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Y2!!dddddH=dYHHHHHHHHHH!d2H282YdHdC2!2H,29HNAddHHHHHHHHHHddddd.dHHHHdddddddddddddddddddHHddddddSC=NdHddd+;HHHHddddddHHH2HHdHHdddHHH,HHHH,HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!HHH!HHH!HHH!HHHHHHHHHHHHHH=?8=8C,?'A,J2H,!F,C8[8J,C2H,H=92=22?,H,C=H8N===H?J!2HHH=,====I!!2222HJ222HHH=!92,!ddhrZz.lZrrvvnFFZ83\\\\=\\\\z\g3gBf\g3g3y\ny\z\\\znFnFn\\F\F\F\\gBg3f\\\\\\\zf\gFgFgF\f\z\\\f\f\n=\\===WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN\\\=\UU\\\\\\@\\\\@==\\\33\\pp\\\b\\=\\@"\[\4\==p=\p\f\z\=\Q\iwUzpNm\QQ====pppfpfzQpGfQ\Q=3zQzffzQz\Qpp\p\\fQfQzppfppppp=\ffpQpppp==\\\\p\\\fffp=i\Q=Tgnj}}ccyyTjcc;T;TXFu ?<  QK xP-#c PE37MP#Q` `  hhCqpp  )DA 961938 S-fO #&m PE37&P#  t!V Before the  Federal Communications Commission  Sx-6Washington, D.C. 20554 Đ\   T-In the Matter of the Application ofhhCq) ` `  hhCq)  T`- ORION NETWORK  hhCq)ppFile No.  )74SATP/LA95  T9 - SYSTEMS, INC.  hhCq)pp  ) ` `  hhCq)  T -For Authority to Construct, Launch and q)  T -Operate a Space Station in the Domestic q)  T -FixedSatellite Service hhCq)  S-  MEMORANDUM OPINION AND ORDER \  T- Adopted: November 20, 1996hhCqReleased:  t!V November 21, 1996 t!V  By the Chief, International Bureau:  S-_ Introduction   T-\1. ` ` On May 7, 1996, we authorized the construction, launch, and operation of eleven satellites in the domestic fixedsatellite ("domsat") service and assigned them to satellite orbit  TB-locations,.B# P<ԍ#c PE37MP#` ` See Assignment of Orbital Locations to Space Stations in the Domestic FixedSatellite Service,  zP-DA 96713 (May 7, 1996) ("May 7 Order").#c PE37MP#(#` . We stated that we would issue separate opinions addressing the merits of each application  T- to follow. We issue this MO&O for the conditional authorization granted to Orion Network Systems,  T-Inc. to construct, launch, and operate one Kuband3# P<ԍ#c PE37MP#` ` For purposes of this opinion, the Kuband encompasses the 11.712.2/14.014.5 GHz bands.(#` Ƹ domestic fixedsatellite at the 1350 W.L. orbital position. The conditional authorization requires Orion to submit additional documentation of its financial qualifications. If the conditions are met, Orion will be unconditionally authorized to enter  T{-the domestic fixedsatellite service market, likely increasing competition in satellite service options to the public.  S -a Background Đ\  T"-2.` ` Orion holds a license for a space station initially authorized as an international""0*((&"  T-separate system satellite.\k# Ph<ԍ#c PE37MP#` `  Orion Satellite Corporation, 6 F.C.C. Rcd. 4201 (1991). See also Orion Satellite  zPA-Corporation, 5 F.C.C. Rcd. 4937 (1990); Orion Satellite Corporation, 101 F.C.C.2d 1302  xP -(1985).(#` \ Until the 1996 domsat processing round, it had never applied for a domsat authorization. In this round, Orion requested authority to construct, launch, and operate one Kuband  T-satellite, OF4. AT&T Corp., EchoStar Satellite Corporation, GE American Communications, Inc. ("GE Americom"), and Hughes Communications Galaxy, Inc. ("HCG") filed comments in response to Orion's application. For the reasons discussed below, we granted Orion's application, subject to certain conditions.  T- \  T-3.` ` Orion's proposed satellite will have 16 Kuband transponders, each with a bandwidth of 54 MHz, a space station transmitter power of 90 watts per channel, and a maximum edge of  T-coverage effective isotropically radiated power ("EIRP") of 50.8 dBW. It proposed to provide coverage to the 48 contiguous states ("CONUS"), Alaska, Hawaii, Puerto Rico, and the U.S. Virgin Islands. Orion estimated the cost to construct and launch its proposed satellite, and to operate it for  T -one year to be $220 million. It requested the 1270 W.L. orbital location, but suggested alternatives,  T -including the 1350 W.L. orbital location. It proposed to launch OF4 in October 1998.  T -  T - 4. ` ` HCG, GE, and AT&T asserted that Orion had not adequately demonstrated its financial qualifications to hold a domsat license nor justified a waiver of the Commission's financial qualification requirements.  S-eP Discussion Đ T-\  S- A. Financial Qualifications   T@-  5.` ` Our rules permit us to assign new licensees "up to two orbital locations" if the  T-applicant is legally, technically, and financially qualified to hold a space station license.# P<ԍ#c PE37MP#` ` See 47 C.F.R.  25.140(b) and (f).(#` Ƌ To this end,  T-each domsat applicant must demonstrate its ability to finance its proposed satellite's construction, launch, and firstyear operating costs. An applicant may demonstrate financial ability by submitting the following financial information: (1) A current balance sheet and documentation of any financial commitments that show current assets and operating revenues sufficient to meet these costs; or, (2)  TP-irrevocably committed debt or equity financing sufficient to meet the costs.P# P <ԍ#c PE37MP#` ` 47 C.F.R.  25.140(c) and (d).