04-19142. Satellite Licensing Procedures

AGENCY:

Federal Communications Commission.

ACTION:

Final rule.

SUMMARY:

In this document, the Commission adopts rule revisions to reduce the amount of the bond that satellite licensees are required to file when they are issued their licenses. These rule changes are intended to reduce disincentives against filing satellite license applications proposing new or innovative services.

DATES:

Effective September 20, 2004.

FOR FURTHER INFORMATION CONTACT:

Steven Spaeth, Attorney Advisor, Satellite Division, International Bureau, telephone [phone] or via the Internet at [e-mail].

SUPPLMENTARY INFORMATION:

This summary of the Commission's First Order on Reconsideration and Fifth Report and Order, IB Docket No. 02-34, FCC 04-147, adopted June 22, 2004, and released July 7, 2004. The complete text of this First Order on Reconsideration and Fifth Report and Order is available for public inspection and copying during regular business hours at the FCC Reference Information Center, Portals II, 445 12th Street, SW., Room CY-A257, Washington, DC 20554. The document may also be purchased from the Commission's duplicating contractor, Best Copy and Printing Inc., Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone [phone], facsimile [phone], or via e-mail http://www.BCPIWEB.com.

Regulatory Flexibility Analysis: In this Fifth Report and Order, the Commission adopts revisions to the current interim bond amounts. Those bond amounts are now $3 million for each GSO satellite and $5 million for each NGSO constellation as the required bond amounts on a going-forward basis. In addition, in this Fifth Report and Order, the Commission considered and rejected giving all satellite licensees the option of creating an escrow account rather than posting a bond. The effect of these rule revisions is to reduce the administrative burdens of space station licensees. We expect that this change will be minimal and positive. Therefore, we certify that the requirements of this Fifth Report and Order will not have a significant economic impact on a substantial number of small entities. The Commission will send a copy of the Fifth Report and Order, including a copy of this final certification, in a report to Congress pursuant to the Congressional Review Act. See 5 U.S.C. 801(a)(1)(A). In addition, the Fifth Report and Order and this certification will be sent to the Chief Counsel for Advocacy of the Small Business Administration, and will be published in the Federal Register. See 5 U.S.C. 605(b).

Summary of Report and Order: In the First Report and Order in IB Docket No. 02-34, 68 FR 51499, August 27, 2003, the Commission adopted several revisions to its satellite licensing procedures, including a requirement that geostationary orbit (GSO) licensees other than mobile satellite service (MSS) licensees file a $5 million bond within 30 days of receiving their licensees. Non-geostationary orbit (NGSO) licensees and GSO MSS licensees were required to file a $7.5 million bond within 30 days of receiving their licensees.

In the FNPRM in this proceeding, the Commission invited comment on revising the bond amounts, and on allowing licensees to establish an escrow account as an alternative to the bond requirement. See 68 FR 51546, August 27, 2003. Also, several parties filed petitions for reconsideration, requesting elimination of the bond requirement, among other things.

In this First Order on Reconsideration and Fifth Report and Order, the Commission reaches the following conclusions: (1) The Commission rejects arguments that it should eliminate the bond requirement; (2) The Commission reduces the required bond amounts to $3 million for each GSO satellite, including GSO MSS satellites, to avoid unreasonably discouraging new or innovative satellite operators from applying for licenses; (3) The Commission also reduces the required bond amounts to $5 million for each NGSO satellite constellation; (4) The Commission does not adopt the escrow account alternative because it does not adequately meet the public policy objectives of the bond requirements; (5) The Commission defers consideration of all the non-bond-related issues in this proceeding to future Order.

Ordering Clauses

Accordingly, it is ordered, that pursuant to sections 4(i), 301, 302, 303(r), 308, 309, and 310 of the Communications Act, 47 U.S.C. 154(i), 301, 302, 303(r), 308, 309, 310, and § 1.429 of the Commission's rules, 47 CFR 1.429, the petitions for reconsideration of the First Report and Order, in IB Docket No. 02-34, 68 FR 51499, August 27, 2003, are denied in part and granted in part, to the extent indicated above, and otherwise deferred to a future Order.

