Attachment 2002Final Analysis P

This document pretains to SAT-LOA-19941116-00088 for Application to Launch and Operate on a Satellite Space Stations filing.

IBFS_SATLOA1994111600088_1026715

                                                                                        ORIGINAL
                                           Before the                              J          c   .
                     FEDERAL COMMUNICATIONS COMMISSION RECEIVED
                              Washington, D.C. 20554
                                                        MAR 2 9 2092
                                                                           PEBEraL comnicy
                                                                                Ommmw


In the Matter of

FINAL ANALYSIS COMMUNICATION                            File Nos.    25—SAT—P/LA—95
SERVICES, INC.                                                       76—SAT—AMEND—95
                                                                     79—SAT—AMEND—96
For Authority to Construct, Launch and                              151—SAT—AMEND—96
Operate a Non—Voice, Non—Geostationary                                7—SAT—AMEND—97
Mobile Satellite System in the 148—150.05 MHz,
400.15—401 MHz, and 137—138 MHz bands

                                                                        Receiy l
Directed to: Chief, International Bureau                              l‘PR
                                                                               8 20g9
                                 PETITION FOR WAIVER Satee Pop
                                                                    Hor7&3’;.&#;‘«»3fimmflfih
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                                            FINAL ANALYSIS COMMUNICATION SERVICES, INC.



                                            By: Aileen A. Pisciotta
                                            Randall W. Sifers
                                            KELLEY DRYE & WARREN LLP
                                            1200 19°" Street, N.W.
                                            Suite 500
                                            Washington, D.C. 20036
                                            202—955—9600

                                            Its Attorneys

Dated: March 29, 2002


                                                              TABLE OF CONTENTS

SUMMARY .1.1.12222222222¥ssssseresssrrerressseseresestreresesereresssessseserrerererecesceresereressessesssesssererererrreererssersrssrecees 1

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IL        BACKTOUNG ........1222022202222se222essererssrrserrerssesrrrevesresererreserrerssesssrereeresessereresnserrenerrrrerer es ces ne sc enes 3

          A.          Spectrum Assignment and Use In NVNG MSS ........12.2222022022222e2eererrererersrrereeeeeks, 3

          B.          Second Round Licensee Construction and Launch Milestones............................. 7

          C.          FACS‘s Requirement For Waiver of the Existing Construction Milestones......... 8

III.      Status of FACS‘s Progress TOWAId Its MAI@StOM@S.............2..0220022022earea se se se se s se esc esc ce}. 10

          A.          Status of Compliance With Completion of Construction and Launch
                      MilESEOM@S .....2020220200202eeseseerereseerrrersrrrrererresreresees iess erses esc en en ereesererrerererereenerererenees 10

                       1.           Spacectaft Design @Ad COMStFUCtHONM .........2...2.2022002222262262e8e es es se es es s es se ere ce 11

                      2.            GIOUNG SYSH@M....22022000000000 00020 eee se es se n es e n es se se s se se rrese se es se se es en se ree se se sere nsc esns 12

                      3.            |teimiaitC 12

IV.       A Waiver of the Commission‘s Rules Is in The Public Interest.................c.c.cccle.e} . 13

          A.          Special Circumstances In This Case Warrant Deviation From The General
                      RUIG ..2200202020202e2es se es es eveererrerererreser es esn es es esn ir iess es ees e es en resere es es sns es esn ierr e en en ere ies eere se n ns 13

          B.          Public Interest Would Be Better Served By Grant of the Waiver Than By
                      DEDMI@] .....2.0220202r2s2serssressererseserrrersersrssrersesssessrresesrersesreseseeees es e es es seb eb err e eerre ns se rernees 14

          C.          General Rule IS NOt UNAGEIMMME@G .............2.0000002sses es es reres es se se se erererrererererrer sc en es 15

V.        flnc‘ e 16


                                            SUMMARY

       Final Analysis Communication Services, Inc. ("FACS") submits this request for waiver

of Section 25.161 of the Commission‘s Rules, 47 C.F.R. § 25.161, with respect to the completion

of construction and launch milestones for its first two commercial Non—Voice, Non—

Geostationary Mobile Satellite Service ("NVNG MSS" or "Little LEO®") satellites. FACS‘s

authorization specifies that the first two satellites must be completely constructed by March 2002

and launched by September 2002. Section 25.161 provides that an authorization shall

automatically be terminated if construction completion milestones specified in an authorizations

are not met.