(#` Ƈ  T-6.` ` Orion requested that we briefly "defer" the financial showing requirement until the  T-number of applicants and the process for selecting qualifying applications became known. Without this information, it contended, it was not able to generate enough confidence in the financial community to obtain the requisite financing for its system. Orion asserted that this uncertainty was  T`-compounded by the Commission's "DISCO I Notice" which was issued while its application was"`=0*(( ""  T-pending.B# Nh<ԍ#c PE37MP#` ` See Amendment to the Commission's Regulatory Policies Governing Domestic FixedSatellites  zP?-and Separate International Satellite Systems, 10 F.C.C. Rcd. 7789 (1995) ("DISCO I Notice").  (#` B In this Notice, the Commission proposed to eliminate the regulatory distinctions between U.S. international separate satellite systems and domsats. Among other things, the Commission proposed to apply the onestage "domsat" financial requirements to separate system applicants, who  T-had, until then, been permitted to demonstrate their financial qualifications in two stages.VS1# PY<ԍ#c PE37MP#` `   Under the separate system twostage process, in the first stage, we issued a conditional construction permit upon submission of a business plan. In the second stage, to receive launch and operating authority, permittees were required to satisfy the "domsat" financial standard to demonstrate full, committed financing. This twostage showing was designed to recognize the unique situation of separate system licensees, who could not procure international  xPR -agreements without a license, and who could not, in all likelihood, obtain financing until  zP -international coordination was completed. See DISCO I Notice at  2629 for a more detailed  xP -discussion. (#` V  T8-7.` ` HCG and GE Americom opposed Orion's application because it did not make the  T-required financial showing.{L # P<ԍ#c PE37MP#` `  They also noted that we recently reaffirmed our commitment to strict financial qualifications  zP-regarding big (voice & data) lowearth orbiting ("leo") satellites. See Amendment of the Commission's Rules to Establish Rules and Policies Pertaining to a Mobile Satellite Service in  zPg-the 16101626.5/2483.52500 MHz Frequency Bands, 9 F.C.C. Rcd. 5936, 594854 (1994). HCG also maintained that the rules encourage efficient and timely satellite service, but discourage "warehousing." (#` { AT&T noted that no other domsat applicant had sought a deferral of the  T-financial qualification requirements because of "uncertainties." The commenters also argued that  T-Orion had provided no basis for a waiver of the rule. 3# P9<ԍ#c PE37MP#` `  Cf. Norris Satellite Communications, Inc., 7 F.C.C. Rcd. 4289, 4290 (1992) reconsideration,  zP-9 F.C.C. Rcd. 7370 (1993); Cf. also Communications Satellite Corporation, 7 F.C.C. Rcd. 6028 (1992) (noting that an agency should not tolerate "evisceration of a rule by waivers," and that "a waiver must not undermine the underlying policy of the rule").(#`   Tp-8.` ` We agree that even if Orion was uncertain about the processing procedure we would use for the 1996 domsat processing group, this does not justify a deferral of our domsat qualification  T -rules. The financial rules have been in place since 1985; they have been applied to the two most  T -recent domsat processing groups in 1985 and 1988. 7 # Pl <ԍ#c PE37MP#` ` See Assignment of Orbital Locations to Space Stations in the Domestic Fixed Satellite Service,  zPE!-50 Fed. Reg. 35228 (August 30, 1985) (  1985 Orbital Assignment Order); See also Assignment  zP"-of Orbital Locations to Space Stations in the Domestic FixedSatellite Service, 3 F.C.C. Rcd.  zP"-6972 (1988) (1988 Orbital Assignment Order).(#`  Moreover, in the DISCO I Notice, the Commission proposed to extend, and later adopted, the onestage financial qualification requirement  T -to all U.S. fixedsatellite applicants. Consequently, there was no reasonable basis for any uncertainty Orion may have had about whether we would apply the onestage domsat showing to domsat  TX-applicants in the 1996 processing round. "0 0*((+"Ԍ T-9.` ` We will, nevertheless, grant Orion a short deferral of the required financial showing.  T-In the DISCO I Report and Order,] k# N@<ԍ#c PE37MP#` `  See also Amendment to the Commission's Regulatory Policies Governing Domestic Fixed zP-Satellites and Separate International Satellite Systems, 11 F.C.C. Rcd. 2429 (1996) ("DISCO I  zP-Report & Order").(#` ] the Commission adopted its proposal to eliminate all distinctions between U.S. domsats and separate systems. This allows all U.S.licensed satellites to provide any mix of domestic or international satellite services they choose, subject only to the licensee obtaining all applicable international approvals. Given this, the Commission also adopted its proposal to require all applicants seeking licenses for U.S. fixedsatellites to meet the onestage "domsat" financial showing. In doing so, the Commission noted it would process those separate system applications filed  T-before the DISCO I Notice under the former twostage showing.t # P <ԍ#c PE37MP#` ` Id at  43.