*Pages 1--151 from Microsoft Word - 27928.doc* FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 1 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of ) ) Amendment of the Commission's Space ) IB Docket No. 02- 34 Station Licensing Rules and Policies ) ) Mitigation of Orbital Debris ) IB Docket No. 02- 54 FIRST REPORT AND ORDER AND FURTHER NOTICE OF PROPOSED RULEMAKING IN IB DOCKET NO. 02- 34, AND FIRST REPORT AND ORDER IN IB DOCKET NO. 02- 54 Adopted: April 23, 2003 Released: May 19, 2003 Comment Date: 30 Days After Publication in the Federal Register Reply Comment Date: 60 Days After Publication in the Federal Register By the Commission: Chairman Powell, Commissioners Abernathy and Adelstein issuing separate statements; Commissioner Copps approving in part, concurring in part and issuing a statement TABLE OF CONTENTS Paragraph I. Introduction 1 II. Executive Summary 2 III. Background 8 A. Current Licensing Procedure 8 B. Proposed Revisions to Satellite Licensing Procedure 11 IV. Preliminary Issues 14 A. Need for Reform 14 B. General Framework 18 V. Modified Processing Rounds for NGSO- Like Satellite Systems 23 A. Overview 23 B. Opportunities for Competitive Entry for NGSO- Like Satellite Systems 24 C. Modification of Processing Round Procedure 30 1 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 2 1. Sharing Mechanism 30 2. Facilitating Processing Round Negotiations 35 a. Time Limit on Negotiations 35 b. System of Preferences 39 c. Other Proposals for Facilitating Negotiations in Processing Rounds 42 d. Need for Pre- Licensing Negotiations 44 D. Details of Modified Processing Round Procedure 48 1. Overview of Framework 48 2. Interrelation with Procedures for GSO- Like Satellite Systems 56 3. Amendments and Modifications 59 4. Additional Processing Rounds 60 5. Revision of Pleading Cycles 66 E. Other Proposals for Modifying Processing Rounds 68 VI. First- Come, First- Served Procedure for GSO- Like Satellite Systems 71 A. Background 71 B. Benefits of First- Come, First- Served Procedure 74 C. Opportunities for Competitive Entry for GSO- Like Satellite Systems 77 D. General Comments 80 1. Introduction 80 2. Spectrum Efficiency 81 3. Speculative Applications 84 4. Influx of Applications 87 5. ITU Issues 91 6. Uncertainty 94 7. Non- U. S.- Licensed Satellites 95 8. Disadvantage in Non- U. S. Markets 97 9. Legal Analysis 99 a. Background 99 b. Consistency with Communications Act 102 c. Qualifications 104 d. Consistency with Commission Precedent 106 E. Details of First- Come, First- Served Procedure 108 1. General Framework 108 a. Establishment of Queues 108 b. Keeping Subsequently Filed Applications on File 111 c. Fees 115 d. Service Rules 117 e. Frequency Allocations 122 f. Feeder Links and Inter- Satellite Links 125 2 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 3 2. Selection Among Mutually Exclusive Applications 132 3. Amendments 136 4. Modifications 141 5. Hybrids 145 6. Filing Window 149 F. Modified First- Come, First Served Proposal 151 G. Fungibility Policy 155 VII. Other Issues 160 A. Background 160 B. Financial Qualifications 161 1. Eliminating the Financial Qualification Requirement 161 2. Posting of Bonds 166 C. Milestone Requirements 173 1. Background 173 2. General Comments on Milestone Proposals 176 3. Contract Execution Milestone 179 4. Standard for Determining Compliance with Contract Execution Milestone Requirement 181 5. Confidential Information 186 6. Critical Design Review 188 7. Commencement of Physical Construction 192 8. Milestones for Satellite Systems Using Feeder Links 194 9. Other Interim or Additional Milestones 195 10. Enforcement of Milestone Requirements 197 11. Incentives for Early Launch 203 12. Alternative Milestone Mechanism 205 13. On- site Inspections 208 D. Trafficking in Licenses 209 1. Elimination of Satellite Anti- Trafficking Rule 209 2. Revision of Anti- Trafficking Rule 224 E. Safeguards Against Frivolous or Speculative Applications 226 1. Safeguards in First- Come, First- Served Procedure 226 2. Safeguards Against Speculation in Modified Processing Rounds 227 3. Limit on Number of Pending Applications 228 4. Attributable Interest 234 5. Selling Place in Queue 240 6. Hard Look Doctrine 244 F. Mandatory Electronic Filing of Space Station Applications 245 G. Replacement Satellites 250 3 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 4 1. Streamlined Procedure 250 2. Technical Characteristics of Replacement Satellites 255 H. Full Frequency Reuse 259 I. Miscellaneous 265 1. Space Station License Terms 265 2. Spectrum Reallocations 268 3. Special Temporary Authority 271 4. Petitions for Reconsideration 274 5. Pending Satellite Applications 275 VIII. Non- U. S.- Licensed Satellites 285 A. Background 285 B. Revision of Framework 290 1. NGSO- Like Satellites 290 2. GSO- Like Satellites 292 C. Information Requirements of Non- U. S.- Licensed Satellite Operators 298 1. Information Requirements for Coordinated Non- U. S. Satellites 298 2. Amendments of Letters of Intent 303 D. Financial Qualifications of Non- U. S.- Licensed Satellite Operators 306 1. Eliminating the Financial Qualification Requirement 306 2. Posting of Bonds 307 E. Milestone Requirements of Non- U. S.- Licensed Satellite Operators 310 F. Safeguards Against Speculation 313 G. Mandatory Electronic Filing for Non.- U. S.- Licensed Satellite Operators 314 H. Procedures for Modifications of Permitted List Satellite Parameters 315 1. Background 315 2. Permitted List Satellite Modifications 317 3. Replacements of Permitted List Satellites 321 4. Changes of Ownership of Satellites on the Permitted List 326 5. Procedures for Non- U. S.- Licensed Satellites That Are Not on the Permitted List 328 IX. Conclusion 330 X. Further Notice of Proposed Rulemaking: Bond Issues 333 XI. Procedural Matters 337 XII. Ordering Clauses 348 Appendix A Parties Filing Pleadings Appendix B Rule Revisions Appendix C Default Service Rules 4 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 5 Appendix D Final Regulatory Flexibility Act Analysis Appendix E Initial Regulatory Flexibility Act Analysis I. INTRODUCTION 1. In this Order, we revise our space station licensing process to adapt it to today's satellite environment. The procedures we adopt today significantly revamp the licensing process that we have used since the early 1980s. The new procedures will allow us to act on applications dramatically faster than we can now, and to recognize the technical growth in satellite design over the last two decades. Specifically, in this Order, we consider two proposals made in the Space Station Reform NPRM to expedite the satellite licensing process. 1 For reasons discussed in detail below, we adopt a queue for considering satellite applications. In addition, we find that different kinds of satellite systems raise different processing issues. Therefore, we adopt two different licensing frameworks – a modified processing round approach based on our current procedure for non- geostationary satellite orbit (NGSO)- like systems, and a "first- come, first- served" procedure for geostationary satellite orbit (GSO)- like systems. By allowing us to cut processing time from the current two- to- three years to less than one year, these procedures will lead to substantial public interest benefits, including faster provision of satellite services to the public, and maintenance of the United States' position as the leader of the global satellite industry. II. EXECUTIVE SUMMARY 2. In the Space Station Reform NPRM, the Commission noted that the satellite industry is a crucial component of the global communications marketplace. 2 For example, satellites are key to wide- area distribution of the video signals of over- the- air broadcasts and cable systems to other satellite systems and directly to consumers. Satellite facilities also constitute a major component of the wireless backbone infrastructure for voice and data communications, and provide an important opportunity to create another competitive platform for delivery of broadband services. Satellite facilities are especially well suited for extending these services to rural and unserved areas. 3 Satellite technology facilitates provision of Internet services, and it likely will continue to play an increasingly important role in this area. Satellite systems have also been used to provide data and voice services to mobile and handheld portable devices. 3. In the Space Station Reform NPRM, the Commission explained in detail why we are considering revisions to our satellite licensing procedure. 4 We noted that there are several factors 1 Amendment of the Commission's Space Station Licensing Rules and Policies, Notice of Proposed Rulemaking, IB Docket No. 02- 34, 17 FCC Rcd 3847 (2002) (Space Station Reform NPRM or Notice). 2 Space Station Reform NPRM, 17 FCC Rcd at 3849 (para. 2). 3 Space Station Reform NPRM, 17 FCC Rcd at 3849 (para. 2), citing FWCC Request for Declaratory Ruling on Partial- Band Licensing of Earth Stations in the Fixed- Satellite Service that Share Terrestrial Spectrum, First Report and Order, IB Docket No. 00- 203, 16 FCC Rcd 11511 (2001) (FWCC/ Onsat First Report and Order). 4 In this proceeding, we consider revisions to the procedure for all new satellite license applications except for Direct Broadcast Satellite (DBS) and Digital Audio Radio Satellite (DARS) licenses. Space Station Reform NPRM, 17 FCC Rcd at 3850 n. 4. Thus, none of the rules adopted in this Order are applicable to DBS or DARS applications, including but not limited to the licensing procedure rules. Accordingly, while we adopt a mandatory electronic filing requirement for other space station 5 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 6 that can increase the time needed to issue satellite licenses, and one major factor is often our current use of processing rounds. 5 This is particularly true in processing rounds in which there are not enough orbital locations and/ or there is not sufficient spectrum available to accommodate all the qualified applicants, as is often the case. In those cases, we afford the applicants an opportunity to negotiate "mutually agreeable" compromises so that all the applications can be granted. Those negotiations can require several months or even years of effort. 6 4. Changes in the satellite industry since the current procedure was adopted in the 1980s 7 warrant consideration of proposals to accelerate the licensing process. First, the satellite industry has matured tremendously since the 1980s. For example, there are many more satellites in operation now then there were in 1980. Many of today's satellites operate in two or three frequency bands, while 1980 technology permitted only single- band satellites. Furthermore, all of today's satellites have greater capacity and operate at higher power than was possible in 1980. Other factors also weigh in favor of accelerating the licensing process. For example, the Commission noted that the International Telecommunication Union (ITU) had recently revised its procedures to require satellite operators to bring planned systems into use within seven years rather than nine as was allowed previously. 8 The Commission also observed that the current procedure can result in long and complex licensing proceedings in cases where the licensees apply for mobile satellite service (MSS) or non- geostationary satellite orbit (NGSO) authority and request feeder link or intersatellite link authorizations in different frequency bands as well. 9 Finally, delays in the provision of satellite services caused by the current satellite licensing procedure can impose costs on both satellite service providers and their customers. 10 It also results in inefficient spectrum use because it increases the amount of time scarce orbit and spectrum resources lie fallow. 11 applications in Section VII. F., DBS and DARS applicants will continue to be permitted but not required to submit applications electronically. In addition, DBS license terms will remain as specified in the Part 100 Order rather than Section VII. I. 1. of this Order. See Policies and Rules for the Direct Broadcast Satellite Service, Report and Order, IB Docket No. 98- 21, 17 FCC Rcd 11331, 11351 (para. 39) (2002) (Part 100 Order). DBS licensees will continue to be required to comply with the due diligence requirements of Section 25. 148( b) rather than the milestone requirements we adopt in Section VII. C. below. Part 100 Order, 17 FCC Rcd at 11353 (para. 44); 47 C. F. R. § 25. 148( b). Nothing in the discussion of the anti-trafficking rule in Section VII. D. will apply to DBS or DARS licenses. Instead, DBS license transfers are discussed in the Part 100 Order, 17 FCC Rcd at 11377- 78 (para. 99). Finally, neither DBS nor DARS applicants are subject to the limit on number of pending applications in Section VII. E. 3., or the replacement satellite procedure in Section VII. G. 5 Space Station Reform NPRM, 17 FCC Rcd at 3850- 52 (paras. 5- 10). We explain processing rounds in Section III. A. below. 6 Space Station Reform NPRM, 17 FCC Rcd at 3851 (para. 10). 7 Filing of Applications for New Space Stations in the Domestic Fixed Satellite Service, Memorandum Opinion and Order, 93 FCC 2d 1260 (1983) (1983 Cut- Off Order), cited in Space Station Reform NPRM, 17 FCC Rcd at 3850- 51 n. 3. 8 Space Station Reform NPRM, 17 FCC Rcd at 3855 (paras. 19- 20). 9 Space Station Reform NPRM, 17 FCC Rcd at 3853- 55 (paras. 15- 18). 10 Space Station Reform NPRM, 17 FCC Rcd at 3852- 53 (paras. 12- 14). 11 Space Station Reform NPRM, 17 FCC Rcd at 3855 (para. 21). 6 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 7 Streamlining the satellite licensing process would reduce those costs. Thus, the procedures we adopt today will ensure that satellite spectrum and orbital resources will be used efficiently, to the benefit of American consumers. 5. In this Order, we adopt procedural reforms to expedite the satellite licensing process. The central procedural revision in this Order is to create a single queue for all new satellite applications. We base additional reforms on our determination that one size does not fit all -- that different procedures are better suited to applications for different kinds of satellite systems. For satellites communicating with earth stations with omni- directional antennas (NGSO- like systems), we adopt a modified processing round procedure. When the application reaches the front of the queue, we will start a processing round, and divide the available spectrum equally among all the qualified applicants. This is similar to the approach used in the 2 GHz Order. 12 For other satellite applications (GSO- like systems), we adopt the first- come, first- served approach we proposed in the Space Station Reform NPRM, with revisions to address some concerns raised in the record. 13 Under both these procedures, we will be able to issue satellite licenses to qualified applicants significantly more quickly than is now possible. 6. We also adopt a number of other measures to expedite satellite licensing and provision of service to the public. For example, we adopt a streamlined procedure for replacement satellite applications. 14 We strengthen our milestone requirements, which will expedite service to the public by reassigning the orbit/ spectrum resource where the original licensee is unwilling or unable to construct, launch, and operate its proposed satellite system. 15 In addition, we replace our current financial qualification showing with a bond- posting requirement. 16 The current financial qualification requirement was designed to address whether the applicant had the financial resources needed to launch a satellite and operate it for one year. 17 Our experience has been that a licensee's financial ability to implement a satellite system does not necessarily mean that it will ultimately expend its resources to that end. Finally, we remove our current restrictions on sales of satellite licenses, to facilitate transfers of licenses in the secondary market to parties that can provide a higher- valued use, but impose certain safeguards to ensure against spectrum speculation and other possible abuses. 18 7. Underlying all our decisions in this Order is our long- standing policy that, as a general proposition, our regulations and procedures should not unreasonably interfere with licensees' business negotiations, and we should allow those negotiations to be based on market forces to the 12 The Establishment of Policies and Service Rules for the Mobile Satellite Service in the 2 GHz Band, Report and Order, IB Docket No. 99- 81, 15 FCC Rcd 16127 (2000) (2 GHz Order). See also Section V. 13 Space Station Reform NPRM, 17 FCC Rcd at 3859- 61 (paras. 32- 39). See also Section VI. 14 Section VII. G. 15 Section VII. C. 16 Section VII. B. 17 See Space Station Reform NPRM, 17 FCC Rcd at 3880 (para. 100). 18 Sections VII. D. and VII. E. 7 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 8 extent possible. 19 This is particularly true in this proceeding, in which placing greater reliance on market mechanisms in our licensing procedures should promote the interests of satellite service consumers without any significant negative effect on satellite operators. Specifically, we adopt procedures that should enable us to establish satellite licensees' operating rights clearly and quickly. We also remove unnecessary barriers to license transfers, so that satellite operators have greater flexibility to negotiate post- licensing transfers of satellite licenses in response to changing market conditions and consumer demands. As a result, licensees will be able to provide service to the public much sooner than is often possible under our current satellite licensing procedures. Customers should not have to wait for months or years while applicants identify and discuss their concerns with each other in the context of processing round negotiations. The rules adopted today rely on market mechanisms to achieve the same or substantially similar results more efficiently, on a faster time scale, and with greater administrative ease once licenses are granted. This will ensure that there is the most efficient use of the satellite spectrum and orbit resources. 20 III. BACKGROUND A. Current Licensing Procedure 8. As we explained in the Notice, we currently issue satellite licenses in "processing rounds," a procedure by which we combine into groups and process together applications to operate satellites in a particular frequency band. 21 The typical process is as follows: First, an 19 See Price Cap Performance Review for Local Exchange Carriers, First Report and Order, CC Docket No. 94- 1, 10 FCC Rcd 8961, 8990- 92 (paras. 67- 69) (1995); Access Charge Reform, Fifth Report and Order and Further Notice of Proposed Rulemaking, CC Docket No. 96- 262, 14 FCC Rcd 14221, 14263- 64 (para. 79) (1999) (Incumbent LEC Pricing Flexibility Order), cited in Space Station Reform NPRM, 17 FCC Rcd at 3866 (para. 54). In particular, in this Order below, we adopt licensing procedures to facilitate negotiations among licensees outside of a regulatory process, rather than encouraging those negotiations in the context of processing rounds as the Commission has in the past. 20 In November 2002, the Spectrum Policy Task Force (SPTF) issued a Report making several recommendations to revise the Commission's spectrum management policies. See Federal Communications Commission, SPTF Report, ET Docket No. 02- 135, (released Nov. 2002) (Spectrum Policy Task Force Report). This report can be found at www. fcc. gov/ sptf. See also Commission Seeks Public Comment on Spectrum Policy Task Force Report, Public Notice, ET Docket No. 02- 135, FCC 02- 322 (released Nov. 25, 2002). The new satellite licensing procedures we adopt in this Order place greater reliance on market mechanisms, and so are consistent with the recommendations in the SPTF Report. SPTF Report at 56- 58. In addition, the SPTF Report recommends that the Commission consider a statutory proposal for Congress that would assess and re- examine Section 647 of the Orbit Act to consider permitting, but not requiring, the Commission to utilize competitive bidding to resolve mutually exclusive applications for global and international satellite services. SPTF Report at 42. Section 647 of the Communications Satellite Act of 1962 (Satellite Act), as amended by the Open- Market Reorganization for the Betterment of International Telecommunications Act (ORBIT Act), 47 U. S. C. § 765f. Our adoption of new satellite licensing procedures should not be construed as implying any conclusion regarding this task force proposal. Moreover, nothing in this Order is intended to preclude the Commission from designating future U. S. satellite spectrum allocations for domestic satellite service only. Moreover, nothing in this Order is intended to limit the Commission from designating future U. S. satellite spectrum rights for distribution via auction consistent with our statutory authority. 21 Space Station Reform NPRM, 17 FCC Rcd at 3850 (para. 5). The Commission also noted that it, in the past, it has used another procedure for Direct Broadcast Satellite (DBS) and Digital Audio Radio Satellite (DARS) licenses. This proceeding does not address the DBS or DARS licensing procedures. Space Station Reform NPRM, 17 FCC Rcd at 3850 n. 4. 8 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 9 initial (or "lead") application for a particular service in a specific band is filed. 22 After staff determines that the application is acceptable for filing, we issue a public notice announcing a "cut- off" date, a deadline for other interested parties to file any additional applications to be considered, concurrently with the lead application, as part of a group. 23 We afford an opportunity for parties to file petitions to deny, comments, and replies with respect to each applications filed. 24 9. On occasion, license applications in a processing round remain pending while the Commission initiates and completes a notice- and- comment rulemaking proceeding to adopt rules for the newly proposed service. 25 In addition, in cases where frequency bands have not been allocated internationally or domestically for a proposed service, the United States must develop and submit proposals for new frequency allocations at International Telecommunication Union (ITU) World Radio Conferences (WRCs), 26 and subsequently the Commission must amend its domestic Table of Frequency Allocations, 27 before it can act on the pending satellite license applications. 28 10. If there are enough orbital locations and/ or there is sufficient spectrum available to accommodate the proposed satellite systems of all of the qualified applicants in the processing round, we issue licenses at that point. 29 If, as is often the case, there are not enough orbital locations and/ or there is not sufficient spectrum available to accommodate all the qualified applicants, we afford the applicants an opportunity to negotiate "mutually agreeable" compromises so that all the applications can be granted. 30 Those negotiations can require several months or even years of effort. 31 On occasion, applicants have not been able to reach mutually agreeable compromises, and the Commission has had to mandate a solution. 32 This process also 22 See Space Station Reform NPRM, 17 FCC Rcd at 3850 (para. 6). 23 See Space Station Reform NPRM, 17 FCC Rcd at 3850 (para. 6), citing 1983 Cut- Off Order, 93 FCC 2d 1260. 24 Space Station Reform NPRM, 17 FCC Rcd at 3850 (para. 6). 25 Space Station Reform NPRM, 17 FCC Rcd at 3850- 51 (para. 7). 26 WRCs are held approximately every two or three years. Space Station Reform NPRM, 17 FCC Rcd at 3851 (para. 9). 27 47 C. F. R. § 2.106. 28 Space Station Reform NPRM, 17 FCC Rcd at 3851 (para. 9). 29 Space Station Reform NPRM, 17 FCC Rcd at 3851 (para. 10). The Commission dismisses applications when it finds that the applicant is not legally, financially, or technically qualified to hold a satellite license. See, e. g., Space Station Reform NPRM, 17 FCC Rcd at 3851 (para. 10). 30 Space Station Reform NPRM, 17 FCC Rcd at 3851 (para. 10). 31 Space Station Reform NPRM, 17 FCC Rcd at 3851 (para. 10). 32 Space Station Reform NPRM, 17 FCC Rcd at 3852 (para. 10), citing 2 GHz Order, 15 FCC Rcd 16127. 9 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 10 requires the completion of a notice- and- comment rulemaking proceeding to implement an assignment scheme consistent with the negotiated agreement or, in cases where no agreement is reached, a Commission approach to resolving mutual exclusivity among the competing applicants. Developing proposals in a Notice of Proposed Rulemaking, reviewing comments, and finalizing rules in a Report and Order can also be time- consuming. B. Proposed Revisions to Satellite Licensing Procedure 11. Certain factors outside our control can lengthen the time needed to grant a license. These include the time necessary to pursue and obtain new international allocations for satellite services pursuant to ITU procedures. Rather than concentrate on those factors where the Commission's ability to shorten the time involved is limited, we have focused our efforts on those licensing areas that are within our control. 33 12. Accordingly, the Notice invited comment on two proposals that would shorten the time required to act on space station applications by either eliminating, or limiting, the opportunity for negotiations among applicants. Specifically, we invited comment on two alternatives for revising our satellite processing procedure. The first option is a first- come, first-served approach, based in large part on the procedure we used for FM radio and television licenses from 1985 to 1998. 34 The second option is to reform and streamline our current processing round procedure. 35 13. For the reasons set forth below in Section IV., we conclude that license applications for different types of satellites raise distinct issues that can be resolved most effectively in procedures adapted to those issues. Specifically, we find that applications for certain satellite systems are best considered in a modified processing round, while others are best considered in a first- come, first- served approach. In Section V., we establish a single queue for all new satellite applications, and we set forth our modified processing round procedure in detail. We discuss our first- come, first- served procedure in Section VI. In Section VII., we adopt other revisions to our space station licensing rules, including replacing our current financial qualification requirements with a bond, eliminating the satellite anti- trafficking rules, strengthening our milestone requirements, and adopting safeguards to protect against speculative satellite applications. We revise our procedures for non- U. S.- licensed satellite operators seeking access to the U. S. market in Section VIII., to be consistent with our procedures for U. S.- licensed satellite operators that we adopt herein. 36 Section IX. is a conclusion for the Report and Order. Finally, in Section X., we 33 Space Station Reform NPRM, 17 FCC Rcd at 3856 (para. 25). 34 Space Station Reform NPRM, 17 FCC Rcd at 3857- 71 (paras. 28- 66), citing Amendment of the Rules Concerning Cut- Off Procedures for FM and TV Broadcast Stations, Report and Order, MM Docket No. 84- 750, FCC 85- 125, 50 Fed. Reg. 19936, 19941- 42 (paras. 33- 36) (May 13, 1985) (TV and FM Broadcast Order), recon. denied, 50 Fed, Reg. 43157 (Oct. 24, 1985), aff'd without published opinion sub nom. Hilding v. FCC, 835 F. 2d 1435 (9th Cir. 1987), reprinted at 58 Rad. Reg. 2d 776 (1985). In Hilding, the Court rejected the petitioner's challenge of the broadcast first- come, first- served rule because it found that the Commission reasonably concluded that its rules balanced the competing public interest concerns better than alternative rules proposed by the petitioner. 35 Space Station Reform NPRM, 17 FCC Rcd at 3871- 75 (paras. 67- 83). 36 In the Space Station Reform NPRM, we proposed revisions to Schedule S, a standardized space station licensing form initially proposed in another proceeding. See Space Station Reform NPRM, 17 FCC Rcd at 3875- 79 (paras. 84- 94); 2000 Biennial Regulatory Review -- Streamlining and Other Revisions 10 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 11 adopt a Further Notice of Proposed Rulemaking to invite additional comment on the details of the bond requirement. IV. PRELIMINARY ISSUES A. Need for Reform 14. Background. Several commenters claim that we need to make only slight revisions to our satellite licensing procedures. 37 Many of these parties note that the Commission has relied on processing rounds for many years (since 1983) with good results. For example, a number of parties claim that processing rounds have enabled the Commission to license as many satellite operators as possible given limited satellite spectrum. 38 Teledesic argues that, while processing rounds have been successful in the past, they have become too slow to be a good means for issuing satellite licenses. 39 Teledesic maintains that any proposals to streamline or facilitate processing rounds are misplaced because, regardless of whether or to what extent the processing round procedure can be improved, the first- come, first- served procedure would produce a better result. 40 Teledesic contends that processing rounds discourage innovative satellite proposals by grouping them together with applications from parties who may not have any interest in moving forward with their proposed satellite systems. 41 SES Americom replies that Teledesic overstates the delays of processing rounds, and overstates the time savings of the first- come, first- served approach. 42 15. Hughes and PanAmSat argue that delays in licensing are often not the result of processing rounds, but rather spectrum allocation or service rule proceedings. 43 Hughes also of Part 25 of the Commission's Rules Governing the Licensing of, and Spectrum Usage by, Satellite Network Earth Stations and Space Stations, Notice of Proposed Rulemaking, IB Docket No. 00- 248, 15 FCC Rcd 25128, 25191- 25201 (App. C) (2000) (Part 25 Earth Station Streamlining NPRM). We will consider comments filed in response to the revised Schedule S in a future Order, as well as our proposal to require non- U. S.- licensed satellite operators seeking access to the U. S. market to complete Schedule S. See Space Station Reform NPRM, 17 FCC Rcd at 3890 (para. 127). In a future Order, we will also consider some commenters' proposals that may require revisions to Schedule S, such as a streamlined procedure for some space station modification applications. See, e. g., SIA Comments at 20- 21; Teledesic Space Station Comments at 26- 27; Intelsat Comments at 21. 37 See Hughes Comments at 47; SIA Comments at 14; SES Americom Reply at 11- 12; PanAmSat Comments at 10; Intelsat Reply at 6- 7; PanAmSat Reply at 3- 4. 38 SIA Comments at 5- 6; Hughes Comments at 2- 3; PanAmSat Comments at 8- 9. See also Boeing Comments at 5- 6, 10. 39 Teledesic Comments at 2- 5. See also Intelsat Comments at 5- 6. 40 Teledesic Comments at 34- 35. 41 Teledesic Comments at 5. 42 SES Americom Reply at 8- 9. 43 Hughes Comments at 3- 4, 33; PanAmSat Comments at 9. 11 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 12 questions the Commission's reasons in the Notice for considering revisions to the satellite licensing process. 44 16. Discussion. We disagree with commenters that assert that we should limit our consideration to minor revisions to the satellite licensing process. We explained in the Notice that the negotiations among applicants are usually time consuming and not always successful. 45 In these cases, the Commission must develop a framework for resolving mutual exclusivity among the applicants. Such a framework is generally adopted in a notice- and- comment rulemaking proceeding. This process (negotiations and rulemaking) has generally taken two to three years, or more. 46 These delays impose real and substantial economic costs on satellite customers as well as service providers. 47 Alternatively, in this Order, we move away from a highly regulatory procedure to a more market- based approach. Furthermore, the International Telecommunication Union (ITU) has shortened its bringing- into- use date by two years, 48 which prompts us to expedite our licensing procedures as much as possible. In addition to these public interest benefits, we also noted that, given the important role the satellite industry plays in the U. S. and world economy, the public interest demands that we continually review our procedures and improve them whenever possible. 49 Moreover, in another context, at least one applicant has criticized the length of the current processing round procedure. 50 Finally, our experience has shown that satellite licensees need about three to six years to construct and launch satellite systems. Given the now- seven- year ITU deadline for bringing planned satellites into use, we need to expedite the licensing process dramatically. Accordingly, we conclude that we must reform the current satellite licensing procedure. 17. Furthermore, while Hughes and PanAmSat are correct that we could issue satellite licenses more quickly if we could expedite spectrum allocation and service rule proceedings, this observation does not provide a sufficient reason to defer needed revisions of the satellite licensing process. Moreover, as we noted in the Space Station Reform NPRM, attempting to streamline the spectrum allocation and service rule procedures in addition to the satellite licensing process would be unwieldy. 51 Thus, it is reasonable to address these issues one at a time, and to address the satellite licensing process first. Moreover, we adopt measures in this Order to limit the delays 44 Hughes Comments at 5- 8. 45 Space Station Reform NPRM, 17 FCC Rcd at 3851- 52 (para. 10). 46 Space Station Reform NPRM, 17 FCC Rcd at 3871- 72 (para. 68). 47 Space Station Reform NPRM, 17 FCC Rcd at 3852- 53 (paras. 12- 14). 48 The ITU's Radio Regulations requires ITU member nations to bring their proposed satellite systems into use within five years of the date the nation informed the ITU of its intent to construct and operate that satellite system. This deadline can be extended to seven years under certain circumstances. Failure to meet the bringing- into- use date causes the member nation to lose its priority relative to other member nations' proposed satellite systems. 49 Space Station Reform NPRM, 17 FCC Rcd at 3856 (para. 22). 50 See Letter from Peter Allen, Director, Pacific Century Group, to Jennifer Gilsenan, Chief, Policy Branch, Satellite Division, International Bureau, FCC (dated Sept. 19, 2002) (describing the Second Ka- band processing round as "unfortunately all too lengthy"). 51 Space Station Reform NPRM, 17 FCC Rcd at 3856 (para. 25). 12 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 13 caused by frequency allocation and service rule proceedings. For applications filed before the ITU has adopted an international frequency allocation, we decide in this Order to return the application without prejudice as premature. 52 We also adopt commenters' recommendations to create generic, default service rules to apply in cases where we grant applications filed in the absence of specific service rules. 53 Accordingly, we do not expect either frequency allocation proceedings or service rule proceedings to delay our actions on satellite applications as much as they have in the past. In any case, we may consider exploring other options for expediting service rule proceedings in the future. B. General Framework 18. Background. In the Notice, we invited comment on two general approaches for revising the current satellite licensing procedure. One of those approaches is the first- come, first-served approach, in which we are to process satellite applications one at a time in the order that they are filed. 54 The other approach modifies and streamlines the current processing round procedure by placing a time limit on negotiations in processing rounds, or establishes a sharing mechanism that would clarify the operating rights of the prospective licensees, and so reduces or eliminates the need for processing round negotiations. 55 19. Discussion. Intelsat proposes something it calls the modified first- come, first- served procedure. 56 Intelsat recommends applying its procedure only to new license applications for orbital locations and spectrum with established service rules and frequency allocations, such as the C- band, Ku- band, and Ka- band, but not to services where band- segmentation is preferable, such as MSS and possibly NGSO satellite constellation applications. 57 In other words, Intelsat would not apply a first- come, first- served procedure to applications for authority to operate in a frequency band where needed service rules or allocations have not yet been adopted. 58 SES Americom argues that limiting the first- come, first- served proposal to "established bands" would not address any of the concerns that commenters have raised about potential for speculation in or the legal basis for a first- come, first- served procedure. 59 SES Americom also questions whether a satellite service should be considered "established" as soon as the Commission adopts service 52 Sections VI. D. 1. and VI. E. 1. e. below. 53 Sections V. D. 1. and VI. E. 1. d. below. 54 Space Station Reform NPRM, 17 FCC Rcd at 3857- 71 (paras. 28- 66). 55 Space Station Reform NPRM, 17 FCC Rcd at 3871- 75 (paras. 67- 83). 56 Intelsat Comments at 8. Intelsat intends all the proposals in its "modified first- come, first- served" approach to be considered together as a single package. Intelsat Comments at 3. For reasons discussed below, we cannot adopt all the elements in Intelsat's proposal. Section VI. F. We find, however, that adoption of some of Intelsat's proposals would further the public interest even if we do not adopt everything in Intelsat's proposal. Accordingly, we will consider the individual elements of Intelsat's proposal on a case- by- case basis. 57 Intelsat Comments at 9- 10. 58 Intelsat Comments at 9- 10. 59 SES Americom Reply at 14- 15. 13 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 14 rules and frequency allocations. 60 Although PanAmSat supports retaining processing rounds over a first- come, first- served procedure, PanAmSat makes a point very similar to Intelsat. PanAmSat argues that different factors may be relevant in processing rounds for different kinds of satellite licenses, such as NGSO or GSO, FSS or MSS. 61 Telesat argues that operators of non- U. S. -licensed GSO FSS satellites seeking access to the U. S. market should be subject to a different procedure than other non- U. S.- licensed satellite operators. 62 20. Intelsat and PanAmSat raise a very good point, in that different kinds of satellite applications raise different kinds of issues, and therefore it may be reasonable to adopt different procedures to address the issues raised by each kind of satellite application. We also agree with SES Americom, however, that Intelsat's proposal to apply different procedures to applications for satellites in "established" and "unestablished" frequency bands may not be the best way to classify satellite applications. Rather, we find that Intelsat's comment is very relevant when it noted that satellite applications for which band segmentation is preferable should be considered pursuant to a different procedure than other satellite applications. 21. The framework we adopt in this proceeding is based on Intelsat's observation that band segmentation is preferable for some but not all satellite applications. The classification we adopt here is based on a refinement of Intelsat's observation that MSS and NGSO applications raise different issues than other satellite applications. 63 Rather than adopting Intelsat's classification, however, we conclude that the classification should be as follows: (1) NGSO satellite constellations and GSO satellites communicating with earth stations with omni-directional antennas, and (2) GSO satellites communicating with earth stations with non- omni-directional antennas. For purposes of this Order, we refer to these types of satellite applications as "NGSO- like" and "GSO- like" applications, respectively. NGSO- like satellite systems are those in which the earth station has little or no directivity towards a satellite, so that the earth station must track the satellite in all directions, such as hand- held satellite telephones. NGSO systems generally cannot operate on the same spectrum without causing unacceptable interference to each other. Examples of GSO- like satellite systems are those which use earth stations with antennas with directivity towards the satellites, such as FSS, and MSS feeder links which use GSO satellites. GSO satellites can operate on the same spectrum at two- degree orbit spacings. 22. This NGSO- like classification better describes the universe of satellite applications for which band segmentation is preferable because it promotes better our goal of trying to license as many satellite systems as possible, so that there is as much competition as possible for each satellite service. If we adopted a first- come, first- served procedure for NGSO- like satellite applications, the first qualified applicant could request authority to operate in so much of the orbit- spectrum resource that additional market entry would be precluded. In these cases, therefore, band segmentation is preferable because it facilitates the potential for competitive market entry. For GSO- like satellite applications, however, licensees are usually authorized to operate throughout the frequency band. Thus, large spectrum requests in GSO- like satellite 60 SES Americom Reply at 15- 16. 61 PanAmSat Comments at 13. 62 Telesat Comments at 4- 5. 63 Intelsat Comments at 9- 10. 14 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 15 applications do not by themselves preclude additional market entry. Accordingly, we adopt a first- come, first- served procedure for GSO- like satellite applications. We explain these conclusions in Sections V. and VI. below. V. MODIFIED PROCESSING ROUNDS FOR NGSO- LIKE SATELLITE SYSTEMS A. Overview 23. As we explained above, the Commisison proposed two general approaches for updating and expediting our satellite licensing process. One was the first- come, first- served approach, 64 and the other approach was to modify the current processing round procedure. We proposed several modifications, including placing a 60- day time limit on those negotiations, 65 adopting criteria for selecting among applicants if the negotiations fail, 66 and establishing a sharing mechanism that would clarify the operating rights of the prospective licensees, and so reduce the need for negotiations. 67 We adopt a modified processing round approach using a spectrum- splitting framework for applications for NGSO- like satellite applications. We find further that the first- come, first- served approach is not well suited to this kind of satellite system. B. Opportunities for Competitive Entry for NGSO- Like Satellite Systems 24. Background. In the Notice, the Commission invited comment on applying a first-come, first- served procedure to both NGSO- like and GSO- like satellite applications. Under a first- come, first- served approach, the first- filed acceptable application for a particular satellite license would be considered before considering other applications requesting to use the same spectrum. 68 Under this procedure, we would issue a public notice inviting comment on the lead application. Subsequently filed applications would be included in a queue according to their sequential date of filing. If for any reason we could not grant the lead application, we would dismiss the lead application and consider the next application in the queue and continue this process until we could grant an application. 69 25. The Commission recognized the possibility that the first applicant in the queue could seek authority for so much spectrum that future service providers could be unreasonably precluded from the market. 70 This is especially true with respect to NGSO- like satellite systems, in which licensing one satellite system operator to provide service in a particular frequency band segment precludes other satellite system operators from providing service in that frequency band 64 This approach is described in detail in the Space Station Reform NPRM, 17 FCC Rcd at 3859- 61 (paras. 32- 40), and in this Order below. 65 Space Station Reform NPRM, 17 FCC Rcd at 3872 (para. 70). 66 Space Station Reform NPRM, 17 FCC Rcd at 3872- 73 (paras. 70- 76). 67 Space Station Reform NPRM, 17 FCC Rcd at 3873- 74 (para. 78). 68 Space Station Reform NPRM, 17 FCC Rcd at 3859 (para. 32). 69 Space Station Reform NPRM, 17 FCC Rcd at 3859 (para. 33). 70 Space Station Reform NPRM, 17 FCC Rcd at 3860 (para. 36). 15 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 16 segment. 71 The Commission suggested that this issue could be addressed by limiting the amount of the spectrum- orbit resource granted to each applicant to the amount needed to provide the proposed service. The Commission also proposed to determine the appropriate amount of spectrum in the context of service rule proceedings, and invited parties to propose methods or criteria for making such determinations. 72 26. We received several comments on the first- come, first- served procedure. We address those comments in detail below. 73 Here, we focus on comments related to using rulemaking proceedings to determine the amount of spectrum needed to provide a service. Based on those comments, we conclude that a revised processing round approach using a pre- established sharing mechanism is better suited for NGSO- like satellite systems than the first- come, first- served procedure is. 27. Discussion. Boeing argues that it would be virtually impossible for the Commission to determine the precise amount of spectrum necessary to provide a particular service on a case-by- case basis. 