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Before the
Federal Communications Commission
Washington, D.C. 20554
)
In the Matter of ) File No. EB-06-IH-2018
INTELSAT NORTH AMERICA LLC ) NAL Account No.
200632080167
Licensee of Various C-band and Ku-band )
Geostationary Satellites FRN No. 0013088984
)
)
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: August 16, 2006 Released: August 16, 2006
By the Chief, Investigations and Hearings Division, Enforcement Bureau:
I. INTRODUCTION
1. In this Notice of Apparent Liability for Forfeiture ("NAL"), we find
that Intelsat North America LLC ("Intelsat"), licensee of various
C-band and Ku-band Geostationary Satellites, apparently violated
Section 1.17 of the Commission's rules (relating to truthful and
accurate statements to the Commission) by making incorrect and/or
misleading certifications without a reasonable basis for doing so in
an application to relocate one of its satellites. Specifically,
Intelsat erroneously certified to the Commission that it was
relocating a satellite to 178.0'0 E.L. and that the satellite's
operation at that location would be in accordance with all applicable
coordination agreements, and the Commission relied on this
certification in allowing Intelsat to modify its license. Intelsat
apparently made the required certifications without reviewing the
entire applicable collocation/coordination agreement for the proposed
destination. The incorrect certification resulted in Intelsat
relocating the satellite without having followed the proper procedures
to obtain approval to do so. For the reasons explained below, because
Intelsat failed to exercise the requisite diligence in the application
process, we conclude that Intelsat is apparently liable for a
forfeiture in the amount of $11,000.
II. BACKGROUND
2. On August 17, 2005, Intelsat filed an application entitled, "Fleet
Management Notice of Intelsat North America LLC of Modification of
Authorization for INTELSAT 604" to relocate one satellite in its fleet
from 157.0'0 E.L. to 178.0'0 E.L. Intelsat filed this notice under the
authority of Section 25.118 of the Commission's rules, which provides
a streamlined procedure for satellite fleet operators to request
authority to move satellites to alternative authorized locations
provided that the licensee makes certain required certifications. As
part of its application, Intelsat certified to the Commission that it
was moving its spacecraft to 178'0 E.L. and that it would "comply with
all applicable coordination agreements at the newly occupied orbital
location" and that it has "completed any necessary coordination of its
space station at the new location with potentially affected space
station operators." Based on these certifications, the International
Bureau, on September 16, 2005, modified Intelsat's authorization to
reflect this change in authorized location.
3. On January 30, 2006, Intelsat filed a request for a Special Temporary
Authority to stop the drift of its Intelsat 604 spacecraft and to now
operate the satellite at 177.85'0 E.L. before reaching its authorized
destination, 178.0DEG E.L. Intelsat made this request after
discovering that a 2001 collocation/coordination agreement between
Intelsat and Inmarsat, the operator of a nearby satellite, actually
precluded Intelsat's operation of its Intelsat 604 satellite at the
178.0DEG E.L. location. The International Bureau, on January 30, 2006,
granted Intelsat's request for special temporary authority but
informed Intelsat that it was doing so without prejudice to any
enforcement action that may be appropriate with respect to
certifications made in the August 17, 2005, Fleet Management Notice.
4. On June 21, 2006, the FCC's Enforcement Bureau issued a letter of
inquiry to Intelsat directing Intelsat to, inter alia, explain the
basis for its August 17, 2005, certification that operation of its
Intelsat 604 spacecraft at the 178.0'0 E.L. orbital location would be
in accordance with applicable coordination agreements and state when
it learned that such agreements precluded such operation. The letter
of inquiry also directed Intelsat to provide copies of the
coordination agreements at issue. On July 20, 2006, Intelsat responded
to the letter of inquiry. In its response, Intelsat indicated that it
was precluded from operating its Intelsat 604 spacecraft at the
authorized destination by a 2001 collocation/coordination agreement
with Inmarsat, the operator of a satellite that was in the vicinity of
178.0'0 E.L. It further explained that the persons responsible for
certifying that the operation at the proposed destination, 178.0'0
E.L., forgot about the collocation portion of Intelsat's
collocation/coordination agreement with Inmarsat. This agreement
provided for both the spacing between Intelsat and Inmarsat satellites
and the technical parameters relating to frequency use by both
satellites.
