Attachment 2004Carriers Opposit

2004Carriers Opposit

OPPOSITION TO PETITION FOR RECONSIDERATION submitted by Carriers

Opposition

2004-08-10

This document pretains to SAT-LOA-19970926-00156 for Application to Launch and Operate on a Satellite Space Stations filing.

IBFS_SATLOA1997092600156_1073445

                                           Before the

                                                                                               RECEIVED
                              Federal Communications Commission
                                    Washington, DC 20554

                                                                                                AuG 1 0 2004
In the Matter of Application of                                    FCC 04—126            Eaderal Communications Commission




                                             N_ NZNL_ZNZ/NZNZ NJ
                                                                     .                           Office of Secretary
Emergency Application for Review and                               File Nos.:
Request for Stay of Globalstar, L.P.                               SAT—LOA—19970926—00151/52/53/54/56
                                                                   SAT—AMD—20001103—00154
                                                                   SAT—MOD—20020717—00116/17/18/19
                                                                   SAT—MOD—20020722—00107/08/09/10/12



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                                                                                                                  ecsgiveq




                                                                                                              w
                                                                                                           AUG 2 0 2004

                   OPPOSITION TO PETITION FOR RECONSIDERATION                                           néemationay Suregy




                                                                   Kathryn A. Zachem
                                                                   L. Andrew Tollin
                                                                   Craig E. Gilmore
                                                                   Wilkinson Barker Knauer, LLP
                                                                   2300 N Street, NW, Suite 700
                                                                   Washington, DC 20037—1128
                                                                   (202) 783—4141


 AT&T WIRELESS SERVICES, INC.                                       CINGULAR WIRELESS LLC
 Douglas I. Brandon                                                J. R. Carbonell
 AT&T Wireless Services, Inc.                                      Carol L. Tacker
 1150 Connecticut Avenue, NW                                       David G. Richards
 Washington, DC 20036                                               Cingular Wireless LLC
 (202) 223—9222                                                     5565 Glenridge Connector
                                                                    Suite 1700
                                                                    Atlanta, GA 30342
                                                                    (404) 236—5543


 August 10, 2004


                                                      TABLE OF CONTENTS

SUMMARY..11222222¥2222¥r¥rrrrrrsrsrsrtsirtsrresirrerieserseesrrsseereserressrssrrssasrecssrersrrrrerstrerreesseee se ce e ies es re se rrererer ie 1i
DISCUSSION.11122222222222rzrrrrrrrevrrrerersersrrerreciesscreseesrereresessesreseseeseresseserisresrer es ricereerereersrerrecneesrere se ce e e es 2
I.          THE FCC ORDER IS LAWFUL AND SHOULD BE UPHELD....1.,20200000020200002006esreekeke, 2
       A.      The    FCC Properly Upheld the Automatic License Cancell@ti0N ...................cvcceeee e 2
       B.      The    FCC Properly Found that Globalstar Was Afforded Fair Notice........................... 10
       C.      The    Decisions Do Not Contravene the Bankruptey Code or Its Policies...................... 13
       D.      The    FCC Properly Treated Globalstar‘s System as an Integrated System .................... 14
ooonN (o) e 15


                                            SUMMARY

       The Carriers oppose the petition for reconsideration seeking reversal of the FCC Order
and reinstatement of Globalstar‘s 2 GHz MSS authorization. The FCC Order correctly affirmed
the denial of Globalstar‘s request for an extension of the construction and launch milestones for
its 2 GHz MSS system and found the contract, which assumed the extensions would be granted,
inadequate for meeting the initial non—contingent contract milestone. As a result, the FCC
properly recognized that the license cancelled automatically pursuant to the explicit milestone
condition in the authorization.

        Petitioners‘ primary argument on reconsideration is that automatic cancellation for failure
to meet the milestone condition on the Globalstar license is inconsistent with Section 312 of the
Act, which governs the revocation of licenses. But there is a material difference between
automatic cancellation for failure to satisfy an express license condition —— where a licensee is
made aware during a rulemaking and/or the licensing proceeding itself that failure to meet the
license condition will render the license null and void —— and license revocation for bad acts ——
where there has not been advance notice that the FCC is even considering revoking the license
and further fact—finding is required.

       Petitioners ignore the long—standing D.C. Circuit Temmer precedent, which held that
where an entity fails to satisfy a requirement on which its authorization is conditioned, its rights
under the license remain unperfected and it is not entitled to a hearing prior to cancellation for
failure to meet that condition. Petitioners also ignore the court‘s more recent finding in
Peninsula Communications that the rescission of a conditional grant for failure to satisfy the
condition is not a revocation requiring a hearing under Section 312. Indeed, the FCC has
consistently held, as far back as 1987 and as recently as this year, that a license that cancels for
failure to satisfy a license condition is not revoked and does not trigger a hearing requirement. In
any event, even assuming arguendo this were treated as a revocation case, no purpose would be
served by a hearing because there is no factual issue to be heard —— there is only the legal question
of whether the Globalstar contract satisfied the initial milestone.

