[Federal Register Volume 60, Number 232 (Monday, December 4, 1995)]
[Proposed Rules]
[Pages 62054-62057]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29330]
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DEPARTMENT OF COMMERCE
National Oceanic and Atmospheric Administration
15 CFR Part 960
[Docket No. 951031259-5259-01]
Licensing of Private Remote-Sensing Space Systems
AGENCY: National Environmental Satellite, Data, and Information Service
(NESDIS), NOAA, Commerce.
ACTION: Notice of inquiry and request for public comment.
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SUMMARY: The National Oceanic and Atmospheric Administration (NOAA) is
considering revisions to its regulations for the licensing of private
remote sensing space systems under Title II of the Land Remote Sensing
Policy Act of 1992, 15 U.S.C. 5601 et seq. To promote the process, NOAA
is using an informal Task Group, of NOAA and Commerce employees, to
compile and consider public comment on the more significant issues
involved in the licensing process. NOAA will use these comments to
decide the extent to which it needs to revise its regulations and what
issues should be addressed. Should NOAA decide that new regulations are
necessary a proposed rule would be published to solicit public comment.
NOAA will then circulate its final draft of proposed regulations in the
informal rulemaking process. NOAA intends that soliciting comments on
the issues proposed in this notice prior to the issuance of any
proposed rule will ensure that NOAA's regulations include provisions
advantageous to industry, as well as to Government. This Notice
solicits such comments, particularly from the regulated industry.
DATES: Comments must be received on or before February 2, 1996.
ADDRESSES: Comments should be sent to, Michael Mignogno, NOAA, National
Environmental Satellite, Data, and Information Service, Federal
Building 4, Room 3301-E, Washington, D.C. 20233.
FOR FURTHER INFORMATION CONTACT: Michael Mignogno at (301) 457-5210 or
Catherine Shea, NOAA, Office of General Counsel at (301) 713-0053.
Additional Discussion Packages are available from Michael Mignogno at
the above address.
SUPPLEMENTARY INFORMATION: In 1987, NOAA published its licensing
regulations that set forth procedures for submission and Government
review of an application pursuant to the Land Remote Sensing
Commercialization Act of 1984. Only one license was issued
[[Page 62055]]
under this act. When Congress passed the Land Remote Sensing Policy Act
of 1992 (the Act), it made several revisions to the licensing process
to stimulate commercial interest in operating systems. On March 10,
1994, the President issued his policy to promote U.S. competitiveness
in remote sensing space capabilities while protecting U.S. national
security and foreign policy interests. Since 1993, NOAA has issued nine
licenses.
NOAA is considering updating its 1987 regulations to reflect
statutory changes, intervening events, and recent licensing experiences
and to ensure that the Government's oversight is simple, transparent,
and predictable. Particularly, NOAA seeks to support the President's
policy that long term U.S. national security and foreign policy
interests are best served by ensuring the U.S. industry continues to
lead this emerging market.
In order to foster the policy of transparency in the licensing
process, NOAA is seeking public input on whether extensive new
regulations are necessary and, if so, what issues should be addressed
in such rule. To assist this process, NOAA developed, for the Task
Group, a series of Discussion Packages that highlight some of the more
significant areas for discussion. NOAA is seeking early public input on
these and on other significant aspects of the licensing process. NOAA
is especially interested in suggestions for innovative methods to carry
out its statutory licensing responsibilities in ways that enhance U.S.
competitiveness. The significant issues identified to date and
highlighted in the discussion packages can be summarized as follows:
1. Review Procedures for License Applications
A. How can the process be improved and modified to provide greater
transparency and predictability and shorter response time?
NOAA seeks to eliminate uncertainty from the licensing process that
could potentially threaten commercial practices while preserving
essential national security and foreign policy interests. For each new
system, these interests are first addressed during the review of the
license application. The review must be thorough and careful, but at
the same time transparent, predictable, and timely so as not to deter
pursuit of and investment in potential systems. The Government must
complete its review within the statutory time limit of 120 days or, if
possible, within a shorter time limit.
To address these legitimate interests and comply with the intent of
the Act and the President's policy, NOAA is considering whether the
Government should institute more formal administrative time limits and
more detailed record keeping requirements in making determinations on a
license application. It is contemplated that under such a system any
reviewing agency unable to comply with a time limit would be required
to submit a satisfactory explanation and specify the additional time
required. The administrative record would be opened as soon as an
application is received and would include all comments on that
application. Ex parte communications would not be permitted and oral
input should not influence the process in any way. The applicant would
have the right to inspect this record during business hours.
To promote timely and transparent decisions NOAA is considering
additional procedures pursuant to its enforcement authority under
section 203 of the Act. This section establishes the right to a hearing
on the record in the event NOAA takes certain adverse actions such as
the denial of a license or imposition of conditions in a license. NOAA
is considering defining adverse actions to include the Government's
failure to act within the applicable time limit and/or advise the
applicant of the reasons for the delay.
