorney for PanAmSat Licensee Corp., to 5 In addition, PAS predicts that its earnings on its PAS-1 William F. Caton, Acting Secretary, Federal Communications satellite should be well over $30 million per annum through Commission. Accordingly, the authority granted herein for final 1995. construction of the PAS-4, PAS-2 and PAS-7 satellite systems is 1867

FCC 94-77 Federal Communications Commission Record 9 FCC Red NO. 9 addition, PAS states that it has received $100 million and will receive another $100 million due it as a part of a "Purchase Agreement" committing Grupo Televisa to pur chase $200 million in partnership assets in PAS.6 5. Finally, PAS states that it has agreed with Hughes Aircraft Company (Hughes) to defer approximately $72.6 million in construction costs, which will be paid in the form of "Supplemental Incentives" and "Incentives Obligations." Under the agreement with Hughes, the Sup plemental Incentives and Incentives Obligations are pay able to Hughes after delivery and in-orbit performance tests, respectively. PAS states that the Supplemental Incen tives are due in monthly installments of $77,088 per sat ellite, and that the amount to be paid per satellite for one year after launch would be slightly over one million dol lars, assuming delivery occurs approximately 45 days prior to launch. According to PAS, the Incentives Obligations are due in monthly installments of $197,369 per satellite, and the amount required to be paid per satellite through one year after launch would be slightly under $2.1 million per satellite, assuming in-orbit performance tests are com pleted within 45 days of launch. 6. Based on this information, we find that the showing by PAS satisfies the requirement that it show sufficient noncontingent funds to cover the costs of construction, launch and first-year operation of its PAS-4, PAS-2 and PAS-7 satellite systems. 7. Accordingly, IT IS ORDERED that PAS is granted final authority to construct its PAS-4, PAS-2 and PAS-7 satellite systems, and that final authorization for launch and operation of PAS-2 and PAS-7 shall not be issued unless and until: (1) one or more foreign authorities au thorize use of this system and enter into consultation pro cedures with the United States Party or Signatory under Article XIV(d) of the INTELSAT Agreement to ensure technical compatibility and to avoid significant economic harm; (2) the Department of State informs the Commission that the United States has completed its Article XIV(d) obligations and that the Commission may proceed with final authorization of the proposed system; and (3) the Commission grants final authorization. 8. IT IS FURTHER ORDERED that PAS shall file with the Commission no later than one year from the release date of this authorization information showing that it is making all reasonable efforts toward obtaining foreign ap proval to provide services via its proposed PAS-2 and PAS- 7 systems. 9. IT IS FURTHER ORDERED that this Memorandum Opinion, Order and Authorization is effective upon adop tion. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary 6 The Purchase Agreement was part of the assignment of space station and earth station licenses to PAS, L.P. See Alpha Lyracom, dlbla Pan American Satellite, Alpha Lyracom Space Communications, Inc., Cygnus Satellite Corp., supra note 1. 1868


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Document Modified: 2007-12-03 14:47:24
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