Comments.NPRM.July 1

COMMENT submitted by TerreStar Networks Inc.

Comments of TerreStar Networks Inc.

2009-07-14

This document pretains to SES-AMD-20080118-00075 for Amended Filing on a Satellite Earth Station filing.

IBFS_SESAMD2008011800075_722393

                              Before the
               FEDERAL COMMUNICATIONS COMMISSION
                        Washington, D.C. 20554

In the Matter of                                   )
                                                   )
Improving Public Safety Communications in the      )   WT Docket No. 02-55
800 MHz Band                                       )
                                                   )
Consolidating the 800 and 900 MHz                  )
Industrial/Land Transportation and Business Pool   )
Channels                                           )
                                                   )
Amendment of Part 2 of the Commission’s Rules      )   ET Docket No. 00-258
To Allocate Spectrum Below 3 GHz for Mobile        )
And Fixed Services to Support the Introduction     )
Of New Advanced Wireless Services, Including       )
Third Generation Wireless Systems                  )
                                                   )
Amendment of Section 2.106 of the Commission’s     )   ET Docket No. 95-18
Rules to Allocate Spectrum at 2 GHz for Use by     )
the Mobile Satellite Service                       )
                                                   )
Application for Review of Grant of ATC authority   )   File No. SES-LIC-20071203-
to New ICO Satellite Services G.P.                 )       01646
                                                   )   SES-AMD-20080118-00075
                                                   )   SES-AMD-20080219-00172
                                                   )   Call Sign: E070272

               COMMENTS OF TERRESTAR NETWORKS INC.

                                       TERRESTAR NETWORKS INC.
                                            Douglas I. Brandon
                                            General Counsel and Secretary
                                            TerreStar Networks Inc.
  OF COUNSEL:                               12010 Sunset Hills Road
  Joseph A. Godles                          Reston, VA 20191
  GOLDBERG, GODLES, WIENER                  (703) 483−7800
  & WRIGHT
  1229 Nineteenth Street, N.W.
  Washington, DC 20036
  (202) 429-4900

  July 14, 2009


                                                               -i-


                                             TABLE OF CONTENTS

                                                                                                       Page
SUMMARY OF ARGUMENT ....................................................................................... 2

DISCUSSION ................................................................................................................... 5

I.        IT WOULD BE INEQUITABLE FOR THE MSS LICENSEES TO
          HAVE TO BEAR BY THEMSELVES THE FINANCIAL
          CONSEQUENCES OF THE DELAY IN BAS RELOCATION...................... 5

          A.         Unique Circumstances Continue To Characterize BAS
                     Relocation. ............................................................................................... 5

          B.         The Commission Should Not Apply Traditional Cost-
                     Sharing Principles to a Unique Process. ............................................. 7

          C.         Multiple Equitable Factors Favor Making Sprint Financially
                     Responsible For The Delay In BAS Relocation. .................................. 9

                     1.      Sprint is responsible for the BAS relocation timetable and
                             maintained that relocation could be completed before
                             MSS systems needed to begin service....................................... 10

                     2.      Sprint could have had no reasonable expectation of
                             recouping BAS relocation expenses from TerreStar. .............. 10

                     3.      Sprint acquiesced in the original sunset date for BAS
                             reimbursement obligations......................................................... 11

                     4.      Sprint insisted on control of BAS relocation. ........................... 11

                     5.      Sprint determined market priority............................................ 14

                     6.      Sprint lacked the required sense of urgency needed to
                             complete BAS relocation on schedule. ..................................... 14

                     7.      Sprint targeted BAS relocation dates that were
                             inconsistent with FCC deadlines. ............................................. 15

                     8.      Sprint grossly underestimated the cost of relocating BAS
                             stations and reconfiguring the 800 MHz band. ....................... 16

                     9.      Some delays were within Sprint’s control................................ 16


                                                            -ii-


          D.        The MSS Licensees Should Not Have To Reimburse Sprint
                    For BAS Relocation Expenses Accruing After September 7,
                    2007 Or For Relocation Expenses Sprint Can Get Credit For
                    In The True-Up. ..................................................................................... 17

II.       RELOCATION COSTS THAT ARE ELIGIBLE FOR REIMBURSEMENT
          SHOULD CONTINUE TO BE LIMITED TO COSTS ASSOCIATED WITH
          RELOCATION IN THE TOP 30 MARKETS AND FIXED LINKS............. 18

III.      SPRINT SHOULD NOT BE PERMITTED TO SEEK MORE THAN
          A PRO RATA SHARE OF EXPENSES FROM EACH MSS LICENSEE. ... 19

IV.       THE MSS LICENSEES SHOULD HAVE AN OPPORTUNITY TO REVIEW
          AND CHALLENGE THE INFORMATION ON WHICH SPRINT’S
          REIMBURSEMENT CLAIMS ARE BASED. ................................................ 20

V.        MSS REIMBURSEMENT PAYMENTS SHOULD BE DUE AT THE
          CONCLUSION OF THE TRUE UP PERIOD. ............................................... 21

 VI.      BAS LICENSEES SHOULD BE REQUIRED TO COORDINATE WITH
          MSS LICENSEES IN GOOD FAITH. ............................................................. 23

 VII. NONRELOCATED BAS INCUMBENTS SHOULD BECOME
      SECONDARY, AND SPRINT/MSS/AWS SHOULD BECOME PRIMARY,
      AS OF FEBRUARY 9, 2010............................................................................... 25

CONCLUSION.............................................................................................................. 26


                              Before the
               FEDERAL COMMUNICATIONS COMMISSION
                        Washington, D.C. 20554


In the Matter of                                     )
                                                     )
Improving Public Safety Communications in the        )   WT Docket No. 02-55
800 MHz Band                                         )
                                                     )
Consolidating the 800 and 900 MHz                    )
Industrial/Land Transportation and Business Pool     )
Channels                                             )
                                                     )
Amendment of Part 2 of the Commission’s Rules        )   ET Docket No. 00-258
To Allocate Spectrum Below 3 GHz for Mobile          )
And Fixed Services to Support the Introduction       )
Of New Advanced Wireless Services, Including         )
Third Generation Wireless Systems                    )
                                                     )
Amendment of Section 2.106 of the Commission’s       )   ET Docket No. 95-18
Rules to Allocate Spectrum at 2 GHz for Use by       )
the Mobile Satellite Service                         )
                                                     )
Application for Review of Grant of ATC authority     )   File No. SES-LIC-20071203-
to New ICO Satellite Services G.P.                   )       01646
                                                     )   SES-AMD-20080118-00075
                                                     )   SES-AMD-20080219-00172
                                                     )   Call Sign: E070272


               COMMENTS OF TERRESTAR NETWORKS INC.

