WPC_ 2fBJZlCourier3|m& >*x6X@`7X@HP LaserJet 5SiHPLAS5SI.PRSx  @\&FX@ S'#X\  P6G;ɒP##&a\  P6G;u&P#2KXKSCourierTimes New Roman"i~'^09CSS999S]+9+/SSSSSSSSSS//]]]Ixnnxg]xx9?xgxx]xn]gxxxxg9/9MS9ISISI9SS//S/SSSS9?/SSxSSIP!PZ9+ZM999+999999S9S/xIxIxIxIxIlnIgIgIgIgI9/9/9/9/xSxSxSxSxSxSxSxSxSxSxIxSxRxSxSxS]SxIxIxInInInZnIxigIgIgIgIxSxSxSxZxSxZxS9/9S999Su]ZZxSg/gCg9g9g/xSbxSxSxSxSxn9n9n9]?]?]?]ZgFg/gMxSxSxSxSxSxSxxZgIgIgIxSg9xS]?g9xSi+SS88WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN*x6X@`7X@ y.X80,ɒX\  P6G;P2a=5,u&a\  P6G;&P]ø{MoVWy?u+j NvQZVk JDxJ }"i~'^5>I\\>>>\g0>03\\\\\\\\\\33gggQyyrg>Frgygrr>3>T\>Q\Q\Q>\\33\3\\\\>F3\\\\QX%Xc>0cT>>>0>>>>>>\>\3QQQQQwyQrQrQrQrQ>3>3>3>3\\\\\\\\\\Q\Z\\\g\QQQyQyQycyQtrQrQrQrQ\\\c\c\>3>\>>>\gcc\r3rIr>r>r3\l\\\\y>y>y>gFgFgFgcrMr3rT\\\\\\crQrQrQ\r>\gFr>\t0\\=!=WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNBnnBT\>Q\\\\\3;\7;\7>>QQ\??n\\nBnnBmgg>Q\7"yyyy\njc\gnn\2  Z :KD3|m& HP LaserJet 5SiHPLAS5SI.PRS&a\  P6G;\&F&P"i~'^5>I\\>>>\g0>03\\\\\\\\\\33gggQyyrg>Frgygrr>3>T\>Q\Q\Q>\\33\3\\\\>F3\\\\QX%Xc>0cT>>>0>>>>>>\>\3QQQQQwyQrQrQrQrQ>3>3>3>3\\\\\\\\\\Q\Z\\\g\QQQyQyQycyQtrQrQrQrQ\\\c\c\>3>\>>>\gcc\r3rIr>r>r3\l\\\\y>y>y>gFgFgFgcrMr3rT\\\\\\crQrQrQ\r>\gFr>\t0\\=!=WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNBnnBT\>Q\\\\\3;\7;\7>>QQ\??n\\nBnnBmgg>Q\7"yyyy\njc\gnn\2K K KWK"i~'^:DPddDDDdp4D48dddddddddd88pppX|pDL|pp||D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDdDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddxHxxHvppDXd<"dxtldpxxd"i~'^:DpddȨDDDdp4D48ddddddddddDDpppd|Ld|pȐD8DtdDdpXpXDdp8Dp8pdppXLDpdddXP,PhD4htDDD4DDDDDDdDp8dddddȐXXXXXJ8J8J8J8pddddppppddpddddzpdddXXhXXXXXdddhdptL8LpLDLpphhp8ZDP8pppddƐXXXpLpLpLphfDtppppppȐhXXXpDppLDd4ddC6CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxHjdDddddddg\\>>>\g0>03\\\\\\\\\\>>ggg\yyrF\yrgyy>3>j\>\gQgQ>\g3>g3g\ggQF>g\\\QI(I_>0_j>>>0>>>>>>\>g3\\\\\QyQyQyQyQD3D3D3D3g\\\\gggg\\g\\\\pg\\\QQ_QyQyQyQyQ\\\_\gjF3FgF>Fgg__gy3ySy>yIy3ggg\\QQQgFgFgFg_y^y>yjgggggg_yQyQyQgy>ggFy>\0\\=2=WxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNBnnBa\>\\\\\\7>\7>\7>>\\\??n\\nBnnBsgg>\\7"yyyy\nlc\gnn\"i~'^5>M\\>>>\}0>03\\\\\\\\\\>>}}}\rryrr>Qygyrr\grrggF3FM\>\\Q\Q3\\33Q3\\\\FF3\QyQQFI3Ic>0cM>>>0>>>>>>\>\3r\r\r\r\r\yyQrQrQrQrQ>3>3>3>3y\\\\\\\\\gQr\\\\gQ\r\r\r\r\yQyQycyQnrQrQrQrQ\\\c\c\>3>\>>>\\ccyQg3gBg>g;g3y\jy\y\\\yrFrFrF\F\F\FccgBg3gM\\\\\\ygcgFgFgF\g>y\\Fg>g\n0\\=(=WddddddddddddddddddddddddddddddddddddddddNBnnB_\F\\\\\\3;\7;\7>>gg\??n\\nBnnBb\\>g\7"yyyy\njc\}nn\"i~'^ %,77\V%%%7>%7777777777>>>0eOIIOD>OO%*ODaOO>OI>DOOgOOD%%37%07070%777V7777%*77O77055;%;3%%%%%%%%%7%7O0O0O0O0O0aHI0D0D0D0D0%%%%O7O7O7O7O7O7O7O7O7O7O0O7O6O7O7O7>7O0O0O0I0I0I;I0OED0D0D0D0O7O7O7O;O7O;O7%%7%%%7M>;;O7DD,D%D%DO7AO7O7O7O7aOI%I%I%>*>*>*>;D.DD3O7O7O7O7O7O7gOO;D0D0D0O7D%O7>*D%O7E77%%WMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN(BB(37%07777j7#TT7!#TT7T!%%007n&&Bn77lBTn(nBB(AZZ>>n%07\n!"IIIITTenn7TnB@;7>lBBn7"i~'^"(22TN"""28"2222222222888,\HBBH>8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""2"2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""/>/>/>/x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxIxIxWxIx{nInInInISSSWS]a?/?]?9?]]WW]n/nKn9nCn/x]xx]x]SSxxIxIxI]?]?]?]WnUn9nax]x]x]x]x]x]xxWnInInIx]n9x]]?n9xSz+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN"q;<#e<$e=%v=Document[4]'Eg%Document Style W4A O g% W4I O g"  . Document[6]'Eg%Document Style W4A O g% W4I O g#  Document[5]'Eg%Document Style W4A O g% W4I O g$  Document[2]'Eg%Document Style W4A O g% W4I O g%*    2m@&p;>'>(=?)?Document[7]'Eg%Document Style W4A O g% W4I O g&  ` ` ` Right Par[1]Eg%Right-Aligned Paragraph NumbersO g% W4I O g'8 @  Right Par[2]Eg%Right-Aligned Paragraph NumbersO g% W4I O g(A@` ` `  ` ` ` Document[3]'Eg%Document Style W4A O g% W4I O g)0     2eC*@+CA,A-BRight Par[3]Eg%Right-Aligned Paragraph NumbersO g% W4I O g*J` ` ` @  ` ` ` Right Par[4]Eg%Right-Aligned Paragraph NumbersO g% W4I O g+S` ` `  @  Right Par[5]Eg%Right-Aligned Paragraph NumbersO g% W4I O g,\` ` `  @hhh hhh Right Par[6]Eg%Right-Aligned Paragraph NumbersO g% W4I O g-e` ` `  hhh@ hhh 2oF.C/_D00E1ERight Par[7]Eg%Right-Aligned Paragraph NumbersO g% W4I O g.n` ` `  hhh@  Right Par[8]Eg%Right-Aligned Paragraph NumbersO g% W4I O g/w` ` `  hhh@ppp ppp Document[1]'Eg%Document Style W4A O g% W4I O g0F    ׃  Technical[5]Eg%Technical Document Style O g% W4I O g1&!"  . 2H2F3&G4G5WHTechnical[6]Eg%Technical Document Style O g% W4I O g2&#$  . Technical[2]Eg%Technical Document Style O g% W4I O g3*%&    Technical[3]Eg%Technical Document Style O g% W4I O g4''(   Technical[4]Eg%Technical Document Style O g% W4I O g5&)*   2MW6I7I8RJ9v JTechnical[1]Eg%Technical Document Style O g% W4I O g64+$,     Technical[7]Eg%Technical Document Style O g% W4I O g7&-.  . Technical[8]Eg%Technical Document Style O g% W4I O g8&/0  . MACNormal9;     X` hp x (#%'0*,.8135@8:<    #:}D4P XP#T I. A. 1. a.(1)(a) i) a)T,0*ÍÍ,*Í ., US!!!! ! #:}D4P XP#     X` hp x (#%'0*,.8135@8:<    #:}D4P XP#,0*ÍÍ,*Í ., US!!!! ! #:}D4P XP#2iZ:oW;W<imX=YFootnote:Íčfootnote tex#;'p #FxX  Pg9CXP#header<Ax 4 <D  #FxX  Pg9CXP# reference=;#FxX  Pg9CXP#2/`>~Z?i\@^]AO^itemizeX1>&V 8F ` hp xr#FxX  Pg9CXP#header2?I ` hp x`    #FxX  Pg9CXP# heading 3@F` hp x #FxX  Pg9CXP# footer!A!!#d\  PCP#23cB a`CnaDr/bEbCitatorFormat Secretary's Citator Output FileBW r5-#d6X@`7Ͽ@# XX  X B r5-S  BFormat DownloadFormat Downloaded DocumentCiޛ r5- XX    \ #d6X@`7Ͽ@#a2AgendaDa1AgendaAgenda ItemsE7D yP ) I. 2eFrecGcHdI)ea3AgendaFHeadingChapter HeadingGJ d  ) I. ׃  Right ParRight-Aligned Paragraph NumbersH>a݅@  I.   X(# SubheadingSubheadingI0\ E A.  23iJdeKUfLjgM1hHIGHLIGHT 1Italics and BoldldeddJ+. DRAFT ONHeader A Text = DRAFT and DateK X =8` (#FDRAFTă r  ` (#=D3 1, 43 12pt (Z)(PC-8))T2Dă  ӟDRAFT OFFTurn Draft Style offL@@    LETTER LANDLetter Landscape - 11 x 8.5M 3'3'Standard'3'3StandardLetter Portrait - 8.5 x 11 ;   2fmN1eiO1jP1kQnlLEGAL LANDLegal Landscape - 14 x 8.5Nf 3'3'Standard'A'AStandardZ K e6VE L"nu;   LETTER PORTLetter Portrait - 8.5 x 11OL 3'3'Standard3'3'StandardZ K e6VE L"nU9   LEGAL PORTLegal Portrait - 8.5 x 14P 3'3'StandardA'A'StandardLetter Portrait - 8.5 x 119   TITLETitle of a DocumentQK\ * ă2qRmSdnTj}nUnBLOCK QUOTESmall, single-spaced, indentedRN X HIGHLIGHT 2Large and Bold LargeSB*d. HIGHLIGHT 3Large, Italicized and UnderscoredT V -qLETTERHEADLetterhead - date/marginsUu H XX  3'3'LetterheadZ K e VE L"n3'3'LetterheadZ K e VE L"nE9    * 3'3'LetterheadZ K e VE L"n3' II"n"Tv3'StandarddZ K e VE L"nU9 Ѓ   2vVE8qW-}rX8sY8tINVOICE FEETFee Amount for Math InvoiceV ,, $0$0  MEMORANDUMMemo Page FormatWD.   ! M E M O R A N D U M ă r  y<N dddy   INVOICE EXPSEExpense Subtotals for Math InvoiceX:A ,p, $0$00INVOICE TOTTotals Invoice for Math MacroYz 4p, $0$002xZLv[Xw\[Ex][xINVOICE HEADRHeading Portion of Math InvoiceZ+C`*   4X 99L$0 **(  ӧ XX NORMALReturn to Normal Typestyle[SMALLSmall Typestyle\FINEFine Typestyle]2{^[-y_[y`[ya>zLARGELarge Typestyle^EXTRA LARGEExtra Large Typestyle_VERY LARGEVery Large Typestyle`ENVELOPEStandard Business Envelope with Headera+w ,,EnvelopeZ K e VE L"n,,EnvelopeLarge, Italicized and Under;    ,, 88+  `   2jbX{cK|d|e}1bdfStyle 14Swiss 8 Pt Without Marginsc$$D Co> PfQ  )a [ PfQO Style 12Dutch Italics 11.5d$$F )^ `> XifQ  )a [ PfQO Style 11Initial Codes for Advanced IIeJ )a [ PfQK  dddn  #  [ X` hp x (#%'b, oT9 ! )^ `> XifQ ` Advanced Legal WordPerfect II Learning Guide   x )^ `> XifQ Advanced Legal WordPerfect II Learning Guide   j-n )^ `> XifQ    Copyright  Portola Systems, Inc. 1987, 1988`6 >Page  jBX )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 2flghi|0Style 3oDutch Roman 11.5 with Margins/Tabsf )a [ PfQO  ddn  # c0*b, oT9 !Style 4 PSwiss 8 Point with MarginsgDq Co> PfQ  dddd  #  Style 1.5Dutch Roman 11.5 Fonth4h )a [ PfQO  dddn Style 2Dutch Italic 11.5i$ )^ `> XifQ 2Ōjޅk~lmStyle 5Dutch Bold 18 Pointj$RH$L T~> pfQ_  )a [ PfQO Style 7Swiss 11.5k$$V )ao> PfQ ]  )a [ PfQO Style 6Dutch Roman 14 Pointl$$N w [ PfQ   )a [ PfQO Style 10oInitial Codes for Advancedm U )a [ PfQK  dddn  ##  [[ b, oT9 !b, oT9 !n )^ `> XifQ ` Advanced Legal WordPerfect Learning Guide   f )^ `> XifQ Advanced Legal WordPerfect Learning Guide   Q" )^ `> XifQ    Copyright  Portola Systems, Inc. 1987, 1988`6 >Page  QN~ )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 2nopqpStyle 8PfInitial Codes for Beginninggni )a [ PfQK  dddn  # X` hp x (#%'b, oT9  [ &e )^ `> XifQ ` Beginning Legal WordPerfect Learning Guide   d )^ `> XifQ Beginning Legal WordPerfect Learning Guide   jH )^ `> XifQ    Copyright  Portola Systems, Inc. 1987, 1988`6 >Page  j )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 Style 9Initial Codes for Intermediateo )a [ PfQK  dddn  # X` hp x (#%'b, oT9 Њ [ e )^ `> XifQ ` Intermediate Legal WordPerfect Learning Guide   3 )^ `> XifQ Intermediate Legal WordPerfect Learning Guide   jf )^ `> XifQ    Copyright  Portola Systems, Inc.`+ >Page  jX )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 UpdateInitial Codes for Update Modulep )a [ PfQK  dddn  #  [ X` hp x (#%'b, oT9 !n )^ `> XifQ ` Legal WordPerfect 5.0 Update Class Learning Guide   f )^ `> XifQ Legal WordPerfect 5.0 Update Class Learning Guide   Q" )^ `> XifQ    Copyright  Portola Systems, Inc. 1987, 1988`7 CPage  jN~ )^ `> XifQ    Page ` Copyright  Portola Systems, Inc. 1987, 1988 2*- 'GV@6FDocument Style=(%8'GBV*%- 'G.Eq56` ` ` 2rqse,teu3*- 'GW@6FDocument Style=(%8'GBW*%- 'G.Er7 8 . 4*- 'GX@6FDocument Style=(%8'GBX*%- 'G.Es 9: 5*- 'GY@6FDocument Style=(%8'GBY*%- 'G.Et ;< 6*- 'GZ@6FDocument Style=(%8'GBZ*%- 'G.Eu*=>   2vpw+xyX7*- 'G[@6FDocument Style=(%8'GB[*%- 'G.Ev?@` ` ` 8*- 'G\@6FRight-Aligned Paragraph Numbers*%- 'G.Ew8AB@   9*- 'G]@6FRight-Aligned Paragraph Numbers*%- 'G.ExACD@` `  ` ` ` 10- 'G^@6FDocument Style=(%8'GB^*%- 'G.Ey0E F    2z{á|p}&11- 'G_@6FRight-Aligned Paragraph Numbers*%- 'G.EzJGH` ` @  ` `  12- 'G`@6FRight-Aligned Paragraph Numbers*%- 'G.E{SIJ` `  @  13- 'Ga@6FRight-Aligned Paragraph Numbers*%- 'G.E|\KL` `  @hh# hhh 14- 'Gb@6FRight-Aligned Paragraph Numbers*%- 'G.E}eMN` `  hh#@( hh# 2~ߤj15- 'Gc@6FRight-Aligned Paragraph Numbers*%- 'G.E~nOP` `  hh#(@- ( 16- 'Gd@6FRight-Aligned Paragraph Numbers*%- 'G.EwQR` `  hh#(-@pp2 -ppp 17- 'Ge@6FDocument Style=(%8'GBe*%- 'G.EFST *  ׃  18- 'Gf@6FTechnical Document Style'GBf*%- 'G.E&UV  . 2k!Bר19- 'Gg@6FTechnical Document Style'GBg*%- 'G.E&WX  . 20- 'Gh@6FTechnical Document Style'GBh*%- 'G.E*YZ    21- 'Gi@6FTechnical Document Style'GBi*%- 'G.E'[\   22- 'Gj@6FTechnical Document Style'GBj*%- 'G.E&]^   2MҪW23- 'Gk@6FTechnical Document Style'GBk*%- 'G.E4_$`     24- 'Gl@6FTechnical Document Style'GBl*%- 'G.E&ab  . 25- 'Gm@6FTechnical Document Style'GBm*%- 'G.E&cd  . Format Downl@6FFormat Downloaded DocumentGBr*%- 'G.EUgh XX    X\ #d6X@7@#26Word222Null@6FWord222Null% =(%8'GB*%- 'G.E1{1|#/x PX##/x PX#HEADING 7@6F* 9% =(%8'GB*%- 'G.E0p Zwp x (#DDDDDD#&a\  PG;&P# 4 hp x (##&a\  PG;&P# HEADING 6@6FF 9% =(%8'GB*%- 'G.E0p Zwp x (#DDDDDD#&a\  PG;&P# 4 hp x (##&a\  PG;&P# HEADING 5@6FT 9% =(%8'GB*%- 'G.E0p Zwp x (#DDDDDD#&a\  PG;&P# 4 hp x (##&a\  PG;&P# 2Aϴ^woHEADING 4@6Fb 9% =(%8'GB*%- 'G.E0 Zwp x (#rr#&a\  PG;&P# 4 hp x (##&a\  PG;&P# NORMAL INDEN@6Fp 9% =(%8'GB*%- 'G.E'4 <DL!T$#&a\  PG;&P##&a\  PG;&P#enumlev1G@6F~ 9% =(%8'GB*%- 'G.E$p  N hp x (#aa#&a\  P G;&P#4` hp x (##&a\  P!G;&P#footnote ref@6Ffootnote reference%8'GB*%- 'G.Ez#V\  P"UP#2sk7Default Para@6FDefault Paragraph Font8'GB*%- 'G.EPPpage number@6Fpage number% =(%8'GB*%- 'G.EZ26- 'G@6Ffootnote text =(%8'GB*%- 'G.Ef\??USlist- 'G@6Flist 9% =(%8'GB*%- 'G.Ef??2L'Fs_endnote refe@6Fendnote reference%8'GB*%- 'G.Ezz#Xj\  P#G;XP##c P$7P#line number@6Fline number% =(%8'GB*%- 'G.Eww#Xj\  P%G;XP##c P&7P#Highlight@6FMiddle Article Highlight'GB*%- 'G.E''#G }'Y##\9> (P(YP#HeadlineG@6FHeadline for newsletter8'GB*%- 'G.E''#> })Y##\9> (P*YP#2752nd line Hea@6F2nd line headline%8'GB*%- 'G.E''#b> }+Y##\9> (P,YP#Graphics hea@6FHeadlines for graphics8'GB*%- 'G.E** #o> P}-YP##\9> (P.YP# Graphics bod@6Fchart data % =(%8'GB*%- 'G.E** #Alo> P}/YXP##\9> (P0YP# Article head@6FHeadline for new article'GB*%- 'G.E*'#r"z1C# #\9> (P2YP# 2aPc endnote text@6Fendnote text% =(%8'GB*%- 'G.Ew#X}xP37XP##I2P4QP#toc 1 'G@6Ftoc 19% =(%8'GB*%- 'G.E.$(#`` hp x (#toc 2 'G@6Ftoc 29% =(%8'GB*%- 'G.E.$` (#`` hp x (#toc 3 'G@6Ftoc 39% =(%8'GB*%- 'G.E.$` (#` hp x (#2=toc 4 'G@6Ftoc 49% =(%8'GB*%- 'G.E.$ (#` hp x (#toc 5 'G@6Ftoc 59% =(%8'GB*%- 'G.E.$h(#` hp x (#toc 6 'G@6Ftoc 69% =(%8'GB*%- 'G.E.$(# ` hp x (#toc 7 'G@6Ftoc 79% =(%8'GB*%- 'G.EZP2motoc 8 'G@6Ftoc 89% =(%8'GB*%- 'G.E.$(# ` hp x (#toc 9 'G@6Ftoc 99% =(%8'GB*%- 'G.E.$(#`` hp x (#index 1'G@6Findex 19% =(%8'GB*%- 'G.E.$` (#` hp x (#index 2'G@6Findex 29% =(%8'GB*%- 'G.E.$` (#`` hp x (#2PIFtoa heading@6Ftoa heading% =(%8'GB*%- 'G.E.$(#` hp x (#caption'G@6Fcaption9% =(%8'GB*%- 'G.Ew#X}xP57XP##I2P6QP#_Equation Ca@6F_Equation Caption%8'GB*%- 'G.Eww#X}xP77XP##I2P8QP#27- 'G@6FDefault Paragraph Font8'GB*%- 'G.E#X}xP97XP##&sxP:7&P#2<p[qHEADING 9@6F 9% =(%8'GB*%- 'G.E'34 <DL!T$#c P;7P##c P<7P#HEADING 8@6F 9% =(%8'GB*%- 'G.E'34 <DL!T$#c P=7P##c P>7P#28- 'G@6FDocument Style=(%8'GB*%- 'G.E` ` ` 29- 'G@6FDocument Style=(%8'GB*%- 'G.E  . 2;ene8p30- 'G@6FDocument Style=(%8'GB*%- 'G.E  31- 'G@6FDocument Style=(%8'GB*%- 'G.E  32- 'G@6FDocument Style=(%8'GB*%- 'G.E*   33- 'G@6FDocument Style=(%8'GB*%- 'G.E` ` ` 2m/34- 'G@6FRight-Aligned Paragraph Numbers*%- 'G.E8@   35- 'G@6FRight-Aligned Paragraph Numbers*%- 'G.EA@` `  ` ` ` 36- 'G@6FDocument Style=(%8'GB*%- 'G.E0    37- 'G@6FRight-Aligned Paragraph Numbers*%- 'G.EJ` ` @  ` `  2h'38- 'G@6FRight-Aligned Paragraph Numbers*%- 'G.ES` `  @  39- 'G@6FRight-Aligned Paragraph Numbers*%- 'G.E\` `  @hh# hhh 40- 'G@6FRight-Aligned Paragraph Numbers*%- 'G.Ee` `  hh#@( hh# 41- 'G@6FRight-Aligned Paragraph Numbers*%- 'G.En` `  hh#(@- ( 2!142- 'G@6FRight-Aligned Paragraph Numbers*%- 'G.Ew` `  hh#(-@pp2 -ppp 43- 'G@6FDocument Style=(%8'GB*%- 'G.EF *  ׃  44- 'G@6FTechnical Document Style'GB*%- 'G.E&  . 45- 'G@6FTechnical Document Style'GB*%- 'G.E&  . 2]46- 'G@6FTechnical Document Style'GB*%- 'G.E*    47- 'G@6FTechnical Document Style'GB*%- 'G.E'   48- 'G@6FTechnical Document Style'GB*%- 'G.E&   49- 'G@6FTechnical Document Style'GB*%- 'G.E4$     2350- 'G@6FTechnical Document Style'GB*%- 'G.E&  . 51- 'G@6FTechnical Document Style'GB*%- 'G.E&  . 52- 'G@6F 9% =(%8'GB*%- 'G.E'4 <DL!T$#&a\  P?G;&P##&a\  P@G;&P#53- 'G@6Ffootnote reference%8'GB*%- 'G.ER#V\  PAUP#2s}54- 'G@6FDefault Paragraph Font8'GB*%- 'G.E((55- 'G@6Ffootnote text =(%8'GB*%- 'G.E>4??US56- 'G@6Fendnote reference%8'GB*%- 'G.ERR#Xj\  PBG;XP##B\  PCUP#57- 'G@6F_Equation Caption%8'GB*%- 'G.EOO#XX2PDQXP##I2PEQP#2dRpp&58- 'G@6FFormat Downloaded DocumentGB*%- 'G.EUOP XX    #\ #d6X@7@#Bld/Und'G@6FBold and Underline Text8'GB*%- 'G.EQR  59- 'G@6FDocument Style=(%8'GB*%- 'G.EST` ` ` 60- 'G@6FDocument Style=(%8'GB*%- 'G.EUV` ` ` 2qe9e61- 'G@6FDocument Style=(%8'GB*%- 'G.EW X . 62- 'G@6FDocument Style=(%8'GB*%- 'G.E YZ 63- 'G@6FDocument Style=(%8'GB*%- 'G.E [\ 64- 'G@6FDocument Style=(%8'GB*%- 'G.E*]^   2 p8  e 65- 'G@6FDocument Style=(%8'GB*%- 'G.E_`` ` ` 66- 'G@6FRight-Aligned Paragraph Numbers*%- 'G.E8ab@   67- 'G @6FRight-Aligned Paragraph Numbers*%- 'G.EAcd@` `  ` ` ` 68- 'G!@6FDocument Style=(%8'GB!*%- 'G.E0e f    2 ,  } 3 69- 'G"@6FRight-Aligned Paragraph Numbers*%- 'G.EJgh` ` @  ` `  70- 'G#@6FRight-Aligned Paragraph Numbers*%- 'G.ESij` `  @  71- 'G$@6FRight-Aligned Paragraph Numbers*%- 'G.E\kl` `  @hh# hhh 72- 'G%@6FRight-Aligned Paragraph Numbers*%- 'G.Eemn` `  hh#@( hh# 2$w73- 'G&@6FRight-Aligned Paragraph Numbers*%- 'G.Enop` `  hh#(@- ( 74- 'G'@675- 'G(@6FDocument Style=(%8'GB(*%- 'G.EFst D*  ׃  76- 'G)@6FTechnical Document Style'GB)*%- 'G.E&uv  . 2x.O77- 'G*@6FTechnical Document Style'GB**%- 'G.E&wx  . 78- 'G+@6FTechnical Document Style'GB+*%- 'G.E*yz    79- 'G,@6FTechnical Document Style'GB,*%- 'G.E'{|   80- 'G-@6FTechnical Document Style'GB-*%- 'G.E&}~   2Zd81- 'G.@6FTechnical Document Style'GB.*%- 'G.E4$     82- 'G/@6FTechnical Document Style'GB/*%- 'G.E&  . 83- 'G0@6FTechnical Document Style'GB0*%- 'G.E&  . 84- 'G1@6F9% =(%8'GB1*%- 'G.E'4 <DL!T$#&a\  PG;&P##&a\  PG;&P#20F85- 'G2@6Ffootnote reference%8'GB2*%- 'G.E>#V\  PUP#86- 'G3@6FDefault Paragraph Font8'GB3*%- 'G.E87- 'G4@6Ffootnote text =(%8'GB4*%- 'G.E* ??US88- 'G5@6Fendnote reference%8'GB5*%- 'G.E>>#Xj\  PG;XP##B\  PUP#2bgi89- 'G6@6F_Equation Caption%8'GB6*%- 'G.E;;#XX2PQXP##I2PQP#90- 'G7@6FFormat Downloaded DocumentGB7*%- 'G.EU XX    \\ #d6X@7@#- 'G8@6FTriangle9% =(%8'GB8*%- 'G.Ea192.E+%*-Right-Aligned Paragraph Numbers !*% 'G*%8@   26/a292.E+%*-Right-Aligned Paragraph Numbers !*% 'G*%A@` `  ` ` ` a392.E+%*-Right-Aligned Paragraph Numbers !*% 'G*%J` ` @  ` `  a492.E+%*-Right-Aligned Paragraph Numbers !*% 'G*%S` `  @  a592.E+%*-Right-Aligned Paragraph Numbers !*% 'G*%\` `  @hh# hhh 2R"h'  !a692.E+%*-Right-Aligned Paragraph Numbers !*% 'G*%e` `  hh#@( hh# a792.E+%*-Right-Aligned Paragraph Numbers !*% 'G*%n` `  hh#(@- ( a892.E+%*-Right-Aligned Paragraph Numbers !*% 'G*%w` `  hh#(-@pp2 -ppp a193.E+%*-Right-Aligned Paragraph Numbers%8'GB*%8@   2&%"##p$a293.E+%*-Right-Aligned Paragraph Numbers%8'GB*%A@` `  ` ` ` a393.E+%*-Right-Aligned Paragraph Numbers%8'GB*%J` ` @  ` `  a493.E+%*-Right-Aligned Paragraph Numbers%8'GB*%S` `  @  a593.E+%*-Right-Aligned Paragraph Numbers%8'GB*%\` `  @hh# hhh 2,X% K&Kb(K*a693.E+%*-Right-Aligned Paragraph Numbers%8'GB*%e` `  hh#@( hh# "i~'^0?]SS999S]+9+/SSSSSSSSSS99]]]Snnnxnnx?Sngxxgxn]gxnngg9/9]S9SSISI9S]//S/]SSS??/]InSI?9%9]9+]]999+999999S9S/nSnSnSnSnSxnInInInInI?/?/?/?/x]xSxSxSxSx]x]x]x]gInSxSxSxSgIxSgSnSnSnSnInIn]nIx{nInInInIxSxSxSx]xS]]?/?S?9?S]]]nSg/gWg9g?g/x]ux]x]xSxSxn?n?n?]?]?]?]]gZg/g]x]x]x]x]x]x]ng]g?g?g?xSg9x]]?g9gS{+SS8/8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuddddddddddddddddddddddddddddddddddddddddN>>\g0>03\\\\\\\\\\>>ggg\yyyyyF\yrrygryyrr>3>g\>\\Q\Q>\g33\3g\\\FF3gQy\QF>(>g>0gg>>>0>>>>>>\>\3y\y\y\y\y\yQyQyQyQyQF3F3F3F3g\\\\ggggrQy\\\\rQ\r\y\y\y\yQyQygyQyQyQyQyQ\\\g\ggF3F\F>F\gggy\r3r_r>rFr3ggg\\yFyFyFgFgFgFggrcr3rgggggggyrgrFrFrF\r>ggFr>r\0\\=3=WddddddddddddddddddddddddddddddddddddddddNBnnB\\F\\\\\\07\7>\7>>\\\??n\\pBnnBigg>\\7"yyyy\nyc\gnn\"i~'^ %>77n\%%%7>%7777777777%%>>>7gOIOOIDVV*7VIgOVDVO>IOOnOOI%%@7%7>0>0%7>%>\>7>>0*%>7O770,,9%9@%%%%%%%%%7%>O7O7O7O7O7nOO0I0I0I0I0))))O>V7V7V7V7O>O>O>O>O7O7O>U7V7O7O7C>O7O7O7O0O0O9O0OQI0I0I0I0V7V7V7V9V7V>V@**>*%*>Y>99V>II2I%I,IO>OO>O>V7V7mOO0O0O0>*>*>*>9I8I%I@O>O>O>O>O>O>nOO9I0I0I0O>I%O>>*I%O7P77%%WMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMMxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN(BB(:7%77777j7!%TT7!%QQ7T!%%777n&&Bn77nBTn(nBB(EZZ>>n%77\n!"IIIITTenn7TnBA;7>lBBn72D f *-879>",tB^ f ^;C]ddCCCdCCCCddddddddddCCY~~vCN~sk~CCCddCYdYdYCdd88d8ddddJN8ddddYYdYd4dddddCddddddddd8YYYYYY~Y~Y~Y~YC8C8C8C8ddddddddddYdddddsdXdXXXddx|X~d~d|XdddddddC8ddddCdoddd|8|H~d|8|8dtddddHHdlLlLlLkd|H|8~ddddddddXXXd~ddkd~ddxCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCYQQddddddFddddFCChhd44ddxxdddvooChdF"dhd9dCCxCddoddCdYds]xUvdYYCCCCx~oxoY~NYdYC8YooYdYxsdxdd~YYxoxxx~CdxYxxxxCCdddddddxCsdYC\   pxtll\tll@\@\`LTimes New RomanTimes New Roman BoldTimes New Roman ItalicCourierCG TimesTimes New Roman Bold ItalicCG Times BoldCourier BoldCourier ItalicCourier Bold Italic"i~'K2^18MSS888S8888SSSSSSSSSS88Jxir{icx{8Aui{x`xoYi{xxxl888SS8JSJSJ8SS..S.SSSS>A.SSxSSJJSJS+SSSSS8SSSSSSSSS.xJxJxJxJxJorJiJiJiJiJ8.8.8.8.{SxSxSxSxS{S{S{S{SxSxJ{SxSxSxS{S`SxIxSxIqIqIrSrS{dgIiSiSgIxSxSxSxSxS{S{S8.SSSS8Sz]SSuSg/gBwgwgcccccc@XKKgg;;c\\\{I\waaIZQQOMXacccujygggpeyuVrQjQcccc3Qlc@uuccc;;ccccccccccccccccccccccnnnnnnnn#3#cccccj3cccccccccccccccccccccccccccccccrrrrnnnnnnnnnnXXccccccllccVVVVuuccaaaaccZZuZVVVV5*FVcc2a=5,u&a\  P6G;&P7jC:,ynXj\  P6G;XP7nC:,\4  pG;<?xxx,<x6X@`7X@+8wC;,D|Xw PE37XP,z-X80,M|X9 xOG;.x/c81,D c PE37PDy.f81,if_ pi7/1a=5,M4&a9 xOG;&P=% ,t#J=4  pG;J?xxx,wx `7X ?xxx,Ρx6Nhez7XH4 ?xxx, TxhM7X23m=6,Do&m PE37&P<r5ddd,<Nd6X@`7@<E<<<,<o<6X@`7,@ r5ddd,>d6Nhez7HOA%!,DuJA PE37JP7jC:,ynXj\  P6G;XP7nC:,Z 3 {O'#X\  P6G;ɒP#эSee C&W reply at 3; Ellipso comments at 1213; GE Americom comments at 1214 and reply at 2, 5, and 911; Globecast reply at 4; ICG comments at 8; INTELSAT reply at 78; MCI WorldCom  yO'comments at iv and 2324 and reply at 2627; and Network reply at iii and 1112.H!Ƈ Some parties also disagree with Comsat that a surcharge must be imposed to  S'allow Comsat to recover costs not recoverable under Level 3 direct access.?"3 {O '#X\  P6G;ɒP#эSee AT&T reply at ii, 1, and 1415; BT North America reply at 2730; C&W comments at 36 and reply at 2 and 5; GE Americom comments at 1012 and reply 2 and 69; Globecast reply at 4; MCI WorldCom reply at iiiiv, 1516, 18, and 2125; Network reply at iv and 1519; and  yOd'PanAmSat comments at 67 and reply at 67.H!ƹ The carriers request, that in its implementation of Level 3 direct access in the United States, the Commission permit a "fresh  Sp'look"@"p3 {O'#X\  P6G;ɒP#эSee AT&T comments at 1315; Globecast reply at 56; ICG comments at 56; IT&E reply at 13; Loral Orion comments at 89; MCI WorldCom comments at iv and 2428 and reply at i and 1314; Network reply at iv and 1920; PanAmSat comments at 710 and reply at 7; and Sprint comments at 1013.H!ƍ of existing longterm contracts with Comsat and "portability"Ap~3 {O!'#X\  P6G;ɒP#эSee MCI WorldCom comments at 2430 and reply at i, and 1314; Sprint comments at 10 and 1314.H! of the INTELSAT capacity now  SH 'being accessed through Comsat. Finally, most parties assert that we have authority under the Satellite"H A0*&&aaK "  S'Act to permit direct access to INTELSAT satellites in the United States,Bz3 {Oh'#X\  P6G;ɒP#эSee AT&T comments at i and 13 and reply at i and 27; BT North America comments at 3 and 911 and reply at 13, 5, and 11; C&W comments at 68 and reply at 1; Ellipso comments at ii and 56; GE Americom comments at i and 27 and reply at 36; GlobeCast comments at 2 and reply at 23; ICG reply at 26; IT&E comments at 1 and 34; Loral Orion comments at 12; MCI WorldCom comments at iii and 37 and reply at iii and 28; Network comments at iv, 6, and 1418 and reply at iii and 39; PanAmSat comments at 24 and reply at 39; and Sprint comments at  yO'35.H!Ư and that such action would  S'not violate the Fifth Amendment as an uncompensated taking.C" 3 {O '#X\  P6G;ɒP#эSee AT&T comments at i and 511 and reply at iiiii and 1112; C&W comments at 910 and reply at 1; GE Americom at 7 and reply at 45; GlobeCast reply at 34; IT&E comments at 34; Loral Orion comments at 2; MCI WorldCom comments at iii and 79 and reply at ii and 911; Network comments at  yO 'iv, 6, and 1416; PanAmSat comments at 2 and 45 and reply at 1 and 35; and Sprint comments at 6.(#  S'x17.PanAmSat supports ending Comsat's monopoly over the provision of INTELSAT services in  S`'the United States, but believes that the issue should be resolved by Congress.yD` 3 yO'#X\  P6G;ɒP#эPanAmSat comments at 13.H!y Nevertheless, PanAmSat contends that if we were to implement Level 3 direct access we should permit direct access  S'in all markets and all routes and regulate INTELSAT as a regular commercial satellite operator.qE 3 {O4'#X\  P6G;ɒP#эId. at 78.H!q PanAmSat also believes that the Commission should apply "fresh look" with respect to Comsat's long S'term contracts with U.S. carriers.rF3 {Ov'#X\  P6G;ɒP#эId. at 910.H!r PanAmSat opposes any Comsat surcharge (over IUC rates) on  S'Level 3 direct access users.oG3 {O'#X\  P6G;ɒP#эId. at 6.H!o Finally, PanAmSat maintains that the Commission has the legal authority to permit Level 3 direct access in the United States and that such action would not constitute  SH 'an uncompensated taking in violation of the Fifth Amendment.qHH :3 {O"'#X\  P6G;ɒP#эId. at 35.H!q  S 'x18.Columbia is concerned about the competitive concerns raised by direct access. It maintains that, at a minimum, INTELSAT should be required to waive its immunity from lawsuit and exemption  S 'from taxation as a condition of imposing any type of direct access.yI 3 yO!'#X\  P6G;ɒP#эColumbia comments at 35.H!y Columbia also asserts that we should grant direct access to INTELSAT in the United States only in the context of a pro-competitive privatization that subjects a privatized INTELSAT to U.S. competition laws and promotes open markets, consistent with the World Trade Organization Agreement on Basic Telecommunications"0 \I0*&&aa"  S'Services ("WTO Agreement").J3 {Oh'#X\  P6G;ɒP#эId. at 9. The commitments undertaken as a result of the WTO basic telecommunications services negotiations ending in 1997 are incorporated into the General Agreement on Trade in Services ("GATS") by the Fourth Protocol to the GATS. FOURTH PROTOCOL OF THE GENERAL AGREEMENT ON TRADE IN SERVICES (WTO 1997), 36 I.L.M. 354, 366 (1997). These commitments are referred to as the WTO Basic Telecom Agreement, although they are not  yOR'technically contained in a standalone agreement.#x6X@`7 X@#H!Ƅ Columbia suggests that we analyze INTELSAT's entry into the U.S.  S'market based on our "DISCO II" standards.K^B3 {O'#X\  P6G;ɒP#эId. at 57, citing Amendment of the Commission's Regulatory policies to Allow NonU.S. Licensed  {O 'Space Stations to Provide Domestic and International Satellite Service in the United States, 12  {ON 'FCC Rcd 24094, 2414150 (1997) ("DISCO II Order").H!ƌ  S'x19.Finally, INTELSAT responds to certain comments of PanAmSat. It states that the Commission lacks authority to regulate INTELSAT as it would any other carrier and that its immunities remain intact, notwithstanding provisions in the recently passed International AntiBribery  S'and Fair Competition Act of 1998 (the AntiBribery Act).vLh 3 yO'#X\  P6G;ɒP#эINTELSAT reply at 37.H!v It also states that Commission action on  S'direct access will not affect progress on INTELSAT privatization efforts.M 3 {O'#X\  P6G;ɒP#эId. at 78 (referencing the International AntiBribery and Fair Competition Act of 1998, Pub. L. No. 105366 (1998)).H!  S'r IV. Discussion Đc  SH ' A. Economic, Competition, and Policy Issues Đ  S 'x20. The issue posed in this proceeding is whether U.S. carriers and users of international telecommunications transmission facilities should be permitted the choice of obtaining satellite services  S 'directly from INTELSAT or continue to require that access in the United States occur only through  S 'Comsat, the U.S. Signatory to INTELSAT. The record demonstrates that foreign carriers and other  SX'users of INTELSAT in countries that permit direct access have realized greater cost savings,  S0'efficiencies, and service benefits by directly accessing INTELSAT rather than going solely through a Signatory. The availability of additional choices are increasingly important to U.S. carriers and users because they must compete on a global basis with their foreign counterparts who presently can obtain  S'direct access, a choice available in 94 countries. In addition, we believe direct access will promote further competition in the international telecommunications market. The competitive nature of the global telecommunications market requires that we assure U.S. carriers and service providers the availability of choices that their foreign competitors now enjoy.  S'x21. The Commission did not implement a direct access policy in 1984 because it determined that  S'the options it was then considering would not result in significant cost savings or other benefits.NR 3 {O%'#X\  P6G;ɒP#э1984 Direct Access Order, 99 FCC 2d at 313319.H!ƕ " N0*&&aa>" Instead, the Commission pursued a facilitiesbased competition policy between and among fiber optic cable and satellite providers. The INTELSAT system continues, however, to be a key source of international satellite transmission capacity for U.S. carriers or users which find it either commercially necessary or desirable to use INTELSAT. The record demonstrates that the direct access program formally created by INTELSAT in 1992, and available today, along with the greater sophistication of INTELSAT, U.S. carriers, and other users of INTELSAT, has eliminated many of the concerns that gave rise to the conclusion in 1984 that direct access would not yield significant cost savings and  S'efficiencies. Therefore, as discussed below, we find that direct access in the United States will result  S'in a variety of significant benefits (including cost savings for consumers, as well as contribute to a more competitive satellite service market in the United States) and authorize its implementation.  SH ' x(1)Benefits of Direct Access Đ  S 'x22. In the Notice we identified several user benefits generated by direct access (as described by INTELSAT): (1) improved responsiveness to customer inquiries on service implementation; (2) avoidance of markup costs charged to third parties; (3) greater control over service quality, performance costs, connectivity, redundancy, and earth station capabilities; and (4) more flexibility (than through third parties) in tailoring services in terms of bandwidth, time duration, performance  S2'standard, redundancy, and service applications.O23 {O'#X\  P6G;ɒP#эSee Notice, 13 FCC Rcd at 22035.#x6X@`7 X@## X\  P6G;ɒP##x6X@`7 X@#(# The parties supporting direct access maintain that  S 'these benefits are substantial and desirable. Comsat and Lockheed Martin contend that any benefits would be insubstantial. The record in this proceeding demonstrates that Level 3 direct access will afford opportunities for U.S. customers who utilize the INTELSAT system to realize greater  S'efficiency, flexibility, control, and cost savings. Affording customers the opportunity to enjoy these benefits will promote competition and thus strengthen U.S. competitiveness in global telecommunications markets. x  S'x(a)ppOperational Benefits  S'x23. Greater Efficiency. The prior 1984 Direct Access Order proceeding, found that adopting the direct access options then under consideration would not yield significant benefits in terms of  ST'increased efficiency.PTZ3 {ON'#X\  P6G;ɒP#э1984 Direct Access Order, 99 FCC 2d at 318.#Xw PE37 |XP#Ѱ We were concerned, at that time, that many functions Comsat then provided to U.S. carriers would have to be undertaken by the carriers. For example, in 1984, Comsat (rather than INTELSAT) provided most of the functions necessary to access INTELSAT, including coordination for special services, detailed billing, earth station certification and access arrangements, market research, customer surveys, and pricing analysis. Therefore, at that time, we were uncertain how U.S. carriers would achieve significant efficiencies if they had to duplicate these functions.  S<'x24. The advent of INTELSAT's formal direct access program, as well as the time that has passed since our consideration of direct access in 1984, justifies a revisiting of the 1984 conclusion. Direct access customers are now able to work exclusively with INTELSAT on all service needs from the initial planning stages through to the final endtoend testing and implementation of service, without"!P0*&&aa " the need for any Signatory involvement. Since introducing direct access in 1992, INTELSAT has established Regional Service Centers that provide administrative, market, and technical support to direct access customers. INTELSAT now has Regional Directors and Customer Support teams that offer endtoend billing services, consultation with customers to help them better understand the unique needs of their markets, and technical expertise, at any time, at no additional charge to IUC rates.  S'x25. INTELSAT also now performs the administrative and technical functions to assure operational capability of earth stations with its satellites. The cost of these functions are included in the IUC rates. The technical functions include "link budget" analysis to verify the bandwidth to be used, the size of the earth station, and verification that earth station performance specifications meet INTELSAT standards. Following technical analysis, INTELSAT performs transmission or "carrier" lineup tests with the earth station to verify that the transmission performance meets the technical specifications, consistent with INTELSAT standards. The INTELSAT Operating Center monitors customer use of the satellites on a 24houraday basis to insure that satellite transmissions operate properly. If there are problems, INTELSAT will attempt to identify them, including the source, and  S 'contact all customers that might be affected.