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File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** DA 96-1940 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of the Applications of ) ) HUGHES COMMUNICATIONS ) File Nos. 5-DSS-P/LA-95 GALAXY, INC. ) 67-SAT-AMEND-95 ) 68-SAT-P/LA-95 ) 12-SAT-MISC-96 For Authority to Construct, Launch and ) Operate Space Stations in the Domestic ) Fixed-Satellite Service ) MEMORANDUM OPINION AND ORDER Adopted: November 20, 1996 Released: November 21, 1996 By the Chief, International Bureau: Introduction 1. On May 7, 1996, we authorized the construction, launch, and operation of eleven satellites in the domestic fixed-satellite ("domsat") service and assigned them to satellite orbit locations, with separate opinions addressing the merits of each application to follow. We issue this MO&O for the authorizations granted to Hughes Communications Galaxy, Inc. ("HCG") to construct, launch, and operate one C-band, Galaxy IX, and one hybrid C-/Ku-band (Galaxy X), domestic fixed- satellites at the 1270 W.L. and 1230 W.L. orbital locations, respectively. These authorizations both partially replace and expand HCG's satellite capacity and will allow it to meet growing customer requirements, while contributing to increased competition in the market for satellite services. We grant, today, HCG's request to temporarily position Galaxy IX at the 123o W.L. orbital position. Backgr ound 2. Hughes Communications Galaxy, Inc. requested authority to construct, launch, and operate one C-band and one hybrid C-/Ku-band satellite, identified as Galaxy IX and Galaxy X, respectively. HCG also requested authority to temporarily reassign Galaxy IX to the same orbital position we permanently assigned to Galaxy X, until Galaxy X is launched and begins operation. HCG intends to expand C-band capacity to meet the current shortage in that frequency band. AT&T Corp. and PanAmSat Corporation filed comments concerning HCG's applications. For the reasons discussed below, we granted HCG's applications. 3. Before the 1996 domsat processing round HCG was authorized to operate nine domestic fixed-satellites: Galaxy I-R(S) (C-band) at 1330 W.L.; Galaxy V-W (C-band) at 1250 W.L.; SBS-5 (Ku-band) at 1230 W.L.; Galaxy IV(H) (hybrid C-/Ku-band) at 990 W.L.; Galaxy III-H (hybrid C-/Ku-band) at 950 W.L.; Galaxy VII-H (hybrid C-/Ku-band) at 910 W.L.; SBS-4 (Ku-band) at 770 W.L.; Galaxy VI (C-band) at 740 W.L.; and SBS-6 (Ku-band) at 740 W.L. 4. HCG's new generation satellite, Galaxy IX, has 24 C-band transponders, a bandwidth of 36 MHz, a space station transmitter power of 16 watts, and a maximum effective isotropically radiated power ("EIRP") of 41.0 dBW. HCG proposed to provide coverage to the 48 contiguous states ("CONUS"), Alaska, Hawaii, Puerto Rico, and the U.S. Virgin Islands. HCG estimated the cost to construct and launch Galaxy IX and to operate it for one year to be $126.3 million. It requested, in its amended application the 1290 W.L. orbital location and sought to offer services on a non-common carrier basis. Galaxy IX was launched on May 23 of this year. 5. HCG's new generation satellite, Galaxy X, will have 24 C-band transponders and 24 Ku-band transponders. The C-band transponders each have a bandwidth of 36 MHz, a space station transmitter power of 20 watts, and a maximum EIRP of 42.4 dBW. The Ku-band transponders each have a bandwidth of 36 MHz, a space station transmitter power of 63 watts, and a maximum EIRP of 51.2 dBW. HCG proposed to provide coverage to CONUS, Alaska, Hawaii, Puerto Rico, and the U.S. Virgin Islands. HCG estimated the cost to construct and launch Galaxy X, and operate it for one year, to be $201.6 million. It requested the 1230 W.L. orbital location and sought to offer services on a non-common carrier basis. It proposed to launch Galaxy X by December 1999. 