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


In the Matter of                )
                                )
IDB Mobile Communications, Inc.,)
                                )
     Complainant,               )
                                )
          v.                    )  File No. E-97-48
                                )
COMSAT Corporation,             )
                                )
     Defendant.                    )

                  MEMORANDUM OPINION AND ORDER

     Adopted:  May 22, 2001             Released:  May 24, 2001


By the Commission:

I.     INTRODUCTION
                                
1.   In this Memorandum Opinion and Order (``Order''), we deny a 
  complaint filed by IDB Mobile Communications, Inc. (``IDB'') 
  against COMSAT Corporation (``COMSAT'') pursuant to section 
  208 of the Communications Act of 1934, as amended 
  (``Communications Act'' or ``Act'').1  IDB alleges that COMSAT 
  violated sections 201(b) and 202(a) of the Communications Act2 
  by refusing to reduce the price for certain satellite 
  communications services provided under a four-year contract 
  between the parties.3  IDB's claims rest on the fact that, 
  halfway through the contract period, COMSAT began to provide 
  satellite communications services to another entity at a price 
  that was lower than the price contained in the IDB/COMSAT 
  contract.  For the reasons described below, we deny IDB's 
  complaint, because IDB has failed to meet its burden under the 
  ``Sierra-Mobile'' doctrine4 of demonstrating that COMSAT 
  harmed the public interest by refusing to reduce the contract 
  price at issue halfway through the contract's term.

II.     BACKGROUND

A.   The Parties

2.   This is yet another salvo in the long-running and multi-
  forum feud between IDB and COMSAT.5  At all relevant times, 
  IDB provided many international satellite communications 
  services, including international maritime satellite services, 
  international aeronautical satellite services, and 
  international land mobile satellite services.6  COMSAT was a 
  corporation created pursuant to the Communications  Satellite 
  Act of 1962 that provided a wide range of international 
  satellite communications services.7  At all relevant times, 
  COMSAT provided such services by, inter alia, combining the 
  capabilities of its land earth stations (``LESs'') in the 
  United States with satellite capacity purchased from the 
  International Mobile Satellite Organization (``INMARSAT'').  
  These services included INMARSAT Standard-A, Standard-B, and 
  Standard-M services.8 

B.   A Brief Description of the Relevant INMARSAT Services

3.   Fixed-to-mobile INMARSAT Standard-A service is an analog 
  satellite communication service that is used, inter alia, to 
  complete transmissions from a fixed land location to a mobile 
  maritime terminal installed on a ship.9  Fixed-to-mobile 
  INMARSAT Standard-B and Standard-M services are digital 
  satellite communications services that are typically used to 
  complete transmissions from a fixed land location to a mobile 
  maritime terminal.10  

4.   At all relevant times, a call from an end user in the United 
  States to, for example, an end user on an ocean vessel would, 
  if using fixed-to-mobile INMARSAT Standard-A, Standard-B, or 
  Standard-M service, typically traverse the following path: (1) 
  from the caller in the United States to (2) the caller's 
  interexchange carrier (``IXC'') to (3) a land earth station in 
  the United States to (4) an INMARSAT satellite to (5) the 
  INMARSAT mobile terminal on the ocean vessel.11  A call from 
  an end user located outside the United States to an ocean 
  vessel could also end up travelling through a LES in the 
  United States, if the caller's IXC chose to route the call to 
  such a LES rather than to a LES in another country.  A call 
  that originates outside the country in which the LES used is 
  located is called ``transit traffic.''12

5.   At all relevant times, COMSAT was the only entity authorized 
  to provide facilities-based INMARSAT Standard-B and Standard-M 
  digital services for the delivery of U.S.-originated fixed-to-
  mobile traffic.13  Thus, if IDB wished to provide such 
  services to its own end user customers in the United States, 
  it had to purchase both ground segment (i.e., LES capacity) 
  and space segment (i.e., satellite capacity) from COMSAT.14  
  By contrast, at all relevant times, IDB was authorized to 
  compete with COMSAT in the provision of facilities-based 
  INMARSAT Standard-A analog service for the delivery of U.S.-
  originated fixed-to-mobile traffic.15  Therefore, if IDB 
  wished to provide this service to its domestic end user 
  customers, it could do so by purchasing only space segment 
  from COMSAT and combining that with its own LES operations in 
  the United States.16

C.   The Contractual Relationship Between IDB and COMSAT

6.   On May 25, 1990, the parties entered into an agreement 
  setting forth the terms and conditions under which COMSAT 
  would provide a wide range of INMARSAT satellite services to 
  IDB (the ``1990 Agreement'').17  Pursuant to the terms of the 
  1990 Agreement, COMSAT would provide space segment for 
  Standard-A service at a rate of $2.75 for the initial 30 
  seconds and $.548 for each additional six seconds during peak 
  usage hours, and $1.40 for the initial 30 seconds and $.28 for 
  each additional six seconds during off-peak hours (i.e., $2.80 
  per minute).18 The 1990 Agreement also established that COMSAT 
  would provide Standard-B and Standard-M services ``as soon as 
  these are available via the INMARSAT system,''19 and that all 
  new such services would be provided at ``comparable discounts 
  (e.g., 25%) below COMSAT's tariffed rates.''20  This Agreement 
  went into effect in September 1991, and was to last for five 
  years thereafter, until September 1996.21