#&a\  P6G;u&P#  S0'x26. Currently, Comsat technical assistance for accessing INTELSAT from the United States is minimal in most cases. U.S. carriers and other INTELSAT users own and operate the earth stations that communicate with INTELSAT satellites, or use the earth station facilities of operators that work directly, and essentially, exclusively with INTELSAT. MCI WorldCom states that although Comsat is not involved in arranging communication services in connection with MCI WorldCom's ownedand  Sh'operated earth stations, it must nonetheless pay Comsat's markup over IUC rates.Qh3 {O'#X\  P6G;ɒP#эSee MCI WorldCom comments at 13.#x6X@`7 X@#ѥ Similarly, the Networks note that they almost always access INTELSAT directly from their own earth stations and that Comsat provides no transmission facilities of its own, but merely acts as an unnecessary  S'intermediary between INTELSAT and the customer.RZ3 yO'#X\  P6G;ɒP#эNetwork comments at 78.#x6X@`7 X@#ї x  S'x27. Unlike 1984, INTELSAT now offers three different online services for INTELSAT's direct access customers in order to allow it to respond quickly to their business needs: (1) The INTELSAT Business Network; (2) TVMax for on-line ordering; and (3) the Digital ESC for direct communication. The Business Network provides direct access customers 24-hour, seven-days-a-week access to INTELSAT service information regarding INTELSAT coverage and capacity, ordering and confirmation capabilities, cybercast training and INTELSAT launch videos, forums and discussion  S'groups, and a wide range of technical information.S3 {O:"'#X\  P6G;ɒP#эSee http://www.INTELSAT.Int/csc/online.htm.#X\  P6G;ɒP# TVMax is a web-based booking and scheduling system which gives customers real-time access to INTELSAT's occasional-use video reservation system. The Digital ESC allows customers to use their web-browser to search and view on-line documents and databases from their desktop computer, and provides a gateway to a variety of on-line"8|S0*&&aa7"  S'operational, technical and financial services.gT3 {Oh'#X\  P6G;ɒP#эId.g In addition, a direct access customer can easily obtain all the information needed in order to place an INTELSAT capacity order by accessing INTELSAT's  S'web page under the title "Become a Customer."UZ3 {O'#X\  P6G;ɒP#эSee www.INTELSAT.Int/csc/process.htm (includes web site titled "Become a Customer").#X\  P6G;ɒP# These online services allow INTELSAT to respond rapidly to customer inquiries on service implementation, while allowing INTELSAT users the ability to be more efficient in their planning and use of the INTELSAT system.  S'x28. INTELSAT also has recently started a program to provide technical consulting and training assistance to customers so that they have an opportunity to utilize the new INTELSAT services and technologies more cost effectively. The program called, "The Advantage Program Mission," offers free consultation and training resources to present the latest developments and applications in satellite telecommunications technology, as well as training fellowships through the INTELSAT On-the-Job  SH 'Training Program.VH 3 {O'#X\  P6G;ɒP#эSee http://www.INTELSAT.com/products/iadp/advantage.htm. x  S 'x29. In view of these changed circumstances since 1984, we conclude that permitting direct access will provide U.S. customers the opportunity to realize efficiencies in accessing INTELSAT satellites by obtaining administrative, market, and technical support directly through INTELSAT, from the initial planning stages for a service through service implementation, rather than having to use Comsat  SX'as an intermediary.  S'x30. Greater Flexibility and Control. Direct access to INTELSAT from the United States today will permit greater flexibility and control for INTELSAT customers. INTELSAT states that direct access offers greater service flexibility than going through a Signatory because it is able to individually tailor services in terms of bandwidth, time duration, performance standards, redundancy  Sj'and service applications.PWj~3 {O'#X\  P6G;ɒP#эSee "Accessing INTELSAT...Directly", reprinted in Record of Hearing before the Subcommittee on  yOR'Telecommunications, Trade, and Consumer Protection on H.R. 1872, at pp. 135141.#&a\  P6G;u&P#(#P  S'x31. Commenters agree that direct access in the U.S. would generate such service flexibilities. C&W asserts that Comsat does not offer all of the services available from the INTELSAT Tariff  S'Manual, thereby limiting the variety of services that carriers can then provide to their customers.X3 yOB '#X\  P6G;ɒP#эC&W comments at 2.#X\  P6G;ɒP#ё MCI WorldCom argues that Comsat has refused to resell services available from INTELSAT (noting a  Sz'specific example in which Comsat has refused to offer preemptible leases on INTELSAT satellites).Y zh 3 yO#'#X\  P6G;ɒP#эMCI WorldCom comments at 14. In response, Comsat states that public service telephony network ("PSTN") service is not a preemptible service in nature. However, MCI WorldCom's trunking network includes more than the single satellite path and it can certainly reroute traffic to other paths in the event of an interruption on the satellite path. Thus, we believe that this kind of preemptible decision should be"%X0*&&%"  yO'made by carriers, the endusers themselves, rather than by Comsat for its customers.#x6X@`7 X@#(#ƴ "zXY0*&&aa"Ԍ S'x   S'x32. In comparing INTELSAT's and Comsat's tariffs, we note that direct access customers have the flexibility to use leased transponders for any service application, i.e. voice. In contrast, Comsat  S'leases capacity by individual service.ZX3 {O'#X\  P6G;ɒP#эComsat Corporation, Original Tariff FCC No. 3 Transmittal No. 125 (effective June 26, 1999) ("Comsat Tariff No. 3")(# INTELSAT also offers customers greater flexibility with regard to the length of time a transponder can be leased. INTELSAT will lease a transponder for  S8'daily, monthly, and yearly time periods, or any prorated time period extending up to fifteen years.[83 yO '#X\  P6G;ɒP#эINTELSAT Tariff Manual (July, 1998). Board of Governors 11818 (May 8, 1997).(#Ʈ In contrast, for longterm leases, Comsat offers only fixed terms of one, five, and ten year services for  S'nonpreemptible services and one, two, five, seven, and ten year terms for preemptible services.u\B3 yO '#X\  P6G;ɒP#эComsat Tariff No. 3 at 3578.u With regard to bandwidth offerings, direct access customers may have greater flexibility in the amount of bandwidth they may purchase with direct access, as they may purchase bandwidth in units of 0.1  Sp'MHz to 150 MHz, and any proportion in between, regardless of its service type.l]p3 yO'#X\  P6G;ɒP#эComsat Tariff No. 3.l By contrast,  SH 'Comsat provides a more limited offering of the various bandwidth configurations , except for internet  S 'service.^Z b 3 yO"'#X\  P6G;ɒP#эIn 1999, Comsat offered bandwidth units of .1, 1, 5, 9, 18, 24, 36, 72, 112, and 150 MHz, and does not allow its customers to purchase any other configurations. For example, a customer would not be able to  {O'purchase 12 MHz of capacity under Comsat's tariff plan.  See Comsat Tariff No. 3 at 139141.(#Ʊ We particularly note that Comsat's video services are limited in terms of duration and  S 'bandwidth offerings, relative to INTELSAT.}_ 3 yO'#X\  P6G;ɒP#эComsat Tariff No. 3 at 3578.(#}  S 'x 33. INTELSAT has also stated that direct access customers have the advantage of greater control over a number of elements that can affect their telecommunication services, such as service quality,  SX'performance costs, connectivity, redundancy, and earth station capabilities.P`X3 {O '#X\  P6G;ɒP#эSee "Accessing INTELSAT...Directly", reprinted in Record of Hearing before the Subcommittee on  yO'Telecommunications, Trade, and Consumer Protection on H.R. 1872, at pp. 135141.#&a\  P6G;u&P#(#P INTELSAT states that  S0'"depending on the level of direct access, coming to INTELSAT puts the customer in charge."a0n3 yO>!'#X\  P6G;ɒP#эINTELSAT Direct Access Customer Brochure at 4. AT&T and C&W agree that direct access would offer it greater control over these service features and  S'functions.b3 yO~$'#X\  P6G;ɒP#эAT&T comments at 12; C&W comments at 2.#x6X@`7 X@#Ѭ  According to AT&T, by eliminating the Signatory as an intermediary, customers have greater control from the initial planning stages through the final endtoend testing and start of"b0*&&aa"  S'operation.gc3 yOh'p` P (#$%p&`'p` P (#$%p&`'`#X\  P6G;ɒP#эAT&T comments at 12.#x6X@`7 X@#g C&W asserts that direct access in the U.K. has meant that it has greater control over the quality and variety of satellite services it can then offer to its own customers an advantage  S'especially important in the highly competitive U.K. telecommunications environment.mdX3 yO'#X\  P6G;ɒP#p` P (#$%p&`'p` P (#$%p&`'`Ѝ C&W comments at 2.#&a\  P6G;u&P#(#m  S`'x!34. The benefits of greater flexibility and control were unavailable when we considered direct  S8'access in 1984 because INTELSAT did not offer a direct access program.{e83 yO 'p` P (#$%p&`'(#$%p&`'`#X\  P6G;ɒP#э INTELSAT only offered monthly rates for voice circuit ($390 per circuit per month) in the mid 1980's. Also around that time, it started offering longterm rates for voice circuits. For transponder leases it was restricted by certain service types. Today, INTELSAT offers a much more flexible tariff, as it indicates in its tariff manual under the footnote of its offerings "Leases are available for any intermediate period  yO 'between 1 week and 15 years in allotment sizes from 0.1 MHz." Source: INTELSAT Tariff, July 1998.#X\  P6G;ɒP#(#{ INTELSAT did not then  S'offer flexible tariffs. INTELSAT also did not offer nolimit transponder leases until the early 1990's  S'and did not offer long term channel rates to its switchedvoice customers before 1989. With the introduction of a formal direct access program in 1992, and the steps INTELSAT has taken to provide its customers with greater flexibility and control over the purchase of INTELSAT services, U.S. customers should benefit from direct access.  S 'x(b)ppCost Savings    S 'x"35. Another change since 1984 are the cost savings that now appear achievable from allowing  S 'direct access. The Notice stated that one of the main user benefits identified by INTELSAT for direct access is the avoidance of markup costs that a third party usually charges. We noted that AT&T and  SZ'MCI WorldCom claim that Comsat's average margin over IUC rates is 68 percent, as well as an  S2'estimation that direct access would reduce this margin to 35 percent,nf23 {Oj'p` P (#$%p&`'p` P (#$%p&`'`#X\  P6G;ɒP#э Notice, 13 FCC Rcd at 22036.(#n producing a cost savings of $1  S 'billion over a ten year period.:g * 3 {O'p` P (#$%p&`'` P (#$%p&`'#X\  P6G;ɒP#э Id. See also MCI WorldCom comments at 12 (The Satellite Users Coalition estimates a benefit to consumers of $1,018.9 billion over a ten year period, or a present value is $690.3 billion, on the assumption that Comsat reduces its margin over IUC rates to 33 percent from Comsat's average margin of 68 percent. This estimation also assumes that the FCC permits a fresh look policy which would allow  yO'customers to renegotiate their contracts.)#x6X@`7 X@#(#: We also noted Comsat's contention that direct access would not generate any meaningful cost savings because a surcharge would be necessary to allow for (1) a proper return on its investment and (2) recovery of costs associated with its Signatory responsibilities and  S'carrier functions.ch3 {O#'p` P (#$%p&`'p` P (#$%p&`'`p` P (#$%p&`'`Sp` P (#$%p&`'#X\  P6G;ɒP#эSSNotice, 13 FCC Rcd at 22036.#x6X@`7 X@#(#Sc The result of properly quantifying costs, asserted Comsat, would yield a savings  Sj'of zero.ijn3 {Ox%'p` P (#$%p&`'Sp` P (#$%p&`'#X\  P6G;ɒP#эSSNotice, 13 FCC Rcd at 22036.#x6X@`7 X@#(#SƏ "ji0*&&aa"Ԍ S'ԙ x#36. Most parties commenting on this issue maintain that allowing direct access will lead to substantial cost savings. They also contend that Comsat should be allowed no, or a limited, surcharge to IUC rates. C&W anticipates substantial savings in the first year of direct access in the United  S'States, and that the savings will increase by 50 percent in each subsequent year.j3 yO'#X\  P6G;ɒP#эC&W comments at 3. #X\  P6G;ɒP#(#ƛ GE Americom states it has experienced the cost savings of direct access in Germany, where prior to direct access, its  S8'SpacenetEurope subsidiary paid approximately a 12 percent markup over INTELSAT rates.k8X3 yO0'#X\  P6G;ɒP#эGE Americom comments at 9. #X\  P6G;ɒP#ћ Loral Orion states that direct access has reduced INTELSAT rates by 25 percent or more in Germany and  S'the UK.l3 yOp '#X\  P6G;ɒP#эLoral comments at 7.#X\  P6G;ɒP#ѓ MCI WorldCom asserts that the excessive nature of Comsat's markups is readily apparent from the fact that Comsat charges markups for services for which it provides no facilities other than  S'INTELSAT space segment.mx3 yO'#X\  P6G;ɒP#эMCI WorldCom comments at 13.#X\  P6G;ɒP#(#ƣ BT North America states that the decline in Comsat's market share  Sp'implies that its rates are too high and Comsat has not responded to competitive pressures.np3 yO'#X\  P6G;ɒP#эBT North America reply at 26. #x6X@`7 X@#ѝ  S 'x$37. We conclude that allowing Level 3 direct access will lead to significant cost savings by INTELSAT users in the United States for the provision of international satellite services. We further conclude that users, in exchange for the option of direct access, must pay Comsat a surcharge to allow it to recoup certain costs associated with its unique Signatory functions. As discussed below, we find  S 'that a Comsat surcharge of 5.58 percent over IUC rates would allow Comsat to recover Signatoryrelated costs not otherwise recoverable through IUC rates. While the cost savings over IUC rates will  S0'vary among different users and services, we estimate that direct access users will be able to avoid most  S'of the markup currently imposed by Comsat for most services.uo3 {O@'#X\  P6G;ɒP#эSee Appendix D.(#u The table in Appendix D  S'demonstrates a range of cost savings from 16 percent to 71.4 percent for switched voice ("IDR") and private line ("IBS") leased service under a direct access regime, even after permitting Comsat to  S'recoup a 5.58 percent surcharge.p* 3 {OZ'#X\  P6G;ɒP#э #X\  P6G;ɒP# Id.(#Ɯ Under the longerterm IDR leases (normally 1015 years), cost  Sh'savings will range from 23.2 percent to 52 percent.iqh 3 {O '#X\  P6G;ɒP#эId.(#i Under the most often used shorterterm IBS leases (normally 13 years), cost savings will range from 16 percent to 42 percent. For video services, the range of cost savings under a direct access regime that includes a Signatory expense  S'surcharge, will be from 10.7 percent to 35.2 percent.{rN 3 {O$'#X\  P6G;ɒP#эSee Appendix E.(#{ x"r0*&&aae"Ԍ S'x%38. We anticipate that carriers and users will pass through any cost savings from direct access to consumers. For example, recent decreases in international settlement rates have led to significant price  S'decreases of international telephone calls from 1997 to 1998.Ps3 {O'#X\  P6G;ɒP#эMCI WorldCom reply at 1617.#X\  P6G;ɒP#  See also FCC International Bureau, Report on International Telecommunications Markets 19971998 (prepared for Senator Ernest F. Hollings) (Dec. 7, 1998).(#P Loral Orion states, that by avoiding Comsat's markups of between 9 and 15 percent, it would be able to pass on such savings to its  S`'customers.t`"3 yO"'#X\  P6G;ɒP#эIT&E comments at 2. Loral comments at 6.#X\  P6G;ɒP#(#ư IT&E states that given the substantial competition it faces from other carriers, it would have every incentive to pass along the cost savings it would receive by the elimination of Comsat's  S'markup to its consumers.u3 yOb '#X\  P6G;ɒP#эIT&E comments at 2.#X\  P6G;ɒP#ђ We also conclude that in a competitive telecommunications environment, U.S. carriers and service providers will have incentives to pass through cost savings to endusers.  S'x&39. In addition, direct access will potentially lead to lower costs for all users, including low volume users. We note that, based on current Comsat tariff filings, low volume users pay a much higher margin over INTELSAT IUC rates than high volume users. Direct access will likely offer low volume users a lower rate even with the surcharge discussed below for the following reasons. First, we agree with MCI WorldCom and GlobeCast that direct access will spawn numerous potential  S 'providers of INTELSAT space segment to low volume users, thus offering greater choice.v B3 yO'#X\  P6G;ɒP#эMCI WorldCom comments at 1516. GlobeCast comments at 3.#x6X@`7 X@#(# Second, like MCI WorldCom and GE Americom, we find no merit in Comsat's claim that direct access will reduce economies of scale, thus producing harm to low volume users who do not purchase directly from INTELSAT. The relevant economies of scale, we believe, are those experienced by INTELSAT,  S0'and not Comsat.w03 yO'#X\  P6G;ɒP#эMCI WorldCom comments at 1516. GE Americom comments at 9.#X\  P6G;ɒP#Ѻ  S'x'40. In the prior 1984 Direct Access Order proceeding the Commission concluded that adopting direct access would yield very little cost savings. The basis for this conclusion was that direct access, at best, would redistribute, rather than reduce the costs of providing INTELSAT satellite service. However, in view of the technical and operational services now available since 1984 from INTELSAT, as well as other customer support functions now available since 1984 as described above, we find that allowing direct access will promote cost savings rather than merely causing cost  S'shifting.x"b 3 yO '#X\  P6G;ɒP#э GE American concurred. Based on its subsidiary Spacenet Europe, it "has found that INTELSAT's sales force is very responsive and keeps direct access customers wellinformed regarding the  {O"'availability of INTELSAT space segment." GE Americom comments at 9. See also C&W comments at 2.(#ƙ We agree with the Networks and MCI WorldCom that the speculation that was required to analyze cost savings in 1984 is no longer necessary because INTELSAT has adopted formal"L x0*&&aa>"  S'procedures for direct access.y3 yOh'#X\  P6G;ɒP#эNetwork comments at 12; MCI WorldCom comments at 10. We further agree with the Networks that "[it is not] possible to know  S' precisely nor should it be the extent of the 'cost savings' that may be realized by customers until further competition engendered by direct access develops, [and that] the point is to allow the additional  S'competition which does develop to wring out whatever cost saving may be achieved . . . ." z X3 yO'#X\  P6G;ɒP#эNetwork comments at 12. Although we estimate percentages of cost saving in appendix D & E to this  yOH'document based on the data we now have available to us, #X\  P6G;ɒP#we note that it is impossible to know the exact percentage of cost savings in the future as many variables could cause the predicted cost savings to change.(#  S`'  S8'x(c)` ` Increased Competition  S'x(41. There have been significant positive changes in the international telecommunications market since 1984. Notably, the market is now largely competitive in terms of availability of alternative  S'suppliers of international transmission capacity.{@3 {Ox'#X\  P6G;ɒP#э #X\  P6G;ɒP# See Comsat NonDominant Order, 13 FCC Rcd at 1414714149.#x6X@`7 X@#(# The existence of competitive alternatives of transmission capacity, however, is not, as Comsat suggests, a basis for precluding additional customer choice available through direct access. United States policy, both as reflected in Commission decisions and by Congress in the Telecommunications Act of 1996, is to promote competition in the  S 'provision of communications services.| 3 {Oj'#X\  P6G;ɒP#э  Telecommunications Act of 1996, 47 U.S.C.  153 et seq.(#Ƭ Competition is the underlying goal of the 1997 WTO Agreement, which resulted in market opening commitments for basic telecommunications services by  S 'many countries. Of the 72 such Signatories, the United States is one of only three WTO members that  S 'signed the WTO Agreement that took a market access limitation for direct access to INTELSAT.} d 3 {O'#X\  P6G;ɒP#эSee MCI WorldCom comments at 11.#x6X@`7 X@#(#ƭ  S0'x)42.While making Level 3 direct access available does not add another facilitiesbased competitor, the additional choice, flexibility, and cost savings made available by direct access to U.S. customers in use of an existing facilitiesbased provider INTELSAT would result in increased competition. Level 3 direct access would place competitive pressures on other satellite operators in terms of service, price, and quality. In addition, it would place competitive pressures on Comsat, particularly with respect to services for which Comsat has a markup substantially higher than INTELSAT IUC rates.  S'x*43. The benefit of direct access is especially relevant in the noncompetitive switched voice,  S'private line, and occasional use video markets, where Comsat is still dominant. In the Comsat Non S'Dominant Order we determined, with respect to thin route markets, that U.S. customers must, by default, choose Comsat for services in these markets; that Comsat retains a significant cost advantage over other authorized U.S. carriers in these markets; and that it exercises market power and is"T }0*&&aa"  S'dominant in the provision of services to these markets.~3 {Oh'#X\  P6G;ɒP#эComsat NonDominant Order, 13 FCC Rcd at 1414114146.#x6X@`7 X@#(# Direct access offers an opportunity to introduce competition in these markets where it clearly does not now exist. This is especially significant given that thin route countries potentially represent some of the growth markets for  S'telecommunication services.4 Z3 yO'#X\  P6G;ɒP#эIn particular, we note that the Satellite Act's stated purpose includes: (a) "[M]aintain[ing] and strengthen[ing] competition in the provision of communications services to the public," 47 U.S.C.  701(c); and (b) direct[ing] "care and attention . . . toward providing such services to economically less  {O'developed countries." 47 U.S.C.  701(b). See also Notice at 2202822029. Many of the countries deemed to be in noncompetitive markets for switched voice and private line services and for occasional use video services are designated by the International Telecommunication Union ("ITU") as "least developed countries"("LDCs"). Telecommunications Indicators for the Least Developed Countries, First Edition, 1995, at 13. Of the 48 listed LDCs, 38 are included on our list of thin  {O 'route countries for switched voice and private line service. Comsat NonDominant Order, at paras.  {O '4142 and Appendix A. We found in our Comsat NonDominant Order that the thin route market  {OX'accounts for approximately ten percent of international traffic and concluded that it was not de minimis  {O"'for purposes of deciding whether to forebear from dominant carrier regulation of Comsat. Comsat  {O'NonDominant Order, 13 FCC Rcd at 1415814159.#&a\  P6G;u&P#(# Imposing Level 3 direct access would serve the Satellite Act's purpose of promoting growth in communications between the U.S. and economically less developed countries by promoting competition and expanding user choice for U.S. services to these markets. We conclude that permitting Level 3 direct access to thin route markets would: (1) reduce Comsat's bottleneck over access to U.S. INTELSAT capacity that is the only service of international transmission capacity serving these markets; (2) give U.S. carriers the option of using another supplier; and (3) reduce  S'Comsat's market power in these markets.  Sp'  SH 'x+44.  We also conclude that direct access should be made available for services to competitive markets as well as to noncompetitive markets. Every party commenting on this issue, other than  S 'Comsat and Lockheed Martin, argue that direct access should be permitted in all markets. V 3 yO'#X\  P6G;ɒP#эLoral Orion comments at 4; MCI WorldCom comments at 1721; Network comments at 1314; PanAmSat comments at 5 and 10; and Sprint comments at 79.(# We recognize, as MCI WorldCom asserts, that direct access to competitive or thick route markets is especially significant where fiber optic cable: (1) does not provide a viable alternative to INTELSAT; (2) transmission involves complex or inefficient routing; (3) it does not reach the entire country; and (4) there is insufficient cable capacity to meet demand, or only one cable is available and satellite capacity is required to minimize the effects of network outages. In addition, permitting Level 3 direct access to all markets will give U.S. carriers more flexibility in assuring efficient utilization of satellite  S'and cable facilities.3 {O."'#X\  P6G;ɒP#эId. at 20.#x6X@`7 X@#я For example, if direct access is only allowed on thin routes, then carriers would likely purchase thin route capacity from INTELSAT and be forced to purchase thick route capacity from Comsat. This approach may undermine carriers' flexibility in shifting capacity among routes and in buying transponder leases under Level 3 direct access that permit service to both "thin route" and "thick route" countries. "@@0*&&aa"Ԍ S'ԙx,45. We agree with the Networks that the fact that we deemed markets competitive in reclassifying Comsat nondominant for purposes of tariff regulation does not preclude us from  S'permitting direct access in all markets where there are public interest benefits in doing so.3 {O'#X\  P6G;ɒP#э Network comments at 1314 and reply at 14. See also Sprint comments at 7.(#ƶ Certainly, we have no policy precluding new entrants from markets that are already competitive. We find, based on the record before us, that there will be significant benefits to Level 3 direct access, as pointed out by the major commercial users of INTELSAT capacity in the United States. Choice by U.S. carriers and users as to how they access the INTELSAT system will result in competition in currently noncompetitive markets and enhance competition in competitive markets. We find that the  S'public interest is served by the competition in all markets that will result from additional choice.  Sp'x-46.Promoting Competition. We further find that the customer benefits and added competition that will result from introducing Level 3 direct access in the United States will promote U.S. competitiveness in the global telecommunications market. In 1962, when the Satellite Act was enacted, there existed only eight U.S. international carriers providing international voice and record  S 'communications using undersea cable of limited capacity (nonfiber) and radio facilities. Z3 {O'p` P (#$%p&`' p(#$%p&`'#X\  P6G;ɒP#эSee Testimony of Newton Minow, Chairman, Federal Communications Commission, before the House Committee on the Judiciary, Antitrust Subcommittee, June 18, 1961. :  AT&T was the dominant U.S. international provider. By 1984, voice and record services were provided over both higher capacity undersea cables and satellites provided by INTELSAT through Comsat in the United States. AT&T continued to be the dominant provider of international voice services with MCI,  S2'Sprint, and other carriers beginning to make progress in entering international markets.23 {O'p` P (#$%p&`' p(#$%p&`'#X\  P6G;ɒP#эSee Earth Station Ownership at 267 (noting introduction of new entrants for the provision of international voice and record services).:  There are now over 77 U.S. facilitiesbased carriers operating in the United States, providing a wide array of  S'voice, data and video services over fiber optic cable and satellite.~3 yO'p` P (#$%p&`' p(#$%p&`'#X\  P6G;ɒP#эCompiled from Circuit Status Reports filed by U.S. carriers covering 1998.: ~ These carriers compete on a global basis against the emerging multinational carriers, as well as traditional national  S'telecommunications providers.Z3 {O'p` P (#$%p&`' p(#$%p&`'#X\  P6G;ɒP#эSee FCC International Bureau, Report on International Telecommunications Markets 19971998, Attachments 1 and 2; (Dec. 7, 1998) (available at http://www.fcc.gov/Bureaus/ International/Reports/ritm9798.pdf).:  They are competing to capture public, multinational business and government customers in national telecommunications markets opening around the world as a result of  SB'the WTO Agreement.`^B 3 {O!'p` P (#$%p&`' p(#$%p&`'#X\  P6G;ɒP#эSee Foreign Participation Order, 12 FCC Rcd 23,891 (1997), recon. pending; 1998  {Ol"'Biennial Regulatory Recon; Reform of the International Settlements Policy and Associated  {O6#'Filing Requirements, Docket No. 98148, FCC 9973 at 5.: ` In some cases, their competitors are still dominant service providers in their"B0*&&aa"  S'national markets.3 {Oh'p` P (#$%p&`' p(#$%p&`'#X\  P6G;ɒP#эSee International Bureau Report on International Telecommunications Markets 19971998 at 5.: Ƣ Many of the foreign competitors of U.S. carriers either are Signatories to INTELSAT or have direct access to INTELSAT available in the national markets in which they  S'operate. The public interest is served by bringing the advantages of increased competition to U.S. consumers in terms of lower prices and better service.  S8'x.47. U.S. telecommunication service providers face a competitive disadvantage compared to foreign carriers that can obtain INTELSAT capacity at IUC rates, either because they are INTELSAT Signatories or are operators from countries that permit direct access. The comments we have received  S'to our Notice demonstrate that the anticipated benefits of direct access lower costs, greater efficiency, flexibility, and control over facility use, as well as competitive pressures on the rates of Comsat and competing satellite operators should enable U.S. industry to better compete with foreign  SJ 'competitors. J "3 {O '#X\  P6G;ɒP#эSee Americatel comments at 1; AT&T comments at 1213; BT North America reply at 2526; C&W comments at 3 and reply at 45; Ellipso comments at 2, 6, and 1519; GE Americom comments at 8 and reply at 11; GlobeCast comments at 34 and reply at 4; ICG comments at 3 and reply 67; IT&E comments at 23; Loral Orion comments at 67; MCI comments at 1618 and reply at 17; and  yO.'PanAmSat comments at 5.(#  And, in view of the potential for direct access to enhance U.S. competitiveness, we do not believe that any special regulatory measures are necessary to assume that cost savings resulting from direct access are passed on to customers. The increased competition resulting from direct access is more likely to result in savings to consumers than what may be realized in the absence of direct access.  SZ'x/48. Two examples provided by commenters that show U.S. competitiveness will be enhanced are particularly illuminating. MCI WorldCom states that the competitive advantage enjoyed by foreign carriers in being able to acquire INTELSAT capacity at IUC rates resulted in its loss of a contract for international Internet services to a foreign carrier because of an inability to match the foreign carriers  S'pricing of INTELSAT satellite links.3 yO.'#X\  P6G;ɒP#эMCI WorldCom comments at 16.#x6X@`7 X@#(#ƣ Similarly, Loral Orion and C&W point out that the Canadian Signatory, Teleglobe, has a competitive advantage because it can purchase INTELSAT capacity in  Sj'Canada at IUC rates and deliver traffic to the United States via Teleglobe fiber links.jd 3 yOn'#X\  P6G;ɒP#эLoral Orion comments at #X\  P6G;ɒP#67.; C&W comments at 3.