Attachment petition

petition

PETITION FOR RECONSIDERATION submitted by GlobalStar

petition

2004-07-28

This document pretains to SAT-MOD-20020722-00110 for Modification on a Satellite Space Stations filing.

IBFS_SATMOD2002072200110_400842

RECEIVED JuL 2 6 2004 BEFORE THE mos c mason an commes FEDERAL COMMUNICATIONS commiSSION "**,PEEn wasHINGTON, D.c. 20554 In re License of ) GLOBALSTAR, LP. ) File Nos: ) saT—LoA—19070026—001st/s2s3/54/56 To Launch and Operate a Mobite Satetlite )) SATWOD300ogyt.o01t0n778719 saT—AMD— — Seevice Sysiens in the 2 Glic Bond )) SAT—MOD—20020722.00107/08/09/10/12 To: The Commission Int! Bure, JUL 2 6 z004 Front Office PETITION FOR RECONSIDERATION William E. Ader Thomas Gutierez Vice President, Legal and Luras, Nace Gumernez & Regulatory Affairs Sacns, Cartersp GromatsrarLLC 1111 19° Street, N.W. 3200 Zanker Road Washington, D.C. 20036 San Jose, CA 95134 (202) 857—3500 (408) 933—4401 Willism D. Wallace Croweu & Mormc LLP 1001 Pennsylvania Avenue, N.W Washington, D.C. 20004 (202) 624—2500 Attorneysfor Globalstar LLC July 26, 2004

TABLE OF CONTENTS SUMMARY.... PETITION FOR RECONSIDERATION . BACKGROUND ... STANDING... L THE 2 GHZ MSS LICENSE SHOULD BE REINSTATED NOW THAT THE GLOBALSTAR SYSTEM HAS EMERGED FROM 3 BANKRUPTCY ... manten 1t THE REVOCATION OF GLPS LICENSE WAS UNLAWEUL.. A. The Commission Lacks the Statutory Authority to Revoke A License By Declaring It "Null and Void"... B. The Commission Cannot Revoke A License For A Reason Not Expressly Enumerated in § 312(@) C._ Seetion 312(c) Of The Act Was Triggered By The Allegation That GLP Failed To Timely Construct... D The Condition On GLP‘s License That Made It Subject To Expedited Revocation Is Unlawful And Unenforceable u. THE REVOCATION OF GLPS LICENSE WITHOUT A HEARING VIOLATED §§ 309(e) AND 312() OF THE ACT.. A. GLP Had a Statutory Right To A Show Cause Hearing Under § 312(0)...... B. An Evidentiary Hearing Was Required Under § 309() To Resolve Substantial And Material Questions Of Fact. IV. GLP WAS NOT AFFRORDED THE FAIR NOTICE OF THE COMMISSION‘S STANDARDS REQUIRED BY DUE PROCESS. A. GLP Could Not Have Received Full And Explicit Notice By Reading The Regulations B. The Express Terms ofthe License Condition Did Not Provide Full And Explicit Notice. .18

6. Full And Explicit Notice Was Not Available From A Fair Reading Of Commission Precedent... Lo THE COMMISSION UNLAWFULLY DENIED GLP AND OPPORTUNITY TO REFORM THE SSL CONTRACT. 20 A The Revocation of GLP‘s License Violated The "Second Chance" Doctrine OF APA § 558(c)... B. Faimess Dictated That GLP Be Given An Opportunity to Cure The Disqualifying Defect... VIL— THE COMMISSION HAS ENFORCED ITS CONTRACT MILESTONE ARBITRARILY.. i THE COMMISSION‘S MILESTONE ENFORCEMENT POLICIENS RESULT IN CANCELLATION OF LICENSES THAT MEET THE MILESTONES..... . 24

SUMMARY Globalstar LLC and Globalstar Satellite LP seek reconsideration ofthe Commission‘s order affirming the revocation of the 2 GHz MSS license of Globalstar, L.P. (°GLP"). GLP‘s license included the condition that system implementation "milestones" be met. The license at issue explicily provided thatit would become null and void without further action by the Commission in the event the system was not "constructed, Iaunched and placed into operation" by three specified dates. But two years before GLP‘s deadline to construct the space station, the International Bureau found that GLP‘s non—contingent satelite manufacturing contract was defective because it conformed to the milestone schedule proposed by GLP in an application for modification of its license. Because GLP allegedly failed to meet the contract requirement in a timely fashion, the Bureau declared GLP‘s license null and void. The only process permitted by applicable law for the revocation of a radio station license is the prior notice and hearing procedures required by 312(c) ofthe Act. Because it operates to revoke a license without prior notice and hearing, the condition ofGLP‘s license that makes its subject to being null and void without further action by the Commission conflicts directly with the "312(c) ofthe Act. Thus, the condition is ultra vires and a nullity. Pre—revocation notice and hearing are required by the clear and mandatory language of § 312(c) of the Act. By virtue of its duty to execute and enforce the provisions of the Act, the Commission must abide by § 312(c) until it is changed by Congress. Since it did not afford GLP cither prior notice or a hearing, the Commission must reinstate GLP‘s license. Ifits is going to

persist in pursuing the revocation of GLP‘s license, the Commission must do so in the manner authorized by § 312(c) The Commission did not reinstate GLP‘s license because i: (1) was "not convinced" by GLP‘s statements astoits *intent to proceed;" (2) had "questions" about GLP‘s financial abilityto proceed; and (3) questioned whether GLP "in fact intended"to construct either the system it originallyproposed or the modified system. Because it had substantial and material questions offact that precluded it from finding that the grant ofthe modification application would serve the public interest, the Commission was required to formallydesignate the modification application for hearing under § 309(c) of the Act Due process precludes the Commission from penalizing a party for violating a rule without first providing advance, full and explicit notice as to the conduct required by a rule. In this case, there was no rule that put GLP on notice thatitslicense was atrisk. On July 29, 2002, when GLP submitted its contract to the Bureau, there was no rule that required a 2 GHz MSS licensee to enter into a binding non—contingent contract for the satellit or satellite system within one year ofgrant. The non—contingent contract milestone was not "codified" until § 25.164 of the Rules was promulgated in May 2003 Absent a rule, the Commission could not disqualify GLP unless some precedent spoke directly to GLP‘s situation and gave it fir waming that ts Kense might be revoked. No such precedent existed. Six months after GLP‘s license was revoked, the Bureau finally issued a decision in which it announced that a construction contract incorporating variations from the space station license that are reflected in simultancously—filed modification application cannot meet the construction milestone if the application is denied. To comply with the full and explicit notice requirement ofue process,the ic