       Petitioners assert that Globalstar lacked fair notice of the principal that a contract which
did not provide for completion of the licensed system within established milestones would not
satisfy the initial milestone. In fact, this principle is well established in FCC precedent, starting
with the 1986 Tempo case. Globalstar was also made well aware through the 2 GHz rulemaking,
the FCC‘s rules, and the Globalstar authorization itself that its license would automatically
terminate with no further action required by the Commission if it did not meet this milestone.

        Petitioners‘ other arguments were properly rejected. The FCC correctly concluded that
nullification was not contrary to the automatic stay provision in Section 362 of the Bankruptcy
Code because it fell under the agency‘s regulatory power exception. The FCC also properly
affirmed the Bureau‘s treatment of Globalstar‘s system as an integrated system. The rejection of
a contract that provided for only a single satellite out of 68 to be timely constructed is not a
"new" policy, but rather a recognition that Globalstar failed to provide for timely construction of
the authorized "satellite system" as required.

       For all these reasons, the petition should be denied and the FCC Order upheld.


                                            Before the
                               Federal Communications Commission
                                      Washington, DC 20554

In the Matter of Application of                     FCC 04—126

Emergency Application for Review and                File Nos.:
Request for Stay of Globalstar, L.P.                SAT—LOA—19970926—00151/52/53/54/56
                                                    SAT—AMD—20001103—00154
                                                    SAT—MOD—20020717—00116/17/18/19
                                                    SAT—MOD—20020722—00107/08/09/10/12

To:    The Commission


                 OPPOSITION TO PETITION FOR RECONSIDERATION


       AT&T Wireless Services, Inc. and Cingular Wireless LLC (the "Carriers") hereby submit

this opposition to the "Petition for Reconsideration" submitted by Globalstar, LLC and

Globalstar Satellite LP ("Petitioners"), as the successors—in—interest to Globalstar, L.P.

("Globalstar").‘ Petitioners seek reconsideration of the Commission‘s decision affirming the

nullification of Globalstar‘s 2 GHz Mobile Satellite Service ("MSS") authorization for failure to

satisfy the initial milestone upon which its license was conditioned." For the reasons set forth

herein, the Petition should be denied and the FCC Order upheld.




       ‘ Globalstar, LLC and Globalstar Satellite LP, Petition for Reconsideration, re: FCC 04—
126 (July 26, 2004) ("Petition"); see 47 C.F.R. §§ 1.4(h), 1.106(g). The Carriers have previously
demonstrated their interest in this proceeding, which demonstration is hereby incorporated by
reference. See AT&T Wireless Services, Inc., Cingular Wireless LLC and Verizon Wireless,
Opposition to Emergency Application for Review, in re: File No. 183/184/185/186—SAT—P/LA—
97 et al., at 1—2 & n.2 (Mar. 18, 2003).

       * See Emergency Application for Review and Requestfor Stay ofGlobalstar, L.P.,
Memorandum Opinion and Order, FCC 04—126 (rel. June 24, 2004) ("FCC Order"), affirming
Globalstar, L.P., Memorandum Opinion and Order, 18 F.C.C.R. 1249 (IB 2003) ("Bureau
Order‘).


                                            DISCUSSION

1.      THE FCC ORDER IS LAWFUL AND SHOULD BE UPHELD

        Globalstar, like all 2 GHz MSS licensees, accepted its license on the condition that it

satisfy certain implementation milestones. That condition, set forth expressly in its

authorization, provided that failure to meet any milestone‘ would result in automatic cancellation

of the license. The first milestone was the requirement to demonstrate the commencement of

construction within one year of licensing by entering into a non—contingent contract for the

timely manufacture of the Globalstar satellite system. Globalstar, however, sought up to a two—

year extension to complete its system and entered into a contract to complete construction not

within its milestones, but within the extended timeframe it proposed. As discussed below, the

FCC Order finding that the Globalstar license became null and void for failure to meet the

milestone deadline specified as a condition of its license is lawful and should be upheld.

       A.      The FCC Properly Upheld the Automatic License Cancellation

       Petitioners concede that Section 303(r) authorizes the FCC to "prescribe such restrictions

and conditions, not inconsistent with law, as may be necessary. »3 They contend, however, that

an automatic cancellation condition for failure to meet a milestone is inconsistent with the

prohibition in Section 312 of the Communications Act (the Act") against revocation of a license

without notice and a hearing, and is therefore "inconsistent with law."" Petitioners further allege

that automatic cancellation is violative of Sections 1.91 and 25.160 of the Commission‘s rules,




        3 47 C.F.R. § 303(1), cited in Petition at 6—7; see also Glendale Electronics, Inc., 19
F.C.CR. 2540, 9 n.27 (2004) ("Glendale Electronics");, Northstar Technology, LLC, 19
F.C.C.R. 3015, € 14 n.56 (WTB/MD 2004) ("Northstar"). As well, Section 301 of the Act states
that no license "shall be construed to create any right, beyond the terms, conditions, and periods
of the license." See 47 C.F.R. § 301; see also Glendale at 9 & n.27; Northstar at 14 & n.56.