74 Hughes maintains that determining reasonable spectrum limits in service rules proceedings would force those proceedings to take on all the characteristics of processing rounds, and so would not reduce the time needed to issue licenses. 75 SES Americom argues that a rulemaking proceeding is not a good forum for determining the amount of bandwidth needed by an applicant in a first- come, first- served procedure. This is because, according to SES Americom, comments in the rulemaking proceeding would be unduly influenced by the commenters' place in the queue, rather than on engineering or economic considerations. In other words, according to SES Americom, commenters who are near the front of the queue would have an incentive to argue that more spectrum is necessary to preclude other applicants from obtaining bandwidth, while commenters near the end of the queue would have an incentive to argue that less spectrum is necessary, to try to ensure that spectrum is still available by the time they reach the front of the queue. 76 Telesat argues that, in some cases, it would not be in the public interest to grant the entire available spectrum to the first applicant in the queue, and so suggests the band- splitting procedure used in the 2 GHz proceeding in those cases. 77 28. Teledesic argues that a first- come, first- served procedure would not give the first applicant the ability to monopolize new services, because the Commission can deny "excessive" applications, grant such applications in part, or condition licenses on compliance with future 71 This is because NGSO- like satellite systems use earth stations that cannot discriminate between satellites when there is an in- line event for NGSOs. In other words, the earth stations have no isolation, as a result of their lack of directivity. 72 Space Station Reform NPRM, 17 FCC Rcd at 3860 (para. 36). 73 Section VI. D. 74 Boeing Comments at 7- 8. 75 Hughes Comments at 34. 76 SES Americom Comments at 6- 7. 77 Telesat Comments at 3. 16 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 17 rulemakings. 78 Teledesic contends further that the Commission will need to consider issues of spectrum efficiency and spectrum excess regardless of whether the Commission adopts a first-come, first- served procedure, and that the Commission would be able to resolve those issues more easily if the Commission can "de- link" several applications on file and address the spectrum issue "head- on." 79 CTIA also advocates limiting spectrum assignments in service rule proceedings, and recommends using those proceedings to consider reallocating spectrum to other uses. 80 Teledesic and CTIA do not, however, provide any suggestions for methods or criteria for determining the amount of spectrum that can reasonably be considered "excessive" in the context of service rule proceedings. 29. The amount of spectrum a particular satellite operator would need to provide a particular service depends on the satellite operator's system design itself and the operator's business assessments of the service to be provided. Given the innovative designs, unique niche markets targeted by each operator, and cutting edge technology, we have not attempted to evaluate each licensee's individual spectrum needs. Rather, we have relied on market mechanisms to the extent possible. Rather than attempting to judge whether an applicant has justified its spectrum request in a first- come, first- served procedure, we believe that a more efficient way of awarding spectrum for NGSO- like systems is through a modified processing round approach with a pre- set band- splitting mechanism. This, together with eliminating the anti-trafficking rule for satellite licenses and adopting safeguards against speculation, will allow the secondary market to determine the appropriate amount of spectrum for each NGSO- like system. Accordingly, we adopt Telesat's recommendation to apply a modified processing round procedure using a band- splitting approach to NGSO- like satellite system applications. C. Modification of Processing Round Procedure 1. Sharing Mechanism 30. Background. Having determined to implement a modified processing round approach using a band- splitting framework, we must decide how to divide the available spectrum among the competing applicants. The Commission's proposed sharing mechanism is based on the method it used in the 2 GHz Order to resolve mutually exclusive situations. 81 Under this approach, once we receive an application to use particular spectrum, we would issue a public notice establishing a cut- off date for additional applications to be considered together with the "lead" application. After the cut- off date has passed, we would dismiss any applications that are 78 Teledesic Comments at 11- 12, citing Assignment of Orbital Locations to Space Stations in the Domestic Fixed- Satellite Service, Memorandum Opinion and Order, 94 FCC 2d 129, 137 (para. 19) (1983) (denying an application deemed to be excessive); Loral Orion Services, Inc., Order and Authorization, 14 FCC Rcd 17665 (Int'l Bur., 1999) (granting authority to launch satellite and conduct in-orbit testing, but denying authority to provide commercial service, without prejudice); PanAmSat Licensee Corp., Order and Authorization, 13 FCC Rcd 1405, 1414 (para. 27) (Int'l Bur. 1997) (license conditioned on outcome of future rulemaking proceeding). 79 Teledesic Reply at 22- 23. 80 CTIA Comments at 6- 7. 81 Space Station Reform NPRM, 17 FCC Rcd at 3873- 74 (para. 78), citing 2 GHz Order, 15 FCC Rcd at 16138 (para. 16). 17 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 18 not "acceptable for filing." 82 After we have placed the remaining applications on public notice, we would deny any applications that do not demonstrate that the applicant is qualified to operate a satellite system under the Commission's rules. If spectrum sufficient to accommodate the remaining applicants is not available, we would divide the available spectrum equally among those applicants. 83 31. Discussion. SIA argues that a modified processing round procedure of the kind the Commission adopted in the 2 GHz Order may not always be the best method for resolving mutually exclusive situations. 84 Teledesic asserts that it is unreasonable to conclude that this procedure would allow applicants an adequate amount of spectrum regardless of the number of applicants. 85 32. We conclude that dividing the available spectrum equally among the qualified applicants is the best way of issuing licenses for NGSO- like satellite systems quickly and fairly. Neither SIA nor Teledesic has persuaded us otherwise. We explained in the Space Station Reform NPRM and in this Order above that there is considerable public interest harm that can result from a very long licensing procedure. 86 If we do not adopt a pre- set method of assigning bandwidth to satellite system applicants, then we will need to continue to base bandwidth assignments on lengthy applicant negotiations, which can take years to complete. We would effectively be allowing one or more applicants in a processing round to delay service to the public while they develop a spectrum sharing arrangement. Thus, we need to adopt a pre- set method of assigning bandwidth to achieve a primary goal of this proceeding, to expedite the satellite licensing process. Further, as we discussed above, it is difficult to determine the amount of spectrum a particular satellite operator would need to provide a particular service. 87 Thus, to the extent that Teledesic contends that the Commission should determine the amount of spectrum that would be adequate for each applicant, we reject that proposal because it would delay licenses and service to the public more than the current procedure. 33. In addition, we disagree that this procedure would not provide licensees with sufficient spectrum for their systems. We eliminate the anti- trafficking rule as part of our package of licensing reforms, 88 and so licensees will be free to purchase spectrum rights from 82 In other words, we proposed dismissing applications that do not meet all the applicable information requirements. 83 Space Station Reform NPRM, 17 FCC Rcd at 3873- 74 (para. 78). We also proposed this procedure in the context of the first- come, first- served approach, as a second- tier selection mechanism in the event that we adopt a first- come, first- served procedure in which we may need to consider two or more satellite applications together. Space Station Reform NPRM, 17 FCC Rcd at 3863- 64 (paras. 46- 48). We discuss this issue in Section VI. E. 2. below. 84 SIA Comments at 16. 85 Teledesic Comments at 32- 33. 86 Space Station Reform NPRM, 17 FCC Rcd at 3852- 56 (paras. 11- 23); Section IV. A. above. 87 Section V. B., above. 88 Section VII. D. 18 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 19 another licensee after licenses have been issued if they believe that they have not been awarded sufficient spectrum, provided that they comply with all applicable rules governing that license, including but not limited to the milestone requirements, performance bond, and limits on pending applications and unbuilt satellites adopted in this Order below. Alternatively, the parties are free to develop spectrum- sharing arrangements. Thus, by dividing the spectrum equally among qualified applicants, we do not need to rely on a lengthy and complicated rulemaking proceeding, or regulatory fiat, to determine the proper amount of spectrum to give to each applicant. Rather, we rely on a market mechanism, i. e., the purchase of additional spectrum from other licensees, which should produce a reasonable result more quickly and with fewer administrative burdens than any other alternative presented in this record. 34. In summary, we conclude that the modified processing round procedure with the sharing mechanism we adopt here, together with a policy that allows licensees to buy or sell licenses freely, should result not only in faster licensing but faster deployment of satellite systems. 2. Facilitating Processing Round Negotiations a. Time Limit on Negotiations 35. Background. As an alternative to adopting a specific sharing mechanism, we sought comment on placing a time limit on negotiations in the context of processing rounds, such as 60 days after the record closes on applications filed on the cut- off date, for the parties to negotiate a plan to accommodate all the applicants. If the parties could not reach an agreement by that time, we would determine which applications to grant based on specific criteria. 89 Alternatively, in the absence of an agreement, we would divide the spectrum as discussed above. 90 36. Discussion. Teledesic argues that many applications filed in processing rounds are speculative, and parties filing such applications have no interest in reaching a negotiated agreement. As a result, according to Teledesic, efforts to facilitate negotiations by placing a time limit on negotiations cannot succeed. 91 SES Americom denies that satellite applicants in processing rounds have no interest in reaching a negotiated agreement. 92 37. Hughes observes that a processing round is a zero- sum game, and compares processing rounds to a game of "chicken" in which parties "posture and dig in – claiming that they'll never swerve, they actually like car crashes, and so on – until the absolute last instant, just before the two cars collide." 93 Nevertheless, Hughes and other parties support placing a time limit on negotiations in processing rounds, and claim that no other licensing procedure reforms 89 Space Station Reform NPRM, 17 FCC Rcd at 3872- 73 (paras. 71- 76). 90 Space Station Reform NPRM, 17 FCC Rcd at 3873- 74 (para. 78). 91 Teledesic Comments at 31. 92 SES Americom Reply at 10- 11. 93 Hughes Comments at 35. 19 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 20 are needed. 94 CTIA claims that a time limit on negotiations would help speed the process, but would not discourage speculative applications. 95 38. Teledesic's and Hughes's observations weigh heavily against adopting any negotiation period, either as part of the sharing approach adopted above or together with the system of preferences we proposed in the Notice, 96 as discussed below. In particular, Hughes's description of applicants' behavior in processing round negotiations suggests that any mandated negotiation period would have no effect other than delaying our actions on the satellite applications. Although this delay would be limited to 60 days, we do not believe that there is any public interest benefit that is significant enough to justify even a limited delay. Furthermore, as we noted above, this procedure does not preclude negotiations among licensees after we issue licenses. In fact, quickly issuing licenses and clarifying licensees' operating rights and responsibilities should facilitate subsequent negotiations more than a time limit on negotiations would. As we noted above, establishing a clear delimitation of rights and responsibilities provides a necessary basis for negotiations regarding the possible purchase and sale of those rights. 97 In addition, applicants may negotiate before or after we issue licenses. If the applicants present a frequency band assignment plan to the Commission before it acts on the applications, the Commission will consider that plan. For the reasons set forth below, however, we will not delay our procedures if the applicants cannot complete their negotiations by the time we are ready to issue licenses. 98 b. System of Preferences 39. Background. In the Notice, we invited comment on adopting criteria for selecting among applicants in a processing round in the event that the applicants cannot reach a negotiated agreement. We noted that we currently have one such criterion in our rules, in that GSO satellite operators with licenses for two unbuilt satellites in a particular frequency band may not apply for another satellite license in that band. 99 We requested parties to discuss additional criteria. For example, we invited comment on establishing a preference for new entrants over existing licensees. 100 We also proposed giving a preference to satellite operators who have not missed a milestone in the past five years, who have already made progress in constructing a satellite, who 94 Hughes Comments at 47. See also SIA Comments at 14 (supporting a limit of 60 to 90 days); SES Americom Reply at 11- 12 (60 to 90 day limit); PanAmSat Comments at 10 (supporting a limit "such as 60 days"); Intelsat Reply at 6- 7; PanAmSat Reply at 3- 4. 95 CTIA Comments at 4. 96 Space Station Reform NPRM, 17 FCC Rcd at 3872- 73 (paras. 70- 76). 97 Section V. C. 2., citing Space Station Reform NPRM, 17 FCC Rcd at 3864 (para. 50); Coase, Social Cost, 3 J. L. & Econ. at 8; Coase, FCC, 2 J. L. & Econ. at 25. 98 See Section V. C. 2.d. below. 99 Space Station Reform NPRM, 17 FCC Rcd at 3872 (para. 70), citing 47 C. F. R. §§ 25. 140( e), (f). 100 Space Station Reform NPRM, 17 FCC Rcd at 3872 (para. 71). 20 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 21 have made a commitment to provide service to rural and unserved areas, and who filed applications before the end of the cut- off period. 101 40. Discussion. Several parties argue that many if not all of the Commission's proposed criteria would be at best difficult to apply, and so would not make it easier to complete a processing round. 102 Intelsat urges the Commission to develop selection criteria different from the criteria proposed in the Notice. It argues that the difficulty in developing workable criteria weighs in favor of a first- come, first- served approach. 103 Pegasus supports a preference for new entrants and a limit on unbuilt satellites to two initial GSO orbit locations in each frequency band, but maintains that the other criteria proposed in the Notice support no sound policy objective or are susceptible to gaming. 104 PanAmSat argues that the limit on unbuilt satellites should help avoid most mutually exclusive situations, but advocates adoption of one or more of the criteria proposed in the Notice in the event that mutually exclusive situations arise. 105 41. We agree with commenters who argue that many of the criteria we proposed in the Space Station Reform NPRM would be difficult to apply. Moreover, applying any of the criteria proposed in the Notice would not streamline our licensing procedure as well as the modified processing round procedure we adopt above for NGSO- like satellite system applications. In addition, the criteria may not accurately reflect who will actually construct, launch, and operate a satellite system, and may therefore delay service to the public. Accordingly, we will not adopt the proposal to decide among applicants in a processing round based on any of the criteria suggested in the Notice. c. Other Proposals for Facilitating Negotiations in Processing Rounds 42. Hughes suggests that the Commission take on a mediator role during satellite applicants' negotiations, giving parties in processing rounds informal opinions regarding their relative positions. 106 Although this might facilitate the negotiations in some cases, it would not facilitate the satellite licensing process as well as the sharing mechanism we adopt above, nor would it lead to a better result than the sharing mechanism we adopt above, together with the freedom to buy and sell spectrum after licenses are granted. In fact, issuing licenses quickly pursuant to the procedure we adopt above, and thereby clarifying licensees' operating rights and responsibilities, should facilitate negotiations more effectively than the Commission could if it assumed the mediator role proposed by Hughes. 107 101 Space Station Reform NPRM, 17 FCC Rcd at 3873 (paras. 72- 75). 102 Teledesic Comments at 31- 32; SIA Comments at 35- 37; Hughes Comments at 37- 42; Pegasus Comments at 5- 6; Intelsat Reply at 7- 9. 103 Intelsat Reply at 9. 104 Pegasus Comments at 5- 6. 105 PanAmSat Comments at 12- 13. 106 Hughes Comments at 47- 48. 107 Section V. C. 2., citing Coase, Social Cost, 3 J. L. & Econ. at 8; Coase, FCC, 2 J. L. & Econ. at 25. 21 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 22 43. SIA recommends prohibiting ex parte statements filed more than 30 days after the end of the negotiation period. 108 In light of our decision to adopt a pre- set sharing mechanism rather than a negotiation period, there is no need to consider SIA's proposal further. d. Need for Pre- Licensing Negotiations 44. Several commenters question whether we should adopt any licensing procedure that does not base the resulting licenses on applicant negotiations. SIA contends that the Commission's band- splitting proposal may not always be the best method for resolving mutually exclusive situations. 109 SIA argues further that the modified processing round procedure ignores the preferences of applicants and the potential for alternative spectrum sharing arrangements. 110 Similarly, Teledesic argues that, in the event that we adopt a procedure that allows for mutually exclusive applications to be considered together, we should allow negotiations and not limit them to a 60- day period. 111 Hughes and PanAmSat recommend that the Commission mediate the applicants' negotiations rather than adopt predicable rules governing bandwidth assignments in processing rounds. 112 45. We disagree with SIA and other commenters that we should delay issuing licenses until the applicants have completed negotiations. As an initial matter, nothing in this proceeding precludes licensees from negotiating alternative agreements to redistribute bandwidth among licensees after licenses have been issued. Rather, in this Order below, we eliminate the anti-trafficking rule in part to facilitate such negotiations. 113 Furthermore, as we observed in the Notice, creating clearly defined initial rights should encourage rather than discourage subsequent negotiations. 114 This is consistent with our determination in other proceedings that creating clearly defined initial operating rights reduces regulatory uncertainty, and so encourages investment. 115 The commenters have not persuaded us to revisit this observation. We also 108 SIA Comments at 14- 15. See also SES Americom Reply at 9- 10. 109 SIA Comments at 16. 110 SIA Comments at 6- 7, 16. 111 Teledesic Comments at 23. 112 Hughes Comments at 47- 48; PanAmSat Reply at 3- 4. 113 The Commission noted in the Space Station Reform NPRM that eliminating the anti-trafficking rule would encourage negotiations. Space Station Reform NPRM, 17 FCC Rcd at 3864 n. 56. 114 Space Station Reform NPRM, 17 FCC Rcd at 3864 (para. 50), citing, e. g., Coase, The Problem of Social Cost, 3 J. L. & Econ. 1 (1960) (Coase, Social Cost). In that article, Coase points out that, in the context of nuisance cases, "[ i] t is necessary to know whether the damaging business is liable or not for damage caused since without the establishment of this initial delimitation of rights there can be no market transactions to transfer and recombine them." 3 J. L. & Econ. at 8. See also Coase, The Federal Communications Commission, 2 J. L. & Econ. 1, 25 (1959) (Coase, FCC) (" One of the purposes of the legal system is to establish that clear delimitation of rights on the basis of which the transfer and recombination of rights can take place through the market.") 115 The Commission has noted on several occasions that regulatory uncertainty can discourage investment, and so unnecessary regulatory uncertainty should be avoided. See, e. g., Inquiry Concerning High- Speed Access to the Internet Over Cable and Other Facilities, Internet Over Cable Declaratory Ruling, Appropriate Regulatory Treatment for Broadband Access to the Internet Over Cable 22 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 23 believe that post- licensing negotiations will often be easier than pre- licensing negotiations, because in many cases only two parties will be involved in negotiations to transfer bandwidth rights from one party to the other. Unlike pre- licensing negotiations, it will not be necessary to have unanimous agreement in those cases. Therefore, a speculative applicant will not be able to delay its competitors through manipulation of post- licensing negotiations, as it could do in pre-licensing negotiations. In addition to finding that post- licensing negotiations should be easier than pre- licensing negotiations in many cases, we have no basis for assuming that the spectrum assignments resulting from post- licensing negotiations will be more or less efficient, or more or less likely to further the public interest, than the spectrum assignments resulting from pre-licensing negotiations. Moreover, we know of no reason to assume that the spectrum assignments resulting from pre- licensing negotiations are likely to be so superior to those resulting from post-licensing negotiations that even the 60- day delay of service to the public advocated by commenters is warranted. 46. We also disagree with commenters to the extent that they argue that the Commission cannot or should not issue any licenses until applicants have been given opportunities to determine and state their preferences, beyond the statements and preferences included in their applications. The Commission has found in other proceedings that applicants do not have an automatic right to a license. 116 It follows that applicants do not have an automatic right to a license for a particular frequency band assignment, particularly when we adopt measures to facilitate post- licensing negotiations. 47. In sum, the procedures we adopt in this Order will enable us to issue licenses quickly, thereby clearly defining satellite licensees' rights and responsibilities, and facilitating later negotiations. Accordingly, there is no reason for continuing to rely on a much slower process in which satellite applicants must conduct negotiations before their rights and responsibilities are defined. D. Details of Modified Processing Round Procedure 1. Overview of Framework 48. Under this procedure, we will continue to license NGSO- like satellite systems through processing rounds. 117 Once a satellite application is filed, and we have determined that it Facilities, Declaratory Ruling and Notice of Proposed Rulemaking, GN Docket No. 00- 185, CS Docket No. 02- 52, 17 FCC Rcd 4798, 4802 (para. 5) (2002); Appropriate Framework for Broadband Access to the Internet over Wireline Facilities; Universal Service Obligations of Broadband Providers; Computer III Further Remand Proceedings: Bell Operating Company Provision of Enhanced Services; 1998 Biennial Regulatory Review – Review of Computer III and ONA Safeguards and Requirements; Notice of Proposed Rulemaking, CC Docket Nos. 02- 33, 95- 20, 98- 10, 17 FCC Rcd 3019, 3022- 23 (para. 5) (2002); Implementation of Sections 3( n) and 332 of the Communications Act, Regulatory Treatment of Mobile Services, Second Report and Order, GN Docket No. 93- 252, 9 FCC Rcd 1411, 1421 (para. 25) (1994). See also Kirby Corp. v. Pena, 109 F. 3d 258, 266- 67 (5th Cir., 1997); Houston Lighting and Power Co. v. United States, 606 F. 2d 1131, 1145 (D. C. Cir., 1979); Chemical Bank New York Trust Co. v. S. S. Westhampton, 358 F. 2d 574, 580 (4th Cir. 1965). 116 TelQuest Ventures, L. L. C., Memorandum Opinion and Order, 16 FCC Rcd 15026, 15038- 39 (para. 34) (2001), citing National Broadcasting Co., Inc. v. United States, 319 U. S. 190, 227 (1943). 117 We describe the procedure for feeder link applications in Section VI. E. 1. f. below. 23 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 24 is acceptable for filing, we will put it on public notice, and announce a cut- off date for applications to be considered concurrently. We will review applications filed by the cut- off date to determine whether they are acceptable for filing, and if so, we will place those applications on public notice. 118 Once the record has closed on all the applications placed on public notice, we will act on the applications. If there is not enough spectrum to accommodate all qualified applicants, we will divide the spectrum equally among those applicants. Each licensee will be allowed to choose its specific band assignment between 30 and 60 days before it launches its first satellite, by filing a letter with the Commission and serving the other participants in the processing round. 119 49. In cases where there is no international frequency allocation, we will dismiss applications for NGSO- like satellite systems without prejudice as premature. In the past, the Commission has accepted applications before needed international frequency allocations were adopted to bolster its position at an international allocation conference, although such applications are not necessary for the United States to develop its position at such conferences. In any event, a petition for rulemaking to amend the domestic Table of Frequency Allocations 120 can also provide support for an international frequency allocation. 50. Once there is an international frequency allocation, we will accept and consider satellite applications. For applications filed before a domestic allocation is adopted, the applicant must request a waiver of the domestic Table of Frequency Allocations. 121 We will consider these requests on a case- by- case basis to determine whether the waiver should be granted or denied, or whether other licensing options, including but not limited to auctions, consistent with our statutory authority, should be pursued. Further, until the Commission adopts a domestic allocation, operations must be on a non- conforming, non- interference basis with respect to allocated services. We will also include a condition in each license that requires the licensee to meet any rules that may be adopted for the service, either together with or after a domestic allocation is made. 122 51. We will also consider applications after we adopt a domestic frequency allocation, but before we have adopted frequency- band- specific service rules. We agree with Teledesic that 118 In the event that only one or two applicants file applications in the processing round, we will consider initiating a second processing round pursuant to the procedure discussed in Section V. D. 4. below. 119 Allowing licensees to select their frequency band segment at the time they launch their first satellite is consistent with the 2 GHz Order. 2 GHz Order, 15 FCC Rcd at 16139 (para. 19). Also consistent with the 2 GHz Order, licensees will be permitted to operate outside their band segment on a secondary basis. 2 GHz Order, 15 FCC Rcd at 16139 (para. 19). 120 47 C. F. R. § 2.106. 121 47 C. F. R. § 2.106. 122 If the international allocation is appropriate to countries or Regions not including the United States, these satellites will only be able to be authorized to provide service in these internationally allocated bands to those countries, and not the United States. If the Commission has made a determination not to implement an international allocation, that band will also not be authorized for service to and from the United States. 24 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 25 frequency- band- specific service rules may not be needed in all cases. 123 In addition, SIA is also correct that the Commission based its service rules for 2 GHz licenses on the service rules for the Big LEO satellite service, and that therefore it should be possible to craft generic service rules based on frequency- band- specific service rules that the Commission has adopted in the past. 124 Intelsat also supports adoption of generic or default service rules, although it does not suggest any such rules. 125 For the reasons discussed below, we adopt Teledesic's proposal, and adopt default service rules to govern satellite operations in frequency bands unless and until the Commission adopts frequency- band- specific service rules. 52. We generally base service rules for new satellite services on our existing rules governing similar services. Thus, we based our service rules for 2 GHz NGSO mobile- satellite service systems on rules for Big LEO NGSO mobile- satellite service systems. Given this, we see no reason to delay licensing satellite systems allocated for but not being used for satellite operations pending establishment of service rules. Rather, as the commenters suggest, we will license systems based on default rules and subject to any subsequent service rules for specific satellite operations in that band. Specifically, we will use the Part 25 technical requirements specified in Appendix C as default service rules for NGSO- like satellite systems. 126 We also require licensees to comply with any applicable ITU technical requirements. 127 Furthermore, licensees will be required to comply with any service- band- specific service rules that the Commission may adopt in that frequency band. 53. Also, as part of our default service rules, applicants must submit a narrative statement describing the design and operational strategies that they will use to mitigate orbital debris, as well as a casualty risk assessment if planned post- mission disposal involves atmospheric re- entry of the spacecraft. We have consistently adopted, or proposed to adopt, this requirement in recent years in connection with a number of new services. 128 Furthermore, last 123 Teledesic Comments at 20- 22. 124 SIA Comments at 13- 14, citing The Establishment of Policies and Service Rules for the Mobile Satellite Service in the 2 GHz Band, Notice of Proposed Rulemaking, IB Docket No. 99- 81, 14 FCC Rcd 4843, 4846 (para. 3) (1999) (2 GHz NPRM) (proposing using big LEO service rules as a "starting point" for another service for the 2 GHz band). 125 Intelsat Comments at 9. 126 We adopt default service rules for GSO- like satellite systems in Section VI. E. 1. d. below. 127 Of course, we will continue to require all earth stations operating in frequency bands that are shared on a co- primary basis between satellite and other services, such as terrestrial wireless services, to coordinate their operations in accordance with Section 25.203 before they are licensed, regardless of whether they plan to communicate with space stations operating under default service rules or frequency-band- specific service rules. 47 C. F. R. § 25. 203. Similarly, non- government operations of earth stations in a frequency band that is shared by Government and Non- Government operations will be required to be coordinated through the National Telecommunications and Information Administration (NTIA) Interdepartment Radio Advisory Committee’s (IRAC) Frequency Assignment Subcommittee (FAS) before awarding a license in these bands. See Amendment of Parts 2, 25, and 90 of the Commission's Rules to Allocate the 13.75- 14. 0 GHz Band to the Fixed- Satellite Service, Report and Order, ET Docket No. 96- 20, 11 FCC Rcd 11951, 11960- 61 (para. 20) (1996). 128 See 2 GHz Order, 15 FCC Rcd at 16188 (paras. 135- 38); The Establishment of Policies and Service Rules for the Non- Geostationary Satellite Orbit, Fixed Satellite Service in the Ku- Band, Report and Order and Further Notice of Proposed Rulemaking, IB Docket No. 01- 96, 17 FCC Rcd 7841, 7865- 66 25 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 26 year we proposed to apply this requirement to all FCC- licensed systems in the Orbital Debris Notice. 129 Based on this precedent and on the record developed in response to the Orbital Debris Notice, we find that the public interest concerns that lead us to require satellite licensees in the past to disclose their orbital debris mitigation plans and that were discussed in the Orbital Debris Notice also support adopting this requirement for satellite systems to which these default rules will apply. In preparing such exhibits, applicants may find guidance in the U. S. Government Orbital Debris Mitigation Standard Practices and the debris mitigation guidelines adopted by the Inter- Agency Space Debris Coordination Committee (IADC). 130 We note that the Orbital Debris Notice sought comment on a broad range of issues in addition to the question of whether a requirement to disclose debris mitigation plans should be adopted. These questions, along with the question of whether additional systems should be subject to a routine disclosure requirement, will be addressed by subsequent Commission action. 54. Our adoption of default service rules is a logical outgrowth of the Notice. There, the Commission proposed a procedure for considering satellite applications filed before service rules are adopted, 131 and it invited parties to recommend alternatives to this proposal, together with all the proposals in the Notice. 132 In response, several commenters recommended the adoption of default service rules. 133 In addition, SIA recommended that the Commission base the default service rules on service rules that Commission has adopted for similar services in the past. 134 Furthermore, the Commission emphasized that one of its primary goals for this proceeding is to expedite the satellite licensing process, 135 and default service rules further that goal. 136 Thus, interested parties should have anticipated that the Commission might consider adopting proposals (para. 81) (2002). See also Establishment of Policies and Service Rules for Non- Geostationary Satellite Orbit, Fixed Satellite Service in the Ka- Band, Notice of Proposed Rulemaking, IB Docket No. 02- 19, 17 FCC Rcd 2807, 2821 (para. 43) (2002). 129 Mitigation of Orbital Debris, Notice of Proposed Rulemaking, IB Docket No. 02- 54, 17 FCC Rcd 5586 (2002) (Orbital Debris Notice). 130 Orbital Debris Notice, 17 FCC Rcd at 5615- 18 (App. A). See also Application Of Constellation Communications Holdings, Inc., Order and Authorization, 16 FCC Rcd 13724, 13731 (Int’l Bur. and Office of Eng. and Tech. 2001); Application of the Boeing Company, Order and Authorization, 16 FCC Rcd 13691, 13702 (Int’l Bur. 2001). A technical presentation concerning the IADC debris mitigation guidelines, made to the most recent meeting of the Scientific and Technical Subcommittee of the U. N. Committee on the Peaceful Uses of Outer Space, is available at www. unvienna. org. The guidelines themselves will reportedly be available electronically in the near future at www. iadc- online. org. 131 Space Station Reform NPRM, 17 FCC Rcd at 3860 (para. 35). 132 Space Station Reform NPRM, 17 FCC Rcd at 3897 (para. 147). 133 SIA Comments at 13- 14; Teledesic Comments at 20- 22; Intelsat Comments at 9. 134 SIA Comments at 13- 14. 135 Space Station Reform NPRM, 17 FCC Rcd at 3849- 50 (para. 3). 136 SIA Comments at 13- 14. 26 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 27 for default service rules. 137 Moreover, because these parties made their recommendations in their comments, interested parties had an opportunity to respond to the proposals in their replies. 138 55. In sum, our default service rules for NGSO- like satellite systems are consistent with requirements that we have imposed on satellite licenses in the past. These default service rules are reasonable, and they further the public interest by enabling licensees to proceed with their business plans more quickly than would be possible otherwise. Moreover, if the default service rules are not appropriate in a particular case, they will be superceded by any service- specific service rules that we may adopt subsequently. Thus, licensees will be required to comply with those subsequent service- specific service rules. Finally, we emphasize that, in cases where we find that frequency- band- specific service rules may be warranted, we will initiate a rulemaking proceeding to consider such rules within four to six months of that determination. For example, frequency- band- specific service rules may be particularly appropriate in cases in which the band is shared between satellite service and other services. 2. Interrelation with Procedures for GSO- Like Satellite Systems 56. Because we stated above that we are adopting one licensing procedure for NGSO-like satellite system applications and another for GSO- like satellite system applications, 139 we will process both types of satellite system applications in a single queue in the order that they are filed. We will consider GSO- like satellite system applications, one at a time in the order they are filed. When an NGSO- like satellite system application reaches the front of the queue, we will conduct a processing round based on the modified processing round procedure we adopted above. 57. In cases where an applicant files an application for a satellite system that includes both categories of satellites, and we have established service rules for sharing between GSO and NGSO satellite systems, we will treat that application as two separate applications. We will consider the GSO- like request under the first- come, first- served procedure, and the NGSO- like request under the modified processing round procedure we adopt today. 58. On a going- forward basis, in cases where there are no service rules establishing criteria for sharing between GSO and NGSO satellite systems in a particular frequency band, we will consider only applications of the kind that is filed first. That is, if an NGSO- like satellite system application is filed first, we will conduct a processing round pursuant to the modified processing round procedure, and we will dismiss subsequently- filed GSO- like satellite system applications in that band until sharing criteria are established. Similarly, if a GSO- like satellite system application is filed first, we will consider other GSO- like satellite system applications in the order they are filed, and we will dismiss subsequently- filed NGSO- like satellite system applications in that band until sharing criteria are established. This is consistent with our current practice. For example, in the Ku- band, we initially considered only GSO satellite applications 137 The concept of "logical outgrowth" includes proposals that parties should have anticipated might be imposed. Small Refiner Lead Phase- Down Task Force v. EPA, 705 F. 2d 506, 548- 49 (D. C. Cir., 1983). 138 See also American Iron and Steel Institute v. EPA, 115 F. 3d 979, 988 (D. C. Cir., 1997) (statute directing agency to issue "guidance" for state water quality criteria also authorized agency to adopt default rules applicable to States that did not adopt standards, policies, and procedures consistent with the guidance). 139 Section IV. B. above. 27 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 28 because the first applications for licenses in that band were for GSO systems. 140 We did not begin considering Ku- band NGSO applications until we had established sharing criteria for compatible services with GSO applicants in that band. 141 In cases in which an applicant proposes a hybrid GSO- like/ NGSO- like satellite system in a frequency band before we adopt sharing criteria for that band, we will treat the proposed satellite system as an NGSO- like system, with the GSO portion of the system as additional satellites in the constellation. This is consistent with the Commission's actions in the 2 GHz Order. Finally, in the event that one or more GSO- like satellite system applications and one or more NGSO- like satellite system applications are filed at the same time, we will initiate a processing round, and divide the frequency band equally among all the qualified applicants. We will designate part of the band for GSO- like satellites and the rest of the band for NGSO- like satellite systems, based on the proportion of qualified GSO- like applicants to qualified NGSO- like applicants. 3. Amendments and Modifications 59. In the Notice, the Commission invited comment on revising the amendment and modification procedures. 142 We find here that neither our amendment procedure nor our modification procedure require any revision as a result of our decision to modify the processing round procedure for NGSO- like satellite system applications. In contrast, we discuss below revisions to the amendment and modification procedures to be adopted in conjunction with the first- come, first- served procedure. 143 4. Additional Processing Rounds 60. Teledesic criticizes the Commission for not explaining in the Notice how this approach would apply to second processing rounds. 144 We explain here the procedure we will use for second and additional processing rounds. This procedure is a logical outgrowth of the procedure we proposed in the Notice. 145 140 See Assignment of Orbital Locations to Space Stations in the Domestic Fixed- Satellite Service, Memorandum Opinion and Order, 94 FCC 2d 129 (1983); Assignment of Orbital Locations to Space Stations in the Domestic Fixed- Satellite Service, Memorandum Opinion and Order, 3 FCC Rcd 6972 (1988); Assignment of Orbital Locations to Space Stations in the Domestic Fixed- Satellite Service, Order and Authorizations, 11 FCC Rcd 13788 (Int'l Bur. 1996). 141 Amendment of Parts 2 and 25 of the Commission's Rules to Permit Operation of NGSO FSS Systems Co- Frequency with GSO and Terrestrial Systems in the Ku- Band Frequency Range, First Report and Order and Further Notice of Proposed Rulemaking, ET Docket No. 98- 206, 16 FCC Rcd 4096 (2000). 142 Space Station Reform NPRM, 17 FCC Rcd at 3866- 67 (paras. 55- 58). By definition, the term "amendment" refers to changes to an application before a license is issued, and the term "modification" refers to changes to a license after it is issued. 47 C. F. R. § 25. 116 (amendments); 47 C. F. R. § 25.117( d) (space station license modifications). The Notice did not propose revisions to the definitions of "amendment" or "modification," but rather invited comment on revising the treatment of amendments or modifications in a first- come, first- served framework. 143 Sections VI. E. 3. and VI. E. 4. below. We discuss transfer of control applications for both GSO- like and NGSO- like applications in Section VII. D. below. 144 Teledesic Comments at 33. 145 Space Station Reform NPRM, 17 FCC Rcd at 3863- 64 (paras. 46- 48), 3873- 74 (para. 78). 28 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 29 61. As an initial matter, we do not anticipate conducting many second or additional processing rounds, because operating rights in all the available spectrum in the frequency band will be assigned equally to all qualified applicants in the first processing round, assuming that the applicants' spectrum requirements exceed the available allocation. In addition, the Commission invited comment on redistributing a licensee's spectrum rights to the licensee or licensees remaining in operation, in the event that a license is cancelled or relinquished. 146 The Commission argued that this would likely put the spectrum into use more quickly than any other alternative. 147 We hereby adopt this proposal in a slightly modified form. If a licensee loses or terminates its license, we will probably reassign the spectrum assigned to that licensee equally among the remaining licensees, assuming that there are a sufficient number of licensees remaining to make reasonably efficient use of the frequency band, and assuming that there is no basis at that time for considering reallocation of the spectrum. For reasons discussed below, we presume that a "sufficient number of licensees" for this purpose is three or more. By "reasonably efficient use of the frequency band," we mean that the remaining satellite licensees have not been assigned more spectrum than they need to meet their current and reasonably anticipated future customer needs. 