Attachment opposition

opposition

OPPOSITION submitted by Intelsat

opposition

2004-09-14

This document pretains to SAT-STA-20040615-00116 for Special Temporal Authority on a Satellite Space Stations filing.

IBFS_SATSTA2004061500116_400887

% ORIGINAL Before the EIVED Setool CommunopiepeCommieams PCV Washington, DC 20554 sep 1 4 2004 Fatenl onmnicatos Conissn In the Matter of iMesotSecmiay Intelsat North America LLC Rpue No. SAT—STA—20040615—00116 Spignint for Estersion oSpocial eceiveq Temporary Authority SEP 2 o zum {nti BureaU 5 2004 To: The Commission .MeltyBranen Bureay de n Front Office OPPOSITION TO APPLICATION FOR REVIEW Intelsat North America LLC (¢Intelsat"), by its attomeys, and pursuant to Section 1.115 ofthe rules of the Rederal Communications Commission (°FCC" or "Commission‘®),‘ hereby opposes SES AMERICOM, Inc.‘s ("SES®) Application for Review of the Intemational Bureau‘s ("Bureau") July 30, 2004 order granting Intelsat‘s request for a 180—dayextension of special temporary authority (*STA") to provide direct—to—home (DTH") additional services"" to former customers of Loral SpaceCom Corporation and Loral Satellite Inc. (together "Loral") ! See 47 C.F.R. § 1.115 (2003). SES AMERICOM, Inc., Application for Review, Pntelsat North America LLC, Requestfor Extension ofSpecial Temporary Authority,File No. SAT—STA—20040615—001 16 (iled Aug. 30, 2004) ("Application for Review"). * Open—Market Reorganization for the Betterment ofInternational Telecommunications Act, Pub. LL. No, 106—180, 114 Stat. 48 (2000), § 681(a)(12)(B)("additional services" defined as "for INTELSAT, direct—to—home (DTH) or direct broadcast satellite (DBS) video services, or services in the Ka or V. bands."),as amended, Pub, L. No. 107—233, 116 Stat. 1480 (2002), as amended, Pub. L. No. 108—228, 118 Stat. 644 (2004). * Intelsat North America LLC, Requestfor Extension ofSpecial Temporary Authority, DA 04— 2445 (rel. July 30, 2004) (*Extension Order")

. BACKGROUND AND SUMMARY In the Intelsat/Loral Order, the Bureau assigned certain Loral satellte lcenses to Intelsatsubject to a condition on providing "additional services" and granted Intelsat STA to provide such "additional services" to former Loral customers until September 13, 2004. On March 12, 2004, SES filed an Application for Review of the Pnrelsat/Loral Order ("Initial Application for Review")" challenging, inter alia, the lawfulness of the Bureau‘s decision to grantIntelsat the limited STA. Intelsat, in response, demonstrated that the Open—Market for the Betterment of International Telecommunications Act ("ORBIT Act") does not prohibit the Commission from authorizing Intelsat‘s provision of "additional services" prior to an Intelsat initial public offering and sought deletion of the relevant condition." This Inital Application for Review is pending. On June 15, 2004, Intelsatrequested extension, until March 12, 2005, of its STA to serve "additional services" customers, including Starband who, as the Bureau previously noted, would otherwise experience disruption or even discontinuance of service." SES filed a Petition to * Loral Sarellte, Inc. (Debtor—in—Possession) and Loral SpaceCom Corporation (Debtor—in Possession), Assignors and Intelsat North America, LLC, Assignee; Applicationsfor Consent to Assignments ofSpace Station Authorizations and Petitionfor Declaratory Ruling Under Section 310b)(4) ofthe Communications Act of1934, Order and Authorization, 19 FCC Red 2404 (2004) (*fitelsar/Loral Order"), as amended, Supplemental Order, 19 FCC Red 4029 (2004). * SES AMERICOM, Inc., Application for Review, File Nos. SAT—ASG—20030728—00138/00139 (filed Mar. 12, 2004) (*Initial Application for Review"), See also SES AMERICOM, Inc., Motion for Expedited Consideration in Part of Application for Review, File Nos. SAT—ASG— 20030728—00138/139 (filed Mor. 12, 2004). " See Opposition ofIntelsat North America LLC to Application for Review, File Nos. SAT ASG—20030728—00138/7139 (fled Mar. 29, 2004) ("Intelsat Opposition"); Intelsat North America LLC Opposition to SES‘s Motion for Expedited Consideration In Part of Application for Review and Cross—motion to Dismiss in Part SES‘s Application for Review, File Nos. SAT—ASG— 20030728—00138/00139 (filed Mar. 29, 2004); Letter to Marlene H. Dortch, Secretary, FCC, from Bert W. Rein er al, counsel to Intelsat, File Nos. SAT—ASG—20030728—00138/00139 (fled June 4, 2004) (*Additional Services Ex Parte"). * Intelsat/Loral Order, 19 FCC Red at 2429—30.