#x6X@`7 X@#(# Loral Orion and C&W state that this competitive advantage would be negated if direct access were to become available in the United States.  S'x049. Additionally, Loral Orion and other commenters point to their experience in operating in foreign markets where direct access is available, as demonstrating its competitive benefits. Loral Orion states that it has been able to expand into markets because direct access made it economical to"z 0*&&aa"  S'initiate service in these countries.C3 {Oh'#X\  P6G;ɒP#эSee Loral comments at 7 noting, for example, that direct access in Germany and United Kingdom has  yO2'reduced rates for INTELSAT space segment capacity by 25 percent.#x6X@`7 X@#(#C BT North America states that direct access has reduced costs of INTELSAT access in the United Kingdom far below the equivalent charges in the United States, while  S'at the same time increasing competition in the United Kingdom satellite services market."3 yOr'#X\  P6G;ɒP#эBT North America reply at 23.#x6X@`7 X@#(#Ƥ We noted  S'above the cost savings of the GE Americom affiliate in Germany.3 {O'#X\  P6G;ɒP#э See GE Americom comments at 9.#X\  P6G;ɒP#ѩ C&W echoes other comments regarding cost savings realized from direct access in the United Kingdom, but also points out that direct access has enabled it to respond to customer needs and add flexibility to its operations to the  S'benefit of U.K. telecommunications users.D3 yO '#X\  P6G;ɒP#эC&W comments at 5.#x6X@`7 X@#(#ƙ C&W, as well as other commenters, point out that a  S'beneficiary of direct access in the U.K. is a Comsat affiliate, Comsat General (U.K.).3 {O\'#X\  P6G;ɒP#эId.#X\  P6G;ɒP#(#Ɩ The Networks state that the availability of direct access in other countries has provided benefits such as avoiding  S'substantial "addon fees" and facilitating "operational arrangements for through circuits."f 3 yO'#X\  P6G;ɒP#эNetwork comments at 1419.#x6X@`7 X@#(#Ƨ  SH 'x150.Comsat argues that U.S. companies are already obtaining INTELSAT capacity through the  S 'Canadian company Teleglobe as an alternative to Comsat. 3 yO'#X\  P6G;ɒP#эComsat comments at 5960 and reply at 38.#X\  P6G;ɒP#Ѩ Teleglobe offers lower rates and service alternatives for U.S. firms wishing to use INTELSAT facilities, despite having to go through land line  S 'facilities and Canadian earth stations in order to use Teleglobe. 3 {O'#X\  P6G;ɒP#эSee Loral Orion comments at 6; C&W comments at 3; and GlobeCast comments at 4.#X\  P6G;ɒP# Comsat asserts that the availability of Teleglobe to U.S. carriers and users provides U.S. customers with a competitive alternative to use of INTELSAT for both competitive and noncompetitive markets and demonstrates that there are "no  SX'market place facts" that justify Level 3 direct access in the Untied States.X3 yO'#X\  P6G;ɒP#эComsat comments at 60.#x6X@`7 X@#(#Ɲ We disagree. U.S. customer use of Teleglobe demonstrates a clear market demand for lower rates for the use of INTELSAT facilities. Current U.S. policy that causes U.S. customers to satisfy commercial needs by routing traffic through another country is not in the public interest. Introduction of Level 3 direct access in the Unites States will provide an alternative for U.S. customers to satisfy their need superior to routing traffic through Canada.  Sh'x  pp  S@'x (2)Cost Recovery "0*&&aa"Ԍ S'x251.  The Notice noted Comsat's contention that INTELSAT IUC rates do not reflect many costs  S'that it would continue to incur on behalf of direct access customers.3 yOB'#X\  P6G;ɒP#эComsat "Joint Response to Satellite Coalition Analysis" at 13.#&a\  P6G;u&P#(# We asked Comsat to specify which of these costs it believes should be added to IUC rates to allow for fair recovery, and to specify the activities or transactions that give rise to these costs and the magnitude of these costs. We also asked parties to respond to Comsat's argument that if the Commission allows direct access we should provide for a "surcharge" to allow Comsat to recover expenses that it alleges are not recoverable through IUC rates, and to comment on the cost information that Comsat provides. We sought comment from all parties on which costs, if any, should be recovered by Comsat by means of a  S'surcharge imposed on U.S. direct access users.X3 {O '#X\  P6G;ɒP#эNotice, 13 FCC Rcd at 25.#X\  P6G;ɒP#Ѱ x  Sr'x352. ppComsat maintains that IUC rates do not represent the true "cost" or "price" of providing INTELSAT space segment service. Comsat asserts that IUC rates do not reflect the following expenses that it will continue to incur on behalf of direct access customers: (1) direct costs undertaken in performing its Signatory functions on behalf of the U.S. government and all users of INTELSAT service; (2) corporate tax liabilities; and (3) indirect costs associated with Comsat's investment and  S 'operating liabilities. 3 yO4'#X\  P6G;ɒP#эComsat comments at 6566.#X\  P6G;ɒP#ј Comsat also argues that IUC rates do not provide Comsat a fair aftertax  S 'return on its statutorilymandated investment. z3 yO'#X\  P6G;ɒP#эComsat comments at 6869.#X\  P6G;ɒP#ј  S2'x453. Comsat states that the appropriate surcharge should range, on average, from 28.67 percent to as much as 45.55 percent of the applicable IUC, depending upon whether the Commission allows Comsat to earn a rateofreturn of 12.48 percent, which represents the aftertax level of return allowed by the Commission under ratebase rate of return regulation, or 15.64 percent of the weighted average  S'rate of return earned by price cap companies. 3 yO<'#X\  P6G;ɒP#эComsat comments at 8384.#X\  P6G;ɒP#ј These numbers are based on 1997 data and Comsat  Sj'notes that these numbers serve as proxies, and should not be substituted for a fullblown analysis.j3 yO'#X\  P6G;ɒP#эComsat comments at 84.#X\  P6G;ɒP#ѕ x  S'x554. Most proponents of direct access oppose imposition of any surcharge. A few parties state  S'they would support a very limited surcharge for direct Signatoryrelated expenses only.* 3 {O!'#X\  P6G;ɒP#эSee Network comments at 78; AT&T comments at 15.#X\  P6G;ɒP#Ѷ  S'x(a)ppSignatoryRelated Expenses "z 0*&&aa"Ԍ S'x655. Comsat asks that the Commission permit a surcharge for expenses Comsat believes are incurred in performing its role as U.S. Signatory to INTELSAT. These expenses, asserts Comsat,  S'include both Signatory function expenses and insurance expenses.3 yO'#X\  P6G;ɒP#эComsat comments at 6566.#X\  P6G;ɒP#ј x  S`'x (i)ppSignatory Function Expenses x  S'x756. Comsat identifies the following activities and functions as Signatory function expenses: (1) attending and preparing for INTELSAT meetings; (2) participating in the U.S. Government instructional process; (3) protecting its investment in INTELSAT; (4) representing the interests of U.S. carriers and users within INTELSAT; and (5) observing the implementation of procedures for  Sp'assigning space segment capacity to users.^pX3 {Oh '#X\  P6G;ɒP#э See Ex Parte letter from Comsat, Keith Fagan, to the Federal Communications Commission Secretary,  {O2 'Magalie Roman Salas, June 11, 1999 ("Comsat June 11 Ex Parte") at 1314.#X\  P6G;ɒP#(#^ Comsat asserts that IUC rates do not cover these  SH 'expenses, which amounted to $3.005 million in 1998.H 3 {O'#X\  P6G;ɒP#эSee Comsat comments, Attachment 1 at Exhibit 4 (Theodore Boll).#X\  P6G;ɒP# x  S 'x857. Comsat also identifies certain capitalized headquarter expenses attributable to carrying out the Signatory function. These include expenses for computer equipment, software, and communications  S 'equipment. F3 {O'#X\  P6G;ɒP#эComsat June 11 Ex Parte at 1314.#X\  P6G;ɒP#Ѧ Since some costs which Comsat believes should be recoverable may be incurred by  S 'functions which also generate nonrecoverable costs, we asked in our Notice that Comsat discuss how  SZ'it would assign its costs. In its response, Comsat stated that it had allocated 25 percent of these capitalized headquarter expenses to the Signatory function, based on the expectation that significant staffing would still be required to carry out statutorilymandated Signatory activities under a Level 3  S'direct access regime.3 {OZ'#X\  P6G;ɒP#э Comsat June 11 Ex Parte at 11.#X\  P6G;ɒP#(#Ƭ These total capitalized expenses amount to $330,000, and are in addition to  S'the $3.005 million figure listed above.jj 3 {O'#X\  P6G;ɒP#э Id.(#j  Sj'x958. Proponents of direct access have mixed views about whether the Commission should permit a surcharge for expenses identified by Comsat as Signatory function expenses. The Networks, AT&T, and MCI WorldCom state that the Commission should, at most, allow Comsat to recover costs directly  S'attributable to its official role as the U.S. Signatory to INTELSAT. 3 {O"'#X\  P6G;ɒP#э See AT&T reply at 15; MCI WorldCom reply at 24; and Network reply at 17.#X\  P6G;ɒP#(# MCI WorldCom argues that a Signatory surcharge should be limited to U.S. government instructional process expenses, and should" 0*&&aaK" not include expenses for Comsat participation in INTELSAT governance in order to protect its  S'commercial interest in INTELSAT.3 yO@'#X\  P6G;ɒP#эMCI WorldCom reply at 24.#X\  P6G;ɒP#ј  S'x:59.In contrast, PanAmSat argues that INTELSAT's investment return to Comsat is more than  S`'adequate to compensate Comsat for its Signatorybased costs.`X3 yOX'#X\  P6G;ɒP#эPanAmSat reply at 7.#X\  P6G;ɒP#ѓ BT North America states that British Telecom ("BT") does not impose a surcharge for costs associated with its Signatory and carrier functions because the costs associated with the administrative burden in separating Signatory costs  S'from purely commercial costs would outweigh the benefits.3 yOp '#X\  P6G;ɒP#эBT North America comments at 57.#X\  P6G;ɒP#Ѡ BT North America states that it finds astounding that Comsat records as a direct Signatory cost 25 percent of the total costs of its headquarters facilities. Before implementing direct access in the United Kingdom, BT only added a  Sp'seven percent surcharge to IUC rates to recover costs it incurred in placing orders.px3 yO'#X\  P6G;ɒP#эC&W comments at 56; BT North America comments at 34.#X\  P6G;ɒP#ѵ  S 'x;60. In determining whether Comsat should be allowed to recover a particular operating expense, our functioning principle is that Comsat should not be allowed to recover any discretionary expenses unrelated to its unique Signatory functions. However, Comsat should recover costs that are unavoidable, nondiscretionary Signatoryrelated functions and expenses that Comsat will continue to incur even after the implementation of direct access. We believe such expenses should be included in a surcharge because they are incurred as a result of the role Congress gave Comsat and mandated by the Satellite Act, and because they are likely to produce value for those customers who take advantage of direct access. x  S'x<61. Based on the record before us, we find that the activities identified by Comsat constitute unavoidable, nondiscretionary Signatoryrelated functions that Comsat cannot proportionally reduce after the implementation of direct access. We agree with the Networks' assessment that such Signatory costs are unique to Comsat. In addition, these Signatory activities directly benefit potential users of direct access because Comsat must represent all U.S. interests in connection with INTELSAT decisionmaking. x  S'x=62. We disagree with PanAmSat that the INTELSAT return before tax is more than adequate to compensate Comsat for Signatoryrelated costs. Despite PanAmSat's assertion, we find that it is appropriate that Comsat be compensated for direct Signatoryrelated expenses in addition to IUC payments. It would be unfair to Comsat to allow an unavoidable, nondiscretionary expense, such as  S'those incurred by the Signatory function, to reduce that return. While we recognize that British Telecom does not impose a surcharge for Signatory expense to direct access users in the United Kingdom, this factor alone does not justify requiring Comsat to act as the U.S. Signatory without compensation for its unavoidable costs. "`0*&&aat"Ԍx(ii) Insurance Expense x  S'x>63. pp Comsat also requests that the Commission include a surcharge for insurance expenses that Comsat has incurred on the deployment of INTELSAT satellites. Comsat states that it has traditionally purchased spacesegment insurance on its own because, until very recently, INTELSAT  S8'did not fully insure total satellite deployment costs.83 {O'#X\  P6G;ɒP#эSee Comsat comments at Appendix, Brattle Group Study at 35.#X\  P6G;ɒP# Comsat states that it has purchased launch and post-separation insurance coverage to protect against possible losses associated with a launch or in S'orbit failure of a satellite, to the extent INTELSAT had not fully purchased such insurance.Z3 {O '#X\  P6G;ɒP#э See Comsat June 11 Ex Parte at Exhibit C (letter) and Brattle Group Study at 35.#X\  P6G;ɒP# Comsat also states that it purchased insurance to provide coverage against the cost of insurance premiums, to  S'the extent INTELSAT has not chosen to cover the insurance premiums.3 {O$ '#X\  P6G;ɒP#э  See Comsat comments at Appendix, Brattle Group Study at 35.#X\  P6G;ɒP# According to Comsat, INTELSAT has underinsured or not insured the costs of satellite deployment in the past because INTELSAT did not have to raise equity in the capital market, and thus did not manage its investment  S 'risk in the same way that commercial companies do. ~3 {O>'#X\  P6G;ɒP#э Comsat June 11 Ex Parte at 910.#X\  P6G;ɒP#Ѭ Comsat states that as an equity investor, it bears a portion of the risk of INTELSAT launch failures or malfunctions in orbit, and thus has  S 'consistently purchased insurance to the extent INTELSAT has not. 3 yO'#X\  P6G;ɒP#эComsat reply comments at 44.#X\  P6G;ɒP#ћ Otherwise, Comsat states, losses associated with uninsured portions of INTELSAT's space segment would reduce IUCprovided  S 'returns. 3 yO'#X\  P6G;ɒP#эComsat comments at Appendix, Brattle Group Study at 35. Comsat argues that absent a surcharge, U.S. direct access users would obtain a free ride on Comsat's insurance payments.  S'x?64. Comsat filed a schedule listing the satellites that have been underinsured, along with the  S'depreciation life for how much insurance expense remains capitalized on its financial statements.0 3 {O'#X\  P6G;ɒP#э See Comsat June 11 Ex Parte at Exhibit C. Comsat states it has $31 million of capitalized insurance remaining as of December 31, 1998. Comsat asserts that the actual expenses attributed to this capitalized insurance would be $13.158 million, which includes the following components: $3.872 million representing the rate of return on the capitalized insurance, assuming a 12.48 percent rate of return that Comsat asserts it could have earned; $7.777 million for depreciation expense; $1.510 million for Comsat's corporate tax liability on the $3.872 million. The total amount of $13.158 million would represent approximately 8.5 percent of Comsat's 1998 IUC payments to INTELSAT. x  Sx'x@65. The Networks argue they should not bear the burden of Comsat's insurance expense when it is not clear why most "satellite insurance costs" are not already recovered in INTELSAT's operating"P 0*&&aa"  S'expenses.3 yOh'#X\  P6G;ɒP#эNetwork comments at 1011.#X\  P6G;ɒP#љ MCI WorldCom and BT North America assert that INTELSAT already fully insures its  S'satellites and launches, and thus argue against a surcharge for insurance expense. X3 yO'#X\  P6G;ɒP#эMCI WorldCom reply at 23; BT North America reply at 27.(#Ɨ BT North America further states that BT does not incur any additional costs associated with satellite launch and  S'insurance.3 yO'#X\  P6G;ɒP#эBT North America comments at 57.#X\  P6G;ɒP#Ѡ  S8'xA66.We find that Comsat should be entitled to a surcharge that recovers that part of Comsat's  S'insurance expenditures attributed to INTELSAT not purchasing, or fully purchasing, launch and  S'post-separation insurance. As we discuss below, Comsat was created by the Satellite Act to plan, initiate, construct, own, manage and operate with foreign governments a commercial communications  S'satellite system.x3 {O'#X\  P6G;ɒP#эSee discussion in paragraphs 158162, infra.#&a\  P6G;u&P#(#ƿ That system became INTELSAT. As the U.S. Signatory in this intergovernmental organization, Comsat is required to make capital investments in the satellite system under the terms of  SH 'the INTELSAT Operating Agreement.H 3 yO'#X\  P6G;ɒP#эINTELSAT Operating Agreement at Article 6.(#Ɗ In carrying out obligations particular to its role, Comsat must insure that the purposes of the Satellite Act are fulfilled. This may include taking steps to protect its investment if not otherwise protected by INTELSAT. We believe Comsat's action to  S 'purchase launch and postseparation coverage, to the extent INTELSAT does not, is prudent given the high risk nature of launching and operating satellites and the large amount of capital committed to the development, launch, and operation of INTELSAT's satellites. Otherwise, a launch or inorbit failure could significantly jeopardize Comsat's investment in INTELSAT. As the U.S. Signatory to INTELSAT, we believe Comsat has a duty to protect its INTELSAT investment in order to serve the interests of the U.S government and INTELSAT users in the United States. As a result, we find Comsat's action to fully insure against launch and inorbit failures to be reasonably related to its  S'Signatory responsibilities, and do not find this insurance expense to be discretionary in nature. B3 yO'#X\  P6G;ɒP#эWe further note that Comsat's unique status as the U.S. Signatory to INTELSAT distinguishes Comsat from other common carriers. Therefore, our treatment of Comsat's insurance expense in this Report and Order is not binding precedent for our treatment of any cost incurred by any other common carrier. The Commission has determined on at least one occasion that regulations applicable to domestic local exchange carriers (LECs) are not suited to Comsat, in part, because of the differences  {O'between Comsat and domestic LECs. See Comsat Corporation, Policies and Rules for Alternative Incentive Based Regulation of Comsat Corporation, IB Docket No. 9860, Report and Order, 14 FCC  yOl!'Rcd 3065, 3072 (para. 20) (1999) (declining to extend LEC price cap regulation to Comsat). #x6X@`7 X@#(#ƹ We believe direct access users that will gain access to INTELSAT facilities that have been partially insured by Comsat should, in turn, partially compensate Comsat for its insurance expenses.  S'xB67.  Cable and Wireless states that the Commission has found in the past that permitting carriers to recover "embedded" or "opportunity" costs from rivals stifles the very consumer benefits that"0*&&aan"  S'competition is intended to produce.3 yOh'#X\  P6G;ɒP#эC&W comments at 4.#X\  P6G;ɒP#ё The argument here by Cable and Wireless, however, is not persuasive. Comsat explains that, in the past, INTELSAT did not have to raise capital itself in the financial markets. Thus, INTELSAT faced different incentives in managing its risks, and so had an  S'incentive to be underinsured.X3 {O'#X\  P6G;ɒP#эComsat Ex Parte letter, July 11, 1999, at 910.#&a\  P6G;u&P#Ѵ Each INTELSAT Signatory was left to decide for itself how much risk it would choose to bear and how much to protect itself through purchase of insurance. Further, because the size of Comsat's ownership interest in INTELSAT is not affected by customers' decisions to access INTELSAT satellites directly or through Comsat, Comsat's investment obligations in INTELSAT to fund replacement for any inorbit failure also remains the same. Therefore, because Comsat has this continuing investment obligation, its insurance of the risk associated with any inorbit failure can be properly viewed as a Signatory expense that Comsat continues to bear, even if all its current customers were to use direct access.  S 'xC68. We do not, however, include a surcharge for any insurance purchased to provide coverage against the cost of the insurance itself in the event of a launch or inorbit failure. Of the $30 million worth of total capitalized insurance amount stated by Comsat, approximately $8.5 million represents  S 'insurance on insurance premiums. While we recognize the importance of purchasing insurance when  S 'INTELSAT has failed to fully do so, we find that Comsat did not need to fully insure the insurance premiums. The risk associated with the need to purchase insurance on insurance premiums could have  S0'reasonably been absorbed in the course of normal business operations. (#(# xpp  S'  x(iii) Calculating Reasonable Surcharge for SignatoryRelated Expenses  S'  S'xD69. In the Notice, we asked Comsat to specify how it would allocate these recoverable costs  Sj'between itself and Level 3 users if such expenses were allowed.j3 {O'#X\  P6G;ɒP#эNotice, 13 FCC Rcd at 22037.#X\  P6G;ɒP#ѭ We also asked Comsat to specify how any recoverable costs should be allocated among the different INTELSAT services.  S'xE70. Comsat submitted a variety of schedules depicting surcharge calculations.|3 {O'#X\  P6G;ɒP#эSee Comsat comments at Attachment 1 and Comsat June 11 Ex Parte. As noted above, Comsat calculated the surcharge percentages based on what portion these expenses represented of the  S'IUC payments, using 1998 data.3 {OP '#X\  P6G;ɒP#эSee Comsat comments at Exhibit 4.#X\  P6G;ɒP#Ѧ In its further response, Comsat argues that calculating the surcharge will be difficult, and will mirror the complex type of rate regulation that the Commission  SR'determined was unnecessary in the NonDominant Order, and it will necessarily entail periodic  S,'visits.,3 yOl$'#X\  P6G;ɒP#эComsat comments at 83.#X\  P6G;ɒP#(#Ɲ Comsat argues that if the surcharge falls short, the result would be below cost access by U.S.",0 0*&&aaq" carriers for INTELSAT space segment, and potentially divert traffic to INTELSAT from more efficient satellite service providers.  S' xF71.  We find that a surcharge should be calculated by determining what percentage a given expense constitutes of the total IUC payments made by Comsat in a given year, and then applying this uniform percentage to IUC rates in the forward year. While we understand that Comsat's Signatoryrelated expenses and IUC revenues may change, thus affecting the size of the surcharge that Comsat  S'receives from direct access users, we do not now anticipate any material changes in these factors. TX3 yOP'#X\  P6G;ɒP#эHowever, as we explain below in paragraph 90, Comsat's initial surcharge tariff will be in effect for no more than one year. If Comsat wishes to continue imposing a surcharge it will have to file a tariff revision for the following year.(#T In addition, we agree with several parties who argue that the Commission should not conduct a rate proceeding to determine the reasonableness of Comsat's potentially recoverable costs. Comsat has failed to provide any evidence on how a potentially insignificant shortage in the surcharge would lead to below cost access by U.S. carriers for INTELSAT space segment, or potentially divert traffic to INTELSAT from more efficient satellite service providers. x  S 'xG72. We find that a uniform surcharge of 5.58 percent over IUC rates would be reasonable, for any particular service, in order to compensate Comsat for these unavoidable Signatory function expenses. This surcharge is based on the finding that Comsat's Signatory function expenses represented 1.94 percent of Comsat's IUC payments to INTELSAT in 1998. We also will allow a surcharge of .05 percent for headquarter account expenses. Likewise, for Comsat's allowable insurance expenses, we find that a uniform surcharge of 3.59 percent over IUC rates be permitted in order to compensate Comsat for these insurance expenses. In total, we find a surcharge of 5.58  S'percent over IUC rates to be reasonable for the purpose of compensating Comsat for Signatoryrelated  S'expenses. Appendix B, hereto, provides the information on calculating this surcharge. x  S@'xH73.  Comsat also asks the Commission to consider the additional costs that it will incur by having to necessarily wait longer for payment from U.S. users of direct access since INTELSAT will  S'first receive the funds. It argues that this poses additional costs on Comsat3 yOx'#X\  P6G;ɒP#эComsat reply at 48#X\  P6G;ɒP#. We do not find this argument to have merit, as customers will pay the surcharge at the time they pay IUC rates to INTELSAT.  SP'x(b)ppReturn on Investment  S'xI74. Comsat asserts that IUC rates do not provide Comsat a reasonable, aftertax return on its  S'investment.x3 yO"'#X\  P6G;ɒP#эComsat comments at 68.#X\  P6G;ɒP#ѕ Comsat states that the 18 percent provided through the IUC mechanism, as cited in the  S'Notice, actually translates into a return well below that earned by other telecommunication services companies after taking into account a number of considerations. First, Comsat argues that the 18 percent return represents a pretax return, and thus ignores the corporate tax liability that Comsat"b 0*&&aag" incurs on the return. After considering tax implications, Comsat states the posttax return on its Signatory equity amounts to 11.2 percent. Second, the 18 percent return is on the book value of invested equity and ignores a capital base that should also include Comsat's liability for the portion of INTELSAT's debt which Comsat finances. Comsat asserts that when considering total capital, or the sum of equity and Comsat's share of INTELSAT's debt, the effective aftertax return will be less than 11.2 percent. Furthermore, asserts Comsat, when considering return on net plant as the measure for total capital employed, the posttax return on net plant amounts to 9.2 percent. In sum, Comsat argues that whether the rate of return is based on equity, equity and debt, or net plant, the IUCprovided  S'return is well below a compensatory return for a private firm subject to corporate tax liability,3 {O( '#X\  P6G;ɒP#эId..#X\  P6G;ɒP#щ and below the return that Comsat has been allowed to earn under the Commission's rate of return policies. For these reasons, Comsat requests that the Commission permit a surcharge to allow Comsat to earn a reasonable rate of return.  S 'xJ75. In response, most parties contend that IUC rates already include a generous rate of return. Z3 yO'#X\  P6G;ɒP#эGE Americom comments at 11.#X\  P6G;ɒP#њ MCI WorldCom states that INTELSAT pays Comsat an aftertax return on Signatory equity of 10.3712.81 percent, which falls within the 11.48 12.48 percent return that Comsat has been permitted to  S 'earn under rate of return regulation. 3 yO '#X\  P6G;ɒP#эMCI WorldCom comments at 20.#X\  P6G;ɒP#ћ In addition, MCI WorldCom states that the relevant rate of return the Commission needs to consider is Comsat's pretax annual rate of return of 1418 percent on Comsat's investment in INTELSAT, and not INTELSAT's rate of return on assets. x  S'xK76. MCI WorldCom asserts that Comsat's election to have excess investment in INTELSAT  S'demonstrates the attractiveness of this return.z3 yO'#X\  P6G;ɒP#эMCI WorldCom reply at 19.#X\  P6G;ɒP#ј MCI WorldCom includes a press statement made by the Comsat CEO, that discusses Comsat's recent decision to increase its investment share in INTELSAT by approximately two percent. The press release states that "Comsat's increased share in INTELSAT makes good business sense, and the corporation expects to see a strong return on this  S'investment." 3 {O'#X\  P6G;ɒP#эMCI WorldCom Ex Parte letter, May, 21, 1999.#X\  P6G;ɒP#ѱ  S'xL77. In the Notice, we requested comment from Comsat and other parties on how our recent decision to reclassify Comsat to nondominant carrier status for most of its services, as well as our pending consideration of incentivebased rather than rate of return regulation of Comsat's remaining dominant services, should affect our consideration of Comsat's cost recovery beyond those costs  S*'associated with its "statutorily imposed official Signatory functions."*3 {Of$'#X\  P6G;ɒP#эSee supra at  47.#X\  P6G;ɒP#Ѡ BT North America responded that is ironic that Comsat seeks surcharges designed to provide a secure rate of return when in the"!. 0*&&aaN"  S'NonDominant proceeding Comsat sought to end rate of return regulation and sought to price its  S'services according to the demands of the marketplace.3 yOB'#X\  P6G;ɒP#эBT North America reply at 29.#X\  P6G;ɒP#ќ x  S'xM78. Based on the record before us, we do not believe Comsat's request to permit a surcharge that would guarantee a particular rate of return above that already provided by IUC rates is reasonable for the following reasons. First, the return provided by IUC rates, which was between 14 and 18 percent in 1998, provides a marketbased rate of return for Signatories, as determined by the INTELSAT Board of Governors, of which Comsat is a member. The INTELSAT Board of Governors acknowledges that a Signatory's ownership of INTELSAT may exceed its usage of INTELSAT services, and in such circumstances, IUC rates provide the only source of income on this excess  Sr'ownership. We assume that the Board will establish IUC rates that reflect a market rate of return. rX3 yOj '#X\  P6G;ɒP#эArticle 8(c) of the INTELSAT Operating Agreement provides that: in determining the rate of compensation for use of the capital of Signatories, the Board of Governors shall include an allowance for the risks associated with investment in INTELSAT and, taking into account such allowance, shall fix the rate as close as possible to the cost of money in the world markets. (# If IUC rates yield an unreasonably low rate of return, the INTELSAT Board would have every incentive to change its pricing strategy or cost management practices to increase this return. INTELSAT evidently considers the competitive environment and the needs of its customers in  S 'determining its prices. @3 {O'#X\  P6G;ɒP#эSee 1997 Annual Report at 2 and 4.(#ƈ For example, INTELSAT stated in its 1997 Annual Report that "over the past year, INTELSAT has worked to ensure that its pricing strategy is attractive to its increasingly  S 'diverse customer base."a 3 {O'#X\  P6G;ɒP#эId.a  S2'xN79. Second, we agree that Comsat's election to have excess investment in INTELSAT  S 'demonstrates, at least to some degree, the attractiveness of IUCbased returns. d 3 yO'#X\  P6G;ɒP#эMCI WorldCom reply at 19.#X\  P6G;ɒP#ј Comsat clearly has attributed Comsat's decision to increase its investment share in INTELSAT by approximately two percent to expecting a strong return on this investment, even though it had greater ownership than its usage required at the time. While Comsat states in its comments that it holds this surplus ownership to enhance its voting power (and the influence of the United States) within INTELSAT, and not solely for investment purposes, Comsat (in a March 30, 1999 press release titled, "Comsat Increases Ownership of INTELSAT System") strongly suggests that obtaining a reasonable return is also part of this business decision to maintain excess ownership.  S'xO80. As discussed in this Report and Order, our regulatory treatment of Comsat has changed  Sz'considerably since the last time we considered direct access in 1984. In the 1984 Direct Access  ST'Order, we found direct access would constrain Comsat to a posttax rate of return well below that recognized by the Commission as necessary to its financial wellbeing. During that period, and up to"." 0*&&aaq" its recent reclassification as a nondominant carrier, Comsat had been authorized to earn between  S'11.4812.48 percent, posttax, on its INTELSAT investment.3 {O@'#X\  P6G;ɒP#э1984 Direct Access Order, 97 FCC 2d at 24.  