Attachment order

This document pretains to SAT-LOA-20031119-00336 for Application to Launch and Operate on a Satellite Space Stations filing.

IBFS_SATLOA2003111900336_454605

Federal Communications Commission pa os—2450 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Ereedom ofInformation Act Request for Satellite ) Construction Contactfled by Pegasus ) FOTAFileNo.2005—512 Development Corporation ) ) tBES FileNo. SAT—LOA—20031119—00336 Pegasus Development Corporation and Pegasus ) CallSign: 52603 Development Corporation 107 Request for ) Confidential Treatment ) orper Adopted: September 13, 2005 Released: September 13, 2005 By the Chief, International Bureau: 1. By this Order, we grant, in par, and deny, in part, the Freedom ofInformation Act (FOIA)! requestfled by Higheast Network,Inc.(Hlighcast) on July 14, 20052 In the FOTA request, Higheast seeks the elease oinformation redacted from the public version ofa contract submitted by Pegasus Development Corporation and its wholly owned subsidiary Pegasus Development 107 Corporation (collectvely, Pegasus) on January 31, 2005. At the same time, we grant, in part, and deny, in part, Pegasus® January 31, 2005 request for confidentiality fo the information redacted from the public version ofthe contract. As we explain more fully below, we determine that only a small portion ofhe information soughtby Higheastis non—confidentil nformation that should be included in the public file. 1. BACKGROUND 2. On January 31, 2005,Pegasus filed with the Commission an unredacted copy of a satellite construction contract and accompanying exhibits executed between iselfand Space Systems/Loral, c This submission was made to demonstrate that the liensee, Pegasus Development !$USC$522,at see *Ereedom of Information Act Request Highcast Network,Inc.filed by Higheaston July14, 2005,FOIA 2008—512 (Highcast FOIA Requesd. ? Pegasus Development Corporation Submission ofExecuted Satellte Constrction Contrct and Request or Confidental Treatment, SAT—LOA—20031119—00336, Cll Sign $2603, filed January 31, 2005 (‘Contrt"and "Confidentality Request"respectivly)The documentsthat Pegasus submited under a requesforconfidentaity are as fllows: (1) Sateite ParchaseContractBy and Between Pegasus Development Corporation and Space Systems(Loral,Inc, Terms and Conditons (ncluding () Atachment A,(i) Anex 1 o Artachment A,(i) Schedule 1 o Annex to AtischmentA;(v)ScheduleIf to Anner I to Atachment A,(v) Atachment B); (2) Exhibit A, Pegasus Development 107 Corporation K—band FSS Satelit, Sutement ofWork, Aupust9, 2002; G) (contimed...)

Federal Communications Commission DA 05—2450 107 Corporation, had satisfied thefrst milestone fo ts lcense to construct, lunch, and operate a Ka— band geostationary satelite orbit (GSO) fixed.—satellte service (FSS) satelite at the 87° W.L. orbital location, e., the execution of a non—contingent contractfor the construction ofhe satelite. The cover letter transmitting the Contract requested confidential reatment for the redacted information. In addition to the unredacted copy ofthe Contract submitted with a request fora confidential treatment, Pegasus simultancously submited a redacted copy ofthe Contractto be placed in the Commission‘s publicfiles 3. OnJuly 14, 2005, Higheastfiled, pursuant to FOIA, request toinspect an unredacted copy ofthe Contract submited to the Commission by Pegasus.® Inits request, Higheast assers that without disclosure ofthese documents "it is impossible to assess Pegasus‘ actual performance" on the Contract* On July 22, 2005, Pegasusfiled an opposition to Higheast‘s FOIA request." On August 9, 2005, Higheast filed a reply to Pegasus‘ opposition, arguing that Pegasus has not demonstrated that the redacted portions ofis Contractare subjectto confidentia tratment subjectto Sections 0.457—0.459 of the Commission‘s rules, and that therefore the redacted portions ofPegasus® Contract should be made available for public inspection® On August 25, Higheast submitted further comments in support ofts FOIA request* On August 30, 2005, Pegusus submitted a supplement to is opposition to Highcast‘s FOLA request" (...contimed rom previous page) ExhibitB, Atachment1, Pegasus Development 107 Compontion Ka—Band FSS Satlltes, Specifcation, August9, 2002; (4) Exbibit C, Pegasus Development 107 Corporation, Ka—Band FIS Satelites, Program Test Plan, August9, 2002; (3) Extibt D, Pegasus Development 107 Comportion, Ka—band FSS Satelites, Program Quality Assurance Plan, August9,2002; (6) Exhibit E, egasis Development 107 Corporation, Ka—Band FSS Satelites, Program Management Plan, August 9, 2002;(7) ExhibitF,Payment Plan and Termination Liility Amounts, August9, 2002;(8) Atachment1,StementofWork;(8) Atachment 7, Milestone Payment Plan; (2) Atachment 8 Maximum Termination Lisbilty and Lettr ofCredit Amount Requirements(10) Atachment9, Export Laws Compliance Programs (11) Atachment 10,Cenifcation; (12) Atachment11, Form—— BillofSale(13) Atachment 12, Options(14) Atischment 13, Escrow Agreement: To Be Supplied EDC + 20 Days;(15) Atachment 14, Anomaly Disclosure Liss and (16) Atachment 15, Letr ofCredit Form We note that only th redacted copy of the fist document Hited abov is included in th public Ale and uploaded to theIaterationa Bureau Flig System (BFS). See IBFS File No. SAT—LOA—20031119—00336. The exhibts and atiachmentslisted in his noteas mamber 1 — 16 were not included in the public version ofthe document. We assume here that Pegasussecks conidentaity withrespect o hese documents in their ntirety. * See note 2 above. ? See Higheast FOIA Request * See Higheast FOLA Request t 2. " See Pegasus Development Corporation Opposion to Pegasus Freedom ofInformation Act Request, Aled aly22, 2005 (Pegasus Oppositon. * a7 crm 5s o4sr—0450. * Hlighcast Replyto Oppositin o Freedom of Information Act Reques, filed August 9, 2005,at1—2 (igheast Repl) " Higheast Network Inc, Addional Comments in Support ofFreedom ofnformation Request, FOIA Control No. 2005—512, led August28, 2008. " see Pegasus Development Comporation Supplement to Oppositon t Freedom of Information Act Reques, filed August30, 2005 (Pegasus OppositionSupplement,