       FACS‘s initial satellites, constructed and launched under experimental authorization,

were intended to be utilized in its commercial constellation, but did not remain operational.

FACS will not be able to meet the upcoming construction and launch milestones for two new

commercial satellites and therefore seeks this waiver with respect to those two milestones.

FACS demonstrates incontrovertibly that the public interest will be far better served by a grant of

the requested waiver than by denial.

       First and foremost, FACS has demonstrated its intention to proceed. Since receiving its

authorization, FACS‘s has expended over 70 million dollars toward the implementation of its

satellite system,; making significant progress in all three critical areas of system implementation,

including spacecraft design and construction, ground system implementation and launch

arrangements.

       Second, decisional deadlock that recently led to bankruptcy of Final Analysis, Inc.

("FAI"), FACS‘s parent, has hampered FACS‘s progress. The assets of FAl have been

purchased in an auction held by the bankruptcy court by New York Satellite Industries, LLC


("NYSI"). Once the post—bankruptcy transfer of control has been approved, FACS will be able

to proceed with its business without hindrance.

       Third, grant of the requested waiver will not result in the warehousing of any spectrum

and will not undermine any Commission policies regarding construction milestones. FACS

shares its spectrum with other users. Because that spectrum will continue to be available to those

other users, any delay in the implementation of FACS‘s full constellation will not harm any other

user or potential user of spectrum. More importantly, Little LEO constellations are uniquely able

to implement service with less than a full constellation. Thus, grant of the requested waiver may

not actually result in any material delay in FACS‘s market entry.

       Fourth and finally, grant of the requested waiver is critical to the achievement of the

Commuission‘s longstanding objective of fostering a competitive NVNG MSS marketplace. Only

one Little LEO operator is currently fully operational. Grant of the requested waiver will enable

FACS to provide an important competitive presence in this valuable market.




                                                  11


                                     Before the
                      FEDERAL COMMUNICATIONS COMMISSION
                               Washington, D.C. 20554




In the Matter of                                     )
                                                     )
FINAL ANALYSIS COMMUNICATION                         )   FileNos.      25—SAT—P/LA—95
SERVICES, INC.                                       )                 76—SAT—AMEND—95
                                                     )                 79—SAT—AMEND—96
For Authority to Construct, Launch and               )                151—SAT—AMEND—96
Operate a Non—Voice, Non—Geostationary               )                  7—SAT—AMEND—97
Mobile Satellite System in the 148—150.05 MHz,       )
400.15—401 MHz, and 137—138 MHz bands                )


Directed to: Chief, International Bureau

                                   PETITION FOR WAIVER


       Final Analysis Communication Services, Inc., ("FACS"), by its attorneys and pursuant to

Section 1.3 of the Commission‘s Rules, 47 C.F.R. § 1.3, respectfully petitions for a waiver of

Section 25.161 of the Commission‘s Rules, 47 C.F.R. § 25.161, and the milestones for

completion of construction (March 2002) and launch (September 2002) of the first two satellites

of its licensed constellation, as set forth in its above—referenced license for a Non—Voice, Non—

Geostationary Mobile Satellite Service ("NVNG MSS"or "Little LEO®") system.‘

L.     INTRODUCTION

       As demonstrated herein, the public interest would best be served by waiver of Section

25.161 of the Rules with respect to these two milestone requirements for FACS. The unique


       Final Analysis Communication Services, Inc., Order and Authorization, 13 FCC Red.
       6618 (Int‘l Bur. 1998); Memorandum Opinion and Order, FCC 001—343 (rel. Dec. 3,
       2001) (CFACS License").


circumstances set forth below establish good cause for granting the waiver rather than

terminating the FACS satellite station authorization if its next two construction milestones are

not met. The policies that the milestone requirements were designed to foster will not be

undermined by grant of the requested waiver. In fact, the public interest in fostering competition

will be best served by grant of this Petition.

        Since well before receipt of its license to construct, launch, and operate its NVNG MSS

system, FACS has proceeded aggressively with the development of its system.          FACS met the

first two milestones in its license. FACS also has expended in excess of 70 million dollars

toward the implementation of its satellite system, including for the launch of satellites (two of

which were experimental satellites that could have served as the initial operating satellites of the

system), the acquisition of launch services, the development of its ground system, the design of

major elements of the satellites, and the acquisition of key components of its commercial

constellation. FACS clearly has demonstrated its intent to proceed.

