Attachment MOO

MOO

MEMORANDUM OPINION AND ORDER submitted by FCC,IB

MOO

2005-07-07

This document pretains to SAT-MOD-19981116-00087 for Modification on a Satellite Space Stations filing.

IBFS_SATMOD1998111600087_440325

Federal Communications Commission ba os—1962 Before the Federal Communications Commission Washington, D.C. 20554 In the matter of File Nos. SAT—MOD—20021213—00242 Lorat srACECOM CoRPORATION SAT—MOD—20000606—00100 SAT—MOD—19981116—00087 (Debtor—in—Possession) SAT—MOD—19981 16—00088 Application for Extension of Milestone Dates Call Sign: 82152 MEMORANDUM OPINION AND ORDER Adopted: July 6,2005 Released: July 7, 200 By the Chict, International Bureau: 1. INTRODUCTION 1. In this Order, we deny, with one exeeption, the multiple requests of Loral SpaceCom Corporation (Lorab)t extend or waive ts construction completion and launch milestones for its Telstar 9 satelite at the 69° W.L. orbital location. Loral‘s failure to make any progress in constructing its satelie a full nine years after it was licensed represents an abdication of its liense and renders its suthorization null and void by its own terms. Accordingly, the 69° W.L. orbital location and associated 3700—4200 MiHz, 5025—6425 Miz, 11.7—122 GHz, 13.75—14.0 GHz, 14.0—14.25 Gifz, 10.95—11.2 Gitz frequencies that had been assigned to Loral are available for reassignment. m BACKGROUND 2. On May 7, 1996, the Commission granted AT&T Corporation authority to construct,launch, and operate a hybrid C/Ku—band satellit at the 69° W.L. orbitallocation —now known as Telstar 9The suthorization established the following milestone dates: (1) commencement of construction by January 30, 1997; (2) completion of construction by December 30, 1998; and (3) launch and operation by January 30, 1999 Under the terms of the grant, unless extended by the Commission for good cause shown, the Telstar 9 authorization would become null and void in the event the space station was not constructed, Iminched, and successfully placed into operation in accordance with the technical parameters, trms, and conditions of the authorizations by the milestone dates. In 1997, the Commission consented to AT&T‘s * On June 28, 2005, Lorl fled an applcation relatingto the Telsr 9 satlftefor consent t he trnsfir o conrol of Loral SpaceCom Corporation (Dcbto—in—Possession), Delaware corponation (‘Loral SpaceCom DIP\),from LoralSpace & Communietions Lid. (Debtor—in—Possesion), a Bermuda company (*Old Loral®), to LoralSpace & Communications Inc.a Delaware corporation (New Loral®).. IBFS File No. SAT—T/C—20050628—00139.. This paricuar applcation is limited to the Telsar 9 steie. * Assigiment ofOrbital Location to Space Sations n the Domesti Fixed—Satelite Service, Order ond Aulhorizations11 ECC Red 13788 (1996) (uithorizing —— without opinon = the constrection, launch,and opertion ofeleven sateliteand assigning them to orbit loeations}; AT&T Corp, Memorandim Opinion andOrder, 11 ECC Red 15038 (In‘I Bur 1996)(authorizing. nter ali, the constraction ofTelsar 6 and laanch into the 69° W.L. orbit location)(Fetar 2 Order}. Telstr 6 was lte renamed Telsar 9 and transfered to Lorl SpaceCom. For ease of reference, w willonly use the name Telsar 9 in this order > Telster 9 Order, pare. 18