It is further ordered, pursuant to sections 4(i), 7(a), 303(c), 303(f), 303(g), and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 157(a), 303(c), 303(f), 303(g), 303(r), that this Fifth Report and Order in IB Docket No. 02-34 is hereby ADOPTED.

It is further ordered that part 25 of the Commission's rules IS AMENDED as set forth below. These rule revisions will take effect September 20, 2004.

It is further ordered that the Consumer Information Bureau, Reference Information Center, shall send a copy of this Order, including the Final Regulatory Flexibility Certification, to the Chief Counsel for Advocacy of the Small Business Administration.

List of Subjects in 47 CFR Part 25

• Satellites

Federal Communications Commission.

Marlene H. Dortch,

Secretary.

Rule Changes

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 25 as follows:

PART 25—SATELLITE COMMUNICATIONS

1. The authority citation for part 25 continues to read as follows:

Authority: 47 U.S.C. 701-744. Interprets or applies Sections 4, 301, 302, 303, 307, 309, and 332 of the Communications Act, as amended, 47 U.S.C. Sections 154, 301, 302, 303, 307, 309 and 332, unless otherwise noted.

2. Amend § 25.137 by revising paragraph (d) introductory text and paragraph (d)(4) to read as follows:

§ 25.137

Application requirements for earth stations operating with non-U.S. licensed space stations.

* * * * *

(d) Earth station applicants requesting authority to operate with a non-U.S.-licensed space station and non-U.S.-licensed satellite operators filing letters of intent or petitions for declaratory ruling to access the U.S. market must demonstrate that the non-U.S.-licensed space station has complied with all applicable Commission requirements for non-U.S. licensed systems to operate in the United States, including but not limited to the following:

* * * * *

(4) For non-U.S.-licensed satellites that are not in orbit and operating, a bond must be posted. This bond must be in the amount of $5 million for NGSO satellite systems, or $3 million for GSO satellites, denominated in U.S. dollars, and compliant with the terms of § 25.165 of this chapter. The party posting the bond will be permitted to reduce the amount of the bond upon a showing that a milestone has been met, in accordance with the terms of § 25.165(d) of this chapter.

* * * * *

3. Amend § 25.164 by adding paragraph (g), to read as follows:

§ 25.164

Milestones.

* * * * *

(g) Licensees of satellite systems that include both non-geostationary orbit satellites and geostationary orbit satellites, other than DBS and DARS satellite systems, and licensed on or after September 20, 2004 will be required to comply with the schedule set forth in paragraph (a) of this section with respect to the geostationary orbit satellites, and with the schedule set forth in paragraph (b) of this section with respect to the non-geostationary orbit satellites.

4. Amend § 25.165 by revising paragraph (a) and paragraph (d), and by adding paragraph (e) to read as follows:

§ 25.165

Posting of bonds.

(a) For all satellite licenses issued after September 20, 2004, other than DBS licenses, DARS licenses, and replacement satellite licenses as defined in paragraph (e), the licensee is required to post a bond within 30 days of the grant of its license. Failure to post a bond will render the license null and void automatically.

(1) NGSO licensees are required to post a bond in the amount of $5 million.

(2) GSO licensees are required to post a bond in the amount of $3 million.

(3) Licensees of satellite systems including both NGSO satellites and GSO satellites that operate in the same frequency bands as the NGSO satellites are required to post a bond in the amount of $5 million.

* * * * *

(d) A GSO licensee will be permitted to reduce the amount of the bond by $750,000 upon successfully meeting a milestone deadline set forth in section 25.164(a) of this chapter. An NGSO licensee will be permitted to reduce the amount of the bond by $1 million upon successfully meeting a milestone deadline set forth in section 25.164(b) of this chapter.

(e) A replacement satellite is one that is:

(1) Authorized to be operated at the same orbit location, in the same frequency bands, and with the same coverage area as one of the licensee's existing satellites, and

(2) Scheduled to be launched so that it will be brought into use at approximately the same time as, but no later than, the existing satellite is retired.