S'xP81. That authorization changed, however, in April of 1998, when we reclassified Comsat as a  S`'nondominant carrier on many routes, and eliminated rateofreturn regulation, so Comsat could price  S8'its services according to the demands of the marketplace. We found Comsat nondominant after concluding that Comsat no longer held market power for services to the vast majority of its routes, and that the increasingly competitive international telecommunications market would best serve to prevent Comsat from charging unreasonable prices. Therefore, we agree with BT North America that it would not be appropriate to grant Comsat's request to permit a surcharge to secure a particular rate of return, as it is inconsistent with Comsat's request to end rate of return regulation in order to allow it the  SH 'freedom to determine appropriate prices in these competitive markets.$H Z3 yOB '#X\  P6G;ɒP#эIn those markets and routes where Comsat has continued to be dominant, we have replaced rate of  {O 'return regulation with an alternative incentive based price regulation scheme. See In the Matter of Comsat Corporation Policies and Rules for Alternative Incentive Based Regulation of Comsat  {O'Corporation, IB Docket No. 98-60, 14 FCC Rcd 3065 (1999) ("Comsat Incentive Based Order").(#  S ' x  S 'xQ82. In addition, we have no evidence of any Signatory receiving a surcharge so it could secure a higher rate of return than that provided by IUC rates. Parties note that there is no markup or surcharge to IUC rates in other countries that have permitted Level 3 direct access, such as Chile,  S 'France, Germany, the Netherlands, and the U.K. F3 yOf'#X\  P6G;ɒP#эMCI reply at 18.#X\  P6G;ɒP#я PanAmSat notes that Canada recently adopted a direct access system that does not include any surcharge fee on direct access customers. Based on  S0'PanAmSat's knowledge, no other administrations assess a surcharge.03 yO'#X\  P6G;ɒP#эPanAmSat reply at 7.#X\  P6G;ɒP#(#ƛ(#(#x  S'xR83. Comsat also asserts that two other direct accessrelated factors increase Comsat's risk and thereby reduce its market return in INTELSAT. First, the limited liquidity faced by INTELSAT Signatories further increases the costs of its investment. Second, INTELSAT Signatories are jointly and individually liable for the entire system. These factors increase the risk, and the corresponding  S@'necessary market return, asserts Comsat.@f 3 yOF'#X\  P6G;ɒP#эComsat reply at 48.#X\  P6G;ɒP#ђ We do not find either of these factors to lie outside the normal business risks already assumed by Comsat today.  S'xS84. In sum, we believe that IUC rates are designed by INTELSAT to provide a reasonable rate of return. Furthermore, INTELSAT established IUC rates with the understanding that Signatories may own a greater part of INTELSAT than they actually use, and thus IUCbased returns would represent the only source of return on this excess investment. In addition, our decision to reclassify Comsat to nondominant carrier status in April of 1998 underlies our conviction that rates should be determined by what the market will support. If Comsat believes that an IUC rate is too low, then it may work"# 0*&&aaA" within its capacity as a Board member of INTELSAT to address any concerns it has with the return on investment provided by IUC rates. x  S'x(c)ppCorporate Tax Liability x  S8'xT85. Comsat also asserts that IUC rates do not allow Comsat to recover the corporate tax expenses that it will incur on any income derived through direct access. Comsat states that its marginal corporate income tax rate in the year 1998 was approximately 37.31 percent and its effective income  S'tax rate was 25.95 percent.3 {O( '#X\  P6G;ɒP#эSee Comsat June 11 Ex Parte letter at Exhibit E.#&a\  P6G;u&P#(# This includes federal, state, and local taxes. Comsat requests that a surcharge be added to IUC rates of 7.11 percent to 13.82 percent, depending on the rate of return Comsat is allowed to earn, in order to allow Comsat to recoup its corporate income tax expenses  SH 'incurred on income derived through direct access.H Z3 yOB '#X\  P6G;ɒP#эBoll Affidavit Exhibits 1 and 3.#X\  P6G;ɒP#ѥ Other commenters in the proceeding, while generally opposing any surcharge, do not address the effects of corporate tax liability on Comsat's return.  S 'xU86. We decline to adopt Comsat's suggestion to include a surcharge for Comsat's corporate income tax expense that it will incur on the income produced by direct access. It is true that as a taxpaying entity, Comsat cannot avoid paying federal, state and local income taxes on income derived from INTELSAT for direct access. The rate of return on equity which INTELSAT pays to its signatories, which is currently set at between 14 and 18 percent before tax by the INTELSAT board, is equivalent to a rate of return on equity to Comsat of about 8.78 to 11.28 percent after tax, based on  S'Comsat's marginal income tax rate of 37.31 percent. Historically, as a dominant carrier, Comsat was  S'rate regulated and was permitted to earn a rate of return of about 11.4812.48 percent after tax.R3 {O'#X\  P6G;ɒP#эSee Communications Satellite Corporation Investigation into Charges, Practices, Classifications, Rates  {O'and Regulations, Memorandum Opinion and Order, 68 FCC 2d 941 (1978).#&a\  P6G;u&P#(#R However, in 1998 we declared Comsat to be nondominant and eliminated rate regulation for most  S@'services on most routes.@F3 {O&'#X\  P6G;ɒP#эComsat NonDominant Order, 13 FCC Rcd 14083 (1998).#c PE37 P#(# Later we replaced Comsat's rate of return regulation on its remaining services along dominant routes with incentive based price regulation. In doing so, we allowed Comsat much greater flexibility to lower prices to meet competitive service providers, but we also clearly intended that Comsat not be guaranteed any particular rate or return on its Signatory equity or rate  S'base.3 {O!'#X\  P6G;ɒP#эComsat Incentive Based Order, 14 FCC Rcd at n. 200. For this reason, we do not see any need to explicitly compensate Comsat by an addition to its  Sx'surcharge for the taxes it would have to pay on the income it receives from INTELSAT#&a\  P6G;u&P#.  S('x (3)Implementation Procedures for Direct Access x"$j 0*&&aaN"Ԍ S'xV87. We have determined that a Comsat surcharge of 5.58 percent over IUC rates for INTELSAT  S'service offerings would be reasonable for purposes of compensating Comsat for Signatory function  S'expenses and insurance expenses related to its Signatory role.3 yO'#X\  P6G;ɒP#э Appendix B hereto provides the analysis calculating this surcharge.#X\  P6G;ɒP#   As pointed out in our Notice, Comsat's current tariff "markup" (over the INTELSAT tariff rate) varies widely across services. Comsat's markup is based on factors such as the service provided, the length of the contract term,  S:'and the amount of capacity being purchased.:X3 {O2'#X\  P6G;ɒP#эSee Notice, 13 FCC Rcd at 2205022051 (Appendix B). The specific tariff examples cited in the Notice showed markups that varied from 18 to 63 percent for fulltime video service, 38 to 270 percent for  S'voiceinternational digital service, and 26 to 88 percent for data international business service.xZ3 {Ov '#X\  P6G;ɒP#эId. Percentage markups can be derived from Appendix B of the Notice. For example, the "tariff ratio" for a 5 year term, 2.048 MB/s IDR, 0270 ckts, hemi/zone/spot coverage, is shown as 3.70. This is equivalent to a 270 percent markup ([(3.701)/1]*100=270%)(#x For switchedvoice service, the markup is highest for shorter term contracts, while the markup for fulltime video and data international business services is highest in long term contracts. Thus, the impact of a uniform markup of 5.58 percent may be particularly effective in lowering the rates for relatively short term switchedvoice traffic contracts and long term fulltime video and data contracts.  S 'xW88. We conclude that, while a surcharge calculated as set forth in this Order is reasonable, based on the record in this proceeding, we do not prescribe this surcharge. Comsat may file a tariff for a different surcharge, provided its proposed surcharge is just and reasonable within the meaning of  S 'Section 201 of the Communications Act, 3 yO0'#X\  P6G;ɒP#э47 U.S.C.  201.#c PE37 P#ђ i.e., that the surcharge will not recover more than the share  S^'of its expenses for the direct Signatoryrelated expenses and its insurance expense that Comsat  S6'reasonably incurs as a result of its role as the U.S. Signatory to INTELSAT.h63 yOr'#X\  P6G;ɒP#эOur action here is not a prescription merely because it specifies a particular surcharge level that we find reasonable. "No principle of law requires the Commission to engage in a pointless charade in which carriers are required to submit and resubmit tariffs until one finally goes below an undisclosed  {O'maximum point of reasonableness and is allowed to take effect." In re TransAlaska Pipeline Rate  {O'Cases, 436 U.S. 631, 653 (1978).#c PE37 P#(#h Accordingly, if any direct access customer believes that the surcharge is unjust and unreasonable, we will consider a  S'complaint filed by that customer.P 3 {O'#X\  P6G;ɒP#эSee 47 U.S.C.  208.#c PE37 P#ќ If we find that the surcharge is unjust and unreasonable, we will require Comsat to issue refunds as warranted.  Sn'xX89. The procedures for implementing direct access to the INTELSAT system from the United  SF'States, including the surcharge element, will consist of several elements. Following release and publication in the Federal Register of this Report and Order, the International Bureau shall issue a Public Notice establishing a 21day period (from the date of the public notice) for eligible carriers and users to notify the Commission in writing that they want Level 3 direct access to INTELSAT. The"%0*&&aa>" public notice also will specify the name and address for filing any such notification. The International Bureau will forward the names of all the eligible U.S. carriers and users to Comsat. Comsat shall be required to inform INTELSAT within ten days of receiving these eligible names that they are authorized to obtain Level 3 direct access from INTELSAT without further approval of the U.S. Signatory Comsat consistent with the procedures established by INTELSAT that permits "blanket  S8'authorizations" for Level 3 direct access.83 {O'#X\  P6G;ɒP#эSee supra at  9.#&a\  P6G;u&P#(#ơ Any eligible carriers and users, not part of the initial "blanket authorization" request sent to INTELSAT, may request that Comsat add them to the list of carriers and users eligible for Level 3 direct access "blanket authorizations." Comsat will be required to inform INTELSAT within ten days of receiving each such subsequent request. Within 60 days after  S'publication in the Federal Register of this Report and Order, Comsat may file, on one day's notice, a tariff of the terms and conditions of surcharges applicable to U.S. Level 3 direct access customers,  SH 'consistent with the findings in this Report and Order.H Z3 yOB '#X\  P6G;ɒP#эIn essence, Comsat will subsequently be allowed to charge a uniform surcharge of 5.58 percent over  yO 'IUC rates charged by INTELSAT.#&a\  P6G;u&P#(# The carriers and users obtaining Level 3 direct access from INTELSAT shall pay Comsat the surcharge specified in Comsat's effective tariff that is applicable to the services obtained from INTELSAT. Finally, Comsat may establish reporting mechanisms with INTELSAT for the limited purpose of assuring that Comsat can identify the appropriate surcharge that U.S. direct access customers must pay Comsat upon receipt of service from INTELSAT under Level 3 direct access. Comsat may take appropriate steps through INTELSAT to terminate a customer's Level 3 direct access status for failure to pay the appropriate surcharge.  S'xY90. We also conclude that Comsat's initial surcharge rates should be in effect for no more than one year. A surcharge that is reasonable today may or may not be reasonable in the future. Comsat's Signatoryrelated expenses may vary from year to year, and its level of recovery of those expenses may also vary. Accordingly, we require Comsat to limit its initial surcharge to one year. If Comsat wishes to continue to impose a surcharge after that date, it may file a tariff revision reflecting a new surcharge that recovers no more than the share of direct Signatoryrelated expenses and its insurance expense that Comsat reasonably incurs as a result of its role as the U.S. Signatory to INTELSAT.  S'xZ91. We also require Comsat to state in its tariff that this surcharge will not apply upon privatization of INTELSAT. This surcharge is intended to enable Comsat to recover its reasonable, prudentlyincurred costs associated with acting as the U.S. Signatory to INTELSAT, direct Signatoryrelated expenses and Comsat's insurance expense reasonably incurred as a result of its role as the U.S. Signatory to INTELSAT. Once INTELSAT has been privatized, Comsat will no longer incur any costs associated with acting as the U.S. Signatory to INTELSAT, and so continuing to impose its surcharge will no longer be just and reasonable at that point.  S'x[92. In summary, we reach the following conclusions with respect to Comsat's surcharge: (1) a surcharge is just and reasonable, provided that it recovers no more than the share of direct Signatoryrelated expense and insurance expense that Comsat reasonably incurs as a result of its role as the U.S. Signatory to INTELSAT; (2) if Comsat wishes to impose a surcharge, it must file a tariff; (3) we find that a surcharge calculated as set forth in the appendices to this Report and Order are just and" &0*&&aa"  S'reasonable but Comsat is free to attempt to show that some other surcharge to cover the same expenses would also be just and reasonable; (4) Comsat's tariff must state that this surcharge will be in effect for no more than a year after the date that its tariff takes effect; and (5) if a Comsat customer believes that Comsat's surcharge recovers more than the direct Signatoryrelated expense and its insurance expense that Comsat reasonably incurs as a result of its role as the U.S. Signatory to INTELSAT, we will consider a complaint filed pursuant to Section 208 of the Communications Act.  S'x \93.  Finally, a decision by Comsat not to file a tariff reflecting a surcharge to direct access users  S'will not preclude the availability of Level 3 direct access to U.S. carriers and users of INTELSAT . Comsat's failure to file a tariff will result in direct access customers obtaining service from INTELSAT without a surcharge to Comsat.  S 'x (4)Potential Competitive Concerns Raised by Direct Access  S 'x]94. The Notice requested comments on whether permitting direct access would result in  S 'competitive distortions in the U.S. market. 3 {O'#X\  P6G;ɒP#эNotice, 13 FCC Rcd at 2204022041.(#Ɣ An important issue that we must consider is, to the extent that we do authorize direct access to INTELSAT, should we impose any limitations on which  SZ'companies should be allowed to obtain direct access within the United States? In addition, the Notice specifically requested parties to address the potential effect of INTELSAT's immunities from suit and process and its immunity from Commission jurisdiction over rates and practices. Parties commenting on this issue address four areas: (1) foreign Signatory operation in the U.S. market through direct access; (2) immunity from suit and process; (3) immunity from Commission jurisdiction; and (4) immunity from taxation.  SD'x(a)ppDirect Access by Dominant INTELSAT Signatories  S'x^95. Comsat contends that with the introduction of direct access in the United States, foreign Signatories, and possibly U.S. carriers, could manipulate INTELSAT IUC rates to their advantage and  S'cause competitive distortions in the U.S. market.Z3 yO'#X\  P6G;ɒP#эComsat comments at 67.#&a\  P6G;u&P#(#Ɲ Comsat is concerned that a sufficient number of foreign Signatories could be enlisted by large international carriers to depress future IUCs in order to  ST'enjoy below cost access to INTELSAT.XT3 yO'#X\  P6G;ɒP#эComsat comments attaching "An Economic Assessment of the Risks and Benefits of Direct Access to INTELSAT in the United States," Professors Jerry Green and Hendrick S. Houthakker, Harvard  yOn 'University, and Johannes P. Pfeifenberger, The Brattle Group, December 21, 1998.#&a\  P6G;u&P#(#Ʀ BT North America notes to the contrary, however, that  S,'downward pressure on prices, in lieu of artificially preserving high supply costs to carriers, is precisely  S'the result the Commission would want to achieve.[ 3 {O#'#X\  P6G;ɒP#эSee Ex Parte Notification from Cheryl L. Schneider and Eric H. Loeb, BT Group Legal Services, to  yOz$'Magalie Roman Salas, Secretary, Federal Communications Commission, (June 11, 1999) at 2.#&a\  P6G;u&P#(#[ In any event, the INTELSAT Board of"'d 0*&&aa4" Governors would ensure that carriers with "significant bargaining power" would not be able to  S'negotiate "preferential IUC rates" with INTELSAT.3 {O@'#X\  P6G;ɒP#эId.#&a\  P6G;u&P#(#Ɛ  S'x_96. While direct access will benefit U.S. carriers and users of INTELSAT services and, in turn, U.S. consumers, foreign Signatory operation in the U.S. market via direct access will pose competition concerns. There may be potential incentives for Signatories to depress IUC rates for direct access to  S'uneconomically low levels, i.e. to levels that do not reflect INTELSAT's full costs of providing direct access in the U.S. market. As Comsat has argued, foreign Signatories desiring to begin or expand operations in the U.S. market may themselves wish to purchase direct access from INTELSAT in the  S'United States.?Z3 T 4#&m PE37o&P#эGreen, Houthakker, and Pfeifenberger, "An Economic Assessment of the Risks and Benefits  Tl 4of Direct Access to INTELSAT in the United States," December 21, 1998 at 20.#Xw PE37 |XP#(#? As such, they will find low prices for direct access in the U.S. to be in their economic interest. Because these same companies that might purchase direct access also have the ability, through their Signatory status, to influence direct access prices, they may be able to develop their U.S. activities at artificially low prices, which could have an adverse competitive impact on Comsat and other international service providers operating in the United States. The fact that the Signatories share in INTELSAT's costs and revenues will not likely offset the incentive to underprice direct access. Unlike Comsat, most foreign Signatories are vertically integrated firms for whom access to INTELSAT is not in itself the end product they sell to customers, but instead an input into telecommunications services they sell to retail consumers. Access for such Signatories is more a source of costs than a source of revenues. IUC rates are for them primarily a transfer price they pay to INTELSAT for access they use themselves, and any returns they lose due to a lower IUC they can, in turn, be made up by the lower "price" they pay for usage of INTELSAT. So long as their usage shares and ownership shares of INTELSAT are roughly balanced, Signatories who are also retail service providers will be unaffected by low IUC rates and have no incentive to resist lowering IUC rates where to do so is otherwise advantageous.  S'x`97. As we explained above, a dominant Signatory may have the opportunity to participate in an effort to reduce direct access prices to uneconomic levels based on its opportunity to exercise a vote in the INTELSAT Board of Directors. Under ordinary circumstances, such activities might raise antitrust concerns. However, in any discussions regarding reducing the IUC, this incentive is not tempered by potential antitrust liability since all Signatories enjoy immunity from antitrust liability for their Signatory related activities.  S'xa98. Because of the incentives for vertically integrated Signatories to favor artificially low direct access prices in markets where they themselves want to be direct access customers, we adopt restrictions on the participation of those Signatories in the U.S. market for direct access to INTELSAT. Specifically, we will not authorize any Signatory, other than Comsat, to purchase direct access in the U.S. for service to or from any specific foreign country in which the Signatory itself uses  S:'50 percent or more of all INTELSAT capacity consumed in that country. This restriction will also apply to affiliates that are more than 50 percent owned by the respective Signatory. Thus, a Signatory carrier affiliate that takes for its own use 75 percent of the total INTELSAT capacity sold in a" (0*&&aa"  S'particular foreign country would, along with any more than 50 percentowned affiliate, be unable to purchase direct access from INTELSAT in the United States for the purpose of originating or terminating traffic to that country. The purpose of this approach is to limit Signatories' incentives to reduce prices for direct access to uneconomic levels. Signatories that do not bear a cost from uneconomic direct access prices by virtue of competition in their home markets, and that can benefit from such prices by consuming direct access in the U.S. market, will have incentive to favor low direct access charges by INTELSAT. That incentive is reduced when such Signatories cannot immediately benefit in their role as direct access consumers, and is greatly weakened (regardless of whether the Signatories purchase direct access in the U.S.) when low direct access pricing is a greater benefit to their competitors than it is to themselves.  SH 'xb99. We limit this restriction to cover Signatories' purchases of direct access for service from the United States into territories where they are dominant, i.e., use 50 percent or more of the INTELSAT capacity consumed in that territory. Nothing in this Report and Order prevents them from using direct access to provide service between the United States and countries in which the Signatory is not the dominant provider of INTELSAT service. The ability to provide such service likely presents a far weaker incentive for the Signatory to favor uneconomic pricing because of the reduced traffic it is likely to carry between the U.S. and areas where it is not a dominant incumbent telecommunications  S0'service provider. 03 yO'#X\  P6G;ɒP#эWe recognize that for transport of telecommunications traffic between the United Sates and many countries there are alternatives to INTELSAT. The existence of such alternatives which include nonINTELSAT satellite services and underseas cables, could effect a dominant Signatory's incentive to reduce direct access prices to uneconomic levels. Thus, to the extent major traffic routes are likely to have the most communications transport alternatives, it is possible to argue that direct access to INTELSAT will be most desirable for transporting traffic not to major Signatory countries, but to smaller, socalled thinroute countries. Under such a theory, where transport alternatives are available to a dominant Signatory into its home country, it is possible that the Signatory's incentive to reduce direct access prices to uneconomic levels will be muted regarding traffic between the United States and its home country. On the other hand, in theory, such a Signatory could have a stronger incentive to reduce direct access prices for traffic between the United States and thinroute countries where the Signatory is not dominant. (# xAlthough this argument is not illogical, we think the small amount of traffic that carriers are likely to transport between the United States and thinroute countries where they are not dominant is unlikely to provide strong incentives to reduce direct access prices to anticompetitive levels. The greater traffic at stake between the U.S. and the home markets of dominant Signatories"and the enormous growth in such traffic as data markets expand"is more likely to provide nontrivial incentives to reduce direct access prices to uneconomic levels even in the presence of alternative means of communications transport. For that reason we adopt dominant Signatory limitation on buying direct access in the United Sates to serve their home markets and any other market where they use more than 50 percent of the INTELSAT capacity consumed, rather than prohibiting them from serving markets"many of  yO"'them thinroute marketsin which they are not dominant.#&a\  P6G;u&P#(# We therefore find the potential benefits for American consumers to outweigh the  S'risks of uneconomic pricing in such cases. However, if our competitive concerns regarding dominant Signatories are not likely to be realized, we will reevaluate this decision. However, we will continue to monitor developments regarding direct access and INTELSAT privatization to determine whether")0*&&aa" the restriction we impose in this Report and Order on dominant Signatories should be modified or eliminated.  S'xc100. We note that, as explained in this Order, our analysis in this rulemaking proceeding is based  Sb'on the longestablished public interest standard.Kb3 S'ԍ#Jz PQɒP#"[A] public interest analysis is a valid exercise of U.S. domestic regulatory authority, required by the  {O'Communications Act and consistent with U.S. international obligations."  Rules and Policies on  {Ol'Foreign Participation in the U.S. Telecommunications Market, IB Docket Nos. 97142, 9522, Report  {O6'and Order and Order on Reconsideration, 12 FCC Rcd 23891, 24040 (1997) (Foreign Participation  {O 'Order).(#K Pursuant to that standard, and as exemplified in a  S:'history of cases,b:3 Sj 'ԍ#Jz PQɒP#"The Commission has applied a public interest analysis as part of its regulatory structure since the Communications Act was passed in 1934. In fact, consideration of the public interest is fundamental in carrying out the general powers of the Commission. We apply the public interest test in a number  {O 'of different contexts to domestic and foreign applicants." Foreign Participation Order, 12 FCC Rcd at  {O'2404041. See also Amendment of the Commission's Regulatory Policies to Allow NonU.S. Licensed  {Of'Space Stations to Provide Domestic and International Satellite Service in the United States, Report and  {O0'Order, 12 FCC Rcd 24094, 24185 (1997) ("DISCO II"). (#b our public interest analysis includes consideration of competition issues. The U.S. obligations under the 1997 WTO Basic Telecommunications Agreement do not affect the  S'Commission's statutory obligation to apply a public interest analysis, 3 Sr'ԍ#Jz PQɒP#Foreign Participation Order 12 FCC Rcd at 24041; DISCO II, 12 FCC 2d at 24185.ĸ and we are "entitled to apply  S'competitive safeguards consistent with U.S. obligations." 3 S'ԍ#Jz PQɒP#Foreign Participation Order 12 FCC Rcd at 2404041. Thus, the approach we take here is not only a lawful exercise of our public interest authority, but it is also based on previous public policy in which we explained the necessity of maintaining the public interest by avoiding competitive harm.  SJ '  S" 'x(b)` ` Immunity from Suit and Process  S 'xd101.INTELSAT and its Signatories, including Comsat, enjoy three categories of immunities: (1) Immunity from jurisdiction, which prevents courts from considering lawsuits of any type against INTELSAT; (2) archival and testimonial immunity, which protects INTELSAT from being compelled to provide documents or testimony of its employees; and (3)immunity of assets, which prevents courts from enforcing monetary judgments against INTELSAT. INTELSAT's immunities derive from its status as an intergovernmental organization conferred upon it by the INTELSAT Agreement and by  S'INTELSAT Headquarters Agreement. In Alpha Lyracom Space Communications v. Comsat Corp., the court found that Comsat was a "representative of the Parties" under the INTELSAT Headquarters Agreement and, therefore, was immune from any type of suit and legal process in the U.S. for acts"*(0*&&aa" taken in its official capacity as a Signatory, but not for those actions taken in its role as a common  S'carrier.D3 {O@'#X\  P6G;ɒP#эSee Alpha Lyracom Space Communications v. Comsat Corp., 968 F. Supp. 876, 877  {O '(S.D.N.Y. 1996), aff'd., 113 F.3d 372 (2d Cir. 1997). See also Headquarters Agreement between the Government of the United States of America and the International Telecommunications Satellite Organization, effective November 24, 1976, 28 U.S.T. 2248 (the "Headquarters Agreement") that provides that INTELSAT and the representatives of the parties and of the Signatories shall be immune from suit and legal process relating to acts performed by them in their official capacity and falling within their functions, except as such immunity is waived by INTELSAT.X   S'xe102. We have twice addressed the question of Comsat's immunity as relates to the U.S. market  S`'and determined that it is a clear advantage over competitors that do not enjoy similar protection.`3 {O '#X\  P6G;ɒP#эSee Comsat NonDominant Order, 13 FCC Rcd at 1416114163.X ƥ  S8'The 1997 DISCO II Order and our 1998 Comsat NonDominant Order found that Comsat's immunity protects Comsat in its broad Signatory activities from suits based on antitrust, tort and contract claims. Also, these immunities protect substantial commercial activities. As the U.S. Signatory, Comsat sits on the INTELSAT Board of Governors and participates in decision making on all matters related to the commercial operation of a satellite system. INTELSAT's financial, legal, operational, commercial, and strategic decisions provide the basis upon which Comsat offers service to U.S. consumers. These decisions entail the planning and procurement of satellites and development and pricing of services to be provided over the satellites to INTELSAT Signatories and direct access users. These are the same types of commercial activities undertaken by Comsat's competitors with one key difference: Comsat's competitors have no immunity from suit and legal process for these types of activities and are subject to U.S. competition laws, including U.S. antitrust laws. As a result, absent an appropriate waiver, we  S 'declined in our DISCO II decision to permit Comsat to provide INTELSAT services into the U.S.  S\'domestic market.$\f 3 {Ob'#X\  P6G;ɒP#эDISCO II, 12 FCC Rcd at 24149. Comsat filed a petition for review of the Commission's  {O,'Report and Order in the U.S. Court of Appeals for the D.C. Circuit (File No. 98101). Comsat is challenging the Commission's authority to require it to waive its immunities as a condition to entry into the U.S. domestic market.X ƻ  S 'xf103. Several parties addressed the effect of INTELSAT's immunity from suit and process on the U.S. market if we permit direct access in the United States. PanAmSat maintains that the Commission should rely on recent amendments to the Foreign Corrupt Practices Act and declare that INTELSAT  S'has no immunity from legal process in the United States.wR 3 yO!'#X\  P6G;ɒP#эPanAmSat comments at 7.(#w Columbia argues that, at a minimum, the Commission should require INTELSAT to waive its immunity from law suits filed in U.S. courts if  SD'we permit direct access in the United States.D3 yO$'#X\  P6G;ɒP#эColumbia comments at 3 and 78.(# Ellipso states that the U.S. should "encourage" such a waiver from INTELSAT and reserve the right to withdraw direct access if anticompetitive practices"+r0*&&aa"  S'result.w3 yOh'#X\  P6G;ɒP#эEllipso comments at 11.(#w Lockheed Martin states that because of INTELSAT's immunities, direct access could result in unfair competition and that this concern supports its contention that the U.S. should pursue  S'privatization of INTELSAT rather than direct access.X3 yO'#X\  P6G;ɒP#эLockheed Martin comments at 1415.X Ƃ INTELSAT comments that, contrary to PanAmSat's assertion, INTELSAT's immunities remain intact under the recently passed amendments  S`'to the Foreign Corrupt Practices Act.v`3 yO'#X\  P6G;ɒP#эINTELSAT reply at 35.(#v Comsat concurs with other parties that market distorting and anticompetitive effects would result from INTELSAT's immunities if direct access were permitted in  S'the United States.sx3 yO( '#X\  P6G;ɒP#эComsat reply at 28.