Bureau had to publish ts policy prior to enforcing it to revoke GLP‘s license. The APA provides that the Commission may lawfully revoke a license only after giving (a) noticein writing ofthe conduct that may warrant revocation and (b) an opportunity to comply with all lawful requirements. The obvious purpose behind thi requirement is tprovide an opportunity to correct transgressions prior to termination of a license. GLP effectively evoked this doctrine by explicitly requesting 90 days to renegotiate its contract if its request for limited waiver of its milestone deadlines was denied. GLP was never afforded such opportunity.. As a result, the revocation ofGLP‘s license was invalid. Like any administrative agency, the Commission must treat similarly situated partics alike. In this instance, the Commission denied GLP‘s request for extension for future milestones. The basis for denial was that the extension request was necessitated only by "business decisions" under GLP‘s control. But just days afterthe Commission affirmed that denial, the Commission granted TMI Communications a waiver based upon unguestionably voluntary "business decisions". This disparate treatment demonstrates the Commission action in the GLP proceeding to be arbitrary and capricious. When the Bureau cancelled GLP‘s license for a GO Stationary Satelite that would serve North America it did so even though GLP requested no milestone extensions for that satellte, and the contract at issue included all milestone dates specified in the licenses for that satellte. The Bureau offered no explanation for that cancellation. In the FCC Order the Commission offered only the post hoc explanation that all five license space stations were treated as an "integrated system" ather than stand alone components. The Commission‘s decision contravened traditional concepts of due process, a there was no policy on "integrated systems"" in place when the Commission adopted

rules for 2 GHz MSS systems.. Prior to the ECC Order the Commission had never stated that milestone compliance ofa hybrid system would stand or fall on the compliance on each individual component. As such, the Commission failed to give GLP the required fair and prior notice ofthe rules that it intended to apply. Forall othe above reasons the ECC Order should be reconsidered and reversed. dve

BEFORE THE FEDERAL COMMUNICATIONS COMMISSION WaSHINGTON, D.C. 20554 In re License of File Nos GLOBALSTAR, L.P. SAT—LOA—19970926—00131/52/53/54/s6 SAT—AMD—20001 103—00154 To Launch and Operate a Mobile Satellite SAT—MOD—20020717—00116/17/18/19 Service System in the 2 GHz Band SAT—MOD—20020722—00107/08/09/10/12 To: The Commission PETITION FOR RECONSIDERATION Globalstar, LLC ("GLLC") and Globalstar Satellte LP ("GSLP"), by their attomeys, and pursuant to § 405(a) of the Communications Act of 1934, as amended (*Act") and § 1.106(b)(1) of the Commission‘s Rules (‘Rules‘), hereby petition the Commission to reconsider its Memorandum Opinion and Order, FCC 04—126 ("Order"), by which it denied the Emergency Application for Review filed by Globalstar, L.P. (°GLP") with respect to the revocation of ts 2 GHz MSS license by the International Bureau (*Bureau).. See Globalstar, LP., 18 FCC Red 1249, 1255 (Intl Bur. 2003)(‘Revocation Order"). BACKGROUND GLP‘s 2 GHte MSS license included the condition that specific system implementation deadlines or "milestones" be met. See Globalstar, L.P., 16 FCC Red 13739, 13759 (Int‘ Bur/OET 2001) (Authorization Order"). The license explicitly provided that it would become null and void without further action by the Commission in the event the system was not "constructed, launched and placed into operation" by three specified dates. Z4 at 13759. But two years before GLP‘s deadline to construct the space station, the Bureau found that GLP‘s non—contingent satellite manufacturing contract was deficient in certain respects. See Revocution Order, 18 FCC Red at 1255. Because GLP allegedly failed to meet the contract requirement in a timely fashion, the Bureau declared GLP‘s license "to construct, launch, and operate its proposed 1

satellite system is null and void." Revocation Order, 18 FCC Red. at 1249. GLP sought Commission review of the Bureau‘s action. The Commission affirmed the Revocation Order, and reaffirmed its "policies expediting provision of satellite service, by expediting [the] revocation of licenses held by applicants {sic} who have not constructed their satellites in a timely fashion." Order, at1. It clarified that GLP‘s license had been cancelled "because its construction contract did not show adequate intention to proceed with construction, and to bring its satellte system into service within the milestone deadlines specified in the license." 14. at 10. Five days after upholding: the Revocation Order, the Commission: waived. an implementation milestone, allowing another licensee to satisfy its first milestone without even entering into a satellite construction contract." STANDING GLLC and GSLP (collectively "Petitioners") were formed after the time for filing comments on GLP‘s application for review of the Revocation Order. GLLC is the successor in interest to GLP with respect to the claims related tothe 2 GHz MSS license. It was appointed by the Bankruptey Court to pursue all claims and causes of action owned by GLP following the effective date ofthe debtor‘s plan of reorganization under Chapter 11. GSLP is an affiiate of Thermo Capital Partners L.L.C. ("Thermo"), which now holds the controlling ownership interest in GLLC.* GSLP filed comments in support of GLP‘s Emergency Application for Review, butits comments were not addressed in the Order:" ! Se TMMI Communications and CompanyL.P., CC 04—148,at 7 (June 29, 2004) * See Leter fom Wiliam D. Wallaceto Marlene . Dortch of723/04. * Themo purchased the assets of GLP in its bankruptey proceeding, and therby acquired an interest in teinstatement ofth 2 GHtz MSS lcenses. See Letr fom Willam D. Wailaceto Marlene H. Donth of 122203

Both parties hold interests that are adversely affected by the Order within the meaning of § 1.106(b) of the Rules. GLLC is the representative of the interests of GLP, which has been dissolved, and the party that. would expect to obtain the 2 GHz MSS license upon its reinstatement. GSLP has an ownership interest in GLLC, and represents the interests of the new owners of the Globalstar system. Both GLLC and GSLP would benefit by the reinstatement of GLP‘s 2 GHz MSS license under GLLC‘s control so that the licensed faciities may be put to use for the expansion and second generation of the Globalstar MSS system. (which GLLC currently operates in the 1.6/2.4 GHz band) ARGUMENT L THE 2 GHZ MSS LICENSE SHOULD BE REINSTATED NOW THAT THE GLOBALSTAR SYSTEM HAS EMERGED FROM BANKRUPTCY Although the Bureau did not discuss GLP‘s bankrupicy in canceling the 2 GHz MSS licenses, it is clear that GLP‘s bankruptey was a significant, if not fhe significant, factor in the decision. A year after the Revocation Order was released, the Bureau ruled that delay arising from bankruptey was not sufficient justification for granting an extension of implementation milestones. See Final Analysis Communication Services, Inc., 19 FCC Red 4768, 4783 (Int‘ Bur. 2004). The Bureau cited the Revocation Order as one case in which it had "not been persuaded to extend a milestone deadline because of a bankruptey proceeding."" 1d. at 4775. It is inconceivable that the Bureau would cite the Revocation Order as precedent for such a claim unless it considered this case as one where bankruptey was the rationale for a milestone extension request. Moreover, the Commission made its sentiments known in this case by stating: "Given that Globalstar has entered into bankruptey, we have questions regarding whether Globalstar has * See Motion for Leave to File Comments in Support of Emergency Appliation for Review (May 28, 2000 Commentin SupportofEmergency Application for Review (May 28, 2004) 5

the financial ability to proceed with its business plan." Order, at 14. Obviously, if it equates bankruptcy with an inability to proceed to construct, launch and operate a proposed satellte system, then the Commission used GLP‘s applications merely as an opportunity to revoke the Hicense after GLP filed for Chapter 11 bankruptey. The decisions in this case contravene the federal policy underlying Chapter 11 bankruptey, which is for the debtor (or its successor company) to survive, unburdened by debt, with the financial wherewithal to continue as a going concem." Here, the Bureau and the Commission took the exact opposite view of Chapter 11 reorganization. They used GLP‘s bankrupteyto conclude that its 2 GHz: MSS license should be cancelled because the company would not survive. Both that conclusion and the cancellation of the license are inconsistent with the Bankruptcy Code. The Bureau‘s decision in Final Analsis and in the Commission‘s Order in this case indicate that the agency violated the automatic stay provisions of § 362(a) of the Bankruptcy Code which preclude "any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate." 11 U.S.C. § 362@)().. The Commission defends its actions by relying upon the "police and regulatory power" exception under § 362(b)(4) to justify the revocation of GLP‘s license while it was in bankruptey. See Order, at 15. But the statements in Final Analysis and the Order show that the Commission did in fact "take action that discriminates against a licensee simply because it is in bankruptey" under the guise ofpursting regulatory enforcement. 14. at 16. Again, the regulatory exception is designed to permit governmental entities to pursue legitimate regulatory requirements, not to impair a debtor—licensee‘s estate simply because it is in bankruptey. If governmental entities were free to cancel valuable licenses based on the bankruptey of the licensee, particularly * See Brotherhood ofRihwayv. REA ExpressInc, 523 F2d 164, 167 (2 Cir. 1975) a