5. Finally, Intelsat states that, on January 31, 2006, the day after this
error was discovered, Intelsat took steps to prevent any future errors
of this type. Specifically , Intelsat states that appropriate
employees, at the direction of Intelsat's general counsel, have
prepared a chart identifying all orbital locations subject to
collocation agreements for its use when considering future moves of
this type.
III. DISCUSSION
6. The Commission has adopted fleet management procedures to streamline
the processing of satellite fleet management modifications. The
procedures adopted under Section 25.118(e) of the Commission's rules
allow a satellite operator to rearrange satellites in its fleet among
its assigned orbital locations to reflect business and customer
considerations where no other public interest factors are adversely
affected. Accordingly, a space station operator may modify its
license to this end without prior authorization, but upon 30 days
prior notice to the Commission and to any potentially affected
licensed spectrum user. To ensure that the streamlined procedure is
used only in the most appropriate circumstances, the Commission
requires the operator to certify that it meets nine specific
requirements. Among the requirements are that the licensee certify
that the satellite in question will be located at a location assigned
to the licensee, that the satellite will operate in accordance with
all applicable coordination agreements at the proposed destination,
and that the satellite licensee has completed any necessary
coordination of its satellite at the new location with other
potentially affected space station operators. In this case, if
Intelsat had submitted accurate information (particularly with respect
to its coordination agreements), which all Commission licensees are
expected to do, its application for streamlined treatment would have
been dismissed or denied. Instead, the Commission approved Intelsat's
request for modification based on Intelsat's certifications, which
apparently were untrue.
7. Based on our review of the record, we find that Intelsat apparently
violated Section 1.17 of the Commission's rules by making erroneous
certifications in the process of relocating its Intelsat 604
spacecraft. This rule provides in pertinent part:
(a) . . . no [Applicant for any Commission authorization] shall . . .
(2) in any written statement of fact, provide material factual information
that is incorrect or omit material information that is necessary to
prevent any material factual statement that is made from being incorrect
or misleading without a reasonable basis for believing that any such
material factual statement is correct and not misleading.
Thus, Intelsat was required to have a reasonable basis to believe its
certifications to the Commission in the August 17, 2005, Fleet Management
Notice were correct and not misleading. In this instance, however,
Intelsat did not comply with this requirement.
8. While Intelsat concedes committing error in its submissions to the
Commission, it contends that its actions do not rise to the level of a
Section 1.17 violation for two reasons. First, Intelsat argues that
its certifications to the Commission were technically correct.
Intelsat asserts that industry practice distinguishes between
"collocation" and "coordination." Therefore, according to Intelsat,
when the company's employees referred only to the frequency
coordination portion of the 2001 agreement in certifying that Intelsat
was in compliance with all "coordination" agreements and had
"coordinated" the new location with other satellite operators, those
statements were literally true. We disagree. Intelsat's interpretation
of Section 25.118(e) would eliminate the need for coordination of the
physical location of satellites altogether, a position altogether at
odds with the purpose and goals of the rule provision. Regardless of
any distinction in "industry practice" between "collocation" and
"coordination," we conclude that Intelsat's employees reasonably
should have reviewed the company's entire agreement with Inmarsat
before making the certifications to the Commission.
9. Second, Intelsat asserts that even if the Section 25.118
certification is read to encompass both coordination of frequencies
and location, Section 1.17 of the Commission's rules does not create
strict liability for erroneous representations, but simply requires a
reasonable basis for making any representations in a written statement
to the Commission. According to Intelsat, because the employee who
actually made the certifications consulted with company personnel with
specialized knowledge of the applicable agreements and was assured
that the relocation was in keeping with applicable coordination
agreements, Intelsat exercised the diligence required by Section 1.17.