      TerreStar Networks Inc. (“TerreStar”) hereby comments on the Further

Notice of Proposed Rulemaking in the above-captioned proceedings. 1




1Further Notice of Proposed Rulemaking (“FNPRM”) and Report and Order and Order
(“R&O”), FCC 09-49 (June 12, 2009).


                                         -2-

                          SUMMARY OF ARGUMENT

      Applying equitable principles to the financial consequences of delays in BAS

relocation. TerreStar supports revisiting the regulatory framework for BAS

relocation in light of the many changes that have occurred since the Commission

adopted a BAS relocation plan. TerreStar opposes applying traditional Emerging

Technologies cost-sharing principles to BAS relocation, however, because doing so

would apply traditional principles in an untraditional setting and would mean

that as between Sprint and TerreStar the entire financial consequences of the

delay in BAS relocation would fall on TerreStar.


      Rather, the Commission should modify its cost-sharing rules for BAS

based on the equities of the circumstances. Numerous factors, including the

pivotal role that Sprint played in the development and implementation of the

BAS relocation plan, make it inequitable for the MSS licensees to bear financial

responsibility for the consequences of BAS relocation delay. In light of these

factors, the MSS licensees should not have to reimburse Sprint for BAS relocation

expenses accruing after September 7, 2007, when BAS relocation was supposed

to have been completed, or for relocation expenses Sprint can get credit for in the

true-up process.


      Eligible relocation expenses. BAS relocation costs that are eligible for

reimbursement from MSS licensees should continue to be limited to costs

associated with relocation in the top 30 markets and fixed links. The


                                         -3-


Commission’s rationale for this cost-sharing principle remains as valid today as

when the Commission established it in 2004.


       Which MSS licensee(s) Sprint approaches. The Commission should not

permit Sprint to seek more than a pro rata share of eligible BAS relocation

expenses from each MSS licensee. If Sprint could seek both MSS licensees’ pro

rata shares from one of the MSS licensees, it would unfairly shift the risk of

collection from Sprint, which took on the risk when it agreed to pay up front for

BAS relocation, to the MSS licensee.


       Documentation of Sprint’s expenses. Sprint should be required to share with

the MSS licensees information on the relocation costs it has incurred as

documented in its annual external audit of 2 GHz band clearing expenses, and

the MSS licensees should have an opportunity to review and challenge the

information on which Sprint’s reimbursement claims are based.


       Timing of MSS reimbursement payments. MSS reimbursement payments

should be due at the conclusion of the true up period to ensure there is a

comprehensive accounting. The BAS relocation accounting process does not

lend itself to a market by market approach, because Sprint’s annual external

audit provides data on total expenses, rather than by market; some of Sprint’s

expenses span multiple markets; and there may be overarching legal issues

concerning reimbursement that should not have to be litigated piecemeal.


                                         -4-


       BAS/MSS coordination. TerreStar continues to believe, based on the

technical studies it has submitted in this proceeding, that it is feasible for 2 GHz

MSS systems and BAS stations to share spectrum during the completion of the

BAS relocation process. However, TerreStar has no objection to the procedure

the Commission adopted in the R&O, under which MSS entrants will be required

to successfully coordinate any operations in nonrelocated markets with BAS

incumbents in those markets prior to beginning service, so long as: (1) BAS

licensees are required to coordinate in good faith; and (2) appropriate measures

are adopted to provide an incentive for completing BAS relocation.


       Primary/secondary status. Nonrelocated BAS incumbents should become

secondary in the 1990-2025 MHz band as of February 9, 2010, i.e., as of the day

after the deadline, as extended in the R&O, for BAS relocation to be completed,

and Sprint, MSS, and AWS entrants would become primary as of February 9,

2010. Implementing this measure would give BAS incumbents a meaningful

incentive for completing BAS relocation and would give important recognition to

the needs of new entrants to provide service in the 1990-2025 MHz band.


                                          -5-

                                    DISCUSSION

       I.     IT WOULD BE INEQUITABLE FOR THE MSS LICENSEES TO
              HAVE TO BEAR BY THEMSELVES THE FINANCIAL
              CONSEQUENCES OF THE DELAY IN BAS RELOCATION.

              A.      Unique Circumstances Continue To Characterize BAS
                      Relocation.

       The BAS relocation process is one of a kind. BAS relocation is one of a

series of interlocking regulatory pieces involving Sprint, MSS licensees, 2

broadcasters, public safety licensees, spectrum reconfiguration, digital

conversion, multiple frequency bands, a true up, anti-windfall payments, and a

complex and overlapping set of responsibilities.


       The Commission recognized when it adopted rules for relocating BAS

stations that it was faced with “unique circumstances.” 3 For that reason, the BAS

relocation plan that the Commission adopted departed in multiple respects from

band clearing procedures that the Commission has instituted in other contexts.

Among other things, “the Commission modified the traditional Emerging

Technologies cost-sharing policy that new entrants who ultimately benefit from

the spectrum cleared by the first entrant share bear the cost of reimbursing the

first entrant for that benefit.” 4 Instead of the traditional cost-sharing policy, the

Commission provided that Sprint, which committed to paying up-front the cost

2 TerreStar’s wholly-owned subsidiary, TerreStar License Inc., holds a letter of intent
authorization (call sign S2633) to serve the United States via the TerreStar-1 MSS
satellite.
3 Improving Public Safety Communications in the 800 MHz Band; Consolidating the 800 MHz

and 900 MHz Industrial/Land Transportation and Business Pool Channels, Memorandum
Opinion and Order, 20 FCC Rcd 16015 at ¶ 113 (2005) (“800 MHz MOO”).
4 FNPRM, ¶ 79.