Federal Communications Commission pa 0s—2450 11. DISCUssION 4. Pegasus has requested that the Commission withhold from publicinspection pursuant to Exception 4 ofthe FOIA® allofthe redacted information requested by Higheast. The Commission‘s rules permit parties that have submited materials or information to the Commission to requestthat such materials or information be withheld from public inspection." Pursuant to Section 0.459()," such requests shall contain a statement ofthe reasons for withholding the materils from inspection and of the fiets upon which those reasons are based.* 5. n its request for confidentiality, Pegasus identifies the specific information for which confidentiality sought and the relevant proceeding. The request for information discusses the particular types ofinformation redacted, eg. costs, schedules regarding delivery and construction, tchnical specifications, price and payment terms, distrbation ofrisk and Hiabiity, indemnification, ntellectual property rights). Pegasus asserts that thisinformation pertain to the construction ofsatelites (a commercial venture),anis thus customariy guarded from competitors because it could be used to target Pegasus‘intended customers, obtain more favorable terms with satelite vendors, o allow compettors o obtain proprietary technical information that was developed and paid for by Pegasus, tereby causing competitive harm."" In ts request, Pegasus also identifies how it has taken compctitive measuresto assure thatthe Contract is not disclosed to the public but is only available to Pegasus employees or agents involved in t contractual negotiation and is not generallyavailable within Pegasus itself"" Further, Pegasus indieates thatthere has been no intentional disclosure to third partes" Finally, consistent with its contractual obligations to Space Systems Loral, Pegasus requests that the Contract be withheld from disclosure for an indefinite period, or in the altemmative a ten—year period by the end ofwhich Pegasus says that any anticompetitive effectofdisclosure will be attenuated:® Thus, Pegasus‘request for the most part "See Pegasus ContrctSubmission. 5 USC § SS2@)4)exempts from publc disclosir "tade secretsand commercilinformation cbrained from a peson and privileged or conidental." narcr®, 504500 harcr® 504590 © in particulr,th requestfr confdentaliy mustcontain the following information: (1) an identiication of the specifi information for which confidental reatment i sought (2)an identfieation ohe Commission proceeding in which th information wassubmited or description othe circumstances giving rise t te submission; ) an explanationoth degzes to which th iformation is commercial or inanciao contaisa tade seereo is priileged;(4)an explanation ofth degresto whichtheinformation concemn a servic that is subject o compettion:(3)an explanation ofhow disclosure ofh information could resilt in substanil compettve harm; (6a idetifation ofany measures aken by the submiting party o prevent unauthorized dicloswe;(7) an identifeaton of whether th information i availableto the public and the extentofany previous disclosure ofthe information to thi partis;() austiation ofth perid daring which the submiting party assers tht materal should not be availalefor blic disclosur; and, (9) ny other iformation thahe party seeking confidental ireatment blieves may be usefil i assessing whether t equest for confidentialtyshould be granted. 47 CER. § 04550 "‘ See Confidentality Request 2:3. * 14. * i. " u.

