Petition for Reconsideration PETITION FOR RECONSIDERATION by DigitalGlobe, Inc. SAT-MOD-20040728-00151 PetRecon

Attachment PetRecon

PetRecon

PETITION FOR RECONSIDERATION submitted by DigitalGlobe, Inc.

Petition for Reconsideration

2005-10-31

This document pretains to SAT-MOD-20040728-00151 for Modification on a Satellite Space Stations filing.

IBFS_SATMOD2004072800151_462432

Before The
Federal Communications Commission
Washington, D.C. 20554

)
In The Matter of )
)
DigitalGlobe, Inc. )
) File No. SAT-MOD-20040728-00151
Modification of Authorization to Construct, ) Call Sign: S2129
Launch and Operate a Remote-Sensing Satellite )
System )
)

To: Secretary, Federal Communications Commission,
Washington, D.C. 20554

PETITION FOR RECONSIDERATION OF BOND REQUIREMENT AMONG OTHER
MATTERS PROVIDED IN FCC ORDER AND AUTHORIZATION, DA 05-2640

DigitalGlobe, Inc. (“DigitalGlobe”), though counsel, pursuant to Section 1.106 of the

Commission’s rules, hereby requests that the Commission reconsider and waive the bond

requirement set forth in Order and Authorization DA 05-2640 (hereinafter, “Order”) issued on

September 30, 2005.1

As an alternative to waiving the application of the bond requirement to DigitalGlobe,

DigitalGlobe requests that Commission rule that: (1) NGSO remote sensing satellites are GSO-

like for purposes of the bond requirement; (2) the appropriate bond for NGSO remote sensing

satellite systems is $3,000,000; (3) there are only four milestones required for the construction of

NGSO remote sensing satellite systems; and (4) an NGSO remote sensing system licensee will

fulfill the milestone requirement by constructing, launching, and bringing into operation the first

satellite in its NGSO remote sensing satellite system.

1
In the Matter of DigitalGlobe, Inc., Modification of Authorization to Construct, Launch and Operate a Remote-
Sensing Satellite System, Order and Authorization, DA 05-2640, FCC LEXIS 5427 (2005) (Order).

In the event that the Commission authorizes an NGSO remote sensing satellite operator

in a license modification to operate new satellites using more bandwidth per satellite than

previously authorized, we would accept a new $3,000,000 bond being imposed on the licensee.

However, we request that the Commission rule that the bond would be fulfilled by the NGSO

remote sensing system licensee launching and bringing into operation the first satellite using the

additional bandwidth. Further, we request that the Commission rule that there would be no bond

requirement for the construction, launch, and operation of additional NGSO remote sensing

satellites authorized pursuant to satellite modification applications, as long as such satellites will

operate only within already-authorized bandwidth.

In addition to this Petition, DigitalGlobe notes that it filed a Request for Determination of

Compliance with Satellite Implementation Milestones (“Request”) on October 24, 2005, which

the Commission has yet to issue a ruling on at the time of filing this Petition.

I. Executive Summary

As part of the Order, the Commission has required that DigitalGlobe post a $5,000,000

bond to: (1) ensure that DigitalGlobe uses the entire spectrum that the Commission has

authorized DigitalGlobe to use; and (2) prevent Digital Globe from warehousing the spectrum to

use in the unlikely event that best case demand scenarios materialize or to delay competitors

from using it.

DigitalGlobe believes that the bond requirement is unnecessary in this case for several

reasons. First, DigitalGlobe is a licensed remote sensing operator by the National Oceanic and

Atmospheric Administration (“NOAA”) and the process of being licensed by NOAA inhibits

speculative and financially unqualified entities from being authorized to operate remote sensing

satellite systems. Second, DigitalGlobe is committed to the U.S. Government (specifically, the

ii

National Geospatial-Intelligence Agency) to construct, launch, and operate the satellites that are

authorized by the Order. DigitalGlobe believes that this fact alone is conclusive evidence that

DigitalGlobe is financially capable and committed to build and operate the authorized satellites.

Third, the warehousing of spectrum and orbital resources by remote sensing operators in the United

States is pragmatically impossible due to NOAA’s licensing requirements, the ability of EESS bands

to be used by multiple users, and the abundance of orbital locations in which prospective operators

can operate their systems.

Alternatively, however, should the Commission not be persuaded to rescind the bond

requirement, DigitalGlobe requests that the Commission make the determination that DigitalGlobe’s

NGSO Remote Sensing Satellites are GSO-like, and, thereby, DigitalGlobe should be subject to only

4 milestones and the bond reduced to $3,000,000. Moreover, DigitalGlobe requests that the

Commission establish that NGSO Remote Sensing System Licensees will fulfill their milestone

requirements by constructing, launching, and bringing into operation the first satellite in their NGSO

Remote Sensing Satellite Systems.

For the good cause demonstrated below, we urge the Commission to grant the request to

waive the bond requirement in the instant case.

iii

TABLE OF CONTENTS

I. Executive Summary ………………………………………… ii

II. Background ………………………………………………… 1

III. There is Good Cause to Waive the Bond Requirement in the
Order in Light of the Totality of the Circumstances related to
DigitalGlobe’s Construction, Launch, and Operation of Its
Next-Generation Earth Exploration Satellite System (“EESS”) … 1

A. The Commission’s Intent Behind the Bond Requirement … 1

B. Standard for Considering Petitions for Reconsideration
and Waivers of Commission Rules ………………… 6

C. Reasons Why the Commission Should Not Require
DigitalGlobe to Post a Bond in the Instant Case ………… 7

1. DigitalGlobe is a Licensed Remote Sensing
Operator by NOAA and the Process of Being
Licensed by NOAA Inhibits Speculative and
Financially Unqualified Entities From Being
Authorized to Operate Remote Sensing Satellite
Systems ………………………………………… 8