10. We disagree with the assertion that such cursory consultation
constitutes due diligence under these circumstances. It is incumbent
on satellite operators making Section 25.118(e) certifications to
fully and thoroughly review all applicable agreements to determine
the accuracy of information to be certified to the Commission; it is
not sufficient to merely rely on the recollection of company personnel
of matters contained in written agreements. As the Commission has
stated, "[we rely] heavily on the truthfulness and accuracy of the
information provided to us. If information submitted to us is
incorrect, we cannot properly carry out our statutory
responsibilities." Intelsat's perfunctory review of the 2001 agreement
resulted in a significant error, which placed its satellite and that
of Inmarsat in danger of operating in unsafe proximity. Only after
Intelsat began moving its satellite did it learn of its mistake, and
then only when an Inmarsat employee sought confirmation that Intelsat
was moving its satellite to the location designated in the 2001
agreement. At that point, Intelsat realized it had erred and took
corrective measures.
11. Section 503(b)(1) of the Communications Act of 1934, as amended, 47
U.S.C. S 503(b)(1), provides that any person who willfully or
repeatedly fails to comply substantially with the terms and conditions
of any license, or willfully or repeatedly fails to comply with any of
the provisions of the Act or of any rule, regulation or order issued
by the Commission thereunder, shall be liable for a forfeiture
penalty. The term "willful" as used in Section 503(b)(1) has been
interpreted to mean simply that the acts or omissions are committed
knowingly. Based on the evidence before us, we find that Intelsat
apparently provided to the Commission in conjunction with its August
17, 2005, Fleet Management Notice material factual information that
was incorrect and/or misleading without having a reasonable basis for
making the representations contained therein, in violation of Section
1.17 of the Commission's rules.
12. Pursuant to Section 1.80 of the Commission's rules, the base
forfeiture amount for misrepresentations or lack of candor is the
statutory maximum or, in this case, $11,000. Section 1.80(b)(4) of the
Commission's rules also specifies that, in determining the amount of a
forfeiture penalty, the Commission or its designee will take into
account "the nature, circumstances, extent, and gravity of the
violations and, with respect to the violator, the degree of
culpability, any history of prior offenses, ability to pay, and such
other matters as justice may require." The Commission takes very
seriously the requirement that applicants and licensees provide
truthful and accurate information at all times. In light of Intelsat's
ability to pay, and the seriousness of this violation as described
above, we find that the base amount is appropriate in this instance.
Under these circumstances, we believe that a forfeiture in the amount
of $11,000 is warranted.
IV. ORDERING CLAUSES
13. ACCORDINGLY, IT IS ORDERED that, pursuant to Section 503(b) of the
Communications Act of 1934, as amended, and Sections 0.111, 0.311,
0.314, and 1.80 of the Commission's Rules, Intelsat North America LLC
is hereby NOTIFIED of its APPARENT LIABILITY FOR A FORFEITURE in the
amount of eleven thousand dollars ($11,000) for willfully violating
Section 1.17 of the Commission's rules.
14. IT IS FURTHER ORDERED that, pursuant to Section 1.80 of the
Commission's rules, within 30 days of the release date of this Notice
of Apparent Liability for Forfeiture, Intelsat North America, LLC
SHALL PAY the full amount of the proposed forfeiture or SHALL FILE a
written statement seeking reduction or cancellation of the proposed
forfeiture.
15. Payment of the forfeiture must be made by check or similar instrument,
payable to the order of the Federal Communications Commission.\001 The
payment must include the NAL Acct. No. and FRN No. referenced in the
caption.\001 Payment by\001check or money order may be mailed to
Federal Communications Commission, P.O. Box\001358340,\001Pittsburgh,
PA 15251-8340.\001 Payment by overnight mail may be sent to\001Mellon
Bank\001/LB\001358340,\001500 Ross Street, Room 1540670, Pittsburgh,
PA 15251.\001\001 Payment by wire transfer may be made to ABA
Number\001043000261, receiving bank\001Mellon Bank, and account
number\001911-6106.