licenses that go to the heart of the debtor‘s business, then the ability of those companies to reorganize under Chapter 11, and the very purpose ofChapter 11, would be severely curtailed.® In any event, as Chapter 11 envisions, the Globalstar system recently emerged from bankruptey as a going concem with sufficient financial resources to move forward on its mission of providing telecommunications services by satellte to rural and underserved populations in the United States and globally. GLP had not missed any milestones when its 2 GHz MSS license was revoked. Itstll had an opportunity to meet all future milestones and retain the license as an integral part of ts reorganization, consistent with the policies underlying the automatie stay and the Bankruptey Code. The Commission should rectify ts erroncous decision contravening the Bankruptcy Code and automatic stay by reinstating GLP‘s licenses for assignment to GLP‘s reorganization successor, GLLC. 11. THE REVOCATION OF GLP‘S LICENSE WAS UNLAWEUL The Commission candidly disclosed its policy of expediting the "revoeation of licenses" held by licensees who allegedly have not constructed their satelites in a timely fashion.. Order, at 1. Thus, the Commission admitted that it revoked GLP‘s license." Consequently, this case squarely raises the issue of whether a license can be revoled without affording the licensee prior notice and the opportunity for a hearing under § 312 of the Act, see 47 U.S.C. § 312(c), and §§ 1.91 and 25.160 ofthe Rules. See 47 C.F.R. §§ 1.91(@)—(0),25.160(c)—d). m{‘ammummnom‘ Inc., 537 US. 293, 302 (2003) (expresing skeptciem ofany expisive ineprctiion of governmental power to impai debtorsestes, and noting that where Congress has interded to provide regulatory exceptions to provisions of the Bankeuptcy Code, it has done so clearly and expressy). " When it adepted an implementation milestone schedul for 2 GHtz MSS systems,the Commission ecognized that non—compliance wth a milestoe could result n the "automatic cancelation®o license, Establishment ofPolicies and Service Rulesforthe MSS in the 2 GHiz Band, 15 ECC Red 1612716178 (2000) °2 Gif MSS Order"),Because the words "cancel"and "revoe" are symonymous,see Alack‘s Low Dictonary 1322 (6th ed. 1990), utomntic Hicense "eancelation"is nothing more than a euphemnism foravtomatc Tcense "revocation" Hence,courts teat the *cancelation" oa leenseas the ‘revocation"of he lcense. See FCG $37 US.at301; Pn re RCC217 F3d 125, 140 2.10 (D.C. Cir2000; P e NextWave Pers, Communs., Ic. 200 F3d43, 59x 15 (D.C. Cir. 1999)

A. The Commission Lacks The Statutory Authority To Revoke A License By Declarine It "Null And Void" Revocation of a license is an "administrative sanction." 47 U.S.C. § 312; 47 C.RR. § 25.160. See 5 US.C. §551(I0YP). Indeed, it is the "ultimate sanction."" Under. the Administrative Procedure Act ("APA"), "(a] sanction may not be imposed or a substantive rule . .. issued except within jurisdiction delegated to the ageney and as authorized by law."" 5 U.S.C. § 558(b). Moreover, APA § 558(b) requires "express grants of statutory authority" for agencies to impose sanctions. American Bus Ass‘n v. Slater, 231 F.3d 1, 6 (D.C. Cir. 2000). Therefore, a Hicense maybe revoked only as expressly authorized by statute. No provision of the Act, nor any other statute, expressly authorizes the Commission to revoke a license merely by declaring it null and void. When its authority to automatically cancel or revoke a license has been challenged, the Commission has been unable to point to any express, statutory delegation of such authority. See Glendale Electronics, Inc., 19 FCC Red 2540, 2543—45 (2004). See also Nortistar Technology, LLC, 19 ECC Red 3015, 3022—23 (WTB 2004). Instead, the Commission has turned to its authority to ssue conditional licenses, which it somehow finds "firmly granted"in § 301 of the Act. Glendale Alectronics, 19 FCC Red at 2543. However, § 301 does not authorize the Commission to impose conditions on licenses." That authority arguably arises from § 303(1)," but that provision does not empower the Commission to condition licenses to make them subject to automatic revocation, cancellation or nulliication. * F—Com,h. 5 ECC Red 6801, 6093 (1990). * Section 301 only provides that iJis the purpose of his Act.... to provide fothe use of such channels, bat not ownership therco... under lccnses granted by[the Commision}, and no such lcenseshall be constrid to rete anyrighbeyond the terms, onditions,and periods ofthelcense." 47 U.S.C.§ 301; Glendle Alecronics, 19 FCC Redar2s©. " See Amendrent of the Commision‘s Space Staton Licensing Rules and Polices, ECC 04—147, t $3 (uly 6, 2004

Section 303() only empowers the Commission to "prescribe such restrictions and conditions, not inconsistent with law, as may be necessary to carryout the provisions of [the ect}:" 47 U.S.C. § 303(6)"" That provision does not constitute an express grant of authority to place conditions on licenses, much Tess conditions making licenses automatically revocable. Regardless, a condition that makes a license subject to revocation without prior notice and hearing would be flatly inconsistent with § 312, as well as unnecessary to carry out the Commission‘s statutory functions. Hence, the imposition of a license condition that allows a license to be expeditiously revoked without Commission action is not authorized by § 303(). Only § 312 of the Act expressly empowers the Commission to impose the sanction of Hicense revocation. Because it must execute and enforee the provisions of § 312, see 47 U.S.C. § 151, the Commission may revoke a license only in the manner authorized by § 312(c). B The Commission Cannot Revoke A License For A Reason Not Expressly Enumerated In § 312(a) The Commission elaimed that GLP‘s right to a pre—revocation notice and hearing was not "triggered," simply because the alleged fuilure to timely construct facilities is not one of the "enumerated reasons" for which a license may be revoked purstant to § 312(a) of the Act. Order, at 17. But GLP did not fail to timely construct. It was found to have entered into a construction contract that "did not show adequate intention to proceed with construction."" 12. at 9—10. Moreover,the Commission‘s interpretation of § 312(a)is contrary to itsplain meaning. According to the Commission, when Congress authorized it to revoke licenses after a hearing for the seven "specified grounds or reasons" enumerated in § 312(a),"" Congress lef it fiee to revoke a license without a hearing for any non—enumerated ground or reason. That " See 47 U.S.C,§ 158() (Commission may take any actions"notinconsitent with the Actl as may benecessury in the execution ofts functions") " MR Rep. No 1750 (1952)reprimed in 1952 U.S.C.C.A N2234, 2202. $