                                            -6-


of BAS relocation, could not seek reimbursement from MSS licensees who

entered the 2 GHz band after the end of the 36-month transition period for 800

MHz. 5


         As is often the case with unique matters, things have not proceeded as

planned. In key respects, BAS relocation has departed radically from what the

Commission envisioned when it adopted a relocation plan. For example:


            •   Timing. Based on information provided by Sprint and the
                broadcasters, the Commission adopted a plan under which BAS
                relocation would be completed in 30 months. 6 This schedule, it
                was believed, would enable the 2 GHz MSS licensees to commence
                nationwide service after launching their satellites. 7 Under the
                revised procedure the Commission adopted in the R&O, however,
                BAS relocation instead will span a period of 59 months, which is
                nearly double the original 30-month schedule.

            •   Cost. Sprint estimated that its combined band clearing and
                relocation costs would be $2.184 billion. 8 This amount plus the
                $2.059 billion value of the spectrum Sprint was giving up fell well
                short of the $4.86 billion value the Commission ascribed to the 1.9
                GHz spectrum Sprint is receiving. 9 So it was thought that Sprint
                would need to make an “anti-windfall” payment to the U.S.
                Treasury. 10 In these circumstances, there would have been no
                financial benefit to Sprint, which had committed to funding the up

5 800 MHz MOO at ¶ 113.
6 Improving Public Safety Communications in the 800 MHz Band; Consolidating the 800 and
900 MHz Industrial/Land Transportation and Business Pool Channels; Amendment of Part 2 of
the Commission's Rules to Allocate Spectrum Below 3 GHz for Mobile and Fixed Services to
Support the Introduction of New Advanced Wireless Services, including Third Generation
Wireless Systems; Amendment of Section 2.106 of the Commission's Rules to Allocate Spectrum
at 2 GHz for use by the Mobile Satellite Service, Memorandum Opinion and Order and
Further Notice of Proposed Rulemaking, 23 FCC Rcd 4393 at ¶ 12 (2008) (“2008 BAS
Reconsideration Order”).
7 2008 BAS Reconsideration Order at ¶ 14.
8 See FNPRM, ¶ 75 & n. 173.
9 See FNPRM, n. 173.
10 FNPRM, ¶ 75.


                                          -7-


                front costs associated with BAS relocation, in seeking
                reimbursement from the MSS licensees for a portion of these
                costs. 11 Sprint now estimates, however, that its expected relocation
                costs will be so large that it will not need to make an anti-windfall
                payment. 12 This means that Sprint’s original estimates were off by
                more than $600 million.

            •   Final accounting. The six-month true up process that would close
                the books on BAS relocation expenses and relocation
                reimbursement claims was supposed to begin on June 26, 2008, at
                the conclusion of the 800 MHz transition. 13 Delays have been so
                significant, however, that over a year later “there is no future date
                certain for completing either the 800 MHz rebanding or the true
                up.” 14

       These unanticipated developments add to the unusual nature of BAS

relocation. They inject an element of unpredictability to what was already an

unprecedented set of circumstances. Uniqueness, therefore, continues to

characterize BAS relocation.


       B.       The Commission Should Not Apply Traditional Cost-Sharing
                Principles to a Unique Process.

       In the R&O and FNPRM, the Commission is endeavoring to adjust its

regulatory framework in light of the “many changes involving the 1990-2025

MHz band” 15 that have occurred. TerreStar supports this effort.




11 Any MSS reimbursement would have reduced, dollar for dollar, the band clearing and
relocation expenses for which Sprint could take credit in the true-up process, and
thereby would have increased, dollar for dollar, the anti-windfall payment Sprint would
owe.
12 See FNPRM, ¶ 76.
13 2008 BAS Reconsideration Order at ¶ 16.
14 FNPRM, ¶ 80.
15 R&O and FNPRM, ¶ 3.


                                         -8-


       TerreStar respectfully disagrees, however, with one element of the

Commission’s tentative approach. In the FNPRM, the Commission has proposed

to apply traditional Emerging Technologies cost-sharing principles to BAS

relocation, 16 thereby requiring that the two MSS licensees reimburse Sprint for

100% of a pro rata share of eligible reimbursement expenses. TerreStar opposes

this approach, because it would revert to traditional principles for a process that

was untraditional at its inception and has become even less traditional over time.


       The potential consequences for TerreStar of applying traditional principles

would be significant. Under the rules the Commission previously adopted,

Sprint could not have sought pro rata reimbursement from TerreStar for eligible

BAS relocation expenses unless TerreStar entered the 2 GHz MSS band prior to

the June 26, 2008, conclusion of the 36-month transition period for the 800 MHz

band. TerreStar had not come remotely close to entering the band as of that date,

so it would not have been required to reimburse Sprint for any relocation

expenses. If the rules are now modified to reflect traditional Emerging

Technologies cost-sharing principles, however, then TerreStar would become

responsible for 100% of a pro rata share of eligible reimbursement expenses.

According to estimates provided by Sprint, TerreStar’s liability in these

circumstances could be $100 million or more. 17



 See FNPRM, ¶ 82.
16

 See, e.g., Sprint’s Complaint to Enforce Orders of the Federal Communications
17

Commission, Civil Action No. 1:08cv651 (E.D. Va., June 25, 2008) at 11.


                                           -9-

              C.      Multiple Equitable Factors Favor Making Sprint
                      Financially Responsible For The Delay In BAS Relocation.

       Rather than reverting to traditional cost-sharing principles in an

untraditional setting, the Commission should modify its cost-sharing rules for

BAS based on the equities of the circumstances. Taking equities into account is

the fairest approach, and a fundamental principle of administrative law is that

agencies should strive for fair results, not arbitrary ones.


       As stated above, if BAS relocation had been completed on time TerreStar’s

liability for BAS relocation expenses would have been $0. If as a result of the

delays in BAS relocation TerreStar were to become responsible for 100% of a pro

rata share of eligible relocation expenses, then as between Sprint and TerreStar

the entire financial consequences of BAS relocation delay would fall on TerreStar.

That outcome would be equitable only if TerreStar were solely responsible for

the delay. As is well known, however, Sprint, not TerreStar, played the pivotal

in the development and execution of the plan for relocating BAS stations. It is

only fitting, therefore, that Sprint bear all or 18 a substantial portion of the

financial consequences of the delay.