16. IT IS FURTHER ORDERED that the response, if any, shall be mailed to
William H. Davenport, Chief, Investigation and Hearings Division,
Enforcement Bureau, Federal Communications Commission, 445 12^th
Street, S.W., Suite 4-C330, Washington, D.C. 20554, and must include
the NAL/Acct. No. referenced in the caption.
17. IT IS FURTHER ORDERED that the Commission shall not consider reducing
or canceling a forfeiture in response to a claim of inability to pay
unless the respondent submits: (1) federal tax returns for the most
recent three-year period; (2) financial statements prepared according
to generally accepted accounting practices ("GAAP"); or (3) some other
reliable and objective documentation that accurately reflects the
respondent's current financial status. Any claim of inability to pay
must specifically identify the basis for the claim by reference to the
financial documentation submitted.
18. Requests for payment of the full amount of this NAL under an
installment plan should be sent to: Associate Managing Director --
Financial Operations, Federal Communications Commission, 445 12th
Street, S.W., Room 1-A625, Washington, DC 20554.
19. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability
for Forfeiture shall be sent by Certified Mail - Return Receipt
Requested, and regular mail, to the attention of Robert Pettit,
Esquire, Wiley Rein & Fielding LLP, 1776 K Street, N.W., Washington
D.C. 20006, counsel for Intelsat North America LLC.; and to the
licensee.
FEDERAL COMMUNICATIONS COMMISSION
William H. Davenport
Chief, Investigations and Hearings Division
Enforcement Bureau
See Fleet Management Notice of Intelsat North America LLC of Modification
of Authorization for INTELSAT 604, IBFS File Number SAT-MOD-20050817-00161
filed August 17, 2005 ("August 17, 2005, Fleet Management Notice").
Intelsat operates a fleet of geostationary satellites in the C-band and
the Ku-band. Id. at 1-2.
47 C.F.R. S 25.118.
August 17, 2005, Fleet Management Notice, Exhibit 2.
See Public Notice, "Policy Branch Information," 20 FCC Rcd 15816, 15817-18
(2005).
Section 25.210(j) requires that the satellite operate within 0.05'0 of its
assigned location. See 47 C.F.R. S 25.210(j). Intelsat's request involved
moving the Intelsat 604 spacecraft 0.15'0 from its assigned location.
See Request for Special Temporary Authority Intelsat 604,
SAT-STA-20060130-00011 filed January 30, 2006.
Attachment to STA Grant dated January 30, 2006.
Letter from William H. Davenport, Chief, Investigations and Hearings
Division, Enforcement Bureau, Federal Communications Commission, to
Intelsat North America LLC dated June 21, 2006.
See id. at 5.
See Letter from Robert L. Pettit, Esq., Wiley Rein & Fielding LLP, counsel
for Intelsat North America LLC, to Jennifer Lewis, Assistant Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, dated July 20, 2006 ("Response"). See also
Letter from Robert L. Pettit, Esq., Wiley Rein & Fielding LLP, counsel for
Intelsat North America LLC, to Jennifer Lewis, Assistant Chief,
Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, dated July 25, 2006 (transmitting two
additional affidavits relating to the Response). Intelsat requested
confidential treatment of its Response, including electronic mail and
other documents relevant to the planning operation of its Intelsat 604
spacecrafts at the 178.0 E.L. location. We do not rule on Intelsat's
request at this time because it is unnecessary to do so for purposes of
this Order. Consistent with the request, however, we limit ourselves to
describing or characterizing the substance of the materials and providing
record citations herein, rather than actually quoting the materials or
otherwise incorporating them into the Order.
See Response at 8.
See id. at 10.
See id at 9.
See id. at 12.
See id.
See Amendment of the Commission's Space Station Licensing Rules and
Policies, Second Report and Order, 18 FCC Rcd 12507 (2003); see also
Letter from Thomas S. Tycz, Chief, Satellite Division, to David K.
Moskowitz, Esq., Executive Vice President and General Counsel, EchoStar
Satellite LLC, 20 FCC Rcd 9156, 9157 (2005) (dated May 19, 2005).