2. DigitalGlobe is Contractually Committed to the U.S.
Government to Construct, Launch, and Operate the
Satellites that are Authorized by the Order, which Fact
is Conclusive that DigitalGlobe is Financially Capable
and Committed to Building and Operating the Authorized
Satellites ………………………………………… 13

3. The Warehousing of Spectrum and Orbital Resources
by Remote Sensing Operators in the United States is
Pragmatically Impossible Due to NOAA’s Licensing
Requirements, the Ability of the Band to Be Used by
Multiple Users, and the Abundance of Orbital Locations
in Which Prospective Operators can Operate their
Systems ………………………………………… 16

iv

IV. In the Event the Commission Decides Not to Waive the
Bond Requirement, the Commission Should Rule that:
(a) NGSO Remote Sensing Satellites are GSO-like; (b) the
Appropriate Bond Amount is $3,000,000; (c) There are
only 4 Milestones for NGSO Remote Sensing Satellite Systems;
and (d) an NGSO Remote Sensing System Licensee Will Fulfill
The Milestone Requirement By Constructing, Launching, And
Bringing Into Operation The First Satellite In Its NGSO
Remote Sensing Satellite System …………………………………. 20

V. Erratum …………………………………………………………. 24

VI. Conclusions …………………………………………….…… 24

v

II. Background

The Order granted DigitalGlobe authority to modify DigitalGlobe’s Non-Geostationary

Satellite Orbit (“NGSO”) satellite system.2 Within the Order, the Commission required

DigitalGlobe to fulfill certain milestones for constructing the authorized satellites and modifying

its space segment (Order, para. 11). Also, the Commission required that DigitalGlobe post a

bond by October 30, 2005 in the amount required by the Commission’s rules for the construction

and operation of an NGSO satellite system: five million dollars ($5,000,000) (Order, paras. 12-

13). The bond requirement was imposed in order to ensure that DigitalGlobe uses the entire

spectrum that the Commission has authorized DigitalGlobe to use. The Commission’s stated

purpose for the bond was to prevent DigitalGlobe from “ ‘warehousing’ the spectrum to use in

the unlikely event that ‘best case’ demand scenarios materialize or to delay competitors from

using it” (Order, para. 13).

III. There is Good Cause to Waive the Bond Requirement in the Order in Light of the
Totality of the Circumstances related to DigitalGlobe’s Construction, Launch, and
Operation of Its Next-Generation Earth Exploration Satellite System (“EESS”)

A. The Commission’s Intent Behind the Bond Requirement

The genesis of the bond requirement lies in the First Notice of Proposed Rulemaking and

First Report and Order, otherwise known as the Space Station Reform NPRM,3 whose principle

aim was to streamline the licensing process.4 In the Space Station Reform NPRM, the

Commission noted that an important aspect of the licensing process was an assurance that

2
Order, (para. 1).
3
See In the Matter of Amendment of the Commission’s Space Station Licensing Rules and Policies, Notice of
Proposed Rulemaking and First Report and Order, IB Docket No. 02-34, 17 FCC Rcd 3847, at 3880-84 (paras. 98-
108) (2002) (Space Station Reform NPRM).
4
Space Station Reform NPRM, 17 FCC Rcd at 3852 (para. 11).

1

applicants for U.S. space station licenses have the technical and financial wherewithal to

construct and operate a satellite.5

At the time of the promulgation of the Space Station Reform NPRM, the Commission’s

Rules required an analysis of the financial position of prospective licensees such that the

Commission could be assured that the licensee could undertake to actually construct and launch

the satellite covered by the license.6 Noting that the then-current “financial qualification

requirement” and the milestone policy serve essentially the same purpose, the Space Station

Reform NPRM, at paragraph 108, requested comments on the necessity or effectiveness of the

financial qualification requirement, as such requirement “provides only a preliminary and

therefore possibly imprecise assessment of whether an applicant is able to proceed with

construction, launch, and operation.”7

In 2003, the Commission promulgated the Space Station Licensing Reform Order8 in

which the Commission, among other matters, eliminated the financial requirement then current

in the Commission’s Rules and addressed numerous comments made by stakeholders on the

Space Station Reform NPRM.9 In the Space Station Licensing Reform Order, the Commission

adopted a proposal by Intelsat, based on a previous Order related to paging companies, that in

lieu of a financial qualification requirement, the Commission would require the posting of a

Bond.

In particular, the Commission noted that:

By requiring satellite licensees to make a financial
commitment to construct and launch their satellites,
5
Space Station Reform NPRM, 17 FCC Rcd at 3880 (para. 100).
6
Id.
7
Space Station Reform NPRM, 17 FCC Rcd at 3881, (para. 102).
8
See In the Matter of Amendment of the Commission’s Space Station Licensing Rules and Policies; Mitigation of
Orbital Debris, First Report and Order, IB Docket No. 02-34, 18 FCC Rcd 10760 (2003) (Space Station Licensing
Reform Order).
9
Space Station Licensing Reform Order, 18 FCC Rcd at 10824 (para. 166).

2

we help deter speculative satellite applications, and
help expedite provision of service to the public.10

In addition, the Commission declared that replacing the financial qualification requirement with

a bond requirement would “result in the financial community determining whether the licensee is

likely to construct and launch its satellite system”, thereby ensuring that the process would be

“market driven rather than a regulatory determination”.

The Commission further opined in the Space Station Licensing Reform Order that the

bond requirement would be applied to new satellite licensees only, not replacement satellites.

