******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** DA 98-1801 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) COLUMBIA COMMUNICATIONS CORP. ) File Nos. CSS-90-010 ) CSS-92-002-ML Application for Modification of ) 77-SAT-MP/ML-98 Authorization to Permit Operation of ) C-Band Satellite Capacity on the ) INTELSAT 515 Satellite to be ) Located at 37.5ø West Longitude ) MEMORANDUM OPINION, ORDER AND AUTHORIZATION Adopted: September 4, 1998 Released: September 8, 1998 By the Chief, International Bureau: 1. By this Order, we authorize Columbia Communications Corp. ("Columbia") to modify its existing satellite authorization to permit it to operate the C-band capacity on a satellite previously owned by INTELSAT. This satellite, formerly INTELSAT 515 and now Columbia 515, is located at 37.7ø W. L. This authorization will implement a coordination agreement ("Coordination Agreement") between INTELSAT and Columbia after long and difficult negotiations and it will permit Columbia to continue to be a viable competitor in the Atlantic Ocean Region ("AOR "). I. Background 2. Columbia has offered video, voice, and data communications using C-band capacity leased on Tracking and Data Relay Satellite Service ("TDRS") satellites in the Atlantic and Pacific Ocean regions since 1991 through an arrangement with the National Aeronautics and Space Administration ("NASA"). Columbia provided service in the AOR using the TDRS-4 satellite at 41ø W.L. Columbia's operations at 41ø W.L. were subject to a consultation agreement reached with INTELSAT, which planned to operate a C-band satellite at the 40.5ø W.L. location beginning in 1997. Under the terms of the agreement, Columbia was to operate the C-band capacity on the TDRS-4 satellite at 41ø W.L. until the end of 1997, when INTELSAT would be ready to launch and operate its planned satellite. In August 1995, NASA extended Columbia's right to market the C-band capacity on TDRS-4 for an additional four years based on changed assumptions regarding the satellite's life expectancy. Soon after, Columbia and INTELSAT began further negotiations regarding extended Columbia operations at 41ø W.L. 3. INTELSAT and Columbia reached a new agreement concerning operations at the 41ø W.L. orbital location in December 1997. The terms of this Coordination Agreement are as follows: 1) INTELSAT will transfer title of the INTELSAT 515 satellite (to be renamed Columbia 515) to Columbia on April 1, 1998; 2) Columbia 515 will be relocated to the 37.5ø W.L. orbit location; 3) Columbia will lease back to INTELSAT, at no cost, a number of C-band transponders on Columbia 515; 4) INTELSAT will transfer to Columbia ownership of two C- band transponders on the INTELSAT 605 satellite located at 27.5ø W.L. for a four-to-five year period beginning January 1, 1998; 5) Columbia will turn off all C-band transponders on the TDRS-4 satellite at 41ø W.L. by May 15, 1998; and 6) the Commission will withdraw its filing with the International Telecommunications Union ("ITU") for U.S. use of the C-band frequencies at the 41ø W.L. orbital location. 4. In order to implement the agreement, Columbia must secure Commission approval to use the INTELSAT 515 satellite at the 37.7ø W.L. orbital location. Thus, Columbia requests permanent modification of its existing AOR authorization to specify operation at 37.7ø W.L. In its application, Columbia requests, if necessary, a waiver of the Commission's "freeze" on the filing of applications for new satellites in the orbital arc between 60ø W.L. and 30ø W.L., and waivers of certain space station technical requirements of the Commission's rules. 5. Orion Network Systems, Inc. ("Orion"), which operates a Ku-band satellite at 37.5ø W.L., filed a petition to deny Columbia's application, asserting that the Coordination Agreement is contrary to Commission policy, illegal, and anti-competitive. Orion also argues that the co-location of the Columbia 515 satellite at the 37.5ø W.L. is technically infeasible because of the risk of collision with its Orion-1 satellite at that location, and is in derogation of Orion's long-term interests at that location. In addition, Orion argues that Columbia's request for waivers should be denied. In the event we grant Columbia's request, however, Orion asks that we ensure such authority does not extend beyond the term of its initial license or the useful life of the Columbia 515 satellite, whichever is shorter. II. Discussion 6. We find that the public interest will be served by a grant of Columbia's application to modify its existing AOR license to permit it to operate the Columbia 515 satellite at the 37.7ø W.L. orbital location. A grant of Columbia's modification application fulfills the United States' international obligation to coordinate U.S.