Deny? on July 19, 2004 asserting that: (1) the Bureau lacked authority to grant the initial STA (which is part of the very issue pending in the Initial Application for Review}; and (2) extension would be inconsistent with the Bureau‘s original purpose in granting STA. In ts July 30, 2004 Extension Order, the Bureau acknowledged that the Commission is considering issues pertaining to Intelsat‘s provision of "additionalservices" and thus preserved the status quo by granting Intelsat‘s extension request "subjectto, and conditioned upon, the Commission‘s findings on the pending [Initil] Application for Review.""" In the instant Application for Review, SES repeats the very same claims it made in its Petition to Deny and Initil Application for Review and argues that the Bureau should have denied the extension request.. As shown below, however, such denial would have preempted the Commission‘s deliberations on the proper scope of Intelsat‘s authority to offer "additional services" and produced needless and costly service disruptions and discontinance, adversely affecting the very customers and end—users the Bureau sought to protect through the STA. Because the Bureau‘s decision to grant STA pending further action by the full Commission was both proper and necessary, the Commission should deny SES® instant Application for Review 11. THE BUREAU‘s DECISION WaAs PROPER BECAUSE IT PRESERVED THE STaTUs QUO PENDING FULL COMMISSION ACTION ON SEs‘ INITIAL APPLICATION FOR REVIEW SES alleges that the Bureau should have denied Intelsat‘s extension request because the Bureau "lacked authority" under the ORBIT Actto grant STA for "additional services".." However, this issue—whether the ORBIT Act allows the Bureau to grant Intelsat authorty, * See SES AMERICOM, Inc., Petiion to Deny, File No. SAT—STA—20040615—001 16 (filed July 19, 2004) ("Petition"). ‘ Extension Order, 6. "‘ Application for Review at 3.

whether by license or STA, to provide "additional services" at this time—currently is before the full Commission. Under these circumstances, the Bureau‘s decision to extend the STA was the proper method for preserving the status guo pending full Commission resolution ofthe relevant legal issue. A.—— The Bureau Properly Took Into Account the Commission‘s Pending Review of the Initial Application for Review in Granting the Extension SES claims that the pending Initial Application for Review provided no basis for extending the STA."" Specifically, SES argues that the "only" question pending on review is "whether the Bureau had authority to grant the STA.""" However, the Commission‘s scope of review is not as limited as SES claims. In order to determine whether the Bureau had authority to grant the STA, the Commission must decide whether the ORBIT Act prohibits Intelsat‘s provision of any "additional services" at thi time.. As Intelsat explained in its opposition to the Initil Application for Review, Intelsat has privatized and thus the "additional services" Himitation in Section 602(a)no longer applies."* Even if the Commission finds that Section 602(a)sill applies, the provision is not—as SES suggests—an absolute bar to Intelsat‘s provision of"additional services". Rather, the full Commission has discretion to determine that the initil grant ofthe STA—and the subsequent extension—is a "necessary measure" to implement the limitation given the circumstances surrounding Intelsat‘s acquisition of "additional services" customers from Loral. Intelsat‘s "additional services" Zx Parte, filed atthe "* Application for Review at 6—7. ® td 7. "* Intelsat Oppositionat 17—18.

