Attachment application

application

APPLICATION FOR REVIEW submitted by the Highcast Network

application

2005-10-13

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

IBFS_SATLOA2003111900336_461590

sceived uC1 2 0 2005 RECEIVED Poiey Branch oct 1.3 200 a Before th@=®02!8uroau id e Communi catesConglssen es Federal Communications Commission e ortee Washington, D.C. 20554 In the Matter of ) ) ReviEw OF FREEDOM OF Freedom ofInformation Act Request for ) INFORMATION ACTION Satellite Construction Contract filed by ) Pegasus Development Corporation ) FOIAFileNo.2005—512 ) Pegasus Development Corporation and ) IBFS File No. SAT—LOA—20031119— Pegasus Development Corporation 107 ) cosse Request for Confidential Treatment ) Call Sign: 82603 To: The General Counsel APPLICATION FOR REVIEW Highcast Network Inc. (‘Highcast") seeks review ofthe above captioned order ofthe International Bureau, which denied in part Highcast‘s Freedom of Information Act request Highcast‘s request sought access to information redacted from documents submitted to the Bureau by Pegasus Development Corp. ("Pegasus") in support ofPegasus® request for a reduction in the amount of a bond posted to secure satellite construction milestone compliance." Pegasus‘ submission refered to the documents as the "Contractual Documents"‘, Along with that fiimg Pegasus included what it called a "redacted version ofthe Contractual Documents" Pegasus sought confidentil treatment ofthe "Contractual Documents" and asked that the "redacted version" rather than the "Contractual Documents® be included in the publicfile ! Pegis Development Compor . Submission ofExecuted Stelite Constraction Contract and Requestfor Confidental Treatment, SATLOA—20031119—00336,Call ign 82603, iled Janoary 31, 2005 (‘Contrac®and "Confidentlity Request® respectvcy)

Pegasus‘ request for confidential reatment acknowledged that the Commission has permitted review ofsatelite contracts pursuant to protective orders.. The request did not object to such review or identify any circumstancesthat would require that special conditions be imposed on such review.* Notably,a substantial number of documents that were submitted to the Bureau for ts own review were not included, even in redacted form, in the so—called "redacted version" that Pegasus supplied for public review,indeed, those documents were not identified or even referenced in Pegasus‘ request for confidential treatment. It was not until the Bureau acted upon Highcast‘s request that the existence ofthose documents became known to Highcast Accordingly, Higheast was unable in its original FOIA request to advance arguments for release of those documents On September 13, 200the Bureau released two orders related to Highcast‘s FOIA request. The first order, from which this appeal is taken, required Pegasus to include a limited amount of additional disclosure in the public fil, but otherwise denied Highcast‘s request.. The Bureau concurrently released a Protective Order pursuant to which interested parties would be granted access to the redacted (and previously undisclosed) materials — Although Highcast believes that Pegasusis withholding from public serutiny many documents and portions thereof for which confidential treatment is not warranted, Highcast acknowledges the general pragmatism of protective orders and acceptsin principle the resolution ofthis mater pursuant to a protective order. However, the Protective Order left open the possiblity that Highcast‘s sole "1d at page2

emplayee, who also serves as ts FCC counsel, would be prohibited from review of the Contractual Documents pursuant to the Protective Order. In the course of proceedings before the Bureau Pegasus indicated that it would object to review by under igned counsel. Such a restrition would effectively deny access to Highcast pursuant to the Protective Order. Since Higheast cannot be assured of access to the information necessary to provide informed commentary on Pegasus‘ milestone compliance it must take this appeal, which is based on two specifies in which the Bureau‘s decision is in conflict with established case law and Commission policy. 1 QUESTION PRESENTED 1. May a licensee redact from its evidence of satelite contact milestone compliance most or all ofthe information on which the Bureau traditionally relis to test the validty of such a contract? 2. Can a party‘s assertion of confidentiality be valid as to documents that are not identified in the request for confidentil treatment and otherwise unidentifed to the public? 11. ARGUMENT 1. Constructive Complete Redaction Highcast argued in support of its FOIA request that theinformation redacted by Pegasus whil secking a determination of contract execution milestone compliance correlated closely with the very information the Bureau reviews to determine whether the contract is indeed "non— (., contimed from previous pago) ° Protetive Order, D4—05—2449,File No. SATXLOA—20031119—00336, eleased September 13, 2008 (‘Proceuive Orter)

contingent" and thus satifies the milestone..For purposes of public review Pegasus basically maintained simply that it had a contract. But the Commission has held repeatedly that the simple existence ofa contract is not enough. The contract must be non—contingent. The Commission has described a non—contingent contract as one that identifies specific satellites and their design characteristics, and specifies the dates for the start and completion of construction. The payment terms and. schedule. demonstrates the [licensee‘s] investment and commitment to completion of the system. The payments are spread throughout the [term of the} contract, the initial payments are significant, and the majority of payments will be made well before the end ofthe construction period * The Commission has also held that a sufficient contract contains no unresolved contingencies that could preclide construction of a satelite and that a contract that allows the Hieensee to cancel construction ofthe satelite without significant penalty is not suflcient The Bureau did not address Highcast‘s assertion that the Pegasus submission is constructively empty, butit did conclude that "the majority of the contract submitted was not redacted and no confidential protection was sought." Order at para. 7. Highcast respectfully submits that it is the quality and pertinence of information available, not the quantity, which Memorandim Opinion and Order in the matter ofMobile Communications Holdings, Inc., PCC:—03—122, released June 4, 2003 at %14, see also In re Petition and Application of Tempo Satellite, Inc. (Mem Opinion and Order}, 7 FCC Red 6597 (1992) at £13, quoted in TMZ Communications and Company: Limited Partmership (Mem. Opinion and Order), DA 03—385, rel. Feb, 10, 2003,at 48. See also Direct Broadcasting Satellte Corp. (Mem. Opinion and Order), DA 93—1332, 8 FCC Red 7959 (Int! Bur, 1993) at 16 (a non—contingent contract must specify a construction timetable with "reaular, specific" proatess deadines), quoting Unied Stares Satellte Broadeasting Co, Inc. and Dominion Video Satelt, Inc. 3 FCC Red 6858 (1988) (°USSDomnion‘), and CBS, Inc. and Dominion Video Satellte, Inc. (Mem Opinion and Order} 98 FCC 28 1056 (1984) ("CBSDominion") at 116.