Federal Communications Commission pa os—1962 assignment to Loral ofcertain satelites used in the Skynet system, including Telstar 0 3. On November 16, 1998, Loral filed a request for an extension of ts milestone requirements. Specificaly, Loral secks to extend the construction completion and launch milestones by two years untl December 1, 2000 and February 1, 2001, respectively.".In support of ts request, Loral alleges that it timely commenced construction, but that further construction was delayed because of the 1997 in—orbit failure of Telstar 401 and the need to divertits resources towards replacing the failed satelite®. Loral argues that ts only option was to use a satelite from its group of newly authorized satelites that was nearest to completion as t replacement satelite." Loral further argues thatthisset back the construction schedule for its other satlftes, including the one at the 69° W.L. orbital location. in November 1998, Loral also filed an application to modify Telstar 9 by: (1) enlarging the service area to provide full coverage ofCanada and Mexico as wellas coverage throughout South Ameriea;® (2) adding extended Ku— band transponders; (3) increasing C—band transponder power, and (4) modifying the Ku—band transponder configurations." Loral states that the modification was prompted, in pat, by the Commission‘s DISCO 7 decision that permitted all U.S—licensed satelitesto provide both domestic and international service." 4.. On June 6, 2000, Loralfiled a second milestone extension request secking an additional two years until December 1, 2002 for completion of construction and February 1, 2003 for laurch of the satellte."" Loral states that the Telstar 9 satelite‘s construction schedule continues to be delayed because of the Telstar 401 falure._In addition, Loral argues that it could not complete construction until it has completed coordination i . i coordination agreements with Brazil, Venezuela, and Argentina." 5. On December 12, 2002, Loral filed its third request for an extension of the construction completion milestone until November 30, 2004 and the launch milestone until December 31, 2004." Loral laims t is stll having difficlty coordinating South American coverage for Telsar 9. Loral has AT&T Corp. and Lorl SpaceCom Corp, Order and Autorizatlon, 12 FCC Red 925 (In‘I Bur. 1997) (dssignnent Order). * TBFS File No. SAT—MOD—19981 116—00087. *u. " On January 11,1997,the Telsar 401 satelite sufered a caisrophicin—orbit ailureat the 97° W orbitlocation. Loralfiled an application foran emergency eplacement satefte with operations bexinning on or before July 1, 1997, See Public Noiee(Report No. SPB—79) Satelite Policy Branch Information: Applications Accepted for Fling May 1, 197. On May 24, 1997, the Tesa 401 saelite wasreplaced by Telstar , which had been a ground spare. * IBFS File No. SAT—MOD—19981 116—00068, pps. 31. Atth ime, Brazilhad TTU filings for satelits ocatedat 70° W.L, 68° WL, and 6#.5° W.Lorbit lacations hat could co—exist withasatliteat69° W...as longthey d notserve the same coverage areas * BFS File No. SAT—MOD—19981 16—00087, pps. 34. "* Amendment to the Commissin‘s Repultary Polies Governing Domestic Fized Satelltes and Scparate Interational Stelit Systems, Repor and Order B Docket No. 95—11, 11 FCC Red 2429 (1996)(DISCO1. Interationalservice is srvicetoorfrom point n the United Statesfrom or to pontsoutside ofhe United Stes. " Amendment to he Commission‘s Regulatory Plices Governing Domestic Fixed Satelite and Separate Internationl Stelite Systems, Repor and Order, 11 FCC Red 2429 (1996) (DISCO 1 Order} " tBFs File No. SAT—MOD—2000060600100. " 1BE File No. SAT—MOD—2000060600100,p. 3—4. "* IBFS No. SAT—MOD—20021213—00042,p. 23. "1Br9 File No. SATMOD—20021213—00042,p. 2.