FCC‘s request,"" evidences the Commission‘s focus on the proper interpretation of Section 602(a) ofthe ORBIT Act Moreover, Commission precedent confirms that the Commission has broad discretion in reviewing a Bureau‘s decision. The Commission may consider both the specific challenges to the decision that are raised in an application for review, as well as other grounds for rejecting o upholding that decision."® The Commission, therefore, could and should delete the *additional services" condition from the Intelsat/Loral Order on the grounds that the ORBIT Act does not bar Intelsat from providing such services. Thus, the pendency of the Initial Application for Review provides a sound legal basis for the Bureau‘s decision to preserve the status quo through STA extension. B. The Bureau‘s Decision Preserved. Not Altered. the Status Ouo In the alternative, SES also argues that the Bureau erred because ts decision id not preserve, but in fact, "drastically alterfed] the status guo.""" This argument is based on the flawed premise that preserving the status quo requires termination ofthe frst 180 day STA. In fact, the status quo refers tothe continuation of "additional services" on Loral satelltes to former Loral customers pending Commission action on the Intial Application for Review. Until then, the proper scope of Intelsat‘s authority to provide "additional services" will remain uncertain. "* See 47 C.F.R. § 25.111(a)("The Commission may request from any party at any time additional information concerning any application, or any other submission or pleading regarding an application,filed under this part."). "* RCA Global Communications, Inc.; Applicationfor Authority to Lease and Operate Facilities for the Provision ofService to 6 New Points ofOperation, Memorandum Opinion and Order, 87 F.C.C.24 526 (1981) (conducting de novo review of the Common Carrier Burcau‘s decision in response to an application for review); S&L Teen Hospital Shuttl, Application to Modify and Reinstate the Licensefor Business Radio Service Station Wi7767, Montrose, California, Memorandum Opinion and Order, 16 FCC Red $153 (2001) (granting an application for review in order to engage in a de novo review of the menits). ‘" Application for Review at 8.

Grant ofthe STA was the only action that the Bureau could have taken to ensure a neutral effect on the Commission‘s pending review and customers‘ commercial rights. In contrast, had the Bureau denied the STA extension, the Bureau would have preempted the Commission‘s practical ability to decide this issue to the benefit of the former Loral customers. Therefore, the only possible action the Bureau could have taken to avoid preempting full Commission review—and thus preserve the status quo for the former Loral customers—was to grant the extension "subject to, and conditioned upon, the Commission‘s findings on the pending Application for Review.""" IIL. EXTENSION WaS NECESSARY AND PROPER TO PREVENT DISRUPTIONS AND DISCONTINUANCE OF SERVICE SES also claims that the "limited rationale underlying the Burea‘s original decision" cannot be read to accommodate an STA extension.‘" On the contrary, the purpose for granting STA in the Inrelsat/Loral Order was to protect customers and end—users from service disruptions and loss of ervice."" The same goal—continuity of service—was equally applicable to the extension request. Specifically, by granting the extension, the Bureau enabled the former Loral customers and, in tum,their end—user consumers to continue to receive the benefits of commercial agreements reached in the competitive global market. Without an extension, these customers would have been compelled, absent final legal determination, to seck new and potentially disadvantageous contractsin order to ensure the transfer of their services to another satellite provider.. Failure to grant an extension, therefore, could have resulted in higher costs and significant disruption.®‘ And, ifeustomers were unable "* Extension Order, 6. !* Application for Review at 4—7. * Intelsat/Loral Order, 19 FCC Red at 2429—30. *‘ Transitioning to another satellite operator, for example, would require re—pointing the antenna at the end—user‘s premises and a "truck roll"from a service provider. The end—usr‘s