       Moreover, FACS shares its spectrum with other users. That spectrum will continue to be

available to those other users, so any delay in the construction of FACS‘s full constellation does

not harm or prejudice any other user or potential user of spectrum. More importantly, because

the unique nature of Little LEO constellations allows implementation of service with less than a

full constellation, grant of the requested waiver may not actually result in any material delay in

FACS‘s market entry. Thus, grant of the requested waiver would not in any way result in, lead

to, or encourage "warehousing" of valuable spectrum.

       In light of FACS‘s demonstrated progress toward construction and clear intent to

proceed, and the unique capabilities of NVNG MSS systems to offer competitive services with

less than a full constellation, grant of the requested waiver to permit FACS to continue the


development of its system would best serve the public‘s interest in the establishment of a

competitive "Little LEO®" marketplace.

IL.     BACKGROUND

        A.      Spectrum Assignment and Use In NVNG MSS

        The FACS License includes the express provision that the authorization will become

"NULL AND VOID" in the event that the 26 satellites authorized are not constructed, launched

and successfully placed into operation in accordance with the technical parameters and terms and

conditions set forth in the license." Section 25.161 of the Commission‘s Rules, provides, in

pertinent part, that

                a station authorization shall be automatically terminated in whole
                or in part without further notice to the licensee upon:

                (a) The expiration of the required date of completion of
                construction or other required action specified in the authorization,
                or after any additional time authorized by the Commission, if a
                certification of completion of the required action has not been filed
                with the Commission unless a request for extension of time has
                been filed with the Commission but has not been acted on....

Thus, absent a waiver of this rule, the FACS License will terminate by its terms if the

construction milestones specified in the license are not met.

        The Commission historically has relied upon construction milestones to ensure that

satellite licensees actually implement their authorized systems and do not "warehouse" spectrum

that might be used by other licensees. Warehousing concerns with respect to any particular

satellite service, however, must be assessed in light of the particular characteristics of that

service. In this respect, the circumstances surrounding NVNG MSS spectrum assignments and

potential frequency use are relevant in the consideration of FACS‘s milestone waiver request.


       Final Analysis License at © 93.


       The assignment plan adopted in the Second Round Report and Order is unique in several

respects. After the first round NVNG MSS systems were authorized," a small amount of

spectrum remained for assignment to additional systems and a second processing round was

opened. In conducting the second processing round, the Commission stated that its primary

objective was "to foster an environment that promotes competition through new entry."" Thus,

the Commission determined that it was in the public interest to license multiple new entrants to

compete with first round NVNG MSS licensees.

       Due to the small amount of spectrum available, it took three years of difficult discussions

and the withdrawal of some of the second round participants to achieve an assignment plan for

second round licensees. The Second Round Report and Order implemented the plan, based

largely on an industry agreement, which included band segmentation for downlinks, shared

frequencies for uplinks, timesharing by the commercial systems with several government users,

and a "daisy chain" of relocation on certain frequencies based upon future spectrum allocations.

For FACS, the assignment also included approval for more service channels than actually could

be accommodated in the available spectrum and a first priority on future international allocations

of NVNG MSS spectrum to fill out its channel requirements.

       The first critical aspect of the second round assignment plan pertinent to the instant

petition is that the Commussion‘s overriding objective in the hard—won second round assignment


       In the Matter ofAmendment ofPart 25 ofthe Commission‘s Rules to Establish Rules and
       Policies Pertaining to the Second Processing Round ofthe Non—Voice, Non—
       Geostationary Mobile Satellite Service, Report and Order, 13 FCC Red 9111 (1997)
       ("Second Round Report and Order").
       In the Matter ofAmendment ofthe Commission‘s Rules to Establish Rules and Policies
       Pertaining to a Non—Voice, Non—Geostationary Mobile Satellite Service, Report and
       Order, 8 FCC Red 8450 (1993) ("First Round Report and Order‘).
5      Second Round Report and Order at [ 11.


plan was the implementation of competition in NVNG MSS. Currently, the only fully

operational commercial NVNG MSS system is the ORBCOMM system, which is a large

constellation authorized to operate a total of 48 satellites with service links in the VHF band (137

MHz —138 MHz).° None of the other first round licensed systems have been implemented.

Therefore, achievement of the Commission‘s competition objectives for Little LEOs depends

upon the successful implementation of one or more second round systems. Grant of FACS‘s

request will facilitate the Commission‘s competition objectives for NVNG MSS.