(#` t It also noted that it would allow future applicants who apply for locations in uncongested portions of the orbital arc to make a twostep  T-financial showing upon appropriate request.` # P<ԍ#c PE37MP#` ` Id at  42. The Commission stated that all such requests should include specific information regarding efforts to obtain financing and an explanation as to why the applicant was not successful. It noted that any applicant requesting a twostep financial showing has the burden of demonstrating that use of this process will not foster the misuse of scarce orbital resources, and that the public interest would therefore not be served by application of the onestep rule.  zP-Id.(#` `  TH - 10.` ` Consequently, an applicant who filed a separate system application at approximately the same time Orion filed its domsat application would be able to receive a conditional license for its proposed system under the twostep standard. Moreover, that separate system satellite could offer the same domestic services as Orion had proposed. In addition, other applicants seeking to provide domestic fixedsatellite services from a satellite located in uncongested portions of the arc may request  T -application of the twostage showing. Orion was assigned an orbital location at 135o W.L., which is  TX-in the relatively uncongested western portion of the orbital arc capable of serving the United StatesX' # P<ԍ#c PE37MP#` ` Orion requested the 127o W.L. orbital location for its OF4 satellite, but indicated that a  xP-location as far west as 135o W.L. would be acceptable.(#` . Under these circumstances, we decided that granting Orion some additional time in which to demonstrate its financial qualifications would not prejudice any other applicant. Such an approach would also place Orion in a more equitable position compared to Separate Systems applicants operating in comparable portions of the orbital arc with the ability to offer comparable service.  T- Additionally, as a potential new entrant in the domestic fixedsatellite service, Orion's involvement may help increase competition and service options to the public. Consequently, we granted Orion  T@-authorization, conditioned on it submitting additional financial documentation.  T- 11.` ` Accordingly, we will afford Orion, 120 days from the release of this order, an  T-opportunity to demonstrate that it is financially qualified to cover the costs of construction, launch, and firstyear operation of its system. Failure to submit documentation evidencing its financial qualifications will result in an automatic cancellation of Orion's conditional license.  S)- ") 0*((["  S-B.  Orbit Location  T- 12.` ` In assigning OF4 to 135o W.L., we considered and rejected comments from EchoStar  T-that we should not assign OF4 to that location.# P<ԍ#c PE37MP#` ` AT&T's objection to assigning OF4 to the 127o W.L. orbit location is moot.(#` Ʊ EchoStar noted that the Commission has reserved  T`-the orbital positions from 133o W.L. to 137o W.L. for high power density satellites.`i# Pi<ԍ#c PE37MP#` ` GE American Communications, 3 F.C.C. Rcd. 6871, 6877 (1988).(#` Ƣ It argues that Orion's OF4 satellite would be operating with low power and should therefore be assigned outside the high power density orbital arc. In contrast, GE argued that Orion should bear the burden of  T-coordination with adjacent satellites because OF4 would be operating with higher powers.  T-   13.` ` In our May 7 Order, we stated that we would no longer continue to designate specific  Tp-portions of the orbital arc for high powerdensity satellites.|p # P<ԍ#c PE37MP#` ` May 7 Order at  7.(#` | We noted that the policy was designed to alleviate interference problems between newer, higher powerdensity satellites and older satellites. We recognized it had been eight years since we established the high powerdensity arc and that most new satellites are operating at these higher power density levels. Further, these satellites have been operating in all portions of the orbital arc without causing interference. OF4's power levels are comparable to those of other authorized satellites. We do not anticipate any undue difficulties in coordinating OF4 with adjacent satellites. As with all licensees of new satellites, it will be incumbent on Orion to coordinate OF4's operations with the operations of adjacent inorbit satellites before it brings OF4 into service. A separate license condition in this regard, as GE suggested, is  T-therefore not necessary.  S- Conclusion and Ordering Clauses Đ\  T@- 14.