62. Under this procedure, if one of those three licensees were to lose its license, the two remaining licensees would keep their spectrum assignments, and we could reassign the newly available spectrum to a new applicant or applicants pursuant to the applicable processing procedure. The existing licensees would not be allowed to apply for another license. This procedure represents a reasonable balance between quickly bringing spectrum into use and promoting multiple service providers in each frequency band. 148 Of course, the Commission always has the option to consider initiating a rulemaking proceeding to determine whether the available spectrum should be reallocated. 63. We will also apply this procedure to initial processing rounds in cases in which fewer than three qualified applicants file applications. In those cases, we will license each qualified applicant to operate in 1/ 3 of the available spectrum, and initiate a second processing round for the remaining spectrum. If there are fewer than a total of three licensees after the completion of the second processing round, we will determine at that time whether to keep that spectrum available for possible future applicants, or consider reallocation of the unlicensed spectrum. 64. We base this presumption that three is a sufficient number of remaining licensees on the Commission's reasoning in the EchoStar- DirecTV Hearing Designation Order, in which the Commission observed that courts have generally condemned mergers that would result in duopoly, particularly in cases where additional market entry would be difficult. 149 The Commission explained further that, in cases where the merger is likely to result in a significant 146 Space Station Reform NPRM, 17 FCC Rcd at 3864 (para. 48). 147 Space Station Reform NPRM, 17 FCC Rcd at 3864 (para. 48). 148 We noted our concerns about promoting multiple service providers in the Space Station Reform NPRM, 17 FCC Rcd at 3860 (para. 36). 149 Application of EchoStar Communications Corporation, General Motors Corporation and Hughes Electronics Corporation, Hearing Designation Order, CS Docket No. 01- 348, 17 FCC Rcd 20559, 20604- 05 (paras. 99- 103) (2002) (EchoStar- DirecTV Hearing Designation Order), citing, e. g., FTC v. H. J. Heinz Co., 246 F. 3d 708, 717 (D. C. Cir. 2001); FTC v. Staples, 970 F. Supp. 1066, 1081 (D. D. C. 1997). 29 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 30 reduction in the number of competitors and a substantial increase in concentration, antitrust authorities generally require the parties to demonstrate that there exist countervailing, extraordinarily large, cognizable, and non- speculative efficiencies that are likely to result from the merger. 150 Here, we find that the factors that have led courts to disfavor mergers to duopoly also support establishing a procedure that will maintain at least three competitors in a frequency band, unless an interested party can rebut our presumption that three is necessary to maintain a competitive market. To rebut this presumption, a party must provide convincing evidence that allowing only two licensees in the frequency band will result in extraordinarily large, cognizable, and non- speculative efficiencies. 151 We also reserve the authority to initiate a second processing round or spectrum reallocation rulemaking proceeding as circumstances warrant when there are more than three licensees remaining in operation in cases where it can be shown that our presumption is incorrect that three licensees would not make reasonably efficient use of the frequency band. 152 65. This procedure for reassigning spectrum among the remaining NGSO- like licensees in a processing round, and the presumption of initiating a new processing round when there are fewer than three licensees, are logical outgrowths of our proposals in the Notice. The focus of the "logical outgrowth" test is whether parties should have anticipated that such a requirement might be imposed. 153 The Commission explicitly invited comment on redistributing spectrum initially licensed in a modified processing round among the remaining licensees. 154 The Commission also noted its concerns about promoting multiple service providers in the Notice. 155 Thus, parties should have anticipated that we would adopt rules to redistribute spectrum in this manner, and to allow new licensees an opportunity to apply for licenses when the number of licensees in a frequency band is less than a certain amount. Furthermore, even if this were not a logical 150 EchoStar- DirecTV Hearing Designation Order, 17 FCC Rcd at 20604- 05 (para. 102). 151 In some cases in the past, prior to the Commission's adoption of the EchoStar- DirecTV Hearing Designation Order, the Commission has allowed only two licensees in a market. See An Inquiry Into the Use of the Bands 825- 845 MHz and 870- 890 for Cellular Communications Systems; and Amendment of Parts 2 and 22 of the Commission's Rules Relative to Cellular Communications Systems, Report and Order, CC Docket No. 79- 318, 86 FCC 2d 469, 478- 79 (para. 19) (1981); Amendments to Parts 1, 2, 27 and 90 of the Commission's Rules to License Services in the 216- 220 MHz, 1390- 1395 MHz, 1427- 1429 MHz, 1429- 1432 MHz, 1432- 1435 MHz, 1670- 1675 MHz, and 2385- 2390 MHz Government Transfer Bands, Report and Order, WT Docket No. 02- 8, 17 FCC Rcd 9980, 9993 (para. 23) (2002). 152 PanAmSat argues that the Commission could expedite processing rounds by starting a second processing round before completing the first round. PanAmSat Comments at 10. We disagree. The licenses that could be issued in a second processing round are dependent on the licenses issued in the first round. Thus, conducting two processing rounds simultaneously would needlessly complicate the second round. In any case, under our new procedure, there will be little need to have a second processing round, and so we need not determine the timing of those proceedings at this time. 153 Aeronautical Radio, Inc., v. FCC, 928 F. 2d 428, 445- 46 (D. C. Cir. 1991); Small Refiner Lead Phase- Down Task Force v. EPA, 705 F. 2d 506, 549 (D. C. Cir. 1983). 154 Space Station Reform NPRM, 17 FCC Rcd at 3864 (para. 48). 155 Space Station Reform NPRM, 17 FCC Rcd at 3860 (para. 36). 30 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 31 outgrowth, Courts have explained that the Commission has broad discretion to manage its proceedings as we have done here. 156 5. Revision of Pleading Cycles 66. Background. In the Notice, we invited comment on whether the pleading cycle for petitions to deny, oppositions, and replies to a lead application should run concurrently with the pleading cycle for competing applications. In other words, after mutually exclusive applications are filed in response to a cut- off date announcement, petitions to deny, oppositions, and replies would be filed in response to all applications, including the lead application, under the same pleading cycle. 157 67. Discussion. SIA suggests placing all applications in a processing round on identical pleading cycles. 158 We will not adopt this suggestion because it could cause a further delay in processing applications in a processing round. Under our current practice, we can start our review of the lead application to determine the applicant's qualifications while we wait for the record to close on the other applications in the processing round. If we postponed the pleading cycle for the lead application to run concurrently with other applications, we would lose that opportunity. As a result, our review of the lead application would be delayed somewhat, and thus action on all the applications in the processing round would also be delayed. Moreover, in cases where no competing applications are filed, the pleading cycle for the lead application would be delayed by 30 days unnecessarily, which in turn would delay licensing and service to the public. E. Other Proposals for Modifying Processing Rounds 68. Some commenters propose other modifications to the processing round procedure. For example, SIA contends that, in 1998, the International Bureau (Bureau) adopted a goal of placing satellite applications on public notice within 10 days, and recommends renewing its efforts towards that goal. 159 While the Bureau strives to place applications on public notice as quickly as possible, and will continue to do so in the future, this 10- day goal applies to routine earth station applications only. 160 Space station applications are more complex than routine earth 156 See Telecommunications Resellers Association v. FCC, 141 F. 3d 1193, 1196 (D. C. Cir., 1998), citing Motor Vehicle Mfrs. Ass'n v. State Farm Mutual Auto. Ins. Co., 463 U. S. 29, 43 (1983); GTE Service Corp. v. FCC, 782 F. 2d 263, 273- 74 (D. C. Cir., 1986). 157 Space Station Reform NPRM, 17 FCC Rcd at 3873 (para. 77). 158 SIA Comments at 13. 159 SIA Comments at 12- 13, citing International Bureau to Streamline Satellite and Earth Station Processing, Public Notice, Report No. SPB- 140 (released Oct. 28, 1998). See also Hughes Comments at 46- 47. 160 See International Bureau to Streamline Satellite and Earth Station Processing, Public Notice, Report No. SPB- 140 (released Oct. 28, 1998). The public notice states that the Bureau will place "routine applications" on public notice within 10 business days of receipt. The Commission does not distinguish between routine and non- routine space station applications. These categories apply only to earth station applications. See 2000 Biennial Regulatory Review -- Streamlining and Other Revisions of Part 25 of the Commission's Rules Governing the Licensing of, and Spectrum Usage by, Satellite Network 31 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 32 station applications, and it will be difficult to determine whether a space station application is complete and acceptable for filing given that the Commission does not currently have a uniform format for such applications. 161 In addition, placing applications on public notice has not been a major source of delay in most processing round proceedings in the past, 162 and so we do not see a need for a formal requirement at this time. 69. PanAmSat recommends establishing a deadline of one year for the Commission to complete processing rounds. 163 We anticipate that the processing round procedure we adopt today will take less than a year to complete, and so PanAmSat's proposed deadline appears unnecessary at this time. 70. Finally, SIA observes that a number of potential sources of delay in issuing satellite licenses, such as coordination with other Federal Government agencies, and the international spectrum allocation process, are outside the Commission's control, and recommends focusing on sources of delay within its control. 164 We agree with SIA. Accordingly, the Commission focused on sources of delay within its control in the Notice. The Commission directed its attention on procedures for processing satellite applications in the Notice when an allocation and service rules are available. 165 Moreover, we note that we have adopted procedures in this Order to dismiss satellite applications before an international frequency allocation is adopted, and that enable us to consider satellite applications before we adopt service- band specific service rules. 166 Therefore, we expect frequency band allocation and service rule proceedings to cause less licensing delay than they have in the past. Finally, in the Notice, the Commission also recognized that interagency coordination can also delay processing of some satellite applications. 167 In the past, we have worked together with other Federal Government agencies to find ways to facilitate interagency coordination, 168 and we will continue to do so in the future. In the meantime, however, SIA's discussion of sources of potential licensing delay outside our control does not dissuade us from addressing the sources of potential licensing delay within our control. We Earth Stations and Space Stations, Notice of Proposed Rulemaking, IB Docket No. 00- 248, 15 FCC Rcd 25128, 25132 (para. 7) (2000) (Part 25 Earth Station Streamlining NPRM). 161 47 C. F. R. § 25.114( b). The Commission has decided to adopt a uniform format for space station applications, to be called "Schedule S." Space Station Reform NPRM, 17 FCC Rcd at 3877 (para. 88). We are currently considering comments regarding the details of Schedule S, and we will address those issues in a future Order. 162 Generally, we have delayed placing satellite applications on public notice only in cases in which a needed domestic or international frequency allocation has not been adopted. 163 PanAmSat Comments at 10. 164 SIA Comments at 9- 11. 165 Space Station Reform NPRM, 17 FCC Rcd at 3856 (para. 25). 166 Section V. D. 1. above. 167 Space Station Reform NPRM, 17 FCC Rcd at 3851 (para. 8). 168 See FCC and NTIA Sign New Memorandum of Understanding on Spectrum Coordination, Press Release (released Jan. 31, 2003). 32 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 33 believe that those specific issues need to be addressed during the development of multilateral procedures to facilitate interagency coordination. VI. FIRST- COME, FIRST- SERVED PROCEDURE FOR GSO- LIKE SATELLITE SYSTEMS A. Background 71. In the Notice, the Commission also invited comment on a first- come, first- served processing approach, based in large part on the procedure used for FM radio and television licenses from 1985 to 1998. 169 Under this approach, in cases where frequencies have been allocated for the proposed service, and we have adopted service rules, we would issue a public notice inviting comment on the first application filed. 170 Subsequently filed mutually exclusive applications would be included in a queue according to their date of filing. 171 If for any reason we could not grant the lead application, we would dismiss it and begin consideration of the next application in the queue and continue this process until we could grant an application. 172 After we issue a license, we would keep the subsequently filed applications on file for the specific GSO orbit location and frequency band. If the licensee loses its license at any time before it begins operation, for failure to meet a milestone or for any other reason, the next application in the queue would be considered. If and when the licensee places its satellite or any of its satellites in a constellation in operation, we proposed returning the later- filed applications to those applicants. 173 72. In cases where frequencies have not been allocated for the proposed service, or the Commission has not adopted service rules, the Commission proposed placing the lead application and subsequently filed applications in a queue. The applications would remain pending until the frequency allocation and service rule proceedings are complete. At that time, under the Commission's proposal in the Notice, it would consider the pending applications under the first-come, first served approach. Specifically, it would process those applications one at a time, in the order that they have been placed in the queue, until it grants an application. 174 73. For reasons discussed in Section VI. B. below, we conclude that the first- come, first-served procedure is the best option available for GSO- like satellite systems, i. e., satellite systems where the earth station antennas accessing the satellites in that system can exclude transmissions from satellites other than the one at which it is directly pointed. In Section VI. C., we explain why a modified processing round approach is not well suited to GSO- like satellite systems. In Section 169 Space Station Reform NPRM, 17 FCC Rcd at 3857 (para. 26). See also Amendment of the Rules Concerning Cut- Off Procedures for FM and TV Broadcast Stations, Report and Order, MM Docket No. 84- 750, FCC 85- 125, 50 Fed. Reg. 19936, 19941- 42 (paras. 33- 36) (May 13, 1985) (TV and FM Broadcast Order), recon. denied, 50 Fed, Reg. 43157 (Oct. 24, 1985), aff'd without published opinion sub nom. Hilding v. FCC. 835 F. 2d 1435 (9th Cir. 1987), reprinted at 58 Rad. Reg. 2d 776 (1985). 170 Space Station Reform NPRM, 17 FCC Rcd at 3859 (para. 33). 171 Space Station Reform NPRM, 17 FCC Rcd at 3859 (para. 33). 172 Space Station Reform NPRM, 17 FCC Rcd at 3859 (para. 33). 173 Space Station Reform NPRM, 17 FCC Rcd at 3860 (para. 34). 174 Space Station Reform NPRM, 17 FCC Rcd at 3860 (paras. 35- 37). 33 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 34 VI. D., we consider and reject several arguments raised in opposition to the first- come, first-served procedure. In Section VI. E., we describe in detail the first- come, first- served procedure we adopt in this Order, including slight variations from the proposals in the Notice based on the record in this proceeding. In Section VI. F., we consider Intelsat's modified first- come, first-served proposal. Finally, Section VI. G. addresses the proposal in the Notice to eliminate the fungibility policy. B. Benefits of First- Come, First- Served Procedure 74. We find that the first- come, first- served procedure will enable us to act on satellite applications dramatically more quickly and efficiently than under the current processing round procedure. Thus, consumers will benefit because they will receive service faster. In addition, our procedure will lead to more efficient spectrum usage because it will reduce the amount of time spectrum lies fallow. Furthermore, a faster licensing procedure would enable U. S. satellite operators to comply with ITU bringing- into- use requirements more easily, and so help preserve U. S. leadership in the satellite industry. Moreover, we expect that the first- come, first- served procedure will be faster than the modified processing round procedure we adopt in this Order above. Accordingly, it would further the public interest to adopt a first- come, first- served procedure for as many types of satellite licenses as possible, except NGSO- like applications, for which licensing the first applicant to operate in a certain frequency band would prevent other applicants from using that spectrum. 175 75. Some commenters question whether the first- come, first- served procedure will expedite licensing. For example, Hughes and PanAmSat argue that delays in licensing are often not the result of processing rounds, but rather spectrum allocation or service rule proceedings. 176 Although we agree that spectrum allocation or service rule proceedings can increase the time needed to issue satellite licenses, Hughes and PanAmSat are mistaken in asserting that the use of processing rounds under our current procedure does not also cause delay. Even in cases where we did not have to obtain an international allocation or adopt service rules, such as the second processing round for GSO Ka- band satellite systems, it often takes several years from filing date to licensing. 177 We also note that the procedures we adopt here will enable us to act on satellite applications before we adopt specific service rules, 178 which will further expedite licensing procedures. 76. Boeing and Hughes also question whether the procedure proposed in the Notice would expedite licensing because of our proposal to facilitate competition by setting spectrum limits in service rule proceedings. 179 These parties maintain that determining spectrum limits in rulemaking proceedings would force those proceedings to take on all the characteristics of processing rounds, and so would not reduce the time needed to issue licenses. 180 We do not 175 Section V. B. 176 Hughes Comments at 3- 4, 5- 8, 33; PanAmSat Comments at 9. 177 See Space Station Reform NPRM, 17 FCC Rcd at 3871- 72 (para. 68) (citing second Ka-band processing round). 178 Section V. D. 1. above. 179 Space Station Reform NPRM, 17 FCC Rcd at 3860 (para. 36). 180 Boeing Comments at 7- 8; Hughes Comments at 34. 34 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 35 intend to use rulemaking proceedings to determine spectrum limits. Rather, because competitive GSO- like satellite systems can operate in the same spectrum, we intend to assign qualified applicants to their requested spectrum, subject to additional limits to prevent speculation and warehousing. We conclude that this adequately addresses Boeing's and Hughes's concern. C. Opportunities for Competitive Entry for GSO- Like Satellite Systems 77. Background. In this Section, we explain why the procedure we adopted for NGSO-like satellite system applications is not well suited for GSO- like satellite system applications. We also conclude that the issue that persuaded us that a first- come, first- served procedure is not appropriate for NGSO- like satellite system applications -- the possibility of unreasonably limiting additional market entry -- is more easily addressed in the context of GSO- like satellite system applications. 78. Discussion. PanAmSat claims that a band segmentation approach for GSO FSS satellite applications would limit satellite operators to a fraction of the frequencies in the band, and would not allow them to develop a viable business. 181 PanAmSat raises a good point. Unlike the case of NGSO- like satellite systems, 182 splitting spectrum at a single orbit location among several processing round participants would not give any of the applicants adequate spectrum in many cases, particularly when there are many participants in the processing round. 183 Furthermore, an applicant would require several transactions to acquire the spectrum needed for a viable service, and completing all those transactions would necessarily take a great deal of time. Accordingly, we conclude that the first- come, first- served procedure is better- suited for GSO- like satellite systems than the modified processing round approach. 184 79. We also find here that the concerns that lead us to reject the first- come, first- served procedure for NGSO- like satellite systems do not apply to GSO- like satellite systems. We observed above that several parties criticized our proposal for preventing a lead applicant from applying for an excessive amount of spectrum in a first- come, first- served procedure, and thereby 181 PanAmSat Comments at 13. 182 Section V. C. 1. 183 For example, there were 13 participants in the first Ka- band processing round. See Assignments of Orbital Locations to Space Stations in the Ka- band, Order, 11 FCC Rcd 13737 (Int'l Bur. 1996). 184 Although we find that the band- splitting approach in the modified processing round procedure is not well suited to GSO- like satellite system applications, we adopt this approach for resolving mutually exclusive situations among two or more GSO- like applications filed at the same millisecond. Section VI. E. 2. This is because a significant factor weighing against the modified processing round procedure for GSO- like satellite system applications are less of a concern when we use this approach as a second- tier selection mechanism in a first- come, first- served procedure. Specifically, splitting the band equally among multiple applicants for a single GSO orbit location in a modified processing round, applicants may need to engage in several transactions to acquire enough bandwidth for a viable service. On the other hand, applying the band- splitting approach to GSO- like satellite systems only as a second- tier selection mechanism should mean that we use this procedure for that kind of application very rarely, and in those cases, the bandwidth should be divided equally between only two applicants. Thus, if a licensee is authorized to operate with what it considers to be an insufficient amount of bandwidth, it should need only one transaction to obtain the bandwidth it desires. 35 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 36 preclude additional market entry. 185 We also concluded above that we cannot adopt a first- come, first- served procedure for NGSO- like satellite system applications because it would either allow an applicant to request so much spectrum as to preclude additional entry, or require us to determine the amount of spectrum needed to provide a service in a processing round. 186 These concerns do not apply to GSO- like satellite applications because assigning a frequency band segment to one licensee at one orbit location does not preclude other licensees from using the same frequency band segments at other orbit locations, or to use other frequency band segments at the same orbit location. Moreover, we adopt additional safeguards in this Order below. First, we limit the number of pending applications each applicant may have in any frequency band. 187 Second, we adopt default service rules for GSO- like satellite system applications based on our two- degree- spacing policy, to facilitate additional entry into the market. 188 D. General Comments 1. Introduction 80. Several parties opposed the proposed first- come, first- served procedure. With respect to GSO- like satellite systems, however, those parties do not raise persuasive reasons for rejecting this proposal. We explain our conclusion in detail below. 2. Spectrum Efficiency 81. Background. Several parties contend that processing rounds facilitate the development of efficient spectrum sharing plans and methods to accommodate more satellites. 189 Teledesic counters that the first- come, first- served approach encourages later applicants to develop methods to share with existing licensees. 190 82. Discussion. As an initial matter, we will use our two- degree- spacing standards for GSO- like satellites in new frequency bands, in the absence of frequency band- specific service rules. 191 The Commission has explained how its two- degree spacing requirements have lead to efficient use of the C- band and Ku- band. 192 Nothing in the first- come, first- served procedure will 185 Section V. B., citing Boeing Comments at 7- 8; Hughes Comments at 34; SES Americom Comments at 6- 7; Telesat Comments at 3. 186 Section V. B. 187 Section VII. E. 188 Section VI. E. 1. d. 189 SIA Comments at 6- 8; SES Americom Comments at 7; Final Analysis Comments at 2- 3; Boeing Comments at 5; PanAmSat Reply at 2- 3; Orbcomm Reply at 2- 3. 190 Teledesic Reply at 25. 191 Section VI. E. 1. d. 192 Licensing of Space Stations in the Domestic Fixed- Satellite Service and Related Revisions of Part 25 of the Rules and Regulations, Report and Order, CC Docket No. 81- 704, FCC 83- 184, 54 Rad. Reg. 2d 577 (released Aug. 16, 1983); Licensing Space Stations in the Domestic Fixed- Satellite 36 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 37 affect the Commission's technical requirements for satellites. Further, by enabling us to issue licenses more quickly, the first- come, first- served approach will lead to more efficient spectrum use than is now possible under our current procedure, by reducing the amount of time spectrum lies fallow. 83. Moreover, assuming for the sake of argument that the current processing round procedure does result in more efficient spectrum use than the first- come, first- served procedure we adopt here, we would still conclude that the first- come, first- served procedure furthers the public interest more effectively than the current procedure. We believe that any marginal increase in public interest benefit that could result from the current processing round procedure would be outweighed by the additional months or years that the current procedure delays service to the public. 3. Speculative Applications 84. Background. PanAmSat and Boeing liken the first- come, first- serve proposal to the ITU notification procedure, and maintain that speculation is a serious problem in that procedure. 193 Several parties doubt that the Commission's proposals to limit speculative or frivolous applications in a first- come, first- served procedure are adequate. 194 SES Americom maintains that satellite applicants intending to construct their proposed systems need protection from speculative satellite applicants, particularly applicants proposing multiple- satellite systems. 195 85. In contrast, Teledesic argues that the first- come, first- served approach discourages speculation by enabling the Commission to act on all applications quickly, 196 and by substantially reducing the incentives to file applications as a "place holder" or to block a competitor's application. 197 Teledesic argues further that a queue would reduce the number of speculative applications by requiring applicants to perform interference studies and develop any needed sharing strategies before they file their applications. 198 SES Americom replies that applicants in a first- come, first- served approach have no incentive to develop sharing strategies with other applicants later in the queue. 199 SES Americom also contends that a first- come, first- served Service, 48 F. R. 40233 (Sept. 6, 1983) (Two Degree Spacing Order) (two- degree spacing adopted to maximize the number of satellites in orbit). 193 PanAmSat Comments at 7- 8; Boeing Comments at 9. 194 SIA Comments at 22- 25; SES Americom Comments at 3; Final Analysis Comments at 3; Inmarsat Comments at 7- 8; Boeing Comments at 5; Hughes Comments at 25- 27; PanAmSat Comments at 5- 6; Pegasus Comments at 2- 3; SES Americom Reply at 4- 5; PanAmSat Reply at 3; CTIA Comments at 4- 5. 195 SES Americom Comments at 4. 196 Teledesic Comments at 27- 28. 197 Teledesic Reply at 18- 19. 198 Teledesic Comments at 9- 10. 199 SES Americom Reply at 6- 7. 37 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 38 approach would discourage satellite operators from developing sharing strategies before they file their applications, because it could require an applicant to reveal its business plans to a competitor and enable that competitor to apply for that orbital location first. 200 86. Discussion. Both Teledesic and other commenters are correct, in that both processing rounds and the first- come, first- served procedure create incentives for speculation. Thus, we disagree with parties who argue that a first- come, first- served procedure will necessarily increase the incentives for filing speculative satellite applications. In addition, although giving licensees flexibility to propose and implement new or innovative satellite systems will always create some potential for speculation, we adopt safeguards that should substantially reduce that potential. These safeguards include limiting the number of licensed but unbuilt satellite systems, adopting new milestones, including a bond- posting requirement, and strictly enforcing milestones. 201 Accordingly, we conclude that the mere possibility of some speculation in a first-come, first- served procedure does not by itself justify rejection of the first- come, first- served procedure for satellite applications. 4. Influx of Applications 87. Background. A number of parties assert that, if the Commission establishes a first-come, first- served licensing procedure, it would be difficult to address a large influx of satellite applications because those applications can be complex and the Commission would need to address multiple queues. 202 Teledesic argues that this problem could be resolved if the Commission considers all applications in the order they are filed, and create a single queue for all satellite applications, rather than establish a separate queue for each orbit location. 203 Specifically, Teledesic denies the premise that applications will form themselves easily into identifiable groups of mutually exclusive applications for particular orbit locations. 204 Rather than making the difficult determination of which application should be placed in which queue, Teledesic recommends creating a single queue, and granting all qualified applications for satellites that would not cause harmful interference to any previously licensed satellite. 205 88. Discussion. We agree that a large influx of satellite applications could be problematic if it overwhelms our electronic filing system. We conclude, however, that this possibility does not justify rejecting the first- come, first- served procedure. First, any problem that occurs would occur only at the time the first- come, first- served rules take effect. Second, we hereby adopt measures to mitigate any problem that may occur. We adopt Teledesic's proposal in modified form, and will maintain one queue. We discuss this queue in detail below. 206 Here, we 200 SES Americom Reply at 7. 201 Sections VII. E. 3, VII. C. 202 SES Americom Comments at 9; PanAmSat Comments at 8; Boeing Comments at 8- 10; SES Americom Reply at 4. 203 Teledesic Reply at 20- 21. 204 Teledesic Reply at 20. 205 Teledesic Reply at 21. 206 Section VI. E. 1. a. 38 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 39 conclude that eliminating the complexity caused by maintaining a separate queue for each orbit location sufficiently addresses the concern that the Commission might have difficulty with a large influx of applications. 89. Furthermore, we will adopt a freeze on all satellite applications, starting with the adoption of this Order, and ending on the date a summary of this Order is published in the Federal Register. This will give us additional time to ensure that our electronic filing system is sufficient for any influx of applications that may develop. Courts have recognized the Commission's authority to adopt application freezes. 207 Moreover, freezes on application filing are procedural in nature and hence are not subject to the notice and comment requirements of the Administrative Procedure Act. 208 90. Finally, the rule revisions in Appendix B will generally take effect upon publication in the Federal Register, rather than 30 days after publication. This is consistent with our actions when we adopted a first- come, first- served procedure with a one- day cut- off rule for the multipoint distribution service (MDS). 209 In the MDS Order, we concluded that cut- off rule was a procedural rule that could take effect on less than 30 days notice. 210 We concluded further that preventing speculation constituted good cause to make the rule revisions take effect upon publication in the Federal Register. 211 5. ITU Issues 91. Background. SIA and SES Americom assert that a first- come, first- served approach would limit the number of companies participating in the ITU spectrum allocation process, because a first- come, first- served approach would substantially reduce the number of applicants receiving licenses. 212 Similarly, Boeing asserts that a first- come, first- served approach would 207 See, e. g., Neighborhood TV Co. v. FCC, 742 F. 2d 629, 637- 38 (D. C. Cir., 1984) and Kessler v. FCC, 326 F. 2d 673, 680- 82 (D. C. Cir., 1963). 208 Administrative Procedure Act, 5 U. S. C. § 553( b)( 3)( B). The Commission has previously found that, in cases where it adopts a new licensing procedure, it may be necessary to adopt temporary licensing freezes to prevent applicants from using the old licensing procedures to engage in speculative activity prior to the effectiveness of the new rules. Implementation of Sections 309( j) and 337 of the Communications Act of 1934 as Amended, Report and Order and Further Notice of Proposed Rulemaking, WT Docket No. 99- 87, 15 FCC Rcd 22709, 22737- 38 (paras. 60- 61) (2000). 209 Amendment of Parts 21, 43, 74, 78, and 94 of the Commission's Rules Governing Use of the Frequencies in the 2.1 and 2.5 GHz Bands Affecting Private Operational- Fixed Microwave Service, Multichannel Multipoint Distribution Service, Instructional Television Fixed Service, and Cable Television Relay Service, Gen. Docket Nos. 90- 54 and 80- 113, 5 FCC Rcd 6410, 6424 (para. 90) (1990) (MDS Order). 210 MDS Order, 5 FCC Rcd at 6441 n. 73. 211 MDS Order, 5 FCC Rcd at 6441 n. 73. 212 SIA Comments at 8- 9; SES Americom Comments at 6. See also Intelsat Comments at 10 (applying a version of a first- come, first- served approach to services without frequency allocations or service rules would place the burden of championing service rules or frequency allocations on one applicant). 39 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 40 limit the number of ITU submissions that the Commission could file. 213 Hughes and Boeing argue that the ITU submission for a lead applicant could limit the options of subsequent parties if the lead applicant fails by requiring the subsequent party to operate within the technical parameters of the first licensee's application. 214 92. Discussion. None of the parties' concerns regarding the ITU persuade us to reject the first- come, first- served procedure. First, SIA and SES Americom are mistaken in assuming that a first- come, first- served approach would substantially reduce the number of applicants receiving licenses relative to processing rounds. We will generally require GSO- like satellite systems to be two- degree- compliant, allowing us to license multiple satellites that will use the same spectrum. Therefore, it seems likely the same number of satellites will be licensed under a first- come, first-served procedure as would be in a processing round. Furthermore, because we expect to grant the same number of satellite applications, we disagree with Boeing that the first- come, first- served procedure will limit U. S. ITU submissions. 93. Finally, we do not agree with Hughes or Boeing that the ITU submission for a lead applicant could limit the options of subsequent parties if the lead applicant fails. Under the processing round procedure, if a license is revoked and the orbit location is reassigned, the new licensee is required to meet the specifications of the original ITU filing or file a new ITU filing, and assume any subsequent ITU costs associated with that filing. 215 This will not change under the first- come, first- served procedure we adopt today. 6. Uncertainty 94. A number of commenters maintain that any major revision of the satellite licensing procedure could cause uncertainty and could lead to litigation over the details of the new procedure. 216 Even if this is true, it does not justify keeping an inefficient processing system in place. 7. Non- U. S.- Licensed Satellites 95. Background. Inmarsat argues that the first- come, first- served approach does not adequately consider whether the lead applicant is requesting a license for an orbital location for which the United States has ITU priority, and so could unreasonably preclude some non- U. S. satellite operators from entering the U. S. market. 217 96. Discussion. As is the case now in processing rounds, U. S. licensees assigned to a particular orbit location in a first- come, first- served approach take their licenses subject to the outcome of the international coordination process. The Commission is not responsible for the outcome of any particular satellite coordination and does not guarantee the success or failure of 213 Boeing Comments at 6. 214 Hughes Comments at 32- 33; Boeing Comments at 6- 7. 215 We do not require new licensees under these circumstances to reimburse the original licensee for ITU fees or any other fees, however. 216 Hughes Comments at 23- 24; Pegasus Comments at 3; PanAmSat Reply at 3. 217 Inmarsat Comments at 4- 7. 40 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 41 the required international coordination. 218 Moreover, we expect U. S. licensees to abide by international regulations when their systems are coordinated. This may mean that the U. S. -licensee may not be able to operate its system if the coordination cannot be appropriately completed. Indeed, with the first- come, first- served approach, we assign applicants to the orbit location that is requested. Consequently, the applicant assumed the coordination risk when choosing that particular orbit location at the time it submitted its application. 8. Disadvantage in Non- U. S. Markets 97. Background. Final Analysis contends that, if the Commission adopts a first- come, first- served approach, it might encourage other countries to adopt this approach. Final Analysis further speculates that some foreign Administrations might implement their first- come, first-served procedures in a way that gives an unfair advantage to their foreign government- controlled satellite operators. 219 98. Discussion. Even assuming that our actions in this Order might induce more countries to adopt a first- come, first- served procedure, there is no evidence that U. S. satellite operators would be disadvantaged. We note that several countries already use a first- come, first-served procedure, and no U. S. operators have claimed to be disadvantaged in those countries. Further, there are safeguards in place to discourage governments from favoring their own providers. Under the World Trade Organization (WTO) Basic Telecom Agreement, WTO signatories are required to treat service providers from other signatories no less favorably than their own service providers. 220 This requirement applies to any WTO signatory adopting a first-come, first- served procedure for satellite licenses. Furthermore, we have procedures in place now that preclude operators of satellites licensed by non- WTO signatories from entering the U. S. market unless they can show that their licensing procedures do not distort competition by creating de facto or de jure barriers for U. S.- licensed satellite operators trying to enter that country's market. 221 9. Legal Analysis a. Background 99. In the Space Station Reform NPRM, the Commission noted that the processing round process was developed in response to Ashbacker, a 1945 Supreme Court case. 222 In Ashbacker, 218 Pegasus Development Corporation, Application for Authority to Construct, Launch, and Operate a Ka- Band Satellite System in the Fixed- Satellite Service, Order and Authorization, 16 FCC Rcd 14378, 14386 (para. 24) (Int'l Bur., 2001). 219 Final Analysis Comments at 2. 220 See Amendment of the Commission's Regulatory Policies to Allow Non- U. S. Licensed Satellites Providing Domestic and International Service in the United States, Report and Order, IB Docket No. 96- 111, 12 FCC Rcd 24094, 24103 (para. 22) (1997) (DISCO II), and sources cited therein. 221 DISCO II, 12 FCC Rcd at 24127- 28 (paras. 72- 73). 222 Space Station Reform NPRM, 17 FCC Rcd at 3868- 69 (para. 62), citing Ashbacker v. FCC, 326 U. S. 327 (1945) (Ashbacker). 41 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 42 the Court interpreted the hearing requirement in Section 309 of the Communications Act 223 to require the Commission to consider two mutually exclusive applications, both of which had been accepted for filing, in a comparative hearing before granting one and denying the other. 224 At the time the Commission adopted the current processing round procedure, in 1983, it interpreted Ashbacker as permitting a cut- off procedure to preserve the rights of all existing applicants and all potential future qualified space station license applicants with concrete proposals for satellite systems. 225 100. As the Commission explained in the Space Station Reform NPRM, it subsequently recognized that the first- come, first- served procedure also meets the Ashbacker requirements. 226 Specifically, the Commission observed that Ashbacker allows it to promulgate regulations limiting the filing rights of competing applicants, and leaves to the Commission's discretion the circumstances under which applications are considered mutually exclusive. 227 The Commission also observed that the Supreme Court's discussion in Storer is consistent with our first- come, first- served proposal. 228 In Storer, a broadcast license applicant argued that Section 309 required the Commission to consider its application even though granting the application would cause the applicant to exceed the Commission's limit on the number of broadcast stations that could be held by one party. 229 The Court held that the hearing requirement in Section 309 does not require the Commission to consider applications that are inconsistent with its rules. 230 101. Hughes and other parties question the legal analysis of a first- come, first- served procedure in the Space Station Reform NPRM. For the reasons set forth below, none of the parties have convinced us that our analysis is incorrect. b. Consistency with Communications Act 102. Background. Hughes asserts that the first- come, first- served approach is inconsistent with the Communications Act, based on an assumption that the Commission's 223 47 U. S. C. § 309. 224 Space Station Reform NPRM, 17 FCC Rcd at 3868- 69 (para. 62), citing Ashbacker, 326 U. S. at 330- 31. 225 Space Station Reform NPRM, 17 FCC Rcd at 3868- 69 (para. 62), citing 1983 Cut- Off Order, 93 FCC 2d at 1261 (para. 2). 226 Space Station Reform NPRM, 17 FCC Rcd at 3869 (para. 63), citing TV and FM Broadcast Order, 50 Fed. Reg. at 19938- 39 (para. 16). 227 Space Station Reform NPRM, 17 FCC Rcd at 3869 (para. 63), citing TV and FM Broadcast Order, 50 Fed. Reg. at 19939 (para. 16), Ashbacker, 326 U. S. at 333 n. 9; MCI Airsignal International, Inc., FCC 84- 397 (released Aug. 17, 1984). 228 Space Station Reform NPRM, 17 FCC Rcd at 3869 (para. 64), citing United States v. Storer Broadcasting Co., 351 U. S. 192 (1956) (Storer). 229 Space Station Reform NPRM, 17 FCC Rcd at 3869 (para. 64), citing Storer, 351 U. S. at 193. 230 Space Station Reform NPRM, 17 FCC Rcd at 3869 (para. 64), citing Storer, 351 U. S. at 202- 04; National Broadcasting Co. v. United States, 319 U. S. 190, 230 (1943). 42 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 43 proposed procedure would result in issuing licenses without a public interest inquiry. 231 Hughes also cites court cases which it claims require the Commission to give parties an opportunity to file applications to be considered together with a lead application. 232 Teledesic and Intelsat question Hughes's legal analysis. 233 103. Discussion. We agree with Teledesic's interpretation of Ashbacker and its progeny. In particular, as Teledesic points out, we have considered and rejected arguments that Ashbacker or the Communications Act requires the Commission to give parties an opportunity to file mutually exclusive applications. 