(#s Comsat further contends that the Commission has no authority to abrogate these immunities and the amendments to the Foreign Corrupt Practices Act do not eliminate INTELSAT's  S'immunities.s3 {Oh'#X\  P6G;ɒP#эId. at 2833.(#s  Sp'xg104.MCI WorldCom contends that direct access would not raise competitive concerns for the  SH 'U.S. market.H 3 yO'#X\  P6G;ɒP#эMCI WorldCom comments at 2123.(# MCI WorldCom states that it is the U.S. direct access customers who would be most affected by INTELSAT's immunities and INTELSAT provides recourse to these customers through  S 'arbitration in its standard direct access service agreement.p * 3 {O'#X\  P6G;ɒP#эId. at 22.(#p MCI WorldCom also points out that, while Comsat argues against direct access based on INTELSAT's immunities, Comsat continues to maintain that the existence of its own derivative immunities should not deter the Commission from  S 'authorizing Comsat to provide INTELSAT services in the U.S. domestic market.i 3 {O'#X\  P6G;ɒP#эId.(#i Finally, MCI WorldCom contends that the amendments to the Foreign Corrupt Practices Act provides for reduction  S0'or elimination of INTELSAT's immunities."0N 3 {O'#X\  P6G;ɒP#эId. at 2223; See also Comsat comments in Docket No. 990405086908601 proceeding of NTIA, dated May 12, 1999, in which Comsat strongly disagrees there are competitive advantages. Comsat argues that its Signatory immunity concerns its conduct in INTELSAT, subject to government instruction and not its conduct in the market place.X Ʒ  S'xh105.In view of INTELSAT's immunities, we agree that we must protect competition in the U.S international market upon implementation of Level 3 direct access. Protections are necessary, however, only to the extent introduction of direct access into the U.S. market for international services results in competitive distortions greater than already exist as a result of Comsat's immunities. Through Comsat, INTELSAT already is in the U.S. market providing space segment capacity for"@,80*&&aa" international communications to U.S. carriers and users on a wholesale basis, by virtue of the Satellite  S'Act and the INTELSAT Agreement.3 {O@'#X\  P6G;ɒP#эSee DISCO II, 12 FCC Rcd at 24149.(#ƈ Comsat enjoys the same immunities as INTELSAT in its role as the U.S. Signatory to INTELSAT, but not in its role as a common carrier supplier of INTELSAT services. Both are protected from suit and process (including antitrust actions) in connection with INTELSAT commercial decisions described above that include development and pricing of services. The services and their prices are reflected in INTELSAT IUCs. However, U.S. carriers and users would pay IUC rates in order to take service from INTELSAT under Level 3 direct access.  S'xi106.Because immunity for the same activities extend to both Comsat and INTELSAT, we conclude that permitting Level 3 direct access in the United States is not likely to lead to any additional competitive distortions in the U.S. market for international services than already exists as a result of Comsat's provision of INTELSAT services in the U.S. market. Level 3 direct access customers would use the same services over the same facilities that result from commercial decisions for which both INTELSAT and Comsat are immune. These services are provided at IUC rates to direct access customers pursuant to standard agreements. Only if INTELSAT engages in additional commercial activities such as marketing to U.S. carriers services outside the terms of IUC rates  S 'could the current competitive situation possibly be further distorted. Any such activities, however, are consistent with that which Comsat performs in its common carrier role and for which it has no  S0'immunity."0Z3 {O*'#X\  P6G;ɒP#эSee above discussion on Level 1 and Level 2 direct access arrangements. As noted above, Level 3 direct access would also allow customers to receive operational and technical information and meet with INTELSAT staff regarding capacity availability and tariff matters. However, these functions do  yO'not entail negotiations for new services and rates. #x6X@`7 X@#(# We would expect INTELSAT to voluntarily waive its immunity to cover the direct marketing of services and negotiation of agreements with U.S. carriers that would lead to the provision of services and rates not included in IUC rates or pursuant to the service agreements different from  S'what INTELSAT generally offers under Level 3 direct access.-XD3 yO'#X\  P6G;ɒP#эINTELSAT normally waives its immunities when entering into contracts or other commercial relationships, including procurement of satellites and financial arrangements with banks and financial institutions.X - We believe that this approach is  S'consistent with our DISCO II decision in which we precluded Comsat from entering the U.S. domestic  Sj'satellite market without a waiver of its privileges and immunities.jd 3 {On'#X\  P6G;ɒP#эDISCO II, 12 FCC Rcd at 21149.(#Ƅ Here, we permit Level 3 direct access only for services to and from the United States, and not for domestic service within the United States.  S'xj107.Comsat contends that its immunity as a Signatory can be distinguished because it allegedly does not involve marketplace conduct and is subject to government instruction. We have previously  Sz'rejected this argument.z 3 {O%'#X\  P6G;ɒP#эComsat NonDominant Order, 13 FCC Rcd at 1416114163; See also DISCO II, 12 FCC Rcd at  yO%'21149.#x6X@`7 X@#(# Comsat's Signatory role entails substantial commercial decisions and"z-P 0*&&aa" activities that are necessary and common to participation in the market place. The government instructional process was neither designed nor is it capable of supplanting the antitrust law as a deterrent to anticompetitive behavior. The instructional process is intended to assure fulfillment of  S'U.S. policy goals under the Satellite Act of 1962.3 {O'#X\  P6G;ɒP#эSee Communications Satellite Corporation, 3 FCC Rcd 7108, 7109 (1988).X Ƭ  S8'xk108. Finally, the provisions of the recently passed amendments to the Foreign Corrupt Practices  S'Act ("the AntiBribery Act") cited by PanAmSat do not appear relevant to this proceeding.Z3 yO '#X\  P6G;ɒP#эInternational AntiBribery and Fair Competition Act of 1998, Pub. L. No. 105366 (1998).X Ƹ The AntiBribery Act amends the Securities Exchange Act of 1934 and the Foreign Corrupt Practices Act of 1977 to implement the OECD "Convention on Combating Bribery to Foreign Officials in International Business Transactions." The law includes Section 5, entitled "Treatment of International organizations providing Commercial Communications Services." Section 5 subjects INTELSAT to provisions of the Securities Exchange Act and Foreign Corrupt Practices Act until the President certifies they have been privatized in a procompetitive manner. Section 5 also states that INTELSAT and Inmarsat shall not be accorded immunity from suit or legal process, except as required by international agreements to which the United States is a party. It requires the President to "expeditiously take full appropriate actions necessary to eliminate or to reduce substantially" all privileges and immunities of INTELSAT and Inmarsat not eliminated by the section (that is, privileges and immunities that remain as a result of existing international agreements). The President is to determine which agreements constitute international agreements for purposes of the section. In this proceeding the Commission is not authorized to make that determination.  S'x(c)ppImmunity from Commission Jurisdiction over Rates and Practices  Sh'xl109. As an intergovernmental organization, INTELSAT is not subject to the jurisdiction of any  S@'national regulatory authority. In our Notice in this proceeding, we requested comments as to the potential effect on competition in the U.S. market in view of INTELSAT's immunity from Commission jurisdiction over rates and practices. We asked whether our authority to license earth  S'stations pursuant to the DISCO II regulatory structure would be a sufficient means of overseeing INTELSAT direct access operations in the U.S. market, or whether other regulatory protections might  S|'have to be imposed.|3 {O'#X\  P6G;ɒP#эNotice, 13 FCC Rcd at 22041.  S,'xm110.PanAmSat responded that, if we permit direct access in the United States, we should treat INTELSAT as any other similarly situated carrier, requiring it to file Title III applications with appropriate fees, subjecting it to Title II dominant carrier regulation with cost based tariff filing  S'requirements, and enforcing our DISCO II "no special concessions policy."w|3 yO#'#X\  P6G;ɒP#эPanAmSat comments at 8.X w Columbia requests that we require INTELSAT to demonstrate that its provision of services directly to U.S. customers will not". 0*&&aa"  S'have an adverse impact on competition.w3 yOh'#X\  P6G;ɒP#эColumbia comments at 6.X w Columbia contends that INTELSAT only would be able to make such a demonstration upon privatization. And Columbia contends that Commission earth station  S'licensing authority would be inadequate to assure no competitive harm results in the U.S. market.qX3 {O'#X\  P6G;ɒP#эId. at 67.X q  S`'xn111. INTELSAT, in response to PanAmSat, states that it does not operate as a carrier providing communications services, but "provides space segment required for international public  S'telecommunications services" to Signatories and direct access users.3 yO '#X\  P6G;ɒP#э INTELSAT reply comments at 7, citing the INTELSAT Operating Agreement, 23 U.S.T. 4091.X Ƽ INTELSAT also points out that it is not subject to Commission regulatory procedures with respect to use of orbital location and  S'frequencies.B3 {O'#X\  P6G;ɒP#э Id. at 6, citing the INTELSAT Agreement.X Ɣ MCI WorldCom contends that the Commission has statutory authority to regulate and  S'impose any needed license conditions on the U.S. entities that have direct access to INTELSAT.3 yO '#X\  P6G;ɒP#эMCI WorldCom comments at 2122.X  Ellipso points out that the Commission has the right to withdraw direct access if it results in  SH 'anti-competitive practices by INTELSAT.wH d 3 yOL'#X\  P6G;ɒP#эEllipso comments at 11.X w  S 'xo112. We disagree with PanAmSat that we should apply the full panoply of Commission regulatory  S 'authority to INTELSAT if we permit direct access in the United States. We decided in our DISCO II  S 'decision to permit foreign satellites to access the United States through earth station licenses. 3 {O>'#X\  P6G;ɒP#эDISCO II, 12 FCC Rcd at 24174.X Ɗ Our authority over earth station licensing provides the means by which to protect competition in the U.S. market. This is an approach readily applicable to INTELSAT in connection with direct access. Additionally, there is no basis for imposing common carrier regulation on INTELSAT. INTELSAT's operation as a provider of space segment capacity is a role similar to that of PanAmSat and other competing U.S. satellite systems. PanAmSat and other U.S. competing systems are not required to  S'operate as common carriers.^ 3 {O'#X\  P6G;ɒP#эEstablishment of Satellite Systems Providing International Communications, 101 FCC 2d  {O '1046 (1985), recon., 61 Rad. Reg. 2d (P&E) 649 (1986), further recon., 51 Fed. Reg. 17631  {Ot!'(1986) (summary only), further recon. 1 FCC Rcd 439 (1986). X Ɨ Nor do we impose common carrier regulation on nonU.S. licensed satellite operators providing service in the United States. PanAmSat provides no convincing argument why INTELSAT should be treated any differently if U.S. customers choose to obtain services directly from INTELSAT via Level 3 direct access. As MCI WorldCom noted, U.S. carriers obtaining service through Level 3 direct access will continue to be subject to the Commission's Title II jurisdiction. "/0*&&aa"Ԍ S'xp113.  We recognized in DISCO II that use of the INTELSAT system in the United States for international services is grounded in the policies of the Satellite Act, and concluded that we would continue to consider applications by Comsat to provide international services via INTELSAT on a case  S'by case basis.3 {O'#X\  P6G;ɒP#эDISCO II, 12 FCC Rcd at 24149.X Ɗ In view of our findings above as to the limited effect of INTELSAT's immunities on the U.S. market under a direct access regime, and the need for INTELSAT to voluntarily waive these immunities in any situations in which it chooses to provide services not covered by IUC rates, we believe that we can protect competition in the U.S. market through our earth station licensing authority. We have the additional means through the U.S. government instructional process to require Comsat to inform INTELSAT that direct access must be discontinued in specific instances where competition problems arise. We therefore do not find it necessary, as Columbia contends, to await privatization of INTELSAT before allowing it direct access to the U.S. market.  S" 'x(d) ppImmunity from Taxation x  S 'xq114.Comsat argues that INTELSAT's taxexempt status under U.S. law would distort competition in the United States market since INTELSAT would enjoy an artificial cost advantage over Comsat and other U.S. satellite providers. Specifically, Comsat asserts that INTELSAT's exemption from property taxes, payroll taxes, corporate income taxes, and customs duties allows it to pass along cost  S2'savings in the form of artificially lower rates.2Z3 yO,'#X\  P6G;ɒP#эComsat comments at 62.#X\  P6G;ɒP#ѕ Because of this cost advantage, INTELSAT would  S 'likely capture business from other U.S. providers of space segment capacity, irrespective of whether  S'INTELSAT is truly the most efficient services provider.3 {Ol'#X\  P6G;ɒP#эId. at 63.#X\  P6G;ɒP#я Columbia argues that the Commission should require INTELSAT to remove its tax exempt status from local, state, and federal taxes on its  S'revenues, as well as assets, before offering Level 3 direct access service to U.S. users.|3 yO'#X\  P6G;ɒP#эColumbia comments at 8.#x6X@`7 X@#і  SB'xr115. We agree that direct access might create a temporary competitive distortion by allowing INTELSAT to provide service to U.S. users while being exempt from income taxes. However, we believe that U.S. customers of INTELSAT capacity and ultimately final consumers will gain from obtaining direct access to INTELSAT at low prices. Furthermore, by virtue of its treaty with the U.S., INTELSAT is exempt from U.S. taxes and the U.S. does not have authority to impose such taxes on INTELSAT. We are not aware of any other country in which INTELSAT pays taxes, and yet we have noted that 94 other countries permit direct access and that most of them do not impose any surcharge above the IUC for direct access. Hence, those countries have apparently found that allowing INTELSAT to have direct access even though it does not pay taxes does not raise problems sufficient  S'to require either a tax surcharge or to prevent direct access. Thus, we do not see why INTELSAT's tax immunity in the U.S. should be sufficiently worrisome to either deny direct access or to cause us to require a surcharge payment to Comsat for taxes. In addition, when INTELSAT is privatized, it"0 0*&&aa" will become subject to taxes just like any other company doing business in the United States or the country in which it is incorporated.  S'xs116. We do not believe it would be appropriate to adjust for INTELSAT's immunity from taxes by adding a surcharge for those taxes that would be payable to Comsat. The only appropriate adjustment for INTELSAT's tax immunity would be for it voluntarily to make payments in lieu of taxes to the appropriate federal and state taxing authorities, something which it has not agreed to do. Because we view any competitive distortion as being small, and of short duration, and because we believe the benefits of direct access far outweigh the costs, we are authorizing direct access without requiring a surcharge for taxes.  SH ' x(5)Fresh Look  S 'xt117.A number of proponents of direct access ask that the Commission permit a "fresh look" at long term carrier contracts between Comsat and AT&T and MCI WorldCom for the acquisition of  S 'INTELSAT space segment capacity.X 3 yO'#X\  P6G;ɒP#эAT&T comments at 1314; ECG comments at 6; GlobeCast Reply at 56; ICG comments at 6; Loral Orion comments at 8; MCI comments at 2428 and reply at 1314; Network reply at 20; PanAmSat  yO'comments at 910; and Sprint comments at 1013.#X\  P6G;ɒP#(#Ƅ Fresh look would allow these carriers to either renegotiate or terminate those contracts in view of the availability of direct access to INTELSAT. Fresh look proponents contend that the full benefits of direct access will not be achieved if AT&T and MCI WorldCom remain bound by contractual obligations secured by Comsat when it was the only provider  S'of INTELSAT service in the United States. 3 yO'#X\  P6G;ɒP#эAT&T comments at 1415. MCI WorldCom comments at 2728.#X\  P6G;ɒP##X\  P6G;ɒP#   S'  S'xu118.The Commission has permitted the extraordinary remedy of fresh look in limited circumstances, to promote consumer choice and eliminate barriers to competition in markets where longterm business arrangements have essentially "locked up" service with a former monopoly  S@'telecommunications carrier. For example, the Commission initially applied fresh look in the 800  S'Portability Order,& x3 {O2'#X\  P6G;ɒP#э  Comsat reply at 59. See also Special Access Expanded Interconnection Order, 8 FCC Rcd at 7342  yO'and 73467348.#x6X@`7 X@#(#& where it allowed AT&T customers to terminate inbound 800 service from AT&T without termination liability within 90 days of 800 numbers becoming portable. This prevented AT&T from leveraging its market power in 800 service to sell other services to its customers. As a  S'further example, the Commission also permitted fresh look in the Special Access Expanded  S~'Interconnection Order, which permitted special access customers to terminate certain long-term special access arrangements with LECs if those customers wish to obtain the benefits of new, more competitive alternatives. There, the Commission recognized that previously established longterm access arrangements would prevent customers from obtaining benefits of the new, more competitive interstate access environment. "1 0*&&aa"Ԍ S'xv119.In applying the fresh look doctrine in these instances, the Commission considered: (1) whether the entity holding the longterm contracts has market power and has exercised that power to create long term contracts to "lock up" the market in such a way so as to create unreasonable barriers to competition; and (2) whether the contractual obligations can be nullified without harm to the public interest. x  S'xw120.Fresh look proponents argue that a direct access policy meets these standards because: (1)  S'Comsat's provision of INTELSAT would have been open to competition through direct access; and (2) preexisting contracts or arrangements would prevent customers from obtaining the benefits of direct  S'access, thus inhibiting the development of a competitive market. 3 yO '#X\  P6G;ɒP#эLoral comments at 8.#X\  P6G;ɒP#ѓ With elimination of Comsat's de  Sr'facto monopoly on the provision of INTELSAT space segment service in the United States, fresh look would allow customers to break their commitment to longterm contracts offering terms that are much  S$ 'less favorable than those under direct access. $ X3 yO'#X\  P6G;ɒP#эMCI WorldCom comments at 2526.#X\  P6G;ɒP#ў Absent fresh look they contend that full competition  S 'will unlikely develop until after these contracts expire, which extend up to 15 years.  3 {O'#X\  P6G;ɒP#эId. at 28. #X\  P6G;ɒP#ё They also contend that Commission implementation of fresh look in this proceeding would be consistent with its  S 'previous decisions in the 800 Portability Order and Special Access Expanded Interconnection Order. z3 {O'#X\  P6G;ɒP#эSee Loral comments at 8; MCI WorldCom comments at 26; and AT&T comments at 14.#x6X@`7 X@#(#  S^'xx121.Comsat opposes the adoption of fresh look.^ 3 {O '#X\  P6G;ɒP#эComsat reply at 56. Comsat contends that because fresh look was not raised in the Notice, adoption  {O'would violate Administrative Procedure Act ("APA") procedures. See Administrative Procedure Act, 5 U.S.C.  551559. Comsat also maintains that Commission application of fresh look and portability,  yOf'as discussed below , would constitute an unconstitutional taking. We do not address these contentions  yO.'since we are not taking these actions in this proceeding.#x6X@`7 X@## X\  P6G;ɒP#(# Comsat argues that prior Commission decisions allowing fresh look are inapplicable here and that the proponents of fresh look do not demonstrate that the criteria established by the Commission in applying fresh look in previous  S'instances have been satisfied. Comsat states that the first test is not met because the Commission has determined that it lacks market power in most markets and that courts have also found that Comsat  S'lacked power to compel carriers to enter into long term agreements. 3 yO'#X\  P6G;ɒP#эComsat reply at 6061.#X\  P6G;ɒP#ѕ Comsat argues that the second test is not satisfied because imposing fresh look will not serve the public interest. First, Comsat argues that negating these contracts would undermine its own and INTELSAT's planning and procurement of the global satellite system, since this planning was based on customer commitments under these longterm contracts. It also contends that eliminating these contracts would also undermine the benefits that these contracts have served in helping lower prices for all customers. "2P 0*&&aa"Ԍ S'xy122.Comsat also contends that prior decisions in which fresh look was granted suggest fresh look  S'is not applicable here. Comsat states that fresh look was applied in the Expanded Interconnection proceeding because customers lacked competitive alternatives when they entered into contracts and required relief from their longterm obligations in order to be able to benefit from competition. In contrast, Comsat states that competitive alternatives to INTELSAT have been available for many years, and INTELSAT users have entered into alternative arrangements with fiber optic submarine cable operators as well as other space segment providers. Lockheed Martin states that fresh look was  S'granted in the 800 Number Portability proceeding so customers who were dependent on a specific 800 number could not be leveraged by AT&T into longterm commitments. Lockheed Martin states, in  S'contrast to individualized 800 numbers, international satellite capacity is fungible.3 yO '#X\  P6G;ɒP#эLockheed Martin reply at 1516.#X\  P6G;ɒP#ў  SL 'xz123. AT&T and MCI WorldCom entered into contracts with Comsat that expire in 2003.L X3 yOD 'p` P (#$%p&`'XS (##T$$%&B''0*,.8135@8:3 {Oh'#X\  P6G;ɒP#эNotice, 13 FCC Rcd at 2202422025. See 47 U.S.C.  721(c).(#ƪ And we  S'further tentatively found that permitting Level 3 direct access would serve the Satellite Act's purpose of promoting growth in communications between the United States and economically less developed  S'countries by promoting competition and expanding user choice for services to those markets.?Z3 {O'#X\  P6G;ɒP#эNotice, 13 FCC Rcd at 2202822029. See 47 U.S.C.  701.(#Ƨ We tentatively concluded that we do not have authority to permit Level 4 direct access in view of Comsat's statutorily mandated role as the U.S. investor in the global satellite system under the Satellite Act.  S'x141.Of the 18 parties submitting responses to the Notice, 13 support the tentative conclusion that  S' we have authority under the Satellite Act to permit Level 3 direct access in the United States.2@X3 yO& '#X\  P6G;ɒP#эThe tentative#X\  P6G;ɒP# conclusion is supported by AT&T, BT North America, C&W, Ellipso, GE Americom, Globecast, ICG, IT&E, Loral Orion , MCI WorldCom, Network, PanAmSat and Sprint.X 2 One Comsat disagrees with this tentative conclusion while four parties do not directly address the issue  SJ 'of Commission authority to permit direct access.WA J 3 yO'#X\  P6G;ɒP#эLockheed Martin, Columbia, Three Angels and INTELSAT do not directly address the Commission's tentative conclusions here. Along with its comments, Comsat also filed an analysis of the Satellite Act and its history to support its contention that the Commission  {ON'lacks authority to permit direct access.  See "The FCC Lacks the Statutory Authority to Permit Level 3 Direct Access to the INTELSAT System," filed by Lawrence W. Secrest III, William B. Baker, and Rosemary C. Harold of Wiley Rein & Fielding (December 22,  {O'1998) ("Comsat Legal Analysis"). We have also considered Comsat's various ex parte filings on these legal issues. We refer to both the comments and legal analysis discussing these issues.X W  S 'x142. Comsat maintains that: (1) it was created as the sole participant in INTELSAT and that role  S 'includes an exclusive franchise over access to the proposed satellite system;B 3 yOR'#X\  P6G;ɒP#эComsat comments at 414; Comsat Legal Analysis at 1341.X Ƙ (2) this exclusive  S 'franchise is vested through the language, structure, and context of the Satellite Act;C p3 yO'#X\  P6G;ɒP#эComsat comments at 1523; Comsat Legal Analysis at 4266.X ƙ (3) the  S 'legislative history of the Satellite Act confirms that an exclusive franchise was granted;D 3 yO"!'#X\  P6G;ɒP#эComsat comments at 2327; Comsat Legal Analysis at 1341.X ƙ (4) the  S\'Commission and courts have recognized this exclusive franchise;E\3 yO#'#X\  P6G;ɒP#эComsat comments at 2829; Comsat Legal Analysis at 6775.X ƙ and (5) contrary to our tentative  S4'finding in our Notice, the 1978 Maritime Satellite Act, which designates Comsat as the sole operating"4< E0*&&aa" entity for participation in Inmarsat, confirms that Congress intended in 1962 to grant Comsat an  S'exclusive franchise over access to INTELSAT.F3 {O@'#X\  P6G;ɒP#эComsat comments at 3032; Comsat Legal Analysis at 7686. See 47 U.S.C.  751.X Ƹ  S'x143.The parties supporting our tentative conclusion generally agree that the Satellite Act confers upon Comsat the right to be the sole United States "participant" in the global satellite system that  S8'became INTELSAT.G8Z3 {O2'#X\  P6G;ɒP#эSee 47 U.S.C.  731735.(#ƅ There is disagreement, however, on the scope of Comsat's exclusive role. BT North America and C&W believe that exclusive participation is limited to Comsat's role as the U.S. government representative in INTELSAT, which includes participating on the Board of Governors, the Meeting of Signatories, and related functions. They assert that it does not include the right to exclusive ownership or investment in the INTELSAT system. They therefore urge us to reconsider  Sp'our conclusion in the Notice that the Satellite Act does not authorize the allowance of Level 4 direct  SJ 'access.HJ 3 {O'#X\  P6G;ɒP#эBT North America comments at 16 and C&W comments at 10; Globecast reply at 23. See  {O'also AT&T reply at 67; MCI WorldCom reply at 45.X   S 'x144. All of these parties agree with our tentative conclusion that the Satellite Act does not give Comsat exclusivity in access to the global satellite system, INTELSAT. They collectively contend that: (1) the plain language and context of the Act do not give Comsat exclusive access to  S 'INTELSAT;I H3 yOj'#X\  P6G;ɒP#эAT&T comments at 45; reply comments at 27; BT North America at 1418; reply comments at 911; C&W comments at 67; Ellipso comments at 5; GE Americom comments at 4; Globecast comments at 2; ICG comments at 23; IT&E comments at 3; Loral Orion comments at 7; MCI WorldCom comments at 4; Network comments at 1516 and reply comments at 34; PanAmSat reply comments at 23; Sprint comments at 3. X  (2) the legislative history of the Satellite Act does not support a conclusion that Comsat  SZ'has exclusive access to the system;JXZ 3 yO'#X\  P6G;ɒP#эAT&T reply at 811; BT North America reply at 1213; GE Americom comments at 45 and reply at 3; IGC reply at 2; MCI WorldCom reply at 68; Network comments at 1416 and reply at 46.X  (3) provisions in the Satellite Act requiring the Commission to ensure "nondiscriminatory use of and equitable access to" the satellite system empower the  S 'Commission to permit Level 3 direct access;OKX 3 yO'#X\  P6G;ɒP#эAT&T comments at 3 and reply at 24; BT North America comments at 1213; C&W comments at 7; GE Americom comments at 4; Globecast comments at 2; Loral Orion comments at 2; MCI WorldCom comments at 57 and reply at 46; Sprint comments at 4.X O (4) the Commission has discretion to permit direct  S'access in the United States based on circumstances that exist today;L 83 yO#'#X\  P6G;ɒP#эAT&T comments at 23 and reply at 27; BT North America comments at 914 and reply at 59; C&W comments at 7; GE Americom comments at 4; Ellipso comments at 56; Globecast comments at 2; Loral Orion comments at 1; MCI WorldCom comments at 37 and reply at 6; Network comments at 15; PanAmSat comments at 34; Sprint comments at"&K0*&&&" 3.X  (5) the 1978 Maritime Satellite"=XL0*&&aa"  S'Act confirms that Comsat was not granted exclusive access to the satellite system in 1962MX3 yO'#X\  P6G;ɒP#эBT North America reply at 2021; C&W comments at 7; Ellipso comments at 6; GE Americom comments at 5; ICG reply at 34; Network comments at 16.X  and no  S'previous Commission nor court decision has held that the Commission does not have authority under  S'the Satellite Act to permit direct access.8NX3 yO'#X\  P6G;ɒP#эBT North America reply at 1719; C&W comments at 78; GE Americom comments at 67; ICG reply at 45; MCI World Com comments at 6 and reply at 78; Network reply at 69; PanAmSat comments at 4; Sprint comments at 56.X 8  S`'x145.In construing whether the Satellite Act permits direct access to INTELSAT satellites from  S8'the United States by entities other than Comsat, we first look to the relevant language of the governing  S'statute.O3 {O'#X\  P6G;ɒP#эChevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) ("Chevron").#X\  P6G;ɒP#(# Analysis of the statutory language includes determining "whether Congress has spoken  S'directly to the precise question at issue."Pb 3 {O'#X\  P6G;ɒP#эChevron, 467 U.S. at 842.X Ƌ This inquiry may be characterized as a search for the plain meaning of the statute. If after "employing traditional tools of statutory construction . . . the intent of  S'Congress is clear, that is the end of the matter."XQ  3 yO,'#X\  P6G;ɒP#эThe traditional tools of statutory construction may include an examination of the statute's  {O'text, structure, purpose, and legislative history. See Chevron 467 U.S. at 84243 (an agency  {O'must give effect to the "unambiguously expressed intent of Congress"). See also Bell  {O'Atlantic Tele. Co. v. FCC, 131 F.3d 1044 (D.C. Cir. 1997) ("Bell Atlantic"); Natural  {OR'Resources Defense Council, Inc. v. Browner, 57 F.3d 1122, 1125 (D.C. Cir. 1995) (quoting  {O'Chevron, 467 U.S. at 843 n.9); Hammontree v. NLRB, 894 F.2d 438, 441 (D.C. Cir. 1990) (deference by a court or regulatory agency would not be appropriate in this situation);  {O'Southern Cal. Edison Co. v. Fed. Energy Regulatory Comm., 116 F.3d 507, 515 (D.C. Cir.  {Ox'1997); First Nat'l Bank & Trust Co. v. Nat'l Credit Union, 90 F.3d 525, 52930 (D.C. Cir.  {OB'1996).#X\  P6G;ɒP# In Bell Atlantic, the Court indicated that legislative history may prove useful in determining if the text and purpose of the statute is clear. In that case, two provisions  yO'appeared unclear. Although the court concluded that the statutory provision at issue was ambiguous it referred to the legislative history in determining whether the Commission's interpretation of the ambiguous statutory provision was reasonable.X X  SH 'x146.On the other hand, if "Congress has not directly addressed the precise question at issue" or "if the statute is silent or ambiguous with respect to the specific issue," the agency's interpretation  S 'should be "based on a permissible construction of the statute."R 3 {OT#'#X\  P6G;ɒP#эChevron, 467 U.S. at 843.