interpretation "transgresses both common: sense and. two. traditional. rules. of statutory interpretation: the presumption against surplusage and expressio wnius est exclusio alterius." Independent Insurance Agents ofAmerica, Inc. v. Hawke, 211 F.3d 638, 643 (D.C. Cir. 2000) Congress would not have specified the "seven discrete grounds for revoking a license" in § 312(@)," if the Commission could also revoke a license for any reason notlisted in § 312(a) To interpret 312(a) to authorize the revocation of licenses for non—enumerated reasons would reduce the enumeration to surplusage.. Moreover, the expressio wnius maxim can be applied in cases such as this where "the draftsmen‘s mention of one thing, like a grant of authority, does really necessarily, or at least reasonably imply the preclusion of altemnatives.". Shook v. Distrier of Columbia Financial Responsibilty and Management Assistance Authority, 132 F3d 775, 782 (D.C. Cir, 1998). The fact that Congress authorized the Commission to revoke a license for seven reasons necessarily implies thatitis not authorized to revoke a license for other reasons. The Commission‘s interpretation of § 312(a) conflicts with its Tegislative history that shows the carefully crafted grounds for revocation were intended to be exclusive. Congress recognized in 1952 the only enforcement power the Commission had was "the power to revoke Hicenses, which is too severe a penalty in the case of many violations.""*. It amended § 312 to give the Commission new powers to. "be able to adjust the penalty to fit the seriousness of the offense.""" Section 312 was modified to change the "specified grounds" for revocation "somewhat" and to provide that in most cases "revocation would be permissible only for acts willfully, knowingly, or repeatedly committed.""® " Ineractve Control Two, Inc., 16 ECC Red 18948, 18961 n.103 (WTB 2001) 5 HLR. Rep. No. 1750,reprined in 1952 US. CCAN. 2234, 236 "u " t m 2202

Congress clearly. intended. the Commission impose the severe penalty. of license revocation only for the reasons specified in § 312(a),and not for less serious violations. It surely could not have intended to limit the Commission to revoking licenses after hearing only on the most serious grounds listed in § 312(a), but permit it to revoke licenses without the safeguard of a hearing on all other, less serious grounds. That would stand justice on its head."" C._ Seetion 312(c) Of The Act Was Triggered By The Allegation That GLP Failed To Timely Construct To expedite the revocation of GLP‘s license, the Commission took a particularly narrow view of its authority to revoke licenses under § 312(@)(2) and (3). Those subsections empower the Commission to revoke a license for conditions which would warrant refusal to grant an original license, see 47 US.C. § 312(@(2), and "for willful or repeated failure to operate substantially as set forth in the license." 1d. § 312(@)(3). The Commission has long construed its authority under subsections (a)(2) and (3) broadly to encompass a wide range of conduct."® The scope of the Commission‘s authority to revoke a license under § 312@@)(2) and (3) was demonstrated most recently in the case of one Roger Thomas Scaggs. Mr. Scages was convicted of murder for beating his wife to death with a lead pipe and then stabbing her repeatedly. See Roger Thomas Seaggs, 18 ECC Red 24367, 24367 (Enf. Bur, 2003). It is safe to say that the murder of Mrs. Seaggs is a matter seemingly beyond the Commission‘s jurisdiction. Nevertheless,the Enforcement Bureau held that Mr. Scages‘ murder conviction constituted a ‘‘The common senseinterprettion of $ 312(s)lexds to the conclusion that the Commissin is not authorized to revake a lcense fora reason that is not enumented in § 312(a). That interprettion comports with the requiement of APA $ 558(b)thatthere be an "express rantof tawtory authorip" timposea sanction, American Pus, 231 Pd at 6. Under § 558(b)itfailire to timely consruct is not among th seven reasons for which the Commision is expresily suthorized to revake a licens, then the Commision cannotrevakea lcense on such grounds. ® See Thomas H. Bowen, 40 F.CC. 24 665, 6%—49 (1973) (partcipationin a conspiracy tocaus interference was ground to revake ieense under § 312G(2)and (3)even hough leensee vilated no laworrile); XHK Rodi, fc. 34 RCC. 1039, 1041 (1963), af‘d KIHK Radio Ine.v. FCG,337 F.2d 540 (D.C. Ci1964), cert denied, 380 US 910 (1965) (conductng iaudulent reasure hants was ground to reva license under § 312(@)2) and (3)because such condact is arenty contary to th publciteres)

ground to revoke his license under § 312(@)2), since the conviction qualified as a "condition coming to the Commission‘s attention that would warrant refusing to grant the license on his original application. Consequently, Mr. Seages was afforded notice and the opportunity to show in a hearing that the murder of his wife was not cause to revoke his lcense. See id.at 24368—69 1f it were willing to attempt to revoke GLP‘s license lawfully in accordance with § 312, the Commission could find its authority to proceed under subsections (a)(2) and (3)..Indeed, in Pass Word, Inc.." the Commission specifically rejected the notion that a "lack of diligence in construction is not a ground for revocation" under § 312(a)(2) and (3) Had we been apprised that the 454 MHz channels had not been constructed and ready to operate by the expirition date of the construction permits and why, we would have been warranted in refusing to grant a lcense to cover those channels and in revoking the construction permit. Bacon did not in fict construct the channels in a timely manner and demonstrted no diligence in attempting to do so. Bacon willfily fiild to constrict and provide service and thus to operate as seforth in the lcenses." In light ofPass Word, the Commission clearly erred when it found that the requirements of § 312(c) were not triggered in this case. Mecting specific implementation milestones is a condition for obtrining and retaining a 2 GH: MSS system license. Knowledge that a Hicensee would be unable to meet an implementation milestone would warrant the Commission in refusing to grant an original application. Moreover, a "conscious and deliberate" decision not to timely construct the 2 GHz: MSS system in accordance with a condition of a license would be a *willful" failure to operate substantially in accordance with the license. See 47 US.C. § 312(D(1). Such a failure to timely construct could be a reason to iniiate a revocation case under both § 312(@)(2) and (3).. The same is true under the Commission‘s satellte rules. "Pass Word, nc 76 RCC. 24 462, S19 (1980)reconsideration denied, 86 FC.C. 28 437 (1981, offd, Pass Word,Inc. v. FCC, 673 F2A 1363 (D.C. Cit), cert denied, 459 U.S. 80 (1982) ® Pass Word, 76 ECC. 20 at 19 (emphasis in orginl) 10

"A station license may be revoked for any repeated and willful violation of the kind set forth in [§ 25.160(a)ofthe Rules}." 47 C.ER. § 25.160(c). Among the kinds of violations that can be sanctioned under § 25.160(a) is the "failure to operate in conformance with . . . any conditions imposed on an authorization.". Id. § 25.160(a). It follows that a licensee‘s failure to fulfllthe condition that the implementation milestones be met is cause for revocation ofa 2 GHz MSS license under the Commission‘s own rules, as it is under § 312(a)(2) and (3). D. The Condition On GLP‘s License That Made It Subject To Expedited Revocation Is Unlawfal And Unenforceable Pre—revocation notice and hearing are required by the clear, unegquivocal and mandatory language of § 312(c).. By virtue of ts duty to execute and enforce the provisions of the Act, the Commission must abide by § 312(c) until it is changed by Congress. See Southwestern Bell Corp. v. FCC, 43 FAd 1515, 1524 (D.C. Cir. 1995)."" The Commission has no choice in the matter for "[wJhen a statute dictates that parties receive notice and hearing ... the provision of those basic procedural rights is not left to be decided by administrative ‘Mexibility® or ‘discretion."". RKO General, Inc. v. FCC, 670 F.2d 215, 233 (D.C. Cir. 1981). Itsimply cannot "substantially nullify® a statutory right to a hearing. Ashbacker Radio Corp. v. FCC, 326 U.S. 327, 334 (1945). See ABC v. FCC, 191 F.2d 492, 501 (D.C. Cir. 1951). The Commission‘s "power is no greater than that delegated to it by Congress.". Rathway Labor Executives‘ Ass‘n v. National Mediation Bd., 29 F.3d 655, 670 (D C. Cir. 1994) (en banc). Delegated no authority by Congress to revoke licenses without the notice and hearing required by § 312(c), the Commission was without power to adopt a policy of expediting the revocation " Moreaver,pr—revecation notce and hearingare required by § 1.91 of he Rules. See 47 CER § 191. Thus, he Commission must provide such notice and hearing under the principle that it "must adhere t is on riles and regulations." Reaers Lid.v. FCC, 781 F24 946, 950 (D.C. Cr. 1986) 11