       The second relevant aspect of the Commussion‘s second round assignment plan is the

nature of the NVNG MSS service and the fact that services can be provided to users even before

a constellation is fully completed. NVNG MSS is a uniquely flexible service. There is very

little spectrum for Little LEOs overall; but, as the assignment plan and the characteristics of the

authorized systems demonstrate, there are various ways in which Little LEO systems can make

good use of the spectrum they have to provide competitive services. NVNG MSS services

involve short data bursts that can be uplinked from, and downlinked to, virtually anywhere in the

world. These services are very valuable because of their global reach and very low cost. The

possible applications include environmental monitoring, data gathering from fixed assets such as

utility meters, tracking of mobile assets such as ships and trucks, alphanumeric messaging, and

web clipping. The Commission has also recognized that NVNG MSS services are capable of


       ORBCOMM was authorized in the first processing round to launch and operate 36
       satellites. Orbital Communications Corporation, Order and Authorization, 9 FCC Red
       6476 (1994), recon den., 10 FCC Red 7801 (1995). In the second processing round it was
       approved for an additional 12 satellites. Orbital Communications Corporation, Order
       and Authorization, 13 FCC Red 10828 (1998). The Commission has recently approved
       the assignment of ORBCOMM‘s NVNG MSS authorization to ORBCOMM License
       Corp. to facilitate the emergence of the ORBCOMM system from bankruptcy. In re
       Orbital Communications Corporation and ORBCOMM Global, L.P., Order and
       Authorization, DA 02—576 (rel. March 11, 2002).


providing certain telecommunications services to tribal lands and other unserved areas that have

not been linked to the telecommunications infrastructure.‘ A variety of factors, including the

number of satellites in the constellation, data storage features and timesharing obligations, affect

the gaps between messages. These gaps in turn impact the types of applications that a particular

constellation may offer. However, even with one satellite, which may pass over a particular spot

on the Earth a few times a day, several types of applications may be provided, such as automated

meter reading. In this respect, Little LEO systems differ markedly from Big LEO and other

mobile and fixed satellite operations, which require deployment of a full constellation before any

service can be offered.

         Therefore, competition in NVNG MSS may be provided across a range of applications to

different degrees by different constellations, or even by the same constellation as deployment of

additional satellites is staged over time. The systems authorized in the second round reflect this

diversity. They include large constellations, specifically the FACS system with service links in

the VHF and UHF band authorized for 26 satellites, and the Leo One Worldwide ("Leo One")*

system with service links in the UHF band (400 MHz — 401 MHz) authorized for 48 satellites.

They also include small systems, specifically E—SAT, the only system planning to operate using

spread spectrum technology, with a constellation of 6 satellites and service links in the VHF

band," and Volunteers for Technical Assistance ("VITA") authorized for one satellite in the UHF

band."



         See Extending Wireless Telecommunications Services to Tribal Lands, Notice of
         Proposed Rulemaking, 14 FCC Red 13679, 13694 (« 37) (1999).
8        Leo One USA Corporation, Order and Authorization, 13 FCC Red 2801 (1998). Leo One
         subsequently changed its name to Leo One Worldwide.
9        E—SAT, Inc., Order and Authorization, 13 FCC Red 19859 (1998). E—SAT, currently
         controlled by DBS Industries, Inc., also has entered into an agreement with Iridium
                                                                                     (continued...)


        Consequently, in assessing whether the public interest will be served by a waiver of

construction milestones, the Commission should consider the variety of ways in which Little

LEO spectrum may be used, the flexibility of the systems to initiate service in some allocations

with less than a full constellation, and the prospects for phased implementation of competition in

different applications. Consideration of these factors will assure the Commission that

competitive NVNG MSS service can be provided in the originally specified timeframe, by 2004,

notwithstanding the grant of the requested waiver.

       B.      Second Round Licensee Construction and Launch Milestones

       In NVNG MSS, the Commission declined to codify a particular set of milestones,

determining instead to establish particular guidelines in each individual license."‘ Nonetheless,

in the second processing round, the Commission followed the general pattern set forth in the first

processing round of requiring commencement of construction of the first two satellites within a

year of grant of the license, commencement of construction of the remaining satellites within

three years of grant, completion of construction of the first two satellites within four years of

grant and launch of the entire system within six years of grant. All of the second round licensees

have the same milestone intervals, and all but one have exactly the same milestone dates.