       * See Petition at 7; see generally id. at §§ II—IIL.

                                               2


which implement Section 312 of the Act and contain similar safeguards, as well as Section 9(b)

of the Administrative Procedure Act ("APA")." These assertions are without merit."

        Petitioners‘ argument is based on the flawed belief that automatic cancellation is the

same as license revocation." As a result, they contend a condition that provides for cancellation

of a license automatically is contrary to Section 312, its implementing regulations, and Section

9(b) —— all of which call for notice and an opportunity to be heard prior to revocation." There is,


        ° See 47 C.FR. §§ 1.91, 25.160; 5 U.S.C. § 558(c), cited in Petition at 5, 20—21.
Petitioners also argue for the first time that nullification without a hearing was unlawful under
Section 309(e), which directs the Commission to conduct a hearing when substantial and
material questions of fact concerning an application are presented. See Petition at 12, 16 (citing
47 C.F.R. § 309(e)). Section 309(e) has no bearing on the lawfulness of the nullification of
Globalstar‘s 2 GHz MSS conditional /icense. Petitioners attempt to invoke the section to
resurrect the dismissed Globalstar modification application, but that application was properly
denied once the underlying license was declared null and void, as there was nothing to modify.
Section 309(e) comes into play only if the license nullification is revisited, and Section 309(e) is
irrelevant to this question.

      °6 See also 47 CF.R. § 1.106(b)(2), (3) (petition which fails to rely on new facts or
changed circumstances subject to dismissal).

        ‘ Petitioners cite to the NextWave cases for the proposition that courts treat "cancellation‘ 5
the same as "revocation." See Petition at 5 n.7. The cases are inapposite. The discussion in the
Supreme Court opinion occurred in the context of Section 525 of the Bankruptcy Code, and the
question of whether cancellation is the same as revocation for Bankruptcy Code purposes was
not even before the Court. See FCC v. NextWave Personal Communications, Inc., 537 U.S. 293,
301 (2003) ("No one disputes that the Commission is a ‘governmental unit‘ that has ‘revoked‘ a
‘license,‘ nor that NextWave is a ‘debtor‘ under the Bankruptcy Act."); see also, e.g., United
States v. Verdugo—Urquidez, 494 U.S. 259, 272 (1990) (judicial decisions do not serve as
precedent for points not raised and analyzed). The footnotes referenced in the two (mis—cited)
Second Circuit decisions are dicta; the first deals only with the jurisdiction of the courts of
appeals in cancellation cases, and not notice and hearing rights under Section 312(c) or Section
9(b), and the second contains nothing more than a (;j)rediction of possible future action by the
FCC. See In re: FCC, 217 F.3d 125, 140 n.10 52“ Cir. 2000); In re: NextWave Personal
Communications, Inc., 200 F.3d4 43, 59 n.15 (2"" Cir. 1999).

       8 Section 312(c) provides that "[blefore revoking a license . . . the Commission shall
serve upon the licensee . . . an order to show cause why an order of revocation . . . should not be
issued. Any such order to show cause shall contain a statement of the matters with respect to
which the Commission is inquiring and shall call upon the licensee . . . to appear before the
Commission at a time and place stated in the order . .. ." 47 U.S.C. § 312(c). Sections 1.91 and

                                               3


however, a meaningful difference between (i) automatic cancellation for failure to meet an MSS

milestone upon which the license was expressly conditioned and (ii) revocation for bad acts or

rule violations.

        With automatic cancellation, prior notice was given in the 2 GHz MSS rulemaking, the

Commission‘s rules, and the order authorizing the Globalstar MSS system, that failure to meet

the condition would result in automatic cancellation of the license." Globalstar was specifically

given the option to reject the license as conditioned, which it did not do."" As a result, Globalstar

was on notice from the time it accepted its license that failure to meet any of the milestone

conditions, including the initial "non—contingent contract‘ or "construction commencement"

milestone, would result in the license canceling by its own terms. Thus, Globalstar, like the

other 2 GHz MSS licensees, had an opportunity to object to the condition in both the rulemaking

establishing conditional licensing as well as in response to the authorization order imposing the

condition.




25.160(d) of the Commission‘s rules contain similar provisions. Section 9(b) provides that "the
withdrawal, suspension, revocation, or annulment of a license is lawful only if, before the
institution of agency proceedings therefor, the licensee has been given . . . (1) notice by the
agency in writing of the facts or conduct which may warrant the action; and . . . (2) opportunity
to demonstrate or achieve compliance with all lawful requirements." 5 U.S.C. § 558(c).