7.   Over a year prior to the expiration of the 1990 Agreement, 
  IDB sought to renegotiate the Agreement's terms.22  COMSAT 
  agreed to IDB's request and engaged in contract 
  negotiations.23  As a result, on June 30, 1995, IDB entered 
  into a new contract (``Contract'') with COMSAT that superceded 
  the 1990 Agreement.24  The new Contract concerned many, if not 
  all, of COMSAT's existing INMARSAT satellite services, 
  including INMARSAT Standard-A, -B, and -M services, as well as 
  any new INMARSAT service that COMSAT might provide in the 
  future.25   The new Contract contained lower rates than the 
  1990 Agreement.  For example, one rate for INMARSAT Standard-A 
  space segment was reduced from $2.80 per minute to $2.55 per 
  minute.26  Regarding INMARSAT Standard-B and -M services, the 
  new Contract provided that IDB would purchase satellite and 
  LES capacity for U.S.-originated fixed-to-mobile traffic at a 
  rate of $3.30 per minute.27  This Contract price of $3.30 was 
  more than 25% below COMSAT's tariffed rates for these services 
  (i.e., $5.55 for Standard-B, $4.95 for Standard-M).28  
  Moreover, the Contract expressly entitled IDB to any lower 
  rate that COMSAT might charge other carriers in the future for 
  INMARSAT Standard-B and -M services for the delivery of U.S.-
  originated fixed-to-mobile traffic.29  The Contract did not 
  mention foreign-originated fixed-to-mobile traffic.30 

8.   The Contract had a term of approximately four years.  Thus, 
  the Contract did not expire until September 2, 1999.31  As of 
  the date that the instant complaint was filed (i.e., September 
  25, 1997), IDB had not purchased from COMSAT any INMARSAT 
  Standard-B or Standard-M service for the delivery of U.S.-
  originated fixed-to-mobile traffic.32


D.   IDB's Complaint Against COMSAT

9.   In August 1997, COMSAT began charging a foreign carrier, 
  Cable & Wireless, $2.50 per minute for INMARSAT Standard-B and 
  Standard-M services for the delivery of foreign-originated 
  fixed-to-mobile traffic.  This was $.80 less than the $3.30 
  Contract rate for the delivery of U.S.-originated traffic.33

10.  On September 25, 1997, approximately halfway through the 
  Contract's term, IDB filed the instant complaint.  The 
  complaint alleges that COMSAT violated the Communications Act 
  by refusing to lower immediately the Contract's price for 
  INMARSAT Standard-B and -M services from $3.30 to $2.50 per 
  minute.

11.  In particular, the complaint alleges that section 202(a)34 
  prohibited COMSAT from continuing to charge IDB the Contract 
  price of $3.30 per minute for the delivery of U.S.-originated 
  traffic, because COMSAT was simultaneously charging Cable & 
  Wireless $2.50 per minute for the delivery of foreign-
  originated traffic.35  IDB premises this claim on the 
  assertion that COMSAT's fixed-to-mobile INMARSAT Standard-B 
  and Standard-M services are the same for the delivery of U.S.-
  originated traffic as they are for the delivery of foreign-
  originated traffic.36 

12.  IDB also asserts that the Contract price for the delivery of 
  U.S.-originated traffic via INMARSAT Standard-B and Standard-M 
  services was unreasonable, in violation of section 201(b) of 
  the Act,37 because it was unrelated to COMSAT's underlying 
  costs.38  To support this claim, IDB points out that (i) 
  INMARSAT's price to COMSAT for satellite capacity was no more 
  than $1.50 per minute;39 and (ii) COMSAT's price to Cable & 
  Wireless of $2.50 per minute presumably covered COMSAT's 
  costs.40  Therefore, IDB argues that the $3.30 rate at which 
  the Contract offered COMSAT's INMARSAT Standard-B and 
  Standard-M services for U.S.-originated traffic was ``clearly 
  related to COMSAT's monopoly status, not to COMSAT's 
  costs.''41

13.  For relief, IDB requests a Commission order requiring COMSAT 
  to disregard the Contract's price terms and offer IDB the same 
  price for fixed-to-mobile INMARSAT Standard-M and Standard-B 
  services that it offers to Cable & Wireless.42  In other 
  words, IDB is asking the Commission to reform the Contract so 
  that the price at issue for the delivery of U.S.-originated 
  traffic matches the price that COMSAT subsequently agreed to 
  charge Cable & Wireless for the delivery of foreign-originated 
  traffic.43  

III. IDB HAS FAILED TO SATISFY THE HIGH PUBLIC INTEREST STANDARD 
     UNDER THE SIERRA-MOBILE DOCTRINE FOR THE MODIFICATION OF THE 
     PRE-EXISTING CONTRACT.

A.   Description of the Sierra-Mobile Doctrine

14.  Under the Sierra-Mobile doctrine, the Commission may revise 
  the terms of a private contract between two carriers 
  concerning communications services.44  The Commission may do 
  so, however, only when the contract's terms ``adversely affect 
  the public interest.''45 

15.  The threshold for demonstrating sufficient harm to the 
  public interest to warrant contract reformation under the 
  Sierra-Mobile doctrine is much higher than the threshold for 
  demonstrating unreasonable conduct under sections 201(b) and 
  202(a) of the Act.46  Thus, a carrier cannot obtain the remedy 
  of contract reformation by showing only that the contract 
  requires it to pay an unduly high price for communications 
  services.47  Such private economic harm, standing alone, lacks 
  the substantial and clear detriment to the public interest 
  required by the Sierra-Mobile doctrine.48