234 Moreover, we have not always issued satellite licenses pursuant to processing rounds. For example, we used a de facto first- come, first- served procedure, without processing rounds, for the first decade during which we accepted commercial satellite applications. 235 We also considered separate system satellites outside of processing rounds until 1996, when we adopted a unified licensing framework for domestic and international satellites. 236 Moreover, we consider replacement satellite applications outside of processing rounds. 237 This practice includes applications for replacements of conventional C- band or Ku-band satellites seeking authority to operate in the extended C- band or extended Ku- band, 231 Hughes Comments at 9- 11, 20- 21. See also SES Americom Reply at 5- 6. 232 Hughes Comments at 12- 14, citing United States v. Storer Broadcasting Co., 351 U. S. 192 (1956), Aeronautical Radio, Inc. v. FCC, 928 F. 2d 428 (D. C. Cir. 1991). 233 Teledesic Reply at 5- 13, citing, e. g., Ashbacker, 326 U. S. at 333 n. 9, FCC v. Pottsville Broadcasting Co., 309 U. S. 134, 138 (1940) (Pottsville Broadcasting); Intelsat Comments at 12 n. 28; Intelsat Reply at 3, citing 47 U. S. C. § 309( e), Hispanic Information & Telecommunications Network v. FCC, 865 F. 2d 1289, 1294 (D. C. Cir. 1989). 234 Teledesic Reply at 13- 15, citing Amendment of Parts 21, 43, 74, 78, and 94 of the Commission's Rules Governing the Use of Frequencies in the 2. 1 and 2.5 GHz Bands, Order on Reconsideration, Gen. Docket Nos. 90- 54 and 80- 113, 6 FCC Rcd 6764, 6776 (paras. 61- 62) (1991) (Wireless Cable Reconsideration Order) (denying petitions for reconsideration claiming that licensing procedure violated the Communications Act because it effectively deprives applicants from filing mutually exclusive applications). 235 See Space Station Reform NPRM, 17 FCC Rcd at 3849 n. 3, and Orders cited therein. 236 The Commission adopted a unified licensing framework in Amendment to the Commission’s Regulatory Policies Governing Domestic Fixed Satellites and Separate International Satellite Systems, Report and Order, CC Docket No. 95- 41, 11 FCC Rcd 2429 (1996) (DISCO I Order or DISCO I). The term "separate system" referred to international satellite systems separate from INTELSAT. See Establishment of Satellite Systems Providing International Communications, Report and Order, CC Docket No. 84- 1299, 101 FCC 2d 1046, 1174 (1985) (Separate Systems Order), recon. 61 Rad. Reg. 2d 649 (1986), further recon. 1 FCC Rcd 439 (1986). 237 See, e. g., Loral Space & Communication Ltd., f/ k/ a Orion Atlantic, L. P., for Authority to Launch and Operate a Hybrid Ku- band/ C- band Satellite System at the 37. 5° W. L. Orbit Location, Memorandum Opinion and Order, 16 FCC Rcd 12490, 12492 (para. 7) (Int'l Bur. 2001); GE American Communications, Inc., Order and Authorization, 10 FCC Rcd 13775, 13775- 76 (para. 6) (Int'l Bur. 1995) (GE Americom Replacement Order); Loral Spacecom Corp., Order and Authorization, 13 FCC Rcd 16348, 16440 (para. 5) (Int'l Bur., Sat. and Rad. Div., 1995). 43 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 44 respectively. 238 We have also granted licenses for satellite land remote sensing systems outside of processing rounds. 239 Finally, when in- orbit, non- U. S.- licensed satellite operators seek access to the U. S. satellite market under the Commission's DISCO II framework, 240 we consider those requests outside of processing rounds. For these reasons, we conclude that neither the Communications Act nor Ashbacker require us to consider satellite license applications in processing rounds. c. Qualifications 104. Background. PanAmSat assumes that the first- come, first- served approach would lead to issuing licenses without consideration of whether the licensee is qualified, and asserts that such a procedure would lead to litigation. 241 In contrast, Teledesic contends that the first- come, first- served approach would not and could not preclude the Commission from determining whether an applicant is qualified before granting a license. 242 105. Discussion. We intend to consider an applicant's qualifications before granting it a license. We stated specifically in the Space Station Reform NPRM that we would place applications on public notice. 243 We also noted that the first- come, first- served procedure allows us to deny applications when appropriate, including but not limited to concerns raised in petitions to reject that application. 244 d. Consistency with Commission Precedent 106. Background. In the Notice, the Commission observed that it has used a first- come, first- served procedure for FM radio licenses, and that this experience might provide a potentially sound, efficient basis for revising its satellite licensing process. 245 Some commenters claim that 238 PanAmSat Licensee Corporation, Application for Authority to Launch and Operate a Hybrid Replacement Fixed Satellite Service Space Station, Order and Authorization, 15 FCC Rcd 22156, 22157- 58 (para. 5) (Int'l Bur., Sat. and Rad. Div., 2000). 239 Application of EarthWatch Incorporated For Authority to Construct, Launch and Operate a Remote Sensing- Satellite System, Order and Authorization, 10 FCC Rcd 10467 (Int'l Bur., 1995) (EarthWatch Authorization Order). Remote- sensing satellites use in- orbit passive optical sensors to measure light reflected from the earth’s surface, and then transmit that information to a central earth station where it is transformed into useable information about the "remotely sensed" object or phenomenon. EarthWatch Authorization Order, 10 FCC Rcd at 10467 (para. 2). Satellite remote- sensing systems can be used for mapping, resource conservation, law enforcement, national security, environmental monitoring, and forecasting functions. EarthWatch Authorization Order, 10 FCC Rcd at 10468 (para. 6). 240 DISCO II, 12 FCC Rcd at 24174 (para. 186). We describe the DISCO II framework in detail below. 241 PanAmSat Comments at 6- 7. See also Hughes Comments at 11- 12. 242 Teledesic Reply at 23- 24. 243 Space Station Reform NPRM, 17 FCC Rcd at 3859 (para. 33). 244 Space Station Reform NPRM, 17 FCC Rcd at 3859 (para. 33). 245 Space Station Reform NPRM, 17 FCC Rcd at 3858- 59 (paras. 29- 31). 44 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 45 any reliance on the first- come, first- served procedure for broadcast licenses is misplaced, because that procedure is not the same as the Commission's satellite first- come, first- served proposal. 246 Hughes also notes that the Commission has employed processing rounds for satellite licenses for a long time, and asserts that the proposals in the Notice constitute an arbitrary and capricious change in policy unless the Commission provides an adequate explanation. 247 Teledesic replies, among other things, that the Commission has authority to change its procedures in rulemaking proceedings. 248 107. Discussion. These contentions do not persuade us to reject the proposals in the Notice. Courts have held that the Commission had broad discretion to determine whether and when to initiate a rulemaking. 249 Courts have also held that administrative agencies are free to adjust or abandon its proposals in light of public comments or agency reconsideration. 250 Therefore, we disagree with Hughes that Commission precedents or practices can limit or preclude the Commission from inviting comment on any particular rule change in a rulemaking proceeding. Furthermore, in the Notice, the Commission explained in detail why the satellite licensing process needs reform. 251 Moreover, commenters overstate the extent to which we rely on the broadcast first- come, first- served procedure. The Commission stated that, because that procedure was successful, it might provide a good starting point for revising satellite licensing procedures. Specifically, "we invite[ d] comment on appropriate procedural revisions consistent with a first- come, first- served approach, with certain modifications to make it fit satellite licenses." 252 E. Details of First- Come, First- Served Procedure 1. General Framework a. Establishment of Queues 246 Hughes Comments at 14- 20; Boeing Comments at 5- 6; SIA Comments at 9. 247 Hughes Comments at 21- 23. See also Hughes Comments at 4- 5, citing Amendment to the Commission's Regulatory Policies Governing Domestic Fixed Satellites and Separate International Satellite Systems, Order on Reconsideration, IB Docket No. 95- 41, 16 FCC Rcd 15579 (2001) (DISCO I Reconsideration Order). 248 Teledesic Reply at 13- 16, citing Committee for Effective Cellular Rules v. FCC, 53 F. 3d 1309, 1317 (D. C. Cir. 1995), Florida Cellular Mobil Communications Corp. v. FCC, 28 F. 3d 191, 196- 97 (D. C. Cir. 1994), cert. denied 514 U. S. 1016 (1995); Rainbow Broadcasting Co. v. FCC, 949 F. 2d 405, 409 (D. C. Cir. 1991). 249 See WWHT v. FCC, 656 F. 2d 807 (D. C. Cir. 1981) (Commission has broad discretion to determine whether and when to initiate a rulemaking). See also Telecommunications Resellers Assn. v. FCC, 141 F. 3d 1193, 1197 n. 6 (D. C. Cir. 1998) (Commission has discretion to initiate rulemaking even in case where the court found that a rulemaking was not "necessary" to implement a statutory requirement). 250 Kooritsky v. Reich, 17 F. 3d 1509, 1513 (D. C. Cir. 1994); International Harvester Co. v. Ruckelshaus, 478 F. 2d 615, 632 & n. 51 (D. C. Cir. 1973). 251 Space Station Reform NPRM, 17 FCC Rcd at 3852- 55 (paras. 12- 20). 252 Space Station Reform NPRM, 17 FCC Rcd at 3859 (para. 31). 45 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 46 108. Background. Under the proposal in the Notice, we would consider applications for each particular geostationary satellite orbit (GSO) satellite license, one at a time in the order they were filed. 253 Teledesic suggests that the procedure would work better if the Commission maintained a single queue rather than a separate queue for each orbit location and/ or frequency band. Under Teledesic's proposal, the Commission would review all satellite applications in the order they are filed, regardless of the orbit location and frequency band requested. Teledesic recommends further that the Commission grant each application that complies with the Commission's rules and does not conflict with any previously granted license, and otherwise deny the application. 254 109. Discussion. We agree with Teledesic that establishing a separate queue for each GSO orbital location could unnecessarily complicate the first- come, first- served procedure. For example, if an applicant seeks authority for the 96° W. L. location, it is not clear whether that application should be included in the same queue as an application for the 95° W. L. location, or the 97° W. L. location, or whether all three applications should be included in the same queue. By including all applications in one queue, we can consider all issues relating to that application, such as compliance with the Commission's two- degree spacing framework and interference with adjacent satellites operating in the same frequency bands. 255 We will make a current list of applications in the queue publicly available. 110. We also recognize that some applications will necessarily require more time to review than others. In cases in which we are reviewing an application that raises such unusually complex issues, it would not serve the public interest to delay consideration of all subsequently filed applications while we resolve those complex issues. Therefore, we may act on some of those subsequently filed applications before we act on the complex application. Those subsequent applications will be considered one at a time in the order they are filed, but only if they are not mutually exclusive with a previously- filed application. We will act on those mutually exclusive applications after we act on the complex application. b. Keeping Subsequently Filed Applications on File 111. Background. After we issue a license, we proposed keeping subsequently filed applications on file. If at any time the licensee loses its license, for failure to meet the first milestone or for any other reason, the next application in the queue would be considered. We also proposed returning the later- filed applications to those applicants if and when the licensee places its satellite or satellites in operation, and to return the associated application fee at that time upon the applicant's request. 256 112. Discussion. All the parties commenting on this issue oppose keeping subsequent applications on file to be considered in the event that a licensee loses its license. Teledesic claims that keeping subsequent applications on file would encourage speculative or "place holder" 253 Space Station Reform NPRM, 17 FCC Rcd at 3859 (para. 32). 254 Teledesic Comments at 13- 17; Teledesic Reply at 20- 21. 255 We discuss our treatment of hybrid applications, and applications with feeder link or intersatellite link requests below. 256 Space Station Reform NPRM, 17 FCC Rcd at 3860 (para. 34). 46 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 47 applications, and discourage applications by parties with innovative methods for using or sharing spectrum. 257 SES Americom argues that, if the lead applicant does not build its system, there would be delay before the next application could be processed, and this delay could discourage other parties from applying for competing licenses. 258 SES Americom also asserts that this delay could cause the United States to lose its international priority at the location in question. 259 113. We decide not to keep subsequently filed applications on file. In other words, if an application reaches the front of the queue that conflicts with a previously granted license, we will deny the application rather than keeping the application on file in case the lead applicant does not construct its satellite system. We agree with Teledesic that keeping applications on file would encourage speculative or "place holder" applications. Moreover, we proposed keeping applications on file because we thought it would expedite reassignment of the orbit location in cases where a licensee loses a license. Under a single queue approach, we could reassign the orbit location just as quickly, or perhaps more quickly, if we accept new applications at the time the location becomes available. For these purposes, we will consider an orbit location to become "available" at the time we adopt an Order revoking a license in cases where we revoke the license, or upon release of a public notice announcing that a licensee has surrendered its license in cases where the licensee surrenders its license. 260 Thus, all parties potentially interested in providing satellite service from the orbit location at issue have an equal opportunity to apply for the license when that orbit location becomes available. 261 In summary, we will deny applications that conflict with previously granted applications because it is more likely to result in faster service to the public, and it will not disadvantage any party that may wish to apply for that orbit location if it becomes available. 114. Our decision not to keep subsequently filed applications on file pending the successful launch of a satellite moots the issue of whether to allow applicants to request the fees associated with their applications to be returned when a licensee launches its satellite. 262 Although no one commented specifically on this proposal, we emphasize that everyone commenting on the underlying proposal to keep subsequent applications on file opposed it. 263 Accordingly, parties applying for a license that is mutually exclusive with a previously filed application are on notice that they will not be able to request an application fee refund after the application is placed on public notice. 257 Teledesic Comments at 17- 20; Teledesic Reply at 19- 20. 258 SES Americom Comments at 3- 4. 259 SES Americom Comments at 3- 4. 260 In the event that a licensee files a petition for reconsideration or application for review of a decision to revoke a license, we would grant the new license subject to the outcome of the reconsideration or review proceeding. 261 We will give applicants the option of assuming the previous licensee's ITU filing or submitting a new filing. 262 Space Station Reform NPRM, 17 FCC Rcd at 3860 (para. 34). 263 Teledesic Comments at 17- 20; Teledesic Reply at 19- 20; SES Americom Comments at 3-4. 47 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 48 c. Fees 115. Background. The Commission invited comment on allowing an applicant to request the return of the application fee if it voluntarily withdraws its application before it is placed on public notice. 264 After the application is placed on public notice, however, the Commission maintained that it would no longer be appropriate to return the application fee. 265 No one commented on this proposal. 116. Discussion. We adopt this proposal. Application fees represent the Commission’s estimate, accepted by Congress, on the average cost to the Commission of providing the service. 266 The Commission incurs a cost regardless of the final result to the applicant, and it is on that basis that the Commission proposed to Congress that fixed processing costs be recovered from each applicant through fees. 267 Therefore, once that application has cleared the fee review process, its subsequent rejection will not result in a fee refund. The conclusion of the fee review process coincides with the date that the application is placed on public notice. Consequently, we adopt the proposal in the Notice to allow requests for the return of GSO- like satellite license application fees if the applicant voluntarily withdraws its application before it is placed on public notice. This procedure is also similar to the Commission's first- come, first- served rules for broadcast licenses, which were cited in the Notice. 268 d. Service Rules 117. Background. In the Notice, the Commission proposed holding applications in abeyance if they are filed after the Commission has adopted a frequency allocation for the proposed service, but it has not adopted service rules. 269 Commenters offered differing opinions on this proposal. Teledesic opposes the proposal to hold applications in abeyance pending adoption of service rules, because service rules may not be needed in all cases. 270 CTIA opposes accepting satellite applications before service rules are adopted. 271 264 Space Station Reform NPRM, 17 FCC Rcd at 3860 (para. 34). 265 Space Station Reform NPRM, 17 FCC Rcd at 3860 (para. 34). 266 Establishment of a Fee Collection Program to Implement the Provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, Memorandum Opinion and Order, Gen. Docket No. 86- 285, 3 FCC Rcd 5987, 5987 (para. 5) (1988). 267 Establishment of a Fee Collection Program to Implement the Provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, Report and Order, Gen. Docket No. 86- 285, 2 FCC Rcd 947, 949 (para. 14) (1987). 268 See Space Station Reform NPRM, 17 FCC Rcd at 3860 (para. 34), citing 47 C. F. R. § 1.1113( c). 269 Space Station Reform NPRM, 17 FCC Rcd at 3860 (para. 35). 270 Teledesic Comments at 20- 22. 271 CTIA Comments at 2- 3. 48 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 49 118. Discussion. We reject the proposal in the Notice to hold in abeyance applications filed before service rules are adopted until the Commission adopts such rules. As we noted above in the context of adopting default service rules for NGSO- like satellite system applications, SIA and Intelsat argue that it is not necessary to develop service rules for each new satellite service, and recommend adopting uniform service rules for future satellite services. 272 We agree. Consequently, we adopt default service rules as suggested by SIA and Intelsat for GSO- like satellite system applications. In light of these default rules, we will be able to act on applications as they are filed and therefore need not consider further the issue of holding applications in abeyance pending final service rules. 119. None of the commenters in this proceeding propose specific default service rules. We will apply the two- degree- spacing requirements that we currently apply to GSO- like satellites in the C- band, Ku- band, and Ka- band satellites to GSO- like proposed satellites in different frequency bands. 273 Specifically, we will apply the requirements set forth in Appendix C. By applying these requirements, we can be assured that satellites in new bands will be designed to allow other satellites to operate in that band as close as two degrees away. This decision does not preclude us from considering other service rules, or from adopting other service rules in notice-and- comment rulemaking proceedings. Rather, when we issue licenses in new frequency bands that comply with our two- degree- spacing requirements, we will do so subject to any band- specific service rules, or rules for earth station coordination in shared bands, that we may adopt in the future. 120. In addition, as we did with respect to NGSO- like satellite licenses, we will require GSO- like satellite licensees to comply with applicable ITU requirements when we issue a license before we adopt frequency- band- specific service rules. 274 We will also require GSO- like satellite licensees operating in bands shared with other commercial operations to communicate only with earth stations that have been coordinated pursuant to Section 25.203. Finally, we will coordinate with NTIA regarding the operations of GSO- like satellite licensees operating in bands shared by Government and non- Government uses. 121. Establishing default service rules based on our two- degree- spacing policy provides an additional benefit by ensuring opportunities for competitive entry by GSO- like satellite operators. In addition, granting licenses before we adopt final service rules should allow licensees to meet their ITU bringing- into- use dates. Furthermore, unnecessary delay in considering satellite applications is contrary to the public interest, as we explained in the Space Station Reform NPRM. 275 Accordingly, we will not adopt CTIA's proposal to preclude consideration of satellite applications before we adopt service- band- specific service rules. e. Frequency Allocations 272 Section V. D. 1., citing SIA Comments at 13- 14; Intelsat Comments at 9. 273 We note, however, that the power flux density (PFD) limits applicable to the C- band, Ku-band, and Ka- band are not included in our default service rules for GSO- like satellites. Instead, licensees will be required to comply with the applicable PFD limits established in the ITU Radio Regulations for the frequency band in which they plan to operate. 274 Section V. D. 1. 275 Space Station Reform NPRM, 17 FCC Rcd at 3852- 53 (paras. 12- 14). 49 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 50 122. Background. In cases where a party files a satellite application, and there is no international or domestic frequency allocation for the proposed service, the Commission proposed allowing the application to remain pending until the frequencies were allocated. 276 In the past, the Commission used the satellite system applications received in processing rounds as justification to pursue an international allocation for the service. In the Notice, the Commission expected to continue this practice. 277 123. Discussion. CTIA opposes accepting satellite applications before frequency allocations are adopted. 278 Teledesic maintains that the Commission could decide on a case- by-case basis to hold applications in abeyance pending an international frequency allocation. 279 124. Because it can take several years for the ITU to adopt an international frequency allocation, we will dismiss GSO- like satellite applications without prejudice as premature if the application is filed before the ITU adopts a necessary frequency allocation. In this Order above, we also decided to dismiss NGSO- like satellite applications filed before a needed international frequency allocation. 280 In the past, the Commission has accepted applications before needed international frequency allocations were adopted so that it could demonstrate that the frequency allocation is needed. We conclude here that a petition for rulemaking to amend the Table of Frequency Allocations 281 can serve the same purpose. 282 Furthermore, when an applicant files its application years before it will be possible to provide service, it is likely that the application may be a "place holder." Accordingly, we will dismiss satellite applications without prejudice as premature if the application is filed before the ITU adopts a necessary international frequency allocation. We will, however, consider applications filed after the ITU adopts an international frequency allocation but before the Commission adopts a domestic allocation. We will consider such applications only on a non- conforming, non- harmful interference basis to facilities operating consistent with the Table of Frequency Allocations. 283 In addition, parties seeking authority to operate on a non- conforming basis must request a waiver of Section 2. 106 of the Commission's rules, 284 and must demonstrate good cause for that waiver. 285 276 Space Station Reform NPRM, 17 FCC Rcd at 3860 (para. 37). 277 Space Station Reform NPRM, 17 FCC Rcd at 3860 (para. 37). 278 CTIA Comments at 2- 3. 279 Teledesic Comments at 17. 280 Section V. D. 1. 281 47 C. F. R. § 2.106. 282 Although we will no longer accept satellite applications before an international frequency allocation is adopted, we will submit advance notice publications to the ITU on behalf of U. S. entities before an international frequency allocation is adopted, provided that the entity agrees to pay all ITU cost recovery fees. Preparing an advance publication will not give a party any standing in any queue. 283 In the event that the Commission later adopts a frequency allocation, any entity operating on a non- conforming, non- harmful interference basis will be required to come into compliance with the rules governing that allocation. 284 47 C. F. R. § 2.106. 50 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 51 f. Feeder Links and Inter- Satellite Links 125. Background. In the Notice, the Commission observed that some MSS services use feeder links, which are radio links that transmit a user's messages in both directions between the system's satellites and the gateway earth station that connects the MSS network with the public switched telephone network. 286 Other satellite services employ inter- satellite service links, by which satellites in a constellation may communicate with each other. 287 The Commission proposed using the first- come, first- served procedure for applications for feeder links or inter-satellite links, and considering service link requests separately from requests for feeder links or intersatellite links. 288 The Commission recognized that this could result in granting service band authority and feeder link authority to different parties, but reasoned that applicants that are not authorized to use the feeder link frequencies they requested can apply for authority to operate in other feeder link frequencies. 289 126. Discussion. SES Americom argues that considering feeder links and intersatellite links separately from service link requests would increase delay because the licensee could not proceed with its business plan until it receives all the authority it requests. 290 SES Americom is also concerned that considering these requests separately might prevent an applicant from obtaining all the authority it requests. 291 127. We will consider requests for service link authority separately from feeder link and intersatellite link requests. 292 SES Americom is mistaken in assuming that separate processes for service link, feeder link, and intersatellite link requests would not allow us to issue satellite licenses faster than we could in a processing round. This is because, as we explained in the Notice, the current procedure is particularly slow when it is used to consider feeder link and intersatellite link requests. 293 Because both the modified processing round approach and the first- 285 See WAIT Radio v. FCC, 418 F. 2d 1153 (D. C. Cir., 1969); Northeast Cellular Telephone Co. v. FCC, 897 F. 2d 1164 (D. C. Cir., 1990). 286 Space Station Reform NPRM, 17 FCC Rcd at 3860- 61 (para. 38), citing 2 GHz Order, 15 FCC Rcd at 13156 (para. 68). 287 Space Station Reform NPRM, 17 FCC Rcd at 3860- 61 (para. 38), citing 2 GHz Order, 15 FCC Rcd at 13156 (para. 68); PanAmSat Licensee Corp. Application for Authority to Construct, Launch, and Operate a Ka- Band Communications Satellite System in the Fixed- Satellite Service at Orbital Locations 58° W. L. and 125° W. L., Memorandum Opinion and Order, 16 FCC Rcd 11534, 11535 (para. 4) (2001) (PanAmSat Ka- band License Cancellation Review Order). 288 Space Station Reform NPRM, 17 FCC Rcd at 3860- 61 (para. 38). 289 Space Station Reform NPRM, 17 FCC Rcd at 3861 (para. 39). 290 SES Americom Comments at 7- 8. 291 SES Americom Comments at 8. 292 Although we will consider these requests separately, we will allow applicants to include service link requests and feeder link or intersatellite link requests in the same application. 293 Space Station Reform NPRM, 17 FCC Rcd at 3853- 54 (paras. 15- 18). 51 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 52 come, first- served approach are faster than the current procedure, considering feeder link and intersatellite link requests separately from service link requests will eliminate substantial delay in service to the public. Moreover, under the single queue approach we adopt above, we will begin our consideration of a service link request and its associated feeder link or intersatellite link request at the same time. Thus, it is not likely that there will be a long time between our action on the service link request and our action on the feeder link or intersatellite link request. Conversely, on occasion, there have been long periods of time between service link authorizations and feeder link or intersatellite link authorizations under our current procedures. 294 In any case, we will continue to give licensees 30 days to decide whether to accept the license. 128. We disagree with SES Americom that considering feeder link and intersatellite link requests separately from service link requests, by itself, might prevent an applicant from obtaining all the authority it requests. In cases where both service link and feeder link requests are considered in modified processing rounds, all qualified applicants will get some service link authority and some feeder link authority. In cases where we consider a feeder link request pursuant to the first- come, first- served procedure, we would grant the request unless the applicant is not qualified, or we previously granted that authority to another applicant. Trying to combine our review of service link requests together with our review of feeder link and intersatellite link requests would not have any effect on our substantive decisions regarding each satellite application. It would make the analysis more complex and lengthen the procedure, however. 129. In addition, even if considering feeder link and intersatellite link requests separately from service link requests prevented an applicant from obtaining all the authority it requests, this would not warrant rejection of the Commission's proposal. 295 MSS systems have a great deal of flexibility. In cases where an applicant is not granted the specific feeder link or intersatellite link authority it requests, the licensee will often still be able to satisfy its requirements by applying for other frequencies. Alternatively, in cases where the licensee's MSS satellite system employs a GSO satellite, there are usually several orbital positions available at which a GSO satellite could communicate with the MSS system's gateway earth stations. This gives the licensee additional flexibility in provisioning its feeder links. In any case, as a result of eliminating the anti-trafficking rule for satellites, 296 an applicant will be able to negotiate with other licensees to purchase feeder link or intersatellite link authority. 130. Furthermore, we must consider service link requests separately from feeder link and intersatellite link requests in cases in which the service link application may not fall under the same classification as its associated feeder link or intersatellite link request. In such cases, considering service link and feeder link requests together would require the Commission to consider part of an application pursuant to a procedure that is not well suited to that request. By considering service link requests separately from feeder link or intersatellite link requests, we can ensure that this situation will not arise. 294 See, e. g., GE Americom Communications Galaxy Inc. Application for Authority to Construct, Launch, and Operate a Ka- band Satellite System in the Fixed Satellite Service, Order and Authorization, 12 FCC Rcd 6475 (Int'l Bur., 1997); GE American Communications, Inc., Application for Authority to Construct, Launch, and Operate a Ka- band Satellite System in the Fixed- Satellite Service, Order and Authorization, 16 FCC Rcd 2461 (Int'l Bur., 2001) (about three- and- a- half years between service band authorizations and intersatellite link authorizations in first Ka- band processing round). 295 SES Americom Comments at 8. 296 Section VII. D. 52 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 53 131. Accordingly, our procedures for applications for feeder link or intersatellite link authority will be consistent with our procedures for the associated service link application. In cases where the proposed service link is a GSO- like service, the first- come first- served procedure set forth in this section of the Order will apply. Examples of these applications are requests for an intersatellite link between two GSO satellites, and requests for a feeder link between a fixed earth station and a GSO satellite. In all other cases, where the associated service link application proposes an NGSO- like satellite system, the modified processing round procedure will apply. 297 We also note that licensees will be allowed 30 days to decide whether to accept any license grant. 2. Selection Among Mutually Exclusive Applications 132. Background. In the Notice, the Commission pointed out that a first- come, first-served procedure requires some method for deciding among two or more mutually exclusive space station applications that are filed on the same day. 298 As a first- tier selection mechanism, the Commission proposed mandatory electronic filing for satellite applications, and considering applications in the chronological order that they are filed, to the nearest thousandth of a second, regardless of whether it receives the application after the close of business or during a weekend. 299 As a second- tier selection mechanism, in the rare event that two applications requesting the same frequencies are filed at the same instant, the Commission proposed dividing the available spectrum by the number of mutually exclusive applicants. 300 The Commission noted that it adopted this approach in the 2 GHz Order. 301 133. Discussion. Teledesic supports basing the filing status of applications on the time each application is filed, measured to the nearest thousandth of a second, because it expects this will eliminate cases of mutually exclusivity. 302 Teledesic also argues that the Commission's proposed sharing method is acceptable, provided that there are few cases in which mutually exclusive applications must be considered together. 303 297 We discuss milestones for satellite systems using feeder links or intersatellite links in Section VII. C. 7. below. 298 Space Station Reform NPRM, 17 FCC Rcd at 3862- 63 (para. 45). 299 Space Station Reform NPRM, 17 FCC Rcd at 3862- 63 (para. 45). As discussed below, we expect to manage this process by adopting our mandatory electronic filing proposal in this Order. 300 Space Station Reform NPRM, 17 FCC Rcd at 3863 (para. 46). 301 Space Station Reform NPRM, 17 FCC Rcd at 3863 (para. 46), citing 2 GHz Order, 15 FCC Rcd at 16138 (para. 16). 302 Teledesic Comments at 22; Teledesic Reply at 21- 22. 303 Teledesic Comments at 23. In the event that the Commission adopts any procedure in which a large number of mutually exclusive applications must be considered together, Teledesic opposes band segmentation, claiming that there are other sharing methods that make more use of the available spectrum. Teledesic does not identify those other methods, however. Teledesic Comments at 22- 24. Teledesic argues further that, in the event that we adopt a procedure that allows for mutually exclusive applications to be considered together, we should allow negotiations and not limit them to a 60- day period. Teledesic Comments at 23. 53 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 54 134. We adopt our proposal to base the filing status of satellite applications on the time each application is filed measured to the nearest thousandth of a second. As Teledesic points out, this will limit the number of applications that must be considered together, and so should enable us to expedite our review of satellite applications substantially. Also, as we explained above, there is nothing in the Communications Act that precludes us from defining mutual exclusivity narrowly, to facilitate the orderly administration of applications. 304 135. We also adopt our proposed second- tier selection mechanism of dividing the spectrum at a particular orbit location evenly among the applicants in cases where two or more applicants file mutually exclusive applications at the same thousandth of a second. Because there should be very few cases in which multiple applicants file at the same thousandth of a second, if any, we do not envision a situation where a GSO- like satellite applicant will be authorized to use less than half the spectrum at a given orbit location. 305 In those rare cases in which a licensee is authorized to use only half the spectrum at a given orbit location, it may be possible for both licensees to provide a viable service with that spectrum. Further, by eliminating the anti-trafficking rule for satellites, licensees will be able to purchase each other's spectrum rights and responsibilities. 3. Amendments 136. Background. In the Space Station Reform NPRM, the Commission noted that its first- come, first- served procedure for broadcast license applications included a provision that amendments to an application that create a conflict with any other application filed prior to the amendment would cause the underlying application to lose its "status" relative to applications behind it in the queue. 306 The Commission observed further that a "major" amendment to a satellite application in a processing round is treated like a new application, and so a major amendment filed after a cut- off date causes the underlying application to be removed from the processing round. 307 Generally, a "major amendment" is one that increases the potential for interference to other applicants or licensees. 308 The Commission proposed revising its satellite application amendment rules so that a major amendment to a satellite application in a first- come, first- served procedure would cause the underlying application to be moved to the end of the queue. 309 304 Section VI. D. 9.b. above, citing, e. g., Ashbacker, 326 U. S. at 333 n. 9. 305 In fact, the only time we think that the probability of two or more applications file at the same thousandth of a second is more than de minimis is the time that the rule revisions we adopt in this Order take effect. We adopt safeguards for this possibility in Section VII. E. below. 306 Space Station Reform NPRM, 17 FCC Rcd at 3866 (para. 55), citing TV and FM Broadcast Order, 50 Fed. Reg. at 19941 (para. 31). 307 Space Station Reform NPRM, 17 FCC Rcd at 3866- 67 (para. 56), citing 47 C. F. R. § 25. 116. 308 Space Station Reform NPRM, 17 FCC Rcd at 3866- 67 (para. 56), citing 47 C. F. R. § 25. 116( b)( 1). 309 Space Station Reform NPRM, 17 FCC Rcd at 3866- 67 (para. 56). 54 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 55 137. Furthermore, to prevent applicants from bypassing this prohibition by merging with another company or transferring control of its business, the Commission proposed treating such transactions as major amendments that cause any pending applications filed by that applicant to be treated as a new application for purposes of determining processing order. In other words, the Commission did not propose a blanket prohibition on such transfers that otherwise meet the requirements of our rules, but rather proposed moving the pending applications of the parties in the transaction to the end of the relevant queue. 310 We did not expect adoption of this proposal to deter a significant number of legitimate business transactions. This was because, in most cases in which the parties to the transaction have assets or provide services, the effects of the transaction on their pending satellite applications would appear to be a small consideration, especially given that they would have a limited number of pending applications under our proposed rules. 311 138. Discussion. Teledesic supports the Commission's proposal for considering amendments to pending applications in a first- come, first- served procedure. 312 SES Americom and Teledesic assert that treating a transfer of control application as a major amendment with respect to pending satellite license applications could deter applicants from entering into legitimate business transactions, however. 313 139. Commenters focus their attention on the treatment of transfers of control as a major amendment, but do not specifically oppose the Commission's proposal to move an application to the end of the queue when the applicant files a major amendment to that application. Accordingly, we adopt this proposal. We will treat major amendments to GSO- like satellite license applications as newly filed applications. Major amendments will cause the license application to be moved to the end of the queue. 140. Transfers of control are treated as major amendments under our current rules. 314 Thus, in effect, SES Americom and Teledesic are requesting us to revise our rules so that transfer of control applications are no longer considered major amendments. We adopt the commenters' recommendation. The Commission did not intend the first- come, first- served procedure to deter legitimate business transactions. Accordingly, in light of the evidence in the record that continuing to treat transfers of control as major amendments in a first- come, first- served procedure might deter legitimate business transactions, we revise this rule. We also revise this rule for NGSO- like satellite system applications considered in modified processing rounds. We see no reason to treat transfers of control differently in the two licensing procedures we adopt in this Order. 315 4. Modifications 310 Space Station Reform NPRM, 17 FCC Rcd at 3865- 66 (para. 53). 311 Space Station Reform NPRM, 17 FCC Rcd at 3865- 66 (para. 53). 312 Teledesic Comments at 24. 313 SES Americom Comments at 5; Teledesic Comments at 30. 314 47 C. F. R. § 25. 116( b)( 3). 315 In the event of a merger, the limits on pending applications and unbuilt satellites will apply to the new company, and it will be required to withdraw applications to the extent that it exceeds those limits. See Section VII. E. 3. 55 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 56 141. Background. Modifications are changes to a licensee's operating authority after the license has been granted. In the Notice, the Commission proposed retaining our current modification procedure as part of our first- come, first- served approach, with a few exceptions. 316 First, in those rare cases in which two or more applications are submitted at the same thousandth of a second, and we divide the spectrum at a particular orbit location evenly among the applicants pursuant to the second- tier selection mechanism, 317 the Commission proposed that it would not consider modification requests seeking to increase the licensee's bandwidth. 318 Second, for modification requests such as relocating a GSO satellite to a new orbital location, or to add additional operating spectrum, the Commission would place those modification requests behind other applications with priority in the queue, and behind any other previously filed conflicting application. 319 142. Discussion. The Commission's proposal for considering modification requests in a first- come, first- served procedure is in accord with Teledesic's single- queue proposal that we adopted above. 320 Modification requests can be placed in the queue together with new license applications, and granted if they are not inconsistent with any previously granted license or modification. 143. Teledesic argues, however, that there are some license modifications that do not increase the likelihood of interference, and that the consideration of such modification requests should not be delayed pending considerations of other applications. 321 Teledesic recommends considering modification requests outside of any queue if they do not "degrade" the interference environment, and classifying such requests as "minor." Teledesic recommends classifying other modification requests as "major" and considering them only after consideration of previously filed applications. 322 Teledesic recommends making the determination between major and minor modification requests on a case- by- case basis. 323 144. We do not adopt Teledesic's proposal at this time. The first- come, first- served procedure will enable the Commission to act on new satellite license applications more quickly 316 Space Station Reform NPRM, 17 FCC Rcd at 3867 (para. 58). 