The Commission specifically provided that “once a licensee has begun to provide service, we are

confident that its replacement satellite application will be intended to continue service, and

would not be filed for speculative purposes.11

In the Space Station Licensing Reform Order, the Commission envisioned a system

where prospective licensees would execute performance bonds payable to the U.S. Treasury

within thirty (30) days of the grant of their licenses.12 The bond would be executed in the event

of a licensee missing any of the milestones without adequate justification: “Thus, the bond

requirement is in effect an additional milestone requirement. We intend this bond requirement to

provide assurance that the licensee is fully committed at the time it’s license is granted to

construct its satellite facilities.…”13 In sum, the Commission states:

By making the bond payable upon failure to meet any
milestone based on circumstances within the licensee's
control, we require licensees to commit to construct
and launch its satellite system, and so we further
strengthen our protections against speculation and
warehousing.14

10
Space Station Licensing Reform Order, 18 FCC Rcd at 10825 (para. 167).
11
Space Station Licensing Reform Order, 18 FCC Rcd at 10825 (para. 167)..
12
Space Station Licensing Reform Order, 18 FCC Rcd at 10826 (para. 170).
13
Id.
14
Id.

3

In the Commission’s most recent ruling regarding milestones and the bond requirement,

the Fifth Report and Order, 15 the Commission established the authority to require a bond and

described the rationale behind the bond requirement.16 In particular, the Commission clarified

that the bond requirement was a new financial qualification requirement.17 In addition, the

Commission re-iterated that it imposes financial qualification requirements to help prevent

warehousing of the orbit/spectrum resource, by ensuring that satellite licensees have the financial

resources necessary to construct and launch a satellite.18 Finally, the Commission stated that

requiring satellite licensees to make a real financial commitment to construct and launch a

satellite, and to demonstrate to a surety company that they will be financially able to proceed,

limits the likelihood that the licensee will hold a license simply to preclude another party from

going forward.19

Thus, the Space Station Licensing Reform Order and the Fifth Report and Order did not

exactly replace the financial qualifications requirement with the bond requirement. The purpose

of the financial qualification requirements was to ensure that prospective licensees would not

warehouse spectrum or delay prompt service to the public because of financial inability to

complete the system authorized by their license. The Commission felt that these two policy

goals could be better met, while simultaneously “streamlining” the licensing process, by strict

enforcement of the milestone requirements.20

15
In the Matter of Amendment of the Commission’s Space Station Licensing Rules and Policies, First Order on
Reconsideration and Fifth Report and Order, IB Docket No. 02-34, 19 FCC Rcd 12637 (2004) (Fifth Report and
Order).
16
See generally, Fifth Report and Order, 19 FCC Rcd 12637.
17
Fifth Report and Order, 19 FCC Rcd at 12646 (para. 19).
18
Id.
19
Fifth Report and Order, 19 FCC Rcd at 12642-12643 (para. 12)
20
Space Station Licensing Reform Order, 18 FCC Rcd at 10828 (para. 175).

4

The Commission argued that the financial weakness of a company would be uncovered

and automatically acted upon were that company to miss a milestone. Warehousing would be

avoided because at the moment a milestone is missed, barring pending motions to extend the

time of the milestone for good cause, a licensee'
s license becomes null and void and the portion

of the spectrum allocated to that licensee would become available once again to new

applicants.21 The Commission appears to have added the bond requirement as an additional

measure to limit speculative license seekers and as a means for the financial community to assess

the fiscal strength of a company before continuing down the construction, launch, and service-

provision path punctuated by the milestones.

While the Space Station Licensing Reform Order claimed to be replacing the financial

qualification requirement with the bond requirement,22 it is clear that both the bond requirement

and strict milestone enforcement operate to limit the probability that speculative license seekers

will obtain licenses without having the prerequisite financial ability or commitment to

constructing the systems that they are authorized to operate.

Within the Order, the Commission provided that the Commission had eliminated the

financial requirements then in place in the Commission’s Rules and replaced them with the bond

requirement.23 The Commission explained that DigitalGlobe must file a bond because: (1)

“remote sensing satellite operators are not exempt from the bond requirement in circumstances

where they propose to operate a next-generation satellite system using additional frequencies for

which they are not currently authorized”24 and (2) DigitalGlobe had received authorization from

21
Space Station Reform NPRM, 17 FCC Rcd at 3882-3883 (para. 105); see also, 47 C.F.R. § 25.160.
22
Space Station Licensing Reform Order, 18 FCC Rcd at 10825 (para. 167).
23
Order, FCC LEXIS 5427 (para. 12).
24
Order, FCC LEXIS 5427 (para. 13); see also, Fifth Report and Order, 19 FCC Rcd at 12658-12659 (para. 58).

5

the Commission to operate three new satellites in its NGSO remote sensing satellite system in

frequencies not previously authorized by the Commission.25

Thus, the apparent rule that currently applies to NGSO remote sensing satellite systems is

that they have to post a bond only when the Commission authorizes modifications of their

satellite system whereby new satellites will operate in frequency bands that are not part of their

prior authorization.

B. Standard for Considering Petitions for Reconsideration and Waivers of
Commission Rules

In considering whether to grant the instant request, DigitalGlobe understands that the

Commission must consider whether there is good cause26 for waiving its rule in the particular

case. In making this determination, DigitalGlobe further understands that the Commission must

assess whether the grant would have an effect of undermining the policy in general and would

otherwise serve the public interest.27 Accordingly, DigitalGlobe herein provides an explanation

regarding why: (1) there is good cause to grant the Motion; (2) the Commission’s policy will not

be undermined by granting DigitalGlobe’s Motion; and (3) granting the instant Motion will serve

the public interest.

DigitalGlobe understands that the Commission has not yet permitted the waiver of the

bond requirement for any satellites licensed since the bond requirement was implemented.