16.  There is a well-established reason why the Sierra-Mobile 
  standard for contract reformation is high:  preserving the 
  integrity of contracts is vital to the proper functioning of 
  the carrier-to-carrier communications market.49  Indeed, the 
  long-term health of the communications market depends on the 
  certainty and stability that stems from the predictable 
  performance and enforcement of carrier-to-carrier contracts.  
  As one court aptly stated in an analogous context, ``[i]f the 
  integrity of contracts is undermined, business would be 
  transacted without legally enforceable assurances and . . . 
  the market, the industry and ultimately the consumer would 
  suffer.''50



B.   Application of the Sierra-Mobile Doctrine

17.  All of IDB's assertions that the Commission should reform 
  the Contract under the Sierra-Mobile doctrine rest almost 
  entirely on one fact:  two years into the four-year Contract 
  term, COMSAT began to charge Cable & Wireless a lower price 
  for INMARSAT Standard-B and -M services for the delivery of 
  transit traffic than COMSAT charged IDB under the Contract for 
  those services for the delivery of U.S.-originated traffic.51  
  As explained above, however, it is well established that, 
  standing alone, a disparity between a long-term contract price 
  and a price subsequently offered to someone else fails to 
  justify the remedy of contract reformation under the Sierra-
  Mobile doctrine.52  Though IDB doubtless would have preferred 
  a lower price for COMSAT's services, such private ``harm'' 
  does not equate to public interest harm.

18.  Indeed, one primary purpose of long-term contracts is to 
  allocate between the parties the risk of future changes in the 
  market price. The seller accepts certain risk that the market 
  price will rise, and the buyer accepts certain risk that the 
  market price will fall.53  IDB's request here is that the 
  Commission frustrate this purpose and impose essentially a 
  ``heads I win, tails you lose'' regime in IDB's favor - IDB 
  gets to take advantage of subsequent reductions in the market 
  rate, while COMSAT remains locked in to the Contract price 
  even if the market rate later rises.54  We perceive no public 
  interest in reaching such an unfair and harmful result.  
  Instead, the parties should generally ``be required to live 
  with their bargains as time passes and various projections 
  about the future are proved correct or incorrect.''55

19.  In support of its assertion that there is a public interest 
  component to the alleged harm, IDB argues that the end-user 
  customers of other IXCs (such as AT&T) to whom COMSAT actually 
  charged the same Contract price paid their IXCs more than they 
  should have for calls made via COMSAT's INMARSAT Standard-B 
  and -M services.56  This argument, however, is conclusory and 
  unsupported in the record.  IDB does not ``offer any evidence 
  (beyond speculation) that . . . ratepayers . . . were 
  adversely affected by the existing rates; it did not, for 
  example, even attempt to show how much if any of the rate 
  disparity was passed on to [IXC] ratepayers rather than borne 
  by the [IXC] itself.''57  IDB also does not offer any evidence 
  that any price reductions to the IXCs would have been passed 
  through, in whole or in part, to the IXCs' end-user customers.  
  Thus, IDB's bald argument fails to support a finding of the 
  requisite harm to the public interest.58  As one court 
  assessing similar circumstances stated, ``a mere rate 
  disparity or a benefit to the purchasing utility or its 
  customers from a rate modification does not suffice, without 
  more, to satisfy'' the ``stringent Mobile-Sierra public 
  interest standard.''59

20.  There are other reasons why the remedy of contract 
  reformation under the Sierra-Mobile doctrine is inappropriate 
  here.  First, the Commission has previously recognized a 
  disparity between rates for satellite services for the 
  delivery of U.S.-originated traffic and for the delivery of 
  transit traffic, but declined to regulate transit traffic.60  
  Moreover, COMSAT's rate for facilities-based INMARSAT 
  Standard-B and Standard-M services for the delivery of U.S.-
  originated fixed-to-mobile traffic was but one of many 
  elements of the Contract.  For example, the Contract addressed 
  the provision of a wide range of other satellite services, 
  such as space segment for INMARSAT Standard-A services.61  
  Often when parties negotiate a contract that addresses such a 
  wide range of products or services, there is some give-and-
  take between issues.  That is, often a party accepts less 
  advantageous terms for the provision or purchase of one 
  product or service in exchange for more favorable terms for 
  the provision or purchase of another product or service.  We 
  hesitate to reform one element of a contract given the 
  possibility of this type of ``horse trading.''62

21.  This does not end our analysis, however.  IDB correctly 
  points out that the public interest might be harmed if we were 
  to enforce a contract term obtained through abuse of market 
  power.63  IDB asserts that COMSAT obtained the Contract rates 
  at issue here through the abuse of market power.  IDB bases 
  that assertion solely on the fact that, at the time the 
  Contract was negotiated, COMSAT was the only provider of 
  facilities-based INMARSAT Standard-B and -M services for the 
  delivery of U.S-originated fixed-to-mobile traffic.64  For the 
  following reasons, we conclude that IDB has failed to meet its 
  burden of demonstrating that COMSAT obtained the contested 
  Contract rates through abuse of market power.