(# This inquiry is applicable in situations where Congress has not expressed itself unequivocally or where a specific provision is ambiguous. As to what would be a "permissible construction" of a statute, the courts have given" >NR0*&&aa~ "  S'regulatory agencies the freedom to interpret them in a flexible manner.S3 {Oh'#X\  P6G;ɒP#эId. at 863.#X\  P6G;ɒP#(#Ƥ However, the meaning of  S'statutory language must be considered in the context of the whole statute.TZ3 {O'#X\  P6G;ɒP#эBell Atlantic, 131 F.3d at 1044.X Ɔ "If the agency's reading  S'fills a gap or defines a term in a reasonable way in light of the legislature's design . . . even if it is not the answer 'the court would have reached if the question initially had arisen in a judicial proceeding',"  S`'it will be upheld.U`3 {O'#X\  P6G;ɒP#эSee Regions Hosp. v. Shalala, 118 S. Ct. 909, 915 (1998) (quoting Chevron).#x6X@`7 X@#X   S'x(b)ppText and Purposes of the Satellite Act  S'x147. We first note that there is little disagreement among parties in this proceeding that United States "participation" in the global satellite system was intended to be through the private corporation  Sp'ԩ Comsat created by the Satellite Act. There is, however, disagreement over the nature of that  SH 'participation and the extent of Commission discretion under the Satellite Act to modify an existing regulatory structure. All parties specifically addressing this issue, with the exception of Comsat, contend that Comsat's participation in INTELSAT does not entail a grant of exclusive access to INTELSAT, requiring carriers and users to obtain space segment capacity through Comsat (in lieu of directly accessing INTELSAT). Comsat maintains that when read in light of its statutory history and  S 'background, and when "read in the context of a coherent whole," the Satellite Act must be interpreted  SX'as vesting in Comsat an exclusive franchise to access INTELSAT.VX~3 yOv'#X\  P6G;ɒP#эComsat's comments at 14; Comsat Legal Analysis 4265.X ƕ As to the language of the  S0'Satellite Act, Comsat contends that the statutory grant of authority to Comsat under Section 735(a) of  S'the Satellite Act, when read with other provisions, implies the absence of similar authority to other  S'carriers and a grant of exclusivity to Comsat.yW3 yO'#X\  P6G;ɒP#эComsat comments at 1620.X y Comsat states that Congress "directed Comsat alone" to provide channels of communication and gave "only Comsat" the power to contract with authorized  S'users to access the system.X3 yO'#X\  P6G;ɒP#эComsat comments at 10; Comsat Legal Analysis at 810 and 4452.X Ɵ It further contends that statutory protections against common carrier control of Comsat in Sections 733734 would not have made sense had Comsat not been granted  S@'exclusive access to the system.Y@. 3 yO '#X\  P6G;ɒP#эComsat comments at 10; Comsat Legal Analysis at 66.X Ɠ  S'x148.We agree that all provisions of the Satellite Act must be read in the context of the entire   S'Act. We begin, therefore, by considering the declared policy and purpose of the Satellite Act in Section 701(a):   (a) The Congress hereby declares that it is the policy of the United States to establish, in conjunction and in cooperation with other countries, as"(? Y0*&&aa" expeditiously as practicable a commercial communications satellite system, as part of an improved global communications network, which will be responsive to public needs and national objectives, which will serve the communication needs of the United States and other countries and which will contribute to  S`'world peace and understanding.vZ`+Z yO'#X\  P6G;ɒP#э47 U.S.C.  701(a).(#v     Section 701(c) provides for the creation of Comsat:   (c) In order to facilitate this development and to provide for the widest possible participation by private enterprise, United States participation in the global system shall be in the form of a private corporation, subject to appropriate governmental regulation. It is the intent of Congress that all authorized users have nondiscriminatory access to the system; that maximum competition be maintained in the provision of equipment and services utilized by the system; that the corporation created under this Act be so organized and operated as to maintain and strengthen competition in the provision of communications services to the public; and that the activities of the corporation created under this Act and of the persons or companies participating in the ownership of the  S0'corporation shall be consistent with the Federal antitrust laws.v[0X+Z yO('#X\  P6G;ɒP#э47 U.S.C.  701(c).(#v     Section 735(a) authorizes Comsat to engage in particular activities: x   (a) In order to achieve the objectives and to carry out the purposes of this Act, the corporation is authorized to    x  44 $ $   (1) plan, initiate, construct, own, manage, and operate itself or in conjunction with foreign governments or business entities a commercial communications satellite system; $ $ $ $   (2) furnish, for hire, channels of communication to United States communications common carriers and to other authorized entities, foreign and domestic; and $ $ $ $   (3) own and operate satellite terminal stations when licensed by  S'the Commission under 201(c)(7).v\f- yO8"'#X\  P6G;ɒP#э47 U.S.C.  735(a).(#v  44  Finally, Section 735(b) elaborates more specifically on the activities in which Comsat is authorized to engage: x" @x\0*&&aa"Ԍ  (b) Included in the activities authorized to the corporation for accomplishment of the purposes indicated in subsection (a) of this section, are, among others not specifically named    x  44 $ $   (1) to conduct or contract for research and development related to its mission; $ $ $ $   (2) to acquire the physical facilities, equipment and devices necessary to its operations, including communications satellites and associated equipment and facilities, whether by construction, purchase, or gift; $ $ $ $   (3) to purchase satellite launching and related services from the United States Government; $ $ $ $   (4) to contract with authorized users, including the United States Government, for the services of the communications satellite system; and  $ $ $ $   (5) to develop plans for the technical specifications of all  S'elements of the communications satellite system.v]f- yOH'#X\  P6G;ɒP#э47 U.S.C.  735(b).(#v  44   S'x149.As we observed in the Notice, the Satellite Act's authorization of Comsat to undertake the activities specified in Section 735, including furnishing "for hire, channels of communication," is not  SB'expressed in terms of exclusivity.^BX3 {O:'#X\  P6G;ɒP#эNotice, 13 FCC Rcd at 22024.(#ƈ That section authorizes Comsat to furnish channels of communication to common carriers and other authorized entities, but does not confer on Comsat an exclusive franchise to do so. Comsat argues that use of such terms in the legislation would have been  S'redundant and that concepts of exclusivity suffuse the statute.y_3 yOT'#X\  P6G;ɒP#эComsat comments at 1516.(#y Comsat points out that the Satellite Act does not grant authority to other entities "to furnish" for hire, channels of communication," and it  Sz'notes that we recognized in our Notice that Comsat is the sole United States entity in INTELSAT to  ST'"plan, initiate, construct, own, manage and operate" the satellite system.`Tz3 {On '#X\  P6G;ɒP#эId. at 1720; Comsat Legal Analysis at 911.(#ƒ Comsat therefore argues that, because one provision in Section 735(a) grants exclusivity, we must read a similarly worded  S'provision in the same section as also granting exclusivity.a 3 yO#'#X\  P6G;ɒP#эComsat comments at 19; Comsat Legal Analysis at 89.X ƕ Comsat further argues that this reading is"Aa0*&&aa4" confirmed by Section 735(b)(4), which Comsat states authorizes "only" it "to contract with authorized  S'users . . . for the services of the communications satellite system."yb3 yO@'#X\  P6G;ɒP#эComsat comments at 1920.(#y  S'x150.The clear purpose of the Satellite Act is to foster creation of the global satellite system, that  S`'became INTELSAT, through a single corporation, that became Comsat. The terms of the Satellite Act, however, do not, as Comsat contends, grant Comsat an exclusive right to furnish "for hire channels of communications" or empower "only" Comsat to contract with authorized users to access the system. Rather, the Act authorizes Comsat to perform these and other functions without reference to principles of exclusivity in order to "achieve the objectives and carry out the purposes" of the  S'Satellite Act.cX3 yO '#X\  P6G;ɒP#э47 U.S.C.  735. See AT&T reply at 5; BT North America reply at 911; GE Americom reply at 4; MCI WorldCom reply at 45; Network reply at 4.X   SH 'x151.To determine whether any authority granted to Comsat is exclusive, we look to each function "authorized" in Section 735 separately and in context. We regard as exclusive Comsat's authorization to "plan, initiate, construct, own, manage, and operate itself or in conjunction with foreign governments or business entities a commercial communications satellite system." Our view is based on the purpose for creating the corporation, as stated in Section 701(c). Section 701(c) provides that U.S. participation in the global satellite system "shall be in the form of a private corporation" (Comsat). Section 735(a)(1) reflects the activities in which Comsat engages in its role as the sole U.S. participant in INTELSAT. In comparison, we regard as nonexclusive Comsat's authorization to "own  S'and operate satellite terminal stations" under Section 735(a)(3).yd3 yOX'#X\  P6G;ɒP#э47 U.S.C.  735(a)(3).(#y The Satellite Act permits the  S'Commission to license satellite terminal stations to the corporation or carriers or both jointly.ex@3 yO'#X\  P6G;ɒP#э47 U.S.C.  721(c)(7). Section 721(c)(7) requires the Commission to "grant appropriate authorization or the construction and operation of each satellite terminal station, either to the corporation or to one or more authorized carriers or to the corporation and one or more such carriers jointly, as will best serve the public interest, convenience, and necessity. It gives the Commission discretion to "authorize the construction and operation of such stations by communications common carriers or the corporation without preference to either."X ƅ The Commission initially licensed joint Comsat and common carrier ownership of earth stations, but later  S'adopted a policy to license carriers separate from Comsat.f 3 {O '#X\  P6G;ɒP#эSee Earth Station Ownership, 100 FCC 2d 250 (1984).X ƙ  S@'x152.While Section 735(a)(2) authorizes Comsat to furnish "for hire channels of communication,"  S'it does not specify exclusivity.vg3 yO$'#X\  P6G;ɒP#э47 U.S.C.  735(a).(#v When viewed within the context of other provisions of the Act, we do not believe that the grant of authority to Comsat to furnish channels for hire gives it an exclusive"Bg0*&&aan"  S'franchise. To the contrary, the language of the Satellite Act points to an opposite result. Congress  S'intended that "all authorized users have nondiscriminatory access to the system."wh3 yO@'#X\  P6G;ɒP#э47 U.S.C.  701(c).(#w Congress required the Commission to insure that all present and future authorized carriers shall have "nondiscriminatory use of, and equitable access to," the system and to "regulate the manner in which available facilities of  S`'the system and stations are allocated among users."i`X3 yOX'#X\  P6G;ɒP#э 77 U.S.C.  721 (c)(2).(#ƌ I t is the Commission, and not Comsat, that is  S8'required by the language of the Satellite Act to insure "nondiscriminatory use of and equitable access  S'to" INTELSAT.j3 {O '#X\  P6G;ɒP#э47 U.S.C.  721(c)(2). See also Notice, 13 FCC Rcd at 22025.(#Ʋ The Satellite Act does not specify that customer access to the INTELSAT satellite system must be through Comsat space segment, but rather applies its nondiscrimination and equitable  S'access requirements to the communications satellite system INTELSAT.kz3 {O '#X\  P6G;ɒP#эNotice, 13 FCC Rcd at 22025. See 47 U.S.C.  721(c).(#ƪ Further, the Satellite Act defines the "communications satellite system" in general and technical terms, without referencing  Sp'Comsat space segment. lp 3 yO'#X\  P6G;ɒP#эThe statute defines the term "communications satellite system" as "a system of communications satellites in space whose purpose is to relay telecommunication information between satellite terminal stations, together with such associated equipment and facilities for tracking, guidance, control and command functions as are not part of the generalized launching, tracking, control, and command." 47 U.S.C.  702(1). X   In view of these provisions, and the fact that Section 735(a)(2) does not specify exclusivity, we view the provision as ambiguous to the question of whether it gives Comsat exclusive access to the INTELSAT system. Given the specified goals of the Satellite Act, that the corporation created to participate in the global system "be so organized and operated as to maintain  S 'and strengthen competition in the provision of communications services to the public,"m 3 yO,'#X\  P6G;ɒP#э47 U.S.C.  701(c).#&a\  P6G;u&P#(#Ɲ we find no basis for implying exclusivity where none is specifically given. x  SX'x153. Congress directed the Commission to implement its mandate to insure authorized carriers "nondiscriminatory use of, and equitable access to" the system under Section 721(c)(2) in its  S'"administration of the Communications Act, as amended."wnL 3 yO'#X\  P6G;ɒP#э47 U.S.C.  721(c).(#w The Communications Act gives the Commission broad authority and discretion to regulate communications to, from, and within the United  S'States according to public interest standards.o&3 {O4"'#X\  P6G;ɒP#эSee 47 U.S.C.  151, 152, 154(i), 303 and 309. See, e.g., Louisiana Public Service  {O"'Comm'n v. FCC, 476 U.S. 355 (1986); AT&T Corp. v. Iowa Util. Bd., 119 S. Ct. 721  {O#'(1999); and City of New York v. FCC, 486 U.S. 57 (1998), regarding the Commission's  yO$'broad authority under the Communications Act. X  Thus, Commission exercise of this authority under the Satellite Act must take into account circumstances that have changed since 1962, and may require new"Co0*&&aaH"  S'approaches to "insure nondiscriminatory use of and equitable access to" the INTELSAT system.yp3 yOh'#X\  P6G;ɒP#э47 U.S.C.  721(c)(2).(#y We conclude that the Satellite Act gives the Commission discretion to permit direct access in the United States to insure "nondiscriminatory use of and equitable access to" the satellite system under circumstances that exist today, if such action is in the public interest. Such action is permissible under the Satellite Act as long as it is not inconsistent with and does not hinder or interfere with the  S8'objectives and purposes of the Satellite Act.q8X3 {O0'#X\  P6G;ɒP#эSee Communications Satellite Corporation, 77 FCC 2d 564 (1980) ("Comsat Study");  {O'Communications Satellite Corporation, 81 FCC 2d 287 (1980) ("Comsat Structure  {O 'Rulemaking"); Changes in the Corporate Structure and Operations of the Communications  {O 'Satellite Corporation, 90 FCC 2d 1159 (1982) ("First Structure Order"), recon. 93 FCC 2d  {OX '701 (1983); Changes in the Corporate Structure and Operations of the Communications  {O" 'Satellite Corporation, 97 FCC 2d 145 (1984) ("Second Structure Order"), recon., 99 FCC 2d 1040 (1984). The Commission determined that Comsat may engage in nonINTELSAT/Inmarsat businesses as long as such activities are "not inconsistent with, do not  {O|'hinder or interfere with the purposes and objectives of the Satellite Act." Comsat Study 77 FCC 2d at 618.X  We find that Level 3 direct access will result in increased competition and enhance the competitiveness of U.S. carriers and users of INTELSAT in today's global telecommunications market. We also find that direct access can be implemented in a  S'manner that is consistent with Comsat's role as the sole U.S. governing participant in INTELSAT through the imposition of a surcharge on U.S. direct access users. Under these circumstances we conclude that we may permit Level 3 direct access consistent with and as a means of carrying out the provisions of the Satellite Act.  S 'x154.We reject various arguments Comsat makes in support of its position that the language and  S 'context of the Satellite Act give it exclusive access to the INTELSAT system. First, Comsat points  S 'out that while the Satellite Act expressly permits competition: (1) in earth station ownership and  S 'operation;r 3 {O'#X\  P6G;ɒP#эSee 47 U.S.C.  721(c)(7).(#ƃ (2) for procurement of equipment and services;s 3 {O'#X\  P6G;ɒP#эId.#x6X@`7 X@#(#Ɛ and (3) from other satellite systems, the  SX'Satellite Act does not expressly permit competition in access to INTELSAT.tX"3 yO'#X\  P6G;ɒP#эComsat comments at 2021; Comsat Legal Analysis at 5865. We note that Comsat  yO'originally opposed, as contrary to the Satellite Act, competition in earth station construction  {O'and operation as well as the authorization of competing satellite systems. See Modification  {Ot 'of Policy on Ownership and Operations of U.S. Earth Stations, 100 FCC 2d 250, 264  {O>!'(1984); Establishment of Satellite Systems Providing International Communications, Report  {O"'and Order, 101 FCC 2d 1046 (1985), recon., 61 Rad. Reg. 2d 649 (1986).X  The provisions cited by Comsat, however, each give the Commission discretion in implementing the competition goals of  S'the Satellite Act. We similarly view the requirement imposed on the Commission to insure "nondiscriminatory use of and equitable access to" INTELSAT as giving us discretion in how to implement equitable access."Dt0*&&aaD"Ԍ S'ԙx155. Second, Comsat argues that the restrictions in Section 733 on common carrier ownership of  S'Comsat would be meaningless if Comsat does not have exclusive access to the satellite system.u3 yO@'#X\  P6G;ɒP#э47 U.S.C.  733(b) and (c). Comsat comments at 2122; Comsat Legal Analysis at 5557.X ƹ  S'While the Satellite Act restricts common carrier ownership of Comsat, it did so at a level initially intended to attract the substantial common carrier investment needed to ensure success of the  S`'system.v`X3 {OX'#X\  P6G;ɒP#эSee Report of the Committee on Aeronautical and Space Sciences to accompany S.2814,  yO"'"Communications Satellite Act of 1962," Senate 87 Cong. 2d Session, Report No. 1319  {O'(April 2, 1962); Report of the Committee of Commerce to accompany H.R. 11040,  yO '"Communications Satellite Act of 1962", Senate, 87 Cong. 2d Session, Report No. 1584 (June 11, 1962) at 2122.X  The Commission stated in 1969:   Congress so structured the Corporation as to establish a dichotomy between the carrier stockholders on the one hand, and the stockowning members of the public on the other hand. In so doing, it placed the carriers in a preferred position within the Corporation visavis the members of the general investing public. Its purpose in doing so was to induce the carriers to invest in the Corporation and actively participate in its affairs, in order to facilitate the realization and success of its vital  S 'mission.w +Z {O'#X\  P6G;ɒP#эTransfer of Stock in Comsat, 2 RR 2d 1718, 17191720(1964).X ơ     The Commission noted in a later decision that Congress made provisions for communications common carriers to own up to 50 percent of Comsat stock "in order to assure that the fledgling corporation  S 'Comsat received needed communications expertise and guidance."x 3 {O'#X\  P6G;ɒP#эDomestic Communications Satellite Facilities, 38 FCC 2d 665, 679680 (1972).X Ƴ Thus, as noted above, the  SX'ownership provisions of the Satellite Act effectively require carrier participation in the planning, initiating, contracting, owning, and managing the satellite system, through Comsat. Comsat fails to present persuasive evidence that exclusive access to the INTELSAT system was considered necessary for Comsat to effectuate the purpose of these provisions. Moreover, Comsat's role as the sole United  S'States investor in INTELSAT would not be altered under a Level 3 direct access regime.y0 3 {O'#X\  P6G;ɒP#эSee Notice, 13 FCC Rcd at 22024.(#ƌ  Sh'x156.Third, Comsat argues that direct access by U.S. carriers would have undermined the rapid  S@'construction and private financing of the global satellite system and would have made no sense.z@ 3 yO!'#X\  P6G;ɒP#эComsat comments at 2223; Comsat Legal Analysis at 6567.X ƙ In particular, Comsat contends that AT&T would not have routed its traffic through Comsat if it could have accessed the system directly from the beginning. We believe it is mere speculation by Comsat as to what AT&T may or may not have done over 37 years ago had direct access been available to it. There is no reason to believe that AT&T and other carriers would not have undertaken the same level of investment and participation in development of the system to assure its success. Upon the"xER z0*&&aa"  S'formation of Comsat, U.S. carriers invested in Comsat, in the aggregate, up to a 50 percent limit of  S'stock, which was the maximum amount of Comsat stock permitted to be owned by carriers.u{^3 {O@'#X\  P6G;ɒP#эSee Implementation of Inmarsat, 74 FCC 2d 59, 6667 (1979); Communications Satellite  {O 'Corporation (Comsat Study) 77 FCC 2d 564, 587, n. 17 (1980), citing Domestic  {O'Communications Satellite Facilities 38 FCC 2d at 679680.X u Comsat fails to present credible evidence that direct access would have changed investor interest in the new corporation that, from its inception, benefited from United States Government sponsorship and  S`'substantial taxpayer research and development on satellite technology that was used in developing the INTELSAT system.  S'  S'x157. Finally, Comsat argues that direct access would make no sense if Comsat would have had to construct and own the satellite system itself that is, if the international community did not join the United States and Comsat in building the satellite system. However, such a scenario, in effect, would have resulted in the equivalent of direct access because United States customers would have obtained service directly from the system owner and operator Comsat. If this result is permissible under the  S 'Satellite Act, then we see no reason why U.S. customers should not be able to obtain service directly from the current owner and operator of the satellite system INTELSAT with Comsat the U.S. investor in the system. The Satellite Act did not require the creation of an intergovernmental cooperative in the nature of INTELSAT, which through its members obtain and resell space segment to U.S. customers. The key provisions of the Satellite Act creation of a commercial global satellite system by a private U.S. corporation with other countries, nondiscriminatory access by authorized users, maintenance and promotion of competition, and government oversight of Comsat to assure achievement of national objectives and purposes could have been satisfied through creation of a different, more traditional commercial mechanism in which Comsat was the sole U.S. investor and participant in its management and operation but U.S. customers obtained service directly from the system operator. The fact that the intergovernmental mechanism was adopted should not change  Sh'Comsat's role under the Act to one affording exclusive access to the system nor restrict Commission discretion in carrying out its mandate under the Satellite Act.  S'x(c)ppLegislative History  S'x158.Comsat asserts that the legislative history of the Satellite Act indicates that exclusive access to INTELSAT by Comsat was intended by Congress. Evidence of this intent, according to Comsat, is  SP'apparent by (1) the fact that the parties involved in the legislative process recognized it;|P3 yO'#X\  P6G;ɒP#эComsat comments at 2325; Comsat Legal Analysis at 1319.X ƙ (2) references to the "United States participant" as a "carrier's carrier" and "monopoly" would make no  S'sense if direct access were contemplated;}~3 yO"'#X\  P6G;ɒP#эComsat comments at 2526; Comsat Legal Analysis at 1731.X ƙ and (3) Congress' rejection of a carrier consortium alternative, in light of its fear that control over access to the satellite system could be exploited,  S'demonstrates an intent to grant an exclusive franchise.~3 yO^%'#X\  P6G;ɒP#эComsat comments at 27; Comsat Legal Analysis at 3137.(#Ɩ "F~0*&&aa"Ԍ S'ԙx159.Various parties disagree with Comsat's view of the legislative history.3 yOh'#X\  P6G;ɒP#эAT&T reply at 811; BT North America reply at 1221; GE Americom reply at 3; MCI WorldCom reply at 6; and Network reply at 46(# They assert that: (1) Comsat relies on selective statements by witnesses at Congressional hearings; (2) references to Comsat as a "carrier's carrier" and "monopoly" by particular witnesses relate to assumptions they were  S'making about Comsat's role and do not indicate a prohibition on direct access; 3 yOH'#X\  P6G;ɒP#эBT North America reply at 14.#x6X@`7 X@#(#ƪ and (3) the legislative history indicates an intent by Congress to give the Commission flexibility and discretion in  S8'its administration of services from INTELSAT.83 yO '#X\  P6G;ɒP#эAT&T reply at 811; BT America reply at 1217; MCI WorldCom reply at 6; and Network reply at 4 OP 46#x6X@`7 X@#.(#  S'x160. The legislative history referenced by Comsat, however, at most depicts an expectation or predictions primarily from nonlegislators regarding Comsat's role during the early years of the satellite system's development. Comsat heavily relies on references in hearing testimony of Comsat's role as a "carrier's carrier" as indicative of Congressional intent that carriers obtain service only through Comsat. Such statements by nonlegislators at Congressional hearings cannot be "accorded  S 'any weight" for statutory construction purposes.^ 3 {O'#X\  P6G;ɒP#эSee, e.g., Kelly v. Robinson, 479 U.S. 36, 5051, n.13 (1986) and McCaughn v. Hershey  {O'Chocolate Co., 283 U.S. 488, 493 (1931). See also 2A Norman J. Singer, Sutherland  {Ol'Statutory Construction  48.10 at 343 (5th ed. 1992). See also AT&T reply at 9.X Ƣ Committee reports are recognized as the "most  S 'persuasive indicia of congressional intent when enacting a statute." > 3 {O'#X\  P6G;ɒP#эSee Singer, supra at 332. See also Mills v. United States, 713 F.2d 1249 (7th Cir. 1983).#x6X@`7 X@#(# Witness statements at committee  S 'hearings are not statements by Congress as to its intent. 3 {O@'#X\  P6G;ɒP#эAs noted in our Notice, the legislative reports accompanying the Satellite Act neither require that Comsat maintain its own space segment for purposes of providing service to United States customers, nor be structured in such a way that its investors are the sole distributors of services from the system.  {O'Notice at 22025, citing Report of the Committee on Interstate and Foreign Commerce to accompany  yOd'H.R. 11040, "Communications Satellite Act of 1962", House of Representatives, 87th Congress, 2d  {O,'Session, Report No. 1636, dated April 24, 1962; Report of the Committee on Aeronautical and Space  {O'Sciences to accompany S. 2814, "Communications Satellite Act of 1962," Senate 87th Congress, 2d  {O'Session, Report No. 1584, dated June 11, 1962. Report of the Committee on Commerce to accompany  yO'H.R. 11040, "Communications Satellite Act of 1962," Senate, 87th Congress, 2d Session, Report No.  {OR '1584, dated June 11, 1962. See also AT&T reply at 89; BT reply at 1415.(# Further, references by witnesses to "carriers  S 'carrier" and "monopoly" were not subsequently incorporated into the Satellite Act. t3 yO"'#X\  P6G;ɒP#эAT&T reply at 9; BT North America reply at 1213; GE Americom comments at 5; MCI WorldCom reply at 6; Network reply at 46.X  As noted in the  S 'Notice, our review of the committee reports show no intent by Congress to grant Comsat an exclusive" G0*&&aa[ "  S'right of access to INTELSAT in perpetuity.03 {Oh'#X\  P6G;ɒP#эNotice, 13 FCC Rcd at 13 ("Our review of the legislative reports accompanying the Satellite Act does not reveal a Congressional requirement that Comsat maintain its own space segment within the satellite system for purposes of providing service to United States customers. Neither do the legislative reports require the global satellite system to be structured in such a way that its investors are the sole distributors of services from the system.").(#0 We note that Comsat argued (and the Commission agreed) in 1984 that it was not limited to a "carrier's carrier" role under the Satellite Act, but had  S'authority to serve the public directly on a retail basis.z3 {O'#X\  P6G;ɒP#эSee Modification of Authorized User Policy, 90 FCC 2d 1394 (1982) ("Authorized User II").#&a\  P6G;u&P#(# Comsat has for years been in the retail business as a result of Commission action years ago. It cannot now persuasively argue that its "carrier's carrier" role is indicative of Congressional intent to grant it exclusivity in access to INTELSAT.  S'x161. In ITT World Communications v. F.C.C.,3$ 3 {O'#X\  P6G;ɒP#эITT World Communications, Inc. v. FCC, 725 F.2d 732 (D.C. Cir. 1984) ("ITT World") (the Court determined that the Commission had discretion to designate noncommon carriers as authorized users  yO&'under the Satellite Act and thus permitted Comsat to provide retail services to United States  {O'customers). See also NAB v. FCC, 740 F.2d 1190, 1203 (D.C. Cir. 1984).#x6X@`7 X@#(#3 the Court viewed statements like Comsat being referred to as a "carriers carrier" as only "predictions" as to Comsat's role, and not restrictive on  S'Commission discretion in implementing the statute where changed circumstances justify such action. 3 {O2'#X\  P6G;ɒP#э ITT World at 742745. See also BT North America reply at 16.#x6X@`7 X@#X  In particular, these references were based on assumptions by particular Congressional hearing witnesses of what they believed would be Comsat's role in the satellite system, at least in the short term. The Court further found that statements made in the legislative process must be considered in  S 'light of the practical realities and expectations of the day and that the broader purposes of a statute  S 'should guide interpretation. 3 {O'#X\  P6G;ɒP#э #X\  P6G;ɒP# ITT World at 743744.#X\  P6G;ɒP#(# We are not persuaded by Comsat's reliance on outdated assumptions of  S 'hearing witnesses which have now lost their relevance. 3 {Of'#X\  P6G;ɒP#эSee BT North America reply at 14.#x6X@`7 X@#(#Ʈ We agree with other parties in this  S 'proceeding that the Satellite Act history depicts an expectation by some witnesses as to Comsat's role, at least during the early years of system development, but should not be interpreted as reflecting Congressional intent to grant Comsat permanent exclusivity in access to INTELSAT. Nor should it be read as foreclosing Commission flexibility at a later date to carry out its mandates under the Satellite Act in a manner responsive to changing circumstances. x  S'x(d)ppOther Issues  SB'xpp(i)` ` Subsequent Legislative Actions "H0*&&aa"Ԍ S'x162.As was stated in our Notice, Congress amended the Satellite Act in 1978 designating Comsat "as the sole operating entity of the United States for participation in Inmarsat for the purpose of  S'providing international maritime satellite telecommunications services."