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Federal Communications Commission
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This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

Report No. IN 97-37 INTERNATIONAL ACTION November 25, 1997

(IB Docket 97-111, CC Docket 93-23)

The Commission today adopted policies that permit non-U.S. licensed satellites to provide services in the United States. Today's decision will promote competition in the U.S. satellite services market, providing significant benefits for U.S. consumers in the form of lower prices, improved service quality, and innovative service options. As a result of today's actions, the Commission expects that new satellite service providers will begin to offer service in the United States early in 1998.

The Commission's actions largely replace the existing procedures for reviewing requests for market access from non-U.S. licensed satellite service providers. The steps taken today underscore the U.S. leadership role in the development and deployment of satellite services. In fact, in early 1996, the Commission eliminated the regulatory distinction between domestic and international satellite service. The impact of that decision was to allow U.S. satellite systems to provide domestic or international service, or both, subject to authorization from foreign administrators.

In February 1997, the United States and 49 other nations made binding commitments in the World Trade Organization (WTO) Agreement on Basic Telecommunications Services to open satellite markets to competition. The International Satellite Service Order, along with its companion Order liberalizing market access for foreign telecommunications providers, takes steps that enhance competition in the U.S. satellite services market, consistent with the U.S. commitments in the WTO Agreement. These Orders reflect the determination that the Commission adopt an open entry approach. With these Orders, the Commission has carried out the letter and spirit of the commitments made by the United States in February. The Commission emphasized that the United States will carefully review the market-opening steps taken by the rest of the world.

As a result of the global commitments made in the WTO Agreement, foreign carriers and U.S. carriers alike will have new opportunities to compete in previously closed markets. The Commission's new policies replace the Commission's current approach of reviewing applications involving foreign satellites on a case-by-case basis with a competitive framework that recognizes the WTO-member and non-WTO-member status of foreign applicants.

Specifically, the Commission adopted the following policies and rules with regard to satellite services:

Policies for Access to Satellite Systems Licensed by WTO Members

The Commission adopted a presumption in favor of access to satellite systems licensed by WTO Members that provide fixed and mobile services. WTO Member commitments under the WTO Basic Telecom Agreement will fundamentally alter the competitive environment for these satellite services. The Commission recognizes, however, that conditions it could impose on a license might not adequately constrain the potential for anticompetitive harm in a particular case and therefore, in the exceptional case in which an application poses a very high risk to competition, it reserved the right to deny the authorization.

Adoption of the ECO-Sat Test

The Commission adopted a new test to govern entry by satellites licensed by non-WTO Members and by satellites that provide DTH services, DBS, and DARS (all services not covered by U.S. commitments in the WTO Basic Telecom Agreement). For applicants to provide these services, the Commission will examine whether U.S. satellites have effective competitive opportunities in the relevant foreign satellite markets (the ECO-Sat test) to determine whether to allow non-U.S. satellites to serve the United States.

Policies Regarding Intergovernmental Satellites Organizations

The Order established a basis upon which the Commission will consider requests from COMSAT to provide U.S. domestic service via INTELSAT and Inmarsat. The Commission will require COMSAT to waive any immunities that it derives from its relationship with INTELSAT and Inmarsat and then to show that use of those satellites will enhance competition in the U.S. satellite market. The Commission will treat satellites of affiliates of INTELSAT and Inmarsat that are licensed by a WTO Member the same as other WTO Member-licensed systems. Operating Requirements for all Satellites

The Commission also will consider other public interest factors, such as spectrum availability and eligibility and operating requirements, in reviewing requests to access foreign-licensed satellites. These systems will be required to conform to the financial, technical and legal requirements that the Commission currently imposes on satellite systems which it licenses directly. The requirements include a prohibition on exclusive operating arrangements, two degrees orbital spacing and universal service obligations. In considering requests to access foreign-licensed satellite systems, the Commission will continue its policy of maximizing use of available spectrum. Action by the Commission November 25, 1997, Report and Order (FCC 97-399). Chairman Kennard, Commissioners Ness, Furchtgott-Roth, Powell and Tristani with Chairman Kennard issuing a separate statement.

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News Media contacts: Meribeth McCarrick at (202) 418-0256 or Rosemary Kimball at (202) 418-0511 International Bureau contacts: Fern Jarmulnek at (202) 418-0751, Linda Haller at (202) 418-0760 or Bob Calaff at (202) 418-0420