       Satellite LLC, the company that purchased the original Iridium system out of bankruptcy,
       to utilize Iridium‘s L—band capacity for certain data service applications. See DBS
       Industries, Inc., Report SB—2 (Small Business), January 11, 2002.
10     Volunteers in Technical Assistance, Order and Authorization, 13 FCC Red 10845 (1998).
       VITA, also a first round licensee, is authorized to operate NVNG MSS services for non—
       commercial, humanitarian applications.
U      First Round Report and Order at [ 18.


       The specific construction milestones set forth in the FACS License are as follows:"

                                    Construction      Construction
                                    Commenced         Completed              Launch
         First Two Satellites       March 1999        March 2002             September 2002
         Remaining Satellites       March 2001        March 2004             March 2004

       FACS met its first two milestones, requiring commencement of construction of the first

two satellites by March 1999 and commencement of construction of the remaining satellites by

March 2001, respectively. However, it is now unable to meet the next two milestones —

completion of construction of the first two satellites by March 31, 2002 and launch of the first

two satellites by September 2002.

       C.      FACS‘s Requirement For Waiver of the Existing Construction Milestones

       The fact that FACS now requires a waiver of two of its milestones is primarily the result

of events outside of the control of the company, which led to a significant interruption in

progress toward the completion of construction of its first fully operational commercial satellites.

In brief, as early as 1999 the company became hindered by decision—making deadlock between

the two voting shareholders (each of which at that time held negative control) ofits parent

company, Final Analysis, Inc. ("FAI)." The deadlock eventually resulted in litigation and

created significant uncertainties and delays in the pursuit of the company‘s construction

program.

       FACS attempted to resolve this decision—making deadlock by various measures.

Notwithstanding FACS‘s efforts to resolve the outstanding disputes through structural changes,



12     Final Analysis License at 4 79 and 93.
13     At the time, FACS was owned 100% by FAI, which in turn was owned 50% by Nader
       Modanlo and 50% by Michael Ahan.


business arrangements and settlement negotiations, the litigation persisted. These circumstances

not only drained the resources of the company but, despite the best efforts of the management to

keep construction on track, so adversely affected FACS‘s ability to conduct business that

progress on its construction program virtually came to a halt.

       Eventually, the continuation of these conditions led to the initiation on September 4, 2001

of Chapter 7 bankruptcy proceedings for the involuntary dissolution of FAL * As of January 14,

2002, the assets of FAI were auctioned by the Trustee in bankruptcy to the highest bidder. New

York Satellite Industries, LLC ("NYSI"), a company owned and controlled by Mr. Modanlo, was

the successful bidder.""

       These events all occurred during a period of time of a severe downturn in financial

markets for the satellite industry. For example, it was around this time that several mobile

satellite operators filed for bankruptcy, including Iridium,‘° ICO,"" and ORBCOMM."* In fact,

the market was so bad that the assets of such companies ultimately were sold for a small fraction




14     In re Final Analysis, Inc., Case No. 01—21039 (Bankr. Md. 2001).
15     Approval was granted on February 7, 2002 for the pro forma transfer of control of FACs
       to the FAI Trustee in bankruptcy. An application for approval of the transfer of control of
       FACS from the FAI Trustee to NYSI has been filed and remains pending.
16
       Bankruptcy under Chapter 11 filed on August 13, 1999. See Brian Graney, Iridium Files
       for Chapter 11, THE MoOTLEY FOOL, Aug. 13, 1999, available at:
       <http://www.fool.com/news/1999/irid9908 13 .htm>.
17
       Bankruptcy under Chapter 11 filed on August 27, 1999. See Satellite Firm Faces
       Bankruptcy, Wired News, Aug. 27, 1999, available at:
       <http://www.wired.com/news/print/0,1294,21478,00.html>.
18     Bankruptcy under Chapter 11 filed on September 11, 2000. See Orbcomm Filesfor
       Chapter 11, WASHINGTON BUSINESS JOURNAL, Sept. 15, 2000, available at:
       <http://washington.bizjournals.com/washington/stories/2000/09/11/daily24 .html>.


of the amount that originally had been invested.‘" The combined effects of FAl‘s corporate

deadlock, debilitating litigation, and depressed financial markets for mobile satellite ventures

dealt FACS a stunning blow. These circumstances, which could not have been foreseen and

defied the company‘s persistent efforts to resolve, have hampered the company‘s ability to

complete construction of the first two commercial satellites by the end of March 2002, the

milestone deadline.