       Multiple equitable factors support this outcome. For example:




18TerreStar previously has presented equitable factors that would support continuing to
apply the original reimbursement rules under which TerreStar, because it entered the 2
GHz band after June 26, 2008, should not have to reimburse Sprint for BAS relocation
expenses. See, e.g., Letter from TerreStar Networks Inc., WT Docket No. 02-55, ET
Docket No. 00-258, ET Docket No. 95-18 (Sept. 8, 2008).


                                         -10-

       1. Sprint is responsible for the BAS relocation timetable and

maintained that relocation could be completed before MSS systems needed to

begin service. Sprint needed Commission approval for a plan under which

Sprint would be given access to spectrum worth billions of dollars. If the

Commission believed that BAS relocation and 800 MHz reconfiguration would

be a lengthy, drawn out affair that would conflict with MSS needs, it would be

less likely to approve Sprint’s proposal. In this context, Sprint and the

broadcasters presented 30 months as an adequate time frame for BAS relocation

that would bring BAS relocation to fruition before MSS systems needed access to

2 GHz spectrum. 19 Sprint also told the Commission it was “confident” that its

experience in spectrum relocation would ensure that the proposed plan would be

implemented successfully. 20


       2. Sprint could have had no reasonable expectation of recouping BAS

relocation expenses from TerreStar. When the Commission approved the




19 “The 30-month timeframe for relocating all BAS incumbents under the MSTV-NAB-
Nextel relocation plan should ensure that the 1990-2025 MHz band is cleared nationwide
before MSS entrants are ready to begin service in the 2000-2025 MHz band.” BAS
Relocation Schedule and Relocation Plan, filed by Nextel, at p. 7, WT Docket No. 02-55
(filed April 6, 2005) (“Consensus Plan”).
20 “Nextel [i.e., Sprint’s predecessor-in-interest] gained substantial experience in

incumbent relocation following the Commission’s 1995 order establishing geographic
licensing in the upper 200 SMR channels. . . . . Nextel is confident that the Consensus
Plan can be implemented just as successfully.” Improving Public Safety Communications in
the 800 MHz Band; Consolidating the 800 and 900 MHz Industrial/Land Transportation and
Business Pool Channels, Reply Comments of Nextel Communications, Inc., WT Docket
No. 02-55 at p. 33 (filed Aug. 7, 2002).


                                          -11-


Sprint/MSTV/NAB plan for BAS relocation in August 2004, 21 TerreStar was not

required to bring its 2 GHz MSS system into operation until November 2008, 22

which is months after the deadline of June 26, 2008, for triggering a

reimbursement obligation. Sprint, therefore, could have had no reasonable

expectation of recouping BAS relocation expenses from TerreStar, and TerreStar

– and investors in TerreStar - had a justifiable expectation that TerreStar would

not be required to reimburse Sprint for these relocation expenses.


       3. Sprint acquiesced in the original sunset date for BAS reimbursement

obligations. Sprint was well aware of the rules the Commission adopted,

including the rule under which MSS licensees would have no reimbursement

obligation if they entered the band after June 26, 2008. Sprint, however, did not

seek reconsideration of these rules.


       4. Sprint insisted on control of BAS relocation.


       Sprint has repeatedly questioned in this proceeding the adequacy of

TerreStar’s participation in the BAS relocation process. In actuality, however,

Sprint told TerreStar in no uncertain terms that it did not want or need

TerreStar’s assistance. 23 Sprint and the broadcasters were insistent that



21 See Improving Public Safety Communications in the 800 MHz Band, 19 FCC Rcd 14969
(2004).
22 See TMI Communications and Company, Limited Partnership and TerreStar Networks Inc.,

Memorandum Opinion and Order, FCC 04-144, ¶ 59 (June 29, 2004).
23
   It is telling that Sprint made no complaint about TerreStar’s role until Sprint fell
behind schedule and the adequacy of Sprint’s efforts came under scrutiny. The only


                                         -12-


TerreStar’s participation in the process would lead to forum shopping and delay

completion of BAS relocation.


       TerreStar had a series of meetings with Sprint beginning in the summer of

2006 to explore the extent to which TerreStar could assist with BAS relocation.

Sprint advised against TerreStar becoming involved because Sprint already had

agreements with most of the BAS vendors and believed it had a workable

process in place for entering into frequency relocation agreements with the

broadcasters. Sprint also expressed concern that adding TerreStar to the mix

would give the broadcasters an opportunity to reopen relocation issues with a

new party.


       Although Sprint was opposed to having TerreStar play an active role, it

did agree, at TerreStar’s request, to hold monthly meetings focusing on overall

status as well as specific details relating to transition markets and

manufacturers. 24 TerreStar also engaged in discussions during this period with

MSTV, 25 equipment manufacturers, 26 and system integrators 27 ; attended NAB



support Sprint has offered for its claim is a Statement of Work that Sprint prepared at
TerreStar’s request and was so one-sided that it provided no basis for meaningful
discussions.
24 These meetings continued through 2007.
25 TerreStar first met with MSTV leadership to discuss BAS clearing on December 6,

2006. On February 6, 2007, TerreStar presented an overview of its MSS/ATC
architecture to the MSTV Engineering Committee and solicited broadcaster perspectives
on accelerating the then stalled BAS relocation process. It subsequently made
presentations to the Engineering Committee on July 13, 2007, October 18, 2007, February
7, 2008, June 5, 2008 and July 10, 2008. It produced a white paper for MSTV members -
Interaction Between Broadcast Auxiliary Service (BAS) Channels A1 and A2 and Mobile