Therefore, the instant petition provides the Commission with a matter of first impression. Thus,

there is no directly on point precedent in the instant case and the only on point standard that

25
Order, FCC LEXIS 5427 (para. 13).
26
47 C.F.R. § 1.3; see also, Fifth Report and Order, 19 FCC Rcd at 12646 (para. 19).
27
See, e.g., Second Round Assignment of Geostationary Satellite Orbit Locations to Fixed Satellite Service Space
Stations in the Ka-Band, 16 FCC Rcd 14389, at 14392-14393 (para. 12), citing WAIT Radio v. FCC, 418 F.2d 1153,
at 1157 (D.C. Cir. 1969), cert. denied, 409 U.S. 1027 (1972).

6

applies is whether there is “good cause” for the suspension, revocation, amendment, or waiver of

the pertinent rule in the instant case.28

C. Reasons Why the Commission Should Not Require DigitalGlobe to Post a Bond
in the Instant Case

The Commission’s stated purpose for the bond requirement, as delineated in detail above,

is to ensure that only those licensees who are financially committed and able to construct,

launch, and operate satellites are licensed by the Commission. In addition, the Commission has

stated that it desired for the financial community to be involved in determining whether licensees

were financially capable of building satellites they are authorized to operate.29 Finally, although

it is not per se addressed in any of the Commission’s prior orders or other rulemakings, it is

apparent that the Commission wanted to have a “milestone” that was earlier than the time of the

first performance milestone (i.e., contract execution)—generally one year after license grant.

The purpose of this earlier “milestone” was ostensibly to ensure more quickly that licensees

made concrete decisions on whether to accept the responsibility of constructing, launching, and

operating their licensed satellite systems than one year from the date of grant.

Therefore, the Commission established the 30-day timeframe by which licensees must

file bonds to demonstrate their financial commitment and ability to construct, launch, and

operate the satellites in their authorizations as a “preliminary” financial qualification mechanism.

Applying the bond requirement to DigitalGlobe in the instant case is unnecessary because:

(1) DigitalGlobe is a licensed remote sensing operator by the National Oceanic and

Atmospheric Administration (“NOAA”) and the process of being licensed by NOAA

inhibits speculative and financially unqualified entities from being authorized to operate

remote sensing satellite systems;

28
47 C.F.R. § 1.3.
29
Space Station Licensing Reform Order, 18 FCC Rcd at 10825 (para. 167).

7

(2) DigitalGlobe is committed to the U.S. Government to construct, launch, and operate the

satellites that are authorized by the Order, which fact is conclusive that DigitalGlobe is

financially capable and committed to build and operate the authorized satellites; and

(3) the warehousing of spectrum and orbital resources by remote sensing operators in the

United States is pragmatically impossible due to NOAA’s licensing requirements, the

ability of EESS bands to be used by multiple users, and the abundance of orbital locations

in which prospective operators can operate their systems.

1. DigitalGlobe is a Licensed Remote Sensing Operator by NOAA and the
Process of Being Licensed by NOAA Inhibits Speculative and Financially
Unqualified Entities From Being Authorized to Operate Remote Sensing
Satellite Systems

DigitalGlobe operates its remote sensing satellite system under authority of the Secretary

of Commerce in accordance with dictates of the Land Remote Sensing Policy Act of 1992 (the

“Remote Sensing Act”),30 the regulations promulgated by NOAA under delegated authority from

the Secretary of Commerce (“NOAA’s Regulations”),31 and the terms of the license issued by

the Secretary of Commerce to DigitalGlobe.32

In particular, the Remote Sensing Act provides that: “No person who is subject to the

jurisdiction or control of the United States may, directly or through a subsidiary or affiliate,

operate any private remote sensing space system without a license pursuant to Section 5621” of

title 15 of the United States Code. NOAA’s Regulations extend the entities that are captured by

30
Land Remote Sensing Act of 1992 (“Remote Sensing Act”), 15 U.S.C. §§ 5621, et seq. (2005).
31
15 C.F.R. Part 960 (2005).
32
DigitalGlobe’s license from NOAA to operate its remote sensing satellite system has elements that are classified.
As a result, DigitalGlobe is not at liberty to submit a copy of its license. If the Commission desires to understand
any of the specific terms of DigitalGlobe’s NOAA license, please contact Kay Weston, Chief of the Satellite
Activities Branch of the NOAA Satellite and Information Service (“NESDIS”) at (301) 713-2024, x. 220.

8

their regulations to include persons subject to the jurisdiction or control of the United States who

propose to operate private remote sensing space systems.33

In terms of the licensing process applicable to remote sensing satellite systems, the

Remote Sensing Act provides that:

...[n]o license shall be granted by the Secretary [of
Commerce] unless the Secretary determines that the
applicant will comply with the requirements of [the
Remote Sensing Act], any regulations issued pursuant
to [the Remote Sensing Act], and any applicable
international obligations and national security
concerns of the United States.”34

NOAA’s Regulations further provide that the Secretary’s determination must be in writing35 and

that license applications received must be disseminated to, reviewed by, and approved by the

Department of Defense, Department of State, Department of the Interior, and any other interested

federal agency before NOAA may issue a license.36

A prospective remote sensing satellite operator must furnish the Secretary of Commerce

in its application to operate a remote sensing space system detailed information regarding the

ownership and affiliations of the prospective licensee, as well as detailed technical information

regarding the operation of the launch, space, and ground segments of the remote sensing space

system.37 This information is used by NOAA to determine the applicant’s “suitability to hold a

private remote sensing space system license.”38

Appendix 1 to NOAA’s Regulations specifically provides that applicants must provide

NOAA with the following information (among other information):

33
See, 15 C.F.R. § 960.2(a).
34
See also, 15 C.F.R. § 960.4, §960.6(f).
35
15 C.F.R. § 960.6(f).
36
See, 15 C.F.R. § 960.6 (a)-(d) and Appendix 2 to Part 960.
37
See, Remote Sensing Act, § 5622(b)(5); see also, 15 C.F.R. § 960.6, Appendix 1, to Part 960, and Appendix 2 to
Part 960.
38
15 C.F.R. Appendix 1 to Part 960, at subsection (d).