` ` We find pursuant to Section 309 of the Communications Act, 47 U.S.C  309, grant  T-of Orion's OF4 application, subject to the condition specified in paragraph 17, will serve the public  T-interest, convenience, and necessity. As specified in the May 7 Order, we have assigned OF4 to the  T-135o W.L. orbital location.  Tx-15.` ` Accordingly, IT IS ORDERED that application file No. 74SATP/LA95 IS CONDITIONALLY GRANTED, as discussed in this order, and Orion Network Systems, Inc. IS CONDITIONALLY AUTHORIZED to construct one Kuband fixedsatellite in accordance with the  T- conditions and technical specifications set forth in its applications.  T-  T-16.` ` IT IS FURTHER ORDERED that Orion Network Systems, Inc. IS CONDITIONALLY AUTHORIZED to launch and operate one space station in the domestic fixed T`-satellite service in accordance with the Assignment of Orbital Locations to Space Stations in the  T8-Domestic FixedSatellite Service, DA 96713 (May 7, 1996), as well as the relevant terms and conditions of all previous orders and authorizations concerning the operation of space stations. These  T -requirements include the filing of annual reports on the progress of space station construction, traffic  T!-on inorbit satellites and  transponder use. See Streamlining the Commission's Rules and Regulations"!0*((%"  T-for Satellite Application and Licensing Procedures, IB Docket No. 95117 (adopted October 29, 1996).  T-17. ` ` IT IS FURTHER ORDERED that this authorization IS CONDITIONED upon Orion  Tb-Network Systems, Inc. submitting, within 120 days of the release of this order, evidence of its  T:-financial qualifications as discussed in paragraph 11, or other evidence of Orion's financial qualifications. Failure to do so, or to present documentation that justifies a waiver of our financial requirements, will AUTOMATICALLY RENDER this CONDITIONAL authorization NULL AND VOID.  Tr-18.` ` IT IS FURTHER ORDERED that unless extended by the Commission for good cause shown, this authorization shall become NULL AND VOID in the event the space station is not constructed, launched, and successfully placed into operation in accordance with the technical parameters and terms and conditions of the authorizations by the following dates:  T -` `  Construction CommencedConstruction CompletedxxXLaunched  TZ-Orion OF4` `  3/30/97qpp3/30/99  )xxX 6/30/99  T -19.` ` IT IS FURTHER ORDERED that the license term for this space station is ten years and will begin to run on the date the licensee certifies to the Commission that the satellite has been successfully placed into orbit and the operations fully conform to the terms and conditions of this authorization.  TB-20.` ` IT IS FURTHER ORDERED that Orion Network Systems, Inc. will prepare , within  T-90 days of the release of this order, the necessary information for submission to the International  T-Telecommunication Union ("ITU") to initiate the advance publication, international coordination, and  T-notification process of these space stations in accordance with the ITU Radio Regulations and for  T-consultation in accordance with Article XIV of the INTELSAT agreement . We also remind all licensees that no protection from interference caused by radio stations authorized by other Administrations is guaranteed unless coordination procedures are timely completed or, with respect to individual administrations, by successfully completing coordination agreements. Any radio stations authorization for which coordination has not been completed may be subject to additional terms and conditions as required to effect coordination of the frequency assignments of other Administrations, 47 C.F.R.  25.111(b).  Tb-21.` ` IT IS FURTHER ORDERED that the assignment of any orbital location to Orion Network Systems, Inc. is subject to change by summary order of the Commission on 30 days notice and does not confer any permanent right to use the orbit and spectrum. Neither this authorization, nor any right granted by this authorization, shall be transferred to any person except upon application to the Commission and upon a finding by the Commission that the public interest, convenience, and necessity will be served thereby.  TJ$-22.` ` Orion Network Systems, Inc. is afforded thirty days from the date of release of this order and authorization to decline this authorization as conditioned. Failure to respond within that period will constitute formal acceptance of the authorization as conditioned.  T'-  23. ` ` This Order is issued under Section 0.261 of the Commission's rules on delegations of"'0*((," authority, 47 C.F.R.  0.261, and is effective upon release. Petitions for reconsideration under Section 1.106 or applications for review under Section 1.115 of the Commission's rules, 47 C.F.R.  1.106, 1.115, may be filed within 30 days of the date of public notice of this order (see 47 C.F.R.  1.4(b)(2)). ` `  hhCFEDERAL COMMUNICATIONS COMMISSION ` `  hhCDonald H. Gips ` `  hhCChief, International Bureau