of licenses by denying licensees their rights under § 312(@). But that is exactly what the Commission admits to have done. To be clear, Petitioners do not contend that the Commission lacked authority to establish implementation milestones. Nor do they contend that the Commission was powerless to issue Hicenses conditioned on satisfying such milestones,. All icenses issued by the Commission under Title 111 of the Act are conditional. See 47 U.S.C. § 309(b). Petiioners challenge the Commission‘s authority to impose a condition that works to make a license subject to being declared "null and void" without compliance with § 312. Because it confliets with § 312(), the portion of the condition on GLP‘s license that made it subject to nullification "with no further action required on the Commission‘s par" is ulira vires." m Trumped by the statute,"" the condition is itself a "mere nullty." Pacific Gas & Alect. Co. v. United States, 664 F2d 1133, 1136 (0mCir. 1981 11— THEREVOCATION OF GLP‘S LICENSE WITHOUT A HEARING VIOLATED §§ 309(e) AND 312(c) Of THE ACT This is far from a case where a licensee has abandoned operations, reducing the liense to a "mere nullty," and license cancellation becomes a "ministerial act" not subject to the notice and hearing provisions of § 312(c)." Nor is this a ease where a license became null and void "with no further action required on the Commission‘s part." Aurhorization Order, 16 FCC Red at 13750. After considering GLP‘s modification application and its waiver request for more than six months, the Bureau found it necessary to author an eight page decision explaining its * See Heckterv. Chanes470 U.S. 821, 833 (1988) (agenciesare not "fee to disrcpardlepilative diectonin the statatary schemme hatthe agency adminiters"); Uted State: Lartonof; 431 U.S. 864, 873 (1977)(regulatins, in orderto b valid, must be consitent with thstatte under whichthey arepromulgated®) ®Sautestake precedence overconlcting administatve ules. See Caldera w JS Alberici Const Co, 153 F3d 1381, 1363 * (Fed. C1998) (‘Stautes trimp conicting regulations"); WolfCreck Colferie . Robinson, 872 Ed 1264, 1267 (Gth Cir 1989) (*tatutry language.. prevailis]over inconsistentrepulatry language") * Roanote Telecasing Corp 62 RCC. 24 899,900 (1976). See E.l Robinson, S F.C.C.2588 590 (1975) 12

conclusion that GLP‘s license was null and void. The Bureau did not reach that conclusion merely byapplying "detailed rules requiring or prohibiting certain contract provisions or types of arrangements" to the terms of GLP‘s construction contract with SSL. Order, at 6. The decision— making process included inferring facts adverse to GLP. As the Commission disclosed, the Bureau cancelled GLP‘s license *because its construction contract did not showadequate infention to proceed with construction, and to bring its satellite system into servicewithin the milestone deadlines specified in the license." Order,at 9 (emphasis added). On appeal, the Commission drew adverse inferences as to GLP‘s intentions fom unresolved questions of fact: J{Wie are not convinced by Globalstar‘s claims that a milestone waiver was warranted to provide service to public, or by its statements of it intent to proceed. Given that Globalstar has entered into bankruptey, we have questions regarding whether Globalstar has the financial ability to proceed. with its business plan. Moreover, based on Globalstar‘s stated. difficulties in constructing its entire system, and its lack of any statement that it was willing to proceed with a system modified to a single satellit, we also question whether Globalstar in fact intended to construct the entire 2 GHz MSS system it proposed in its original license application or its 2002 modification application. These questions preclude us from basing a milestone waiver on Globalstar‘s assertions of its intent to proceed with its satellite system and to provide service." Under the APA, an adjudicatory process has been employed to revoke GLB‘s license."" But it was not the process due GLP under § 309(e) of the Act, as well as § 312(c). Ac—— GLP Had A Statutory Right To A Show Cause Hearing Under § 312(c " Order, t 14—15 (foomores omited). °* An "adjadicationis defined asan "agency process for the formulation of an order." 5 USC. § 5S1(7). An *sgency procecding" is defined t include an agency processof"adjudicaton." 14 § SS1(12) 13

As a prerequisite to the revocation of a license, § 312(c) directs the Commission to afford the licensee notice and a hearing that complies with the procedural requirements of §§ 554 through 557 of the APA."" Thus, the statute conveys to the licensee a right to the procedural safeguards traditionally provided by a judicial tral in a civil proceeding.. See 1 Kenneth Culp Davis & Richard J. Pieres, J., Administrative Law Treatise § 8.2,at 378—79 (3d ed. 1994). The Commission has the legal duty to afford the licensee a hearing in which to "show cause why an order of revoeation . . should not be issued." 47 U.S.C. § 312(c); 47 CER. § 1.91(b). Even in a case where the licensee "admitted to many of the facts at issue," the Commission recognized that "license revocation cannot proceed as a matter of law without a hearing on all the relevant facts.". MobileMedia Corp., 12 F.C.C.R 14896, 14901 (1997) (emphasis added). Before a license can be revoked, the staff must carry its burden ofproving the existence of one of the grounds for revocation enumerated in § 312(a). See 47 U.S.C. § 312(0) See also 47 C.FR. § 1.91(d)(1). The staff also must prove that the nature of the licensee‘s violation is "suficiently egregious" to warrant the exercise of the Commission‘s discretion to revoke the license. See 7—Com, 5 FCC Red at 6693. At a minimum, the statute affords the liensee a right to present evidence of mitigating circumstances to show cause that the revocation of its license would not serve the public interest, See Donald Hammond, 61 ECC 24 368, 373 (Rev. Bd. 1976)"" Thus, a licensce already " APA §§ 554 through 557 apply "in every caseof adjudication required by sttue o be detrmined on the record after opportinity foran agency hearing." S US.C. § 55#(a). While the exact phrase "on the recort"is not in § 312(0, Congress described the nature of the required hearing wth language that can only refer t a triak.ype evidentay hearing. Not only daes $ 312(6) requrethe Commisson t cll upon the lensee t "appear" befor t and "aive evidence,"but $ 312(4) placs the burden oproceedingwth the introductionoeidence and tburden ofroof"upon h Commission in any heating held to revake a leense. 47 U.S.C. § 312(d). Since the Commission must prove violitions enumerated in 5 312(a¥1)(7) a revocation hearingis "precitly the type of proceeding for which the APAs adjudiatory procedures ere intended." Steadmon v SBC, 450 U.S. 91, 96 n13 (1981) "" See 47 CE R. § 1.91(e)(‘Coections or promises to correctheconditionsor mattrs complained of, and thpast record ofthe lcenses,may... be considered in determining whether a revocation orde should be issued") 14