9

(1) the proposed launch schedule; (2) the proposed launch vehicle source; (3) the

proposed launch site; (4) the anticipated operational date; (5) the range of orbits

and altitudes (nominal apogee and perigee); (6) the inclination angle(s); (7) the

orbital period(s); (8) the number of satellites which will comprise the system; (9)

technical space system information at the level of detail typical of a request for

proposal specification; (10) the command (uplink and downlink) and mission data

(downlink) transmission frequencies and system transmission (uplink and

downlink) footprint; (11) the downlink data rate and any plans for

communications crosslinks; (12) the applicant’s plans for protection of uplink,

downlink and any data links; and (13) other data pertinent to the imaging

capabilities of the system.39

Applicants are required to provide data regarding their proposed remote sensing space

system “in sufficient detail to enable the Secretary to determine whether the proposal meets the

requirements of the [Remote Sensing Act].”40 All of the information submitted to NOAA as part

of the licensing process becomes a part of the licensee’s license to operate a remote sensing

satellite system, and the Remote Sensing Act and NOAA’s Regulations make it unlawful for a

licensee to violate any provision of its license.41

It is clear, both from the above-cited, substantive requirements imposed in NOAA’s

Regulations and from DigitalGlobe’s practical experience in going through the extensive

licensing process—including the licensing of modifications to DigitalGlobe’s space system—

with NOAA, the Department of Defense, the Department of State, and the U.S. Intelligence

39
15 C.F.R. Appendix 1 to Part 960, Section I-V.
40
Id.
41
15 C.F.R. § 960.13.

10

Community, that the process of obtaining and maintaining a license to operate a remote sensing

satellite system is extraordinarily difficult.

The process is so exacting and the license requirements so detailed that DigitalGlobe

believes NOAA’s licensing policy alone provides a sufficient mechanism to preclude prospective

remote sensing satellite operators from filing speculative license applications. There have been

only thirteen (13) entities licensed by NOAA to operate private remote sensing space systems in

the thirteen (13) year existence of the legal regime to permit the operation of such systems. Of

the 13 NOAA licensees, only approximately half have filed license applications with the FCC to

operate their remote sensing satellites in the spectrum allocated for use by the Earth Exploration

Satellite Service (“EESS”). Further, of the 13 entities licensed by NOAA, only 4 have current

remote sensing satellite operations.

In the exercise of its role as the primary agency responsible for implementing U.S.

remote sensing policy, NOAA is charged with ensuring that the systems it authorizes operate

without causing unavoidable interference on the operations of the other licensed systems.

NOAA will not authorize any prospective applicant to operate a remote sensing system, if the

technical parameters provided by such prospective applicant will result in interfering with the

operations of existing licensees, nor will NOAA authorize existing licensees to modify their

systems in such a way as would cause interference on other existing licensees or prospective

licensees who have applications before the agency.

DigitalGlobe believes that the procedures associated with obtaining a license to

operate a remote sensing space system from NOAA are so rigorous that there is no need for the

Commission to impose bonds on remote satellite systems authorized by NOAA.42 The

42
On a side matter, DigitalGlobe notes that the Commission’s Rules do not currently explicitly prohibit entities that
are not already authorized to operate remote sensing space systems by NOAA from obtaining licensees to operate

11

Commission’s stated purpose for the bond is: (1) to provide an early mechanism for licensees to

show the Commission that they are financially capable of constructing and operating the

authorized satellites; (2) to provide the Commission with an independent assessment regarding

the financial wherewithal of the licensee to construct and operate the satellites; and (3) to prevent

entities from “warehousing” scarce spectrum and orbital resources by not constructing,

launching, and operating in a timely fashion.

In light of the rigorous licensing requirements imposed by NOAA and the detailed

review of the qualifications of prospective licensees to operate their remote sensing satellite

systems in accordance with the national security interests of the United States by NOAA, the

Department of Defense, the Department of State, and the U.S. Intelligence Community (among

other interested agencies), DigitalGlobe contends that the bond requirement is unwarranted. It is

hard to imagine that NOAA, the Department of Defense, the Department of State, and the U.S.

Intelligence Community (not to mention the other interested agencies) would permit prospective

applicants to obtain licensees when such licensees do not have a commitment to building their

satellite systems.

Even assuming the relevant agencies were to permit applicants to obtain “speculative

licenses”, it is clear from the Remote Sensing Act and NOAA’s Regulations that NOAA could

only authorize such applicant to obtain a license if such grant was in the national security interest

of the United States. It is inconceivable that NOAA or any of the other relevant, interested

agencies would permit any licensees to “warehouse” spectrum or other “valuable” remote

sensing satellite resources (e.g., orbital slots, etc.) at the expense of either existing, licensed

remote sensing satellites in EESS bands, DigitalGlobe strongly encourages the Commission to amend its rules to so
provide. NOAA is the “lead agency” with regard to the regulation of remote sensing satellite systems in the United
States, being directly involved in coordinating the joint use of EESS spectrum by its licensees. Thus, it would be
proper for the Commission to require prospective EESS licensees to obtain NOAA licenses prior to filing licenses
with the Commission to use EESS-allocated spectrum.

12

remote sensing operators or future, viable remote sensing applicants. “Warehousing” spectrum

or wasting other “valuable” remote sensing satellite resources is directly contrary to the national

security interests of the United States.

