SATELLITE INDUSTRY REJECTS FCC PLAN TO CHANGE LICENSING PROCESS

Existing rules allocate spectrum in “fair and efficient manner” and have been important factor in successful development of competitive satellite communications industry in U.S. and other regions, SIA said. Use of processing rounds, combined with its licensing of space segment, has provided “certainty and reliability” to satellite operators, it said, and has helped promote creation of new satellite services by identifying fixed pool of applicants that have incentive to assist in “difficult and expensive” ITU spectrum allocation process. Processing rounds also maximize number of independent contractors using spectrum, SIA said.

Commission should improve current system rather than replace it, SIA said. It suggested FCC: (1) Reduce time necessary to place new applications on public notice and promptly establish cut-off deadlines for new processing rounds. (2) Restrict periods for negotiation between pending satellite applicants. (3) Streamline certain other rules for satellite licenses such as those authorizing replacement satellites. (4) Retain antitrafficking rules and fungibility policy. (5) Avoid adopting preferences for applicants that could delay issuance of licenses and expose Commission’s licensing decisions to greater potential legal challenge. (6) Improve milestone requirements, working to reduce average 4-year period that it usually takes to revoke license when company fails to meet milestone.

One size doesn’t fit all, PanAmSat said of new licensing proposal: “What works for geostationary satellites may not work for nongeostationary satellites.” PanAmSat primarily operates C-band and Ku-band satellite and most space station applicants in that band will be for replacement satellites. It also favors keeping processing rounds that deter and weed out speculators and applicants filing for anticompetitive reasons, it said, and first-come, first-served processing encourages land rush for spectrum without regard to qualifications. Process merely substitutes speed at front- end for more delay and litigation on back end, it said.

Commission could improve current system without compromising licensing process, Boeing said. First-come, first-served could cause significant harm to by inadvertently inviting speculation and trafficking, filing said. Pegasus said drastic changes weren’t needed, but Commission should establish rules to support new entrants. Teledesic said processing round system had outlived its usefulness and instant cut-off was most important procedural reform FCC should make. Instant cut-offs facilitate reasoned adjudications, discourage speculative filings and reward responsible prefiling conduct, filing said: “The root of the problem is that many of the people filing applications have no immediate interest in seeing them granted.” No amount of facilitation will produce negotiated agreement, Teledesic said.

Final Analysis said it was concerned about impact new rules would have outside U.S. It’s possible, and even likely, other countries would adopt similar first-come, first-served rules and state-controlled companies would quickly file for all available spectrum, it said. Final Analysis also is concerned with continued consolidation and mergers in satellite industry. Eventually spectrum will be controlled by few large incumbent U.S. companies and non-U.S. operators, it warned. Hughes said first-come, first-served was legally unsustainable and not feasible. Problem doesn’t lie with licensing scheme, but with way Commission applies rules and policies, Hughes said. Backing SIA, SES said first-come, first-served would decrease competition and result in less efficient use of spectrum.

Satellite licensing rules may be outdated, Intelsat said. It suggested modified licensing procedure that would: (1) Establish queue and process applications in order received. (2) Cover only new licenses with established service rules and frequency allocations. (3) Wasn’t employed where sharing was based on band segmentation. (4) Require $10 million bond at time of filing. (5) Permit 2nd inline applicants to shift to other available orbital locations. (6) Result in license grant or denial for first applicant within 90 days. (7) Permit applicants or license holders to transfer applications or authorizations to other qualified applicants, but only at cost similar to broadcasters.

CTIA agreed new system was needed, saying delays and inefficiencies of current process were burden for satellite applicants. More troubling is tendency of FCC to tie up valuable spectrum for years, CTIA said, and process repeatedly has resulted in mismatch in spectrum required for projects with spectrum allocated. CTIA wants Commission to establish rules that would: (1) Make frequency allocations and service rules before it accepted license applications. (2) Discourage speculative applications. (3) Ensure real progress is made toward construction and launch of satellite systems. (4) Promote redeployment of spectrum to other services if satellite proposals floundered.