Attachment request

request

PETITION FOR RECONSIDERATION submitted by ICO

request

2005-06-23

This document pretains to SAT-MOD-20050110-00004 for Modification on a Satellite Space Stations filing.

IBFS_SATMOD2005011000004_439241

\/va;{ Before the FEDERAL COMMUNICATIONS COMMISSION RECEIVED — FCC Washington, D.C. 20554 ReOe,de JuN 2 3 2005 In the Matter of m } 3UN 2 8 2005 *apine. _‘ 1CO Satellte Services G.P ) Policy Branch ) ntematoreiBan Application for Modification of 2 GHz ) TBFS No. $X¥non—20050110—00004 LOI Authorization ) To: The Interational Bureau PETITION FOR PARTIAL RECONSIDERATION 1C0 Satellite Services G.P. ("ICO®) submits this petition for partial reconsideration ofthe memorandum opinion and order by the Interational Bureau ("Bureau‘") in the above—captioned proceeding." Specifically, 1CO seeks reconsideration ofthe Bureau decision to require ICO to posta bond in the amount of $1.5 million. The application ofthe bond regquirement to ICO is not authorized by any Pederal Communications Commission ("PCC"or "Commission®) rule or poticy.. Additionally, Subjecting 1CO, but not other 2 GHz mobile satellte service (°MSS") Hicensees," to the bond requirement harms competition and the public interest by placing ICO at a severe competitive disadvantage. Accordingly,the Bureau immediately should set aside ts decision to require ICO to post a bond. Altematively, the Bureau should waive the bond requirement as it appliesto 1CO. ! See ICO SatelteServices G.P., DA 05—1504 (1B May 24, 2005) (*Modfcuion Orde") * Forease ofreference,the terms licenss" and "lcensees," withrespct to 2 GHHe MSS, willreferto FCC suthorizationstoprovide2 Giz MSS and the partes that old thoseauthorizations,regardlessofwhether the authorzation i a U.S, sitelite Hcense or a eteofintnt (*LOI®) authorization grating a reservationof spectrum to a freigeicensed stelte sstom deaionis 1

L BACKGROUND On July 17, 2001, the Bureau granted ICO a letter ofintent ("LOI") authorization reserving spectrum in the 2 GHz frequency band for the provision of MSS in the United States." On May24, 2005, the Bureau granted ICO‘s application to modify its 2 GHz MSS LOI authorization by substituting a geostationary satellite orbit (°GSO") system for a non— reostationary satellite orbit ("NGSO") system to serve the U.S. market.* The Bureau also required ICO to post a bond "pursuant to the procedures set forth in Public Notice, DA 03—2602, 18 FCC Red 16283 (2003), by June 24, 2005."" The bond filing procedure set forth in the public notice cited in the Modification Order was based upon the FCC rules adopted in the Satellite Reform rulemaking requiring satellite Hicensees to post a bond as a condition of their licenses." These rules became effective on October 27, 2003,and were subsequently revised to provide for reduced bond amounts," > See ICO Services Linited, 16 FCC Red 13762 I/OET 2001). Pursant to Commission approval granted on March 21, 2002the LOF authorizaton wasassigned on a proforme basis rom 1CO Services Limited to 1CO. See Leterfrom Fern . Jarmulncl, Itemational Bureau, FCC,to Chery! A. Trit, Counsel. 1CO, Fle No. SAT—ASG— 20020128—00015 (Mar. 21, 2002) * See ModRcation Order 1. *1d. 40. The Bareau ntally require1CO to posta bond in th amount of53 milton, but laterreduced the amountby 50 pereent in view ofICO‘s compliance wth the contract execution and crtcal deign review milestanes. See FCC PubliNoice, Policy Branch Iformation, DA 0%—145 (May 27,2005). As required,ICO concurrentyi ubmitinga bond in the amount ofS1.5 milion. fthis pertion is ranted, 1CO requess permission to carcethe bond in ts entrety " See FCC Public Notice,Iternational Bureau Explains Procedurefor Flng Bonds Pursuant to New Suelite Licensing Procedire, 18 FCC Red 16283, 16283 (2003) ? See Amendment ofthe Conmission‘s Space Staon LicensingRules and Polices, 18 ECC Red 10760, 4351 (2003) ((SoteliteLicensing Reform Order"), sunmarized in 68 Fed. Reg. $1499 (Aug. 27,2003),as corrected by 68 Fed Reg. 59127 (Oct 14, 2003 * Amendnentothe Commission‘s Space Station Licensing Rules and Polices, 19 FCC Red 12637,91 (200%) (*‘SatliteLicensing Reform Reconsideration Orde?) dear0m8 >