       ° See Establishment ofPolicies and Service Rulesfor the Mobile Satellite Service in the 2
GHz Band, 15 F.C.C.R. 16127, 16177—78 (2000) ("Non—compliance with implementation
milestones will result in cancellation of the authorization."); 47 C.F.R. § 25.161 (2000) (failure
to certify compliance with a "required action" specified in the authorization results in automatic
termination "without further notice to the licensee"); Globalstar, L.P., Order and Authorization,
16 F.C.C.R. 13739, 13759 (IB/OET 2001) ("GLP Authorization Order‘) ("[This authorization
shall become NULL and VOID with no further action required on the Commission‘s part in the
event the space station is not constructed, launched and placed into operation in accordance with
the technical parameters and terms and conditions of the authorization . . . .").

        9 See GLP Authorization Order, 16 F.C.C.R. at 13760 ("Globalstar, L.P. may decline
this authorization as conditioned within 30 days . . . . Failure to respond . . . will constitute
formal acceptance of the authorization as conditioned.").

                                               4


        By contrast, where a licensee has not been given specific prior notice that an act or

omission will automatically result in loss of the license, Section 312 of the act requires prior

notice and an opportunity to be heard before a license may be "revoked.""‘ For example, all

licensees are aware that misrepresentation or lack of candor may result in admonishment,

forfeiture or, in extreme cases, license revocation."" Because licensees do no know where that

dividing line occurs, however, Section 312 requires notice and an opportunity to be heard prior

to the affirmative act of revoking the license." Thus, revocation, where further fact—finding is

required, is very different from the case where a licensee is told in advance that failure to meet a

specific condition will cause it to automatically forfeit its license."*

        The Commission‘s authority to adopt and enforce automatic cancellation conditions

without a hearing is well established. Petitioners ignore that the D.C. Circuit made clear in its

1984 Temmer decision that an applicant who accepts a license that is conditioned on future

performance accedes to such condition(s), which renders the applicant‘s rights contingent.

Only after satisfaction of the condition(s) do the contingent rights vest. In other words, where an

entity fails to satisfy a requirement on which its authorization is conditioned, its rights under the

license remain unperfected and it is not entitled to a hearing prior to cancellation for failure to

meet that condition."" Globalstar‘s failure to satisfy the initial milestone upon which its license



        U 47 CF.R. § 312(0).
        2 See, eg., 47 U.S.C. § 312(a); 47 C.F.R. §§ 1.17, 1.80.
        } See 47 U.S.C. § 312(c).
       * The Commission‘s passing reference to "revocation" is thus of no moment. See FCC
Order at § 1. It is not the label, but the content behind the label that is determinative.

        5 P & R Temmer v. FCC, 743 F.24 918, 928 (D.C. Cir. 1984) ("Temmer").
       5 See id. Although Temmer arose in the context of Section 316 hearing rights, the case
has long been applied in the context of Section 312. See, e.g., Revision ofPart 21 of the
                                             5


was conditioned meant that its rights under the authorization, including the right to a hearing (if

all conditions had been met), never vested.""

        The distinction between automatic cancellation, which does not require a hearing, and

revocation, which does, was recently made clear in the D.C. Circuit‘s Peninsula

Communications decision —— also ignored by Petitioners —— and the corresponding FCC order it

affirmed."" In Peninsula, the grant of several FM translator station renewal applications was

expressly conditioned on divestiture to rectify non—compliance with an FCC co—ownership

restriction. Peninsula did not fulfill the condition despite an explicit warning when it received

the grants that failure to divest would result in rescission. In rescinding the conditional grants,

the Commission cited to the D.C. Circuit‘s decision in Temmer. On appeal to the D.C. Circuit,

Peninsula argued that it had a right to a hearing under Section 312(c) prior to rescission. The

court disagreed and affirmed the rescission, finding that:

               One of Peninsula‘s remaining challenges is that the 2001 order
               revoked the licenses without a hearing as required in 47 U.S.C. §
               312(c). But the Commission did not revoke any of the licenses. It



Commission‘s Rules, 2 F.C.C.R. 5713, 5718 (1987) ("Contemporary has attacked our proposal
that a license would automatically expire if a certification is not filed at the end of a construction
period. We do not believe, however, that Section 312(c) is an impediment to this policy.
Section 312(c) states that the Commission may not revoke a license pursuant to Section 312(a)
without serving upon the licensee an order to show cause and conducting a hearing into the
matter. Our proposal, however, is not to revoke a license. By conditioning the license upon the
filing of a certificate, the failure to file a certificate would make a license expire automatically
under its own terms. CL P & R Temmer v. FCC, 743 F.2d 918 (D.C. Cir. 1984); Music
Broadcasting Co. v. FCC, 217 F.2d4 339, 342 (D.C. Cir. 1954)."); see also discussion infra.