It must follow, therefore, that NOAA, and the other interested agencies involved in

reviewing remote sensing satellite applications, have already implemented a licensing system

that precludes the warehousing of spectrum and ensures that only “qualified” applicants receive

remote sensing satellite system authorizations. By requiring remote sensing satellite operators

who are licensed by NOAA to post bonds to show that they are financially capable of

constructing, launching, and operating remote sensing satellite systems, the Commission is

implementing a regulatory regime that imposes a duplicative burden on remote sensing satellite

operators.

2. DigitalGlobe is Committed to the U.S. Government to Construct, Launch,
and Operate the Satellites that are Authorized by the Order, which Fact is
Conclusive that DigitalGlobe is Financially Capable and Committed to
Building and Operating the Authorized Satellites

As DigitalGlobe described in its Request for Determination of Compliance with Satellite

Implementation Milestones (“Request”) on October 24, 2005, DigitalGlobe has already

commenced construction of the first satellite authorized by the Order, having completed, prior to

the time of the Commission’s grant of the Order, three (3) of the five (5) milestones set forth in

the Order.

As we instructed the Commission in our original application (SAT-MOD-20040728-

00151) and in the “Request for Determination of Compliance with Satellite Implementation

Milestones”, the funding of the construction of the newly authorized satellite is coming from

both DigitalGlobe and the National Geospatial-Intelligence Agency (“NGA”), in accordance

with the terms of an agreement between DigitalGlobe and NGA called the NextView Agreement.

13

Under the NextView Agreement, NGA has agreed to fund fifty percent (50%) of the actual cost

of DigitalGlobe’s development and construction of the next-generation remote sensing satellite

system, not to exceed a specified maximum amount, in exchange for DigitalGlobe’s agreement

to operate that system once launched and to provide data from it to NGA at favorable prices.

Specifically, the following are some details related to the NextView Agreement from the

NIMA (now NGA) press release announcing the awarding of the contract:

The NextView award to DigitalGlobe is a contract with
a potential to award more than $500 million over the
period of performance of the contract. The contract
allows NIMA early participation in the development
cycle for the next generation of U.S. commercial
satellite imaging capabilities. NextView moves beyond
the commodity-based approach of commercial imagery
acquisition and seeks to assure access, priority
tasking rights, volume (area coverage) and broad
licensing terms for sharing imagery with all potential
mission partners. This contract will transform how
NIMA provides geospatial intelligence by assuring
availability of 0.5-meter commercial imagery.43

Under the NextView Agreement with NGA, DigitalGlobe is obligated to meet certain

detailed satellite construction, launch, and operation milestones imposed by NGA.44

DigitalGlobe’s obligations to the U.S. Government under the NextView Agreement are generally

more extensive than the obligations stipulated in the Order in terms of the timeframes for

constructing, launching and bringing the satellites into operation. The only requirement in the

Order that is not contained in the NextView Agreement is the bond requirement.

DigitalGlobe believes that the existence of the Agreement with NGA according to which

DigitalGlobe has demonstrated its commitment to construct, launch and operate the satellites
43
See NIMA (now NGA) Media Release 3-12, September 30, 2003.
44
Unfortunately, DigitalGlobe is not at liberty to submit a copy of the NextView Contract, as there are significant
portions of the NextView Contract that are classified. In the event that the Commission desires to understand the
full nature of DigitalGlobe’s contractual commitments to NGA under the NextView Contract, we direct you to
discuss salient matters with Ms. Cyndi Wright, the NextView Program Manager at NGA, at (301) 227-6645, or
wrightc@nga.mil.

14

there is no need for the Commission to use the bond as an “early” milestone. Finally, as

DigitalGlobe is committed to the U.S. Government under the NextView Agreement to build the

satellite system, using all of the spectrum allocated in the Order, there is no risk that

DigitalGlobe has filed a speculative license application or that DigitalGlobe will “warehouse”

the authorized bandwidth.

Accordingly, DigitalGlobe contends that the bond is unnecessary. As the facts of the

present case are exceptionally unique and the Commission’s grant of the instant Petition would

rely on and be specifically tailored to the facts presented, the Commission’s grant of this petition

will not undermine the policy objectives of the underlying bond requirement. Finally, the waiver

of the bond requirement in the instant case will facilitate the timeliness by which DigitalGlobe

brings its remote sensing system into operation, as the waiver of the bond requirement will

enable DigitalGlobe to use all of its resources in constructing, launching, and operating the

authorized satellites.

3. The Warehousing of Spectrum and Orbital Resources by Remote Sensing
Operators in the United States is Pragmatically Impossible Due to NOAA’s
Licensing Requirements, the Ability of the Band to Be Used by Multiple
Users, and the Abundance of Orbital Locations in Which Prospective
Operators can Operate their Systems

As discussed in Section II, C., 1., above, DigitalGlobe believes that the regulatory regime

implemented by NOAA in regulating the activities of remote sensing satellite licensees has made

it practically impossible for entities to “warehouse” spectrum to the detriment of either existing

or prospective, future remote sensing satellite operators. For, NOAA has developed a rigorous

system to ensure that licensed operators use the applicable remote sensing frequencies (the EESS

frequencies) without causing interference on other licensed operators (whether presently

authorized or to be authorized in the future).

16

In addition to the limitations on speculation and harmful warehousing provided for by

NOAA’s regulatory regime, DigitalGlobe notes that, from an astro-physics perspective, it is

virtually inconceivable, considering the current demand for remote sensing satellite imagery, that

a well-coordinated spectral band could ever encounter a situation where either spectrum or

orbital positions could be “warehoused” or otherwise wasted by licensees authorized to operate

NGSO satellites to the detriment of prospective, future NGSO remote sensing operators or

currently authorized NGSO operators. The very astro-physical characteristics associated with

the “use” of orbital parameters by NGSO remote sensing satellites results in such orbital

parameters being anything but “scarce.”