enables informed public commentary. The Bureau did not require Pegasus to release any of the information that the Bureau itelf normally reviews to determine whether a satelite construction contract is non—contingent. The importance of the factors weighed by the Bureau bear emphasis ifa party has not made material payments, or ifthe contract gives the licensee options, contingencies or loopholes that would allow the licensee to maintain the contract without really constructing a satellite — then the Bureau will conclude that the spectrum (which was awarded without cost) is being warehoused to the detriment of a public and will cancel the license and call the bond In Mobile Communications Holdings, Inc. the Commission stressed that ®.. [the milestone requirements for commencement of satelite construction are especialy important because they provide an intial objective indication as to whether liensees are committed to proceeding with implementation oftheir proposls."* The Bureau could not make a reasonable determination as to milestone compliance based on the information in the public file and neither can the public. No one would contend thatinformation in contracts between consenting parties should not be entitl to some level of confidential treatment as an abstract matter. However in this case the submitting party is secking return of a substantal sum of money from the government based on somewhat questionable claims that are supported by information available only to the government and concealed from the public. Highcast submits that the Bureau erred (. ontinued from previous page) * Pirst Report and Order and Further Notice ofProposed Rulemaking in IB Docket No. 02—34, and First Report and Order in TB Docket No. 02—54, FCC 03—102, released May 19, 2003 at §184 ("First Satelite Licensing Reform Order®) * Memorandim Opinian and Order in the matter ofMobile Communications Holdings Inc., ECC—t3—122, relased June 4, 2003 act 14

in determining that Pegasus may withhold from the public essentially allofthe key information on which the Bureau bases ts decision 2. confidentility Failure showing unidentifed Perhaps the most troubling aspect ofthe Bureau‘s order is itsidentification of a large number ofdocuments that apparently were submitted by Pegasus in support ofits milestone request but not identiied in the request for confidential treatment and not included even in redacted form in the public fil. As noted, Highcast was unaware of these documents until September 13, 2005, when the Bureau released the Order and the Protective Order. After reciting a long list of documents submitted by Pegasus in support of its milestone performance, Footnote 2 of the Order concluded We note that only the redacted copy of the first document listed above is included in the public file and uploaded to the International Bureau Fiing System (IBFS). See IBFS File No SAT—LOA—20031119—00336. The exhibitsand attachments listed in this note as number 1 ~ 16 were not included in the public version of the document. We assume here that Pegasusseeks confidentialty with respect to these documents in their entirety. Two days later the Bureau released an errata and a corrected order that listed only 7 documents, but similarly adopted the same assumption — that Pegasus sought confidentiality with respect to all documents that were not included in the public version of the document. Whether it is six documents or fifeen, Pegasus has failed to make the requisite showing for confidential treatment. Since 2003 the Commission has treated the submission of satellte construction contracts for the purpose of demonstrating milestone compliance as a submission under Section

0.459(b) of the Commission‘s rules." Accordingly, Pegasus has the initial burden of demonstrating that the information submitted is subject to confidential treatment Information submitted by: licensees to the Commission in support of requested Commission action is, by default, available for public inspection.. Submitting parties may follow established procedures to seek confidential treatment, but it is the parties burden to establish that confidental treatment is warranted.. In this case it is impossible for Pegasus to have met that burden, as it does not identify the information for which confidentiality is sought nor does it othernise even purport to make the showing required by Section 0.459(b) of the Commission‘s rules The Bureau erred in "assuming" that Pegasus sought confidential treatment for those documents. The fact that the Bureau had to make an assumption for such a large number of documents should be dispositve. Pegesus cannot have met ts burden if the Bureau is required to make assumptions about what Pegasus sought. ‘The default is to disclosure and open decision making. Documents whose existence is not even revealed to the publicthrough a proper request for confidential treatment cannot be assumed to be confidential. Highcast submits that Pegasus failed to establish entitlement to confidential treatment for those documents and that the Bureau erred in effectively waiving that requirement for Pegasus. Higheast respectfully requests that the Bureau‘s decision as to the confidential nature of documents submitted but not identiied by Pegausus should be reversed. Those documents should be made available for publicinspection " FirstSatellte Licensing Reform Order at$ 187

mm. CoNCLUSION For the reasons explained in this Application for Review, Higheast respectfuly requests thatthe Commission reverse the order ofthe Bureau tothe extentidentiied herein Respectfully Submitted, m Twork mc By. Jopé Hine 4938 Hampden Lane, #167 Bethesda, MD 20814 202.258.0224


Document Created: 2005-10-20 16:51:11
Document Modified: 2005-10-20 16:51:11
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