1t THE BOND REQUIREMENT DOES NOT APPLY TO A MODIFICATION OF AN EXISTING 2 GHz MSS LICENSE The Commission adopted the bond requirement long after ICO obtained its 2 GHz MSS LOI authorization and did not contemplate extending the requirement to ICO and other pre— existing licensees. Both the plain text ofthe FCC rules requiring the posting ofbonds and the underlying decisions adopting these rules demonstrate that the Commission intended to impose the bond requirement only on newsatellite licenses, not modifieations ofexisting licenses. Specifically, Section 25.165 ofthe FCC rules provides that "[fJor all stellite Hcenses issued after September 20, 2004 [ie.,the effective date of the bond requirement, as modified on reconsideration}, other than DBS licenses, DARS licenses, and replacement satelite licenses as defined in paragraph (¢), the licensee is required to post a bond within 30 days ofthe grant of its Hicense."" Similarly, Section 25.137(d) provides that "non—U.Slicensed satellte operators filing letters of intent ... to access the U.S. market must demonstrate that the non—U.S—licensed space station has complied with all applicable Commission requirements including but not limited to the following: .... For non—U.S.—licensed satelltes that are not in orbit and operating, a bond must be posted.""" The plain text of these rules does not evidence any intent to extend the bond requirement to modifications of licenses granted prior to the effective date of the rules. In fact, when the Commission adopted the bond requirement, it expressly stated that it ~will apply this bond requirement to newsarellite fcensees only.""" The Commission further emphasized that "licensees will nor be required to post a bond for ficenses they have been *47 CFR. § 25.165 (emphasi added). ® ie 5 as.070) " SurellteLicensing Reform Order § 167 (emphasis added) deaioz1s 3

granted in the past."" Subsequently, on reconsideration, the Commission reiterated that "the bond requirement applies t all ficenses granted after the requirement took effect, regardless of when the application for each of those licenses was filed."" At no time did the Commission suggest that the bond requirement would be extended to modifications ofpre—existing licenses."" Consequently, because ICO obtained its 2 GHz MSS LOT authorization long before the Commission adopted the bond requirement, the Bureau is not authorized under the FCC rules to require ICO to post a bond as a condition of its modified authorization. HHL REQUIRING ICO, BUT NOT OTHER 2 GHz MSS LICENSEES, TO POST A BOND IS UNFATRLY DISCRIMINATORY Even assuming that the bond requirement applies to modifications of pre—existing Hicenses, requiing ICO to post a bond is unfairly discriminatory because the Commission has not imposed the same requirement on other 2 GH: MSS licensees. For example, last year, the Commission granted TM‘s application for a modification of is 2 GHz: MSS LOI authorization to reflect a change in orbital location." The Commission did not require TMI to post a bond, even though the order granting the modification application was issued on June 29, 2004 — after ®\ 14.283 (emphasisadded) ° SatellteLicensing Reform Reconsideraion Order§72 (emphasis added !* Altbough the Commision treats modifcation aplictionsto change orbitl archtectureasnew liccnse applicationsforfiling fee parposes, it his nodone so for anyother parposes. Infic, when the Bureau graned Bocing‘s2 GHtz MSS modifation application o change orbalarchtectur, it did not apply the ther—cxisting processin procedares appliableto ow ense applcations, but ather processed th aplication using the generl standard for pproving modification applcations. See The Bocing Co., 18 FCC Red 12317, 47 IB/OET 2003) ("Bocing Order®). Addtionally,when the Commission requied Sizias Satelite Radio T. to submita new lense appleationfeefora modifiation applcationto change orbial ocation, it acknovledged the distiction betveen the granof a cense and the grantofa modification oa lcensefor purposes ofthe Communications Ac of 1932,as amended. See Sius Sutelite RadioInc, 18 FCC Red 12551 10 (2003) Itfound that the decision to apply the new liense appliction fet Siiu‘ modlifiation applcation is flly consistent with th anguage and policy of thestatory and rale provisions govermingfees." 12 11. Incontast, treating a modlification application o change orbitlloction asa new icens applcation for bond fling parposes would not be consistent whelanguage and policy ofthe bond Aling rles. As discussed above, the bond flingriles and underlying policesdo not supgest ay Commisionintent t apply the bond requirementto modifations ofre—exsting censes. " See TMI Communiations and Co, LP, 19 FCC Red 12603 (2004) (TdlOrder®) doaron1s a