317 Section VI. E. 2. above. 318 Space Station Reform NPRM, 17 FCC Rcd at 3867 (para. 57). 319 Space Station Reform NPRM, 17 FCC Rcd at 3867 (para. 58). 320 Section VI. E. 1. a. 321 Teledesic Comments at 25- 26. According to Teledesic, "current law" distinguishes between major and minor modifications based on whether the modification increases or decreases the likelihood of interference. Teledesic Comments at 24- 25. Teledesic is mistaken. Section 25. 117( d) does not distinguish between major and minor modifications for space station licenses. This mistake does not, however, preclude us from considering Teledesic's proposal. 322 Teledesic Comments at 26- 27. 323 Teledesic Comments at 27. 56 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 57 than is now possible, 324 and should expedite our review of modification requests as well. Further, deciding whether a proposed modification increases the potential for interference often requires a complex analysis. Unless we can categorically classify some modifications as "minor," conducting such a complex case- by- case analysis of modification requests as they are filed will delay action on other applications in the queue. 325 5. Hybrids 145. Background. Hybrid satellites are satellites designed to operate in more than one frequency band. 326 We try to encourage deployment of hybrid satellites because there are cost benefits in implementing several service bands on a single space platform. 327 In the Notice, when the Commission was contemplating a first- come, first- served procedure with a separate queue for each orbit location and each band, the Commission proposed considering hybrid applications as follows. In cases where the applicant is first in the queue in both frequency bands, the Commission would simply grant the application. In cases where the applicant is first in the queue in only one frequency band, the Commission proposed to grant authority to operate in that band, and deny authority to operate in the other band. 328 In cases where one of the frequency bands has not been allocated for satellite service, or where the Commission has adopted service rules for only one of the bands, the Commission proposed granting authority to operate in one frequency band. The application would remain pending with respect to the band without the international or domestic frequency allocation or service rules, consistent with the Commission's proposed first-come, first- served procedure for single band satellites. 329 146. Discussion. Hughes contends that a first- come, first- served procedure would discourage hybrid satellites, assuming that two separate queues would seldom be aligned. 330 SES Americom argues that a hybrid satellite applicant could be foreclosed from using a "critical frequency band" if another applicant filed for that band a few seconds before the hybrid applicant. 331 Teledesic contends that adopting its proposal to create a first- come, first- served procedure with one queue would simplify treatment of hybrid satellite applications more than the Commission's proposed first- come, first- served procedure. 332 324 Section VI. D. 2. above. See also Teledesic Comments at 27- 28. 325 Some parties have proposed such a categorization for space station modifications. We will consider those proposals in a future Order. 326 Space Station Reform NPRM, 17 FCC Rcd at 3868 (para. 59). 327 Space Station Reform NPRM, 17 FCC Rcd at 3868 (para. 59), citing Rulemaking to Amend Parts 1, 2, 21, and 25 of the Commission’s Rules to Redesignate the 27. 5- 29.5 GHz Frequency Band, to Reallocate the 29.5- 30.0 GHz Frequency Band, to Establish Rules and Policies for Local Multipoint Distribution Service and for Fixed Satellite Services, Third Report and Order, CC Docket No. 92- 297, 12 FCC Rcd 22310, 22322 (para. 31) (1997) (Ka- Band Service Rules Order). 328 Space Station Reform NPRM, 17 FCC Rcd at 3868 (para. 60). 329 Space Station Reform NPRM, 17 FCC Rcd at 3868 (para. 61). 330 Hughes Comments at 31. 331 SES Americom Reply at 9. 332 Teledesic Comments at 17. 57 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 58 147. In this Order above, we adopt a single queue to implement our first- come, first-served approach. 333 We explain that a single queue eliminates the issues raised by maintaining a queue for each orbit location, and allows us to expedite our process by reviewing applications in different bands at the same time. Consistent with that decision, we will consider together both frequency band requests in a hybrid satellite application for purposes of the first- come, first-served procedure. 334 Under this approach, when an applicant files a hybrid application, and that application reaches the head of the queue, we will grant it if the applicant is qualified, and granting authority to operate in that band would not conflict with any previously filed license. In cases where the applicant meets these standards for both requested frequency bands, 335 we will authorize the requested hybrid satellite. In other cases, we may authorize the applicant to operate in only one of its requested frequency bands. Also, as we proposed in the Notice, our treatment of hybrid satellite applications in which we have not adopted a frequency allocation or service rules for one or both of the bands will be consistent with the procedure we adopted above for single band satellites. 336 In other words, if we have not adopted service rules for one frequency band in a hybrid satellite application, we will authorize the applicant to operate in that band if it shows that it will be 2° compliant, and subject to any future service rules we may adopt. 337 If we have not adopted a domestic frequency allocation in one band, we will dismiss the application in part with respect to that band, or grant operating authority on a non- conforming, non- interference basis. 338 148. Finally, we conclude that SES Americom's concern, that some hybrid satellite applicants may not receive authority to operate in all the frequency bands they request, does not justify rejection of the first- come, first- served approach, either generally or for hybrid satellite applications. Satellite operators under the current procedure may not necessarily be awarded all of the spectrum requested. 339 Moreover, eliminating the anti- trafficking rule will allow a licensee to purchase spectrum rights from another licensee in a number of cases, which would allow it to construct, launch, and operate its proposed hybrid satellite. Finally, we emphasize that one of the 333 Section VI. E. 1. a. 334 An applicant filing a hybrid satellite applications will still be required to pay the fee for one satellite application, however. 335 As we did in the Space Station Reform NPRM, we assume that the application is acceptable for filing, and seeks authority to operate in two frequency bands to simplify this discussion. Space Station Reform NPRM, 17 FCC Rcd at 3868 n. 71. 336 Space Station Reform NPRM, 17 FCC Rcd at 3868 (para. 61). 337 Section VI. E. 1. d. 338 Section VI. E. 1. e. 339 Application of Columbia Communications Corporation for Modification of Authorization to Permit Operation of Ku- band Satellite Capacity on the Columbia 515 Satellite Located at 37. 7° West Longitude, Memorandum Opinion and Order, 16 FCC Rcd 12480 (Int'l Bur. 2001); Loral Space & Communication Ltd., f/ k/ a Orion Atlantic, L. P., for Authority to Launch and Operate a Hybrid Ku- band/ C-band Satellite System at the 37. 5° W. L. Orbit Location, Memorandum Opinion and Order, 16 FCC Rcd 12490 (Int'l Bur. 2001); Columbia Communications Corporation, Memorandum Opinion and Order, 15 FCC Rcd 15566, 15571 (para. 10) (Int'l Bur. 2000) (First Columbia Milestone Order). 58 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 59 overriding policy goals of this proceeding is to enable customers to get satellite service more quickly than is usually possible under our current procedure. Although we recognize that there are cost benefits in hybrid satellites, 340 those benefits do not outweigh this overriding policy goal of expediting service to the public. 341 6. Filing Window 149. Background. In the Notice, the Commission noted that its procedure for broadcast licenses included an initial 30- day filing window. All applications filed during that window were considered together on a consolidated basis, while the first- come, first- served procedure applied only to applications filed after the close of the window. 342 We did not include a filing window in our first- come, first- served proposal for satellite license applications. 343 150. Discussion. Teledesic and Intelsat supports the Commission's proposal. 344 On the other hand, Hughes argues that, whenever an application is filed, the Commission must give other parties an opportunity to file applications that are mutually exclusive with the first application. 345 We will not include a filing window in our first- come, first- served procedure for GSO- like satellites. We have previously considered and rejected Hughes's argument that the Communications Act requires the Commission to give applicants an opportunity to file mutually exclusive applications. 346 F. Modified First- Come, First Served Proposal 151. Background. Intelsat proposes something it calls the modified first- come, first-served procedure. 347 Intelsat intends all of its proposals to be considered together as a single package. 348 This package of proposals may be summarized as follows: 340 Space Station Reform NPRM, 17 FCC Rcd at 3868 (para. 59), citing Ka- band Service Rules Order, 12 FCC Rcd at 22322 (para. 31). 341 When a satellite operator proposed modifying its hybrid C/ Ku- band satellite license to authorize two single- band satellites, the Bureau found that there were no compelling public interest considerations weighing against the modification request because the modification would "permit the expedited introduction of Ku- band service to customers. . . " Assignment of Orbital Locations to Space Stations in the Domestic Fixed- Satellite Service, Application of GE American Communications, Inc., for Modification of Authorization to Construct, Launch, and Operate a Space Station in the Fixed- Satellite Service, Memorandum Opinion and Order, 14 FCC Rcd 686, 688 (para. 7) (Int'l Bur., Sat. and Rad. Div., 1998). 342 Space Station Reform NPRM, 17 FCC Rcd at 3862 (para. 42), citing TV and FM Broadcast Order, 50 Fed. Reg. at 19940- 41 (paras. 28- 30). 343 Space Station Reform NPRM, 17 FCC Rcd at 3862 (paras. 43- 44). 344 Teledesic Comments at 22; Intelsat Comments at 13- 14. 345 Hughes Comments at 19- 20. 346 Section VI. D. 9.b. above; Wireless Cable Reconsideration Order, 6 FCC Rcd at 6776 (paras. 61- 62). 347 Intelsat Comments at 8. 59 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 60 € Applies only to new license applications for orbital locations and spectrum with established service rules and frequency allocations, such as the C- band, Ku- band, and Ka- band, but not to services where band- segmentation is preferable, such as MSS. In other words, Intelsat would not apply this procedure to applications for authority to operate in a frequency band where needed service rules or allocations have not yet been adopted. 349 € Applicants are allowed "partial fungibility." Under this proposal, an applicant that is second- in- line in a given queue is permitted to switch its application to a GSO orbit location for which there are no pending applications. If two or more second- in- line applicants switch to the same location, however, they would be allowed to switch back to their originally requested location. 350 € The Commission must strenuously enforce milestone obligations. 351 € Applicants must provide evidence of a $10 million bond, payable to the U. S. Treasury, upon failure to meet a milestone or revocation of a license for any other reason. 352 € Applicants can transfer licenses and applications at cost. 353 € The Commission must act on applications within 90 days. 354 152. SES Americom argues that limiting the first- come, first- served proposal to "established bands" would not address any of the concerns that commenters have raised about potential for speculation in or the legal basis for a first- come, first- served procedure. 355 SES Americom also questions whether a satellite service should be considered "established" as soon as the Commission adopts service rules and frequency allocations. 356 SES Americom criticizes Intelsat's partial fungibility proposal because it could lead to multiple applicants switching among queues on an almost constant basis. 357 153. Discussion. In this Order, we have adopted portions of Intelsat's modified first-come, first- served approach. As Intelsat suggests, we have adopted a first- come, first- served approach for GSO- like systems but not for NGSO- like systems, where we agree that a band- 348 Intelsat Comments at 3. 349 Intelsat Comments at 9- 10. 350 Intelsat Comments at 15- 17. 351 Intelsat Comments at 19- 21. 352 Intelsat Comments at 10- 12. 353 Intelsat Comments at 17- 19. 354 Intelsat Comments at 14- 15. See also Teledesic Reply at 24 (acting on applications within 90 to 180 days would deter speculation). 355 SES Americom Reply at 14- 15. 356 SES Americom Reply at 15- 16. 357 SES Americom Reply at 17. 60 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 61 segmentation framework is more appropriate. We also agree that licensees should be able to freely transfer licenses and that we should strictly enforce milestone conditions. 154. Nevertheless, limiting these reforms to "established" frequency bands would make them inapplicable to the vast majority of future satellite applications. As we explained previously, we find that the first- come, first- served framework, as adopted here, will allow us to act on applications involving "new" frequency bands efficiently and effectively. Nor will we adopt Intelsat's proposal to permit second- in- line applicants to switch to a queue for another GSO orbital location, because we decided above not to maintain separate queues for each orbit location. 358 Moreover, to the extent that Intelsat is in effect proposing that we allow applicants to make major amendments to their applications to state new orbit locations without moving to the end of the queue, we reject this proposal. It would unreasonably encourage speculation to allow applicants to select any orbit location available at the time their application reaches the head of the queue, rather than submitting a substantially complete satellite application specifying an orbit location. For this reason, this would be an unreasonable departure from the Commission's first-come, first- served procedure for broadcast licenses. 359 Finally, we consider below Intelsat's proposed bond- posting requirement and mandatory electronic filing requirement. G. Fungibility Policy 155. Background. In Section V. of this Order above, we considered many proposals from the Notice for revising the current processing round procedure. Another revision proposed in the Notice was to eliminate the fungibility policy. 360 In the Notice, the Commission noted that it has historically maintained a policy of treating GSO orbital locations as fungible in the context of processing rounds in the fixed satellite service as one means of resolving mutually exclusive situations in those processing rounds. 361 The fungibility policy is applied where it is not possible to assign to each participant in a processing round the exact orbital location that is requested. In those situations, rather than institute lengthy proceedings to decide which of several applicants should be assigned to a requested location, we assign some other GSO location to that applicant. 362 156. The Commission proposed to streamline processing rounds by eliminating the fungibility policy. 363 We observed that working to find a way to accommodate each applicant as 358 Section VI. E. 1. a. Because we do not adopt Intelsat's proposals as a single package, we need not determine whether Intelsat's proposals would have enabled us to act on satellite applications within 90 days as Intelsat claims. See Intelsat Comments at 14- 15. 359 TV and FM Broadcast Order, 50 Fed. Reg. at 19941 (para. 31), cited in Space Station Reform NPRM, 17 FCC Rcd at 3866 (para. 55). 360 Space Station Reform NPRM, 17 FCC Rcd at 3874- 75 (paras. 79- 81). 361 Space Station Reform NPRM, 17 FCC Rcd at 3874 (para. 79), citing Assignment of Orbital Locations to Space Stations in the Domestic Fixed Satellite Service, Memorandum Opinion and Order, 84 FCC 2d 584, 601 (para. 45) (1981) (1980 Assignment Order); Separate Systems Order, 101 FCC 2d at 1176 n. 168. 362 Space Station Reform NPRM, 17 FCC Rcd at 3874 (para. 79). 363 Space Station Reform NPRM, 17 FCC Rcd at 3874 (para. 80). 61 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 62 much as possible can substantially increase the time needed to complete a processing round. 364 We further observed that the backlog in publishing ITU submissions makes this accommodation more difficult, because it is difficult to determine whether we are assigning an applicant to an orbit location that has been encumbered by an ITU filing from another Administration. 365 We reasoned that relying on applicants to take responsibility for requesting orbit locations that are not encumbered by another Administration's ITU submission would enable us to complete processing rounds more quickly. 366 Accordingly, we proposed eliminating the fungibility policy because it would eliminate the need to make these determinations. 367 157. Pleadings. Several commenters claim that the fungibility policy is necessary to resolve mutually exclusive situations in processing rounds. 368 SIA and PanAmSat disagree with the Commission that the ITU's backlog in publishing ITU submissions warrants eliminating the fungibility policy, because the ITU maintains a database of filed but unpublished ITU submissions. 369 SIA also asserts that the Commission has not in the past delayed issuing licenses until the ITU has assigned the orbit location to a United States licensee. 370 Inmarsat maintains that eliminating the fungibility policy would preclude the Commission from reassigning a satellite operator to a new location in cases involving coordination of U. S.- licensed and non- U. S.- licensed satellite systems. 371 Alternatively, Teledesic recommends eliminating the fungibility policy because GSO orbital locations are not in fact fungible in the fixed satellite service. 372 158. Discussion. Under the procedures we adopt here, the fungibility policy is unnecessary because it will no longer apply to any satellite applications. As we explained in the Notice, the fungibility policy applies only to GSO- like satellite applications considered in processing rounds. 373 Thus, under our new procedures, the fungibility policy cannot be applied to GSO- like applications because we will consider those applications in a first- come, first- served procedure, not in processing rounds. We assume that applicants are willing to be licensed for the orbital locations for which they apply, and that they will either take the location subject to any encumbrances such as ITU priority, and at their own risk, or will reject the license. Moreover, the fungibility policy has never been applicable to NGSO- like satellite applications. The 364 Space Station Reform NPRM, 17 FCC Rcd at 3874 (para. 80). 365 Space Station Reform NPRM, 17 FCC Rcd at 3874 (para. 80). 366 Space Station Reform NPRM, 17 FCC Rcd at 3874 (para. 80). 367 Space Station Reform NPRM, 17 FCC Rcd at 3874 (para. 80). 368 SIA Space Station Comments at 27; PanAmSat Space Station Comments at 11; Hughes Space Station Comments at 48- 49; SES Americom Space Station Reply at 10. 369 SIA Space Station Comments at 27; PanAmSat Space Station Comments at 11- 12. 370 SIA Space Station Comments at 11, 27. 371 Inmarsat Space Station Comments at 8- 11, citing Assignment of Orbital Locations to Space Stations in the Fixed- Satellite Service, Memorandum Opinion and Order, 13 FCC Rcd 13863 (Int'l Bur. 1998). 372 Teledesic Space Station Comments at 33- 34. 373 Space Station Reform NPRM, 17 FCC Rcd at 3874 (para. 80). 62 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 63 fungibility policy applies to GSO orbital locations, not NGSO orbital planes. Finally, the fungibility policy is unnecessary for GSO MSS satellite applications, which are "NGSO- like," and so they will be considered pursuant to the modified processing round approach. Such satellites must operate in different frequency band segments to avoid becoming mutually exclusive, and therefore may be essentially collocated in the GSO orbit, which in turn obviates the need for the fungibility policy. 159. We disagree with Inmarsat that elimination of the fungibility policy would preclude us from considering licensees' modification applications requesting relocation of a satellite. By definition, modification applications request revisions to a license after it is issued. Under the fungibility policy, the Commission treated FSS orbital locations as fungible as one means of resolving mutually exclusive situations in the context of processing rounds. 374 In other words, the fungibility policy applies only at the time licenses are issued in a processing round context, not afterwards. Thus, eliminating the fungibility policy will have no effect on future modification applications. VII. OTHER ISSUES A. Background 160. The Commission invited comment on several proposals intended to make the satellite application process more efficient, and thus help speed provision of service to the public, regardless of whether we adopt the first- come, first- served option or modify the current procedure. 375 We discuss each of those proposals below. B. Financial Qualifications 1. Eliminating the Financial Qualification Requirement 161. Background. Applicants for satellite licenses must now show generally that they have the financial resources to construct and launch a satellite or satellite constellation, and to operate it for one year. 376 In the Notice, the Commission observed that this requirement and its milestone requirements serve very similar purposes. 377 The Commission explained that it examines financial qualifications to help ensure that licensees have the financial resources to proceed with their plans so that service is promptly made available to users. 378 Similarly, 374 See Space Station Reform NPRM, 17 FCC Rcd at 3874 (para. 79), citing 1980 Assignment Order, 84 FCC 2d at 601 (para. 45); Separate Systems Order, 101 FCC 2d at 1176 n. 168. 375 See Space Station Reform NPRM, 17 FCC Rcd at 3880 (para. 98). 376 Space Station Reform NPRM, 17 FCC Rcd at 3880 (para. 100), citing 47 C. F. R. § 25. 114( c)( 13) and rules cited therein. 377 Space Station Reform NPRM, 17 FCC Rcd at 3881 (para. 102). 378 Space Station Reform NPRM, 17 FCC Rcd at 3880 (para. 100), citing, e. g., Amendment to the Commission's Rules to Allocate Spectrum for, and to Establish Other Rules and Policies Pertaining to, a Radiodetermination Satellite Service, Second Report and Order, Gen. Docket No. 84- 689, 104 FCC 2d 650, 663 (para. 23) (1986) (RDSS Second Report and Order); Norris Satellite Communications, Inc., Order and Authorization, 7 FCC Rcd 4289, 4291 (para. 11) (1992). 63 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 64 milestone deadlines ensure that licensees construct and launch their systems in a timely manner. 379 Accordingly, the Commission invited comment on eliminating the financial qualification requirements currently in its rules, and relying exclusively on our milestone policy to ensure that licensees provide service in a timely fashion. 380 162. Discussion. Several commenters oppose eliminating the financial showing and stress that it is necessary to ensure that prospective licensees are able to construct their proposed satellite systems. 381 Teledesic, however, supports the proposal to eliminate financial qualification requirements and agrees with the Commission that milestones serve many of the same purposes. 382 Teledesic argues further that there have been several cases of licensees who failed to launch their satellites despite meeting the financial qualification requirements, and licensees who launched their satellites based on attracting investment with a sound business plan rather than relying on assets available at the time an application is filed, as our financial qualification requirements primarily measure. 383 163. Some parties suggest relaxing the financial qualification requirement rather than eliminating it. PanAmSat specifically proposes that the Commission require applicants to demonstrate financing for a substantial portion (e. g., 30 percent) of their costs when they file or require applicants to demonstrate financing for an additional portion of costs after a later specified period. 384 Additionally, PanAmSat proposes that the Commission refrain from requiring a financial showing for new services or frequencies until the process for allocating frequencies internationally and domestically has been completed and the Commission has adopted service rules. 385 SIA and Inmarsat also argue that the Commission should not eliminate its financial qualification requirement, but instead should revise the requirement to accommodate new entrants in the industry. 386 379 Space Station Reform NPRM, 17 FCC Rcd at 3881 (para. 101), citing First Columbia Milestone Order, 15 FCC Rcd at 15571 (para. 11); National Exchange Satellite, Inc., Memorandum Opinion and Order, 7 FCC Rcd 1990, 1991 (para. 8) (Com. Car. Bur. 1992) (Nexsat Order), citing MCI Communications Corporation, Memorandum Opinion and Order, 2 FCC Rcd 233 (1987) (MCI Order). 380 Space Station Reform NPRM, 17 FCC Rcd at 3881 (para. 102). 381 Hughes Comments at 43- 45; Boeing Comments at 10- 12; Intelsat Comments at 10- 12; SES Americom Reply at 12. 382 Teledesic Comments at 41- 42. 383 According to Teledesic, only 11 of 19 participants in the 1983 C and Ku- band processing round launched their satellites, 3 of 23 participants in the 1985 processing round, and 11 of 19 in the 1988 processing round. Teledesic Reply at 26- 28. See also Application of TRW, Inc., for Authority to Construct, Launch, and Operate a Low Earth Orbit Satellite System in the 1610- 1626. 5 MHz/ 2483. 5- 2500 MH Band, Order and Authorization, 10 FCC Rcd 2263, 2264 (para. 6) (Int'l Bur. 1995), citied in Teledesic Reply at 27. 384 PanAmSat Comments at 15- 16. 385 PanAmSat Comments at 15- 16. 386 SIA Comments at 34; Inmarsat Comments at 11- 12. 64 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 65 164. We decide to eliminate the financial qualification requirement currently in the Commission's rules. Our current financial qualification requirements have not proven to be determinative of whether a licensee implements its system. Our experience has shown that financially qualified licensees have chosen not to go forward, while other licensees who could not have met the requirement but were awarded a license because we waived the requirement, have successfully built and launched systems. We note that we have decided not to apply the current financial qualification requirements to mobile satellite service (MSS) operators in the 2 GHz band, in part because strict enforcement of milestone requirements would ensure timely system construction and service deployment, 387 and have often granted waivers of this rule in cases where all the pending satellite license applications could be accommodated. We conclude that strictly enforcing our milestone schedule provides more certainty that systems will be timely built, while allowing smaller or start- up companies an opportunity to succeed or fail in the marketplace. Our milestone policy will also allow us to reclaim unused spectrum in a timely manner, and to assign that spectrum immediately to those licensees that are proceeding (in the NGSO- like context) or quickly to new applicants (in the GSO- like context). 165. We also decide not to revise the current financial qualification requirement as commenters propose. By eliminating the requirement, we facilitate new entry more effectively than the relaxed financial qualifications would. In addition, relaxing the financial qualification requirement would not make it a better predictor of whether the licensee will construct its satellite system in a timely manner. Instead, we adopt a new financial qualification requirement proposed by commenters, posting bonds, as set forth below. 2. Posting of Bonds 166. Background. In the Notice, the Commission invited interested parties to suggest alternatives to its proposal to eliminate the current financial qualification requirement, 388 and in general to recommend other ways to reform the satellite licensing process. 389 Intelsat argues that the existing policy is insufficient to deter the filing of frivolous applications. 390 Intelsat proposes that the Commission require applicants to execute a bond in the amount of $10 million, to be included in their applications. Those bonds would be payable to the U. S. Treasury upon license revocation if the licensee has not yet incurred ten percent of their costs at the time the license is revoked. 391 Intelsat argues that a $10 million bond would be sufficient to discourage speculative applications, but would not discourage legitimate applicants because the bond would be payable only if the licensee does not make a good faith effort to proceed with construction of its satellite. 392 Intelsat claims that the Commission has previously adopted a bond requirement in 387 Space Station Reform NPRM, 17 FCC Rcd at 3881 (para. 103), citing 2 GHz Order, 15 FCC Rcd at 16150- 51 (para. 48). 388 Space Station Reform NPRM, 17 FCC Rcd at 3883 (para. 108). 389 Space Station Reform NPRM, 17 FCC Rcd at 3897 (para. 147). 390 Intelsat Comments at 10- 12. 391 Intelsat Comments at 10- 11. 392 Intelsat Comments at 11- 12. 65 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 66 another service. 393 SES Americom argues that a $10 million bond would unreasonably discourage new entry and innovative new services. 394 PanAmSat also opposes a bond requirement as excessive. 395 167. Discussion. We adopt Intelsat's proposal, as modified below, and replace our existing financial qualification requirements with a bond requirement. By requiring satellite licensees to make a financial commitment to construct and launch their satellites, we help deter speculative satellite applications, and help expedite provision of service to the public. Moreover, replacing our current financial qualification requirement with a bond requirement will result in the financial community determining whether the licensee is likely to construct and launch its satellite system. Thus, financial qualifications will become a market- driven rather than a regulatory determination. We will apply this bond requirement to new satellite licensees only, not replacement satellites. Once a licensee has begun to provide service, we are confident that its replacement satellite application will be intended to continue service, and would not be filed for speculative purposes. The bond will be payable upon missing a milestone without providing an adequate justification for extending the milestone. Licensees will be allowed to reduce the amount of the bond upon meeting each milestone. 168. We are concerned, however, by Intelsat's proposed bond amount of $10 million. The bond amount should help deter speculation, without deterring legitimate satellite applications. While Intelsat argues that a $10 million bond requirement meets these standards, SES Americom and PanAmSat disagree, and we do not have an adequate basis in the record at this time for resolving this issue. Accordingly, on an interim basis, we will set the required bond amount at $5 million for GSO- like satellite licensees, and $7.5 million for NGSO- like satellite system licensees. A higher amount for NGSO- like satellite system licensees is reasonable because a greater commitment is required to implement a multiple- satellite system. Below, we adopt a Further Notice of Proposed Rulemaking inviting parties to comment on a long- term bond requirement. 169. Furthermore, to the extent that SES Americom is correct that a bond requirement may discourage legitimate satellite operators from applying, we do not want this to affect public safety services. Accordingly, we will consider requests for complete or partial waivers of the bond requirement for satellite operators proposing satellites designed to provide public safety services. The Commission's rules provide for waivers of any rule, provided that the petitioner can show good cause for its waiver request. 396 We would consider things such as public safety intent in deciding whether a waiver is warranted. 393 Intelsat Reply at 4- 6, citing Amendment of the Commission's Rules to Provide Channel Exclusivity to Qualified Private Paging Systems at 929- 930 MHz, Report and Order, PR Docket No. 93- 35, 8 FCC Rcd 8318, 8325- 27 (paras. 22- 23) (1993) (Private Paging Exclusivity Order). In that Order, the Commission adopted a bond requirement for paging companies seeking an extension of their milestones. 394 SES Americom Reply at 16- 17. 395 PanAmSat Reply at 3. 396 47 C. F. R. § 1.3. For more on the meaning of "good cause" for purposes of waivers of Commission rules, see WAIT Radio v. FCC, 418 F. 2d 1153 (D. C. Cir. 1969) (WAIT Radio); Northeast Cellular Telephone Co. v. FCC, 897 F. 2d 1166 (D. C. Cir. 1990) (Northeast Cellular). 66 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 67 170. As proposed by Intelsat, and as the Commission did in the Private Paging Exclusivity Order, we require licensees to execute performance bonds payable to the U. S. Treasury. 397 We require a licensee to obtain this bond within 30 days of grant of their license, as a condition of its license. Otherwise, its license will be null and void. Thus, the bond requirement is in effect an additional milestone requirement. We intend this bond requirement to provide assurance that the licensee is fully committed at the time its license is granted to construct its satellite facilities, not committed merely to spend up to ten percent of the construction costs of the satellite. Therefore, we will not adopt Intelsat's proposal to make the bond payable only if the licensee has not incurred ten percent of its costs at the time the license is revoked. 398 Instead, the bond will be payable upon failure to meet any milestone, without providing adequate justification for extending that milestone. The bond would not be payable if the licensee missed a milestone because of circumstances beyond its control that warrant a milestone extension. By making the bond payable upon failure to meet any milestone based on circumstances within the licensee's control, we require licensees to commit to construct and launch its satellite system, and so we further strengthen our protections against speculation and warehousing. 171. If a licensee transfers or assigns its license, the purchaser of the license will be required to assume the bond. The bond will also be payable if the licensee surrenders its license voluntarily before a milestone date. Again, the purpose of the bond is to require the licensee to commit at the time the license is granted to construct and launch a satellite system. The purpose of the commitment is to ensure that the service is provided to the public as soon as possible. Allowing a licensee to avoid paying the bond by merely selling or surrendering its license substantially reduces the licensee's commitment to construct and launch the satellite, and so increases the likelihood that service to the public would be delayed until the license is surrendered and we reassign the license to another party. 172. In the Private Paging Exclusivity Order, the Commission allowed paging licensees to reduce the outstanding principle on their bonds as they progressed on the construction of their networks. 399 Intelsat did not include this in its proposal, however. 400 We adopt a similar provision in this Order. Below, we revise our milestone requirements to establish a total of five milestones for NGSO- like licensees, and four for GSO- like licensees. 401 Accordingly, NGSO- 397 Private Paging Exclusivity Order, 8 FCC Rcd at 8326 n. 45; Intelsat Comments at 10- 11. The surety on the bond must be a surety company deemed acceptable within the meaning of 31 U. S. C. § 9304, et seq. This requirement is also consistent with the Private Paging Exclusivity Order, 8 FCC Rcd at 8326 n. 45. 398 Intelsat Comments at 10- 11. Further, we reject proposals below for basing milestones on payment of certain percentages of the construction cost of a satellite system, because it would encourage applicants to project unreasonably low satellite costs. Section VII. C. 12. The same reasoning weighs against Intelsat's proposal to make the bond payable upon failure to spend ten percent on the construction of the satellite. 399 Private Paging Exclusivity Order, 8 FCC Rcd at 8326- 27 (para. 23). 400 Intelsat Comments at 10- 12. 401 The NGSO- like milestones are: (1) contract execution; (2) critical design review; (3) commencement of construction; (4) launch; and (5) bring entire system into operation. The GSO- like milestones are (1) contract execution; (2) critical design review; (3) commencement of construction; and (4) launch. See Section VII. C. 2. below. 67 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 68 like licensees will be allowed to reduce the amount of the bond by 20 percent of the original bond amount upon meeting each milestone after they post their bonds, and GSO- like licensees will be allowed to reduce the amount of the bond by 25 percent of the original bond amount upon meeting each milestone after they post their bonds. C. Milestone Requirements 1. Background 173. Milestones are intended to ensure that licensees provide service to the public in a timely manner, to prevent warehousing of scarce orbit and spectrum resources. Such warehousing could hinder the availability of services to the public at the earliest possible date by blocking entry by other entities willing and able to proceed immediately with the construction and launch of their satellite systems. 402 Currently, we require licensees to execute a construction contract within one year of the license grant, and to launch and begin operation of all of their authorized satellites within five to six years, depending on the type of satellite. We include these requirements as conditions in satellite licenses. 174. In the Notice, we proposed to adopt generic milestone requirements for all satellite services. We also invited comment on adding a milestone for completion of Critical Design Review (CDR), or in other words, completion of the design phase of implementation and commencement of physical construction. 403 We noted that we adopted this requirement for mobile satellite service (MSS) operators in the 2 GHz band. 404 In addition, the Commission invited comment on whether we should apply the milestones adopted in the 2 GHz Order to all satellite services, 405 including a "Commence Construction" milestone for beginning the physical construction of the satellite. 406 NGSO GSO Contract Execution 407 1 1 CDR 2 2 402 PanAmSat Ka- Band License Revocation Review Order, 16 FCC Rcd at 11537- 38 (para. 12), citing Nexsat Order, 7 FCC Rcd at 1991 (para. 8); MCI Order, 2 FCC Rcd at 233 (para. 5); First Columbia Milestone Order, 15 FCC Rcd at 15571 (para. 11). 403 Space Station Reform NPRM, 17 FCC Rcd at 3881 (para. 103). We discuss these milestones in more detail in this Order below. 404 Space Station Reform NPRM, 17 FCC Rcd at 3881 (para. 103), citing 2 GHz Order, 15 FCC Rcd at 16178- 79 (para. 108). 405 Space Station Reform NPRM, 17 FCC Rcd at 3881 (para. 103), citing 2 GHz Order, 15 FCC Rcd at 16177- 78 (para. 106). 406 See 2 GHz Order, 15 FCC Rcd at 16177- 78 (para. 106). 407 In the past, we have used the term "construction commencement" for the first milestone, to mean executing a non- contingent construction contract. In this Order, we adopt the term "contract execution" for the first milestone, and define "construction commencement" to mean the beginning of the physical construction of a satellite. 68 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 69 Commence Construction 2.5 3 Launch 408 3.5 Bring Entire System Into Operation 6 Launch and Operate 5 (Milestones are stated in number of years after authorization.) Further, we invited comment on whether we should adopt interim or additional milestone requirements. 409 175. We adopt the milestones proposed in the Notice, in addition to the 30- day bond-posting requirement adopted above. Milestones remain an important tool to prevent warehousing of scarce orbit and spectrum resources. In addition, strict enforcement of milestones will help safeguard against speculative satellite applications, because the value of the license decreases as the contract execution milestone approaches. 410 Moreover, licensees must work with the financial community to find the financing necessary to enter a contract to construct a satellite system within one year of the grant of the license. Therefore, licensees must develop a viable business plan to obtain that financing, and so milestones introduce a market- based mechanism into our licensing process. Our reasons for adopting the milestones proposed in the Notice are explained in more detail below. 2. General Comments on Milestone Proposals 176. Background. Teledesic proposes that, rather than relying solely on "generic" milestones, the Commission should develop milestones for each service and licensee. 411 SES Americom opposes Teledesic's proposal, claiming it could create uncertainty and the potential for litigation. 412 Teledesic also opposes the Commission imposing stricter milestone requirements on NGSO than on GSO satellites. 413 177. Discussion. We adopt our proposal to establish generic milestones in our rules. As an initial matter, although we have adopted milestone schedules on a case- by- case basis in the past, we have generally adopted contract execution and launch milestones consistent with those 408 Non- geostationary satellite systems must launch their first two satellites within 3. 5 years of authorization. Geostationary satellite systems must launch their first satellite within 5 years of authorization. 2 GHz Order, 15 FCC Rcd at 16177- 78 (para. 106). 409 Space Station Reform NPRM, 17 FCC Rcd at 3882 (para. 104). 410 Space Station Reform NPRM, 17 FCC Rcd at 3886 (para. 116). 411 Teledesic Comments at 43- 44. 412 SES Americom Reply at 13. 413 Teledesic Comments at 43. 69 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 70 previously used, which track those we proposed in the Notice. 414 Moreover, the milestone schedule we include in each license has generally not varied from license to license. Thus, codifying generic milestones is not a great departure from our current practice. Alternatively, Teledesic's proposal to adopt different milestones for each service would be a departure from current practice, and Teledesic does not provide an adequate justification for such a departure. 178. We disagree with Teledesic that longer milestone deadlines for NGSO licenses are warranted. As an initial matter, both NGSO licensees and GSO licensees are required to meet the same milestone schedule, except for commencement of physical construction and launch. Therefore, the NGSO milestone schedule is not substantially stricter than the GSO schedule. Further, the NGSO milestones that we proposed in the Notice are consistent with those the Commission adopted for NGSO licenses in the 2 GHz Proceeding, 415 which are similar to the schedules established for previously licensed NGSO satellite systems. 416 Moreover, the Commission observed that GSO satellite licensees need a longer period in which to launch their first satellite because individual GSO satellites may take more time to construct than an NGSO satellite within a larger constellation of technically identical satellites. 417 Thus, we see no reason to extend the milestones for other NGSO licenses in this proceeding. 3. Contract Execution Milestone 179. Background. CTIA recommends setting the contract execution milestone at nine months after the license is issued, rather than one year. 418 SES Americom replies that nine months does not take into account the need to mesh satellite design with business plans. 419 180. Discussion. We will not adopt CTIA's proposal to set the contract execution milestone at nine months. The Commission has historically set this milestone at one year after the license is granted. Our experience has shown that this time period represents a reasonable balance between ensuring that licensees are moving forward with their business plans and allowing licensees adequate time to negotiate satellite construction contracts with manufacturers. CTIA has not provided sufficient reason at this time to question the reasonableness of this balance. We may revisit this issue in the future, however, if our experience shows that a more stringent contract execution milestone is warranted. 414 PanAmSat Licensee Corp., Memorandum Opinion and Order, Order and Authorization, 13 FCC Rcd 1405 (Int’l Bur. 1997) (PanAmSat Second Round Ka- band Authorization Order). 415 See 2 GHz Order, 15 FCC Rcd at 16177 (para. 106). 416 See 2 GHz NPRM, 14 FCC Rcd at 4881 (para. 85) (discussing milestone schedules for Big LEO and NVNG MSS systems). 417 2 GHz NPRM, 14 FCC Rcd at 4881- 82 (para. 85). 418 CTIA Comments at 5. 419 SES Americom Reply at 22. 70 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 71 4. Standard for Determining Compliance with Contract Execution Milestone Requirement 181. Background. The Commission invited comment on several issues related to enforcement of its milestones. 