                                           -13-


conventions to meet with other vendors and system integrators; and sent

representatives to an SBE meeting on BAS to obtain a broadcast engineering

viewpoint on BAS relocation. TerreStar also has kept MSTV’s Engineering

Committee apprised of its network architecture and planning horizon and

solicited MSTV’s cooperation on multiple occasions to discuss and refine market-

specific coordination protocols. 28 In addition, TerreStar has offered to engage in

various initiatives with broadcasters to facilitate coordination. 29 In short,


Satellite/Ancillary Terrestrial Component (ATC) Service Licensed in the 2000-2020 MHz Band
– preliminarily describing the interference expectations in the 2000 to 2020 MHz band
given MSS and BAS emission characteristics. TerreStar kept MSTV informed of its
operational timeline, its plan to engage consulting engineers to conduct interference
analyses and the results of the bench and field analyses it conducted. TerreStar’s MSTV
outreach in the last year has been grounded in its engineering due diligence and has
focused on manual coordination protocols and interference avoidance practices that are
easily implemented by MSS and BAS licensees during the short gap between completion
of the BAS migration above 2025 MHz and commercial launch of MSS. These pragmatic
technically feasible solutions by which BAS licensees assigned to channels A1 or A2
could move to 12 MHz channelization and/or migrate off channels A1 and A2 with no
intrusion or business impact to ENG operations.
26 TerreStar visited vendor manufacturing facilities (NuComm and MRC) where it saw

warehouses stacked with radios committed to Sprint. TerreStar’s visits to BAS vendors
largely confirmed Sprint’s previous disclosure to TerreStar that it had 6,000 BAS radios
under contract. Sprint had by that time locked up BAS radio manufacturing capacity in
volume purchase agreements and substantially controlled the supply.
27 TerreStar met twice with a system integrator (DSI Systems).
28 In a June 5, 2008 TerreStar presentation to the MSTV Engineering Committee,

TerreStar described several best engineering practices that would accommodate shared
use of the 2000 to 2020 MHz band. MSTV has declined despite numerous requests by
TerreStar to engage in substantive discussion around implementing one or more of the
market-specific coexistence practices described in the exhibit that will allow BAS and
mobile terminals to operate without interference in DMAs that are not cleared after
TerreStar begins commercial operations.
29 TerreStar offered to participate in a joint field test aimed at replicating the duTreil

results using jointly developed methods of procedure, 2 GHz MSS handsets and BAS
receivers. It has offered to do local broadcaster presentations describing interference
avoidance options and develop a quarterly coordinated spectrum sharing plan and
report for MSTV. It has offered manual backstop mechanisms such as a toll-free hotline,
a web portal as a source of answers to specific BAS licensee questions, liaison between


                                          -14-


TerreStar has made every effort to play a constructive role in BAS relocation

despite the active discouragement of Sprint.


       5. Sprint determined market priority. The relocation plan adopted by

the Commission left it to Sprint to determine the order in which BAS markets

would be cleared. 30 This procedure enabled Sprint to assign highest priority to

markets in which it had the greatest commercial need for 1.9 GHz spectrum.


       Moreover, although TerreStar identified three markets it planned to enter

first because it would be conducting market trials there, TerreStar’s plans had no

impact on the market order as determined by Sprint. The dates by which

TerreStar sought entry for two of the markets were consistent with the schedule

Sprint already had developed, and at Sprint’s request TerreStar changed the

third market from one that would have required a change in Sprint’s schedule

(Dallas) to one that did not require a change (Houston).


       6. Sprint lacked the required sense of urgency needed to complete BAS

relocation on schedule. In the early stages of what was supposed to have been a

with BAS Acceleration Teams and TerreStar’s Operations staff in addition to escalation
channels to senior TerreStar management.
30 “[T]he Commission required Sprint … to file a plan within 30 days of the issuance of

the 800 MHz R&O stating which markets it would relocate in stage one (i.e. within
eighteen months).” Memorandum Opinion and Order, FCC 08-73 (March 5, 2008)
(“2008 MO&O), ¶ 13. “The MSS entrants then had 30 days to review this plan and
identify which of the top 30 markets they intended to invoke involuntary relocations.”
2008 MO&O, ¶ 13. As it turned out, “no MSS entrant opted to invoke its [involuntary
relocation] right.” 2008 MO&O, ¶ 13. The Commission had envisioned this possibility,
providing that if “MSS licensees choose not to trigger involuntary relocation,” then
Sprint “will proceed under its plan to relocate BAS incumbents.” Improving Public Safety
Communications in the 800 MHz Band, 19 FCC Rcd 14969, ¶ 257 (2004).


                                           -15-


30-month BAS relocation process, little progress was made. Sprint and the

broadcasters share responsibility for this state of affairs. For example:


           •   Sprint and the broadcasters lost precious time fighting over the
               ground rules for relocation. 31

           •   Six months into the relocation process, an agreement had been
               signed in only a single market. 32
           •   Sprint did not accept the Commission’s band relocation order until
               February 7, 2005, six months after it was issued. 33
           •   Sprint did not provide a relocation plan until April 6, 2005, eight
               months after the order. 34
           •   Sprint took on the responsibility of leading the first step of the 2
               GHz relocation process, which was the market kickoff. 35 Although
               the FCC issued its decision in August 2004, the first market kickoff
               events were not held until April 2005, and the last were not
               conducted until the fall of 2006. 36
           •   The first item of equipment was not ordered until November 2005,
               more than a year after the 2004 Order was issued. 37
       7. Sprint targeted BAS relocation dates that were inconsistent with FCC

deadlines. Despite the fact that the BAS relocation deadline, as extended in 2008,


31 See, e.g., BAS Relocation Status Report, ET Docket No. 02-55 (filed March 7, 2006) at p.
4 (Sprint claimed it was “far behind schedule” because BAS was demanding
indemnification for tax liability and because the parties were unable to agree upon an
FRA).
32 See Adrianne Kroepsch, Sprint Nextel Emptying 2 GHz for MSS, Officials Report, Comm.

Daily, Oct. 7, 2005.
33 Letter from Tim Donahue, President and CEO of Nextel Communications, Inc., to

Michael Powell, Chairman, FCC, WT Docket No. 02-55 (filed Feb. 7, 2005).
34 Nextel Communications, Inc., BAS Relocation Schedule and Implementation Plan, WT

Docket No. 02-55, ET Docket No. 00-258, RM-94-98, RM-10024, ET Docket No. 95-18
(filed April 6, 2005) (“Implementation Plan”).
35 Id.
36 Sprint Nextel, “NAB 2006: One Year Later; 2 GHz Relocation” (April 21-27, 2006),

available at
http://www.2ghzrelocation.com/plugin/template/broadcast/Welcome/1270 (“NAB
Presentation”).
37 NAB Presentation at 3.