Federal Communications Commission pa 051962 notfiled a further requestfor extension ofthe milestone requirements. 6. In a letterdated November 1, 2004, Loralstatesthatit has entered intoa contractto construct the Telsar 9 satelite, but has not begun physical constraction.. Loral states that the delayis due to continuing difficultiesassocited with coordinating the Telstar 9 satelite as well tcircumstances that necessitated Loral‘s Chapter 11 reorganization."" i. DiSCUssION 7. The Commission has required. satelite Hicensees to adhere to system implementation milestone schedules for more than two decades,"" For most ofthat time, the Commission imposed three milestones for each space station or stelite system t licensed, requiring licenseesto enter nto a satelite— manufacturing contract (sometimes expressed as "commencing. construction"), complete. sutelite construction, and launch the sateliteby specific dates." Milestone schedulesare designed to ensure that Heensees are proceeding with construction and will launch theirsatelites in a timely manner, and that the orbit spectrum resource is not being held by licenses unable or unwillng to proceed with their plans."" Milestones ensure speedy delivery of service to the public and prevent warchousing of valuable orbit locations and spectrum by requiring Hicenses to begin operation within a certain time.®. Warchousing could hinder the availabiity of services to the public at the earliest possible date by blocking entry by other entites willing and able to proceed immediately with the construction and launch oftheir satelite systems"" Moreover, warhousing undercuts decisions by the Commission to allocate scarce spectrum resources t satelite services over other competing services. !* Leterdated November 1, 2004 from John Stemattomey for Lorl Space and Communications L. to Thomas S. Tyez, Chict Satelite Divisio, Intemational Burenu. "" See, ex., Inquiy into the DevelopmentofRegulatory Policy in Regard to Diret Broadcast Satlltes, Report and Order, 90 F:C.C.2d 676, 719 (pae.114)(1982) (adepting rule requiring DBS Teenseesto "begin constuction or complete contictng for constriction® ofsaelites wthin one year afer recelvingconsruction permito, and MCT Communications Cotp, Memorandm Gpinion and Order, 2 FCC Red 233, 233 (par 5) (Com, Car. Bur.1987) (MCT Order) (noting thta milestone schedule s included in each domestspace sttion nuthorization issued by the Commissiony e also Noris Satlite Conmunications,In., Memorandm Gpinion and Order, 12 ECC Red 22209 (1997) Worei Review Order}; Moming Star Stelite Company,LLC. Memorandum Opimion and Order, 15 FCC Red 11350 (ntlBur.2000), f, 16 FCC Red 11550 (2001)(Morning Stor Reconsideration Order). !* We note, however, thtfo fture Tcensesthe milestones assetfrth in theSpace Staion Licensing Reform Order, ar as follows: (1 eter a non—contingent constrction contract(2)completecricaldesign review(3)besin physical constiction;(4) Inch;and (5) certify entre system s opertional. Amendment ohe Commisson‘s Space Staton Licensing Rulesand Polices, is Report and Order, 1B Docket No.02—34, 18 ECC Red 10760, 10827 9 173 (2003) (SpaceSion Licensing Reform Order. " See,eg., Advanced Communications Corportion, Memrandarm Gpinion and Order, 10 ECC Red 13337,13338 (pan. 4)(Bur. 1995) (Adbanced Order, af"411 ECC Red 3399 (1995) (Advanced Review Order)afd AdvancedConmunicatons Corporation . FGC, 84F3 1452 (D.C. Ci, 1996) (wapublished order availableat 1996 WL 250160National Exchange Satelite, Ic, Memorandum Opinion and Order, 7 FCC Red 1990 (Com. Car. Bur, 1992) (Nersar OrderAMSC Subsidiry Com, Memorandam Opinion and Order8 FCC Red 4040, 4042 (para. 13) (1993)(AMSC Order); Motorol,Inc. and Teledesic LLC, Memorandrm Gpinion and Order, 17 ECC Red 16543 (IntI Bur 2002)(Moorolo/Teledesic Order) ** see The Esablshment ofRolicies and Service Rules forthe Mobile Sateite Servie n the2 GHtz Band, Report and Order, 1B Docket No,99—81,1 FCC Red 16127, 16177 (pre.106) (2000), See also Columbia Communications Corportion, Memorandum Opinion and Order, 15 FCC Red 15566, 15871 (pae. 11) (InI Bur 2000)(Rist Columbia Milstone Order " SpaceStaion Licensing Reform Order , 18 ECC Red at 10827 (pra.173), cting PandnSaKe—Band License Revocation Review Order, 16 FCC Red at 11537—38 (pama. 12), ing NexsatOrder,7 FCC Red t 1991 (paa.8); MCI Order2 BCC Red at 233 (para. 5)Pst Colurmbia Mlestone Order,15 CC Red at 15571 (pare.11)