convieted of twelve felony counts of sexual abuse of children, and sentenced to 84 years in prison, was afforded a pre—revocation evidentiary hearing in which to show "mitigating factors." See Contemporary Media, Inc. v. FCC, 214 F3d 187, 191—96 (D.C. Cir. 2000). Surely, then, GLP was entitled to present evidence showing that the circumstances that led it to file for Chapter 11 reorganization constituted "strong mitigating factors.". Hammond, 61 FCC 2d at 372. As it tums out, GLP had much more to prove than mitigating circummstances. The Commission has revealed that the revocation of GLP‘s license rested initally on the Burean‘s inability to determine whether GLP in fact intended to proceed with construction.. See Order, at 9—10. By its own admission, the Commission did not reinstate the license because it (1) was "not convinced" by GLP‘s statements as to its "intent to proceed;"(2) had *questions" about GLP‘s financial ability to proceed; and (3) questioned whether GLP "in fact intended" to construct either the system it originally proposed or the modified system it proposed in 2002. J at 14—15.. It is clear that the Commission ultimately gave no weight to GLP‘s "claims"that a waiver would enable it to provide service, or to its "statements" that it intended to proceed. Order, it 14. The Commission brushed aside GLP‘s claims and drew adverse inferences without allowing GLP to defend itself in a show cause hearing. That was unlawful. See RKO General, 670 R2d at 225 GLP lost its license in an informal adjudication in which it faced the "high hurdle" of persuading the Bureau to extend or waive its construction milestone. WAIT Radio . FCC, 459 F24 1203, 1207 (D.C. Cir. 1972). Ifits right to a pre—revocation hearing had been honored, GLP would have been a party to a hearing in which the Burcau faced the burden of proceeding with the introduction of evidence to prove that GLP willfully failed to meet its milestone...Sce 47 U.S.C. § 312(d)47 CER. § 1.91(d)(1). The initial decision on whether the milestone was 1

missed would have been made by an administrative law judge, not the Bureau charged with enforcing the milestone. GLP obviously was prejudiced by the deprivation ofits § 312(c)rights. B.— An Evidentiary Hearing Was Required Under §309(c) To Resolve Substantial And Material Questions Of Fact The Bureau‘s denial of GLP‘s modification application took on decisional significance with the Commission‘s disclosure that a grant of GLP‘s waiver request was precluded by questions conceming its intent and financial ability to proceed. See Order, at 14—15. The Bureau denied GLP‘s modification application simply because it was premised on an extension of the milestones. However, since the modification application proposed a major change in GLP‘s licensed 2 GHz MSS facilities, the Commission‘s disposition of the application was governed by § 309(c) of the Act. Accordingly, the Commission was required to formally designate the modification application for hearing to resolve the substantial and material questions of fact that precluded it from finding that the grant of the application would serve the public interest. See 47 U..C. §309(). IV. GLP WaS NOT AFEORDED THE FAIR NOTICE OF THE COMMISSION‘S STANDARDS REQUIRED BY DUE PROCESS Due process traditionally requires prior notice so that parties can conform their conduct to the law. See International Union, UMWA v. Bagwell, 512 US. 821, $36—37 (1999). Thus, due process precludes the Commission from penalizing a party "for violating a rule without first providing advance, clear and adequate notice as to the conduct required . . . by the rule." Mereury PCS IL, LLC, 13 F.C.C.R. 23755, 23750 n.17 (1998). As the Commission concedes, the revocation of GLP‘s license was a sufficiently severe penalty to trigger due process protection, see Trinity Broadcasting ofFlorida, Inc. v. FCC, 211 F.3d 618, 628 (D.C. Cir.2000),including 16

the safeguard that it be afforded "full and explicit" notice of the standards with which the SSL contract was expected to conform. See Order,at 11."" Such notice was never given GLP. A.— GLP Could Not Have Received Full And Explicit Notice By Reading The Resulations The Commission relies heavily on Laeshore Broadcasting, Inc. v. FCC, 199 F.3d 468 (D.C. Cir. 1999) to support its claim that it need not adopt "detailed rules" in order to put licensees on notice of how they must "meet the requirements of the contract execution milestone." Order, at 6 & n.37. Quoting Lakeshore, 199 F3d at 475, the Commission claims that it is "enough if based on a ‘fair reading" ofthe rule, applicants knewor should have known what . {was] expected of them .". Order, at 11. But the rub is that GLP could not have received notice of what the Commission expected of it by reading the Rules: On July 29, 2002, when GLP submitted the SSL contract to the Bureau, there was no rule that required a 2 GHz MSS licensee "to enter into a binding non—contingent contract for the satellite or satellite system within one year of grant." Order, at 4. As the Commission recognized, the non—contingent contract milestone was not "codified" until § 25.164 ofthe Rules was promulgated in May 2003.. See id. at 4; Amendment of he Commission‘s Space Station Licensing Rules and Policies, 18 FCC Red 10760, 10900—01 (2003). That rule did not go into effect until August 27, 2003, and applied only to licenses issued on or after that date. See 47 C.BR. § 25.164. That was more than a year after GLP allegedly violated the non—contingent contract milestone. " The Commission may enfore a ule srietlyto impose such a dasticsanction,but only *solong asthe quid pro quo is explit notice ofall applicable requirement". Aorida Jnstture of Fechnology . FCC, 952 Ead $19, 550 (D.C. Cir.1992). The ess forgving the Commission‘sstandard, "the more precis ts requrements must be" Sulzerv RCC, 778 F.2d $69, 875 (D.C. Ci, 1985), Thus,anexcting standard, enfrced by asevere sanction, must be accompanicd byfill and expliit ntice" ofallthe Commission‘ equirement. Seeid. t $71—72. 17

Before a licensce can be sanctioned for its failure to comply: with a regulatory requirement, the Commission must either have put the requirementin the regulation itself, or at least referenced the requirement in the regulation. See Zrinity, 211 F.3d at 631. Not only was there no non—contingent contract milestone rule when GLP submitted its contract, there was no rule that referenced the non—contingent contract milestone. That being the case, no "Fair reading"" of the Rules could have afforded GLP the "Fair notice" of the milestone requirements that due process requires. See Trinipy, 211 F.3d at 631. B. The Express Terms Of The License Condition Did Not Provide Full And Explicit Notie A "fair reading" of the condition on its license would not have given GLP full and explicit notice of what the Commission expected of it regard to its construction contract or what it could expect if it missed the contract milestone. ‘The condition provided as follows: . . . 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 aecordance with the technical parameters and terms and conditions of the authorization by the following dates ....."" There were seven dates on GLP‘s license, but only three concerned construction, launch and operation: (1) the first two NGSO satellites had to be constructed and launched by January 17, 2005; (2) one GSO satellite had to be constructed and launched into orbit by July 17, 2008; and (3) the entie system had to be certified as operational by July 17, 2007. GLP id not miss those three milestones. It allegedly missed the July 17, 2002 deadline for entering into a non— contingent contract. But under the explicit terms of the condition, missing that deadline would " Sincthe Commission was not bound by any rule, GLP could not know with "asceriinable certainy" that the Commission would adhere to any previously arieulted standard for enforcing the contact execution milestone. Trinip, 211 Fd at 628. Absent a rile codifying hat milestone,GLP was not on nticethat the SSLcontract put ts Heense atrisk ofrevocation *‘ Autorization Order, 16 ECC Red at13759 (emphasis added) 18