420 First, the Commission explained that the test it now uses for determining whether a licensee has met its contract execution milestone is whether the licensee has a binding, non- contingent satellite construction contract with the manufacturer. 421 We have defined "non- contingent contract" as one where there will be neither significant delays between the execution of the contract and the actual commencement of construction, nor conditions precedent to construction. 422 The Commission noted that this test can require interpretation of construction contracts, and so can take time to administer, and can raise issues regarding requests for confidential treatment of construction contracts. 423 The Commission invited proposals for streamlining our enforcement of contract execution milestones. 424 It also invited proposals for bright- line, easily administered tests for other milestones. 425 182. Pleadings. Teledesic asserts that basing the contract execution milestone on a "non- contingent contract" is problematic because all contracts include some contingencies. 426 SES Americom replies that the concept of "non- contingent contract" is not as difficult as Teledesic asserts. 427 183. SIA criticizes the Commission for alleged delay in enforcing contract execution milestones in the past, and recommends establishing fixed procedures for contract execution inquiries and a set time limit for the submission of copies of non- contingent satellite construction contracts. 428 Similarly, PanAmSat suggests requiring that licensees submit their construction 420 Space Station Reform NPRM, 17 FCC Rcd at 3882- 83 (paras. 105- 06). 421 Space Station Reform NPRM, 17 FCC Rcd at 3882- 83 (para. 105), citing PanAmSat Licensee Corp. Memorandum Opinion and Order, 15 FCC Rcd 18720, 18723 (para. 9) (Int'l Bur. 2001) (PanAmSat Ka- band License Cancellation Order). 422 Space Station Reform NPRM, 17 FCC Rcd at 3882- 83 (para. 105), citing Norris Satellite Communications, Inc., Memorandum Opinion and Order, 12 FCC Rcd 22299, 22303- 04 (para. 9) (1997) (Norris Review Order), PanAmSat Ka- band License Cancellation Review Order, 16 FCC Rcd at 11539 (para. 16). 423 Space Station Reform NPRM, 17 FCC Rcd at 3882- 83 (para. 105). 424 Space Station Reform NPRM, 17 FCC Rcd at 3882- 83 (para. 105). 425 Space Station Reform NPRM, 17 FCC Rcd at 3882- 83 (para. 105). 426 Teledesic Comments at 42- 43. 427 SES Americom Reply at 12- 13, citing PanAmSat Licensee Corp. Application for Authority to Construct, Launch, and Operate a Ka- Band Communications Satellite System in the Fixed-Satellite Service at Orbital Locations 58° W. L. and 125° W. L., Memorandum Opinion and Order, 15 FCC Rcd 18720 (Int'l Bur. 2000), aff'd 16 FCC Rcd 11534 (2001). 428 SIA Comments at 30- 32. 71 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 72 contracts, rather than simply certifying that they have entered into non- contingent contracts. 429 Intelsat proposes that the Commission require licensees to certify under penalty of perjury that they have entered into a binding, non- contingent construction contract by the milestone date, or provide a copy of the contract. 430 Teledesic proposes that, instead of requiring licensees to submit confidential corporate information, the Commission should require licensees to certify that they have met each of their milestones. 431 184. Discussion. As an initial matter, we retain our practice of requiring a "non-contingent contract" to demonstrate compliance with the one- year contract execution milestone. This does not mean that the contract cannot contain any contingencies. Rather, a "non- contingent contract" is one that allows neither significant delays between the execution of the contract and the actual commencement of construction, nor conditions precedent to construction. 432 We have also held that a sufficient contract is one that contains no unresolved contingencies that could preclude construction of the satellite. 433 In addition, a contract that allows the licensee to cancel construction of the satellite without significant penalty is not sufficient to meet the construction commencement milestone. 434 185. We adopt SIA's and PanAmSat's proposal to require satellite licensees to submit their contracts to the Commission on or before the date of the contract execution milestone. In particular, by placing this requirement in our rules, we will eliminate the need to send a letter to licensees requesting them to submit their contracts, and so we will be able to begin review of those contracts sooner. We have found that the contracts are needed to allow us to determine whether the licensee has met the milestone. The licensee's certification has not always proven to be dispositive in the past. 435 429 PanAmSat Comments at 45- 46. 430 Intelsat Comments at 20. 431 Teledesic Comments at 42- 43. 432 Space Station Reform NPRM, 17 FCC Rcd at 3882 n. 142, citing Norris Satellite Communications, Inc., Memorandum Opinion and Order, 12 FCC Rcd 22299, 22303- 04 (para. 9) (1997) (Norris Review Order), PanAmSat Ka- band License Cancellation Review Order, 16 FCC Rcd at 11539 (para. 16). 433 Tempo Enterprises, Inc., Memorandum Opinion and Order, 1 FCC Rcd 20, 21 (para. 7) (1986) (Tempo Order). Although the Commission used this standard to review DBS due diligence requirements, it is also applicable to FSS contract execution determinations. 434 Furthermore, a contract to construct only part of a satellite system, by itself, cannot satisfy the construction commencement milestone. In cases where a licensee chooses not to construct the satellite system as licensed, we expect the licensee to file a modification application prior to the date of the construction commencement milestone, rather than simply submitting a contract to construct a different satellite system. 435 See Mobile Communications Holdings, Inc., Memorandum Opinion and Order, 17 FCC Rcd 11898, 11901 (paras. 9- 10) (Int'l. Bur., Sat. Div., 2002). In this proceeding, the licensee was required to commence construction of the first two satellites in a 16- satelite Big LEO system by July 1998, and the remaining satellites by July 2000. The licensee asserted that its contract to construct the first two satellites together with testing plans for the remaining 14 satellites constituted a non- contingent construction contract for all 16 satellites. See also Morning Star Satellite Company, L. L. C., Memorandum Opinion and Order, 15 FCC Rcd 11350, 11352 (para. 6) (Int'l. Bur. 2000). In this Order, the licensee's president submitted an 72 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 73 5. Confidential Information 186. Teledesic opposes submission of construction contracts in part because it claims that the Commission’s procedures for protection of confidential commercial information in those contracts, including our procedures for protective orders, are inadequate. 436 Teledesic does not make any concrete proposals for improving our procedures, nor does it explain how any greater protection could be extended to construction contracts within the bounds of the Freedom of Information Act (FOIA). 437 These comments lack specificity and do not provide a reasonable basis for rejecting SIA's proposal to require submission of construction contracts. As noted, we cannot necessarily rely on a licensee's assessment of its contract as proof that it has met the required milestone. 187. We take this opportunity, however, to explain generally how we plan to treat requests for confidential treatment of satellite construction contracts on a going- forward basis. If a licensee seeks confidential treatment of its construction contract, we will require it to submit an unredacted version of their contracts, and as well as a redacted version to be made publicly available. In addition, we will expect it to provide all the information needed to justify that request for confidentiality, including the information specified in Section 0.459( b) of the Commission's rules. 438 Generally, we have recognized that specific dollar amounts and some of the detailed technical specifications of satellites warrant confidential treatment. 439 We anticipate continuing that policy. 6. Critical Design Review 188. Background. SIA questions the benefits of adding a milestone date for CDR. 440 If the Commission decides to adopt such a milestone, SIA and Intelsat encourage the Commission to allow licensees to develop their own CDR deadlines, based upon the licensee’s submission of a reasonable CDR completion date. 441 PanAmSat generally opposes the proposal to add a new milestone for CDR. 442 affidavit representing that its construction contract was sufficient to meet the construction commencement milestone, even though the contract contained no terms governing construction schedules, payment schedules, or any other evidence of a binding commitment to build a satellite. See also EchoStar Satellite Corporation, Memorandum Opinion and Order, 17 FCC Rcd 8827, 8829 (para. 7) (Int'l. Bur. 2002) (documents submitted by licensee purporting to show compliance with Ka- band milestone did not include any commitment to construct a satellite with Ka- band capacity). 436 Teledesic Comments at 42- 43. 437 5 U. S. C. § 552. 438 47 C. F. R. § 0.459( b). 439 We note, however, that certain technical details are required to be included in an application for a Commission space station license. See 47 C. F. R. § 25. 114( c). We do not believe that information of this general nature should be routinely withheld from public inspection. 440 SIA Comments at 32- 33. 441 SIA Comments at 32- 33; Intelsat Comments at 21. 442 PanAmSat Comments at 17- 18. 73 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 74 189. Discussion. We conclude that we should apply the milestone schedule we adopted for licensees in the 2 GHz proceeding, including the CDR milestone requirement, to all satellite licensees on a going- forward basis. Without a CDR milestone, there would be an unacceptable amount of time for scarce orbit and spectrum resources to lie fallow in cases where the existing licenses is not proceeding and the spectrum could be reassigned to an entity willing and able to construct a satellite system in a timely manner. 443 The 2 GHz proceeding concluded that a CDR milestone will aid us in determining whether licensees are taking immediate, concrete steps toward system implementation after meeting the first milestone, and allows us to identify any failure in system progress. 444 We have not found anything in our experience with 2 GHz licensees that would weigh against applying that milestone schedule to all satellite licensees. 190. Further, we will not set CDR milestones on a case- by- case basis in individual licenses. Making those determinations on a case- by- case basis would add to the time needed to process satellite applications. Furthermore, neither Intelsat nor SIA explain why licensees should be given more flexibility than is included in the CDR milestone requirement we adopt here. Specifically, nothing precludes a licensee from meeting the CDR milestone earlier than the deadline we adopt in this Order, and we know of no reason why a licensee that is committed to constructing and launching its satellite system would not be able to commit to completing the spacecraft CDR within the time provided in the milestone schedule. 191. In the 2 GHz Order, we defined "CDR" as the stage in the spacecraft implementation process at which the design and development phase ends and the manufacturing phase starts. 445 Generally, well before the CDR stage, the licensee should not anticipate making any modifications to its spacecraft design that would require Commission approval, absent unusual circumstances. We will not prescribe a particular method for licensees to show that they have met their milestone, but emphasize that licensees will bear the burden of demonstrating that they have met this milestone. Evidence of compliance with this milestone may include: (1) evidence of a large payment of money, required by most construction contracts at the time of the spacecraft CDR; (2) affidavits from independent manufacturers; and (3) evidence that the licensee has ordered all the long lead items needed to begin physical construction of the spacecraft. Finally, it may be necessary or appropriate to supplement the record on occasion. In such cases, the Commission retains discretion to require licensees to provide further information, or to conduct physical inspections. 443 See 2 GHz Order, 15 FCC Rcd at 16179 (para. 108) (noting concerns about three- year gap between first and second milestones). See also National Exchange Satellite, Inc., Memorandum Opinion and Order, 7 FCC Rcd 1990, 1991 (para. 8) (Com. Car. Bur. 1992) (Nexsat Order); MCI Communications Corporation, Memorandum Opinion and Order, 2 FCC Rcd 233 (1987) (MCI Order); Columbia Communications Corporation, Memorandum Opinion and Order, 15 FCC Rcd 15566, 15571 (para. 11) (Int'l Bur. 2000) (First Columbia Milestone Order); PanAmSat Licensee Corp., Application for Authority to Construct, Launch, and Operate a Ka- Band Communications Satellite System in the Fixed-Satellite Service at Orbital Locations 58° W. L. and 125° W. L., Memorandum Opinion and Order, 16 FCC Rcd 11534, 11537- 38 (para. 12) (2001) (PanAmSat Ka- Band License Revocation Review Order) (noting that milestones are intended to limit warehousing). 444 2 GHz Order, 15 FCC Rcd at 16179 (para. 108). 445 2 GHz Order, 15 FCC Rcd at 16178 (para. 108). 74 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 75 7. Commencement of Physical Construction 192. The Notice observed that the milestone schedule adopted in the 2 GHz Order, included a separate milestone for the physical construction of the satellite, and invited comment on including this milestone for all future licensees. 446 No one commented on this proposal. We conclude that this milestone will provide additional assurance that licensees are making adequate progress towards constructing and launching their satellite systems, and so protects against warehousing. Accordingly, we adopt it. 193. Neither the Notice nor the 2 GHz Order specified in detail what showing would be required to demonstrate compliance with this milestone. Therefore, we will not establish a specific test in this Order. Rather, we will require licensees to provide sufficient information to demonstrate to a reasonable person that they have commenced physical construction of their licensed spacecraft. We emphasize that, as with other milestones, the burden of proof for this showing is with the licensee. 8. Milestones for Satellite Systems Using Feeder Links 194. Above, we establish licensing procedures for systems using feeder links and intersatellite links, that may result in issuing operating authority for parts of a satellite system at different times. 447 In those cases, we will apply the milestone schedule included in the first grant of authority to the entire satellite system. In the past, the Commission determined that requests for ISL authority and feeder link authority do not warrant a milestone extension. 448 There is nothing in the Notice to suggest that we would revisit those conclusions in this proceeding. 9. Other Interim or Additional Milestones 195. Background. CTIA also states that the Commission should adopt other, interim milestones based on six- month intervals, but does not make any specific recommendations for these milestones. 449 SES Americom replies that constructing a satellite system is more technically complex than constructing a terrestrial wireless network, and cannot be tied to a strict schedule. 450 196. Discussion. By adopting new CDR and physical construction commencement milestones, we find that we will have sufficient assurance throughout the construction stage that the licensee is building its system. We see no reason to adopt additional six- month milestones, nor do we wish to limit licensees' flexibility to negotiate manufacturing contracts that best serve their needs within our general milestone framework. Furthermore, CTIA does not provide sufficient detail for its six- month milestone suggestion to enable us to adopt it here. 446 Space Station Reform NPRM, 17 FCC Rcd at 3881 (para. 103), citing 2 GHz Order, 15 FCC Rcd at 16177- 78 (para. 106). 447 Section VI. E. 1. f. 448 See, e. g., PanAmSat Ka- Band License Revocation Review Order, 16 FCC Rcd at 11541 (para. 21); Space Station Reform NPRM, 17 FCC Rcd at 3860- 61 (para. 38). 449 CTIA Comments at 5- 6. 450 SES Americom Reply at 21- 22. 75 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 76 10. Enforcement of Milestone Requirements 197. Background. The Commission also proposed several measures, in addition to its current milestone policies, to strengthen its milestone requirements. Currently, failure to meet a milestone results only in cancellation of the license. 451 The Commission sought comment on imposing forfeiture penalties for failure to meet milestones. 452 It also sought comment on whether, and to what extent, we should prohibit licensees who miss a milestone from applying for other satellite licenses. 453 For example, the Commission invited comment on prohibiting the licensee from applying for another satellite license, or applying for a license to operate a space station in that band, or to operate at that orbit location in the case of GSOs, either permanently, for a certain number of years, or until the licensee has shown that it would meet all its milestone requirements if it were granted another space station license. 454 198. Discussion. SIA claims that imposing penalties other than the loss of the license in question on licensees that fail to meet their milestones could discourage applicants from filing licenses for new or innovative satellite systems. 455 Intelsat opposes prohibiting a licensee from applying for another satellite license in the same band or orbital location if a milestone is missed, and it argues that such a penalty would discourage licensees from taking necessary risks and could overly penalize such licensees. 456 199. We are sensitive to SIA's and Intelsat's concerns. Accordingly, we will not impose additional penalties on all satellite licensees who miss milestones. Nevertheless, we believe that such penalties might be warranted in possible cases of speculation. In this Order below, we eliminate the satellite anti- trafficking rule, and adopt new safeguards against speculation. One of those safeguards is a limit on the number of pending applications and unbuilt satellites an applicant may have. That limit is five GSO- like satellites and one NGSO- like satellite system in any frequency band. 457 For the reasons discussed below, we find that our proposed limits, in addition to the milestone revisions and bond requirement we adopt here, will be adequate to discourage speculation in most cases. 458 In unusual cases in which the limits do not discourage an applicant from filing speculative applications, however, those speculative filings could lead to "warehousing" orbital locations. 459 In warehousing cases, we have removed authority from 451 Space Station Reform NPRM, 17 FCC Rcd at 3883 (para. 106), citing, Morningstar Satellite Company, L. L. C., Memorandum Opinion and Order, 15 FCC Rcd 11350 (Int'l Bur., 2000); PanAmSat Ka- band License Cancellation Order, 15 FCC Rcd 18720. 452 Space Station Reform NPRM, 17 FCC Rcd at 3883 (para. 106). 453 Space Station Reform NPRM, 17 FCC Rcd at 3883 (para. 106). 454 Space Station Reform NPRM, 17 FCC Rcd at 3883 (para. 106). 455 SIA Comments at 33. 456 Intelsat Comments at 21. 457 Section VII. E. 3. 458 Section VII. E. 3. 459 Section VII. E. 3., Pegasus Comments at 5. 76 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 77 licensees who have not met their satellite construction and launch schedules, so that those licensees are not permitted to waste scarce orbital locations and channels. 460 In other words, warehousing occurs when a licensee has not shown an adequate commitment to move forward with its business plan. 461 Warehousing prevents other potential licensees willing and able to move forward with their business plans from attempting to provide service to the public in a timely manner. Therefore, ensuring that we have adequate means to prevent warehousing is crucial to achieving the goals of this proceeding. As a logical outgrowth of the Commission's proposal to prohibit a licensee from filing future satellite applications upon failure to meet a milestone, we will apply a more strict limit on the number of pending applications and unbuilt satellites for a licensee that has established a pattern of failure to meet milestones. 200. This stricter limit should enable us to address instances of warehousing, while also addressing SIA's and Intelsat's concern about discouraging parties from applying for satellite licenses regardless of their intent to proceed with their business plans. We base this more strict limit on a variation of Pegasus's proposal of two unbuilt satellites. 462 We will apply this limit to both GSO- like and NGSO- like systems, in all frequency bands. In other words, applicants who have established a pattern of missing milestones with two or more applications pending, or with two licensed- but- unbuilt satellite systems of any kind, will not be permitted to file another GSO-like application or NGSO- like application in any frequency band. 463 We adopt a presumption that missing three milestones in any three year period would constitute a "pattern of failure to meet milestones" for these purposes. At the time any licensee misses three milestones in three years, we will presume that the licensee's applications were speculative, and the lower limit on pending applications and unbuilt satellites will remain in effect unless and until the licensee provides adequate information to rebut that presumption, or to demonstrate that it is very likely to construct its licensed facilities if it were allowed to file more applications. 201. We have ample authority for adopting this additional milestone enforcement measure. The Notice advised interested parties that the Commission was contemplating an additional sanction of this kind. 464 In addition, the Communications Act gives the Commission authority to establish qualification requirements for license applicants. 465 By applying for a 460 See Advanced Communications Corporation, Memorandum Opinion and Order, 10 FCC Rcd 13337, 13342 (para. 19) (Int’l Bur. 1995), aff’d 11 FCC Rcd 3399 (1995); Volunteers in Technical Assistance, Order and Authorization, 11 FCC Rcd 1358, 1363 (para. 15) (Int’l Bur. 1995); Norris Satellite Communications, Inc., Order, 11 FCC Rcd 5402 (Int’l Bur. 1996). 461 Nexsat Order, 7 FCC Rcd at 1991 (para. 8), citing MCI Communications Corporation, Memorandum Opinion and Order, 2 FCC Rcd 233 (1987). 462 Pegasus Comments at 5. 463 We will also presume that a licensee that creates a pattern of obtaining licenses and then surrendering them before a milestone deadline is also engaging in speculative activity, and will impose the stricter limits unless and until the licensee rebuts this presumption. 464 Space Station Reform NPRM, 17 FCC Rcd at 3883 (para. 106). 465 Section 308( b) of the Communications Act, 47 U. S. C. § 308( b): "All applications for station licenses, or modifications or renewals thereof, shall set forth such facts as the Commission by regulation may prescribe as to the citizenship, character, and financial, technical, and other qualifications of the applicant to operate the station; ...." 77 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 78 satellite license, an applicant implicitly states that it does not intend to hold the license merely to preclude others from going forward with their business plans. It is reasonable to impose a sanction on licensees that do not meet this implicit promise. 202. In light of our decisions to establish milestones for spacecraft CDR and commencement of physical construction of a spacecraft, to include milestone requirements in the rules, to require licensees to post bonds, and to limit the right to file applications of parties who establish a pattern of missing milestones, we find that rules specifying additional forfeiture penalties are not warranted at this time. Section 1.80 of the Commission's rules already provides adequate authority for the Commission to impose forfeiture penalties upon failure to comply with a rule or a license condition. 466 Accordingly, in the event that a party applies for satellite licenses without the intent to construct or launch a satellite, we will determine whether starting a proceeding to consider forfeiture penalties is warranted. 11. Incentives for Early Launch 203. Background. We sought comment on establishing incentives for implementing satellite systems before the launch milestone deadline, such as extending the satellite license term by two years if the licensee launches its first satellite by at least a certain number of months before the applicable launch milestone. 467 We invited parties to propose other incentives. 468 204. Discussion. No one commented on this proposal. We find that the other proposals we adopt in this proceeding should be sufficient to ensure compliance with milestone requirements in most cases. We may consider revisiting this proposal if our experience reveals that additional incentives to comply with milestone requirements are necessary. 12. Alternative Milestone Mechanism 205. Background. As an alternative to the milestone requirements proposed in the Notice, the Commission invited comment on requiring that licensees spend a certain amount of money on the construction of its satellite system each year. 469 206. Discussion. CTIA supports this proposal. 470 Teledesic agrees that the proposal to require expenditure of a certain amount of money each year would improve the current system, but it encourages the Commission to entertain other, more creative, improvement options. 471 On 466 "A forfeiture penalty may be assigned against any person found to have: (1) Willfully or repeatedly failed to comply substantially with the terms and conditions of any license, permit, certificate, or other instrument of authorization issued by the Commission; (2) Willfully or repeatedly failed to comply with any of the provisions of the Communications Act of 1934, as amended; or of any rule, regulation, or order issued under that Act by the Commission ..." 47 C. F. R. § 1.80( a)( 1), (2). 467 Space Station Reform NPRM, 17 FCC Rcd at 3883 (para. 107). 468 Space Station Reform NPRM, 17 FCC Rcd at 3883 (para. 107). 469 Space Station Reform NPRM, 17 FCC Rcd at 3882 (para. 104). 470 CTIA Comments at 6. 471 Teledesic Comments at 44. 78 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 79 the other hand, Hughes criticizes mandatory expenditure milestones as having the potential to encourage licensees to project unrealistically low total costs. 472 Hughes and SES Americom also worry that such a milestone could alter the relationship between operators and manufacturers. 473 SES Americom also asserts that this proposal would limit operators' flexibility to allocate resources among different projects during the construction period. 474 207. We decide against replacing milestones with a requirement that licensees spend a certain amount of money on the construction of their satellite systems each year. We agree with Hughes that mandatory expenditure milestones could encourage licensees to project unrealistically low costs. In those cases, meeting cost- based milestones would not necessarily show that the licensee is progressing towards implementation of its system. In addition, to protect against this possibility, we would need to develop methods for determining whether a licensee's cost projections are reasonable, which could prove overly complex. On the other hand, the milestones we adopt in this Order will provide a reasonable basis for assessing progress of system implementation. Moreover, to a certain extent, the payment of money is already a factor in our milestones, in that we examine the payment schedule to determine whether payments are spread evenly throughout the term of the contract term rather than deferred to the end of the term. 475 Mandating a payment schedule with any more specificity might not reflect the best schedule for the particular satellite being built. 13. On- site Inspections 208. CTIA proposes that the Commission make on- site inspections to verify milestone completion. 476 SES Americom maintains that this would delay the satellite licensing process. 477 We believe that the milestone rule revisions we adopt in this Order should be sufficient in most cases to determine whether a licensee has met a particular milestone. In particular, in cases where a licensee has not adequately demonstrated that it has met a milestone, we have authority to revoke the license without inspecting an on- site facility. Nevertheless, an on- site inspection of manufacturing facilities is one reasonable method to supplement the record in a milestone review proceeding, in cases where it may be necessary or appropriate to supplement the record. The Commission retains discretion to make such inspections. D. Trafficking in Licenses 1. Elimination of Satellite Anti- Trafficking Rule 472 Hughes Comments at 45- 46. 473 Hughes Comments at 45- 46; SES Americom Reply at 13. 474 SES Americom Reply at 22. 475 See Tempo Order, 1 FCC Rcd at 21 (para. 7). 476 CTIA Comments at 6. 477 SES Americom Reply at 22. 79 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 80 209. Background. The Commission prohibits licensees from selling "bare" satellite licenses for profit. 478 This "anti- trafficking rule" is intended to discourage speculators and prevent unjust enrichment of those who do not implement their proposed systems. 479 On the other hand, the existing satellite anti- trafficking rules may prevent a satellite license from being transferred to the entity that would put it to its highest valued use in the shortest amount of time. 480 Accordingly, the Notice invited comment on whether we should eliminate the anti-trafficking rule for satellite licenses. 481 210. The Commission adopted this restriction on sales of licenses to address two concerns. First, an entity might obtain a license without any intention of building facilities or providing service, but rather only to sell the license for profit. This would benefit the seller, but would not necessarily provide any benefit to the public. 482 Another concern is that, if a licensee directs its attention to selling its license to the exclusion of constructing facilities, the spectrum assigned through the license would not be put to any use until after the license were sold. In this case, during the time before the sale, the public would be deprived of whatever valuable service might have otherwise been provided by some other entity. 483 211. On the other hand, the Commission noted that there may be many situations in which it would be efficient to allow an entity that applied for and received a satellite license to resell that license at any time, provided that the purchaser meets the milestones in the original license. 484 In particular, allowing a licensee whose business plan is no longer viable to sell its license to another entity with another business plan or adequate financial resources would benefit the public by putting scarce orbit and spectrum resources sooner than would be possible otherwise. 485 In addition, allowing the sale of licenses would reduce the risk associated with constructing and launching a satellite system, by giving licensees the option of selling their licenses if they find that their business plans are not viable, and so could encourage satellite deployment. 486 These factors weigh in favor of removing the restriction on sales of licenses. 478 Space Station Licensing Reform NPRM, 17 FCC Rcd at 3883- 84 (paras. 109- 10). See also, e. g., Rulemaking to Amend Parts 1, 2, 21, and 25 of the Commission’s Rules to Redesignate the 27. 5-29. 5 GHz Frequency Band, to Reallocate the 29. 5- 30.0 GHz Frequency Band, to Establish Rules and Policies for Local Multipoint Distribution Service and for Fixed Satellite Services, Third Report and Order, CC Docket No. 92- 297, 12 FCC Rcd 22310, 22339- 40 (para. 74) (1997) (Ka- Band Service Rules Order). A "bare" license is a license to operate a communications facility when no facility has been constructed. Space Station Licensing Reform NPRM, 17 FCC Rcd at 3883 n. 144. 479 Ka- band Service Rules Order, 12 FCC Rcd at 22339 (para. 74). 480 Space Station Reform NPRM, 17 FCC Rcd at 3884 (para. 111). 481 Space Station Reform NPRM, 17 FCC Rcd at 3883- 86 (paras. 109- 17). 482 Space Station Reform NPRM, 17 FCC Rcd at 3884 (para. 110). 483 Space Station Reform NPRM, 17 FCC Rcd at 3884 (para. 110). 484 Space Station Reform NPRM, 17 FCC Rcd at 3884 (para. 111). 485 Space Station Reform NPRM, 17 FCC Rcd at 3884 (para. 111). 486 See Space Station Reform NPRM, 17 FCC Rcd at 3884- 85 (paras. 112- 13). 80 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 81 212. In the Notice, the Commission also requested comment on whether the satellite licensing process itself might tend to discourage parties from applying for a license merely to sell it. First, the Commission proposed requiring the purchaser to meet the milestones in the original license, which would also serve to discourage speculation because the license would lose value as the milestone date drew near unless the licensee had made sufficient progress in constructing its satellite. 487 In addition, the Commission noted that preparing a satellite license application and filing it with the Commission is a technically complex and costly undertaking, and that those costs might help to limit purely speculative applications. 488 Based on all these considerations, we proposed to eliminate the anti- trafficking rule and invited comment on whether we had struck the correct balance between the competing goals of preventing unjust enrichment and expediting service to the public. 489 213. Pleadings. Some parties maintain that eliminating the anti- trafficking rule would increase the incentives for filing speculative applications. 490 Inmarsat asserts that if there is an increase in speculation, satellite operators would face an increase in costs that could be passed on to consumers. 491 Inmarsat claims further that eliminating the anti- trafficking rule would delay service to the public. 492 Hughes maintains that it is unreasonable to make a public interest determination that an applicant is qualified to hold a license, and then allow it to sell the license to another party without any Commission review. 493 214. Alternatively, ICO supports elimination of the anti- trafficking rule, arguing that it would be consistent with the Commission's efforts to allow secondary markets to develop for spectrum in other services. 494 ICO argues that the Commission has relaxed its anti- trafficking rules for other Commission licensees, and that there is no reason to hold satellite licensees to a higher standard. 495 ICO maintains that implementing reasonable milestone requirements would 487 Space Station Reform NPRM, 17 FCC Rcd at 3886 (para. 116). 488 Space Station Reform NPRM, 17 FCC Rcd at 3886 (para. 117). 489 Space Station Reform NPRM, 17 FCC Rcd at 3886 (para. 117). 490 Hughes Comments at 28; SES Americom Comments at 5; Inmarsat Comments at 11; SES Americom Reply at 12. 491 Inmarsat Comments at 11. 492 Inmarsat Comments at 11. 493 Hughes Comments at 49- 50. 494 ICO Reply at 2- 3, citing Principles for Promoting the Efficient Use of Spectrum by Encouraging the Development of Secondary Markets, Policy Statement, 15 FCC Rcd 24178, 24181 (para. 10) (2000) (Spectrum Secondary Markets Policy Statement); Promoting Efficient Use of Spectrum Through Elimination of Barriers to the Development of Secondary Markets, Notice of Proposed Rulemaking, WT Docket No. 00- 230, 15 FCC Rcd 24203 (para. 10) (2000) (Spectrum Secondary Markets NPRM). 495 ICO Reply at 3, citing, e. g., Amendment of Section 73. 3597 of the Commission's Rules (Applications for Voluntary Assignments or Transfers of Control), Report and Order, BC Docket No. 81- 897, FCC 82- 519, 52 Rad. Reg. 2d 1081, 1086 (para. 21) (1982) (Broadcast Trafficking Report and Order) (elimination of "three- year rule" for broadcast stations). 81 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 82 provide adequate protection against unjust enrichment. 496 ICO disagrees that the anti- trafficking rule is needed to discourage speculation. 497 Finally, ICO points out that allowing sales of licenses can help mitigate risk and so helps attract investors. 498 Teledesic argues that, in the past, anti-trafficking rules have generally not discouraged speculation in licenses, but rather added unnecessary complication to legitimate business transactions. 499 215. Discussion. We eliminate the anti- trafficking policy for satellite licenses. We conclude that, while preventing unjust enrichment and expediting service to the public are both important policy goals, expediting service to the public warrants more weight. The issue raised in the Notice is not whether eliminating the restriction on satellite license sales might increase the incentives for speculation. The Commission recognized that eliminating the rule would increase the incentives for speculation. 500 Rather, the relevant issue is whether the public interest benefits of eliminating the satellite anti- trafficking rule outweigh the benefits of keeping the rule. 501 For reasons discussed below, we find that the benefits of keeping the anti- trafficking rule are relatively small given the other safeguards against speculation we adopt in this Order, while the benefits of eliminating the rule are fairly substantial. Therefore, we are adopting several safeguards against speculation in this Order below. In addition, we retain our authority to review transfer of control applications to determine whether the proposed transfer will further the public interest, convenience, and necessity. 216. Moreover, the licensing procedures we adopt today should discourage speculation by themselves to some extent. Because we will require buyers to meet the milestone schedule in the original license, the value of the license will decrease rapidly as each milestone deadline approaches. Because milestone enforcement will reduce the profits a speculator can make from its sale, it will discourage some speculation. In addition, we use a first- come, first- served procedure for GSO- like satellites because awarding licenses to the first qualified applicant, by itself, will not preclude us from licensing other applicants at other orbit locations. Thus, in cases in which there are other orbit locations available, applicants are unlikely to purchase a license from a "speculator" because they can simply apply for one. 502 Also, as the Commission observed in the Notice, there are significant costs associated with filing a satellite application. 503 These costs include the technical analyses required to prepare a satellite application, the application 496 ICO Reply at 3- 4. 497 ICO Reply at 4. 498 ICO Reply at 4- 5. 499 Teledesic Comments at 35- 38; Teledesic Reply at 28- 30. 500 Space Station Reform NPRM, 17 FCC Rcd at 3884 (para. 110). 501 Space Station Reform NPRM, 17 FCC Rcd at 3884- 85 (paras. 111- 15). 502 We realize that a GSO- like applicant may have an incentive to purchase a license from a speculator rather than apply for another location with the Commission in cases where its business plans require a specific orbit location. In most cases, however, orbit locations close to each other in the GSO orbit are close substitutes for each other, so that there will be less incentive to purchase a license from a speculator when another close orbit location is available. 503 Space Station Reform NPRM, 17 FCC Rcd at 3886 (para. 117). 82 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 83 fee, 504 annual regulatory fees, 505 and ITU cost recovery fees. Finally, we adopt other safeguards against speculation in this Order, such as a bond requirement, and limits on the number of pending applications and unbuilt satellites a licensee may have in each frequency band. Further, our procedure for NGSO- like satellite systems, where we divide the available spectrum equally among the qualified applicants in a processing round, also establishes disincentives against speculative applications. Because the speculator's spectrum rights would be redistributed to the other licensees if and when the speculator misses the first milestone, other licensees have some incentive to acquire spectrum through this process rather than to buy spectrum rights from the speculator. 506 Although none of these factors by themselves would be sufficient to prevent speculation, they provide enough protection when combined with the speculation safeguards discussed below 507 to make the anti- trafficking rule for satellites superfluous. 217. Thus, while the benefits of retaining the current restriction on sales of satellite licenses are relatively small, the benefits of eliminating the restriction are substantial. Eliminating the restriction on sales expedites provision of satellite service to the public by facilitating the transfer of licenses in the secondary market to those parties that have the greatest incentive and ability to construct a satellite system within the required time frame. 508 In addition, easing unnecessary restrictions on post- licensing transactions will enable satellite spectrum to move more efficiently to its highest and best use without the need for relicensing procedures. It helps satellite licensees mitigate their business risk, and so encourages investment in the satellite industry. 509 218. In addition, we agree with ICO that eliminating the restriction on sales of satellite services could help a secondary market to develop for satellite capacity. 510 Secondary markets 504 The Commission listed the satellite application fees in the Notice, but those fees have since been increased. The application fees are now $98,645 for each GSO space station, and $339,730 for each NGSO satellite system. Amendment of the Schedule of Application Fees Set Forth in Section 1.1102 through 1. 1107 of the Commission's Rules, Order, GEN Docket No. 86- 285, 17 FCC Rcd 13948, 13982- 83 (2002). These fees took effect on December 5, 2002. See Notice of Publication in the Federal Register and Announcement of Effective Date of Schedule of Charges for Application Fees, Public Notice, DA 02- 3080 (released Nov. 7, 2002). 505 Currently, the regulatory fee is $99,700 per space station for GSO licensees and $103,200 per licensed NGSO satellite system for NGSO licensees. 47 C. F. R. § 1. 1156. The Commission has proposed increasing these fees to $115, 625 and $108,375, respectively. Assessment and Collection of Regulatory Fees for Fiscal Year 2003, Notice Of Proposed Rulemaking, MD Docket No. 03- 83, FCC 03- 64 (released Mar. 26, 2003). 506 In this Section below, we adopt the proposal in the Space Station Reform NPRM to maintain the current milestone schedule when a license is sold. See also Space Station Reform NPRM, 17 FCC Rcd at 3886 (para. 116). 507 Section VII. E. 508 See Space Station Reform NPRM, 17 FCC Rcd at 3884 (para. 111). We note that this approach is consistent with the recommendations of the Spectrum Policy Task Force Report. SPTF Report at 38- 39. 509 See Space Station Reform NPRM, 17 FCC Rcd at 3884- 85 (paras. 112- 13). 510 ICO Reply at 2- 3. 83 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 84 can provide benefits to satellite users and consumers not only through the outright transfer of licenses, but also through partial redistribution or transfer of unused spectrum. By encouraging satellite licensees to sell unused spectrum to other parties willing to put the spectrum into use, we allow parties flexibility to transfer satellite bandwidth to more efficient uses in response to changing market conditions and consumer demands, and we allow marketplace forces to determine which companies succeed. 511 Furthermore, as ICO notes, we have relaxed our restrictions on sales of other licenses for this reason. 512 For example, we have recently eliminated anti- trafficking restrictions in the cellular service, 513 and in most other terrestrial services, we allow the full or partial transfer of licenses without holding requirements. Similarly, we abolished our three- year holding rule 514 for broadcast licenses 20 years ago, concluding that the public interest is usually best served by allowing station sales transactions to be regulated by marketplace forces. 515 We also held that our previous concerns about speculation in broadcast licenses were outweighed by the public interest benefits of removing restrictions on sales of licenses. 516 We find this reasoning as persuasive today as it was in 1982. 517 219. We also note that there are other factors that weigh in favor of eliminating the restriction on sales of licenses. First, as we noted above, eliminating the restriction greatly facilitates post- licensing negotiations among licensees. 518 Given that we adopt procedures in this proceeding to expedite satellite licensing by avoiding the need for pre- licensing negotiations, it is important that we do not discourage post- licensing negotiations. In light of those measures, the restriction on sales of licenses will not be needed as much as it was in the past. 220. As we noted above, the relevant issue is whether the public interest benefits of eliminating the satellite anti- trafficking rule outweigh the benefits of keeping the rule. 519 511 Spectrum Secondary Markets Policy Statement, 15 FCC Rcd at 24182 (para. 11). 512 ICO Reply at 3. 