NGSO remote sensing satellite systems operate very differently from every other NGSO

satellite system regulated by the FCC. Although multiple remote sensing satellites are routinely

authorized by the Commission under single NGSO authorizations, remote sensing satellites do

not operate as constellations under any circumstances. That is, there is no interoperation

between NGSO remote sensing satellites authorized under single NGSO licenses, unlike the

majority of other NGSO satellites.

The Commission conceded in the Order, as well as in the Fifth Report and Order, that

NGSO remote sensing satellites are GSO-like with regard to the applicable procedures for

reviewing and approving NGSO remote sensing satellite applications.45,46 However, the

Commission decided to treat NGSO remote sensing satellites as NGSO constellations with

regard to the bond requirement in the Order, without providing any explicit reasons therefor.

The unique parameters associated with the operation of NGSO remote sensing satellite

systems essentially results in a situation whereby neither bandwidth nor operational parameters

45
See, Order, FCC LEXIS 5427 (paras. 6-8).
46
See, Fifth Report and Order 19 FCC Rcd at 12664 (para. 74).

17

are scarce commodities, contrary to published conclusions of the Commission. In particular, the

Commission ruled in the Fifth Report and Order against excluding NGSO remote sensing

satellite systems from the bond requirement because the Commission concluded that “granting

an EESS license precludes other EESS licensees from using the same frequencies, orbits, and

transmission times.”47 In making this statement, we believe that the Commission did not fully

appreciate the vast number of combinations of orbital parameters and time-delimited

transmission combinations that can be used by prospective remote sensing operators to

interoperate in EESS bands.

The evidence is clear that there are ample, open orbital positions which NGSO remote

sensing satellite operators can use to park their satellites. In fact, the determining factor for

choosing appropriate locations for NGSO remote sensing satellites is not the inclination angle of

such satellites, but their altitudes. The desired altitudes for the satellites drive the determinations

regarding the best inclination angles for NGSO remote sensing satellites. Moreover, it should be

noted that as many as four (4)—and possibly more—NGSO remote sensing satellites can be

placed in the same altitudes and inclination angles (down to tenth of degrees) and operate

without undue interference, providing that the 4 satellites are each phased 90 degrees apart from

one another.

In DigitalGlobe’s application to modify its NGSO remote sensing satellite system, in fact,

DigitalGlobe requested the authorization to operate two NGSO remote sensing satellites at 97.2

degree inclination angles, with approximately 450-475 km altitudes, with the satellites phased at

0 degrees and 180 degrees in the orbit. The other two authorized satellites meanwhile were

authorized to operate at a 98.5 degree inclination angles, with approximately 770-795 km

altitudes, with such satellites phased at 0 degrees and 180 degrees in the orbit, as well. The same
47
See, Fifth Report and Order, at paragraph 74.

18

inclination angles can handle a significant number of orbiting satellites, merely by varying the

altitude of the given NGSO remote sensing satellites slightly.

As a result of the vast number of possible combinations of orbital parameters and time-

delimited transmission combinations that can be used by prospective remote sensing operators to

interoperate in EESS bands, it is clear that there is virtually no chance that a prospective remote

sensing satellite operator will be able to harm other existing or prospective EESS licensees by

failing to bring satellite systems into operation in a “timely” fashion or otherwise “warehousing”

orbital resources. Furthermore, it is now a widely understood fact that EESS bands can be

jointly used by all prospective remote sensing operators. Therefore, there is not a good public

policy reason to impose a bond requirement on remote sensing satellite licensees.

* * * * *

Accordingly, for the good cause demonstrated above, DigitalGlobe requests that the

Commission reconsider its decision to impose a bond on DigitalGlobe in the Order.

DigitalGlobe believes that in the instant case waiving the bond requirement as it applies to

DigitalGlobe in the Order will not undermine the Commission’s policy for requiring bonds for

other licensed satellite systems. Nevertheless, DigitalGlobe also believes that the Commission

should reconsider its decision to require remote sensing satellite licensees to post bonds in

general, in light of the stringent licensing review placed on prospective remote sensing satellite

operations by NOAA (and other interested agencies), including the review of modifications to

existing authorized operations. The fact that there are a vast number of possible combinations of

orbital parameters and time-delimited transmission combinations that can be used by prospective

remote sensing operators to interoperate in EESS bands further mitigated against the imposition

of bond requirements on remote sensing satellite licensees. Finally, it is in the public interest not

19

to impose a bond requirement on NOAA-licensed remote sensing satellite operators, as the bond

requirement results in duplicative regulatory requirements being imposed, which slow the

timeliness by which remote sensing services are provided by licensees and used for the public’s

benefit.

IV. In the Event the Commission Decides Not to Waive the Bond Requirement, the
Commission Should Rule that: (a) NGSO Remote Sensing Satellites are GSO-like;
(b) the Appropriate Bond Amount is $3,000,000; (c) There are only 4 Milestones for
NGSO Remote Sensing Satellite Systems; and (d) an NGSO Remote Sensing System
Licensee Will Fulfill The Milestone Requirement By Constructing, Launching, And
Bringing Into Operation The First Satellite In Its NGSO Remote Sensing Satellite
System

As provided for in significant detail above, DigitalGlobe strongly believes that there is

good cause to waive the bond requirement imposed in the Order due to the totality of

circumstances surrounding DigitalGlobe’s construction, launch, and operation of its next-

generation EESS satellite system. Nevertheless, in the event that the Commission refuses to

grant DigitalGlobe’s request a waiver of the bond requirement in the instant case, DigitalGlobe

requests that the Commission rule that:

(1) NGSO remote sensing satellites are GSO-like for purposes of the bond requirement;

(2) the appropriate bond for NGSO remote sensing satellite systems is $3,000,000;

(3) there are only four milestones required for the construction of NGSO remote sensing

satellite systems; and

(4) an NGSO remote sensing system licensee will fulfill the milestone requirement by

constructing, launching, and bringing into operation the first satellite in its NGSO remote

sensing satellite system.