to obtain alternative capacity, such customers and the end—users these customers serve, would have faced discontinuance of service. For example, in the Inrelsat/Loral Order, the Bureau recognized the "adverse consequence that may result if broadband service to Alaska and Hawwail is discontinued" as result ofone such customer — Starband — being foreed off the Intelsat system." Extension was particularly justified in light of the unusual cireumstances ereated by a shortcoming of the ORBIT Act. Because the ORBIT Act did not expressly envision Intelsat‘s acquisition ofa satellite operator with existing "additional services" customers, falure to grant the extension would have foreed such customers to abandon contracts entered into with Loral in an advantageous commercial environment. It would be antithetical t the ORBIT Act‘s purposes to force customers to negotiate replacement capacity under an FCC—mandated timeframe, in a more concentrated satellite capacity market (Ze., absent Loral and Intelsat). SES nonetheless argues thatthe "marketplace uncertainty®"created by its pending Initial Application for Review did not jusify an STA extension because these customers knew they had to switch providers and had plenty of time to negotiate satisfactory arrangements." This argument ignores the fact that customers may never needto switch providers given the likelihood that the full Commission,in the context of its pending review, will confirm Intelsat‘s ability to fulfll these customers® existing contracts beyond September 13, 2004. As such, it would make inconvenience could range from waiting at home for the service technician to temporary service disruption to the purchase of new equipment (outdoor and indoor) * Intelsat/Loral Order, 19 FCC Red at 2421 Indeed, the Bureau noted that Intelsat had voluntarily committed to continue access to broadband service to those areas and customers in Alaska and Hawalicurrently receiving such service from Starband and the Bureau *incorporated and [] relfied) on Intelsat‘s commitments"in torder. J Of course, absent the extension Intelsat could not honor ts commitment to continue access to broadband service to customers in Alaska and Hawaii beyond September 13, 2004. d ®" Application for Review at 5—6.

Hittle sense to require customers to switch providers only to find out later that it was unnecessary to do o. As demonstrated above, switching providers is a time consuming and costly endeavor. Thus, extension was a reasonable measure to avoid foreing these customers to negotiate new, costly, and potentially unnecessary arrangements, while the Commission considers the issue of the scope of the Intelsat‘s authority under the ORBIT Actto offer "additional services". iv. conctuston Forthe foregoing reasons, Intelsat respectfully requests that the Commission deny SES® Application for Review. Respectfully submitted, INTELSAT NORTH AMERICA LLC BerW. Rein Jennifer D. Hindin Amy E. Bender WILEY REIN & FIELDING LLP 1776 K Street, N.W. Washington, DC 20006 202.719.7000 September 14, 2004

CERTIFICATE OF SERVICE 1, Christopher E. Ryan, a legal assistant at Wiley Rein & Fielding LLP, do hereby certify that a true and correct copy of the foregoing Opposition to Application for Review was sent by firs—class mail, postage prepaid, this 14th day of September 2004, to the following: Marlene H. Dortch (hand delivery) Pantelis Michalopoulos Secretary Chung Hsiang Mah Federal Communications Commission Steptoe & Johnson LLP 445 Twelfth Street, SW. 1330 Connectiout Avenue NW Washington, D.C. 20554 Washington, DC 20036—1795 Scott B. Tollefsen Lourence D. Atlas Nancy Eskenazi Vice President, Government Relations SES AMERICOM, INC. Loral Space and Communications Ltd. 4 Research Way 1755 Jefferson Davis Highway Princeton, NJ 08540 Suite 1007 Arlington, VA 22202—3501 Phillip L. Spector Philip L. Verveer Joseph J. Simons Willkic Farr & Gallagher LLP Patrick S. Campbell 1875 K Street, NW Paul, Weiss, Rifkind, Wharton Washington, DC 20056 & Garrison LLP 1615 L Street, NW, Suite 1300 Washington, DC 20036 David K. Moskowitz Earl W. Comstock Senior Vice President and General Counsel John W. Butler EchoStar Satellte Corporation Sher & Blackwell LLP 5701 South Santa Fe 1850 M Street, NW Litleton, CO 80120 Suite 900 Washington, DC 20036 David R. Goodfriend Kenneth J. Wees Director, Legal and Business Affairs Vice President/General Counsel EchoStar Satellte Corporation StarBand Communications, Inc. 1233 20" Street, NW, Suite 701 1760 Old Meadow Road Washington, DC 20036 MeLean, VA 22102 ChuStopher E/fyan


Document Created: 2004-10-14 11:00:45
Document Modified: 2004-10-14 11:00:45
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