        7 See supra note 16.

        4 Peninsula Communications, Inc. v. FCC, 2003 U.S. App. LEXIS 1713 (D.C. Cir. Jan.
30, 2003) ("Peninsula Communications") (unpublished), affirming Peninsula Communications,
Inc., 16 F.C.C.R. 11364 (2001); ef. D.C. Cir. R. 28(c)(1)(B) ("All unpublished orders or
judgments of this court, including explanatory memoranda . . . entered on or after January 1,
2002, may be cited as precedent.").


               conditionally granted the renewals and then rescinded the
               conditional grants forfailure to satisfy the condition."

       Similarly, in Glendale Electronics, the Commission affirmed the automatic cancellation

of the license at issue for failure to maintain the operations upon which the license was expressly

conditioned."" The former license holder argued that the Commission could not revoke its

license for the permanent discontinuation of operations without being afforded a revocation

hearing under Section 312.‘ The Commission rejected this argument, citing to both Peninsula

and Temmer:

               [A] license that cancels for failure to satisfy a license condition is
               not revoked and does not trigger a hearing requirement." GEI‘s
               argument that the Commission must hold a hearing to determine
               whether discontinuing station operations for one year or more
               should result in license cancellation is erroneous. As the Court of
               Appeals for the District of Columbia stated in P&R Temmer v.
               FCC, a Commission "licensee takes its license subject to the
               conditions imposed on its use. These conditions may be contained
               in both the Commission‘s regulations and in the license.
               Acceptance of a license constitutes accession to all such
               conditions. A licensee may not accept the benefits of the license
               while rejecting the corresponding obligations."



               * See Peninsula Communications, Inc. v. FCC, No. 01—1273, slip op. at 2 (D.C.
               Cir. Jan. 30, 2003) (finding that rescission of the conditional grant of licenses for
               failure to satisfy the condition is not a revocation without a hearing as required
               under Section 312(c) of the Communications Act, 47 U.S.C. §3 12(0)).22




        Peninsula Communications, 2003 U.S. App. LEXIS 1713 at *5 (emphasis added).
        * Glendale Electronics, Inc., supra note 3. Specifically, the license automatically
cancelled pursuant to Section 90.157 of the Commission‘s rules, 47 C.F.R. § 90.157, which
provides that a license cancels automatically upon a station‘s permanent discontinuance of
operations. Any station that has not operated for one year or more is considered to have been
permanently discontinued.

       *‘ See Glendale Electronics at [ 8.

       * Glendale Electronics at         10 & n.28 (citations omitted).

                                                    7


         The Wireless Telecommunications Bureau adopted the same rationale as the Commission

in Glendale Electronics earlier this year in the Northstar case." Northstar is of particular

relevance because it dealt with the failure to meet a buildout/construction benchmark —— the

terrestrial wireless equivalent of a milestone. As is the case with MSS licenses conditioned upon

compliance with milestones, a broadband PCS license terminates automatically as of the

construction deadline if the licensee fails to meet its buildout requirements. In Northstar, the

former licensee argued automatic termination of the license was effectively a revocation, which

could not occur without notice and opportunity for hearing pursuant to Section 312.The

Bureau rejected this argument for the reasons stated above, citing Peninsula, Glendale

Electronics and Temmer."" In both Glendale Electronics and Northstar, the Commission made

clear that its authority to adopt automatic cancellation provisions is grounded in Section 303(r),

as well as Section 301 of the Act, neither of which, as shown above, is inconsistent with Section

312."°
         Section 9(b) of the APA (5 U.S.C. § 558(c)) contains the same basic requirements as

Section 312, i.e., notice and opportunity to be heard prior to revocation, and courts have found it

similarly inapplicable to automatic cancellation cases. For example, in the 1985 Aflantic

Richfield case, the appellants were shippers who had received domestic trading approvals

"subject to the condition that they would terminate if any one of four unsubsidized ships was not




         * See Northstar, supra note 3.

         * See id. at € 13.

       * See id. at [ 14 & nn.56—59. The assertion that cancellation also violated Sections 1.91
and 25.160(d) of the Commission‘s rules, which mirror the procedural safeguards required by
Section 312 prior to license revocation, likewise fails for the same reasons.

         * See Glendale Electronics at 9 & n.27; Northstar at 14 & n.56.

                                             8


‘fixed for suitable employment."""" When the condition to the approval was not satisfied, the

domestic trading approvals were deemed to have expired on their own terms. The shippers

challenged the termination as contrary to Section 9(b)."" The D.C. Circuit rejected this

argument, holding that "the licenses were not withdrawn, suspended, revoked or annulled, but

rather terminated on their own terms. We hold, therefore, that neither appellant was entitled to a

hearing under section 9(b).""°

        In any event, even assuming arguendo that Section 312 applies here, no purpose would

be served in holding an evidentiary hearing because there is no factual dispute as to the terms of

Globalstar‘s contract and its arrangements for construction of its 2 GHz MSS system. There is

only a pure question of law as to whether those arrangements satisfied the initial milestone.