                                        -16-


was March 5, 2009, 38 Sprint’s “progress” reports following the MO&O uniformly

showed numerous markets for which the scheduled and expected relocation

months were April, June, July, or August 2009. One such report showed over 70

such markets.


      8. Sprint grossly underestimated the cost of relocating BAS stations and

reconfiguring the 800 MHz band. Sprint estimated that its relocation and

configuration costs would be $2.184 billion. 39 If Sprint’s estimate had been

within even $600 million of the actual figure, Sprint would have owed an anti-

windfall payment to the U.S. Treasury and there would have been no financial

benefit to Sprint, which had committed to funding the up front costs associated

with BAS relocation, in seeking reimbursement from the MSS licensees for a

portion of these costs. 40 Coming in over budget may not be uncommon, but it

would be inequitable for TerreStar to have to bear the financial consequences of

Sprint’s miscalculation.


      9. Some delays were within Sprint’s control. “Sprint did not clear all

Wave 1 Channel 1-120 incumbents by the eighteen-month date as the




38 Memorandum Opinion and Order and Further Notice of Proposed Rulemaking, FCC
08-73 (March 5, 2008) at 1.
39 See FNPRM, n. 173.
40 See Section I.A, above.


                                         -17-


Commission required … [and] Sprint has not asserted that all of the delays were

beyond its control.” 41


       D.     The MSS Licensees Should Not Have To Reimburse Sprint For
              BAS Relocation Expenses Accruing After September 7, 2007 Or
              For Relocation Expenses Sprint Can Get Credit For In The True-
              Up.

       For the foregoing reasons, it would be inequitable for the MSS licensees to

have to bear the full financial brunt of the delays in BAS relocation. Sprint

devised the BAS relocation timetable; presented itself as sufficiently experienced

in spectrum relocation matters that it could implement the timetable

successfully; and insisted on and had control over the relocation process. For

these and other equitable reasons, Sprint should have to bear all or a substantial

portion of the financial consequences of delay in BAS relocation.


       If Sprint had completed BAS relocation in a timely fashion, there would

have been no relocation expenses after September 7, 2007, which marked the

conclusion of the 30-month relocation period. Assuming that TerreStar is not

relieved of liability for relocation expenses based on the fact that it had not

entered the 2 GHz band as of June 26, 2008, therefore, as an equitable matter

TerreStar should not be responsible for pro rata reimbursement of eligible BAS

relocation expenses Sprint incurred after that date. Rather, TerreStar’s pro rata




 Improving Public Safety Communications in the 800 MHz Band, WT Docket 02-55, Third
41

Memorandum Opinion and Order, FCC 07-167, ¶ 14 (Sept. 12, 2007), aff’d sub nom. Sprint
Nextel Corporation v. FCC, No. 07-1416 (D.C. Cir., May 2, 2008).


                                            -18-


reimbursement liability should be limited to eligible expenses Sprint incurred on

or before September 7, 2007.


       Each MSS licensee’s reimbursement liability, moreover, should be limited

to a pro rata share of the eligible BAS relocation expenses that Sprint cannot

receive credit for in the true-up process. 42 Requiring the MSS licensees to make

reimbursement payments for amounts Sprint is entitled to get credit for, dollar

for dollar, in the true-up process would be contrary to the public interest,

because it would not benefit Sprint but would diminish unnecessarily the funds

the MSS licensees have on hand to dedicate to serving the public.


       II.     RELOCATION COSTS THAT ARE ELIGIBLE FOR
               REIMBURSEMENT SHOULD CONTINUE TO BE LIMITED TO
               COSTS ASSOCIATED WITH RELOCATION IN THE TOP 30
               MARKETS AND FIXED LINKS.

       The Commission has tentatively concluded that the BAS relocation costs

eligible for reimbursement from the MSS licensees to Sprint should continue to

be limited to the cost of clearing the 30 largest markets and the cost of relocating

fixed links in all markets. 43 TerreStar supports this proposal.


       As the Commission has recognized, this cost-sharing principle was

“clearly established in the 800 MHz R&O in 2004.” 44 The reason that the

principle was adopted, moreover, remains valid. The Commission deemed


42 Sprint can claim credit for up to $4.86 billion minus the $2.059 billion attributed to the
value of the spectrum Sprint is relinquishing. See FNPRM, ¶ 75 & n. 173.
43 FNPRM, ¶¶ 85-86.
44 FNPRM, ¶ 85.


                                         -19-


expenses associated with relocating non-fixed links outside the top 30 markets as

ineligible for reimbursement because MSS licensees “were not required to

relocate BAS” in these markets “before they could begin operations.” 45 That is

still the case today.


         Sprint questions the fairness of the relative percentages of BAS relocation

expenses that it and MSS licensees are responsible for under the Commission’s

definition of relocation expenses that are eligible for reimbursement. 46 These

relative percentages, however, are a function of the cost-sharing principle that

the Commission adopted in 2004. If Sprint had concerns about whether the

principle is equitable, it should have petitioned for reconsideration at the time.

Sprint has presented no basis for revisiting the Commission’s prior decision.


         III.   SPRINT SHOULD NOT BE PERMITTED TO SEEK MORE
                THAN A PRO RATA SHARE OF EXPENSES FROM EACH MSS
                LICENSEE.

         In the FNPRM, the Commission asked whether Sprint should be

permitted to request reimbursement from a single MSS licensee of both MSS

licensees’ pro rata shares of eligible reimbursement expenses on the theory that an

MSS licensee obligated to pay both shares “may, in turn, seek reimbursement”




45   FNPRM, ¶ 86.
46   See FNPRM, ¶ 86.


                                       -20-


from the other MSS license. 47 Permitting Sprint to proceed in this fashion would

be unwarranted, and the Commission should not permit it.


      The question posed by the Commission may be moot, because as the

Commission has stated, “it appears that Sprint … has asked both ICO and

TerreStar to pay equal amounts of relocation costs based on their equal amount

of assigned spectrum.” 48 There is no principled basis, however, for permitting

Sprint to seek from an MSS licensee more than that licensee’s share of eligible

reimbursement expenses. Giving Sprint this right would unfairly shift the risk of

collection from Sprint, which took on the risk when it agreed to pay up front for

BAS relocation, to the MSS licensee. Accordingly, the reimbursement Sprint may

seek from any MSS licensee should be limited to the MSS licensee’s pro rata share

of eligible reimbursement expenses.