In the event of an appeal, the administrative record would stand
alone as evidence for all determinations made during the application
review. NOAA would have to demonstrate that a preponderance of the
evidence in this record establishes, for example, that the system
proposed would compromise identified national security or foreign
policy interests. As such, the record would have to include information
from the appropriate secretary sufficient to identify the interest at
risk and describe why the proposed system would not preserve that
interest. (This information may be classified where necessary). Should
NOAA establish such an appeal process, the record would have to contain
this information and the evidence would have to be sufficient to meet
the requisite test or the agency determination would not prevail.
B. What are the minimum informational requirements for a complete
application?
A related issue in terms of ensuring expeditious review is
determining when an application is considered complete. It is important
that applicants and the Government agree on what basic information must
be provided in order to enable the Government to perform a thorough
review and, at the same time, avoid over-burdening the applicant. Such
an understanding also will avoid frequent requests for additional
information which delay the process. Particularly important is the
information that describes the operational aspects of a proposed system
which are significant in terms of its national security and foreign
policy implications. NOAA is interested in assessing what information
is necessary before a review can begin and what level of burden is
imposed by gathering the information necessary for a complete
application. Any comments received on this issue also will be relevant
in terms of compliance with the Paperwork Reduction Act.
The existing informational requirements are found at 15 CFR 960.6.
A more complete list, that includes additional items identified as
significant by the reviewing agencies during recent license application
reviews, is contained in Discussion Package 1. This Discussion Package
also sets forth in more detail the type of process that NOAA is
considering for reviewing license applications.
2. Restricting Imaging To Preserve National Security/Foreign Policy
Interests--What Standard Must Be Applied and What Procedures Must Be
Followed?
Once a license is issued and a remote sensing satellite is
operational, the most critical issue for the licensee is when the
Government might restrict imaging of a particular area and for how long
because of national security or foreign policy considerations.
The basic license condition, derived from the President's policy,
provides:
The Secretary of Commerce may, after consulting with the
Secretary of Defense or State, as appropriate, require the licensee
to limit imaging an area and/or limit distributing data from an area
during any period when national security or foreign policy interests
may be compromised.
To ensure that restrictions will be invoked only where appropriate,
this consultation and any decision to implement this condition will be
controlled at the Secretarial level and any Secretarial disagreement
will be elevated to the Presidential level.
While the above standard and process appears to have achieved
considerable consensus, questions have been raised whether such a
standard is too vague. For example, representatives of the media
addressed this issue in the 1989 Petition for Rulemaking. The media
representatives have maintained that imaging could be restricted only
if ``there is clear evidence that such action is necessary to prevent
serious and immediate injury to distinct and
[[Page 62056]]
compelling national security and foreign policy interests of the United
States.'' (Petition for Rulemaking filed by Radio Television News
Directors Association, April 5, 1988)
In 1989, NOAA responded to this Petition for Rulemaking announcing
that it would reopen its regulations and would incorporate the
principle that ``conditions imposed in a license will be the least
burdensome possible.'' 54 FR 1945. This rulemaking was interrupted by
passage of the Act in 1992 and NOAA is now considering a number of
provisions to implement the President's policy. These could include
ensuring that limitations on imaging would be imposed only over the
smallest area and for the shortest period of time possible and would
not be imposed at all if comparable data is otherwise available.
Ultimately, any standard and process for making decisions
concerning the need for restrictions on imaging must ensure that the
Government has the ability to protect its national security and
international obligation interests adequately while preserving First
Amendment rights and other U.S. interests, including that of protecting
industry's position in global competition. NOAA believes that it is now
an appropriate time for a full discussion of this issue before systems
become operational. Comments from previous rulemaking actions and other
relevant material are contained in Discussion Package 2.
3. Review of Foreign Agreements
Section 202(b)(6) of the Act requires that licensees ``notify the
Secretary [of Commerce] of any agreement the licensee intends to enter
with a foreign nation, entity, or consortium involving foreign nations,
or entities.'' To implement this section, NOAA's licenses now require
licensees to provide notice of a significant or substantial foreign
agreement at least 60 days before conclusion. This requirement reflects
interagency consensus that sixty days is needed for meaningful
notification but that, consistent with the President's policy, this
burden is justified only if agreements are significant or substantial.
As required by the President's policy, NOAA anticipates defining such
agreements in these regulations and solicits comments on this issue (as
well as the appropriateness of the 60 day review period).
This provision of the Act is subject to differing legal opinions.
One view of the Act is that it requires that licensees notify the
Secretary of every agreement. The Department of Commerce disagrees with
this interpretation. Legislation has been introduced on this subject;
however, to date no subsequent legislative action has occurred.
Should NOAA's legal interpretation not be upheld and no legislation
be passed, comments might want to address whether NOAA should consider
defining different classes of agreements with corresponding
notification requirements. For example, the regulations could retain a
60 day notice requirement for significant or substantial agreements
while requiring that notice of other agreements be provided only prior
to their effective date.