Where there are no material questions of fact to be resolved, only questions of law, the FCC is

not required to hold a purposeless evidentiary hearing.""



        *" See Atlantic Richfield Co. v. United States, 774 F.2d4 1193, 1197 (D.C. Cir. 1985)
("Atlantic Richfield").

        * See id. at 1199—1200.
        * Id. at 1202 (emphasis added). In conducting its analysis under Section 9(b), the D.C.
Circuit drew parallels to the Temmer case. See id. at 1201.

        39 See, eg., US. v. Storer Broadcasting Co., 351 U.S. 192, 2002—05 (1956); Alabama
Power Company v. FCC, 311 F.34 1357, 1372 (11‘" Cir. 2002) ("APCo must therefore identify a
material question of fact that warrants a hearing. But its dispute is only over . . . a legal issue
that hardly warrants an evidentiary hearing since no material facts are disputed."); RKO General,
Inc. v. FCC, 670 F.2d 215, 231 (D.C. Cir. 1981) ("RKO®") (where the Commission needs only to
"draw legal conclusions from ‘facts already known,"" it is "not required to . . . reopen the
proceeding for an evidentiary hearing that would have served no purpose") (quoting Lakewood
Broadcasting Service, Inc. v. FCC, 478 F.2d4 919, 924 (D.C. Cir. 1973)); Network Project v.
FCC, 511 F.2d 786, 796 (D.C. Cir. 1975) (a hearing is not necessary where the Commission‘s
decision is based on "inferences and conclusions drawn from undisputed facts"); Citizens for
Allegan County, Inc. v. Fed. Power Commission, 414 F.2d 1125, 1128 & n.5 (D.C. Cir. 1969)
("The right of opportunity for hearing does not require a procedure that will be empty sound and
show, signifying nothing."); Anti—Defamation League ofB‘nai B‘rith v. FCC, 403 F.2d 169, 171
(D.C. Cir. 1968) ("inferences to be drawn from facts already known and the legal conclusions to
                                              9


        B.     The FCC Properly Found that Globalstar Was Afforded Fair Notice

        Petitioners further contend that Globalstar was not afforded fair notice of the

Commission‘s milestone standards as required by due process. The Commission is obligated to

ensure that a regulated entity has fair notice of the agency‘s requirements for milestone

compliance,"‘ but is not required to "prescribe all—inclusive, specific, and detailed terms" for

contractual arrangements."" The D.C. Circuit has made clear that questions of fair notice turn not

only on the specific language of the applicable rule or condition, but also on   666
                                                                                       "‘other public

statements issued by the agency."""" As discussed below, based upon review of the regulatory

requirement and relevant precedent and agency statements, the FCC and the Bureau properly

found that Globalstar knew or should have known that its contract would not satisfy the initial

milestone, resulting in the automatic cancellation of its license.

       Petitioners contend that the license condition was unclear, because it stated that it would

become null and void for non—compliance "if the station is not constructed, launched and placed



be derived from those facts" may be made by the Commission without an evidentiary hearing);
TelePrompTer Cable Systems, Inc., 52 F.C.C.2d 1263, 1264 & n.2 (1975) ("[E)ven if Section
312 were applicable, it is difficult to see what there would be to hear, given our view of the case.
. . . It seems to us beyond question that ‘once evidentiary facts are undisputed, a hearing serves
no purpose."") (quoting Gellhorn & Robinson, Summary Judgment in Administrative
Adjudication, 84 Harv. L. Rev. 612, 630 (1971)), remanded on other grounds, 543 F.2d 1379
(D.C. Cir. 1976).

        3 See McElroy Electronics Corp. v. FCC, 990 F.2d 1351, 1358 (D.C. Cir. 1993) (making
clear that fair notice requires "not . . . that the agency [has] made the clearest possible
articulation," but "only that, based on a ‘fair reading‘ ofits order, the petitioners knew or should
have known what the Commission expected of them") (citing RCA Global Communications, Inc.
v. FCC, 758 F.2d 722, 730—31 (D.C. Cir. 1985)).