Federal Communications Commission pa os—1962 8. Loralfiled three requests o extend the construction and Iaunch milestones upon which its authorization is conditoned. The standard that licensees must meet to justify a milestone extension request is well established. Generally, we grant milestone extensions to Fixed—Satelfite Service icensees, such as Loral, only when the delay in implementation is due to extraordinary circumstances beyond the control othe licensee,"" or when there are unique and overriding public interest concernsthat justfy an extension." As discussed below, although Loral may have originally articulated a valid basis for extension of its milestone requirementsin it frst extension request, it has since failed to jusify further extensions., Loral acknowledges that t has not taken any steps towards the physical construction of the satellite although almost nine years have now passed since grant of the license."". Thus, the record establishes that Loralhas effectively abdicated ts license, which renders ts authorization null and void. 9. First Mlestone Extension Request. Loral claims that it met is first milestone by entering into a binding, non—contingent contract construction contract.". Although that is sufficient to meet the first milestone, the Commission has held that there must be neithesignificant delay between the execution of the construction contract and the actual commencement of physical construction nor conditions precedent to construction.®" Loral‘s milestone schedule called for construction to be completed by December 30, 1998 and launch ofthe stellite by January 30, 1999, On November 16, 1998, Loralsought anextension until December 1, 2000 for the completion of construction and February 1, 2001 for the Iaunch of the satelite. Loral rlies upon the 1997 in—orbit failure of its Telstar 401 as a basis for the delay in constructing the Telstar 9 satelite. We find this argument persuasive because the in—orbitfailire was not within Loral‘s control and the need to address this sitution immediately by launching a replacement stellie on an emergency basis would conceivably justify a delay in commencing the construction of other satelftes such as Telstar 9. Thus, a one—time only extension of two years of the completion of construction and launch milestones would be warranted in light ofth failure ofthe Telstar 401 satllte. 10. Second Miestone Etension Request. In ts second milestone extension request filed on June 6, 2000, Loral secks to extend milestone for completion construction until December 1, 2002 and the milestone for Iaunch of the satelite until February 1, 2003.. Loral again relied upon the 1997 in—orbit failure ofthe Telstar 401 satelit. In addition, Loral cites the proposed modifications to the satelite to permit full coverage of Canada, Mexico, and South America as justification for its second milestone extension request. Loral states that these changes were motivated in part by the Commission‘s DISCO 7 decision in which the Commission allowed ll satlftes to provide domestic as well as intemnational service. Loral also argues that that it could not commence construction until it had coordination sgreements in place with several South American countres: 11. Turing to Loral‘s frst argument, while we believe that the 1997 in—orbit failure of the Telsar 401 satelite justified one milestone extension, Loral has not demonstrated ts continued impact on ® 47 CFR, §28.117@1). See also INTELSAT LLC, Order and Authorizaton, 17 FCC Red 2391, 2382 (pra. 5) (Int! Bur.2002);Columbia Communications Corporation, Memorandars Opinion and Order, 15 FCC Red 16496, 16497 (par. 5)(t‘I Bur.2000) (Second Columba Milestone Order; Nexsat Order,? ECC Red at 1991 (par 8y Hughes R and Galaxy A—R Domestic ixed—Satelies, Orderand duthorizorion,5 FCC Red 3423,3424 (pars. 11) (Com. Cr. Bu, 1990); MCI Order, 2 FCC Red at 233 (prn. 5. "ancr® g25.100). * Letterdated November 1,2004, from Jobn Stem, attomey for Lorl Space and CommunicationsLid.to Thomas 8. Tyez, Chiet, Satelite Diision, FCC. ® Letter dated November 1,2004, from Jobn Stem, attomey for Lorl Space and Communications L. to Thomas 5. Tyez. Chiet,Satelite Divsion, FCC. See Tempo Enterprises, nc. t al, Memorande Opinan and Order, 1 PCC Red 20,21 47 (1986) (Zempo Order) * Noris Satlite Communications,Inc.Applicaionfor Review ofOrder Denying Extension of Time to Construct andLaunch Ko—bandSatelteSystem, 12 ECC Red 22299 (1997), 49.