Federal Communications Commisson DA 05—2450 containsall ofthe requisiteinformation needed to determine whetherits request for confidentility is valid. 6. Where a part is requized to submit information to a Federal Government agency, the standard for determining if such commercial or financial information is "confidential" under Exemption 4 ofFOIA is if disclosure ofsuch information is likely to: (1)impair the Goverment‘s ability to obtain necessary information in the future; or (2) cause substantial harm to the competitive position ofthe person from whom the information was obtained." Pegasus was required to submit ts Contact as part ofthe Commission‘sreview ofPegasus‘ milestones as mandated by its satelite authorization.®‘ We note, however, hat Highcast argues in its FOIA request that the Commission has permitted interested parties to review satelite contracts o determine whether the lcensee has met ts construction milestones, and that therefore, Pegasus‘ Contract should be released for public inspection.®. Instances where the Commission allowed inspection of satllte contracts under a "Protective Order"® which allows a party to review confidential materials pursuant to ertain restrctions, however,is not the unfettered public disclosure sought in a FOLA request. Thus, th standard applied in allowing restricted disclosure pursuant to a Protective Order is not relevant in the contextofa POIA request 7. The majorty ofthe contract submitted was notredacted and no confidential treatment was sought®" Pegasus only redacted paymentterms,terms regarding the distibation ofrisk and labilty between thsatelite icensee and manuficturer,intellectual property right, and costs in the event of termination. We find that theredacted information contained in the Pegasus‘ Contract (excluding exhibits and attachments) is confidentia information under Exemption 4 of the FOIA. Accordingly, the release of this confidential information iikely to cause substantial harm to Pegasus‘ competiive position. As we explain below, with respect tothe Exhibits and Attachments, we do find, however, that limited amount ofinformation is not confidentil information protected from disclosure. 8. Pegasus‘ Contract contained a number of Attachments and Exhibits®® The majority of these documents are the epitome of information thatthatis closely held and customarily guarded from competitrs, Le. proprietary technical information. For example, Exhibit B contains the sateite specification" Exhibit C contains the test lan,® and Exhibit D contains the quality assurance plan." " NetonalParks and Conservation 4sn v. Morton, 498 E.24 765, 770 (D.C.Cir1974); CritcalMass Energy Projectv. NRC, 975 .2d 871, 879 (D.C.Ci1992)(enbanc), cert denied, 507 US. 984 (1993); Examination of Current Policy Coneezning the Treatment ofConfidental Iformation Submited o he Commission, GEN Docket No. 9655 Report and Order, 13 FCC Red 24816, 24819 (1998)(Confidental bformation Policy Order). Our rules provide thatt partyinitllyclimingconfidentality pursuant to Section 0.459(a) bears the burden of proving bya prepanderance ofthe evidence that such reatment is approprie. 47 CR § 0489@. "" Amendment of he Commissiu‘s Space Sution Licensing Rules and Polices, Fist Report and Order, B Docket No.02:34, 18 FCC Red 10760, 10827 9 173 (2003)(Space Staion Licensing Reform Order) ® Higheast POLA Requestat3. * We motethta protectiveorderailowing Highcast ces o he Contactsubject o eriin resrictonsis being issued contemporaneously wit his Order. * See Redacted Contact n TBFS File No. SAT—LOA—20031119—00336. * See foomote 3 above. " See Exhibit B of the Contrct ented "Attichment 1, Pegasus Development 107 Corporation, Ka—Band ESS Satelltes,Specifiation, August9, 2002."