the bond requirement became effective on October 27, 2003."" The Commission‘s failure to impose the bond requirement in that case suggests that it did not contemplate that the requirement would apply to modifications of pre—existing authorizations. Moreover, despite the differences between ICO‘s and TMI‘s modifiation applications, neither the FCC rules requiring the posting ofbonds nor the underlying decisions adopting these rules reveal any intent to extend the bond requirement only to certain types of modifications, but not others." Furthermore, the Bureau did not require Boeing to post a bond when it granted Bocing‘s application for a modification of ts 2 GHz MSS LO1 license to changefrom an NGSO to GSO system."" Because Bocing‘s modification application was pending at the time the Commission issued the Sarellte Licensing Reform Order adopting the bond requirement, the Bureau could have chosen to grant the application subject to a bond requirement that would be imposed when the requirement became effective. In fact, the Commission contemplated that the bond requirement would apply to applications pending at the time ofits adoption of the Sarellite Licensing Reform Order." By failing to require either Bocing or TMI to post a bond as a condition oftheir modified Hicenses, the Commission granted an unfair competitive advantage to those companies. Unlike 1CO, both Bocing and TMI were permitted to implement their modified 2 GHz MSS proposals without the financial restrictions imposed by the bond requirement. In fact, Bocing recently " See supra note 7 and accompanyingtext "‘ TMI‘s modifcation aplicationsought a changs in orbital ocatin, butdid ot requesta resevation of spectrum for feeder ink opertions because TML proposed t oute alltaffic through a gateway in Canada. See TA Order TY 11, 53. In contast 1CO‘s modlifiation application sought a change in orbtl archtecture and a change in the frequenciesto be reserved for feede k operations. SModifcation Order 9 5, 14 " See The Bocing Co. Y 36—46. © See Satlite Licensing Reform Order 4275 (ntingthat "[thereareseveralsatlite Kicenseapplications currenty pending before the Commision®and hat"we will applythe rules and procedures we adopt i this Orde o pending appliations") de—ai9018 s

surrendered its modified license without penalty.®" To ensure that consumers receive the full benefits of 2 GHz MSS competition, the Commission must provide a level playing field for all competitors and must not impose financial restrictions that are not equally applicable to all competitrs. IV. THE BUREAU SHOULD WAIVE THE BOND REQUIREMENT To the extent that the bond requirement applies to ICO‘s modified LOI authorization, 1CO requests a waiver ofthat requirement. The Commission may waive its rules upon a showing of "good cause.""! Waiver is appropriate if(1) special circumstances warrant a deviation from the general rule, and (2) the deviation better serves the public interest than strict adherence to the rule."" Circumstances warranting a waiver include "considerations of hardship, equity, or more effective implementation ofoverall policy: "*" The Commission may waive a rule in a particular case if the relief requested would not undermine the policy objective ofthe rule and otherwise would serve the public interest." Special circumstances warrant a waiver in this particular ease.. Although both ICO and TML, the two remaining 2 GHz MSS licenses, have obtained modifications of their LOI authorizations, only ICO is required to post a bond. This selective enforcement ofthe bond requirement places ICO at a severe competitive disadvantage by limiting its access to copital, while allowing TMIto implement ts 2 GHz: MSS system withoutthe same financial restriction. * fete] "arorr gis Northeast CelliarTelephone Co.v. FCC, 97 F2d 1164, 16 (D.C. Cir. 1990)(cting HAT Radiov. FCC,418 ©2d 1183, 1158 (D.C.C1969),cere denied, 409 US. 1027 (1972)) 9 WalT Redio, 418 F2d m1189 " td m lis7, deaion18 6