-licensed satellites with those of other countries or administrations. This modification implements the terms of the Coordination Agreement reached by Columbia and INTELSAT, and supported by the United States, concerning international coordination between the Columbia satellite and INTELSAT's planned satellite at 40.5ø W.L. The Department of State supports Commission grant of Columbia's application as necessary to implement the Coordination Agreement. In this case, Columbia is moving to an unassigned orbit location as a means of completing coordination with INTELSAT in a manner that permits Columbia to continue to serve its AOR customers. 7. In granting Columbia's modification application, we reject Orion's claim that the Coordination Agreement, upon which it is premised, is unlawful and contrary to the public policy. According to Orion, the Coordination Agreement involves a "sham" transfer of title that gives INTELSAT access to the U.S. orbital location at 37.5ø W.L. In support of this claim, Orion cites Columbia's lease back of capacity to INTELSAT on the Columbia 515 satellite and INTELSAT's continued provision of Tracking Telemetry and Control ("TT&C") services for the Columbia 515. Orion also argues that the "sham" transfer gives only one U.S. operator, Columbia, any access to capacity on INTELSAT 515. Finally, Orion argues that the Coordination Agreement results in the relinquishment of valid U.S. commercial rights for the 41ø W.L. orbital location, permitting INTELSAT to confer an unfair competitive advantage upon its privatized spin-off entity, New Skies Satellites, N.V. ("New Skies"), whom it intends to operate the satellite at 40.5ø W.L. 8. We are not persuaded that the transfer of title of the satellite to Columbia was a "sham" transaction. Columbia will operate the satellite to serve its AOR customers. It is not unusual for satellite operators to obtain TT&C operations from a third party provided the operator retains ultimate responsibility for the satellite's operation. The Coordination Agreement clearly spells out that Columbia will have full responsibility for the satellite, even if TT&C is provided by INTELSAT. In addition, there is nothing inherent in the lease back arrangement in itself to indicate that INTELSAT still controls the satellite. Based on the record, neither of these two factors, taken individually, or when taken together, support a finding that Columbia has not assumed full control of and responsibility for the satellite. 9. Orion also argues that, under the Coordination Agreement, the United States improperly relinquished its claim to valid U.S. commercial rights at 41ø W.L. To the contrary, United States use of the 41ø W.L. location was always predicated on the knowledge that INTELSAT planned to launch a C-band satellite into the 40.5ø W.L. location which would limit any continued operation at the 41ø W.L. location. Orion has not identified any interest in this orbital location either in terms of having an existing satellite at or near 41ø W.L. or a pending application to locate a satellite at or near that location that would be affected by the United States' decision to relinquish its claim to 41ø W.L. as part of the Coordination Agreement. 10. Further, we need not address Orion's argument that INTELSAT's affiliate, New Skies, will enjoy a competitive advantage over U.S. licensees through its operation from 40.5ø W.L. As with other satellites to be transferred to New Skies, operation of this New Skies satellite in the United States requires Commission authorization pursuant to the standards established in the Commission's DISCO II decision. The framework adopted in DISCO II is designed to "prevent potential anticompetitive or market distorting consequences of continued relationships or connections" between an Intergovernmental Organization ("IGO"), such as INTELSAT, and its affiliates. Applications have been filed to operate with New Skies and placed on public notice. 11. In addition to its concerns about the terms of the Coordination Agreement, Orion also argues that the Commission acted improperly by giving Columbia assurance of Commission approval of the Agreement before the Columbia 515 satellite began its drift from 21.3ø W.L. to the 37.7ø W.L. orbital location. The basis for Orion's assertion is a letter dated February 20, 1998 from Columbia to the Commission indicating that in May 1998 the Columbia 515 satellite would be located at 37.5ø W.L. According to Orion, Columbia would not have begun to move the satellite without having received assurance from the Commission that it would ultimately approve the relocation. To the extent that Orion is suggesting that the Commission indicated its support for the relocation in the coordination process, before it solicited public comment, it is correct. This, however, is consistent with our international obligation to coordinate U.S. systems with those of other administrations and to use good faith efforts to accommodate each other's requirements. In this case, the United States agreed to support INTELSAT's long-planned satellite at 40.5ø W.L. while at the same time assuring that Columbia would be able to continue to serve its C-band customers from the 37.5ø W.L. orbital location. Assigning Columbia to an unassigned location would not adversely affect any other U.S. interests. Nevertheless, we required Columbia to file a modification application to transfer its AOR operations from 41ø W.L. to 37.5ø W.L. to give any potentially affected entity an opportunity to comment. Orion, in its comments, has provided no persuasive reason why the Coordination Agreement should not be implemented. 