Federal Communications Commission pa 0s—2450 Each of these documents contains information that is customanily closely held by satelite manufacturers and would be appropriately withheld from the public file in their entirey. The following Exhibits and Attachments, however, should not have been withheld from the public fle in their entirety: (1) ExhibitF, entiled "Payment Plan and Termination Lisbilty Amounts, August 9, 2002;" (2) Attachment 10, entitled "Certification;" (3) Attachment 11, entiled "Form — Bill ofSale;"(4) Attachment 13, enttled "Escrow Agreement: To Be Supplied EDC + 30 Days;" and (5) Aftachment 15, entitled "Letter of Credit Form." 9. Pegasus‘failure to submita redacted version ofthe one page document entiled, "Extibit F; Payment Plan and Termination Lisbility Amounts, August 9, 2002, Frst Satelite and Satelite Operations Equipment" stains the limits ofthe confidentiality protection. The payment schedule is a one—page document containing only 21 events (such as "Lunch® or "CDR" short for entical design review, and "DELIVERY ON ORBTT*). As such, it sppearsto be a generic document containing well« known and obvious events in the construction ofa satellit. Thus, we do notfind the exhibit tsefto be per se confidentialin its entiety. The monetary amounts attached to the progress payments, termination Hisbilty, or both, however, would be considered confidentia information. Accordingly, with respect to ExhbitF, we find that thinformation contained in the columns with the following headings is not confidential:(1) Payment Number; (2) Month Number;(3) NominalInvoice Month; (4) Payment Due; (5) Milestone Event; and (5) Completion Crteria. We do, however, find the information contained in the following columns to be confidential and protected from disclosure: (1) Payment %; (2) 1" Satellit; (3) Sat. Oper. Equip.;(4) Payment Amount; (5) Cum. Payment; and (6) Cum. Term. Linbility. 10. Pegasus also requested confidentility for Artachment 10 entitled "Certifiation," Aftachment 11 entiled "Form — Bill ofSale," Attachment 13 entiled "Escrow Agreement: To Be Supplied EDC + 30 Days," and Attachment 15 entitled "Lette ofCredit Form." With the exception of Aftachment 13, these documents are exactly what thei ies imply, blank legal forms without any monetary or technical information attached. Blank legal documents containing boilerplate language would not appear to be confidentiainformation. Pegasus has failed to provide any rationale for treating these blank forms as confidential in this instance, Attchment 13 is merely a one—page document containing only thetite,the contract number, and the "confidentialstamp." Obviously, it is not confidentia. Thus, we deny Pegasus‘ request for confidentility with respect t the entiety of Attachments 10, 11, 13, and 15. 11. We, therefore,conclude that, other than the material that we havejust outlined in Exhibits F (columns 1—5), Attachments 10, 11, 13, and 15 (in their entiety),the information subjectto the request for confidentialityfalls squarely under Exemption 4 t the FOIA rules and meetsthe requirements of Section 0.459 and may be withheld from public disclosure (...contimed from previous page) see Exhibit C ofhe Contract, entited *Pegass Development 107 Corportion, Ka—Band FSS Satlites Program Test Plan, August9, 2002." * See Exhibit D ofthe Contract, entited "Pegasus Development 107 Corporation, Ka—band FSS Satelites, Progam Qualiy Assurance Plan, August 9, 2002." ® arcrR $04590)

Federal Communications Commisson a os—24s0 TiE CONCLUSION 12. TT JS ORDERED that the request for confidentility submitted by Pegasus on January 31, 2008 is Granted, in part,and Denied,in part to the extent provided herein. Accordingly, we will submit a redacted copy of the "Exhibit F: Payment Plan and Termination Liabilty Amounts, August 9, 2002," without redacting the information in he following columms, for inclusion in the public file: (1) Payment Number; (2) Month Number; (3) NominalInvoice Month; (4) Payment Due; (5) Milestone Event;and (5) Completion Criteria. Further, we will provide a complete copy ofAttachment 10 entitled "Certification," Attachment 11 entited "Form — Bill ofSile," Attachment 13 entitld "Escrow Agreement: To Be Supplied EDC + 30 Days,"and Aftachment 15 entiled "Leter of Credit Form" for inclusion in the public file." Submission ofthe redacted materials to the Commission‘s public file asindicated here will not be carried out untl th time period within which to filapplication for review has expired or Pegasus® application for review has been fully and fnally resolved by the Commission (or any approprite court of competent jurisdiction),whichever occurslater. Under 0.461() ofthe Commission‘s rules, 47 C.FR. § 0.461(), Pegasus may file an application forreview ofthe Bureau‘s handling ofpartal denial of Pegasus‘s requestfor confidental reatment. Such an application for review must be filed with the Office ofGeneral Counsel within 10 days from the date ofthis order. 13. TT FURTHER ORDERED that Higheast Network Inc.s Freedom ofInformation Act request, FILE NO. 2005—512, is Granted, in part, and Denied, in par,to the extent provided herein. Under Section 0.461G) ofthe Commission‘s rules, 47 CF.R. § 0.461(), Highcast may file an application for review of the Bureau‘s handling ofhe FOLA request. Such an application for review must be filed with he Office ofGeneral Counsel within 30 days from the date of this order. 14. This Orde is isued pursuant to Sections 40) and 310(3)ofhe Communications Act of 1934, as amended, 47 U.S.C. §§ 154() and 310(d), the Freedom of Information Act, 5 U.S.C. § 552, and authority delegated under Sections 0.51 and 0.261 ofthe Commission‘s rules, 47 CFR. §§ 0.51,0.261, and is effective upon its adoption. Fepi co .TONS CoMMISSION Donald Abelson Chief, International Bureau ® Contemporaneously with the issuance ofthis order, Pegasus will be provided copies of the documents to be submited into he publc fls to ensire tht ther is no confusion regarding the documents, or portions thereo, that are determined notto be confidetial


Document Created: 2005-09-13 17:02:30
Document Modified: 2005-09-13 17:02:30
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