See Amendment of the Commission's Space Station Licensing Rules and
Policies, 18 FCC Rcd at 12509-10, P 7.
See id. at 12511, P 9.
See 47 C.F.R. S 25.118(e)(1)-(9).
See 47 C.F.R. S 25.118(e)(1), (4)-(5).
47 C.F.R. S 1.17.
Id.
See Amendment of Section 1.17 of the Commission's Rules Concerning
Truthful Statements to the Commission, Report and Order, 18 FCC Rcd 4016,
4021 P 10 (2003) (reasonableness depends on the circumstances under which
a written statement is made to the Commission, and the Commission
described its standard as akin to a negligence standard), recon. denied,
Memorandum Opinion and Order, 19 FCC Rcd 5790, further recon. denied,
Memorandum Opinion and Order, 20 FCC Rcd 1250 (2004). See also Letter from
Peter H. Doyle, Chief, Audio Services Division, Media Bureau, Federal
Communications Commission, to Lee W. Shupert, Esq., KMZ Roseman, counsel
for ICS Holdings, Inc., DA 06-1427, 2006 WL 1911076 (MB/ASD rel. July 12,
2006) (admonishing applicant in a renewal application proceeding for minor
technical violation of Section 1.17 and cautioning applicant to be more
attentive to applicant certifications in the future as a false statement,
even absent an intent to deceive, constitutes an actionable violation of
Section 1.17 of the Commission's rules).
See Response at 9.
Id.
See id. at 11.
See id.
See id.
See Amendment of Section 1.17 of the Commission's Rules Concerning
Truthful Statements to the Commission, Notice of Proposed Rulemaking, 17
FCC Rcd 3296, 3297 P 3 (2002) (subsequent history omitted).
Response at 2.
Response at 8.
Section 312(f)(1) of the Communications Act, or 1934, as amended, 47
U.S.C. S 312(f)(1), which applies to violations for which forfeitures are
assessed under Section 503(b) of the Act, provides that "[t]he term
'willful', when used with reference to the commission or omission of any
act, means the conscious and deliberate commission or omission of such
act, irrespective of any intent to violate any provision of this Act or
any rule or regulation of the Commission authorized by this Act..." See
Southern California Broadcasting Co., Memorandum Opinion and Order, 6 FCC
Rcd 4387 (1991).
See 47 C.F.R. S 1.80.
See 47 U.S.C. S 503(b)(2)(C) (setting forth the statutory maximum
forfeiture for non-broadcast licensees). The Commission twice amended
Section 1.80(b)(3) of the Rules, 47 C.F.R. S 1.80(b)(3), to increase the
maximum forfeiture amounts, in accordance with the inflation adjustment
requirements contained in the Debt Collection Improvement Act of 1996, 28
U.S.C. S 2461. See Amendment of Section 1.80 of the Commission's Rules and
Adjustment of Forfeiture Maxima to Reflect Inflation, Order, 15 FCC Rcd
18221 (2000) (adjusting the maximum forfeiture amounts for non-broadcast
licensees from $10,000/$75,000 to $11,000/$87,500); Amendment of Section
1.80 of the Commission's Rules and Adjustment of Forfeiture Maxima to
Reflect Inflation, Order, 19 FCC Rcd 10945 (2004) (adjusting the maximum
forfeiture amounts from $11,000/$87,500 to $11,000/$97,500).
47 C.F.R. S 1.80(b)(4).
See Intelsat Investor Fact Sheet - First Quarter 2006, available at
[1]http://ww2.intelsat.com/pdf/en/investors/financial/2006/2006-Fact-Sheet_1Q.pdf
(visited Aug. 15, 2006) (first quarter 2006 revenues for Intelsat were
$280 million).
See 47 C.F.R. S 1.1914.
(...continued from previous page)
(continued....)
Federal Communications Commission DA 06-1646
2
Federal Communications Commission DA 06-1646
References
Visible links
1. http://ww2.intelsat.com/pdf/en/investors/financial/2006/2006-Fact-Sheet_1Q.pdf