22.  In order for an entity to abuse market power, it must first 
  possess market power.  Assessing whether an entity possesses 
  market power is a difficult task.  The essential first step in 
  that task is precisely defining the particular product or 
  service market over which the entity allegedly has power.65  
  According to one classic iteration of this step, ``[t]he outer 
  boundaries of a product market are determined by the 
  reasonable interchangeability of use or the cross-elasticity 
  of demand between the product itself and substitutes for 
  it.''66  In other words, a properly defined product or service 
  market includes not only the specific product or service at 
  issue, but also any reasonable substitutes.67

23.  IDB ignores this threshold step in assessing COMSAT's 
  alleged market power.  Although IDB has the burden of showing 
  an absence of available substitutes for these products, IDB 
  makes no effort to demonstrate that facilities-based INMARSAT 
  Standard-B and Standard-M services for the delivery of U.S.-
  originated fixed-to-mobile traffic, by themselves, constituted 
  a distinct product market during the relevant period.  In 
  particular, IDB fails to submit any evidence that there 
  existed in 1995 no reasonable substitutes for such INMARSAT 
  Standard-B and Standard-M services.  

24.  This dearth of record evidence is fatal to IDB's assertion, 
  because the lack of reasonable substitutes, for market 
  definition purposes, is far from self-evident.  In fact, the 
  record contains some evidence indicating that facilities-based 
  INMARSAT Standard-A service for the delivery of U.S.-
  originated fixed-to-mobile traffic  which IDB itself provided 
   was at least one potentially reasonable substitute for 
  INMARSAT Standard-B and Standard-M services;68 and IDB makes 
  no claim that the Contract price for INMARSAT Standard-A space 
  segment was skewed by market power or in any other way 
  unreasonable.  Furthermore, in a related vein, IDB proffers no 
  evidence to rebut COMSAT's contention that COMSAT's bargaining 
  power was circumscribed by the possibility that abusively high 
  prices for facilities-based INMARSAT Standard-B and -M 
  services would have caused IDB to seek authorization to 
  provide such services itself, which IDB had already done with 
  respect to INMARSAT Standard-A services (and which IDB 
  ultimately did do on the day after it filed this complaint).69  
  Therefore, the record does not permit us to conclude that 
  COMSAT had market power in any material market, which, in 
  turn, precludes us from concluding that COMSAT abused market 
  power such that we should reform the Contract under the 
  Sierra-Mobile doctrine.70

25.  In any event, to the extent that the record speaks at all to 
  the issue of COMSAT's conduct during the Contract's formation, 
  it suggests no abuse of any market power.  For example, COMSAT 
  agreed to renegotiate the parties' pre-existing 1990 Agreement 
  even though over a year remained on the Agreement's term.  In 
  addition, COMSAT agreed in the new Contract to lower rates 
  than were specified in the 1990 Agreement.71  Moreover, COMSAT 
  agreed in the new Contract to give IDB any lower rate for 
  U.S.-originated traffic that COMSAT might give in the future 
  to some other carrier.72  Furthermore, the Contract's rates 
  were substantially lower than COMSAT's contemporaneous 
  tariffed rates.73  Finally, IDB proffered no evidence in the 
  record that, during the Contract negotiations or shortly 
  thereafter, IDB ever complained internally, to COMSAT, or to 
  the Commission that the negotiation process or the Contract's 
  rates were abusive or unfair.  Thus, the record fails to 
  justify a conclusion that COMSAT obtained the Contract rates 
  at issue through abuse of market power.

26.  In sum, IDB has not submitted sufficient record evidence to 
  demonstrate that COMSAT harmed the public interest by 
  refusing, mid-way through the Contract's term, to reduce the 
  Contract's rates for facilities-based INMARSAT Standard-B and 
  -M services for the delivery of U.S.-originated fixed-to-
  mobile traffic.  Accordingly, IDB has failed to establish 
  entitlement to reformation of the Contract under the Sierra-
  Mobile doctrine.  Thus, we deny IDB's complaint in its 
  entirety.

                     IV.     ORDERING CLAUSE

27.  ACCORDINGLY,  IT IS ORDERED, pursuant to sections 1, 4(i), 
  4(j), 201, 202, and 208 of the Communications Act of 1934, as 
  amended, 47 U.S.C.  151, 154(i), 154(j), 201, 202, 208, that 
  the above-captioned formal complaint filed by IDB Mobile 
  Communications, Inc. against COMSAT Corporation IS DENIED IN 
  ITS ENTIRETY, and this proceeding is TERMINATED WITH 
  PREJUDICE.

                                             
                              FEDERAL COMMUNICATIONS COMMISSION  
                              
                              Magalie Roman Salas
                              Secretary
_________________________