Federal Communications Commission ba os—1962 the construction ofthe Telstar 9 satlfite. ‘The Commission has explained that where there is deay due to cireumstances beyond the control of the icensee, "we expectlcenseesto consider atermatives or exercise reasonable care to attempt to resolve issues that may impede ts ability to meet ts milestones" We note that following the failure of the Telstar 401 satelite in February 1997, Loral launched a replacement satellte — which had been a ground spare in May 1997. in addition, Telstar also subsequently constructed and Iaunched its Telstar 7 satllite into the 129° W.L.orbit location and stated construction on its Telstar 8 satelite that was to be launched into the 89° W.L. orbi location. These actions demonstrate that any issues surrounding timpact ofthe Telstar 401 satelit failure on subscquent Telsta series satelites had been resolved. Accordingly, it was incumbent upon Loral to explain why an additional extension oftime to complete construction of Telstar 9 was warranted.. Instead, Loral merely reiterated the same general {ustification included in its first milestone extension request without any further showing that construction of Telstar 9 was stll being affected by the 1997 Telsar 401 failure almost three and one—halfyears ate. Consequently, we rejectthis argument as a basis for Loral‘s second milestone extension request. 12. Reviewing Loral‘s second argument, it is beyond doubt that coordination difficulties do not {ustify an extension of milestone requirements. Grant ofa license to Inunch and operate a satllte carries with it the responsibility to coordinate with other potentially affected satellte operators.. The U.S. is under a reaty obligation, in connection with its membership in the Intermational Telecommunication Union (FTU), "* to coordinate all U.S—licensed satelte systems:". ‘The coordination procedures are intended to ensure thatthe operations of one country‘s satlltes do not cause harmful interference to the operations of another country‘s stelites. Once a system has been properly coordinated with the ITU, it is entitled to intermational recognition and is protected against interference.. If a system has not been successfully coordinated, it is obligated to avoid interfering with other properly coordinated systems Moreover, such an uncoordinated system receives no protection from interference caused by other stelite systems. 13. in light ofthe intermational coordination responsiblities, the Commission‘s rules specifically provide that a licensee is not protected against interference caused by foreign satelites until it has successfully complete coordination."" This provision is also typically imposed as a condition on the Hicense as was the case with Telstar 9."" The Commission more recently reminded applicants that they "" WB Holdings 1 LLC, Applcation for Extension of Launch and Operation Milestonc, Memorindim Opinion and Order, DA 05—1698(rl. Jie 21, 2005)(*W Holdings Order®) (Granting only twelve monthsofrequested cightcen month linch and operating milestone extensionreques0. "* See Final Acts of he World Adminisrative Radio Conference for Space Telecommunications, Geneva, 1971. Because orbial locations and spectrurm must be shared among nations and because satelite coverageareas cross mational boundaries, intemational procedires have been developed to ensire that itererence levels remain acceptable when accessing the ori—spectrum resourc. " see Amendment Of Pars 2,22 and 25 ohe Commission‘s Rules to Allocate Spectrum fo and to Establsh Other iRules and Polies Petaining t the Mobile Satelite Servicefor the Provision ofVarious Common Carier Services, 6 BCC Red 4900 (1991) (describing the intemational coordination proces); See abo 47 CER, § 25.1110) (‘Applcants, permiteesand Heensees ofradi sations govemed by ths prt shall providethe Commision withall information it requires for the Advance Publcation, Coordination and NotiReation of frequency assignments pursiant t the Interational Radio Regulations. No protection from iterfrence caused by radio stations authorized by other Administations is guaranteed unless coortintion procedures are timely completed or, wth respect to individual administations, by succesfilly completing coortination agreements. Any staion authoriztion for which coortiation has not beencompleted may be subjec o addtionalterms and conditionsas required to effect coortintionofthfequency assignments wth other Administations.") "arcr® 251110 " Telsar 9 Order at par22.