513 Year 2000 Biennial Regulatory Review – Amendment of Part 22 of the Commission’s Rules to Modify or Eliminate Outdated Rules Affecting the Cellular Radiotelephone Service and other Commercial Mobile Radio Services, Report and Order, WT Docket No. 01- 108, 17 FCC Rcd 18401, 18436- 38 (paras. 70- 74) (2002). 514 The three- year holding rule prohibited transfers of broadcast licenses unless the licensee had held the license for a minimum of three years. 515 Broadcast Trafficking Report and Order, 52 Rad. Reg. 2d at 1087 (para. 23). 516 Broadcast Trafficking Report and Order, 52 Rad. Reg. 2d at 1087- 88 (paras. 24- 25). 517 Courts have also upheld past Commission efforts to replace government regulation with reliance on market forces in appropriate circumstances. FCC v. WNCN Listeners Guild, 450 U. S. 582 (1981) (affirming Commission conclusion that promoting diversity in broadcasting through market forces and competition among broadcasters is in the public interest); WOLD Communications, Inc., v. FCC, 735 F. 2d 1465, 1475 (D. C. Cir., 1984) (" But the public interest touchstone of the Communications Act, beyond question, permits the FCC to allow the market place to substitute for direct Commission regulation in appropriate circumstances"). 518 Section V. C. 2. 519 Space Station Reform NPRM, 17 FCC Rcd at 3884- 85 (paras. 111- 15). 84 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 85 Therefore, parties arguing merely that the anti- trafficking rule is needed to discourage speculation do not provide a sufficient basis for retaining the rule. 520 Of the parties arguing in favor of the anti- trafficking rule, only Inmarsat comments on whether the benefits of the restriction outweigh the benefits of removing the restriction. Specifically, Inmarsat asserts that removing the restriction might cause delay in provision of satellite services to the public, and might increase the cost of satellite services. 521 We disagree with both of Inmarsat's assertions. We disagree that removing the restriction will delay provision of satellite services to the public. In fact, we conclude that eliminating the restriction on satellite license sales on balance should expedite service to the public. As we noted in the Notice, the purchaser will often be able to implement the project when the original licensee finds it cannot. 522 In addition, because we require buyers to meet the milestone schedule in the original license, the sale of a license should not delay service to the public. 523 We also disagree with Inmarsat that removing the restriction will result in any significant increase in the cost of satellite services. The Commission observed in the Notice that it can cost millions of dollars to design, build, and launch a satellite system. 524 If speculators were able to sell the licenses at excessive prices, the excessive price paid becomes part of the operator’s fixed cost, and would not affect the price of satellite services in a competitive market, where prices are determined by the marginal cost of the highest cost operator rather than fixed costs. 221. Finally, contrary to Hughes's assertion, the rule revisions we adopt here will not allow licensees to sell their licenses without Commission review. 525 Section 310( d) of the Act requires prior Commission review of all transfers of licenses, 526 and Section 25.119( a) of the Commission's rules prohibits transfers of satellite licenses unless the Commission determines that the public interest, convenience, and necessity will be served thereby. 527 The Commission did not propose any revision to that requirement, nor do we adopt any such revision here. Thus, by eliminating the anti- trafficking rule, we will no longer review each satellite transfer of control application to determine whether the proposed transaction is the sale of a bare license for profit, but we will continue to review transfer of control applications to determine whether the proposed transaction furthers the public interest, convenience, and necessity. As part of that determination, we will consider whether the transferee is qualified to hold a satellite license, and whether the proposed transaction is likely to facilitate provision of service to the public. We also note that the 520 Hughes Comments at 28; SES Americom Comments at 5; SES Americom Reply at 12. 521 Inmarsat Comments at 11. 522 See Space Station Reform NPRM, 17 FCC Rcd at 3885 (para. 114). 523 Space Station Reform NPRM, 17 FCC Rcd at 3884 (para. 111), citing MCI Order, 2 FCC Rcd at 234 (para. 7); First Columbia Milestone Order, 15 FCC Rcd at 15571 n. 35; Columbia Communications Corporation, Memorandum Opinion and Order, 15 FCC Rcd 16496, 16500- 01 (para. 12) (Int'l Bur. 2000) (Second Columbia Milestone Order), PanAmSat Ka- band License Cancellation Review Order, 16 FCC Rcd at 11538 (para. 13). 524 Space Station Reform NPRM, 17 FCC Rcd at 3886 (para. 117). 525 Hughes Comments at 49- 50. 526 47 U. S. C. § 310( d). 527 47 C. F. R. § 25. 119( a). 85 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 86 Commission’s public interest authority is broad enough to cover certain specific sensitivities that have been raised in this proceeding, as well as concerns of the Commission. Thus, we note that we may also examine, if appropriate, whether the seller obtained the license in good faith or for the primary purpose of selling it for a profit, whether the licensee makes serious efforts to develop a satellite or constellation, and/ or whether the licensee faces changed circumstances. 222. Allowing those with no intention of building a satellite system to profit from the Commission's regulatory process would be contrary to the public interest. We do not expect this situation to arise very often, however. 528 In addition, the Commission always has the option to consider initiating a rulemaking proceeding to determine whether the available spectrum should be reallocated. Finally, we emphasize that a license purchaser will be required to comply with all the rules applicable to the original licensee, including but not limited to milestones, the performance bond, and the limits on pending applications and unbuilt satellites. We do not anticipate that such a review will slow down the processing of transfer requests. 223. In summary, we adopt the proposal in the Notice to eliminate the prohibition on sales of bare satellite licenses for profit. We find that the public interest benefits of retaining this restriction are significantly outweighed by the benefits of eliminating the restriction. 2. Revision of Anti- Trafficking Rule 224. Background. Intelsat proposes revising the anti- trafficking rule rather than eliminating it. Intelsat observes that the Commission's broadcast rules prohibit parties from accepting payments for withdrawing petitions to deny broadcast licenses unless the payments are less than the petitioner's legitimate and prudent out- of- pocket expenses, except in cases of bona fide merger transactions. 529 Intelsat proposes applying this standard to transfers of both licenses and pending applications, claiming that it is a "more relaxed approach" than our current anti-trafficking rule. 530 PanAmSat recommends retaining the current anti- trafficking policy, but applying it flexibly to allow ownership changes that are part of legitimate business transactions, or are entered into for financing purposes. 531 225. Discussion. We do not adopt Intelsat's or PanAmSat's proposals. Above, we determined that eliminating the restriction on sales of satellite licenses will yield fairly substantial public interest benefits, with relatively few negative effects. In particular, we found that any 528 While substantial evidence that a satellite license was obtained exclusively for purposes of selling for profit will weigh heavily against finding that a subsequent transfer of the license would further the public interest, bald allegations or weakly supported claims of speculation will not be afforded this weight in our public interest determination. We initiated this proceeding to expedite our satellite licensing process, in part to enable licensees to provide service to the public faster than is now possible. Space Station Reform NPRM, 17 FCC Rcd at 3852- 53 (paras. 12- 14). Eliminating the anti- trafficking rule helps further that policy goal. Space Station Reform NPRM, 17 FCC Rcd at 3885 (para. 115). It would undercut that goal to allow commenters to use our speculation concerns primarily for anti- competitive purposes to delay approval of other parties' transactions. 529 Intelsat Comments at 17- 18, citing 47 C. F. R. §§ 73. 3525, 73. 3588. 530 Intelsat Comments at 18- 19. 531 PanAmSat Comments at 18- 19. See also Hughes Comments at 50- 51 (retain rule but grant waivers in cases of "genuine cases of business transfers.") 86 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 87 increase in speculation resulting from the eliminating the restriction should not result in an increase in the price of satellite services. Therefore, we do not see any public interest benefit from restricting the sales of some licenses based on whether the sale is part of a "legitimate business transaction" or "bona fide merger transaction." Furthermore, as Teledesic points out, anti- trafficking rules in the past have generally not eliminated speculation and have hindered legitimate business transactions. 532 E. Safeguards Against Frivolous or Speculative Applications 1. Safeguards in First- Come, First- Served Procedure 226. In the Notice, the Commission proposed several measures to discourage frivolous or speculative applications in the first- come, first- served procedure. First, the Commission proposed placing a limit on the number of satellite license applications any one entity can have on file. 533 In conjunction with this proposed limit, the Commission proposed an attribution rule to determine the applicant for purposes of this rule. 534 Further, the Commission proposed prohibiting applicants from transferring their place in any queue to another party. 535 For reasons discussed below, we adopt these proposals. 2. Safeguards in Modified Processing Rounds 227. The Notice did not propose any specific rule revisions to limit speculative applications in processing rounds. Teledesic, however, maintains that processing rounds create an incentive for speculation. 536 We agree. By announcing a cut- off date in a processing round, the Commission gives both speculative and legitimate applicants an opportunity to file, and to have their applications considered concurrently with the lead application. Furthermore, announcing a cut- off date can cause a sense of scarcity to develop, when applicants recognize that this may be their only opportunity to secure access to that orbit/ spectrum resource. Consequently, we will adopt the same safeguards against speculation in modified processing rounds that we adopt for the first- come, first- served procedure. 537 We discuss these safeguards below. 3. Limit on Number of Pending Applications 228. Background. The Notice proposed limiting the number of satellite license applications any one applicant can have pending in a frequency band to five GSO orbital 532 Teledesic Comments at 35- 38; Teledesic Reply at 28- 30. 533 Space Station Reform NPRM, 17 FCC Rcd at 3864- 65 (para. 51). 534 Space Station Reform NPRM, 17 FCC Rcd at 3865 (para. 52). 535 Space Station Reform NPRM, 17 FCC Rcd at 3865- 66 (para. 53). 536 Teledesic Comments at 5- 8. 537 The Commission proposed these safeguards for both GSO and NGSO applications. See Space Station Reform NPRM, 17 FCC Rcd at 3864- 66 (paras. 51- 53). 87 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 88 locations and one NGSO system. 538 The Notice observed that the Commission placed a limit on the number of pending broadcast applications in the TV and FM Broadcast Order. 539 Furthermore, our rules currently limit the number of additional GSO orbital locations that may be assigned in each frequency band for satellite operators with previously authorized but unlaunched satellites in that band. 540 The Commission asked in the Notice whether the limit should include authorized but unlaunched satellites in addition to pending applications. 541 229. Discussion. Teledesic argues that limiting pending satellite applications is a reasonable way to limit speculation without restricting applicants' business plans. 542 Teledesic also maintains that adopting this proposal would give licensees an incentive to turn in licenses for satellite systems that they do not intend to build. 543 Hughes, however, asserts that this proposal is too restrictive because it could preclude legitimate applications from consideration. 544 Alternatively, SES Americom asserts that limiting the number of pending satellite applications is not restrictive enough. SES Americom argues that such a limit would not prevent speculative applications because there could be an unlimited number of speculative applicants. 545 230. We adopt our proposed limits on pending applications. We agree with Teledesic that limiting pending applications to five GSO orbit locations or one NGSO satellite system per frequency band will restrain speculation without restricting applicants' business plans. In addition, five orbit locations is reasonable because it gives licensees the option of providing a global service with good look angles for each satellite. We further agree that limiting pending applications gives licensees an incentive to turn in licenses for satellite systems that they do not intend to build. This in turn should make orbital locations available for reassignment more quickly than they would be if licensees waited until a milestone deadline. We disagree that this limit on pending applications will preclude legitimate applications from consideration. Rather, it simply requires satellite operators to prioritize their business plans. Although SES Americom is correct that this does not totally prevent speculation, it does provide, together with strict milestone enforcement and the new bond requirement we adopt above, some protection against speculation. 231. We also adopt our proposal to include authorized but unlaunched satellites in the five GSO- like orbit location limit. 546 Adopting our proposal to limit unlaunched satellites 538 Space Station Reform NPRM, 17 FCC Rcd at 3864- 65 (para. 51). 539 Space Station Reform NPRM, 17 FCC Rcd at 3864- 65 (para. 51), citing TV and FM Broadcast Order, 50 Fed. Reg. at 19940 (para. 24). 540 Space Station Reform NPRM, 17 FCC Rcd at 3864- 65 (para. 51), citing 47 C. F. R. § 25. 140( f). 541 Space Station Reform NPRM, 17 FCC Rcd at 3864- 65 (para. 51). 542 Teledesic Comments at 28- 29. 543 Teledesic Comments at 44. 544 Hughes Comments at 28- 29. 545 SES Americom Comments at 4. 546 Space Station Reform NPRM, 17 FCC Rcd at 3865 (para. 51). 88 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 89 provides additional protection against speculation, without substantially restricting licensees' flexibility. No one commented on this proposal. We will apply this limit on a frequency band-by- frequency band basis. This is consistent with the Commission's current practice of limiting additional orbital locations for satellite operators with previously authorized but unlaunched satellites on a frequency band basis. 547 232. PanAmSat and Pegasus do not comment directly on the proposed limit on pending satellite applications. In the context of the Commission's proposal to include a system of preferences in its processing round rules, however, PanAmSat supports a two- orbit- location limit, with one additional orbit location allowed in subsequent processing rounds, as is permitted currently in the Commission's rules. 548 Pegasus advocates the current limit of two unbuilt satellites, but allowing applicants to exceed that limit upon a showing of a firm commitment to spend funds for constructing the additional satellites. 549 Pegasus is concerned that parties applying for licenses for more than two locations are likely going to "warehouse" the additional locations. 550 In this Order above, we reject proposals for systems of preferences intended to streamline processing rounds. 551 Here, we reject a two- unbuilt- satellite limit as a general proposition. Currently, the Commission's policy is to permit initial applicants in processing rounds to request two orbital locations per frequency band per ocean region, plus two over the continental United States (CONUS) region, for a total of eight per frequency band. Reducing the limit to five orbit locations provides additional protection against speculation, but still allows licensees to develop global satellite systems. If we were to reduce the limit to two, we would agree with Hughes that such a limit is likely to preclude legitimate applications from consideration. Moreover, considering requests for more than two pending GSO- like applications upon a case- by- case showing could result in licensing delay. Unlike the case- by- case showing proposed by Pegasus, we expect the five- pending- application rule to be an easily administered, bright- line rule. Reviewing those case- by- case showings might delay our review of other applications in the queue, which in turn would delay service to the public. Accordingly, we will not adopt Pegasus's proposal to impose a two- application limit on all GSO- like satellite applicants. Nevertheless, to address Pegasus's concern that allowing more than two pending satellite applications could lead to warehousing, we adopt in this Order above a limit of two pending applications and unbuilt satellites for licensees that have established a pattern of missing milestones. 552 233. In summary, we will not accept any additional applications from entities which have more than five pending GSO- like satellite license applications or previously authorized but unlaunched GSO- like satellite systems, in any frequency band. Nor will we accept applications from entities with more than one pending application for an NGSO- like system, or more than one NGSO system where no satellites have been launched, in any frequency band. We emphasize 547 See Space Station Reform NPRM, 17 FCC Rcd at 3865 n. 59; 47 C. F. R. § 25. 140( f). 548 PanAmSat Comments at 10- 11. 549 Pegasus Comments at 5. 550 Pegasus Comments at 5. 551 Section V. C. 2. 552 Section VII. C. 10. 89 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 90 that these limits apply only to applications for U. S. licenses for new GSO- like and NGSO- like satellite systems. These limits do not apply to applications for replacement satellites, renewals of NGSO- like constellation licenses, modifications, transfers of control, or any other satellite- related application. Nor will we include a U. S. applicant's foreign- licensed satellites in these limits. 553 We find that these limits should discourage speculative satellite applications in most cases. In the event that our experience with these limits do not discourage a particular applicant from filing speculative applications, we will impose more stringent limits on the number of pending applications and unbuilt satellites on that applicant. 554 4. Attributable Interest 234. Background. In the Notice, the Commission observed that limiting the number of orbit locations or constellations that an applicant can have pending requires it to determine who is an "applicant" for purposes of this limit. 555 Therefore, the Commission proposed attribution rules prohibiting a party from filing a satellite application if it holds more than 33 percent of the total asset value of applicants with applications for five GSO orbital locations, and one NGSO satellite system, in any frequency band, pending before the Commission. 556 We also noted that we adopted an attribution rule of 33 percent in the context of determining eligibility for the "new entrant" bidding credit in auctions for commercial broadcast service licenses. 557 235. Discussion. Teledesic supports this proposal. 558 Hughes claims that the Commission's proposal is too restrictive for separate operating companies that have overlapping stock ownership, and to joint ventures. 559 Boeing claims that the proposed limit could be evaded by speculative applicants. 560 236. We adopt our proposed attribution rule in a modified form. To limit speculative applications, we adopted a limit to the number of satellite applications an applicant can have pending before the Commission in this Order above. 561 This necessitates some attribution rule. Otherwise, applicants could evade the limit simply through corporate restructuring. 553 We adopt limits for non- U. S.- licensed satellite operators seeking access to the U. S. market in Section VIII. F. below. 554 Section VII. C. 10. above. 555 Space Station Reform NPRM, 17 FCC Rcd at 3865 (para. 52). 556 Space Station Reform NPRM, 17 FCC Rcd at 3865 (para. 52). 557 Space Station Reform NPRM, 17 FCC Rcd at 3865 (para. 52), citing 47 C. F. R. § 73. 5008( c); Implementation of Section 309( j) of the Communications Act -- Competitive Bidding for Commercial Broadcast and Instructional Television Fixed Service Licenses, Memorandum Opinion and Order, MM Docket No. 97- 234, 14 FCC Rcd 12541 (1999) (Broadcast New Entrant Credit Order). 558 Teledesic Comments at 29. 559 Hughes Comments at 29. 560 Boeing Comments at 7. 561 Section VII. E. 3. 90 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 91 237. Consequently, the issue is not whether to adopt an attribution rule, but what attribution rule to adopt. Neither Hughes nor Boeing persuades us that our proposed attribution rule is unreasonable. Hughes claims that the proposed rule is too restrictive for satellite operators with overlapping stock ownership or involved in joint ventures. We use the 33 percent standard for the "new entrant" credit in auctions for commercial broadcast licenses. In that context, the Commission found that 33 percent was sufficient to avoid undercutting the policy goal of promoting competitive entry into the broadcast industry, without unreasonably limiting broadcasters' efforts to obtain financing. 562 The same concerns apply here. In contrast, Boeing contends that this standard is not restrictive enough, because it could be evaded by speculative applicants. 563 Therefore, to provide additional protection against speculation, we adopt two new provisions. First, we will revise our proposed attribution rule to include a controlling interest, and any other subsidiaries of that controlling interest. 564 Second, we will calculate ownership interests on a fully diluted basis. All agreements, such as warrants, stock options, and convertible debentures, will generally be treated as if the rights thereunder already have been fully exercised. This will provide additional protection against speculation by precluding parties from evading the limits by using stock options. The Commission has adopted a substantially similar measure to define "designated entities," which are small businesses and minority- owned businesses that have been eligible for bidding credits in certain license auctions. 565 238. Accordingly, if one applicant has an interest in another applicant, in which the equity (including all stockholdings, whether voting or non- voting, common or preferred) and debt interest or interests, in the aggregate, exceed 33 percent of the total asset value (defined as the aggregate of all equity plus all debt) of that applicant, the pending applications and unbuilt satellites of both applicants will be counted together for purposes of the limits. 566 Also, if an applicant, or the subsidiary of an applicant, has a controlling interest in another applicant, the pending applications and unbuilt satellites of both applicants will be counted together for purposes of the limits. 567 We will calculate ownership interests on a fully diluted basis, i. e., all agreements, such as warrants, stock options, and convertible debentures, will generally be treated as if the rights thereunder already have been fully exercised. 568 239. We explained above that the limits do not apply to applications other than new satellite applications. Similarly, this attribution rule does not preclude a participant in a 562 Broadcast New Entrant Credit Order, 14 FCC Rcd at 12545- 47 (paras. 9- 11). 563 Boeing Comments at 7. 564 Specifically, we adopt here the "controlling interest" standard the Commission adopted in Amendment of Part 1 of the Commission’s Rules – Competitive Bidding Procedures, Order on Reconsideration of the Third Report and Order, Fifth Report and Order, and Fourth Further Notice of Proposed Rule Making, WT Docket No. 97- 82, 15 FCC Rcd 15293, 15323- 27 (paras. 59- 67) (2000) (Part 1 Fifth Report and Order). See also 47 C. F. R. § 1.2110( b)( 2). 565 47 C. F. R § 25. 2110( c)( 2)( ii)( A). 566 Space Station Reform NPRM, 17 FCC Rcd at 3865 (para. 52), citing 47 C. F. R. § 73. 5008( c); Broadcast New Entrant Credit Order, 14 FCC Rcd 12541. 567 47 C. F. R § 1.2110( b)( 2). 568 47 C. F. R § 1.2110( c)( 2)( ii)( A). 91 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 92 processing round from purchasing the spectrum rights of another NGSO- like licensee in that processing round. A licensee with five pending GSO- like applications or unbuilt satellites in a frequency band, however, would not be allowed to acquire a license for another GSO- like satellite in that band. Similarly, in a merger transaction, the resulting entity would be required to abandon some of its pending applications if it exceeds the applicable limits. 5. Selling Place in Queue 240. Background. The Commission proposed prohibiting applicants from allowing other entities to assume their place in any queue. 569 The Commission explained that, without this prohibition, it is possible that some parties would file satellite applications simply to obtain a place in a queue to sell to another party willing and able to implement its proposed satellite system. 570 241. Discussion. Hughes notes that the Commission also proposed to eliminate the anti-trafficking rule, and argues that it is inconsistent to prohibit sales of places in the queue while eliminating the anti- trafficking rule. 571 Teledesic argues that the arguments in favor of eliminating the anti- trafficking rule also support allowing the sale of places in the queue. 572 Teledesic also questions whether this safeguard is necessary if the first- come, first- served approach enables the Commission to act on applications as quickly as Teledesic expects. 573 SES Americom claims that allowing applicants to sell their place in line would facilitate speculation. 574 242. We prohibit applicants from transferring their places in the queue. As the Commission explained in the Notice, without this prohibition, it is possible that some parties would file satellite applications simply to obtain a place in a queue to sell to another party willing and able to implement its proposed satellite system. 575 Accordingly, we must adopt this safeguard to avoid facilitating speculation. 243. Contrary to Hughes's contention, this decision is consistent with our decision above to eliminate the anti- trafficking rule. In the case of a license sale, the Commission has reviewed the licensee's application, and has determined that the licensee is qualified to hold a satellite license. In the case of a sale of a place in the queue, however, the Commission has not yet reviewed the application or reached any conclusion regarding the applicant's qualifications. There would be no way to determine whether the application is substantially complete, or filed merely to obtain a place in line to try to sell to other parties. By requiring applicants to demonstrate their qualifications before they are permitted to offer any spectrum rights or potential 569 Space Station Reform NPRM, 17 FCC Rcd at 3865- 66 (para. 53). 570 Space Station Reform NPRM, 17 FCC Rcd at 3865- 66 (para. 53). 571 Hughes Comments at 29- 31, 50. 572 Teledesic Comments at 29- 31. 573 Teledesic Comments at 29. 574 SES Americom Reply at 17- 18. 575 Space Station Reform NPRM, 17 FCC Rcd at 3865- 66 (para. 53). 92 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 93 spectrum rights for sale, it is more likely that the applicant intends to construct the satellite system for which it has applied. Thus, we decrease the likelihood that the applicant has sought a license merely for speculation. 6. Hard Look Doctrine 244. In the Notice, the Commission emphasized that it requires satellite applications to be substantially complete when they are filed. 576 The Commission reasoned further that any relaxation of the requirement that satellite applicants submit substantially complete applications could encourage speculative applications. 577 The Commission also observed that it relied on a substantially complete application requirement to deter speculative applications in its broadcast first- come, first- served procedure. 578 None of the commenters responded to this discussion in the Notice. Here, we find that continuing to require substantially complete satellite applications will also continue to provide some additional protection against speculative satellite applications. F. Mandatory Electronic Filing of Space Station Applications 245. Background. In the Notice, we requested comment on requiring most satellite applicants to file license applications electronically. 579 We observed that electronically filed earth station applications can be processed in about half the time as paper earth station applications. 580 In addition, we assumed that Internet access has become sufficiently common that few if any U. S.- licensed satellite operators will be disadvantaged by mandatory electronic filing. 581 In addition, the Commission observed that mandatory electronic filing would facilitate a first- come, first- served procedure, by enabling the Commission to record application filing times to the nearest thousandth of a second. 582 246. Discussion. Intelsat supports mandatory electronic filing so that we can place applications in the queue based on the date and time of filing. 583 SIA advocates mandatory electronic filing, noting that it expedites Commission review of earth station applications, 576 Space Station Reform NPRM, 17 FCC Rcd at 3875 (para. 84). 577 Space Station Reform NPRM, 17 FCC Rcd at 3878 (para. 93). 578 Space Station Reform NPRM, 17 FCC Rcd at 3878 n. 123, citing TV and FM Broadcast Order, 50 Fed. Reg. at 19939- 40 (paras. 19- 24). 579 Space Station Reform NPRM, 17 FCC Rcd at 3886 (para. 118). The Commission proposed mandatory electronic filing for all satellite applicants except DBS and DARS applicants. Space Station Reform NPRM, 17 FCC Rcd at 3850 n. 4. 580 Space Station Reform NPRM, 17 FCC Rcd at 3886 (para. 118), citing Part 25 Earth Station Streamlining NPRM, 15 FCC Rcd at 25153 (para. 76). 581 Space Station Reform NPRM, 17 FCC Rcd at 3886 (para. 118). 582 See Space Station Reform NPRM, 17 FCC Rcd at 3862- 63 (para. 45). 583 Intelsat Comments at 12. 93 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 94 including, on occasion, 100- page long applications. 584 Hughes argues, however, that the Commission should allow, but not mandate, electronic filing. Hughes maintains that space station applications are complex and cannot be handled routinely as many earth station applications can. Therefore, Hughes doubts whether mandatory electronic filing for space station applications would yield time savings comparable to electronic filing for earth station applications. 585 Hughes further contends that an electronic filing system might not handle hybrid satellite applications or "unusual" applications very well. 586 247. We adopt our proposal to require space station applications to be filed electronically. The Commission requires mandatory electronic filing in other areas, 587 including requests for special temporary authority (STA) for wireless telecommunications services. 588 Furthermore, the International Bureau Filing System (IBFS) can record filing times to the nearest thousandth of a second. Thus, mandatory electronic filing will facilitate the first- come, first-served procedure for GSO- like satellite systems, without giving any particular applicant an advantage over any other applicant. 589 In fact, as the Commission explained in the Notice, a mandatory electronic filing requirement for satellite applications is potentially more fair to all potential applicants than a process that permits paper applications. 590 This is because paper applications must be submitted to the Commission in person or by mail, and these procedures clearly disadvantage applicants located outside of Washington, D. C. None of the commenters in this proceeding questioned this statement. Moreover, we specifically invited commenters to 584 SIA Comments at 18. 585 Hughes Comments at 51- 52. 586 Hughes Comments at 51- 52. 587 See Wireline Competition Bureau Initiates Electronic Filing of Automated Reporting Management Information System (ARMIS) Data and Associated Documents By Incumbent Local Exchange Carriers, Public Notice, 18 FCC Rcd 3245 (Wireline Comp. Bur., 2003); Amendment of the Commission's Rules for Implementation of its Cable Operations And Licensing System (COALS) to Allow for Electronic Filing of Licensing Applications, Forms, Registrations and Notifications in the Multichannel Video and Cable Television Service and the Cable Television Relay Service, Report and Order, CS Docket No. 00- 78, FCC No. 03- 55 (released Mar. 19, 2003); Wireless Telecommunications Bureau (WTB) Extends Mandatory Electronic Filing Date for Microwave Licensees to Coincide with Availability of Electronic Filing Via the Internet, Public Notice, 15 FCC Rcd 15692 (Wireless Tel. Bur., 2000); 1998 Biennial Review – Streamlining of Mass Media Applications, Rules and Processes, Report and Order, MM Docket No. 98- 43, 13 FCC Rcd 23056, 23060 (para. 8) (1998); Electronic Tariff Filing System (ETFS), Order, 13 FCC Rcd 12335 (Com. Car. Bur. 1998). 588 47 C. F. R. § 1.931( a). 589 The Internet is a packet- switching network, which splits up data into "packets." Each router in the network calculates the best routing for a packet at a particular moment, given current traffic patterns, rather than transmitting over a dedicated end- to- end transmission path. If congestion arises at a particular point in the network, an almost infinite array of alternative paths could be employed without the user knowing it. Digital Tornado: The Internet and Telecommunications Policy, OPP Working Paper No. 29 (( Mar. 1997) at 1- 3; Internet Over Cable: Defining the Future in Terms of the Past, OPP Working Paper No. 30 (Aug. 1998) at 13- 15. Thus, if applicants in Washington, DC and California submit a satellite application at the same time, it is possible that the California application will reach the Commission first. 590 Space Station Reform NPRM, 17 FCC Rcd at 3862- 63 (para. 45). 94 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 95 discuss whether basing priority on thousandths of a second might disadvantage applicants based further away from Washington, D. C. because of the time needed to route applications through the Internet. 591 None of the parties address this issue. 248. We are sympathetic to Hughes's concerns about "unusual" satellite applications, but we are confident that our electronic filing system can accept unusual satellite applications without any problem. We have accepted electronically filed space station applications for several years now. That experience has enabled us to refine our electronic filing system as needed. As SIA observes, our electronic filing system can accept 100- page long earth station applications. 592 Furthermore, 70 percent of the satellite applications filed in 2002 were electronic. Therefore, we conclude that our electronic filing system will be sufficient to support our satellite application mandatory electronic filing requirement. In the unlikely event that an applicant brings to our attention any problems with filing an unusual application, we will work to resolve those problems. 249. Although we agree with Hughes that we do not have "routine" processing standards for space station applications, we find that mandatory electronic filing is still warranted to facilitate our first- come, first- served procedure for GSO- like satellite applications. 593 The first-come, first- served procedure will enable us to act on GSO- like satellite applications much faster than is now possible, 594 and this procedure will be expedited further if we minimize the number of satellite applications that must be considered simultaneously. 595 Thus, mandatory electronic filing will expedite our actions on satellite applications, regardless of whether we can process any satellite applications "routinely." G. Replacement Satellites 1. Streamlined Procedure 250. Background. In the Notice, we explained our replacement satellite policy for GSO satellites. 596 Given the huge costs of building and operating GSO space stations, we have found 591 Space Station Reform NPRM, 17 FCC Rcd at 3862- 63 (para. 45). 592 SIA Comments at 18. 593 See Space Station Reform NPRM, 17 FCC Rcd at 3862- 63 (para. 45). See also Intelsat Comments at 12. 594 Section VI. B. 595 See Teledesic Comments at 22- 24. 596 Space Station Reform NPRM, 17 FCC Rcd at 3887 (para. 119). We have a different policy for replacements of satellites in NGSO constellations. Generally, NGSO authorizations cover all construction and launches necessary to implement the complete constellation and to maintain it until the end of the license term, including any replacement satellites necessitated by launch or operational failure, or by retirement of satellites prior to the end of the license period. All replacement satellites must be technically identical to those in service, including the same frequency bands and orbital parameters, and may not cause a net increase in the number of operating satellites in the authorized orbital planes or an additional orbital plane. See Amendment of the Commission's Rules to Establish Rules and Policies Pertaining to a Mobile Satellite Service in the 1610- 1626.5/ 2483. 5- 2500 MHz Frequency Bands, Report and Order, CC Docket No. 92- 166, 9 FCC Rcd 5936, 6006 (para. 182) (1994) (Big LEO Order); The Establishment of Policies and Service Rules for the Non- Geostationary Satellite Orbit, Fixed Satellite Service in the Ku- band, Report and 95 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 96 that there should be some assurance that operators will be able to continue to serve their customers. 597 Therefore, the Commission has stated that, when an orbit location remains available for a U. S. satellite with the technical characteristics of the proposed replacement satellite, it will generally authorize the replacement satellite at the same location. 598 It has also acted on applications for replacement satellites as they are filed, without consolidating them into a processing group. 599 251. The Commission usually acts on replacement satellite applications in Orders, however. We requested comment on two alternatives for streamlining this process. First, we proposed grant- stamping unopposed replacement satellite applications with technical characteristics consistent with those of the satellite to be retired. 600 We stated that this process would be similar to that we use for unopposed earth station applications. We would simply stamp the application as "granted" and return a copy to the applicant. 601 252. As an alternative, we proposed deeming unopposed replacement satellite applications granted after a specific amount of time after the date for petitions to deny has passed, unless we issue a public notice stating that we need more time to review the application. 602 Under this proposal, once we have decided to allow the application to be deemed granted, we would issue a public notice announcing that fact. 603 The Commission noted that it used a similar procedure for certain international Section 214 applications, and for certain submarine cable landing license applications. 604 We also invited comment on the timing of such grants and suggested a "deemed granted" date of at least 60 days after the date for filing petitions to deny. 605 Order and Further Notice of Proposed Rulemaking, IB Docket No. 01- 96, 17 FCC Rcd 7841, 7861- 62 (para. 68) (2002). 597 Space Station Reform NPRM, 17 FCC Rcd at 3887 (para. 119), citing Assignment of Orbital Locations to Space Stations in the Domestic Fixed- Satellite Service, Memorandum Opinion and Order, 3 FCC Rcd 6972, 6976 n. 31 (1988) (1988 Orbit Assignment Order); Hughes Communications Galaxy, Inc., Order and Authorization, 6 FCC Rcd 72, 74 n. 7 (1991) (Hughes Replacement Order); GE American Communications, Inc., Order and Authorization, 10 FCC Rcd 13775, 13775- 76 (para. 6) (Int'l Bur. 1995) (GE Americom Replacement Order). 598 Space Station Reform NPRM, 17 FCC Rcd at 3887 (para. 119), citing 1988 Orbit Assignment Order, 3 FCC Rcd at 6976 n. 31; GE Americom Replacement Order, 10 FCC Rcd at 13775- 76 (para. 6). 599 Space Station Reform NPRM, 17 FCC Rcd at 3887 (para. 119), citing GE Americom Replacement Order, 10 FCC Rcd at 13775- 76 (para. 6); Loral Spacecom Corp., Order and Authorization, 13 FCC Rcd 16348, 16440 (para. 5) (Int'l Bur., Sat. and Rad. Div., 1995). 600 Space Station Reform NPRM, 17 FCC Rcd at 3887 (para. 120). 601 Space Station Reform NPRM, 17 FCC Rcd at 3887 (para. 120). 602 Space Station Reform NPRM, 17 FCC Rcd at 3887 (para. 120). 603 Space Station Reform NPRM, 17 FCC Rcd at 3887 (para. 120). 604 Space Station Reform NPRM, 17 FCC Rcd at 3887 n. 159. 605 Space Station Reform NPRM, 17 FCC Rcd at 3887 (para. 120). 96 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 97 253. Discussion. Hughes and Teledesic support grant- stamping unopposed replacement satellite applications. 606 SIA and Intelsat support the "deem granted" proposal. 607 PanAmSat supports both alternatives, but it prefers the deemed granted procedure because the public notice would make it easier for the public to keep track of the Commission's satellite licensing actions. 608 We adopt the "grant- stamp" proposal. We have used the grant- stamp procedure for unopposed earth station applications, and find that this experience is more comparable to space station applications than the international Section 214 applications and cable landing license applications subject to a "deemed granted" procedure. Nevertheless, we are sensitive to PanAmSat's concerns about keeping track of the Commission's satellite licensing actions. Accordingly, we will issue public notices announcing when we have grant- stamped unopposed replacement satellite applications. 254. Intelsat asserts that a petition to deny a replacement satellite application should not render the application ineligible for a "deemed granted" procedure. 609 SES Americom contends that the Communications Act requires that any "deemed granted" procedure should be limited to uncontested applications. 610 We have traditionally addressed petitions to deny satellite applications in the context of an Order, so that we could provide a reasoned explanation for denying or granting the petition to deny. Intelsat has not persuaded us to depart from this policy. 2. Technical Characteristics of Replacement Satellites 255. Background. In the Notice, the Commission proposed making the streamlined procedure for replacement satellites available for applications for replacement satellites with technical characteristics consistent with those of the satellite to be retired. 611 256. Pleadings. Several commenters ask the Commission to explain in more detail the extent to which replacement satellites must be technically consistent with the satellites they are intended to replace for purposes of the replacement satellite policy. 612 For example, these commenters argue that satellite operators should be allowed to increase power from one generation of satellites to the next without losing their replacement expectancy. 613 They further 606 Hughes Comments at 51; Teledesic Comments at 44. 607 SIA Comments at 39- 41; Intelsat Comments at 21- 23. 608 PanAmSat Comments at 13- 14. 609 Intelsat Comments at 22. 610 SES Americom Reply at 18, citing 47 U. S. C. § 309( d)( 2). 611 Space Station Reform NPRM, 17 FCC Rcd at 3887 (para. 120). 612 SIA Comments at 40- 41; Intelsat Comments at 22- 23; PanAmSat Comments at 14- 15; PanAmSat Reply at 4; SES Americom Reply at 23. See also Hughes Comments at 51. 613 SIA Comments at 40- 41; Intelsat Comments at 22- 23; PanAmSat Comments at 14- 15; PanAmSat Reply at 4; SES Americom Reply at 23. 97 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 98 contend that satellite operators should be allowed to expand their coverage areas. 614 Finally, these parties request that the Commission allow replacement satellite applications to include "expansion frequency" requests, such as a request for authority to operate in extended Ku- band frequencies when the existing satellite license includes conventional Ku- band authority. 615 257. Discussion. When we stated in the Notice that we would use a streamlined licensing process for replacement satellites that are technically consistent with the satellites they are replacing, we did not intend to require the satellites to be technically identical. We do not require replacement satellites to be technically identical to the existing satellite. 616 We recognize that next- generation satellites will incorporate satellites with technical advancements made since the previous generation satellite was launched. We do not intend to change this policy, which facilitates state- of- the- art systems. Rather, we will continue to assess only whether operations of the replacement satellite will be consistent with our international coordination obligations pursuant to regulations promulgated by the International Telecommunication Union. 