In the event that the Commission authorizes an NGSO remote sensing satellite operator

in a license modification to operate new satellites using more bandwidth per satellite than

20

previously authorized, DigitalGlobe would accept a new $3,000,000 bond being imposed on the

licensee—assuming that the Commission keeps the bond requirement for EESS satellite

licensees. However, DigitalGlobe requests that the Commission rule that the bond would be

fulfilled by the NGSO remote sensing system licensee launching and bringing into operation the

first satellite using the additional bandwidth. Further, we request that the Commission rule that

there would be no bond requirement for the construction, launch, and operation of additional

NGSO remote sensing satellites authorized pursuant to satellite modification applications, as

long as such satellites will operate only within already-authorized bandwidth.

In making the present alternative request of the Commission, DigitalGlobe is essentially

requesting that the Commission clarify what DigitalGlobe believes to be the Commission’s

position with regard to the application of bond requirements on NGSO EESS licensees.

Specifically, in the Order, the Commission provided that the Commission had eliminated the

financial requirements then in place in the Commission’s Rules and replaced them with the bond

requirement.48 The Commission explained that DigitalGlobe must file a bond because: (1)

“remote sensing satellite operators are not exempt from the bond requirement in circumstances

where they propose to operate a next-generation satellite system using additional frequencies for

which they are not currently authorized”49 and (2) DigitalGlobe had received authorization from

the Commission to operate three new satellites in its NGSO remote sensing satellite system in

frequencies not previously authorized by the Commission.50

Thus it appears that the Commission has provided that the bond will be imposed only in

instances where the Commission approves an NGSO EESS licensee to add satellites to its system

and any of the newly authorized satellites is authorized to use more spectrum than any of the

48
Order, FCC LEXIS 5427 (para. 12).
49
Order, FCC LEXIS 5427 (para. 13); see also, Fifth Report and Order, 19 FCC Rcd at 12659-12660 (para. 58).
50
Order, FCC LEXIS 5427 (para. 13).

21

The Commission should extend the concession that NGSO remote sensing satellites are

GSO-like for processing round purposes to the bond requirement. While DigitalGlobe desires

for NGSO remote sensing satellites to be deemed “GSO-like” for purposes of the bond

requirement, DigitalGlobe notes that NGSO remote sensing satellite systems are very distinct

from GSO-like satellites. Accordingly, DigitalGlobe contends that the Commission should

create a special rule to accommodate NGSO remote sensing satellites.

As individual NGSO remote sensing satellites operate independently of the other NGSO

remote sensing satellites that comprise the NGSO remote sensing satellite system, each satellite

is truly GSO-like, as opposed to other NGSO systems which have been determined to be GSO-

like for processing round purposes. In such cases, the entire NGSO constellation operates like a

GSO satellite; therefore, the entire NGSO constellation is GSO-like. With regard to NGSO

remote sensing satellites, however, each satellite will provide services independently of the other

authorized satellites. As a result, there might be an inclination to require licensees to post a bond

for each newly authorized satellite that will comprise its NGSO remote sensing system.

For, if the Commission establishes that a bond is required only to construct, launch, and

operate the first satellite authorized to operate in an NGSO remote sensing satellite system,

satellite, the bond will not function to force or otherwise encourage the remote sensing satellite

licensee to build, launch, or bring into operation the subsequent satellites authorized to operate in

the same bandwidth. DigitalGlobe believes that NOAA already has sufficient measures in place

to ensure that speculative licensing does not result in harm to existing or prospective future,

remote sensing licensees. Therefore, DigitalGlobe believes that there is good cause to limit the

extension of the bond requirement to remote sensing satellite licensees requesting the authority

23

to operate any single satellite in more bandwidth than its then-currently authorized satellites are

authorized to operate in.

V. Erratum

DigitalGlobe hereby requests that the Commission issue a modified Order, or in lieu of a

modified Order, an Erratum to address the following typographical error set forth in the Order.

The error is as follows:

Paragraph 5 of the Order lists the Telemetry Downlink as being at 8030 MHz.

This appears to be a typographical error, as Paragraphs 18 and 29 of the Order

correctly refer to the downlink to be used by DigitalGlobe as being at 8380 MHz.

Consequently, please strike “ 8030 MHz” in Paragraph 5 and replace it with

“8380 MHz”.

VI. Conclusions

For the good cause demonstrated herein, we urge the Commission to grant the

request to waive the bond requirement in the instant case.

* * * * *

24

Should there be any questions regarding the foregoing information, please contact the

undersigned at (703) 563-3090, x. 205 or DigitalGlobe’s General Counsel, Ms. Bettina Eckerle,

at (303) 684-4312.

Respectfully submitted,

DIGITALGLOBE, INC.

By: _/s/__________________________

Keil J. Ritterpusch
Mark J. Fiekers

PIERSON & RITTERPUSCH, LLP
2121 Cooperative Way, Suite 200
Herndon, Virginia 20171
(703) 563-3090, x. 205

COUNSEL TO DIGITALGLOBE, INC.

Bettina Eckerle
General Counsel
DIGITALGLOBE, INC.
1601 Dry Creek Drive
Longmont, Colorado 80503

October 31, 2005

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Document Modified: 2019-04-15 12:41:49

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