Federal Communications Commission pa os—1962 "take their Hicenses subject to the outcome of the interational coordination process" and that the Commission "does not guarantee the success of the required coordination.""". Consequenty, problems with coordination cannot be used as basis for an extension of milestone requirements because the duty to coordinate with potentially affected satellte operators, and the risks inherent in this process, are assumed by the license upon acceptance of the authorization. Hence, Loral‘s coordination difficulties do not constitute an extraordinary circumstance beyond an applicant‘s control. 14. We also reject Loral‘s argument that an extension was required because it filed to modify the desizn ofthe Telstar 9 stelite in order to take advantage of the DISCO 7 decision.. Specifically, Loral decided to increase the coverage area of the satelite. Although the Telstar 9 satelite, as originally proposed, would have been able to provide some intermational service from the 69° W.L. orbit location due to spillover of its coverage pattem, Loral decided to modify its license to provide full coverage of South America.. The Commission has held that the decision to file a modification application is a business decision within the control ofthe lcensee that does notJustfy a milestone extension‘" and that to hold otherwise would allow licensees to defer milestones indefinitely with repeated modifications." Consequently, Lorl‘s decision to extend the Telstar 9 satelite‘s coverage area was not an extraordinary circumstance beyond ts control"" Further, its decision not to commence construction until it had completed coordination agreements was a business decision that was wholly within Loral‘s control. 15. Third Milestone Extension Request. in its December 12, 2002 request, Loral cites its continuing problems with reaching a coordination agreement with Brazil and Argentina. We reject it for the reasons articulated above. 1v. concLusion 16. Loral has effectvely abandoned prosecution of ts milestone extensions and has not commenced physical constrction ofis satellite more than nine years afte it was lensed. Indeed, Loral has failed to meet even one of the dates proposed in its own milestone extension requests and the construction completion and Iaunch milestones specified in Loral‘slast extension request,"November 30, 2004 and December 31, 2004, respectively, have passed without Loral filing for further extension. Thus, even ifwe were to grant allpending requests, Loral‘s authorization would stllbe declared null and void forfiling t meet the milestons as extended. Consequently, Loral‘s authorization to lunch and ® Amendment of the Commission‘s Space Sation Licensing Rulesand Polies,st Reportand Order,18 FCC Red. 10760 pars. 9) (2003). "* See LoralSpace & Communications Comportion Requestfor Etensionof Time to Constrct, Launch, and Operate a Kaband Satelite System in the Fixed Satllte Servie, Order,16 FCC Red 11044, 1047 (InI Bur 2001) (Coral Ko—RandExtension); Tempo Enterprises,Inc. t al, Memorandum Opinion and Order,1 CC Red 20 (1986) (DBSConect Review Order) ** See PanamsatLicensee Cor. Application for Authoricaion to Construct Launch, and Operatea Ka—band Communications Satelte System in the Fixed—Satelte Service at Orbitl Locations 58° WL.and 123° WL, Memorandum Opinion and Order, 13 ECC Red 18720, 18723 (In‘I Bur, 2000); Advanced Communications Corportion, Memoranarm Opinion ard Order, 10 ECC Red 13337, 13341 (Inl Buz, 1995). "* See Loral Ke—band Extension, 16 FCC Red at11047; DBS Contract Review Order Tempo, 1 CC Red 20 (1986); seealso Columbia Communications Corporation Ptition to Revoke Authorzation ofOrion Satlite Corporation to Constrit, Launch,and Operate an Itemational Communications Stelte t be Located t 47 W.L., Memorandire Opirion andOrder, 15 FCC Red. 19866, 15571 (In‘! Bur.2000)(Commission deniedColumbia‘s requestto toll the milestne deadlines for a C—band GSO satelfte based on Columbia‘s aserion that it could not proceed with satelit constuction untl it knew whether it would b grante the Ku—band authortyfo ha lcation it requesed in a penting modifiation applicaton). " Fil No. SAT—MOD—200zi213—00002.

Federal Communications Commission ba os—1962 operate a satellite atthe 69° W.L. orbitlocation is null and void. The 69° W.L. orbita location and associated frequencies originally assigned to Loral are now available to other potentia applicants. v.. ORDERING CLAUSES 17. Accordingly, TT 18 ORDERED that the Loral SpaceCom Corporation‘s First Milestone Extension Request, File SAT—MOD—19981116—00088 IS GRANTED and the completion of construction milestone is extended until December 1, 2000 and satellite launch milestone is extended until February 1, 2001. 18, IT IS FURTHER ORDERED that the Loral SpaceCom Corporation‘s Second and Third Milestone Extension Requests, File Nos. SAT—MOD—20021213—00242 and SAT—MOD—20000606—00100, ARE DENID. 19. IT IS FURTHER ORDERED that the authorization held by Loral SpaceCom Analysis Communication Services, Inc. is DECLARED NULL and VOID and the 69° W.L. orbitallocation and associated frequencies originally assigned to Loral SpaceCom are available to potentil applicants. 20. IT 1 FURTHER ORDERED that the application of Loral SpaceCom to modify its lcense, File No. SAT—MOD—19981 116—00087, is DISMISSED as moot. 21. This Order is ssued pursuant to delegated authority, 47 C.F.R. § 0.261, and is effective upon release. repra}, cor 1caions commssion / Donald Abelson Chief International Bureau


Document Created: 2005-07-07 12:24:55
Document Modified: 2005-07-07 12:24:55
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