1         47 U.S.C.  208.
2         47 U.S.C.  201(b), 202(a).
3         IDB Mobile Communications, Inc. v. COMSAT Corporation, 
Formal Complaint, File No. E-97-48 (filed Sept. 25, 1997) 
(``Complaint'').
4         See Federal Power Commission v. Sierra Pacific Power 
Co., 350 U.S. 348 (1956) (``Sierra''); United Gas Pipe Line Co. 
v. Mobile Gas Service Corp., 350 U.S. 332 (1956) (``Mobile'').  
The doctrine is also known as the ``Mobile-Sierra'' doctrine.
5         See, e.g., COMSAT Corp. v. Stratos Mobile Networks 
(USA), LLC, Memorandum Opinion and Order, 15 FCC Rcd 22338 (Enf. 
Bur. 2000), aff'd, COMSAT Corp. v. Stratos Mobile Networks (USA), 
LLC, Order on Review, FCC 01-72, 2001 WL 178414 (F.C.C.) 
(released Feb. 26, 2001), petition for review pending, COMSAT 
Corp. v. FCC, Docket No. 01-1161 (D.C. Cir. filed April 6, 2001); 
COMSAT Corp. v. IDB Mobile Communications, Inc., Memorandum 
Opinion and Order, 15 FCC Rcd 7906 (Enf. Bur. 2000), Order on 
Review, 15 FCC Rcd 14697 (2000), petition for review pending, 
COMSAT Corp. v. FCC, Docket No. 00-1383 (D.C. Cir. filed Aug. 24, 
2000).
6         Complaint at 2-3,  6; IDB Mobile Communications, Inc. 
v. COMSAT Corporation, Answer of COMSAT Corporation, File No. E-
97-48 (filed Nov. 10, 1997) at 17,  30 (``Answer'').
7         Answer at 1,  1.  See 47 U.S.C.  701, et seq. On 
July 31, 2000, COMSAT was granted authority to assign its space 
and earth station licenses to Comsat Government Systems, LLC 
(CGS-LLC), a wholly owned subsidiary of Lockheed Martin 
Corporation, as part of the merger of Lockheed Martin and COMSAT.   
Lockheed Martin Corp., COMSAT Government Systems, LLC, and COMSAT 
Corp., Applications for Transfer of Control of COMSAT Corporation 
and Its Subsidiaries, Licensees of Various Satellite, Earth 
Station Private Land Mobile Radio and Experimental Licenses, and 
Holders of International Section 214 Authorizations, Order and 
Authorization, 15 FCC Rcd 22910 (2000).
8         Answer at 2,  3.  Except where otherwise indicated, 
references to ``INMARSAT services'' refer to a combination of 
space segment (i.e., satellite capacity) and ground segment 
(i.e., LES capacity).
9         See IDB Mobile Communications, Inc. v. COMSAT 
Corporation, Letter from Martin F. Cuniff, Counsel for COMSAT 
Corporation, to Warren Firschein, Attorney, Market Disputes 
Resolution Division, Enforcement Bureau, FCC, File No. E-97-48 
(filed February 2, 2001) at 1 (``February 2, 2001 Letter'').
10         See IDB Mobile Communications, Inc. v. COMSAT 
Corporation, Letter from Alfred M. Mamlet and Colleen A. 
Sechrest, Counsel for IDB Mobile Communications, Inc., to Warren 
Firschein, Attorney, Market Disputes Resolution Division, 
Enforcement Bureau, FCC, File No. E-97-48 (filed January 16, 
2001) (``January 16, 2001 Letter'').
11        Complaint at 4,  11; Answer at 18,  35; IDB Mobile 
Communications, Inc. v. COMSAT Corporation, IDB Mobile 
Communications, Inc. Supplemental Brief, File No. E-97-48 (filed 
Jul. 14, 2000) at 4 (``IDB Supplemental Brief''). 
12        Answer at 5-6,  13.  Domestic transit traffic is any 
international message communication that passes through U.S. 
telecommunications facilities but originates and terminates 
outside the United States.   Normally, only the sender's and 
receiver's carriers participate in the transmission and reception 
of a message.  The process of ``transiting'' occurs when a third 
carrier (in this case COMSAT) is needed to serve as an 
intermediary because the sender and receiver are geographically 
separate, and direct interconnection is technologically 
difficult, inferior, or impossible.  See Implementation and Scope 
of the International Settlements Policy for Parallel 
International Communications Routes, Order on Reconsideration, 2 
FCC Rcd 1118, 1118, 1124,  3 n.5 (1987); Establishment of 
Regulatory Policies Pursuant to the Communications Act of 1934 
With Respect to Use of Communication Facilities in the United 
States by Foreign Entities for Communication Traffic Transiting 
the United States, Memorandum Opinion and Order, Docket No. 
19031, FCC 81-188, 1-2,  2 (rel. May 5, 1981) (``Transit Traffic 
Order''); 47 C.F.R.  43.61(f) (1991).  Unless otherwise 
indicated, in this order we use the terms ``transit traffic'' and 
``foreign-originated traffic'' interchangeably.
13        Complaint at 3,  10; Answer at 17,  34; IDB Mobile 
Communications, Inc. v. COMSAT Corporation, IDB Mobile 
Communications, Inc. Final Brief, File No. E-97-48 (filed Feb. 
18, 1998) at 3 (``IDB Brief''); IDB Mobile Communications, Inc. 
v. COMSAT Corporation, Brief of COMSAT Corporation, File No. E-
97-48 (filed Feb. 17, 1998) at 6 (``COMSAT Brief''); IDB 
Supplemental Brief at 23. 
14        Complaint at Appendix A (Affidavit of Joanne Suppa) at 
1,  3;
15        Complaint at 3,  10; Answer at 2,  4; COMSAT Brief at 
3, 4.
16         In fact, with regard to Standard-A service to and from 