not cause the license to become null and void. Nullfieation would result only if the station is not "constructed, launched and placed into operation" by the dates specified on the license. c. Full And Explicit Notice Was Not Available From A Fair Reading Of Commission Precedent The Commission claims that GLP "knew or should have known" that its construction contract would not meet the so—called Tempo Order standards® if it did not provide for completing construction of the entire Globaltar system within the milestones set forth in GLP‘s license. Order, at 11. However, under Lakeshore and Trinity, GLP was not required to pour over eightecn years of post—Tempo Order precedent in an attempt to obtain full and explicit notice of the standards that would apply to the SSL contract. Principles of due process pressed the duty on the Commission to publish regulations that provide notice. Even assuming that GLP was obliged to foretell how the Commission would apply its ever—evolving and admittedly "general," Tempo Order standards," the Commission could not disqualify GLP unless some precedent "spoke directly" to GLP‘s stuation and gave it "fair warning" that its license might be revoked.. Ailimore Forest Broadeasting FM, Inc. v. FCC, 321 F3d 155, 161 (D.C. Cir. 2003). See High Plains Wireless, L.P. v. FCC, 276 F.3d 599, 607 (D.C. Cir, 2002) As was the case with the Bureau, the Commission was unable to point to any published decision that explicitly held that a 2 GHe MSS licensee could not enter into a non—contingent construction contract that provided for completing construction within the milestone schedule proposed in an application for a modification of license. Nor could it cite precedent that explicitly held that the licensee would be afforded no opportunity to cure the defect in its " See Tenpo Enterprises,Inc. 1 PCC Red 20, 21 (1980). ®See Order,at6. 19

contract if ts 2 GHz MSS license was not modified as contemplated. The Commission produced no such precedent because none existed until after GLP submitted ts contract. Six months aftrit released its Revocation Order, the Bureau finally published a decision that clearly articulated the policy it had applied without notice against GLP..In the margin of a decision granting an application to modify a 2 GHz MSS license, the Bureau announced that a construction contract incorporating variations from the space station license that are reflected in a simultaneously—filed modification application cannot meet the construction milestone if the application is denied.. See The Boeing Company, 18 FCC Red 12317, 12328 156 (Intl Bur. & OET 2003). That announcement provided fair waming to licensees considering the option of secking a modification of their milestones in concert with a modification of their licenses.. But the warning came a year too late for GLP. The Commission cannot formulate a new standard in an adjudicatory proceeding and apply it retroactively to sanction a party for fuiling to conform to i. See RKO General, 670 F.2d at 222 (Commission cannot judge conduct by standards not "clearly enunciated"" when the conduct occurred). Because the SSL contract was judged by a standard that had not been adopted when the contract was signed, the revocation of GLP‘s license must be rescinded and the Hicense reinstated. v. THE COMMISSION UNLAWEFULLY DENIED GLP AN OPPORTUNITY TO REFORM THE SSL CONTRACT A. The Revocation OF GLP‘s License Violated The "Second Chance" Doctrine OF APA & 558c The procedural safeguards of APA § 558(c) also are available when the Commission secks to revoke or annul a license. See 47 U.S.C. § 312(c). Thus, absent a finding of willfulness, the Commission may lawully revoke a license only if, before the institution of the revocation proceeding, the licensee was given: (1) notice by the Commission in writing of the "facts or 20

conduct which may warrant the action" and (2) an "opportunity to demonstrate or achieve compliance with all lawul requirements." 5 U.S.C. § 558(c). The obvious purpose of § 55(c)is "to provide individuals with an opportunity to correct their transgressions before the termination or suspension of their licenses.". Air North America v. Dep‘t of Transp., 937 B2d 1427, 1438 (Oth Cir, 1991).. GLP effectively invoked the "second chance" doctrine of APA § 558(c)by explicitly requesting 90 days to renegotiate its contract if its request for a limited waiver of its milestone deadlines was denied At no time during the six months that ts application for a modification of itslicense was pending did GLP receive written notice that the Bureau‘s disposition of its application may warrant the revocation of its license.. Moreover, the Bureau afforded GLP no opportunity to renegotiate its contract to come into compliance with the Commission‘s standards. To the contrary, the Bureau notified GLP that would have no apportunity to reform its contract so as to achieve compliance with the Commission‘s implementation milestones.. See Revocation Order, 18 FCC Red at1254—55. In short,the Bureau never gave GLP the "second chance" required by APA § 558(c).. As a result, the revocation of GLP‘s license was invalid.. See Anchustegu v. Dep‘tof Agriculture, 257 F34 1124, 1129 (9thCir. 2001) (reversing the cancellation of a permit for the permittee‘s failure to comply with the terms and conditions ofthe permit). B. Faimess Dictated That GLP Be Given An pportunity To Cure The Disqualifving Defect The Burcau recently recognized that some of the satellte rules could be reasonably misinterpreted engendering uncertainty as to the information required. To clarify those rules and to provide guidance to applicants, the Bureau issued public notices spelling out what was required of applicants."" Those not in compliznce with the rules as clariied were given the * See ex, Clarffcution of47 CFR. $28.1400)0) Space StarionApplicaionIterference Analysi, 18 ECC Red 25099 (Inl Bur 2003) 21

opportunity to bring their applications into compliance:"". On its own motion, the Bureau also reversed the dismissal of applications on the grounds that the satellite rules involved were "subject to conflicting, but reasonable, interpretations regarding the specific information required" and may not have provided "sufficient information for some applicants in formulating their [applications}.""". The reinstated applicants were given 30 days to come into compliance. In effect, the Bureau held that an applicant cannot be disqualified without an opportunity to cure in cases of regulatory uncertainty caused by a rule that is susceptible to conflicting, but reasonable, interpretations.. Yet, GLP was denied an opportunity to cure having relied, in the absence of a detailed rule, on a reasonable interpretation of precedent. involving. the Commission‘s admittedly general standards. The month before GLP‘s construction contract milestone, the Bureau rejected. an argument that the licensee missed the milestone because its non—contingent contract conformed to its pending application to modify itslicense, not to the license.. See Teledesic, LLC, 17 ECC Red 11263, 11265 (Intl Bur. 2002). ‘The Bureau noted that licensees are generally allowed to modify their satellite systems. See . It held that the modification application would be decided "on its own merits" and would not "factor into" the determination of whether the licensee had met its initia, construction contract milestone.. /d.. A reasonable interpretation of Teledesic is that GLP would not be disqualified simply because the SSL contract conformed to its application to modify is icense. At that time no precedent spoke directly to the contrary. The Bureau ultimately confirmed that GLP‘s interpretation of Zeledesic was reasonable. In Bocing, the Burea cited Teledesic to find that a construction contract that incorporates the * See id at 25100 (aplicants notin compliance subject o a Commissionrequestfr upplementl information} * Nortiop Grumman Space & Mission Sistens Corp., DA O—I72S, at 1 (Jne 16, 2004); conteciiE0 Conmunications, LLC, DA 04—1722, t 1 (Jne 16,2004) 22

