NOTICE ********************************************************* NOTICE ********************************************************* This document was originally prepared in Word Perfect. If the original document contained-- * Footnotes * Boldface & Italics --this information is missing in this version The document format (spacing, margins, tabs, etc.) is changed too. If you need the complete document, download the Word Perfect version. For information about downloading documents (FTP) see file how2ftp. File how2ftp (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** DA 95-1682 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of the Applications of ) ) PanAmSat Licensee Corporation, ) ) File Nos. CSS-91-005 For Modification of its Authority To ) CSS-91-006 Construct, Launch, and Operate a ) Hybrid Separate System International ) Communication Satellite ) MEMORANDUM OPINION, ORDER, AND AUTHORIZATION Adopted: July 28, 1995 Released: July 31, 1995 By the Chief, International Bureau: INTRODUCTION 1. By this Memorandum Opinion, Order, and Authorization, we grant PanAmSat Licensee Corporation's ("PanAmSat's") Application for Modification and Request for Final Authority to construct, launch, and operate its hybrid satellite ("PAS-6") on both C-band (4/6 GHz) and Ku- band (11-12/14 GHz) frequencies, to serve the Indian Ocean Region ("IOR"), as part of its separate international communications satellite system. 2. PanAmSat has filed the above-captioned application to modify its conditional authority to construct, launch, and operate PAS-6, and to make that authority final. We placed the application on public notice on April 12, 1995. Hughes Communications Galaxy, Inc. filed an objection, which was subsequently withdrawn following a status conference held by the International Bureau with both parties. For the reasons set forth below, we grant PanAmSat's request to transfer its financial showing and the final construction authority for its PAS-7 satellite to PAS-6. Therefore, PanAmSat is left with a conditional construction authorization for its PAS-7 satellite. BACKGROU ND 3. PanAmSat currently has conditional authorization to construct, launch, and operate its PAS-6 satellite system, which was initially authorized to be located at 68§ East Longitude ("E.L."). This authorization was conditioned on PanAmSat's submission of the second-stage financial information required under the Separate Systems decision. This requires PanAmSat to demonstrate sufficient non-contingent funds to meet the projected construction, launch, and first-year operational costs for its PAS-6 satellite. The Commission stated that, unless otherwise authorized, PanAmSat could not expend any funds on constructing PAS-6 until it submitted this showing. 4. The Commission also required PanAmSat to make its second-stage financial showing no later than 60 days following the State Department's notification to the Commission that the United States has fulfilled its Article XIV(d) obligations under the Intelsat Agreement. The Article XIV(d) process is designed to address potential harm to the Intelsat satellite system. As a result of this process, PanAmSat now seeks authority to operate its PAS-6 satellite at 68.5§ E.L., rather than 68§ E.L. 5. In addition to conditional authorization for PAS-6, PanAmSat has received final construction authority for its PAS-7 satellite. PanAmSat received its PAS-7 authority on May 30, 1994, after demonstrating that it was financially qualified to cover the costs of construction, launch, and first-year operations for the satellite. PAS-7 is assigned to 72§ W.L. and will also serve the IOR. PanAmSat has been constructing its PAS-7 satellite pursuant to its final construction authority. However, due to various technical, marketing, and international satellite coordination issues, PanAmSat now seeks to launch this IOR satellite at 68.5§ E.L., instead of at its 72§ E.L. location. PanAmSat, therefore, requests that the final construction authority for its PAS-7 satellite be transferred to PAS-6. 6. PanAmSat's application to modify PAS-6 indicates that the cost of PAS-6 is approximately $20 million more than the cost of PAS-7. The showing relied upon in connection with PAS-7 indicated approximately $45 million funds available in excess of estimated cost. DISCUSSION 7. The Commission has found that PanAmSat is financially and legally qualified with respect to PAS-7, and specifically that it has demonstrated sufficient noncontingent funds to cover the costs of its PAS-7 satellite system. The financial demonstration submitted in connection with PAS-7 is sufficient to establish that adequate funds are available to be transferred to the costs of PAS-6. Consequently, we will apply the full financial showing submitted for PanAmSat's PAS-7 satellite and the final construction authority to PAS-6. 