       Against these odds, however, the company has made substantial progress toward meeting

its construction and launch milestone deadlines. Under its new ownership and management

structure and freedom from the FAI decisional deadlock that previously stymied the company,

FACS is poised to move forward to implement an aggressive plan to complete construction as

soon as possible.

III.   STATUS OF FACS‘S PROGRESS TOWARD ITS MILESTONES

       A.      Status of Compliance With Completion of Construction and Launch
               Milestones

       FACS has made substantial progress toward compliance with its completion of

construction and launch milestones, including through the establishment of key strategic

partnerships and relationships with major independent suppliers. As mentioned above, FACS

has already expended millions of dollars toward the implementation of its system. The

significant progress FACS has made in each of the three critical areas of spacecraft design,

construction, and launch, as well as ground system implementation, is described below.




19     In the case of Iridium, outside investors ultimately purchased the assets for $25 million,
       or 0.5% of the original investment. See Will Iridium Bankruptcy Buyout Be Deal ofthe
       Century, SPACEDAILY, Nov. 16, 2000, available at:
       <http://www.spacedaily.com/news/iridium—00e.html>.



                                                10


Through the bankruptcy proceeding, NYSI acquired the assets of FAI and will dedicate them to

FACS for the engineering of the FAISAT system and construction of the spacecraft.

               1.      Spacecraft Design and Construction

       FACS has in fact already designed, constructed and launched satellites, two of which,

FAISAT—1 and FAISAT—2v, were authorized pursuant to experimental licenses."" FAISAT—2v in

particular served as the platform for services to be provided by VITA under that company‘s first

round authorization, and would have served as FACS‘s first commercial satellite if it had

remained in operation.*‘

       Aside from these experimental satellites, as FACS reported to the Commission in 1999,""

FACS made other significant strides in the construction of its initial commercial satellites,

including (i) initiation of the architecture design process for the commercial constellation; (i1)

development of statements of work for numerous components, particularly long lead time items

such as software and major components, and (iii) negotiations with various subcontractors for

production of major subsystems. Today, all subsystems for the satellite constellation are beyond

the preliminary design stage with the majority of design elements completed. In fact, the key

components of its first two entirely commercial satellites, the command and data handling

subsystem, which includes the on—board computers, are substantially constructed.

       Since the grant of the FACS commercial license, non—refundable payments have been

made based on acceptance of milestone compliance for some of the major components from


20     FAISAT—1, Call Sign KE2XGY; FAISAT—2v, Call Sign KS2XCY.
21     FAISAT—2v was launched in 1997 and, at the time that the Final Analysis License was
       granted, Final Analysis was in intermittent communication with the spacecraft.
       Subsequently, regular communication with the satellite was lost.
22     Letter dated April 1, 1999 from Aileen A. Pisciotta, Counsel to Final Analysis
       Communication Services, Inc. to Roderick K. Porter, Acting Chief, International Bureau.



                                                 11


various subcontractors, has conducted design reviews on various subsystems, and in some cases

has already taken delivery of engineering units and prototypes of equipment. FACS has heavily

invested in core infrastructure and capital equipment to support the construction and deployment

of the FAISAT constellation, including a class 100,000 environmental clean room construction,

maintenance, and upgrades to support satellite construction and integration.

               2.      Ground System

       In connection with the operation of its experimental satellites, FACS constructed and

today maintains fully implemented and operational ground systems, including ground stations in

Logan, Utah, and a ground station and control center in Lanham, Maryland."" FACS plans to

request approval to operate these same facilities as the initial ground segment for its commercial

constellation. FACS has acquired an extensive array of electrical and mechanical ground support

equipment.

               3.     Launch Vehicles

       FAI entered into a final, non—contingent Launch Services Agreement dated June 20, 1998

with P.O. Polyot of Omsk, Russia ("Polyot") for the launch of its entire commercially licensed

constellation. Under the contract, Polyot manufactured and delivered four dedicated Cosmos

launch vehicles for the launch of FACS‘s entire constellation. Polyot received a license from the

Russian Space Agency on February 15, 1999 specifically for the launch of FACS‘s satellites.

NYSI has acquired FAl‘s contracts with Polyot through the FAI bankruptcy proceeding. As with

the other assets of FAI acquired by NYSI, these launch vehicles will be made available to FACS.




23     Logan, UT Ground Station Experimental License, Call Sign KS2ZXDA, File No. 0226—
       EX—RR—1999; Lanham, MD Ground Station Experimental License, Call Sign WAZXHE,
       File No. 0224—EX—RR—1999.