12. Orion also argues that the proposed co-location of the Columbia 515 satellite with Orion's satellite at 37.5ø W.L. is not technically feasible because of the risk of collision. Since the filing of Orion's petition to deny, Columbia moved its satellite an additional 0.2ø westward to allay Orion's concerns. Since the move to 37.7ø W.L., there have not been any incidents resulting from the co-location. We have traditionally assigned satellites that operate in different frequency bands to the same orbit location. This approach has enabled us to make maximum use of scarce orbital resources and has become the cornerstone of our orbital assignment policies. 13. We also reject Orion's argument that relocation of Columbia's AOR operations to the 37.5ø W.L. orbit location is in conflict with its interest at that location. Orion says that it has a long-term interest in the 37.5ø W.L. orbital location because it currently operates a Ku-band satellite at the location and that the location was reserved for its future C-band operations because it prepared C-band ITU filings for that location. Contrary to Orion's suggestion, the ITU filing for C-band operations at that location was done to protect U.S. interests in the location and not the interests of any particular company. Moreover, the ITU filings were prepared and submitted in 1990. If Orion was interested in pursuing C-band operation at this location, it had ample opportunity to file an application. It did not prior to notice that Columbia and INTELSAT had reached an agreement in December 1997. Consequently, we deemed that location as available for consideration in resolving the U.S.-INTELSAT coordination. 14. We further find that the "freeze" does not preclude authorization of this application, as Orion contends. The "freeze" was initiated in 1985 and was intended to address congestion in the portion of the orbital arc between 60ø W.L. and 30ø W.L. by suspending the processing of new applications involving these locations. Columbia's modification request, however, does not involve assignment of an additional orbit location in this portion of the arc. Rather, it merely relocates Columbia's AOR operation from one location in the arc to another. 15. Last, we recognize that the INTELSAT 515 satellites does not meet Commission regulations regarding saturation flux densities, space station antenna cross- polarization isolation, and orbital-position maintenance properties. Contrary to Orion's assertion, however, we find Columbia has justified a waiver of these rules. As Columbia points out, INTELSAT 515 cannot at this point be modified to meet the Commission's technical requirements. Further, the satellite will not cause harmful interference into any other satellites since the nearest satellite is separated from it by three degrees. In addition, the satellite has only a limited useful life of approximately 3-4 years. Under these circumstances, we find that a waiver of these technical requirements is justified in the public interest for the remainder of Columbia's license term. III. Conclusion and Ordering Clauses 16. Accordingly, Columbia's application to modify its existing AOR license, File Nos. CSS-90-010, CSS-92-002-ML and 77-SAT-MP/ML-98, to reflect its operation at 37.7 ø W.L. instead of 41ø W.L. IS GRANTED. 17. IT IS FURTHER ORDERED that, with the exception of additional C-band capabilities on the Columbia 515 satellite, this authorization confers upon Columbia no greater rights than those contained in its authority, as modified, to conduct C-band operations on the TDRS-4 satellite at 41ø W.L. until the expiration of its AOR license term. 18. IT IS FURTHER ORDERED that Orion's petition to deny Columbia's application IS DENIED. 19. This authorization is issued pursuant to Section 0.261 of the Commission's rules and is effective upon adoption. Petitions for reconsideration under Section 1.106 or applications review under Section 1.115 of the Commission's rules may be filed within 30 days of the public notice of this order (see Section 1.4(b)(2)). FEDERAL COMMUNICATIONS COMMISSION Regina M. Keeney Chief, International Bureau