the Atlantic and Pacific Ocean regions, the parties' contract 
provided solely for the sale of INMARSAT space segment.  January 
16, 2001 Letter at Attachment B, Attachment 1 at  2.1; Answer at 
3,  5; COMSAT Brief at 4; IDB Supplemental Brief at 4. 
17        See January 16, 2001 Letter at Exhibit A.
18        Id. at Exhibit A,  1.8.
19        Id. at Exhibit A, Annex A,  1.1.
20        Id. at Exhibit A,  2.3. 
21        Id. at Exhibit A,  1.3.  See February 2, 2001 Letter 
at 1.
22        COMSAT Brief at 4, 7, 9; IDB Mobile Communications, 
Inc. v. COMSAT Corporation, IDB Mobile Communications, Inc. Final 
Reply, File No. E-97-48 (filed Mar. 9, 1998) at 10-11 (``IDB 
Reply'').
23        IDB Mobile Communications, Inc. v. COMSAT Corporation, 
Reply Brief of COMSAT Corporation, File No. E-97-48 (filed Mar. 
9, 1998) at 3 (``COMSAT Reply''); COMSAT Brief at 4, 7, 9; IDB 
Reply at 10-11.
24        See COMSAT Brief at 9; January 16, 2001 Letter at 
Exhibit B, Preamble. 
25        Complaint at 4,  12; Answer at 3, 18,  5, 36; COMSAT 
Brief at 4, 7-8; January 16, 2001 Letter at Exhibit B.  Pursuant 
to 47 U.S.C.  211(a), the Contract was filed with the Commission 
on August 2, 1995.  Answer at 28,  55a; COMSAT Reply at 5. 
26        See January 16, 2001 Letter at Exhibit B, Annex.  In 
addition, Standard-A space segment during ``peak'' hours was 
reduced from approximately $5.48 per minute to a maximum of $5.10 
per minute with the possibility of further discounts that would 
reduce the per-minute rate to as low as $4.50.  January 16, 2001 
Letter at Exhibit B, Attachment 1,  2.2.  The Contract also 
reduced the rates for, inter alia, High Gain Aeronautical Data 
(from $.28 to $.19 per kilobit); Voice Group Call (from 
approximately $16.50 to $16.10 per minute); and Low-Power Multi-
Channel Ship Station Service during off-peak hours (from $2.80 to 
$2.50 per minute).  Compare January 16, 2001 Letter at Exhibit A, 
Annex at  1.8 with January 16, 2001 Letter at Exhibit B, Annex. 
27        Complaint at 4,  12; Answer at 18-19,  36; January 
16, 2001 Letter at Exhibit B, Attachment 1 at  4.1.
28        IDB Mobile Communications, Inc. v. COMSAT Corporation, 
Supplemental Reply Brief of COMSAT Corporation, File No. E-97-48 
(filed Jul. 21, 2000) at App. A (``COMSAT Supplemental Reply''). 
Moreover, in June 1995, COMSAT's tariffed rate for INMARSAT 
Standard-A space segment was $9.30 per minute, whereas the 
Contract rate was $5.10.  See February 2, 2001 Letter at 3; 
January 16, 2001 Letter at Exhibit B, Annex.  In October 1996, 
COMSAT reduced the tariff rates for Standard-B and Standard-M 
services to $4.45 and $4.55 per minute, and permitted eligible 
customers to receive further discounts for high volume through a 
``customer discount program.''  COMSAT Supplemental Reply at App. 
A.
29        January 16, 2001 Letter at Exhibit B, Attachment 1 at  
4.1.
30        Answer at 3,  7.  See January 16, 2001 Letter at 
Exhibit B.
31        January 16, 2001 Letter at Exhibit B,  1.1; Answer at 
3,  5; COMSAT Brief at 4.
32        Answer at 2,  4; COMSAT Brief at 3, 5, 9; IDB Reply at 
11.
33        Answer at 21,  39; IDB Brief at 6, 9; IDB Reply at 5, 
7, 9.  IDB initially alleged that COMSAT offered these services 
to Cable & Wireless at $2.40 per minute.  See Complaint at 5,  
15. 
34        Section 202(a) of the Act makes it unlawful ``for any 
common carrier to make any unjust or unreasonable discrimination 
in charges . . . for or in connection with like communication 
service . . . or to make or give any undue or unreasonable 
preference or advantage to any particular person . . . .''  47 
U.S.C.  202(a). 
     35   Complaint at 2,  4; IDB Brief at 4-7; IDB Reply at 2-
3.
36        Complaint at 8-9,  20-22; IDB Brief at 5-6; IDB Reply 
at 4-5; IDB Supplemental Brief at 8-10; IDB Mobile 
Communications, Inc. v. COMSAT Corporation, IDB Mobile 
Communications, Inc. Supplemental Reply Brief, File No. E-97-48 
(filed Jul. 21, 2000) at 4-7 (``IDB Supplemental Reply'').
37        Section 201(b) of the Act states, in pertinent part, 
that ``[a]ll charges, practices, classifications, and regulations 
for and in connection with such communications service, shall be 
just and reasonable, and any such charge, practice, 
classification, or regulation that is unjust or unreasonable is 
hereby declared to be unlawful . . . .''  47 U.S.C.  201(b).
     38   Complaint at 11-12,  26-28; IDB Brief at 7-8; IDB 
Reply at 5-6.
     39   Complaint at 11,  26; IDB Brief at 8.  INMARSAT 
charges COMSAT, and all other INMARSAT signatories, $1.25 per 
minute for INMARSAT Standard-B service and $1.50 per minute for 
INMARSAT Standard-M service.  IDB Brief at 8.
40        Complaint at 11-12,  26-27; Answer at 27,  50; IDB 
Brief at 8.
41        Complaint at 12,  28.  See IDB Brief at 7-8.
42        Complaint at 15,  35; IDB Brief at 14-15; IDB Reply at 
13.