milestone schedule proposed in an application to modify the license, rather than the Hicensed schedule, did not present a "material deficiency"since the application was being granted.. 18 FCC Red at 12328 n.56. Because Feledesic could be reasonably be interpreted to permit GLP to proceed as it did, the Commission should recognize that this case "arose out of regulatory uncertainity" sufficient to warrant giving GLP an opportunity to reform the SSL contract. Thus, GLP is entitled to a "second chance" under both Commission precedent and APA § 558(c). VI.— THE COMMISSION HASENFORCED ITS CONTRACT MILESTONE ARBITRARILY The Commission must treat similarly situated parties alike or provide an adequate justification for the disparate treatment. MeBlroyElectronics Corp. v. FCC, 990 F24 1351, 1365 (D.C. Cir. 1993). There appears to be no principled justification for the disparate treatment doled out by the Commission in this case and PMCommunications. The Bureau denied GLP‘s request for extension of certain fiture milestones based on its view that the reasons offered by GLP represented voluntary "business decisions"within GLP‘s control. Revocation Order, 18 FCC Red at 1253.. On appeal, the Commission rejected GLP‘s arguments that its reasons for secking extensions ofthe milestones were beyond its control. See Order, at 14—15. Just days later, the Commission forged new ground on what constitutes a "business decision" justifying a waiver ofthe milestone requirements. In 7MI Communications, the Commission waived an implementation milestone based on the licensee‘s efforts to comply with Anown regulatory requirements of Industry Canada, and its entirely voluntary business decision concerning which affiliate hold the 2 GHz MSS LOL See FCC 04—144, at 16. Moreaver, the Commission allowed the licensee to satisfy the first milestone without even entering into a satellite construction contract. 1d. at7. 23

The Commission cannot sustain a policy which allows it to deem GLP‘s actions to be "business decisions" not supporting a milestone waiver, while the obvious voluntary business decisions of TMI justify a waiver of the same milestone. Moreover, it cannot find that GLP‘s non—contingent contract cannot satisfy the milestone requirement, while t allows TML not to sign a contract and still fulil the same milestone. Thus, under the Tempo Order standards, voluntary business decisions may or may not justify an applicant‘s request for milestone extensions.. A signed contract may or may not fulfll a milestone requirement.. This demonstrates that the Commission‘s policy on mecting milestone requirements is unprincipled. and. arbitrarily enforced. Indeed, there is no appropriate general standard for granting a waiver of the milestone rules, only the whims of the Commission as to what constitutes a business decision. ViI. THE COMMISSION‘S MILESTONE ENFORCEMENT POLICIES RESULT IN CANCELLATION OF LICENSES THAT MEET THE MILESTONES. The Bureau cancelled without explanation GLP‘s license for the geostationary satellte (§2321) that would serve North America even though GLP had requested no milestone extensions for that satellite,and the contract with SSL included all the milestone dates specified in the licenses for that satellite. The Commission‘s post hoc explanation is that GLP‘s construction contract treated the five licensed space stations as an "integrated system"rather than stand—alone components. See Order, at 12. Therefore, the Commission claims the Bureau correetly cancelled the licenses for the entire system rather than acting on individual components because the contract did not reflect completion of the entire system within the time frames specified for all the licensed space stations. See id. There was no policy on "integrated. systems" in place when the Commission adopted service rules for 2 GHz MSS systems or when the Bureau granted GLP‘s 2 GHMS licenses. When it adopted rules for 2 GHz MSS, the Commission stated that hybrid systems "(containing NGSO and GSO components) must follow the non—geostationary milestones for the non— 24

geostationary portion of the system and comply with the geostationary milestones for the geostationary portion of the proposed system." 2 GHz MSS Order, 15 FCC Red at 16177 GLP‘s $2321 satellite was complying with the geostationary milestone rules. Prior to this case, the Commission had never stated that milestone compliance of a hybrid system would stand or fall on the compliance of each individual component.._ For example, if GLP had signed five construction contracts with SSL, one for each space station component, with the milestones specified in the actual SSL contract for each component. Under the Commission‘s "integrated system" theory, all the licenses could have been cancelled although the contract for $2321 was fully compliant the license milestones.. That is not the result that would be predicted from the Commission‘s statement when it adopted the policy for milestone compliance for hybrid systems. The Commission did not give fair notice to GLP with respect to the $2321 geostationary satellite. Accordingly,the cancellation ofthe license for $2321 was an abuse ofdiscretion. For all the foregoing reasons, GLLC and GSLP respectfully request the Commission to reconsider its Order, reverse the Revocation Order, and reinstate GLP‘s licguse Respectfilly Submited, Willan D. crowsut & morno Ltr 1001 Pennsylvania Aveme, N.W, 1111 19 Sveet MP—Sate 1200 Washington, D.C. 20004 Washington, D.C 20036 (200)e2t—2500 (202) 57—2500 or counset Wiltam E. Ader ororaLsTAR cartrat corroraTIon 461 5. Milpius Bivc. Miipies, Ca 9s03s on ana—zs01 July 26, 2004 25

CERTIFICATE oF SERVICE 1, Steven A. McCord, herebycertify that I have on this 26th day of July 2004, caused to be served true and correct copies of the foregoing "Petition for Reconsideration" upon the following persons via hand delivery (marked with an asterisk (*)) or first—class United States mail, postage prepaid: The Honorable Michacl K.Powell. * The Honorable Kathleen Q. Abemathy * Chairman Commissioner Federal Communications Commission Federal Communications Commission 445 12th Street, SW 445 12th Street, S.W. Washington, DC 20554 Washington, D.C. 20554 The Honorable Michael Copps * The Honorable Kevin Martin * Commissioner Commissioner Federal Communications Commission Federal Communications Commission 445 12th Street, S.W. 445 12th Street, S.W. Washington, D.C. 20554 Washington, D.C. 20554 The Honorable Jonathan S. Adelstein * John Rogovin * Commissioner Office of General Counsel Federal Communications Commission Federal Communications Commission 445 12th Street, S.W. 445 12th Street, S.W. Washington, D.C. 20554 Washington, D.C. 20554 Donald Abelson * Thomas S. Tyez * International Bureau International Bureau Federal Communications Commission Federal Communications Commission 445 12th Stret, S.W., Room 6—C750 445 12th Street, S.W., Room 6—A665 Washington, D.C. 20554 Washington, D.C. 20554 Karl A. Kensinger * Howard Gribo® * Interational Bureau Interational Bureau Federal Communications Commission Federal Communications Commission 445 Twelft Street, S.W., Room 6—A663 445 12th Street, S.W., Room 6—C467 Washington, D.C. 20554 Washington, D.C. 20554 Daniel Harrold. * Thomas Gutierrez Office ofGeneral Counsel Lukas Nace Gutierrez & Sachs, Chartered Federal Communications Commission 1111 19th Street, N.W. 445 12th Street, S.W., Room 6—AG65 Suite 1200 Washington, D.C. 20554 Washington, D.C. 20036

Joseph A. Godles Tom W. Davidon Goldberg, Godles, Wiener & Wright Akin Gump Strauss Hauer & Feld, LL.P. 1229 19th Stret, N.W. 1676 Interational Drive Washington, D.C. 20036 Penthouse MeLean, VA 22102 L. Andrew Tollin Douglas 1 Brandon Kathryn A. Zachem AT&T Wireless Services, Inc. Craig E. Gilmore 1150 Connectiout Avenue, N.W. Wilkinson Barker Knaver, LLP Washington, D.C. 20036 2300 N Street, N.W., Suite 700 Washington, D.C. 20037 John T. Scott, T JR Carbonell Cellco Partmership Carol L.Tacker @Wbia Verizon Wircless David G. Richards 1300 I Street, N.W., Suite 400—W Cingular Wireless LLC Washington, D.C. 20005 5565 Glenridge Connector, Suite 1700 Atlanta, GA 30342 Steven A. McCord


Document Created: 2004-10-13 15:56:06
Document Modified: 2004-10-13 15:56:06
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