       * FCC Order at « 12 (citing Lakeshore Broadcasting, Inc., v. FCC, 199 F.3d 468 (D.C.
Cir. 1999) ("Lakeshore"); Trinity Broadcasting ofFlorida v. FCC, 211 F.3d 618 (D.C. Cir.
2000) ("Trinity"y).
        * Trinity, 211 F.3d at 628 (quoting General Elec. Co. v. EPA, 53 F.3d 1324, 1329 (D.C.
Cir. 1995)).
                                             10


into operation by the following dates.""" According to Petitioners, although seven milestone

deadlines were imposed, "only three concerned construction, launch and operation," and these

three do not include the non—contingent contract milestone."" This new legal argument does not

withstand scrutiny."" The Commission has long defined the commencement of construction as

entering into a non—contingent construction contract."‘ Indeed, Globalstar itself has previously

acknowledged as much, explaining that "GLP had in fact commenced construction by entering

into a non—contingent satellite contract.""* Globalstar was thus fully aware under the terms of its

authorization that failure to enter into a compliant manufacturing contract was equivalent to

failing to commence construction, which would render its license null and void.

        Petitioners also reiterate prior assertions that no precedent existed holding that a

construction contract that did not provide for completion of construction in accordance with the

milestone deadlines would not meet the initial milestone."" According to Petitioners, the only

applicable case law —— the decision in The Boeing Company, 18 F.C.C.R. 12317 (IB/OET 2003)




        * Petition at 18 (quoting GLP Authorization Order, 16 F.C.C.R.. at 13759).
       3° See Petition at 18—19.
        36 See 47 C.F.R. § 1.106(b)(2), (3) (petition which fails to rely on new facts or changed
cirecumstances subject to dismissal).

       * See, eg., Tempo Enterprises, Inc., 1 F.C.C.R. 20, 21 (1986) ("Tempo"); AMSC
Subsidiary Corp., 8 F.C.C.R. 4040, 4042 n.27 (1993); Norris Satellite Communications, Inc., 12
F.C.C.R. 22299, 22303 (1997); Morning Star Satellite Company, LLC, 15 F.C.C.R. 11350,
11352 (IB 2000), aff‘d, 16 F.C.C.R. 11550 (2001); see also FCC Order at ® 3, 5, 7.

       * See Globalstar, L.P., Emergency Application for Review, re: File No.
183/184/185/186—SAT—P/LA—97 et al., at 16 (Mar. 3, 2003) (asserting that "GLP had in fact
commenced construction by entering into a non—contingent satellite contract‘).

        3 See Petition at 19; see also 47 C.F.R. § 1.106(b)(3) (repetitious petitions subject to
dismissal).

                                              11


—— came too late, after the milestone had passed."" Petitioners simply dismiss the long—standing

Tempo case and its progeny, cited in the FCC Order and the Bureau Order, which made clear

that the execution of a contract that does not provide for complete construction of the satellites

by the deadlines specified in the license does not satisfy the initial construction

commencement/non—contingent contract milestone.*‘ These cases all preceded the milestone

deadline. Thus, invocation of the Boeing case is a red herring."*

       Finally, Petitioners assert that Globalstar lacked fair notice of what was expected of it

under the rules, contending now that Section 25.164 codifying the non—contingent contract

milestone did not become effective until after the milestone had passed.43 Regardless of the

effective date of Section 25.164, Section 25.161 was in place at the time Globalstar received its

authorization, and clearly states that failure to certify compliance with a "required action"

specified in the authorization results in automatic termination "without further notice to the

licensee."*"" Here, Globalstar was unable to certify that it met the first milestone because, under

the aforementioned precedent, its contract was noncompliant; thus, Globalstar was only able to

certify to having executed a contract that provided for construction of the system in accordance

with deadlines inconsistent with those in its authorization.   Globalstar was therefore also on

notice under Section 25.161 that failure to certify to the "required action" would render its

license null and void.



       9 See id. at 19.

       * See FCC Order at § 7—11, 20—22 (citing precedent); Bureau Order at [ 6 (same).

       * See FCC Order at § 22.
       " See Petition at 17; see also 47 C.F.R. § 1.106(b)(2), (3) (petition which fails to rely on
new facts or changed cireumstances subject to dismissal).

       *4 See 47 CFR. § 25.161 (2000).
                                              12


        C.      The Decisions Do Not Contravene the Bankruptcy Code or Its Policies

        Petitioners contend that the Globalstar license should be reinstated now that Globalstar

has emerged from bankruptcy. Petitioners argue that the cancellation of the Globalstar license

contradicts the purpose of the Bankruptcy Code for entities to survive bankruptcy,"" yet that is

exactly what Globalstar has done without the license —— emerge from bankruptcy as a going

concern. The FCC also properly concluded that nullification was not contrary to the automatic

stay provision in Section 362 of the Bankruptcy Code because it fell under the agency‘s

regulatory power exception."" As Petitioners admit, the purpose of the regulatory exception is to

permit governmental entities to "pursue legitimate regulatory objectives" and not to impair a

debtor‘s estate "simply because it is in bankruptcy.”47 As the FCC Order explained, the license

nullification did not occur because Globalstar was in bankruptcy, it occurred because Globalstar

failed to comply with a known regulatory requirement and express licensee condition.""         The



