Attachment response

response

LETTER submitted by Pegasus

response

2006-01-09

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

IBFS_SATLOA2003111900336_475015

**"h (6 rEGASYUS" communicrons as January 5, 2006 By Hand Delivery Fem Jarmulnck Deputy Chict Satelite Division Federal Communications Commission 445 12" Stret,S.W. Washington, DC 20554 Re: Submission of Executed Satellite Construction Contract SAT—L0A—20031119—00336, Call Sign S2608 Dear Ms. Jarmulnclc Pegasus Development Corporation (‘PDC") hercby responds to the December 20, 2005 inquiry letter by the Intermational Bureau (*Bureau") regarding the satelite construction contract between Pegasus Development 107 Corporation ("PD 107") and Space SystemsLoral,Inc.(Loral"), as amended (the "87°W Contract‘). 1. Please clarify the relationship between the licensee, Pegasus Development Corporation, and the customer, Pegasus Development 107 Corporation. PD 107, the contracting party, is a wholly owned subsidiary ofPDC, the lcensce ofthe Ka—band satellte uthorization forthe 87°W orbital location. PDC is a wholly owned subsidiary ofPegasus Communications Corporation (‘PCC"), which is a publicly held company. Thus, both PD 107 and PDC are under common control by PCC. 2. Please indicate what obligation the icensee, Pegasus Development Corporation, has ifh customer, Pegasus Development 107 Corporation,fuils to perform under the trms ofthe Contract. While PDC has no obligation under the 87°W Contract, Commission precedent permits entitest execute satelite construction contractsin fullllment of an afflite lcensce‘s milestone requirement. See, eg. KastorCom World Sorelite, 225 Ciy ineAvene * Sute 200 * Bolo Crvqd, PA 19004 Tol 610934—7000 * For: 6109947121 * vamepghccom

Fem Jarmulnck Federal Communications Commission January 5, 2006 Page2 LLC, 18 FCC Red 22337, 22339 n.16 (It]. Bur. 2003) (holding that licensce met ts fist milestone when its commonly—contolled sister corporation entered into a non—contingent construction contract with a spacecraft manufacturer}; see also Report No. SPB—179 (June 18, 2002) (approving satelite contract executed by a commonly controlled affliate ofthe lcensee, File No. SAT—LOA—19931203— co04041, SAT—LOA—19950929—00125/00129, SAT—LOA—19950929—00137); in re Pegasus Development License Corporation, 18 ECC Red 23899 (2008) (@pproving satelite contract executed by parent entity oficensee). Here, the Hicensee PDC and the contracting party PD 107 are both 100% owned and controlled by PCC, As the Commission is aware, due to requirements oflenders in the communications area, and also for tax, corporate stricturing, and bankamipicy reasons,ts very common for the physical assets of an FCC licensce to be held by separate companies under common control by a single entity. 3. Please indicate progress payments made to date by Pegasus to Space Systems/Loral, Ic. by date, amountpaid, and a briefdescription ofwork completed (well understood terms in the sateliteindustry may be used to describe theprogress payments and/or reference may be made to the progress schedule previously submited aspart ofhe Contracy. In August 2002, Pegasus Development 107 License Corporation ("PD 107 License Corp.")a wholly owned subsidiary ofPD 107, submitte to the FCC a contract between PD 107 and Loral (the "107°W Contract), evidencing PD 107 License Corp.‘s compliance with its Ka—band satelite authorization athe 107°W orbital location. Based on review ofthat contract, the Bureau concluded that PD 107 License Corp. met ts inital milestone requirement. See Jn re Pegasus Development License Corporation, 18 ECC Red 23899 (2003). Under the 107°W Contract, PDC on behalfofPD 107 paid Lorala total o$1,025,000, with the most recent payment being made on July 1, 204. As provided under Article 30.2 and the Statement ofWork ofthe 107°W Contract, Loral provided EMES Services,including system design defintion/refinement services. In January 2005, PD 107 License Corp. surrendered ts Ka—band satellte authorization forthe 107°W orbita location. Concurrently, PDC negotiated with Loral to amend the 107°W Contractfor the deployment of a satelite athe 87°W orbital location, salvaging tothe extent possible the work related to the 107°W satelite. However, as a result of n insbility to obtain financing for the deployment of the Ke—band sateliteand the bankruptey ofcertain afflntes of

Fem Jarmulnc Federal Communications Commission January 5, 2006 Page3 PCC in 2004, PDC has not submitted any payments to Loralsince amending the 107°W Contract Very trly yours, jwr/(‘/éfl& Scott A. Blank Senior Vice President ofLegal and Corporate Affairs Jay Whaley Tony Lin,Pilisbary Winthrop Shaw Pittman LLP


Document Created: 2006-01-09 15:46:46
Document Modified: 2006-01-09 15:46:46
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