43        IDB also reserves its right to file a supplemental 
complaint for specific damages, should it prevail on the issue of 
liability.  Complaint at 15,  35.  In light of our denial of 
contract reformation, however, IDB has no basis on which to seek 
damages because reformation would be a necessary predicate to 
such damages.
44        See, e.g., Western Union Telegraph Co. v. FCC, 815 F.2d 
1495, 1501 (D.C. Cir. 1987); ACC Long Distance Corp. v. Yankee 
Microwave, Inc., Memorandum Opinion and Order, 10 FCC Rcd 654 
(1995). 
45        Sierra, 350 U.S. at 355.  See, e.g., Western Union, 815 
F.2d at 1501; Yankee Microwave, 10 FCC Rcd at 657,  17.  The 
parties agree that the Sierra-Mobile doctrine applies in this 
proceeding.  See, e.g., Complaint at 13,  32; Answer at 29,  
56; IDB Brief at 11-12; COMSAT Reply at 5.
46        See Potomac Electric Power Company v. Federal Energy 
Regulatory Commission, 210 F.3d 403, 407-408 (D.C. Cir. 2000); 
Papago Tribal Utility Authority v. Federal Energy Regulatory 
Commission, 723 F.2d 950, 953-54 (D.C. Cir. 1983) (Scalia, J.); 
Kansas Cities v. Federal Energy Regulatory Commission, 723 F.2d 
82, 87-88 (D.C. Cir. 1983) (Scalia, J.); Town of Norwood, 
Massachusetts v. Federal Energy Regulatory Commission, 587 F.2d 
1306, 1313, n.21 (D.C. Cir. 1978); Yankee Microwave, 10 FCC Rcd 
at 657,  17-19.  We rely herein on court decisions construing 
the Natural Gas Act, 15 U.S.C.  717 et seq., and the Federal 
Power Act, 16 U.S.C.  792 et seq., because the relevant 
provisions of those Acts are virtually identical in language and 
purpose to sections 201(b) and 202(a) of the Communications Act.  
Compare 15 U.S.C.  717c (a) and 16 U.S.C.  824d (a) with 47 
U.S.C.  201(b), and 15 U.S.C.  717c (b) and 16 U.S.C.  824d 
(b) with 47 U.S.C.  202(a); see Western Union, supra; Yankee 
Microwave, supra (both relying on court decisions construing the 
Natural Gas Act and the Federal Power Act in applying the Sierra-
Mobile doctrine to common carriers under the Communications Act).
47        See generally San Diego Gas & Electric Co. v. Federal 
Energy Regulatory Commission, 904 F.2d 727 (D.C. Cir. 1990) 
(rejecting request for contract reformation because request 
stemmed solely from subsequent drop in market price); Yankee 
Microwave, 10 FCC Rcd at 656-57,  16 (holding that the Sierra-
Mobile doctrine applies where ``a buyer subsequently demands 
lower rates when the market price falls after the contract has 
been signed'').
48        See, e.g., Sierra, 350 U.S. at 354-55 (explaining that 
a contract that may be ``unreasonable'' from a contracting 
party's perspective may nevertheless not contravene the public 
interest); PEPCO v. FERC, 210 F.3d at 409 (explaining that ``the 
fact that a contract has become uneconomic to one of the parties 
does not necessarily render the contract contrary to the public 
interest''); Papago v. FERC, 723 F.2d at 953, n.4 (explaining 
that discrimination against the contracting purchaser does not 
meet the Sierra-Mobile threshold, absent ``some independent harm 
to the public interest''); Yankee Microwave, 10 FCC Rcd at 657, 
 17-18 (declining to reform contract, because the complainant 
``allege[d] only private injury, an injury that resulted solely 
from [its] improvident bargain'').
49        See, e.g., Mobile, 350 U.S. at 344 (``By preserving the 
integrity of contracts, it permits the stability of supply 
arrangements that all agree is essential....'); PEPCO v. FERC, 
210 F.3d at 409 (``The court has repeatedly emphasized the 
importance of contract stability in a number of cases involving 
the Mobile-Sierra doctrine.''); Maine Public Service Co. v. 
Federal Energy Regulatory Commission, 964 F.2d 5, 10 (D.C. Cir. 
1992) (``This court has determined that contractual rates promote 
economic stability.''); San Diego v. FERC, 904 F.2d at 730 
(approving the fact that FERC ``placed great weight on the policy 
considerations behind contract stability....''). 
50        San Diego v. FERC, 904 F.2d at 730 (quoting Public 
Service Co. of New Mexico, 43 FERC  61,469 at 62,153 (June 13, 
1988)).  We note that the Sierra-Mobile analysis does not apply 
to interconnection agreements reached pursuant to sections 251 
and 252 of the Act, because the Act itself provides the standard 
of review of such agreements.  See 47 U.S.C.  252(e)(2).
51        See, e.g., Complaint at 5, 6, 7, 8, 11-12,  15, 17, 
18, 20, 27, 29; IDB Brief at 1, 4, 8-9, 12; IDB Reply at 3, 7, 8-
9, 12; IDB Supplemental Brief at 5, 20.  For the purposes of this 
discussion, we will assume, without deciding, that INMARSAT 
Standard-B and -M services for the delivery of U.S.-originated 
fixed-to-mobile traffic are ``like'' such services for the 
delivery of transit fixed-to-mobile traffic. 
52        See, e.g., PEPCO v. FERC, supra; Maine v. FERC, supra; 
San Diego v. FERC, supra; Norwood v. FERC, supra; Boroughs of 
Chambersburg v. Federal Energy Regulatory Commission, 580 F.2d 