        * Petition at 4.
        * FCC Order at €33. Section 362(a) preludes "any act to obtain possession of property
of the estate or property from the estate or to exercise control over property of the estate." See
11 U.S.C. § 362(a)(3). Section 362(b)(4), however, states that a bankruptcey petition does not
stay the "commencement or continuation of an action or proceeding by a governmental unit . ..
to enforce such governmental unit‘s . .. regulatory power." See 11 U.S.C. § 362(b)(4). The
Second Circuit has held that the cancellation of licenses as null and void for noncompliance with
a license condition falls within Section 362(b)(4)‘s regulatory exception of the automatic stay.
See In re: FCC, 217 F.3d at 138 n.8; accord NextWave Personal Communications., Inc. v. FCC,
254 F.3d 130, 147—48 (D.C. Cir. 2001) ("The Second Circuit spoke clearly and unequivocally
about this issue, stating that . .. ‘we hold that the FCC‘s regulatory decisions fall within
[subsection] 362(b)(4).‘ . . . [Wle will thus assume that the /fcense cancellation falls within the
regulatory power exception to the automatic stay.") (emphasis added). The Supreme Court later
found that a government agency‘s regulatory powers were trumped under a separate section of
the Bankruptey Code, 11 U.S.C. § 525, when the non—payment of a debt dischargeable in
bankruptcy is at issue. See FCC v. NextWave Personal Communications, Inc., 537 U.S. 293
(2003). Here, however, as the FCC found, there is no debt at issue. See FCC Order at ©| 33.

       *" Petition at 4.
       * See FCC Order at 4 33.
                                             13


regulatory condition existed to ensure licensees were proceeding with their licensed systems for

the benefit of the public —— a valid regulatory objective."

        D.     The FCC Properly Treated Globalstar‘s System as an Integrated
               System

        Petitioners also assert that the cancellation of the single GSO satellite that Globalstar

intended to construct within its milestone deadlines —— out of the 64 NGSO and 4 GSO satellites

it was licensed to build —— was wrongly cancelled based on an "integrated system" policy of

which it lacked fair notice."" The FCC Order, however, properly upheld the nullification of

Globalstar‘s authorization, which was based upon construction of a 64 NGSO/4 GSO "satellite

system" by certain deadlines."‘ This is not a "new" policy, but a recognition that the execution

of a contract for the timely construction of only 1% of the licensed system is plainly not in

accordance with the "satellite system" it was authorized to construct. Accordingly, the FCC

properly concluded that "by not contracting to construct its integrated satellite system within the

timeframe required by its license, Globalstar did not comply with the first milestone."""




       * See FCC Order at § 1, 3, 7.
       °9 See Petition at 24—25.
       * See GLP Authorization Order at 4 50.

       2 FCC Order at 25.
                                             14


                                        CONCLUSION

       For the reasons stated above and in prior submissions by the Carriers in this proceeding,

the "Petition for Reconsideration" should be rejected and the FCC Order upheld.

                                                           Respectfully submitted,



                                                           %L
                                                           Kathryn A. Zéchem
                                                                             2 _.—
                                                           L. Andrew Tollin
                                                           Craig E. Gilmore
                                                           Wilkinson Barker Knauer, LLP
                                                           2300 N Street, NW, Suite 700
                                                            Washington, DC 20037
                                                            (202) 783—4141



                                                                      1


%@M&m/
Douglas Y. Brandon
                                                          ~TEprvdlichirle,
                                                           J. R. Carbonell
                                                                               Z2         )


AT&T Wireless Services, Inc.                               Carol L. Tacker
1150 Connecticut Avenue, NW                                David G. Richards
Washington, DC 20036                                       Cingular Wireless LLC
(202) 223—9222                                              5565 Glenridge Connector
                                                           Suite 1700
                                                           Atlanta, GA 30342
                                                            (404) 236—5543
August 10, 2004




                                           15


                                CERTIFICATE OF SERVICE

       I, Patrice Wilson, hereby certify that copies of the foregoing "Opposition to the Petition
for Reconsideration" have been served this 10°" day of August, 2004, by United States mail, first
class postage prepaid, on the following:


William F. Adler                                     Thomas Gutierrez
Vice President, Legal and Regulatory Affairs         Lukas, Nace Gutierrez & Sachs, Chartered
Globalstar LLC                                       1111 19°" Street, NW
3200 Zanker Road                                     Washington, DC 20036
San Jose, CA 95134




William D. Wallace                                  Joseph A. Godles
Crowell & Moring LLP                                Goldberg, Godles, Wiener & Wright
1001 Pennsylvania Avenue, NW                         1229 19°" Street, NW
Washington, DC 20004                                Washington, DC 20036




Tom W. Davidson
Akin Gump Strauss Hauer & Feld, LLP
1676 International Drive
Penthouse
McLean, VA 22102




                                                         %MmPatrice Wilson



Document Created: 2015-01-16 15:31:53
Document Modified: 2015-01-16 15:31:53

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