6. HCG asserted that its proposed satellites are needed to help relieve the current C-band capacity shortage and meet customer service requirements. AT&T contended that it would be better if it were assigned to the 129o W.L. orbital position. PanAmSat argued that we should deny all HCG's applications and hold the orbital locations for future competitors. Discussi on A. Galaxy IX 7. HCG's proposed expansion satellite was its C-band-only Galaxy IX satellite. Our rules permit us to assign an existing licensee to one additional orbit location in each frequency band in which it is authorized to operate. No objections were raised regarding HCG's qualifications to hold a domestic fixed-satellite service license. We found HCG legally, technically, and financially qualified to construct, launch, and operate Galaxy IX. Accordingly, in our May 7 Order, we granted HCG's application for a C-band expansion satellite, Galaxy IX. 8. HCG also applied to operate Galaxy IX at the 123o W.L. orbital position until its Galaxy X satellite is ready to launch and begin operation from this orbital position. It has already received special temporary authority ("STA") to do so. It also currently operates a Ku-band satellite from the 123o W.L. orbital location, SBS-5. There are no regularly assigned C-band operations from this location and no objections were raised regarding this request. 9. We conditionally authorize HCG to operate Galaxy IX from the 123o W.L. orbital position. No other operator will be prejudiced by this authorization. This grant is conditioned on HCG relinquishing any right to the continued operation of SBS-5 and on Galaxy IX moving to its permanently assigned orbital location of 127o W.L. at the time Galaxy X is launched and begins commercial operations from the 123o W.L. orbital location. 10. PanAmSat urged denial of this application, as well as HCG's other expansion applications, suggesting instead that we reserve some "domsat" orbital locations for future assignment to other entities and impose a cap on the number of orbital locations for which a particular operator may be licensed. It argued that HCG and GE "control 29 of the 35" in-orbit domestic fixed-satellites and, consequently, that assigning either applicant additional orbital locations would exacerbate an anti- competitive overconcentration of control. PanAmSat claimed that reserving orbit locations that might otherwise be assigned to HCG would ensure that new entrants will have a realistic opportunity to compete in the domsat service market. PanAmSat further claimed, since domsat operators can now provide both domestic and international services, the HCG/GE "duopoly" would threaten PanAmSat's primary market, international service. 11. PanAmSat's arguments are without merit. We have always permitted satellite operators to expand their services. Our expansion rule was designed to provide licensees some certainty that additional orbital locations would be available if traffic growth was realized. Significantly, no one supported PanAmSat's suggestion to limit the number of orbit assignments to GE and HCG. Further, two other licensees -- AT&T Corp. and Comsat General Corporation -- are already providing satellite services; Loral Space and Communications Ltd. was recently authorized to do so; and EchoStar Satellite Corporation and Orion Network Systems, Inc. were granted licenses conditioned on the submission of additional information. Furthermore, we disagree with PanAmSat's contention that the market for satellite services is unduly concentrated. It presented no evidence that HCG and GE Americom have or will have the power to compete unfairly. 12. The Commission dismissed similar arguments made by PanAmSat in our recent DISCO I proceeding, where we adopted rules to allow all U.S. licensed satellite systems to offer both domestic and international service. The Commission noted there that domsat and international separate system operators, traditionally located in different portions of the orbital arc, would each have different short term advantages. We explicitly rejected PanAmSat's suggestion that several orbital locations in the "domsat" arc be reserved for separate systems operators, noting that we did not want to delay implementation of our DISCO I policy, and its benefits to the public. Additionally, PanAmSat had the opportunity to be a part of this domsat processing round, as well as past domsat processing rounds, but chose not to file an application. B. Galaxy X 13. HCG proposed to replace its Ku-band SBS-5 satellite with a hybrid C-/Ku-band satellite, Galaxy X. HCG acknowledged that only the Ku-band portion of Galaxy X could be considered a replacement for SBS-5 and, therefore, requested a waiver of our expansion satellite rule to the extent necessary. 