Furthermore, grant ofthe requested waiver will more effectively implement the Commission‘s policy objectives and better advance the public interest than strict adherence to the rules. The bond filingrules are intended to deter speculation and warchousing, and to ensure that"the licensee is fully committed to construct its satellite facilities.""" 1CO‘s substantial expenditures and unparallieled construction efforts to date demonstrate its longstanding commitment to provide 2 GHz MSS tothe United States, rather than any intent to warchouse orbit and spectrum resources. Because the Commission effectively waived the bond requirement for other 2 GHz MSS Hicensees, a similar waiver should be granted to ICO to ensure fair and nondiscriminatory regulatory treatment. In fact, the Commission‘s waiver decisions must comport with its treatment of similarly situated parties."" Moreover, any differential reatment must be supported by reasoned analysis, not mere recitation ofperceived factual distinctions that have no relevance to the Commission‘s rules or policies."" The Commission‘s obligation to extend fair and nondiscriminatory treatment to all 2 GHz MSS licensees thus requires grant of ICO‘s waiver request ® Suellte Licensing Reform Order T0 " See Airmark Corp. w FAd, 758 F2d 685, 91 (D.C. C1989)(‘Deference to agency authoriy or expertse however, i not a icense o .. ueatlikecases differenty") (inemal quottions onited); Freeman Engineering Associates Inc v. FCC, 103 —3¢ 169, 180 (D.C. i 1997)(inding that FCCs intrprtation ots ulwas reasonable, but nonethless vacating it decision denying applicants requesfo"pioneer‘s preference" because of inconsistent application ofth ruleinterprtation); Melody Mc, . . PCC, 345 F.2d 730, 732.3(D.C. Cir 1965) (rling that FCC‘s refusal to expain disparate reatment oappelintand another lcensce*was eor‘) " See Northpoint Technology,L1d.v. FCC, 2008 US. App.LEXIS 11804, 26 (D.C. Cir. June 21, 200%)(ECC‘s dispraterepulatory treatmentoftwo tpes ofsitelit srvices is premised on an insignifiant ditiction); Perroleun CommunicationsIc. v. FCG, 22 ¥3d 1164, 1172 (D.C. Ci, 1994)("We have ong held that an agency must provide an adequate explanationbefor it eatsimlarly situated paries diffrents."); Mefody Murc, 345 F24 at 73(PCC must"do more than enumeratefictualdiferences, ifany, etweenappelantand the othercasesit must explain th relevance ofthosedifferences") deaionis 7

v. CoNCLUSION Based upon the foregoing, ICO urges the Bureau to grant this petition and climinate or waive the requirement to post a bond as a condition of ts 2 GHz MSS LOI authorization. Respectfully submitted, 1CO SATELLITE SERVICES G.P. Chery! A. Tritt Suzam\ga Hutchings Mulloa Phuong N. Pham Senior Regulatory Counsel Morrison & Foerster LLP 2000 Pennsylvania Avenue, NW 2000 Peansylvania Avenue, N.W. Suite 4400 Suite 5500 Washington, D.C. 20006 Washington, D.C. 20006 Its Attomeys June 23, 2005 dc—ai0218

CERTIFICATE OF SERVICE 1, Theresa L. Rollins, hereby certify that a copy of the foregoing PETITION FOR PARTIAL RECONSIDERATION has been served this 23" day of June 2005 by U.S. mail or by electronic mail as indicated(*) on the following: Joseph P. Markoski Fem Jarmulnck® Bruce A Olcott Deputy Chief, Satellte Division Squire, Sanders & Dempsey LLP Interational Bureau 1201 Pennsylvania Avenue, N.W. Federal Communications Commission Washington, D.C. 20004 445 12Street, SW Counselfor The Bocing Company Washington, DC 20554 Email: FemnJarmulnek@fee.gov. Cassandra Thomas* Karl Kensinger® Deputy Chict, Satelite Division Associate Division Chief, Satellite Division Interational Bureau Interational Bureau Federal Communications Commission Federal Communications Commission 445 12" Street, SW 445 12" Street, SW Washington, DC 20554 Washington, DC 20554 Email: Cassandra.Thomas@fee.gov Email: Karl.Kensinger@fee.gov deaio018


Document Created: 2005-06-28 11:21:07
Document Modified: 2005-06-28 11:21:07
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