$3 {O'#X\  P6G;ɒP#эNotice, 13 FCC Rcd at 2202722028 citing 47 U.S.C.  752(a)(1) (emphasis added); See  {O'also H.R. Rep. No. 951134, Part 1, 95th Cong., 2d Sess. 15 (1978); H.R. Rep. No. 951134, Part II, 95th Cong. 2d Sess. 12 (1978); S. Rep. No. 951036, 95th Cong., 2d Sess. 20 (1978).X ƕ In this case, the Commission has and continues to view the provision of Inmarsat space segment for the provision of maritime services via United States earth stations by Comsat as an exclusive role within the United  S:'States by virtue of the Maritime Satellite Act.D:3 {O '#X\  P6G;ɒP#эNotice, 13 FCC Rcd at 22028, citing Provision of Aeronautical Services in the Inmarsat  {OX 'System, 2 FCC Rcd 390 (1987) ("Aeronautical Services Order I"), Dkt. No. 871077/78  {O" '(D.C. Cir. February 12, 1987), remanded November 22, 1988 per November 15, 1988  {O 'Commission request; In the Matter of Provision of Aeronautical Services via the Inmarsat  {O 'System, 4 FCC Rcd 6072 (1989) ("Aeronautical Services Order II");  See also Participation by Comsat Corporation in a New Satellite System Designed to Provide Service for Hand {OH'held Communications Devices, 9 FCC Rcd 7693 (1994) ("InmarsatP Declaratory Ruling"),  {O'motion for temporary relief denied, 10 FCC Rcd 1061 (Int'l. Bur. 1993); petition for review  {O'denied, Comsat Corporation v. FCC, 77 F.3d 1419 (D.C. Cir. 1996).X D In contrast, the Satellite Act specified no such exclusive role for Comsat with respect to access to INTELSAT satellites nor did it make any reference  S'to Comsat space segment in the system. 3 {O'#X\  P6G;ɒP#эNotice, 13 FCC Rcd at 22028.(#Ƃ  S'x163.Comsat argues that the language of the 1978 amendment applicable to Inmarsat confirms that  Sr'the Satellite Act that led to creation of INTELSAT granted Comsat an exclusive franchise over the  SJ 'INTELSAT system.J &3 yO'#X\  P6G;ɒP#эComsat comments at 3234; Comsat Legal Analysis at 7687.(#ƙ Comsat contends that the use of more explicit language in the 1978 amendment "may be explained by virtue of the fact that the draftees of the Inmarsat Act benefitted  S 'from the knowledge gained through the years of implementation of the Satellite Act and the creation,  S 'deployment and operation of the INTELSAT system."v 3 yO('#X\  P6G;ɒP#эComsat comments at 33.(#v Other parties disagree. They contend that Congress' use of the language "sole operating entity in the United States" that appears in the 1978 amendment is a grant of exclusivity not present in the Satellite Act, and that Congress' choice of language in 1978 confirms an intent in 1962 to grant discretion to the Commission in connection with  S2'INTELSAT.2F3 yO"'#X\  P6G;ɒP#эBT North America reply at 2021; C&W reply at 7; ICG reply at 34; MCI WorldCom reply at 89; Network reply at 4.X  " I0*&&aa"Ԍ S'x164.The 1978 amendments demonstrate that when Congress intended to give Comsat an exclusive  S'role in the operations of a satellite system, it used specific language to make that intent clear.3 {O@'#X\  P6G;ɒP#эNotice, 13 FCC Rcd at 22027.(#ƈ We do not agree with Comsat that Congress' use of specific language in 1978 was simply a reaffirmation of Congressional intent in 1962. Comsat's position is based on the argument that the 1978 amendment is patterned after the Satellite Act and specific language in the 1978 amendment is comparable to language in the Satellite Act. In particular, Comsat compares the 1978 amended language "sole  S'operating entity in the United States for participation in Inmarsat" with Satellite Act language, which states that "United States participation in the global system shall be in the form of a private  S'corporation," and implies that both establish the same exclusive franchise.Z3 yO '#X\  P6G;ɒP#эComsat comments at 33 and Comsat Legal Analysis at 83, each comparing 47 U.S.C.  752(a)(1) with 47 U.S.C.  701(c).X  However, Comsat fails to make the full comparison by leaving out language completing the sentence in the 1978 amendment of,  Sp'"for purposes of providing international maritime satellite services."p3 {O'#X\  P6G;ɒP#эSee 47 U.S.C.  752(a)(1).(#ƃ In giving exclusive access in  SH 'regard to Inmarsat, the same section specifically refers to Comsat "space segment" which the Satellite Act does not. Considering the language of the 1978 amendment in its full context, it is clear that Congress was granting an exclusive franchise explicitly to provide international maritime services. Comsat correctly observes that the 1978 amendment does not use the word "exclusive" in referencing  S 'Comsat space segment just as the Satellite Act does not use the word when referring to "channels of  S 'communications." D3 yOd'#X\  P6G;ɒP#эComsat comments at 3334 and Comsat Legal Analysis at 8384 (comparing 47 U.S.C.  752(a)(4) with 47 U.S.C.  735(a)(2)).X  Nevertheless, Section 752, titled "Designated Operating Entity" assigns Comsat the role of "sole operating entity" . . . for the purpose of providing international maritime satellite  S0'telecommunications service.s03 yOl'#X\  P6G;ɒP#э47 U.S.C.  752.X s The term "sole" means "only" and clearly connotes exclusivity. In  S'comparison, the language in the Satellite Act referring to "channels of communication" is not similarly modified by terms of exclusivity.  S'x165. Nothing in the legislative reports accompanying the 1978 amendment states that the  Sh'arrangement being adopted was the same as that reflected in the Satellite Act. In fact, the approach taken by Congress in 1978 appears to have been based on specific consideration of how maritime satellite communications services would most efficiently be delivered by United States carriers to  S'United States customers. , 3 {O!'#X\  P6G;ɒP#эSee Senate Commerce Committee Report No. 951036 at 89; House Interstate and Foreign Commerce Committee Report No. 951134 at 1011. The 1978 amendment left to the Commission's discretion to determine operational arrangements between Comsat and earth station operators for interconnection of service to United States carriers but the Committee reports made it clear that a "carrier's carrier" arrangement was not necessarily the optimal  {O%'approach for distribution of maritime satellite services. See 47 U.S.C. 752(1). As"%0*&&%" enacted, the 1978 amendment provided for FCC licensing of both Comsat and other entities. 47 U.S.C.  752(c)(2). We also note that there was disagreement between the House and Senate as to whether the Commission would be permitted to license only Comsat or other entities to operate earth stations. X  We note that Comsat once again primarily relies upon testimony at"J0*&&aaa" hearings as support for its contention that the 1978 amendment reflects Congressional intentions in the  S'Satellite Act. We are not persuaded that the views of witnesses in 1978 should be given any weight in  S'assessing what Congress intended to do in passing legislation in 1962.3 {O'#X\  P6G;ɒP#эSee United States v. Gonzales, 520 U.S. 1 (1997).X Ɨ We believe that the 1978  S'amendment is relevant here only to the extent it demonstrates that when Congress wants to confer exclusive status, it does so with explicit language.  S'x(ii)` ` Previous Commission and Court Decisions  S'x166.Comsat contends that previous Commission and Court decisions recognized Comsat as  S'having an exclusive franchise for access to the INTELSAT system.B3 yOz'#X\  P6G;ɒP#эComsat comments at 2830; Comsat Legal Analysis at 6776.X ƙ Other parties respond that Comsat has misread these decisions; that neither the Commission nor the Courts have despositively  SH 'ruled on the issue; and that past Court decisions lend support to the tentative finding in our Notice that  S" 'the Satellite Act does not confer an exclusive franchise on Comsat." 3 yO'#X\  P6G;ɒP#эBT North America reply at 1720; ICG reply at 45; MCI WorldCom reply at 78; Network reply at 69.X   S 'x167.Comsat points to the Commission's Authorized User I decision as an early Commission  S 'recognition of an exclusive franchise. * 3 {Ov'#X\  P6G;ɒP#эIn re Authorized Entities and Authorized Users Under the Communications Satellite Act, 4  {O@'FCC 2d 421 (1966) ("Authorized User I").X  Authorized User I stated that Comsat has a virtual monopoly position in the operation of the INTELSAT space segment and that the Commission lacks authority to  S^'authorize other carriers to operate space segment facilities from INTELSAT.w^ 3 {O'#X\  P6G;ɒP#э Id. at 428.X w However, as we  S6'explained in the Notice, the issue before the Commission in that decision was whether the Satellite Act allowed Comsat to provide services directly to entities other than carriers. The particular issue of  S'whether Comsat has exclusive access to the INTELSAT space segment under the Satellite Act was not  S'before the Commission. Further, Authorized User I included virtually no analysis of the statutory  S'language or legislative history relevant to the direct access issue. We stated in the Notice that we regard these statements as dicta and we are not now foreclosed from considering our authority under  SL'the Satellite Act to permit direct access.L3 {O$'#X\  P6G;ɒP#эNotice, 13 FCC Rcd at 2202622027.X Ɣ Contrary to Comsat's assertions,L3 yO%'#X\  P6G;ɒP#эComsat Legal Analysis at 6770.X Ƒ we find that the"LK:0*&&aa" Commission was not deciding whether or not it had legal authority to permit direct access under the  S'Satellite Act.3 {O@'#X\  P6G;ɒP#эSee BT North America reply at 6 and Network reply at 6.#X\  P6G;ɒP#X  If it had decided in 1966 that it lacked authority to permit direct access, then it would  S'not have later initiated a proceeding in 1982 to consider permitting direct access.  S`'x168.Similarly, the Commission was not making such a decision in 1970 when it adopted a policy to permit United States carriers to use nonComsat space segment when using foreign earth stations for transit traffic. In rejecting Comsat's argument that United States carriers should use Comsat, the  S'Commission, referring to its Authorized User I decision, concluded that "there is no doubt the Satellite Act provides that Comsat is the chosen instrument to provide space segment facilities to licensees of  S'earth stations in the United States."Z3 {O '#X\  P6G;ɒP#эSee Satellite Facilities for Handling Transiting Traffic, 23 FCC 2d 9, 12 (1970) ("Satellite  {O^ 'Transiting Order").X  The Commission, however, also noted that "there are no  Sr'specific words in Section 305 which indicate exclusivity as to any of the powers set out therein."r3 {O'#X\  P6G;ɒP#эId. referencing 47 U.S.C.  305.X Ɖ  SJ 'These observations were essentially carried over from the Authorized User I decision in which the issue of Comsat's exclusive access to INTELSAT was not at issue. Moreover, the decision taken by  S 'the Commission in the Satellite Transiting Order turned on the Commission's exercise of its discretion under the Satellite Act in determining the public interest "in light of subsequent developments in a  S 'newly and rapidly development technology." H3 {O'#X\  P6G;ɒP#эSatellite Transiting Order, 23 FCC 2d at 1213.(#ƛ We do not regard the comments as determinative that  S 'the Commission lacks authority to permit direct access.  S6'x169.Parties supporting our tentative conclusion that we have discretion to permit Level 3 direct  S'access point to a series of Commission actions and court decisions, subsequent to Authorized User I  S'and the Satellite Transiting Order. They contend that these decisions illustrate evolving Commission views on Comsat's role under the Satellite Act and application of agency discretion in implementing  S'the Act's provisions.3 yO'#X\  P6G;ɒP#эBT North America reply at 19; ICG comments at 45; MCI WorldCom reply at 68;  yO'Network reply at 69.#X\  P6G;ɒP#X  BT North America points out that the Commission in its 1980 Comsat Study  St'envisioned permitting forms of direct access by United States carriers to INTELSAT.t2 3 {OF'#X\  P6G;ɒP#эBT North America reply at 1719, citing the Comsat Study, 77 FCC 2d at 758. Comsat  {O 'cites the Comsat #X\  P6G;ɒP#Study for a statement made referencing "Comsat's current monopoly in INTELSAT and provider of INTELSAT space segment capacity to U.S. international communications common carriers and other authorized users". Comsat comments at 29,  {Oj"'citing Comsat Study, 77 FCC 2d at 693. This statement was made in the context of discussion about the policy benefits and detriments of disenfranchising Comsat of its role as the wholesale provider of space segment in favor of new U.S. signatory in INTELSAT for investment purposes and having Comsat compete with other U.S. carriers on the retail level. The discussion did not state that Comsat's monopoly was attributed to the Satellite Act. "%0*&&x%" Comsat inaccurately states that the Commission recognized that Congressional action would be required to change the corporation's exclusive position (Comsat's Legal Analysis at 73). In fact, the Commission did not address the question of Congressional action in the context  {O'of any aspect of the option under review.  See Comsat Study 77 FCC 2d at 693695. As noted above, in the same report, the Commission discussed permitting a form of direct access under its own authority without need for change in legislation.X  The Comsat"tLB0*&&aa"  S'Study was a report to Congress required by the 1978 amendments to the Satellite Act and entailed Commission review of Comsat's corporate structure and operating activities to determine whether any  S'changes were required to ensure Comsat's fulfillment of its obligations under the Satellite Act.B3 {O '#X\  P6G;ɒP#эComsat Study, 77 FCC 2d at 564.X ƅ  S'Following the Comsat Study, the Commission undertook several proceedings in view of its findings in  Sd'the report. Those actions included the concurrent initiation of a proceeding to modify Authorized User  S>'I to permit Comsat to compete with United States carriers in the retail market.>3 {O '#X\  P6G;ɒP#эAeronautical Radio, Inc., et al, Notice of Proposed Rulemaking, 77 FCC 2d 535 (1980).X ƻ The Commission later changed its policy for licensing earth stations to permit carriers to own and operate earth stations  S'separate from Comsat,f 3 {O'#X\  P6G;ɒP#эEarth Station Ownership, 100 FCC 2d 250 (1984).X ƕ and the Commission began an inquiry as to whether to permit United States carriers direct access to INTELSAT and allow them to compete with Comsat in the wholesale  S'market. 3 {O8'#X\  P6G;ɒP#э1982 Direct Access Inquiry, 90 FCC 2d 1146.X Ɨ Each of these proceedings involved exploration of policy options available to the  Sx'Commission in carrying out its responsibilities under the Satellite Act and the Communications Act.  S( 'x170.In the 1982 Authorized User II decision, the Commission abandoned its 1966 Authorized  S 'User I policy of permitting only carriers to offer INTELSAT services directly to the public and  S 'permitted Comsat to enter the retail market through a separate subsidiary. 3 {O'#X\  P6G;ɒP#эModification of Authorized User Policy, 90 FCC 2d 1394 (1982) ("Authorized User II").X  The Commission's decision was remanded by the Court in 1984. The Court ruled that the Satellite Act affords the Commission discretion to allow Comsat to compete at the retail level, and to consider a policy favoring competition (i.e., competition between cable and satellite transmission modes), but that the  S<'agency failed to consider adequately relevant factors in implementing its Authorized User II policy. One such factor identified by the Court was direct access to INTELSAT which retail carriers argued  S'was necessary to promote intermodal competition.3 {O '#X\  P6G;ɒP#эITT World, 725 F. 2d at 746, 752755. X ƌ The Court required the Commission to consider  S'direct access before implementing a change in the  Authorized User II policy. In so requiring, the Court did not suggest that direct access was not permissible under the Satellite Act. The Commission  Sx'initiated a Notice of Inquiry and subsequently decided in 1984 not to pursue direct access options"xM0*&&aa" based on public interest considerations; it did not, however, address its legal authority to require direct  S'access under the Satellite Act.3 {O@'#X\  P6G;ɒP#эNotice, 13 FCC Rcd at 22015, citing 1984 Direct Access Order, aff'd Western Union, 814 F.2d 1280.X   S'x171.  The Commission's 1984 Direct Access Order was affirmed by the Court in 1986 in its  Sb'review of three related Commission decisions: (1) Authorized User III in which the Commission  S<'essentially readopted its Authorized User II policy;<"3 {O'#X\  P6G;ɒP#эAuthorized User III.X ƀ (2) the Earth Station Ownership decision in  S'which the Commission permitted carriers to own and operate earth stations separate from Comsat;3 {Oj '#X\  P6G;ɒP#эEarth Station Ownership, 100 FCC 2d 250 (1984).X ƕ  S'and (3) the 1984 Direct Access Order. The Court's opinion focused on review of the Commission's public interest analysis in exercise of its discretion under the Satellite Act and the Communications Act. The Court did not address nor did it suggest that the Commission lacked authority to permit direct access to INTELSAT had the Commission determined that it was required in the public interest.  S( 'x172.Finally, Comsat cites various statements made in several judicial decisions as evidencing  S 'recognition of its exclusive right to access the INTELSAT system. F3 {O'#X\  P6G;ɒP#эComsat comments at 2930 and Comsat Legal Analysis at 7376, citing National Ass'n of  {O'Broadcasters, 740 F.2d at 1214; Communications Satellite Corporation v. FCC, 836 F.2d  {Oz'623, 625 (D.C. Cir. 1988), Alpha Lyracom Space Communications, Inc. v. Communications  {OD'Satellite Corporation, 946 F.2d 168 (2nd Cir. 1991), aff'd in part, rev'd and remanding in  {O'part, Alpha Lyracom Space Communications, Inc. v. Communications Satellite Corp., 1990 {M'2 Trade Cas. (CCH)  69, 188 (S.D.N.Y. 1990).X  Other parties argue that the decisions and statements cited by Comsat are not relevant to the issue before us in this proceeding  S 'access to the INTELSAT system. 3 yO'#X\  P6G;ɒP#эBT North America reply comments at 19; ICG reply comments at 45; Network reply  yO'comments at 7.#X\  P6G;ɒP#X  We agree. The decisions in question neither turned on, nor  S 'analyzed, nor interpreted the issue of Commission discretion under the Satellite Act to permit access to  S`'INTELSAT other than through Comsat. The National Ass'n of Broadcasters decision involved review  S:'of the reasonableness of the Commission's interim DBS regulations and the NAB's challenge to  S'Comsat's ability to provide such services. The AlphaLyracom case involved an antitrust suit brought against Comsat by PanAmSat and turned, in part, on Comsat's immunity in its role as the U.S. Signatory to INTELSAT. Neither case turned upon an analysis of whether Comsat has exclusive access to INTELSAT under the Satellite Act.  SL'x(e)ppConclusions on Commission Authority Under the Satellite Act  S'x173.We find that the Commission has authority under the Satellite Act to ensure "nondiscriminatory use of and equitable access to" and to regulate allocation of available facilities on the INTELSAT system. We also find that the Satellite Act neither expressly nor by implication grants"N 0*&&aa" Comsat an exclusive franchise to access the INTELSAT space segment. The provisions cited by Comsat as giving it exclusive access are ambiguous, and a reasonable construction is that Congress did  S'not intend exclusivity where it did not so expressly state exclusivity. We base these findings on a reading of all relevant provisions of the Satellite Act in context. We reject Comsat's view of the  S`'legislative history of the Satellite Act as allegedly being dispositive of the issue of direct access. We do so on the basis that there is no clear intent reflected in accompanying House and Senate reports to grant exclusive access to Comsat, and also based upon court determinations that statements by  S'witnesses in hearings as to Comsat's role can only be viewed as "predictions." We further find that Commission statements in decisions made shortly after passage of the Satellite Act are not dispositive of the issues then before the Commission and should be considered dicta. Judicial decisions involving specific review of our past decisions on direct access and related issues as to Comsat's role under the Satellite Act do not suggest that the Commission lacks authority under the Satellite Act to permit direct access.  S 'x174.For these reasons, we conclude that the Satellite Act does not confer upon Comsat an exclusive franchise to access the INTELSAT system. We further conclude that we have discretion under the Satellite Act to permit Level 3 direct access upon a finding that such a policy is necessary in the public interest and is not otherwise inconsistent with the objectives and purposes of the Act. We also conclude that we do not have authority to permit Level 4 direct access because, as discussed above, the Satellite Act provides that U.S. participation in the global satellite system shall be in the form of a private corporation (Comsat) and that carrier investment in Comsat is the means by which carriers participate in the ownership and management of INTELSAT.  Sh' x2.Constitutional Considerations  S'x175.A Fifth Amendment "takings" issue may arise when the Commission or any government  S'action affects a private property right.z3 {OX'p` P (#$%p&`'Sp` P (#$%p&`'`#X\  P6G;ɒP#эSSU.S. CONST. amend. V. See, e.g., Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 420  {O"'(1982) ("Loretto"); Penn Cent. Transp. Co. v. New York City, 438 U.S. 104 (1978) ("Penn"); American  {O'Continental Corp. v. United States, 22 Cl. Ct. 692, 696 (1991) ("American"); Dolan v. Tigard, 512  {O'U.S. 374 (1994); Lucas v. S.Carolina Coastal Council, 505 U.S. 1003 (1992); Nollan v. Cal. Coastal  {O'Comm'n, 483 U.S. 825 (1987).#X\  P6G;ɒP#Sp` P (#$%p&`'`p` P (#$%p&`'(#Sz In our Notice, we addressed Comsat's assertion that permitting Level 3 direct access to the INTELSAT system by United States carriers, other than  S'Comsat, would constitute an uncompensated "taking" in violation of the Fifth Amendment.}3 {O'p` P (#$%p&`'XS4` hp x (#%'0*,.8135@8:'#X\  P6G;ɒP#эSee Notice, 13 FCC Rcd at 22018.#x6X@`7 X@#(#Ƴ  S'The first inquiry considers whether a contract actually exists.~3 {O '#X\  P6G;ɒP#эSee Winstar, 518 U.S. at 860861.(#Ƈ This inquiry focuses in part upon whether the relationship was one of governmental regulation of the private party as opposed to a one S:'onone contractual undertaking with that private party.$:3 {O '#X\  P6G;ɒP#эWinstar, 518 U.S. at 86164, 89697. See also Bowen v. Public Agencies Opposed to Social Security  {O 'Entrapment, 477 U.S. 41, 55 (1986) (alleged contract right at issue was part of a regulatory program over which the Congress retained its right to amend a statute in the exercise of its power to provide for the general welfare).(# As Comsat provides no evidence of an explicit contractual undertaking between it and the United States Government, analogous to what private parties might negotiate, any contract purporting to promise exclusive rights in this context would be in the form of a statutory or regulatory contract (between it and the United States Government). We find that Congress did not vest in Comsat an exclusive property right, by way of  Sr'the Satellite Act and its regulatory structure, to access INTELSAT satellites from the United States.  SJ ' Since there is no government contract, there is no basis for finding that Comsat has a vested property  S" 'right affording it exclusive access.PX" 3 yO'#X\  P6G;ɒP#эAT&T comments at 67; AT&T Reply at 11; C&W comments at 9; Loral Orion comments at 2; GE comments at 7; PanAmSat comments at 4; MCI WorldCom comments at 8; MCI WorldCom Reply at  yON'10.#x6X@`7 X@#(#P  S 'x183. "A party claiming a property right must be able to demonstrate the abrogation of an express contract by statute or the existence of a contractual relationship between the private party and the  S 'government."*& 3 {O>'#X\  P6G;ɒP#эAT&T comments at 6. See The Binghampton Bridge, 70 U.S. 51 (New York legislature expressly  {O'established a charter (i.e., a contract) by statute, granting specific bridge companies the right to build a  {O'bridge.) See also Winstar, 518 U.S. 839 (regarding claim that government had taken away through  yO'legislation a right conferred by contract.)#x6X@`7 X@#(#* In Binghampton, the Court held that a state breached an express statutory provision  S\'for exclusivity.\ 3 {O"'#X\  P6G;ɒP#эNotice, 13 FCC Rcd at 22018.#x6X@`7 X@#(#Ư We have found here that there is no express provision in the Satellite Act that  S4'confers on Comsat an exclusive right to access INTELSAT satellites in the United States. Winstar held that the United States Government was liable for breach of contract as a result of a new federal statute and implementing regulation that invalidated a specific provision in a contract previously"S0*&&aa"  S'negotiated by the respective parties.3 {Oh'#X\  P6G;ɒP#эId.#x6X@`7 X@#(#Ɩ Here, there is no contract that has been negotiated between Comsat and the U.S. Government so there can be no invalidation of a contractual provision by way of  S'statute or regulations. Although Comsat disputes the Commission's view of Binghampton and  S'Winstar, it does not show where and how we erred. Moveover, it fails to show how the circumstances here are consistent with the circumstances in either of those cases. Beyond its general reliance on the  S<'Satellite Act, Comsat cites no other statutory provision or regulatory program that amounts to a contractual undertaking by the U.S. Government with respect to Comsat's access to INTELSAT  S'satellites.fZ3 {O '#X\  P6G;ɒP#э We pointed out in the Notice that, by contrast, in Winstar, the Court found a number of specific commitments by the U.S. Government which were identified by petitioners that amounted to  {Ox 'contractual undertakings. Winstar, 518 U.S. at 86064. For example, the Court found that the U.S. Government had expressly agreed to indemnify the private party for costs associated with regulatory  {O 'change.  Id. at 88687. See also PanAmSat Reply at 3.(#f Thus, we affirm the tentative conclusion in our Notice that there is no commitment by the U.S. Government relating to Comsat's access to INTELSAT satellites that amounts to a governmental contract  SN 'x184. In our Notice we said that Comsat failed to demonstrate that consideration of "special rules,"  S( 'such as those identified by the Court in Winstar, require a finding of a vested contractual right. We said there was no showing that there was an unmistakable or unambiguous surrender of sovereign authority, or that there was an express delegation to an agent to surrender such authority, that effectively vested a property right in Comsat with regard to access to INTELSAT satellites. Comsat  S 'provides no new information in response to our Notice that would cause us to change our position on  Sd'this. Accordingly, we affirm the findings in the Notice.  S'x185.In this proceeding, Comsat generally repeats much of the same reasoning that we rejected in  S'our Notice, or simply makes conclusory statements without specifically rebutting the Commission's  S'prior arguments.3 {Ox'#X\  P6G;ɒP#эWe incorporate by reference the Commission's arguments. Notice, 13 FCC Rcd at 22020. #x6X@`7 X@#(# It also relies upon its view of what the Satellite Act and regulatory regime gave it, but fails to show when and how the bequeath occurred. In particular, Comsat cites to no particular statutory or regulatory provision that amounts to an exclusive contractual undertaking by the United States Government with Comsat regarding access to INTELSAT satellites. Although it alleges that no express promise is necessary, it does not show an implied promise or contract. Furthermore, it does  S'not otherwise demonstrate a property right of exclusive access to INTELSAT satellites.H3 yOB '#X\  P6G;ɒP#эAT&T comments at 4; Sprint comments at 5; GE comments at 4; BT North America comments at  {O !'14. See RCA Global Communications, Inc., et. al., 3 FCC Rcd 2814 (1988). #x6X@`7 X@#(#H  S'Accordingly, we affirm our determination in the Notice that Comsat has no legitimate expectation that  S'Congress granted it a contractlike right of exclusivity. 3 yON$'#X\  P6G;ɒP#эNetwork comments at 18. MCI WorldCom comments at 45. AT&T comments at 6.#x6X@`7 X@#(# As there is no property right for exclusive access, the Fifth Amendment cannot be violated. "bT 0*&&aa"Ԍ S'x  (b)ppComsat Establishes No Fifth Amendment "Taking"  S'x186.In light of our finding that Comsat possesses no vested property right giving it exclusive access to INTELSAT satellites from the United States, there can be no issue regarding a Fifth Amendment "taking" of private property. Therefore, it is unnecessary to further address the issue. Nevertheless, if we assume that Comsat possesses a property right, we would then have to consider whether allowing Level 3 direct access to INTELSAT satellites in the United States constitutes a permanent physical occupation, physical invasion, or economic regulation that would establish a "taking" under the Fifth Amendment. For the reasons discussed below, we find, even assuming Comsat has a property right, that no violation of the Fifth Amendment "takings" clause has been  Sp'established./p3 {O '#X\  P6G;ɒP#эSee Sprint comments at 6; MCI WorldCom comments at 78; Loral Orion Comments at 2; IT&E  yO 'comments at 4; C&W at 1; and AT&T comments at 5 and 7.#x6X@`7 X@#(#/  S 'x187.Comsat asserts that Level 3 direct access would deny it, as one holding a property right, the  S 'right to exclude third parties from the use of Comsat's property. "3 yO'#X\  P6G;ɒP#эComsat comments at 40.#x6X@`7 X@#(#Ɲ   This infringement, says Comsat, would constitute a "permanent physical occupation authorized by state law and, therefore, a 'taking' of  S 'private property by the government." 3 {O'#X\  P6G;ɒP#эId. at 4041.#x6X@`7 X@#(#ƚ Comsat also asserts that government allowance of Level 3 direct access would deny it the "economically viable use" of its property exclusive access to  SX'INTELSAT satellites.XD3 {O<'#X\  P6G;ɒP#эId. at 39. See Penn Cent., 438 U.S. at 124, n.198.#x6X@`7 X@#(# It disputes the characterization, made in our Notice, of a Level 3 arrangement  S2'as voluntary.23 yO'#X\  P6G;ɒP#эComsat comments at 41.#x6X@`7 X@#(#Ɲ In particular, Comsat contends that since it would not be involved with the arrangements involving INTELSAT except to the extent the Commission required it to consent to  S'such arrangements the arrangement would not be voluntary.f 3 {O'#X\  P6G;ɒP#эId. Comsat does not elaborate on this assertion further.#x6X@`7 X@#(# Comsat argues that it is irrelevant,  S'contrary to the Commission's view in our Notice, 3 {OR'#X\  P6G;ɒP#эNotice, 13 FCC Rcd at 22020.#x6X@`7 X@#(#Ư that "the U.S. would not be a party to the service  S'agreement or in such an arrangement." 3 yO '#X\  P6G;ɒP#эComsat comments at 41.#x6X@`7 X@#(#Ɲ Finally, it contends that Comsat and its investors "bought  Sl'their property in reliance on a state of affairs that did not include" a Level 3 direct access regime.l3 {O&#'#X\  P6G;ɒP#эId. at 40. See also Loretto, 458 U.S. at 43435.#x6X@`7 X@#(#  S'x  (i)ppNo Permanent Physical Occupation "U0*&&aa"Ԍ S'x188.As stated in our Notice, a taking will be found where the character of the governmental  S'action results in a "permanent physical occupation" of property.Z3 {OB'#X\  P6G;ɒP#эNotice, 13 FCC Rcd at 38. See Lucas, 505 U.S. at 101516; Loretto, 458 U.S. at 43435 (a taking occurs to the extent of the occupation without regard to whether the governmental action achieves an  yO'important public benefit or has only minimal impact on the owner.)#&a\  P6G;u&P#(#Ƶ I n Loretto, the Supreme Court held that if the "character of the government action" results in a "permanent physical occupation" a "taking" occurs to the extent of the occupation, regardless of whether the public gains some benefit or the  Sd'economic impact is minimal.+d3 {O'#X\  P6G;ɒP#эLoretto, 458 U.S. at 434435, n.200. AT&T cites a number of court cases that address the taking  yO 'issue, AT&T reply at 1112.