                                                12


IV.     A WAIVER OF THE COMMISSION‘S RULES IS IN THE PUBLIC INTEREST

        Section 1.3 of the Commission‘s Rules specifies that a waiver will be granted if "good

cause" is shown, including a demonstration that special circumstances warrant deviation from

the general rules and that deviation would better serve the public interest than strict adherence to

the rule."" Clearly special, unique circumstances warrant the waiver requested herein; and the

waiver requested would better serve the public interest than strict adherence.

       A.      Special Circumstances In This Case Warrant Deviation From The General
               Rule

       It is well established that special circumstances that justify a waiver include

considerations of hardship, equity or more effective implementation of overall policy."" The past

four years have presented some of the most difficult and challenging cireumstances for even the

largest and best—established satellite companies. Investors and financial markets seemed to turn

their backs on the satellite industry as a whole. These difficulties were magnified several fold

for a small company such as FACS. It was in the midst of these already difficult times that

FACS suffered the additional hardship of debilitating decisional deadlock and the burdens and

distractions oflitigation that threatened the very existence of the company.

       However, it is not the hardship, per se that justifies a waiver in this case. Rather it is the

fact that, despite these difficulties, FACS has been able to accomplish so much. The company

has designed, manufactured and launched satellites and built out a ground system, has secured

the launch of its entire constellation, has signed important customer contracts that will generate

funds for the completion of construction of its next satellites, has created important strategic



24     See Northeast Cellular Telephone Co. v. FCC, 897 F.24 1166 (D.C. Cir. 1990); see also
       Comsat Corporation, Order, 11 FCC Red 9622, 9625
25     See WAIT Radio v. FCC, 418 F.24d 1153, 1159 (D.C. Cir. 1969).



                                                 13


partnerships and relationships, and has invested millions of dollars that, among other things, have

already yielded the manufacture of key components for its next satellites. In light of these

significant investments and the progress already made toward completion of construction,

considerations of equity dictate that FACS be granted a waiver and be permitted to complete its

program.

          B.     Public Interest Would Be Better Served By Grant of the Waiver Than By
                 Denial

          Clearly the public interest would be best served by grant of the waiver requested. The

Commission has determined that NVNG MSS provides a variety of valuable low cost data

service to the public and that the public interest in the availability of such services would best be

served by a competitive industry. To date, there is only one fully operational NVNG MSS

system in the market. FACS has actually built and launched satellites and is moving forward to

complete its»constellation. FACS intends to succeed in achieving the Commission‘s goal of

providing a truly competitive industry.

          The public‘s interest in the success of the FACS system is further assured by the fact that

the circumstances that created the delay have now been largely overcome. The corporate

governance issues that have plagued the company over the past several years have been resolved.

The company is now poised to move forward with an aggressive program to implement its

system.

          With the problems causing delay behind it, and with so much progress already made, it

would be contrary to all notions of equity, as well as to the public interest, to deny the requested

waiver and eliminate the opportunity for FACS to proceed as authorized. This is further

underscored by the fact that FACS will be able to provide competitive service as soon as its first

commercial satellites are successfully placed in orbit. As described above, due to the technical



                                                  14


characteristics of Little LEO operations and the nature of the applications offered, service may

be initiated, and the public may enjoy the benefits of competition, even before the entire

constellation is deployed.

       C.      General Rule Is Not Undermined

       Grant of the requested waiver would not in any way undermine the Commission‘s

general policies and rules regarding construction milestones. In fact, because Little LEO

systems are unique to the extent that service may be initiated prior to the deployment of a full

constellation, existing precedent regarding construction milestones is not fully on point.

Nevertheless, grant of this waiver request is consistent with existing precedent.

       Specifically, in all prior cases where satellite construction milestone extensions and

waivers have been denied, the licensee had either not even met its first milestone for

commencement of construction or the Commission had serious doubts that the licensee had the

intent to proceed with completion of construction."" In contrast, where as here the licensee has

demonstrated that it is not "warehousing" spectrum but rather that it has met the first two

milestones and has made substantial progress toward completion of construction and