A. What agreements must be submitted for review?
The threshold question with respect to the notification requirement
of section 202(b)(6) of the Act is what agreements are covered. The
purpose of such notification is to ensure continued preservation of
U.S. national security and foreign policy interests. Existing licenses
require notification of those types of agreements that could have
particular national security or foreign policy implications such as:
those that give a foreign party control over the operation of the
system, e.g., the ability to operate the spacecraft, task the sensors,
or exercise managerial control; and those that provide for a
significant role in distributing the data from the system, e.g., by
operating a foreign ground station.
Routine data sales have traditionally been excluded from the
definition of significant agreement because an advance notice
requirement would put U.S. companies at a competitive disadvantage.
Furthermore, scrutinizing all direct sales to foreign customers would
not effectively preserve U.S. interests inasmuch as a determined buyer
could purchase any scene or scenes desired through a variety of legal
channels.
More specifically, existing licenses require notice of the
following types of foreign agreements:
(1) cooperation in the launch and/or operation of the spacecraft;
(2) Tasking of the satellite sensors, modifying satellite tasking
commands, revising the priority of tasking requests, or otherwise
providing an opportunity to exercise managerial control over the
system's operation;
(3) Real-time direct access to unenhanced data; or
(4) Distributorship arrangements involving the receipt of high
volumes of unenhanced data;
(5) An equity interest in the Licensee. (A license amendment is
required if the aggregate equity interest in the Licensee by foreign
nations and/or persons exceeds or will exceed 25 percent.)
These licenses exclude agreements that provide only for the sale of
data or value added products, or for the establishment of marketing
outlets in foreign countries established in the ordinary course of
business if described in the plan for sale and distribution contained
in the license application.
NOAA seeks comment on whether the above criteria are adequate to
define ``significant or substantial'' agreements. In particular, NOAA
is searching for appropriate criteria to determine when review is
necessary for agreements providing solely for foreign investment in a
licensee. Every sale of stock to a foreign investor cannot be subject
to review. On the other hand, a threshold for review is necessary to
ensure that the technology remains secure and that the operator remains
sufficiently under U.S. ownership or control that it must respond
appropriately when necessary to preserve national security.
Furthermore, in accordance with the President's policy, aggregate
foreign investment in excess of a particular amount would not only be
subject to notification but to approval, i.e., by amendment to the
license. NOAA is particularly interested in industry views about what
criteria should trigger a review of a foreign investment agreement.
B. What process should be in place to inform applicants when the
Government has identified a concern with a potential foreign agreement?
When the Government raises a concern and issues negative advice, what
rights of appeal should be available to an applicant or licensee?
To promote more timely and transparent decisions on the review of
significant foreign agreements NOAA is considering a process that would
be similar to the review of an initial license application in that the
Government would institute more formal administrative time limits and
more detailed record keeping requirements. However, this process would
recognize that, unlike the case of an initial application, the
Secretary does not have the legal authority to approve or disapprove
these agreements. Therefore, if the Secretary does not advise a
licensee of any conflicts within sixty days of notification, the
licensee is free to enter into the agreement.
A possible process to be considered and on which NOAA seeks
comments is as follows: If the Secretary does advise a licensee of a
conflict, i.e., that the proposed agreement will compromise national
security or foreign policy interests, the licensee may at that point
[[Page 62057]]
request a hearing on the record to determine whether a preponderance of
the evidence in the record supports that conclusion. In circumstances
where waiting for the normal hearing process could jeopardize relations
among parties to the agreement, NOAA would provide an expedited hearing
process.
Discussion Package 3 sets forth in more detail the type of process
under consideration.
6. Miscellaneous
Comments on the above issues are specifically solicited but all
comments on improving and simplifying the regulations are welcome and
will be reviewed and considered in the course of the normal agency
process of issuing proposed regulations, should such regulations be
deemed necessary. NOAA is also interested in comments on whether or not
NOAA should sponsor a public meeting on the issues presented in this
notice or others related to the regulations.
NOAA intends that all information obtained from the public in
connection with this Notice be a matter of public record. Consequently,
comments must be in writing to be considered. Oral comments are
discouraged. NOAA will not accept submissions made on a confidential
basis. The record containing all comments will be maintained with the
above listed contacts, NOAA, Federal Building 4, Room 3301, Suitland,
MD. From 9 a.m. to 3 p.m., it may be inspected, by appointment, and any
comments copied in accordance with regulations published in Part 4 of
Title 15 of the Code of Federal Regulations. Further information about
inspection and copying of records at this facility may be obtained from
the above contacts.
Commentors can request copies of the Discussion Packages referenced
in this document from the contacts listed above.
Robert S. Winokur,
Assistant Administrator for Satellite and Information Services.
[FR Doc. 95-29330 Filed 12-1-95; 8:45 am]
BILLING CODE 3510-12-P