8. We also find that PanAmSat's proposed PAS-6 satellite system, as modified, satisfies the technical requirements of the Separate Systems decision. The spacecraft is capable of operating in a manner consistent with Commission rules and the International Radio Regulations. The technical proposal for PAS-6 also is consistent with the Commission's two-degree spacing policy, as required under the Separate Systems decision. PanAmSat has successfully completed consultation, for a satellite at 68.5§ E.L., pursuant to Article XIV(d) of the Intelsat Agreement. We hereby grant final authorization for the construction, launch, and operation of the PAS-6 satellite system at 68.5§ E.L. 9. Because the final authorization and the financial showing for PAS-7 satellite has been transferred to PAS-6, PanAmSat no longer meets the financial qualifications requirements with respect to PAS-7 and, therefore, is in the position with respect to PAS-7 that it was previously in with respect to PAS-6. Specifically, prior to issuing final authority to construct, launch and operate PAS-7, we will require PanAmSat to submit a showing that it is financially qualified to cover the costs of construction, launch and first-year operations of PAS-7. CONCLUS ION 10. We find that PanAmSat is legally, financially, and technically qualified to hold a final authorization to construct, launch and operate its PAS-6 international satellite system at 68.5§ E.L. We also find that PanAmSat is qualified for conditional authorization to construct its PAS-7 satellite system. These authorizations are consistent with our orbit assignment policies and will serve the public interest, convenience, and necessity under section 309(a) of the Communications Act. We believe that PanAmSat's proposed expansion into the IOR, and the resulting worldwide interconnection capability, will provide substantial benefits to users of international satellite communications services. The grant of PanAmSat's application should provide the user benefits contemplated by the Commission in the Separate Systems decision, specifically: the stimulation of transmitting information over satellites; improved network efficiencies; reduced user costs; and the creation of new business and trade opportunities through improved international communications. Given these important public interest benefits, we grant PanAmSat's application for modification and request for final authority for PAS-6. This authorization represents final authority for PanAmSat to construct, launch and operate its PAS-6 satellite. 11. Accordingly, IT IS ORDERED that pursuant to sections 4(i) and (j), 308, 309 and 319 of the Communications Act, as amended, 47 U.S.C. sections 4(i) and (j), 308, 309 and 319, and Section 0.261 of the Commission's Rules on delegations of authority, we grant PanAmSat's request to transfer the final construction authority for PAS-7 to PAS-6. Therefore, PanAmSat is authorized to construct, launch and operate its PAS-6 satellite system as described in its Application for Modification and Request for Final Authority to construct, launch and operate PAS-6. 12. IT IS FURTHER ORDERED that this authorization is conditioned upon the outcome of the Commission's pending rulemaking proceeding, Amendment to the Commission's Regulatory Policies Governing Domestic Fixed Satellite and Separate International Satellite Systems, FCC 95-146 (Released April 25, 1995), and is without prejudice to any action the Commission deems appropriate in that proceeding. 13. IT IS FURTHER ORDERED that PanAmSat is assigned the orbital location of 68.5§ East Longitude for operation of its PAS-6 satellite. 14. IT IS FURTHER ORDERED that the assignment of any orbital location to PanAmSat is subject to change by summary order of the Commission on 30 days notice and does not confer any permanent right of the use of the orbit or spectrum. 15. IT IS FURTHER ORDERED that PanAmSat will not be issued final authority to construct, launch and operate a satellite at 72§ E.L. until it submits a showing that it is financially qualified with respect to that satellite. 16. IT IS FURTHER ORDERED that PanAmSat shall submit a showing that it is financially qualified to cover the costs of construction, launch, and first-year operation of PAS-7 within 60 days after completion of Intelsat consultation, pursuant to Article XIV(d), or within eighteen months from the release of this Memorandum Opinion, Order, and Authorization, whichever is earlier. FEDERAL COMMUNICATIONS COMMISSION Scott Blake Harris Chief, International Bureau