14. Generally, the Commission permits licensees to replace retired satellites with new ones. This provides service continuity to customers and assurances to licensees and financiers making capital intensive investments in these systems. HCG has requested replacement of the SBS-5 satellite within a reasonable time frame. At the same time, we acknowledge that only the Ku-band portion of Galaxy X can be considered a replacement for SBS-5. In past decisions we have recognized the cost efficiencies inherent in hybrid satellites and have attempted to accommodate hybrid satellites where possible. In this processing round we have an adequate number of orbit locations to satisfy all qualified applicants. Granting HCG's request will permit the most cost-effective use of the limited orbit spectrum resource. Furthermore, granting HCG's waiver request will increase C-band capacity at a time when there is a compelling need for more transponders operating in this frequency band. Under these circumstances, in our May 7 Order, we granted HCG a waiver of Section 25.140(g) of our rules to allow it more than one expansion C-band authorization in this processing round. We assigned Galaxy X to the 123o W.L. orbit position. CONCLUSION AND ORDERING CLAUSES 15. We find that pursuant to Section 309 of the Communications Act, 47 U.S.C  309, grant of HCG's Galaxy IX and Galaxy X applications will serve the public interest, convenience, and necessity. These satellites will allow HCG to provide follow-on capacity to its existing customers and to expand its system to meet anticipated traffic growth. As specified in the May 7 Order, we have assigned Galaxy IX and Galaxy X to the 127o W.L. and 123o W.L. orbital locations, respectively. 16. Accordingly, IT IS ORDERED that application file Nos. 5-DSS-P/LA-95, 67-SAT- AMEND-95, and 68-SAT-P/LA-95 ARE GRANTED, as discussed in this order, and Hughes Communications Galaxy, Inc. IS AUTHORIZED to construct one C-band and one hybrid C-/Ku-band fixed satellites, in accordance with the technical specifications set forth in its applications. 17. IT IS FURTHER ORDERED that Hughes Communications Galaxy, Inc. IS AUTHORIZED to launch and operate two space stations in the fixed-satellite service in accordance with the Assignment of Orbital Locations to Space Stations in the Domestic Fixed-Satellite Service, DA 96-713 (May 7, 1996), as well as the relevant terms and conditions of all previous orders and authorizations concerning the operation of space stations. These requirements include the filing of annual reports on the progress of space station construction, traffic on in-orbit satellites and transponder use. See Streamlining the Commission's Rules and Regulations for Satellite Application and Licensing Procedures, IB Docket No. 95-117 (adopted October 29, 1996). 18. IT IS FURTHER ORDERED that unless extended by the Commission for good cause shown, each of the authorizations 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: Construction Commenced Construction Completed Launch Galaxy IX 9/30/95 4/30/96 5/30/96 Galaxy X 1/30/97 9/30/99 12/30/99 19. IT IS FURTHER ORDERED that Hughes Communications Galaxy, Inc. shall relinquish any right to the continued operation of SBS-5 at the time it begins commercial operations of Galaxy X. Hughes Communications Galaxy, Inc. shall inform the Commission when commercial operation of Galaxy X has begun. 20. IT IS FURTHER ORDERED that the license term for the space stations 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. 21. IT IS FURTHER ORDERED that Hughes Communications Galaxy, Inc. will prepare, within 90 days of the release of this order, the necessary information for submission to the International Telecommunication Union ("ITU") to initiate the advance publication, international coordination, and notification process of these space stations in accordance with the ITU Radio Regulations and for 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). 22. IT IS FURTHER ORDERED that the temporary assignment of any orbital location to Hughes Communications Galaxy, 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. 23. Hughes Communications Galaxy, Inc. is afforded thirty days from the date of release of this order to decline this authorization as conditioned. Failure to respond within that period will constitute formal acceptance of the authorization as conditioned. 24. This Order is issued under Section 0.261 of the Commission's rules, 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)). FEDERAL COMMUNICATIONS COMMISSION Donald H. Gips Chief, International Bureau