26     See, e.g., AMSC Subsidiary Corporation, Applications to Modify Space Station
       Authorizations in the Mobile Satellite Service, Memorandum Opinion and Order, 8 FCC
       Red 4042 («] 13) (failure to begin construction raises questions regarding the licensee‘s
       intention to proceed); Norris Satellite Communications, Inc., Application for Review of
       Order Denying Extensions of Time to Construct and Launch Ka—band Satellite System,
       Memorandum Opinion and Order, 12 FCC Red at 22306 (« 17) (by failing to commence
       construction or request extension within the milestone deadline, licensee in that Order did
       not demonstrate a commitment to proceed with its proposed system). See also A4MSC
       Order, 8 FCC Red 4040, 4042—43 (« 14) (construction commencement demonstrates
       intention to proceed with business plan); Application of GE American Communications,
       Inc., for Orbital Reassignment andfor Modification ofAuthorization to Construct and
       Launch the Satcom H—1 Domestic Fixed—Satellite, Memorandum Opinion and Order, 7
       FCC Red 5169, 5169 (« 3) (Com. Car. Bur. 1992) (construction commencement
       demonstrates intention to proceed with business plan).



                                                 15


preparations for launch, and may implement service with less than a complete constellation, it is

appropriate and consistent with Commission precedent to grant a waiver.""

       FACS intends to proceed as quickly and as vigorously as possible to establish a new

proposed schedule for the implementation of its full constellation."*

v.     CONCLUSION

       Wherefore, for the foregoing reasons, FACS respectfully requests that the Commission

waive Section 25.161 of its Rules with respect to the milestones for completion of construction

(March 2002) and launch (September 2002) of the first two satellites, as set forth in the above—

referenced license of FACS.

                                              Respectfully submitted,

                                              FINAL ANALYSIS COMMUNICATION SERVICES, INC.



                                             By: M""Jb‘\

                                             Aileen A. Pisciotta
                                             Randall W. Sifers
                                             KELLEY DRYE & WARREN LLP
                                              1200 19°" Street, N.W.
                                              Suite 500
                                             Washington, D.C. 20036
                                             202—955—9600

                                             Its Attorneys

Dated: March 29, 2002




2      See GE American Communications, Inc. Order and Authorization, 16 FCC Red 11038
       (2001); and Earth Watch Incorporated, Order and Authorization, 12 FCC Red 19556
       (1997).
28
       A new schedule cannot be established until the pending request for approval of transfer of
       control of FACS to NYSI has been granted and business arrangements can be finalized
       under the new ownership structure.



                                                16


                                           Declaration



       Pursuant to Section 1.16 of the Commission‘s Rules, 47 C.F.R. § 1.16, 1, Nader Modanlo,
Chairman and President of Final Analysis Communication Services, Inc., hereby submits this
declaration in support of the foregoing Petition for Waiver dated March 29, 2002. 1 have read
the Petition, and the statements contained therein are true of my own knowledge, except as to
matters which are thercin stated on information and belief, and as to those matters, I believe them
to be true. I declare under penalty of perjury that the Coregoing is true and correct. Executed on
March 29, 2002.                                                ;                                IP
                                                                         /            ——

                                                                  o
                                                 _ Nader Ifi‘odanl
                                                   Chairman and President
                                                      Final Analysis Communication
                                                      Services; Inc.


                                CERTIEFICATE OF SERVICE

       I, Beatriz Viera—Zaloom, hereby certify that a true and correct copy of the foregoing
Petition for Waiver, on behalf of Final Analysis Communication Services, Inc., was hand
delivered this 29th day of March 2002, to the individuals on the following list:

William Caton                                        Cassandra Thomas, Deputy Chief
Acting Secretary                                     Satellite Division, International Bureau
Federal Communications Commission                    Federal Communications Commission
445 12"" Street, S.W.                                445 12" Street, S.W.
Washington, D.C. 20554                               Washington, D.C. 20554

Donald Abelson                                       Jennifer Gilsenan, Chief
Chief, International Bureau                          Satellite Division Policy Branch,
Federal Communications Commission                    International Bureau
445 12"" Street, S.W.                                Federal Communications Commission
Washington, D.C. 20554                               445 12" Street, S.W.
                                                     Washington, D.C. 20554
Thomas Tycz, Chief
Satellite Division, International Bureau             Mark Young
Federal Communications Commission                    Satellite Division, International Bureau
445 12" Street, S.W.                                 Federal Communications Commission
Washington, D.C. 20554                               445 12"" Street, S.W.
                                                     Washington, D.C. 20554




                                                      fi(m@%%
                                                     Beatriz Viera—Z4loom



Document Created: 2013-10-29 15:14:54
Document Modified: 2013-10-29 15:14:54

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