#x6X@`7 X@#(#+ However, a court will not find a "taking" where an agency simply  S<'regulates the terms of a voluntary commercial relationship. <D3 {O '#X\  P6G;ɒP#эSee FCC v. Fla. Power Corp., 480 U.S. 245, 251 (1987) (Supreme Court held that the relief from overcharging on pole attachment leases, pursuant to the Pole Attachment Act, between cable and utility companies did not constitute a permanent physical occupation; the Court noted that the Pole Attachment Act neither gives cable companies the right to attach to utility poles nor requires utility  {OB'companies to enter into attachment agreements with cable operators.); See also Yee v. Escondido, 503  {O 'U.S. 519 (1992); Nixon v. United States, 978 F.2d 1269, 1286 (D.C. Cir. 1992).#x6X@`7 X@#(#   S'   S'x189.Although, Comsat is correct that "just compensation" would likely be forthcoming where a permanent physical occupation of a property right occurs, permitting other United States carriers and users to obtain Level 3 direct access to INTELSAT satellites would not result in a permanent physical  St'occupation of Comsat's INTELSAT property. Under a Level 3 direct access regime, a voluntary contractual arrangement would be created between a United States carrier or user and INTELSAT.  S$ 'This contractual arrangement permits "use" but not a "permanent occupation."$ 3 yO'#X\  P6G;ɒP#эLoral Orion comments at 2.#x6X@`7 X@#(#ơ The U.S. Government is not a party to the service agreement between INTELSAT and a Level 3 direct access  S 'customer. As we pointed out in our Notice, under a Level 3 direct access agreement other carriers  S 'would be allowed to use but not to permanently (physically) occupy INTELSAT satellites. R 3 {O'#X\  P6G;ɒP#эSee Notice, 13 FCC Rcd at 20.#x6X@`7 X@#(#Ƽ In return,  S 'INTELSAT would receive payment for that use from the customer. 3 yO '#X\  P6G;ɒP#э INTELSAT Service Agreement (May 1, 1997), http://www.intelsat.int/cc/connect/servform.htm.(# Comsat has provided nothing further in its comments that would cause us to alter our position on this point. Under these circumstances, a direct access customer's use of INTELSAT satellites does not result in a permanent physical occupation of Comsat's property that would constitute a "taking" within the meaning of the  S'Fifth Amendment.  S'  S'x  (ii)` ` No "Taking" by Partial Physical Occupation or Economic Regulation  SF'x190. Where government action does not result in a "permanent physical occupation," yet raises  S'"takings" issues or where regulation denies its property owner "economically viable use" of that"Vt0*&&aa"  S'property , the courts will weigh the facts in an ad hoc manner.'D 3 {Oh'#X\  P6G;ɒP#эSee Penn Cent., 438 U.S. 104. See also AT&T Comments at 7; Loral comments at 2. A Fifth Amendment uncompensated "taking" can be supported under two situations. One, the property is  {O'physically occupied, destroying the owner's right to "possess, use and dispose of it." See, e.g.,  {O'Loretto, 458 U.S. at 435 (quoting United States v. General Motors Corp., 323 U.S. 373, 378 (1945)). Direct access will not prohibit continued access by Comsat to the INTELSAT system. AT&T comments at 8. Two, an unconstitutional taking occurs when the property has been physically invaded  {O'and the owner has been denied of all economically beneficial use of the property. See Lucas, 505 U.S. at 101516. (The factors analyzed by courts in determining whether there is a physical invasion are: (1) the character of the government action, (2) the economic impact of the regulation on the claimant, and (3) the extent to which the regulation has interfered with distinct investmentbacked  {O@ 'expectations.); See Penn Cent., 438 U.S. at 124; Preemption of Local Zoning Regulation of Satellite  {O 'Earth Stations, Report and Order, Memorandum Opinion and Order, and Further Notice of Proposed  O 4Rulemaking, 11 FCC Rcd at 19302 ( 43)." AT&T comments at 8.#x6X@`7 X@# # x6X@`7 X@#(#' Specifically, as noted in our Notice, a physical invasion of property (short of a permanent physical occupation), or a regulation that merely  S'affects the use of property, will lead to the application of three factors noted previously. 3 {O&'#X\  P6G;ɒP#эSupra n. at 252. Notice, 13 FCC Rcd at 2021. See Ruckelshaus v. Monsanto Company, 467 U.S.  {O'986, 1005 (1984). See also Loretto, 458 U.S. at 426 (the degree of interference with investment {O'backed expectations is of particular significance); Penn Cent., 438 U.S. at 124; Lucas, 505 U.S. at  {O'1015. See also Kaiser Aetna v. United States,  444 U.S. 164 (1979). Comsat insists that the third  yON'prong is the "key to this analysis." Comsat comments at 39.(#  Applying these three factors, we conclude that allowing carriers other than Comsat to access INTELSAT satellites in the United States through Level 3 direct access would not give rise to a taking under the  S:'Fifth Amendment.  S'x191.We consider first whether the character of the governmental action indicates that a "taking" has occurred. "A 'taking' may more readily be found when the interference with property can be characterized as a physical invasion by government, than when interference arises from some public  Sr'program adjusting the benefits and burdens of economic life to promote the common good."r3 {O'#X\  P6G;ɒP#эPenn Cent., 438 U.S. at 124.#X\  P6G;ɒP#(#Ư In this  SJ 'case, the nature of the government action serves Commission objectives.J 3 {O'#X\  P6G;ɒP#эSee AT&T comments at 911.#x6X@`7 X@#(#Ƨ As discussed above, the Commission has the authority under Section 201(c)(2) and (11) of the Satellite Act to adopt a rule or policy that assures U.S. carriers and users to obtain nondiscriminatory and equitable access to  S 'INTELSAT satellites.z 3 yO"!'#X\  P6G;ɒP#э47 U.S.C.  721(c)(2) and (11).z INTELSAT, in its normal business operations, provides procedures for direct access to INTELSAT satellites by nonSignatories. A rule or policy permitting other U.S. carriers and users to obtain Level 3 direct access would not compel physical use of Comsat's INTELSAT facilities. Rather, such a rule or policy would be permissive because Level 3 direct access to INTELSAT's facilities would be based on a voluntary contractual arrangement entered into between a carrier or user and INTELSAT. In addition, as discussed below, the rule or policy would, among other objectives," W@0*&&aa" serve the important Commission objective of promoting competition and U.S. competitiveness in the global telecommunications market. The character of the Commission's action is reasonably related to an important Commission objective and is likely to produce a widespread public benefit. Further, it  S'carries out the goals of the Satellite Act.  S8'x192.Secondly, we consider whether the economic impact of government action to the property demonstrates a "taking" by government. Under a Level 3 direct access contractual arrangement, customers will be required to compensate INTELSAT for the use of INTELSAT satellites. In turn, Comsat and its shareholders would continue to receive a 1418 percent investment return from INTELSAT for the communications traffic attributable to INTELSAT's United States Level 3 direct access customers. In addition, as we discussed above, we are requiring U.S. direct access customers to pay Comsat a reasonable surcharge to cover certain Signatoryrelated costs. We also are denying U.S. carriers "fresh look" relief for their current longterm contracts with Comsat, so Comsat may maintain  S 'its current customer arrangements which allow it an opportunity to recoup its investment. Level 3 direct access may result in some of Comsat's customers switching to competing carriers for switched voice, private line and occasionaluse video service due to service and pricing competition. Comsat, however, would have the opportunity to price and package its services in response to these competitive  SX'market conditions to counter any adverse economic effect from new competition.ZX3 {O'#X\  P6G;ɒP#эSee Concrete Pipe and Products of Cal., Inc. v. Construction Laborers Pension Trust for S. Cal., 508 U.S. 602, 645 (1993) ("[O]ur cases have long established that mere diminution in the value of  yOR'property, however serious, is insufficient to demonstrate a taking.").#&a\  P6G;u&P#(#ƪ  S'x193.Finally, we consider whether the degree of interference of the governmental action on an  S'owner's reasonable investmentbacked expectations amounts to a "takings." We find that the Satellite Act, regulatory structure implementing the Act, and recent changes in the way INTELSAT conducts its business with customers provided reasonable notice to Comsat and its shareholders that direct access to INTELSAT satellites in the United States was a possibility and reasonably foreseeable. First, we found above that the Satellite Act affords the Commission discretion to permit Level 3 direct  S'access. Second, the Satellite Act reserves to Congress the "right to repeal, alter, or amend" its  S'provisions,3 yOz'#X\  P6G;ɒP#Í47 U.S.C.  732.#X\  P6G;ɒP#(# as well as make it subject to appropriate regulation by the Commission.iz3 yO 'p` P (#$%p&`'` P (#$%p&`'`#X\  P6G;ɒP#э47 U.S.C.  701(c).#x6X@`7 X@#i Regulatory agencies historically have ordered access to common carrier bottleneck facilities for the purpose of  S'increasing competition and facilitating the development of new servicesLZ 3 {OJ '#X\  P6G;ɒP#ÍSee, e.g., United States v. Terminal Railroad Ass'n of St. Louis, 224 U.S. 383 (1912) (antitrust court  {O!'ordered railroads to provide competitors equivalent access to bottleneck railway terminal facilities), appeal  {O!'after remand, 236 U.S. 194 (1915); Cellular Communications Systems, 86 FCC 2d 469, 49596 (1981) (Commission required telephone companies to furnish interconnection to cellular systems upon terms no  {Op#'less favorable than those used by or offered to wireline carriers), modified, 89 FCC 2d 58 (1982), further  {O:$'modified, 90 FCC 2d 571 (1982); Need to Promote Competition and Efficient Use of Spectrum for Radio  {O%'Common Carrier Services, 59 RR 2d 1275 (1986), clarified, 2 FCC 2d 2910 (1987), aff'd on recon., 4 FCC Rcd 2369 (1989) (Commission clarified policies regarding interconnection of cellular and other radio"%0*&&%"  {O'common carrier facilities to landline network); Lincoln Tel. & Tel. Co. v. FCC, 659 F.2d 1092, 1103 (D.C. Cir. 1981) (court upheld Commission's order requiring Lincoln to provide interconnection facilities  yO"'to MCI).#X\  P6G;ɒP#(#Ʀ or they have imposed other"X0*&&aa"  S'requirements to satisfy statutorilymandated public interest objectives.3 yO'#X\  P6G;ɒP#ÍFor example, the Commission required AT&T to de-tariff and sell its customer premises equipment  {OR'(CPE). CPE De-tariffing (Computer II), 95 FCC 2d 1276, 129596, recon. denied, 100 FCC 2d 1290 (1983). We rejected AT&T's Fifth Amendment claim because we found that the sale requirement was reasonably related to our legitimate objective of protecting the ratepayer's equitable share of the gains on  {O'regulated assets and the public's interest in the availability of reasonably priced CPE. 95 FCC 2d at  yOv '1295.#X\  P6G;ɒP#(# In fact, the Commission addressed this very issue in 1984, but decided at that time not to implement a direct access scheme for  S'reasons unrelated to whether it had legal authority to order direct access. f 3 {O '#X\  P6G;ɒP#э1982 Direct Access Inquiry.#X\  P6G;ɒP#(#ƨ Third, Comsat was involved with the process that sanctioned Level 3 and other forms of direct access in many cases to the INTELSAT system worldwide, by virtue of its participation as the U.S. Signatory in INTELSAT. For all of the foregoing reasons, Comsat and its shareholders certainly should have been on notice that, in light of the regulatory structure Comsat has been under, direct access might someday be permitted in the United States. Consequently, we conclude that neither Comsat nor its shareholders could have reasonably maintained an expectation that Comsat's access to INTELSAT satellites from  S'the U.S. would be exclusive in perpetuity.Z 3 {O0'#X\  P6G;ɒP#эSee Concrete Pipe and Products, 508 U.S. at 645 (readjusting rights and burdens in a particular field subject to federal regulation is not unlawful solely because it "upsets otherwise settled expectations"  yO'even if new duties or liabilities are imposed).#X\  P6G;ɒP#(#Ƥ  Sp'  SH 'x  (c)ppComsat Establishes No Case for "Just Compensation"  S 'x194.Having concluded that no Fifth Amendment "taking" has been established, we need not address whether "just compensation" is an issue. Nevertheless, even assuming that a Fifth Amendment "taking" has occurred, we do not believe that under the circumstances before us, compensation by the  S 'United States Government would be due Comsat. 3 yO:'#X\  P6G;ɒP#эWe do not address here the proper forum for comsat to pursue compensation should a taking be  yO'established.#&a\  P6G;u&P#(#  S0'x195.Comsat asserts that if Level 3 direct access to INTELSAT satellites in the United States is allowed, the United States Government must compensate it for damages. Comsat specifically contends that because it and its investors "bought their property in reliance on a state of affairs that did not include" anything resembling Level 3 direct access, the Commission's imposition of Level 3 direct  S'access would represent a "taking" and require "just compensation," including expectation damages.r3 yO$'#X\  P6G;ɒP#эComsat comments at 40.#x6X@`7 X@#(#Ɲ "hY0*&&aa"Ԍ S'x196.The Fifth Amendment "takings" clause requires "just compensation" for a government "taking" of private property. This has generally meant an amount that is fair to all parties concerned  S'or a monetary equivalent of the property taken.3 {O'#X\  P6G;ɒP#эSee Reynolds, 397 U.S. 14 ; Danforth, 308 U.S. 207 .#x6X@`7 X@#(# Other courts have described "just compensation" as  S'adequate compensationZ3 {O'#X\  P6G;ɒP#эSee State v. Hale, 96 S.W.2d 135, 141 (Tex. Civ. App.Austin, 1936).#x6X@`7 X@#(# or an amount that leaves one no poorer or richer than before the property  S`'was taken. It has also been held that the Fifth Amendment protects private investors from being  S8'limited to a rate that is so unjust as to be confiscatory.83 {O '#X\  P6G;ɒP#эDuquense Light Co. v. Barasch, 488 U.S. 299, 307 (1989) (citing Covington & L. Turnpike Road Co.  {O 'v. Sandford, 164 U.S. 578, 597 (1896)).(#  S'x197.The essence of Comsat's "taking" claim, which would require "just compensation," rests with the contention that the gain by other carriers of Level 3 direct access to INTELSAT satellites is loss  S'for Comsat, for which it must be compensated.H3 yO'#X\  P6G;ɒP#эComsat comments at 4042.#x6X@`7 X@#(#Ʀ The specific loss Comsat refers to would be the ability of carriers and users within the United States to "physically occupy the circuit and transponder  SH 'capacity of INTELSAT's satellites of which Comsat is coowner."H 3 {O'#X\  P6G;ɒP#э Id. at 40.#x6X@`7 X@#(#ƞ  S 'x198.Although Level 3 direct access would allow carriers and users to obtain INTELSAT satellite space segment capacity, which Comsat claims as a property right based on its investment in INTELSAT, United States direct access customers would be obtaining capacity, as discussed above, under a voluntary business arrangement with INTELSAT for a monetary consideration. The price and other terms of this business arrangement are set by all INTELSAT Signatory investors, including Comsat. Comsat is thus part of the INTELSAT governing body that establishes the prices and terms of service under the INTELSAT IUC and the return on Signatory investment in the satellites. Therefore, Comsat and other Signatories have presumably set what they consider to be "just compensation" for Level 3 direct access to INTELSAT satellites. In addition, as discussed above, United States direct access customers will be required to pay a reasonable surcharge to cover certain Signatoryrelated costs.  S'x199.Furthermore, Comsat would still retain space segment capacity that it acquires from  S'INTELSAT and the right to sell all of this capacity to other carriers and users.wXj 3 yO '#X\  P6G;ɒP#эComsat currently has agreements with INTELSAT for transponder capacity. An actual physical use of Comsat's alleged property would not be apparent as Comsat would continue to retain its complete contractual reservation by way of longterm contracts of capacity on INTELSAT.(#w Comsat would also have an opportunity to retain its current longterm contracts with other carriers, because, as discussed below, we reject the "fresh look" proposal of some parties. In other words, Comsat would retain the same financial gain opportunity as a "middleman" (gobetween) or "retail seller" of INTELSAT satellite capacity. Level 3 direct access will increase the competition and hence may pressure Comsat"PZ 0*&&aa"  S'to lower its retail prices. As demonstrated in the Notice, Comsat charges a markup of IUC rates  S'ranging from 18270 percent, depending on the service.^3 {OB'#X\  P6G;ɒP#эSee Notice, 13 FCC Rcd at 22036 and 2205022051 (Appendix B). See also, supra, n. 212. See also  yO 'Sprint comments at 4; Network comments at 9; and C&W comments at 2.#x6X@`7 X@#(#^ The opportunity made available through Level 3 direct access for carriers and users to purchase capacity at the much lower IUC rate could lead  S'to a lowering of Comsat's prices for INTELSAT access.I"3 yOL'#X\  P6G;ɒP#эComsat has benefited from a regulatory structure that shielded it from full competition and guaranteed  yO'it a very high return on its invested capital. PanAmSat comments at 4.#x6X@`7 X@#(#I Nevertheless, Comsat would still continue to have a reasonable opportunity to earn a fair return ("just compensation") on both the wholesale and  S:'retail aspect of its participation in INTELSAT.;:z3 {OT '#X\  P6G;ɒP#эSee Williamson County Reg'l Planning Comm'n v. Hamilton Bank, 473 U.S. 172, 19495 (1985) (it is only necessary that a reasonable, certain and adequate provision for obtaining compensation exist at the time of the taking; "[i]f the government has provided an adequate process for obtaining compensation, and if resort to that process [results in compensation], then the property owner [has no  yOv'takings claim]").#X\  P6G;ɒP#(#;  S'x(d)ppConclusion on Fifth Amendment Issue  S'x200. We find that Comsat has not provided new information that would warrant a change in our  Sr'tentative conclusion in the Notice that no Fifth Amendment violations would occur if Level 3 direct  SL 'access were permitted. Specifically, we conclude that: (1) Comsat possesses no property right which would confer on it an exclusive right to access INTELSAT satellites from the United States; (2) assuming that Comsat may have a property right, that permitting Level 3 direct access would not result in a permanent physical invasion or an economic regulation of Comsat's private property that would constitute a "taking" requiring just compensation under the Fifth Amendment; and (3) assuming a "taking" has actually occurred, Comsat has and will continue to have the opportunity to receive "just compensation" by virtue of other United States carriers being allowed Level 3 direct access to  S4'INTELSAT satellites. 4, 3 yO'#X\  P6G;ɒP#эComsat, in any event, has not presented a detailed analysis of the extent of any alleged "taking" resulting from the Commission's allowance of Level 3 direct access. To the extent Comsat argues that allowing Level 3 direct access will cause economic harm, resulting in a "taking", it is speculative at this point. Therefore, any alleged taking claim may be premature. In addition, there is also the legal issue of whether the Commission or the U.S. Court of Claims would be the proper entity to  yO'determine what constitutes just compensation in a Fifth Amendment "takings" claim.#&a\  P6G;u&P#(#  S ' c  S'N  V. SUMMARY OF FINDINGS AND CONCLUSIONS Đc  Sl'x201.We find that making Level 3 direct access available in the United States would result in substantial public interest benefits for U.S. carriers and users of the INTELSAT system for the provision of international services. The record in this proceeding demonstrates that the lower rates, additional customer choice and benefits resulting from Level 3 direct access should be available in all"[0*&&aaa" markets and services and not only to those in which competition does not yet exist. Additional customer choice in all markets and services is necessary to enhance U.S. competitiveness in the global telecommunications market. The availability of direct access to INTELSAT in 94 countries places U.S. carriers and users at a competitive disadvantage with their foreign counterparts. We therefore conclude that permitting Level 3 direct access in the United States would serve the public interest.  S'x202.We also conclude, however, that certain conditions must be imposed in implementing Level 3 direct access in the United States to prevent competitive distortions in the U.S. market. First, we will prevent any INTELSAT Signatory other than Comsat from obtaining Level 3 direct access in the United States for service to or from any specific foreign country in which the Signatory itself uses 50 percent or more of all INTELSAT capacity consumed in that country. Second, we find that U.S. carriers and users must pay Comsat a reasonable surcharge when obtaining INTELSAT services under  S 'Level 3 direct access. A surcharge of 5.58 percent will enable Comsat to recover certain Signatoryrelated costs. Even with the surcharge, there will be substantial cost savings available to carriers and users in the range of 10.7 to 71.4 percent of Comsat's current tariff rates. Third, in order to protect competition in the U.S. market, we expect that INTELSAT will voluntarily waive its immunity from suit and process to cover any instance in which it negotiates with U.S. carriers or users for the provision of space segment capacity not available under the terms of INTELSAT IUC rates. INTELSAT need not waive its immunities in those instances where U.S. carriers and users obtain capacity under the standard Level 3 direct access contract pursuant to terms and conditions of INTELSAT's IUC. In addition, we find it unnecessary to impose full common carrier regulatory authority over INTELSAT as requested by some parties. For purposes of implementing Level 3 direct access, we will treat INTELSAT the same as a nonlicensed U.S. satellite system and use our authority  Sh'to license earth stations within the DISCO II regulatory structure, as a means of overseeing INTELSAT's Level 3 direct access operations in the United States.  S'x203.We deny the requests of certain U.S. carriers for "fresh look" of their longterm contracts with Comsat for the use of INTELSAT space segment capacity. Our decision to permit Level 3 direct access is intended as a forwardlooking policy that permits U.S. carriers additional choice in future decisions on obtaining INTELSAT space segment capacity. We do not in this proceeding grant carrier requests for portability of INTELSAT space segment. Such a measure should be considered only if the benefits of direct access are not realized because nonComsatowned space segment capacity capable of serving the United States proves to be unavailable to U.S. carriers and other authorized users. The record in this proceeding does not demonstrate that such action is necessary at this time to assure future benefits. We will, however, consider again the issue of portability if direct access customers show evidence that Comsat's control of INTELSAT capacity prevents realization of direct access benefits.  S 'x204.We affirm the tentative conclusion in our Notice that the Commission has the discretion under the Satellite Act and the Communications Act to permit Level 3 direct access in the United States. We find that the Satellite Act neither explicitly nor implicitly grants Comsat exclusive access to the INTELSAT system. Discretion to permit Level 3 direct access is based on its authority granted to the Commission under the Satellite Act, to insure that carriers have "nondiscriminatory use of and equitable access to" the global system and to "regulate the manner which available facilities of the system . . . are allocated among users." We further find that we may exercise this discretion: (1) taking into account factors not existing in 1962, or in 1984, when we decided not to move ahead with"%\0*&&aa$" direct access; and (2) upon a finding that doing so is in the public interest and is not otherwise inconsistent with the purposes of or any provision in the Satellite Act. The record in this proceeding demonstrates that substantial benefits will accrue to U.S. carriers and users from Level 3 direct access and that permitting Level 3 direct access would be in the public interest. Under Level 3 direct access, Comsat will remain the sole U.S. investor and participant in the management and operation of the INTELSAT system. Comsat will earn a return on its investment attributable to U.S. direct access use of the system both as a result of the percent return it will receive from INTELSAT and the surcharge we are requiring U.S. direct access users to pay to cover certain Signatoryrelated costs. Under these circumstances, we also conclude the Level 3 direct access is permissible under the Satellite Act of 1962. Finally, as discussed above, we conclude that permitting direct access in the United States under the circumstances outlined in this order would not constitute an uncompensated "taking" in violation of the Fifth Amendment.  S ' " ]0*&&aa` "    S'R VI. REGULATORY FLEXIBILITY ACT Đc  S`'x205. As required by Section 603 of the Regulatory Flexibility Act ("RFA"),Z`3 {O'#X\  P6G;ɒP#ЍSee 5 U.S.C.  603. The RFA, see 5 U.S.C.  601 et seq., has been amended by the Contract With America Advancement Act of 1996, Pub. L. No. 104121, 110 Stat. 847 (1996) ("CWAAA"). Title II  yOZ'of the CWAAA is the Small Business Regulatory Enforcement Fairness Act of 1996 ("SBREFA").#&a\  P6G;u&P#(# an Initial  S8'Regulatory Flexibility Analysis ("IRFA") was incorporated in the Notice. The Commission then  S'sought written public comment in that proceeding, including comments on the IRFA. No party filed  S'comments in response to the IRFA. Further, this Report and Order promulgates no new rules and our  S'action here does not affect the previous analysis in the Notice. The Commission certifies that there  S'will be no significant effect on a substantial number of small entities.  S& 'FT VII. ORDERING CLAUSES Đc  S 'x206.Accordingly, IT IS ORDERED, that, pursuant to Sections 102 and 201(c)(2), (7) and (11) of the Communications Satellite Act of 1962, as amended, 47 U.S.C. 701 and 721(c)(2), (7) and (11), and Sections 1, 2, 4(c), 201, 202, 214, 301, 303, 307, 308 and 309, of the Communications Act of 1934, as amended, 47 U.S.C.  151, 152, 154(c), 201, 202, 214, 301, 303, 307, 308 and 309 that 60 days after publication of this Report and Order in the Federal Register Level 3 direct access to INTELSAT shall be available to carriers and users authorized to obtain INTELSAT space segment capacity for the provision of telecommunications services to and from the United States in accordance with the terms and conditions of this Report and Order and those established by INTELSAT to implement Level 3 direct access.  SF'x207.IT IS FURTHER ORDERED, that, upon publication in the Federal Register of this Report and Order, the International Bureau shall release a Public Notice requesting authorized carriers and users desiring to obtain Level 3 direct access to INTELSAT to so inform the Commission within 21 days of the release of the Public Notice.  S~'x208.IT IS FURTHER ORDERED, that, in its capacity as the U.S. Signatory to INTELSAT, and in accordance with procedures established by INTELSAT permitting "blanket authorizations" for Level 3 direct access, Comsat shall inform INTELSAT in writing within ten calendar days of receiving the information from the International Bureau that the identified authorized carriers and users responding to the Public Notice may obtain Level 3 direct access from INTELSAT on the effective date of this Report and Order, as provided in paragraphs 206 and 216, without further approval of the U.S. Signatory.  S>'x209.IT IS FURTHER ORDERED, that, authorized carriers and users, not identified as part of the initial "blanket authorization" sent to INTELSAT by Comsat, may request Comsat to request adding them to the list of named carriers and users eligible for Level 3 direct access and Comsat shall so inform INTELSAT within ten days of receiving each such subsequent request."!^0*&&aa "Ԍ S'ԙx210.IT IS FURTHER ORDERED, that, within 60 days of publication in the Federal Register of this Report and Order, Comsat may file, on one day's notice, a tariff of the terms and conditions of the surcharge applicable to U.S. Level 3 direct access customers which shall be consistent with findings in the Report and Order.  S8'x211.IT IS FURTHER ORDERED, that, authorized carriers and users obtaining Level 3 direct access from INTELSAT shall pay Comsat the surcharge specified in Comsat's effective tariff that is applicable to the services obtained from INTELSAT.  S'x212.IT IS FURTHER ORDERED, that, in its role as the U.S. Signatory, Comsat may establish reporting mechanisms with INTELSAT for the limited purpose of assuring that Comsat can identify the appropriate surcharge that U.S. direct access customers must pay Comsat upon receipt of service from INTELSAT under Level 3 direct access.  S 'x213.IT IS FURTHER ORDERED, that, Comsat's tariff may provide that failure to pay the appropriate surcharge will result in loss of a customer's Level 3 direct access privileges.  SX'x214. IT IS FURTHER ORDERED, that the Comsat Corporation MOTION TO STRIKE the ex  S2'parte filing submitted by counsel for the Satellite Users Coalition, IS DENIED. 23 yO'#X\  P6G;ɒP#эComsat moves to strike the filing on September 9, 1999 by the Satellite Users Coalition giving notice  {Ob'of an ex parte presentation it made to Commission staff the previous day, prior to release of the  {O,'Sunshine Notice. See Letter from Comsat Corporation to the Secretary, Federal Communications  {O'Commission, dated September 9, 1999. See also Opposition to Motion to Strike by Satellite Users  {O'Coalition, IB Docket No. 98192, File No. 60SATISP97 (Sept. 13, 1999). See also Comsat Reply to Opposition to Motion to Strike, IB Docket No. 98192, File No. 60SATISP97 (Sept. 14, 1999). Comsat contends that receipt of this required filing the following day, by staff not present at the  {O'September 8, 1999 meeting, constituted a violation of our  ex parte rules which prohibits presentations  {O'to decisionmakers on matters listed on the Commission's Agenda. See 47 C.F.R.  1.1203(a). However, the oral and other information provided by the Satellite Users Coalition on September 8, 1999, was constructively available to all Commission decisionmakers on that date. In addition, the Satellite Users Coalition was required to file this information for the public record by the end of the next day in accordance with Section 1.1206(b) of our rules. 47 C.F.R.  1.1206(b). As a result, service on decisionmakers not present at the September 8 meeting did not constitute a violation of  yO'Commission's rules. #&a\  P6G;u&P#(#ƽ  S'x215.IT IS FURTHER ORDERED, that, the Commission's Office of Managing Director shall send a copy of this Report and Order, including Final Regulatory, Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.  SD'x216.IT IS FURTHER ORDERED, that, policies, rules and requirements established in this Report and Order shall take effect 60 days after publication in the Federal Register, or in accordance with the requirements of 5 U.S.C.  801(a)(3) and 44 U.S.C.  3507, whichever occurs later. p` P (#$%p&`'` p(#$%p&`' "|_T 0*&&aa"Ԍ` `  ,FEDERAL COMMUNICATIONS COMMISSION ` `  ,Magalie Roman Salas  S'` `  ,Secretary #&m PE37o&P#