573, 577-78 (D.C. Cir. 1978).
53        See, e.g., San Diego v. FERC, 904 F.2d at 730; Norwood 
v. FERC, 587 F.2d at 1312.
54        We note that IDB does not allege that, when the 
Contract was executed, COMSAT was offering a lower price for 
INMARSAT Standard-B and -M services to anyone else.
55        Norwood v. FERC, 587 F.2d at 1312.  See PEPCO v. FERC, 
210 F.3d at 410.
56        Complaint at 13,  31; IDB Brief at 12; IDB 
Supplemental Brief at 22; IDB Supplemental Reply at 4.  IDB does 
not make this argument regarding its own end-user customers, 
because IDB never purchased INMARSAT Standard-B or -M services 
from COMSAT.  Answer at 3-4,  7; COMSAT Brief at 3; IDB Reply at 
11; IDB Supplemental Brief at 13; COMSAT Supplemental Brief at 2.
57        PEPCO v. FERC, 210 F.3d at 409.
58        The bald nature of IDB's claim readily distinguishes it 
from the circumstances in International Settlement Rates, 12 FCC 
Rcd 19806 (1997), aff'd sub nom., Cable & Wireless P.L.C. v. 
Federal Communications Commission, 166 F.3d 1224 (D.C. Cir. 
1999), where the Commission invoked the Sierra-Mobile doctrine in 
revising international settlement rates that were causing 
substantial and substantiated harm to all Americans engaged in 
international communications.
59        PEPCO v. FERC, 210 F.3d at 404 (emphasis added).
60        Transit Traffic Order at 6,  15-17.
61        January 16, 2001 Letter at Exhibit B, Annex.
62        See, e.g., COMSAT Brief at 4, 7-9; COMSAT Reply at 3, 
6.
63        IDB Brief at 4, 10-12; IDB Reply at 7, 9, 10-11.  See 
PEPCO v. FERC, 210 F.3d at 410-411; Maine v. FERC, 964 F.2d at 
10; Norwood v. FERC, 587 F.2d at 1312-13; Yankee Microwave, 10 
FCC Rcd at 657,  17.
64        Complaint at 3-4,  10; IDB Brief at 6; IDB Reply at 
10-11.  IDB Supplemental Brief at 3-4.
65        See, e.g., Brown Shoe Co. v. United States, 370 U.S. 
294, 324 (1962); Applications of NYNEX Corp. and Bell Atlantic 
Corp. For Consent to Transfer Control of NYNEX Corp. and Its 
Subsidiaries, Memorandum Opinion and Order, 12 FCC Rcd 19985, 
20014,  49 (1997) (``NYNEX/Bell Atlantic Merger Order''); Merger 
of MCI Communications Corp. and British Telecommunications plc, 
Memorandum Opinion and Order, 12 FCC Rcd 15351, 15368,  35 
(1997).
66        Brown Shoe, 370 U.S. at 325.  See, e.g., NYNEX/Bell 
Atlantic Merger Order, 12 FCC Rcd at 20014-15,  50.
67        See, e.g., U.S. v. Continental Can Co., 378 U.S. 441, 
449 (1964); NYNEX/Bell Atlantic Merger Order, 12 FCC Rcd at 
20014-15,  50.  See generally IIA PHILLIP E. AREEDA ET AL., 
ANTITRUST LAW  500 et seq. (1980).  We recognize that this is an 
extremely oversimplified description of a very complex subject, 
but it suffices for purposes of this discussion.
68        See February 2, 2001 Letter at 3.
69        Answer at 16,  27b; COMSAT Brief at 6.  See Stratos 
Mobile Networks (USA), LLC Application For Authority To Provide 
U.S.-Originated Fixed-To-Mobile and Mobile-To-Fixed INMARSAT-B 
and -M Services Via U.S. Land Earth Stations, Memorandum Opinion 
and Order and Authorization, 14 FCC Rcd 15933 (Int. Bur. 1999).
70        Because the record has the shortcomings described 
above, we need not reach the question whether merely the 
possession of market power, even absent ``abuse'' of such power, 
should be considered in a Sierra-Mobile inquiry.  We note, 
however, that at least two federal circuit courts have 
``expressed skepticism about the relevance of uneven bargaining 
power in Mobile-Sierra analysis.''  PEPCO v. FERC, 210 F.3d at 
411 n.3 (noting the First Circuit's observations in Northeast 
Utils. Serv. Co. v. Federal Energy Regulatory Commission, 993 
F.2d 937, 961 (1st Cir. 1993)).  Cf., Norwood v. FERC, 587 F.2d 
at 1312 (suggesting that uneven bargaining power is common and 
not sufficient to question what occurred at the contract 
formation stage); but cf., Yankee Microwave, 10 FCC Rcd at 660,  
34.
71        COMSAT Reply at 3.  See  6, supra.
72        January 16, 2001 Letter at Exhibit B, at Attachment A, 
 4.1.  The fact that the Contract expressly entitles IDB to 
subsequent price reductions regarding U.S.-originated traffic, 
but says nothing about subsequent price reductions regarding 
transit traffic, bolsters our conclusion that it would be 
inappropriate to reform the Contract.  Had IDB thought to 
``protect'' itself from subsequent price reductions regarding 
transit traffic, it appears that IDB could have sought a 
provision in the Contract to do so.   
73        For example, in June 1995, COMSAT's tariffed per-minute 
rates for facilities-based INMARSAT Standard-B and M services for 
the delivery of U.S.-originated fixed-to-mobile traffic were 
$5.55 and $4.95, respectively, whereas the Contract's per-minute 
rates for those same services were $3.30.   See COMSAT 
Supplemental Reply at Exhibit A; January 16, 2001 Letter at 
Exhibit B, at Attachment A,  4.1.