      IV.    THE MSS LICENSEES SHOULD HAVE AN OPPORTUNITY TO
             REVIEW AND CHALLENGE THE INFORMATION ON WHICH
             SPRINT’S REIMBURSEMENT CLAIMS ARE BASED.

      The Commission has tentatively concluded that Sprint should “be

required to share with other new entrants information on the relocation costs it

has incurred as documented in its annual external audit of 2 GHz band clearing

expenses.” 49 TerreStar agrees.




47 FNPRM, ¶ 87.
48 FNPRM, ¶ 87.
49 FNPRM, ¶ 99.


                                          -21-


       The MSS licensees’ potential reimbursement liability is substantial, and

the licensees should have the ability to examine in detail the basis for Sprint’s

reimbursement claims. Fairness requires this. Moreover, if the MSS licensees

have a good faith basis for believing that some amounts claimed by Sprint are

not eligible for reimbursement, the MSS licensees should have an opportunity to

dispute the amounts. 50


       V.      MSS REIMBURSEMENT PAYMENTS SHOULD BE DUE AT
               THE CONCLUSION OF THE TRUE UP PERIOD.

       In the FNPRM, the Commission asks “when the MSS … entrants would

owe reimbursement to Sprint.” 51 For the reasons discussed below, MSS

reimbursement payments should be due at the end of the true-up period.


       Before MSS licensees are required to make reimbursement payments, as

discussed above they should be given an opportunity to examine in detail, and

contest if appropriate, the documentation on which Sprint’s reimbursement

claims are based. This accounting process does not lend itself to a market by

market approach.




50 For example, some of Sprint’s filings suggest that it is seeking reimbursement for
internal expenses. Under Commission precedent, however, internal expenses are not
reimbursable. See, e.g., Amendment to the Commission's Rules Regarding a Plan for Sharing
the Costs of Microwave Relocation, First Report and Order and Further Notice of Proposed
Rulemaking, 11 FCC Rcd 8825, 8848 at ¶ 42 (1996) at ¶ 42 (“We conclude that PCS
licensees are not required to pay incumbents for internal resources devoted to the
relocation process.”).
51 FNPRM, ¶ 95.


                                          -22-


       First, as the Commission has recognized, “the [Sprint] annual external

audit provides data on total expenses, rather than by market.” 52 If the

documentation the MSS licensees will receive is based on total expenses, then the

licensees should have an opportunity to review and comment on Sprint’s

reimbursement claims on a total expenses basis.


       Second, some of Sprint’s expenses span multiple markets. Meaningful

review of these expenses is not possible until the complete picture is in.


       Third, there may be overarching legal issues concerning the expenses for

which Sprint seeks reimbursement. 53 The MSS licensees should not have to

litigate these issues on a piecemeal, market-by-market basis.


       In short, a comprehensive approach is warranted. It is not possible to be

comprehensive until BAS relocation is complete and Sprint’s reimbursement

documentation can be examined in its entirety.


       In addition, a final accounting for reimbursement of Sprint’s BAS

relocation expenses is part and parcel of the true-up process. The Transition

Administrator needs to know the amount of reimbursement Sprint will receive

from the MSS licensees “to ensure that Sprint … receives the proper amount of




52FNPRM, ¶ 99.
53For example, as stated above it appears that Sprint is seeking reimbursement for
internal expenses, which under Commission precedent are not reimbursable.


                                       -23-


credit against the anti-windfall payment for BAS relocation.” 54 Accordingly, a

proper accounting of BAS relocation expenses cannot occur until relocation is

complete and the true-process is underway.


      VI.    BAS LICENSEES SHOULD BE REQUIRED TO COORDINATE
             WITH MSS LICENSEES IN GOOD FAITH.

      Under the procedures the Commission adopted in the R&O, “MSS

entrants will be required to successfully coordinate any operations in

nonrelocated markets with BAS incumbents in those markets prior to beginning

service.” 55 In addition, “an MSS entrant … [cannot] approach the BAS

incumbents in a particular market to coordinate operations until sixty days

before the MSS entrant expects to provide commercial service in that market.” 56


      In the FNPRM, the Commission requested comment “on whether MSS can

operate on an unrestricted and secondary basis in nonrelocated BAS markets. 57

TerreStar continues to believe, based on the technical studies it has submitted in

this proceeding, that it is feasible for 2 GHz MSS systems and BAS stations to

share spectrum during the completion of the BAS relocation process. TerreStar

has no objection to the procedure the Commission adopted in the R&O, however,

so long as: (1) BAS licensees are required to coordinate in good faith; and

(2) appropriate measures are adopted, along the lines discussed in the next


54 FNPRM, ¶ 99.
55 R&O, ¶ 53.
56 R&O, ¶55.
57 FNPRM, ¶ 102.


                                          -24-


section of these comments, to provide an incentive for completing BAS

relocation.


       In the R&O, the Commission emphasized the responsibility of BAS

licensees “to act cooperatively to accommodate good faith proposal for MSS

operation.” 58 Among other things, the Commission stated that it expects BAS

incumbents to disclose the location of their BAS receive sites upon request. 59


       Although TerreStar hopes that the Commission’s language will usher in a

new period of cooperation, it has been frustrated to date by its inability to get

even the most basic information from the broadcasters. For example, TerreStar

has asked MSTV on multiple occasions to distribute the attached one-page

survey to its members to solicit information concerning BAS receive sites. 60

TerreStar respectfully requests that the Commission, in the interest of facilitating

coordination, declare that it would be bad faith for a broadcaster to refuse to

answer TerreStar’s questionnaire. TerreStar also requests clarification that

preliminary work in uncleared markets that will set the stage for coordination,

such as seeking completion of the one-page survey, is not subject to the

prohibition against requesting coordination more than 60 days before entering a

market.



58 R&O, ¶ 55.
59 R&O, ¶ 55.
60 Portions of the attached survey have been filled in with generic information to show

what a completed survey would look like.


                                        -25-

       VII. NONRELOCATED BAS INCUMBENTS SHOULD BECOME
            SECONDARY, AND SPRINT/MSS/AWS SHOULD BECOME
            PRIMARY, AS OF FEBRUARY 9, 2010.

       In the FNPRM, the Commission expressed “concern[] that some BAS

licensees may not be making a good faith effort to complete the BAS transition in

a timely manner.” 61 The Commission, therefore sought comment on “incentives

… [it] might apply to encourage all BAS incumbents to diligently work toward

completing the BAS transition so as not to delay further the introduction of new

services in the band.” 62 The Commission suggested three possible alternatives

for providing the appropriate incentives. 63


       TerreStar supports the first of the three proposed alternatives. Under this

first alternative, nonrelocated BAS incumbents would become secondary in the

1990-2025 MHz band as of February 9, 2010, i.e., as of the day after the deadline,

as extended in the R&O, for BAS relocation to be completed, and Sprint, MSS,

and AWS entrants would become primary as of February 9, 2010. 64

Implementing this measure would give BAS incumbents a meaningful incentive

for completing BAS relocation and would give important recognition to the

needs of new entrants to provide service in the 1990-2025 MHz band.




61 FNPRM, ¶ 110.
62 FNPRM, ¶ 110.
63 FNPRM, ¶ 112.
64 FNPRM, ¶ 112.


                                -26-

                            CONCLUSION


In view of the foregoing:


   •   MSS licensees should not have to reimburse Sprint for BAS
       relocation expenses accruing after September 7, 2007, when BAS
       relocation was supposed to have been completed, or for relocation
       expenses Sprint can get credit for in the true-up process.

   •   BAS relocation costs that are eligible for reimbursement from MSS
       licensees should continue to be limited to costs associated with
       relocation in the top 30 markets and fixed links.

   •   The Commission should not permit Sprint to seek more than a pro
       rata share of eligible BAS relocation expenses from each MSS
       licensee.

   •   Sprint should be required to share with the MSS licensees
       information on the relocation costs it has incurred as documented
       in its annual external audit of 2 GHz band clearing expenses, and
       the MSS licensees should have an opportunity to review and
       challenge the information on which Sprint’s reimbursement claims
       are based.

   •   MSS reimbursement payments should be due at the conclusion of
       the true up period to ensure there is a comprehensive accounting.


                                         -27-


          •     BAS licensees should be required to coordinate in good faith.

          •     Nonrelocated BAS incumbents should become secondary in the
                1990-2025 MHz band as of February 9, 2010, and Sprint, MSS, and
                AWS entrants would become primary as of February 9, 2010.

                                           Respectfully submitted,

                                           TERRESTAR NETWORKS INC.

                                           By:   /s/Douglas I. Brandon
                                                 Douglas I. Brandon
                                                 General Counsel and Secretary
                                                 TerreStar Networks Inc.
                                                 12010 Sunset Hills Road
                                                 Reston, VA 20191
                                                 (703) 483−7800
OF COUNSEL:
 Joseph A. Godles
 GOLDBERG, GODLES, WIENER
 & WRIGHT
 1229 Nineteenth Street, N.W.
 Washington, DC 20036
 (202) 429-4900

July 14, 2009


EXHIBIT 1


                           Sample BAS Survey Form
BAS 2 GHz Facility Survey                      Date: 12/10/08          Submitted By:     Fred Ding                         Rev 6/9/08
         Station Call Sign: KBAS        Market/City: Any Town            State: USA      Group Organization: Cosmos Broadcasting
       Local News Source: Orginate          Originate; Doupoly; LMA        Net: NBC
                                                                                                    Useage:Voice; Natural (Sound); Control
SBE Coordinated              Analog/ Enter X in the column and row as approprite                    Subcarrier 1 Subcarrier 2 Subcarrier 3
     BAS Use/BAS Channels Digital Ch A-1 CH A-2 Ch A-3 Ch A-4 Ch A-5 Ch A-6 Ch A-7 Freq                     Use Freq      Use Freq     Use
   1st ENG Live Channel       Analog/     X                                                         5.8 Voice 6.2 Natural
   2nd ENG Live Channel       Analog/                                   X                           5.8 Voice 6.2 Natural
 Helicopter ENG Channels      Digital                                                               5.8 Voice 6.2 Natural 6.8 Control
Fix Srv:STL/TSL/Intercity 1 Analog/                                                  X              5.8 Voice 6.2 Voice
Fix Srv:STL/TSL/Intercity 2 Digital                                                           X     5.8 Voice 6.2 Voice          6.8 T1
Fix Srv:STL/TSL/Intercity 3
Fix Srv:STL/TSL/Intercity 4
Fix Srv:STL/TSL/Intercity 5
Sprint/Nextel Selected/Preferred Equipment Vendor          Nucom
 Station ENG Receive Sites        Site #1            Site #2             Site #3      Site #4       Station Contact    Dynamo Sparks
       Tower/Building        Tower              Building           Tower                                  Phone        888-999-0099
    Height AG/AMSL ( ft)         1,500    2,000      300     1,200       300     350                      Email        888-888-0098
          Latitude           40 18' 50"         40 19' 10"         40 18' 56"                       Market Contact     Bill Upstart
         Longitude           75 58' 02"         75 57' 87"         75 57" 14"                             Phone        800-345-6789
       Street Address        10 Transmitter Rd 135 N. Main St      4500 N South St                        Email        888-654-9876
          Zipcode            99934              99937              99945                            SBE Coordinator Sammy Smart
     Antenna Size/Type       8' Ultrascan       Nurad Horns        6 ' Superscan                          Phone        765-987-8765
ENG Ch Received (A1-A7?) 1-7                    1                  1&4                                    Email        800-876-3421
   Receiver Manufacturer     MRC                Nucomm             RF Central                       Other Coordinator Abbey Parks
       Receiver Model        MRC-4579           N-8756             RF-9920                                Phone        786-876-6543
       Analog/Digital        Analog/Digital     Analog             Analog                                 Email        897-989-0066
     Bandwidth Switch        yes                No                 Yes 15 & 20 MHz
                                                                                           Email responses to: replies@basclearing.com

   Comments & Notes:



Document Created: 2009-07-14 20:37:10
Document Modified: 2009-07-14 20:37:10

© 2024 FCC.report
This site is not affiliated with or endorsed by the FCC