617 Thus, we will continue to consider applications for replacement satellites with higher power capabilities relative to the applicant's existing satellites. 618 258. In the past, we have considered applications for replacement satellites with greater coverage areas than the original satellites. 619 We have also considered requests for replacement conventional C- band or Ku- band satellites seeking authority to operate in the extended C- band or extended Ku- band, respectively. 620 We find, however, that we must revisit these aspects of our replacement satellite policy in light of our new first- come, first- served procedure. Under our new procedure, parties are free to apply for licenses to operate only in the extended C- band or 614 SIA Comments at 40- 41; Intelsat Comments at 22- 23; PanAmSat Comments at 14- 15; PanAmSat Reply at 4; SES Americom Reply at 23. 615 SIA Comments at 40- 41; Intelsat Comments at 22- 23; PanAmSat Comments at 14- 15; PanAmSat Reply at 4; SES Americom Reply at 23. SIA recommends limiting this "expansion frequency" policy to frequencies that are not shared between GSO and NGSO satellite operators, such as the Ka- band. SIA Comments at 41 n. 95. 616 See Space Station Reform NPRM, 17 FCC Rcd at 3888 n. 160, and sources cited therein. 617 See Hughes Communications Galaxy, Inc., Order and Authorization, 6 FCC Rcd 72, 74 n. 7 (1991) (Hughes Replacement Order); cited in Space Station Reform NPRM, 17 FCC Rcd at 3887 n. 158. 618 See American Telephone and Telegraph Company, Order and Authorization, 10 FCC Rcd 12132, 13133 (para. 7) (Int'l Bur. 1995) (authorizing replacement satellite capable of operating in a "'non- routine' high power mode," but cautioning licensee that it is responsible for coordinating the higher power with adjacent satellite operators). See also Hughes Communications Galaxy, Inc., Memorandum Opinion and Order, 5 FCC Rcd 1653 (Com. Car. Bur. 1990) (granting modification of replacement satellite license to increase transponder amplifier power). 619 See Application of Columbia Communications Corporation for Modification of Authorization to Permit Operation of Ku- band Satellite Capacity on the Columbia 515 Satellite Located at 37. 7° West Longitude, Memorandum Opinion and Order, 16 FCC Rcd 12480, 12483- 84 (para. 9) (Int'l Bur. 2001). 620 PanAmSat Licensee Corporation, Application for Authority to Launch and Operate a Hybrid Replacement Fixed Satellite Service Space Station, Order and Authorization, 15 FCC Rcd 22156, 22157- 58 (para. 5) (Int'l Bur., Sat. and Rad. Div., 2000). 98 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 99 extended Ku- band at a particular orbit location if no one has previously been authorized to provide that service. It would be contrary to the public interest to preclude a party from providing such a service merely because a current licensee might request that authority in a future replacement satellite application. We will consider replacement satellite applications that request greater coverage areas and/ or extended band authority, but only if no other applicants have been licensed to provide those services. In other words, satellite operators may request such operating authority, but this authority is not included in their replacement expectancies. H. Full Frequency Reuse 259. Background. In the Notice, we stated that our two- degree- spacing policy 621 for GSO satellite systems includes full frequency reuse requirements. 622 Currently, the full frequency reuse requirements require FSS satellite operators to use both vertical and horizontal polarization. 623 Essentially, full frequency reuse doubles the capacity of a space station. Thus, our full frequency reuse requirements are important for ensuring that scarce orbit and spectrum resources are used efficiently. 624 260. Our full frequency reuse policy for GSO satellites operating in the conventional C-band and Ku- band 625 is codified in Sections 25.210( e), (f), and (g) of our rules. 626 We proposed clarifications to these rules in the Notice. First, we proposed clarifying that these requirements apply to the conventional C- band and Ku- band. 627 Second, we proposed revising Section 25.210( f) based on the language we used for Ka- band full frequency reuse requirements in 621 Part 25 includes several "2° spacing" requirements for geostationary satellite orbit satellites. The Commission instituted its 2° orbital spacing policy in 1983 to maximize the number of satellites in orbit. Licensing of Space Stations in the Domestic Fixed- Satellite Service and Related Revisions of Part 25 of the Rules and Regulations, Report and Order, CC Docket No. 81- 704, FCC 83- 184, 54 Rad. Reg. 2d 577 (released Aug. 16, 1983); reprinted at Licensing Space Stations in the Domestic Fixed- Satellite Service, 48 F. R. 40233 (Sept. 6, 1983) (Two Degree Spacing Order). Under the 2° spacing framework, the Commission assigns adjacent in- orbit co- frequency satellites to orbit locations 2° apart in longitude. Space Station Reform NPRM, 17 FCC Rcd at 3879 (para. 95), citing Part 25 Earth Station Streamlining NPRM, 15 FCC Rcd at 25132 (para. 7). 622 Space Station Reform NPRM, 17 FCC Rcd at 3879 (para. 96). 623 "For fixed- satellite space stations providing domestic service, full frequency re- use is defined as re- use of the frequency bands by polarization discrimination in both the uplink and downlink directions using state- of- the- art equipment and techniques." 47 C. F. R. § 25. 210( f). 624 Space Station Reform NPRM, 17 FCC Rcd at 3879 (para. 96), citing Systematics General Corporation, Memorandum Opinion and Order, 103 FCC 2d 879, 881- 82 (paras. 6- 9) (1985); Columbia Communications Corporation, Memorandum Opinion, Order, and Authorization, 7 FCC Rcd 122, 123 (para. 15) (1991); First Columbia Milestone Order, 15 FCC Rcd at 15572 (para. 13). 625 The conventional Ku- band is the 11. 7- 12.2 GHz and 14. 0- 14. 5 GHz bands. 626 47 C. F. R. §§ 25. 210( e), (f), (g). Section 25. 210( e) creates the full frequency reuse requirement for GSO FSS space stations. Section 25. 210( f) defines full frequency reuse for domestic satellite service, and Section 25. 210( g) defines full frequency reuse for international satellite service. 627 Space Station Reform NPRM, 17 FCC Rcd at 3879- 80 (para. 97). 99 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 100 Section 25.210( d). 628 Specifically, we proposed revising Section 25.210( f) to read as follows: "All space stations in the Fixed Satellite Service in the 3700- 4200 MHz, 5925- 6425 MHz, 11.7- 12.2 GHz, and 14. 0- 14.5 GHz bands shall employ state- of- the- art full frequency reuse either through the use of orthogonal polarizations within the same beam and/ or the use of spatially independent beams." 629 We asked whether this proposal effectively takes account of the current state of the art in satellite technology and expected future developments. 630 We also asked whether we should apply these full frequency reuse requirements to extended C- band and extended Ku- band satellites. 631 261. Discussion. Teledesic supports the Commission’s proposal to clarify its full frequency reuse policies. 632 Teledesic agrees that the Commission should revise Section 25.210( f) based on the language it used for Ka- band full frequency reuse requirements in Section 25.210( d). 633 No one opposed this proposal. 262. We hereby adopt all the revisions to the full frequency reuse rules that were proposed in the Notice. When we adopted full frequency reuse requirements for Ka- band GSO satellite systems, we noted that new satellites are capable of generating multiple narrow- beam spot beams. 634 We also noted that such space stations reuse frequencies in spatially independent beams rather than by using orthogonally polarized signals within a single beam. 635 By revising Section 25.210( f), we encourage deployment of new, technologically innovative spot- beam satellites in the C- band and Ku- band. 636 263. We also conclude that GSO satellite operations in the extended C- and Ku- bands should be subject to full frequency reuse requirements as well. There is no policy justification for 628 Space Station Reform NPRM, 17 FCC Rcd at 3879- 80 (para. 97), citing 47 C. F. R. §25.210( d). The term "Ka- band" generally refers to the space- to- earth (downlink) frequencies at 17. 7- 20.2 GHz and the corresponding earth- to- space (uplink) frequencies at 27.5- 30.0 GHz. 629 Space Station Reform NPRM, 17 FCC Rcd at 3879- 80 (para. 97). 630 Space Station Reform NPRM, 17 FCC Rcd at 3879- 80 (para. 97). 631 Space Station Reform NPRM, 17 FCC Rcd at 3879- 80 (para. 97). 632 Teledesic Comments at 40- 41. 633 Teledesic Comments at 40- 41. 634 Ka- Band Service Rules Order, 12 FCC Rcd at 22321- 22 (para. 28). 635 Ka- Band Service Rules Order, 12 FCC Rcd at 22321- 22 (para. 28). 636 When the Commission first adopted full frequency reuse requirements, the requirement was defined in terms of minimum use of bandwidth allocated to the service. For example, a space station operating in the conventional C- band was required to have a capacity equivalent to that provided by a space station having transponders that use 864 MHz of a 1000 MHz (with two- times frequency reuse) assignment and provide a total power of 192 watts. See Space Station Reform NPRM, 17 FCC Rcd at 3879 (para. 96), citing Two- Degree Spacing Order, 54 RR 2d at 598 n. 67; Separate Systems Order, 101 FCC 2d at 1168- 69 (para. 248). Here, we emphasize that we now define full frequency reuse in terms of use of dual polarization, not minimum bandwidth usage. 100 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 101 allowing satellite operators to operate inefficiently, without full frequency reuse, in extended bands. Therefore, we will revise Section 25.210( f) to include the extended C- and Ku- bands. 264. SES Americom recommends revising Section 25.210( e) to be consistent with Section 25.210( d), and our proposed revisions Section 25.210( f). 637 Section 25.210( f) establishes full frequency reuse requirements for all conventional and extended C- band and Ku- band satellite services. Therefore, rather than revise Section 25.210( e) as SES Americom recommends, we remove it from Part 25. Similarly, we remove Section 25.210( g) as unnecessary in light of our revisions to Section 25.210( f). I. Miscellaneous 1. Space Station License Terms 265. Background. Together with the Notice, the Commission adopted a First Report and Order in another proceeding, in which it adopted rules to enable it to issue space station and earth station licenses with 15- year terms, an increase from the 10- year terms in the previous rules. 638 The Commission stated that the new earth station license term rule applies only to earth station licenses granted after the new rules take effect. 639 The Commission did not state clearly whether existing space station licenses were subject to the revised rule. 640 266. Discussion. SIA argues that the terms of existing satellite licenses should be extended to 15 years, to be consistent with the license terms of satellites granted under the revised rules. 641 We find that the license terms of existing space station licenses should be extended to 15 years. We did not adopt this proposal for earth station licenses because it would be potentially burdensome for licensees and the Commission to reissue thousands of earth station licenses. 642 This reason does not apply to space station licenses, which number in the dozens. Accordingly, we adopt SIA's proposal. All space station licenses are deemed automatically modified by extending the license term of the satellite, or satellite constellation in the case of NGSO systems, an additional five years, to 15 years, from the date the first satellite is successfully placed into orbit. 267. We also revise Section 25.121( e). Currently, Section 25. 121( e) requires NGSO satellite licensees requesting replacement authority for next- generation satellites to file their applications about eight years after the beginning of the license term of the current- generation system. 643 As a logical outgrowth of our decision to extend the license term for all satellite 637 SES Americom Comments at 9- 10. 638 Space Station Reform NPRM, 17 FCC Rcd at 3894- 96 (paras. 139- 43). 639 Space Station Reform NPRM, 17 FCC Rcd at 3895 (para. 142). 640 Space Station Reform NPRM, 17 FCC Rcd at 3895- 96 (para. 143). 641 SIA Comments at 22. 642 Space Station Reform NPRM, 17 FCC Rcd at 3895 (para. 142). 643 "Applications for space station system replacement authorization for non- geostationary orbit satellites shall be filed no earlier than 90 days, and no later than 30 days, prior to the end of the seventh year of the existing license term." 47 C. F. R. § 25. 121( e). 101 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 102 licensees, we also extend the deadline for all NGSO licensees to file their replacement satellite applications until about two years before the end of their 15- year license terms, as extended in this Order. 2. Spectrum Reallocations 268. Background. In the Notice, the Commission proposed a procedure to expedite reassignment of licenses to other satellite operators if the licensee loses its license for any reason. 644 CTIA recommends extending that concept. For example, if an initial group of satellite licensees does not make sufficient progress in constructing their systems, CTIA recommends that the Commission stop considering additional applications pending reallocation of the spectrum to another service. 645 CTIA suggests that the Commission consider reallocating satellite spectrum to another service whenever no "credible" satellite license application is filed within a year of the time the spectrum is allocated to satellite service. 646 CTIA also recommends considering reallocating satellite spectrum to another service whenever a satellite license is revoked. 647 269. SES Americom argues that CTIA's proposals are inconsistent with sound spectrum policy. 648 Several commenters point out that the Table of Frequency Allocations is based on long-term spectrum planning and should not be altered because some operators have tried and failed to provide service. 649 ICO argues that CTIA's proposals would have eliminated DBS, cellular, UHF, and FM services if they were applied to those services. 650 PanAmSat also contends that this proposal is beyond the scope of this proceeding. 651 270. Discussion. We will not adopt CTIA's proposals. Adopting CTIA's proposals would be equivalent to assuming that spectrum should be reallocated whenever a single satellite operator or group of operators fails to meet a milestone, or whenever satellite license applicants do not meet CTIA's proposed credibility standard. Under our current procedure, when we decide to allocate spectrum to a particular use, we base our decision on specific principles and policy goals. 652 These goals are not thwarted because particular satellite licensees are unable to move 644 See Space Station Reform NPRM, 17 FCC Rcd at 3860 (para. 34). 645 CTIA Comments at 6- 7. 646 CTIA Comments at 8. 647 CTIA Comments at 8. 648 SES Americom Reply at 19- 21. 649 SES Americom Reply at 20; PanAmSat Reply at 5; ICO Reply at 5- 6. 650 ICO Reply at 6- 8. 651 PanAmSat Reply at 4- 5. 652 Redesignation of the 17.7- 19.7 GHz Frequency Band, Blanket Licensing of Satellite Earth Stations in the 17.7- 20.2 GHz and 27.5- 30.0 GHz Frequency Bands, and the Allocation of Additional Spectrum in the 17.3- 17.8 GHz and 24.75- 25.25 GHz Frequency Bands for Broadcast Satellite- Service Use, First Order on Reconsideration, IB Docket No. 98- 172, 16 FCC Rcd 19808, 19811 (para. 6) (2001) (" Based on the extensive record in the proceeding, on June 8, 2000, the Commission adopted the 18 GHz Order that made several important decisions with the goal of permitting more efficient use of the radio spectrum for existing and future operators and facilitating deployment of new services in the band.") 102 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 103 forward. Furthermore, CTIA's proposed automatic mechanism to initiate a spectrum reallocation proceeding when a satellite licensee fails to go forward limits our flexibility to determine how the public interest will be best served. In cases where reallocating spectrum from one service to another would further the public interest, we can reallocate that spectrum in a rulemaking proceeding. 653 In addition, if we adopted an automatic mechanism for reallocating spectrum when satellite operators fail to meet a milestone, without another mechanism for reallocating spectrum in cases where other operators in other services fail to meet milestones, we would be declaring by government fiat that other services provide a higher and better use of spectrum than satellite service under all circumstances. 3. Special Temporary Authority 271. Background. SIA requests that we specify in the rules the extent to which we will grant applicants special temporary authority (STA) without placing the STA request on public notice. 654 SIA further recommends treating STA requests as granted as of seven business days after they are filed for STA requests less than 30 days, or five business days after the end of the public notice period for STA requests greater than 30 days. 655 272. Discussion. We adopt SIA's proposal to revise the Commission's rules to spell out more completely the requirements for STAs. These requirements are now set forth in Section 309 of the Communications Act. Section 309( c)( 2)( G) governs STA requests that are not placed on public notice. 656 Under that provision, the Commission may grant STAs for no more than 30 days in cases where an application for regular authority is not contemplated, or for 60 days otherwise. Under Section 309( f), the Commission may grant STA requests for up to 180 days if they are placed on public notice. 657 In this Order, we revise Section 25.120 of our rules to include these provisions. 658 273. We will not adopt rules that automatically grant an STA request if we do not act on the request within a certain number of days, however. In other cases where we have allowed filings by regulated companies to take effect after a certain number of days, the procedure was established by the Communications Act, 659 or we adopted safeguards sufficient to ensure that allowing the filing to take effect would not be inconsistent with the public interest. 660 SIA's proposal does not 653 See Reallocation and Service Rules for the 698- 746 MHz Spectrum Band (Television Channels 52- 59), Report and Order, GN Docket No. 01- 74, 17 FCC Rcd 1022 (2002). 654 SIA Comments at 21- 22. 655 SIA Comments at 21- 22. 656 47 U. S. C. § 309( c)( 2)( G). 657 47 U. S. C. § 309( f). 658 47 C. F. R. § 25. 120. 659 47 U. S. C. § 204( a)( 3) (common carrier tariff filings are "deemed lawful" unless Commission takes action within specified time). 660 See 1998 Biennial Regulatory Review -- Review of International Common Carrier Regulations, Report and Order, IB Docket No. 98- 118, 14 FCC Rcd 4909, 4913- 14 (para. 12) (1999) (the 103 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 104 include any such safeguards. In addition, the Communications Act specifies that we grant STAs only when there are "extraordinary circumstances." 661 There is nothing in the Communications Act that suggests that Congress contemplated allowing STA requests to be routinely granted. Moreover, in emergency cases, the Commission can grant STAs orally, to be memorialized later by letter. 662 4. Petitions for Reconsideration 274. Teledesic proposes a stamp- based procedure for denying meritless petitions for reconsideration. 663 Teledesic does not propose a definition for "meritless." We see no need to adopt this procedure at this time, especially with no dividing line between "meritless" petitions and other petitions. In addition, this proposal seems unnecessary. If a petition for reconsideration truly has no merit, it can be dismissed in a timely manner under the Commission's current procedure. 664 This is particularly true for petitions for reconsideration that do not raise any new arguments. 665 5. Pending Satellite Applications 275. There are several satellite license applications currently pending before the Commission, including applications for NGSO and GSO satellites that would operate in the V-band, 666 and for NGSO satellites that would operate in the Ka- band. 667 For reasons set forth in this class of international Section 214 applications that qualify for streamlined treatment are subject to regulations and safeguards sufficient to prevent anticompetitive effects in the U. S. market). 661 47 U. S. C. § 309. Convenience to the applicant, such as marketing considerations or meeting scheduled customer in- service dates, will not be deemed sufficient for this purpose. 47 C. F. R. § 25. 120( b). 662 See Letter from Jennifer M. Gilsenan, Chief, Policy Branch, Satellite Division, International Bureau, to Nancy J. Eskanazi, Vice President and Associate General Counsel, SES Americom, Inc. (dated June 25, 2002) (memorializing oral STA grant to relocate satellite from 79° W. L. to 37. 5° W. L.). 663 Teledesic Comments at 44- 46. 664 See Texcom, Inc., d/ b/ a Answer Indiana, Complainant, v. Bell Atlantic Corp., d/ b/ a Verizon Communications, Defendant, Order on Reconsideration, 17 FCC Rcd 6275 (2002); Joy Public Broadcasting Corporation, Radio Station WJTF- FM, Panama City, Florida, Memorandum Opinion and Order, 16 FCC Rcd 11971 (Enf. Bur. 2001); Applications of Warren Price Communications, Inc., Memorandum Opinion and Order, MM Docket No. 87- 246, 7 FCC Rcd 6850 (1992) (examples of dismissals of petitions for reconsideration because they had no merit). 665 See 47 C. F. R. § 1.106( b)( 3). 666 The Commission adopted the current band plan for non- government operations in the V-band in December 1998. Allocation and Designation of Spectrum for Fixed- Satellite Services in the 37.5- 38. 5 GHz, 40. 5- 41.5 GHz, and 48. 2- 50. 2 GHz Frequency Bands; Allocation of Spectrum to Upgrade Fixed and Mobile Allocations in the 40. 5- 42.5 GHz Frequency Band; Allocation of Spectrum in the 46. 9- 47. 0 GHz Frequency Band for Wireless Services; and Allocation of Spectrum in the 37. 0- 38. 0 GHz and 40. 0- 40. 5 GHz for Government Operations, Report and Order, IB Docket No. 97- 95, 13 FCC Rcd 24649 (1998) (36- 51 GHz Order), aff'd 15 FCC Rcd 1766 (1999) (36- 51 GHz Reconsideration Order). The Commission is currently considering revising these allocations. See Allocation and Designation of Spectrum for Fixed-Satellite Services in the 37. 5- 38.5 GHz, 40. 5- 41. 5 GHz, and 48. 2- 50.2 GHz Frequency Bands; Allocation 104 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 105 section below, we will apply the rules and procedures we adopt in this Order to pending applications, in cases where doing so will help further the goals of this proceeding to expedite service to the public and discourage speculation. 276. The Commission is allowed to apply new procedures to pending applications under limited circumstances. Specifically, the Commission can apply new procedures to pending applications if doing so does not impair the rights an applicant possessed when it filed its application, increase an applicant's liability for past conduct, or impose new duties on applicants with respect to transactions already completed. 668 Applying our new procedures to pending satellite applications as discussed below would not have any of these results. 277. Applying new procedures to pending satellite applications would not impair the rights that any applicant possessed when it filed its application, nor impose any new duty with respect to a transaction already completed. Courts have explained that applicants do not gain any vested right merely by filing an application. 669 Similarly, merely filing an application cannot be considered a "transaction already completed" for purposes of this analysis. In addition, the pending applications were filed under the current processing round procedures described in this Order above. 670 The current processing round procedure included the fungibility policy eliminated in the Order above. 671 Thus, at the time applicants filed their applications, they had no reasonable basis for assuming that they would receive the operating authority they requested, or that they of Spectrum to Upgrade Fixed and Mobile Allocations in the 40. 5- 42.5 GHz Frequency Band; Allocation of Spectrum in the 46. 9- 47. 0 GHz Frequency Band for Wireless Services; and Allocation of Spectrum in the 37. 0- 38.0 GHz and 40. 0- 40. 5 GHz for Government Operations, Further Notice of Proposed Rulemaking, IB Docket No. 97- 95, 16 FCC Rcd 12244 (2001) (36- 51 GHz Further Notice). 667 For more on Ka- band NGSO service, see The Establishment of Policies and Service Rules for the Non- Geostationary Satellite Orbit, Fixed- Satellite Service in the Ka- Band, Notice of Proposed Rulemaking, IB Docket No. 02- 19, 17 FCC Rcd 2807 (2002) (Ka- band NGSO NPRM). 668 DirecTV, Inc., v. FCC, 110 F. 3d 816, 825- 26 (D. C. Cir., 1997) (DirecTV); Landgraf v. USI Film Products, 511 U. S. 244, 280 (1994) (Landgraf). 669 Chadmoore Communications, Inc. v. FCC, 113 F. 3d 235, 240- 41 (D. C. Cir. 1997) (Chadmoore) (" In this case the Commission's action did not increase [the applicant's] liability for past conduct or impose new duties with respect to completed transactions. Nor could it have impaired a right possessed by [the applicant] because none vested on the filing of its application."); Hispanic Info. & Telecomms. Network v. FCC, 865 F. 2d 1289, 1294- 95 (D. C. Cir. 1989) (" The filing of an application creates no vested right to a hearing; if the substantive standards change so that the applicant is no longer qualified, the application may be dismissed."); Schraier v. Hickel, 419 F. 2d 663, 667 (D. C. Cir. 1969) (filing of application that has not been accepted does not create a legal interest that restricts discretion vested in agency). See also United States v. Storer Broadcasting Co., 351 U. S. 192 (1952) (pending application for new station dismissed due to rule change limiting the number of licenses that could be held by one owner); Bachow Communications, Inc. v. FCC, 237 F. 3d 683, 686- 88 (D. C. Cir. 2001) (Bachow) (upholding freeze on new applications and dismissal of pending applications in light of adoption of new licensing scheme); PLMRS Narrowband Corp. v. FCC, 182 F. 3d 995, 1000- 01 (D. C. Cir. 1999) (applicant did not, by virtue of filing application, obtain the right to have it considered under the rules then applicable). 670 Section III. A. above. See also Space Station Reform NPRM, 17 FCC Rcd at 3850- 52 (paras. 5- 10). 671 Section V. E., above. 105 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 106 would be granted any operating authority at all if other mutually exclusive applications were filed. In other words, no applicant had any right to rely on our former procedures for a grant, and applying new procedures does not impose any burden on any applicant. 672 Accordingly, applying our new procedures to pending satellite applications does not impair the rights any applicant had at the time it filed its application. 278. We recognize that the authorizations issued under our new procedures may not be exactly what applicants expected. This by itself does not make our decision to rely on the new procedures unreasonable, however. Courts have determined that any statute may unsettle expectations and impose burdens on past conduct. For example, a new property tax or zoning regulation may upset the reasonable expectations that prompted those affected to acquire property. 673 Just as such new property taxes or zoning regulations are not inherently unreasonable, we conclude that reviewing satellite applications under procedures adopted after the applications were filed is not inherently unreasonable. 279. The Commission's primary goals in this proceeding include adopting licensing procedures that will allow faster service to the public, while maintaining adequate safeguards against speculation. 674 Continuing to consider pending applications under the existing processing round procedure would frustrate these goals in the case of the V- band. 675 Accordingly, we direct the International Bureau to treat all pending V- band applications filed in a timely manner in the current processing round as though they were filed at the same time. The V- band will be divided between GSO- like service and NGSO- like service based on the proportion of qualified GSO- like applicants and NGSO- like applicants. Qualified GSO- like applicants will be licensed to the orbit locations they requested. In cases in which two GSO- like applicants requested mutually exclusive orbit locations, the applicants will be given an opportunity to amend their applications to request another location. In cases where the applicants choose not to amend their applications, the Bureau will divide the GSO- like portion of the V- band at that location equally between the two applicants. Also, the Bureau will divide the NGSO- like portion of the V- band equally among the qualified NGSO- like applicants. The Commission is in the process of considering revisions to the V- band band plan. 676 We direct the International Bureau to release a public notice shortly after the pending V- band Report and Order is released, to explain this V- band procedure in more detail, and to give V- band applicants an opportunity to amend their applications if necessary. 280. In the Notice of Proposed Rulemaking in the Ka- band licensing proceeding, we proposed a method that would enable multiple Ka- band NGSO systems to share the same spectrum. 677 The pleading cycle in that proceeding has closed and we have developed a full 672 See Cassell v. FCC, 154 F. 3d 478, 486- 87 (D. C. Cir., 1998). 673 Langraf, 511 U. S. at 269- 70; DirecTV, 110 F. 3d at 826, citing Bell Atlantic Telephone Cos. v. FCC, 79 F. 3d 1195, 1207 (D. C. Cir., 1996); Black Citizens for a Fair Media v. FCC, 719 F. 2d 407, 411 (D. C. Cir., 1983). 674 Space Station Reform NPRM, 17 FCC Rcd at 3852- 56 (paras. 11- 23); 3864- 66 (paras. 51-53). 675 Chadmoore, 113 F. 3d at 242; Bachow, 237 F. 3d at 686. 676 36- 51 GHz Further Notice, 16 FCC Rcd 12244. 677 Ka- band NGSO NPRM, 17 FCC Rcd at 2807 (para. 2). 106 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 107 record on our licensing proposal. At this stage in the proceeding, we see no reason to impose a band- splitting approach on the Ka- band NGSO applicants if they believe that they can share the spectrum. Considering the comments will allow us to determine which licensing method is best suited for the Ka- band NGSO applications, without delaying grant of the licenses. Therefore, we direct the International Bureau to award Ka- band licenses pursuant to the processing mechanism adopted in the forthcoming Report and Order in the Ka- band NGSO licensing proceeding. 281. In the case of both V- band and Ka- band NGSO applications, however, we find that eliminating the anti- trafficking rule is likely to expedite provision of service to the public, and that application of the safeguards against speculation would help limit speculation and warehousing. Accordingly, V- band and Ka- band NGSO licensees will be subject to the bond- posting requirement and new milestones adopted above. 678 Finally, V- band applicants will be required to withdraw all but five GSO- like orbit location requests and one NGSO- like satellite system request. It is at best unlikely that the applicants requesting more than five GSO- like orbit locations will successfully complete construction of all the satellites they have requested. Thus, granting all those applicants' requests could result in warehousing spectrum until we cancel licenses at the time of the first milestone. 282. Finally, we will not consider fee refunds under the rule we adopt in this Order in the event that an applicant withdraws its application. The fee refund provision adopted in this Order is intended to enable an applicant in a first- come, first- served procedure to obtain a fee refund in cases where an earlier- filed application would make it impossible to grant its application. 679 There are no such pending applications here that we would consider pursuant to a first- come, first- served procedure. 283. We emphasize that some of the rules we apply to pending applications do not apply to licenses granted before this Order was adopted. Thus, licensees will not be required to post a bond for licenses they have been granted in the past. Similarly, nothing in this Order affects the milestones of licenses granted before we adopted this Order. However, we eliminate the anti-trafficking rule for current satellite licensees as well as for satellite license applications granted after this Order takes effect. 284. In summary, we will rely on procedures adopted in this Order in reviewing currently pending satellite applications, where appropriate, as discussed above. We direct the International Bureau to review pending satellite applications consistently with our discussion in this Order, and to adopt licensing Orders acting on those pending satellite applications consistent with rules and policies governing the spectrum, and in coordination with other potentially affected Bureaus and Offices. VIII. NON- U. S.- LICENSED SATELLITES A. Background 678 The milestones adopted in this Order above are consistent with those proposed by the Commission in the Ka- band NGSO NPRM, 17 FCC Rcd at 2820 (paras. 40- 41). 679 See Section VI. E. 1. c. above. We note, however, that applicants who withdraw their applications will avoid the bond requirement. Moreover, there are currently provisions in the Commission's rules by which an applicant may apply for a fee refund. The new fee refund provision we adopt in this Order does not affect those provisions. 107 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 108 285. Under the terms of the World Trade Organization (WTO) Agreement on Basic Telecommunications Services (WTO Telecom Agreement), 680 78 WTO signatories, including the United States, have made binding commitments to open their markets to foreign competition in satellite services. 681 Providing opportunities for non- U. S.- licensed satellites to deliver services in the United States brings U. S. consumers the benefits of enhanced competition. 682 This policy also promotes greater opportunities for U. S. companies to enter previously closed foreign markets, thereby stimulating a more competitive global satellite services market. 683 286. In the Notice, the Commission described the framework it uses for considering requests for access to the U. S. market by non- U. S.- licensed satellite operators for satellite services. 684 The Commission's framework provides two procedures by which a non- U. S.- licensed satellite may provide service in the United States. 685 The first procedure allows the non- U. S. satellite operator to participate in a space station processing round through an earth station application seeking to communicate with the satellite or through a "letter of intent" to use its non-U. S. satellite to provide service in the United States. The non- U. S. licensed satellite must meet 680 The WTO came into being on January 1, 1995, pursuant to the Marrakesh Agreement Establishing the World Trade Organization (the Marrakesh Agreement). 33 I. L. M. 1125 (1994). The Marrakesh Agreement includes multilateral agreements on trade in goods, services, intellectual property, and dispute settlement. The General Agreement on Trade in Services (GATS) is Annex 1B of the Marrakesh Agreement. 33 I. L. M. 1167 (1994). The WTO Telecom Agreement was incorporated into the GATS by the Fourth Protocol to the GATS (April 30, 1996), 36 I. L. M. 354 (1997) (Fourth Protocol to the GATS). 681 Fourth Protocol to the GATS, 36 I. L. M. at 363. See also DISCO II, 12 FCC Rcd at 24102 (para. 19). The United States made market access commitments for fixed and mobile satellite services. It did not make market access commitments for Direct- to- Home (DTH) Service, Direct Broadcast Satellite Service (DBS), and Digital Audio Radio Service (DARS), and took an exemption from most-favored nation (MFN) treatment for these services as well. See Fourth Protocol to the GATS, 36 I. L. M. at 359. Generally, GATS requires WTO member countries to afford most- favored nation (MFN) treatment to all other WTO member nations. "With respect to any measure covered by this Agreement, each Member shall accord immediately and unconditionally to services and service suppliers of any other Member treatment no less favourable than that it accords to like services and service suppliers of any other country." GATS Article II, paragraph 1. Member nations are permitted to take "MFN exemptions," however, under certain circumstances specified in an annex to GATS. See GATS Annex on Article II Exemptions. 682 DISCO II, 12 FCC Rcd at 24097 (para. 4). 683 DISCO II, 12 FCC Rcd at 24099 (para. 10). 684 We adopted this framework in DISCO II, 12 FCC Rcd 24094, recon. 15 FCC Rcd 7207 (1999) (DISCO II First Reconsideration Order), recon. denied 16 FCC Rcd 19794 (2001) (DISCO II Second Reconsideration Order). For a detailed summary of the DISCO II framework, we refer the reader to DISCO II First Reconsideration Order, 15 FCC Rcd at 7209- 10 (paras. 4- 5). In evaluating requests by foreign- licensed satellites to serve the U. S. market, the Commission adopted a public interest framework that considers the effect on competition in the United States, spectrum availability, eligibility and operating (e. g., technical) requirements, and national security, law enforcement, foreign policy, and trade concerns. See, e. g., Space Station Reform NPRM, 17 FCC Rcd at 3889 n. 165, citing DISCO II First Reconsideration Order, 15 FCC Rcd at 7209- 10 (paras. 4- 5). 685 DISCO II, 12 FCC Rcd at 24174 (para. 188). 108 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 109 all Commission requirements that apply to U. S.- licensed satellites before we will authorize it to provide service in the United States. 686 287. The second procedure is applicable in cases where the non- U. S.- licensed satellite operator seeks immediate access to the U. S. market through an in- orbit satellite, and has initiated international coordination negotiations for that satellite network pursuant to the International Telecommunication Union's (ITU's) international Radio Regulations. 687 Under this procedure, a prospective U. S. earth station operator seeking to communicate with the in- orbit non- U. S. -licensed space station must file an application for an initial earth station license or a modification of an existing license, listing the non- U. S.- licensed space station as a "point of communication," and demonstrating that the space station meets all applicable Commission requirements. 688 288. Under both of these procedures, each request for initial U. S. market access must contain the information required in Section 25.114 of the Commission's rules, which governs applications for space station authorizations, with two exceptions. 689 The Commission does not require the non- U. S.- licensed space station operator to submit technical information if it has completed the international coordination process, or to submit financial information if the satellite has been launched. 690 289. In the Notice, the Commission proposed to modify the procedures and information requirements applicable to operators of non- U. S.- licensed satellites seeking access to the U. S. market, to make them consistent with any revisions to the procedures for U. S.- licensed satellites that the Commission might adopt in this proceeding. 691 The Commission also proposed additional rule revisions to clarify the information requirements of non- U. S.- licensed satellite operators seeking access to the U. S. market. 692 We address these issues below. B. Revision of Framework 1. NGSO- Like Satellites 290. Background. In the Notice, the Commission stated that, in the event that it continued to use processing rounds as a vehicle for licensing, it would not need to modify the current Letter of Intent procedure. 693 As we explained above, we have adopted a modified 686 DISCO II, 12 FCC Rcd at 24173- 74 (paras. 184- 85, 188). 687 DISCO II, 12 FCC Rcd at 24174 (para. 186). 688 See generally 47 C. F. R. § 25. 137. 689 See generally 47 C. F. R. § 25. 137; DISCO II, 12 FCC Rcd at 24174 (para. 188). 690 See 47 C. F. R. § 25. 137( b); DISCO II, 12 FCC Rcd at 24175- 76 (para. 191). 691 Space Station Reform NPRM, 17 FCC Rcd at 3890 (para. 125). 692 Space Station Reform NPRM, 17 FCC Rcd at 3890 (para. 125). 693 Space Station Reform NPRM, 17 FCC Rcd at 3890 (para. 126). 109 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 110 processing round procedure for NGSO- like systems that awards licenses by dividing the available spectrum evenly among the qualified applicants. 694 291. Discussion. We will continue to treat Letters of Intent filed by non- U. S.- licensed NGSO- like system operators as we have in the past. That is, a Letter of Intent will be treated as a request for reservation of spectrum in a processing round. 695 If authorized to serve the United States, the foreign system will be allowed to provide service in the United States using 1/ n of the available spectrum, just as U. S.- licensed satellite operators in that processing round. 2. GSO- Like Satellites 292. Background. The Commission also solicited comment on treating Letters of Intent and earth station applications for authority to access a non- U. S.- licensed satellite as a satellite application for purposes of determining priority in the queue, in the event that we adopt a first-come, first- served procedure. 696 In other words, Letters of Intent and earth station applications would be placed in the queue together with U. S. applications, and considered at the time the Letter of Intent or earth station application reaches the head of the queue. 293. Discussion. Telesat maintains that foreign entities seeking to operate GSO- like satellites in the United States should not be required to file Letters of Intent. Rather, because the U. S. licensing process does not supercede the ITU date priority process, Telesat argues that the only relevant issue should be whether the non- U. S.- licensed satellite operator has ITU date priority. 697 If the foreign satellite has ITU date priority, a U. S. operator seeking to operate in the same bands will not be able to coordinate with the foreign- licensed system and will therefore be unable to operate in any event. Telesat argues that we should allow non- U. S.- licensed satellite operators to provide service in the United States upon a showing of (1) a valid authorization from another administration; (2) the applicable ITU filings, and (3) a list of the relevant coordination agreements. 698 294. We disagree that we should change the methods by which foreign satellite operators request U. S. access for their GSO- like satellites as Telesat suggests. Letters of Intent or earth station applications will continue to be the vehicle for non- U. S.- licensed satellite operators to request access to the United States. These vehicles provide information needed to address issues such as spectrum availability, 699 and compliance with U. S. technical requirements. 700 In other proceedings, we have considered and rejected arguments that obtaining a satellite license from another administration is sufficient to show that the satellite system will comply with U. S. 694 Section V. above. 695 DISCO II Order, 12 FCC Rcd at 24173- 74 (para. 185). 696 Space Station Reform NPRM, 17 FCC Rcd at 3890 (para. 126). 697 Telesat Comments at 4; Telesat Reply at 2- 3. 698 Telesat Comments at 6. 699 DISCO II, 12 FCC Rcd at 24158- 59 (paras. 147- 50). 700 DISCO II, 12 FCC Rcd at 24161- 63 (paras. 154- 59). 110 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 111 technical requirements. 701 Here, we conclude that ITU date priority is also not sufficient to show that a non- U. S.- licensed satellite operator will meet all the public interest factors we weigh when evaluating requests for access to the U. S. satellite market. Given that we will continue to consider public interest factors in reviewing requests for market access, we must determine the procedures for reviewing Letters of Intent in conjunction with the first- come, first- served procedure for GSO- like satellite applications we adopt in this Order. We conclude that Letters of Intent should be treated the same as satellite applications. This is consistent with our WTO commitments to treat non- U. S. satellite operators no less favorably than we treat U. S. satellite operators. 295. In addition, the first- come, first- served procedure we adopt today affords sufficient opportunity to address ITU priority issues. 702 Moreover, ITU date priority does not preclude us from licensing the operator of a U. S.- licensed GSO satellite on a temporary basis pending launch and operation of a satellite with higher priority in cases where the non- U. S.- licensed satellite has not been launched yet. 703 When we have authorized a U. S. licensee to operate at an orbit location at which another Administration has ITU priority, we have issued the license subject to the outcome of the international coordination process, and emphasized that the Commission is not responsible for the success or failure of the required international coordination. 704 296. Furthermore, in the first- come, first- served procedure, when considering requests for U. S. market access from two or more non- U. S.- licensed satellite operators licensed by different Administrations, we will continue to take into account the impact of the ITU coordination process. Under the ITU’s international Radio Regulations, it is the responsibility of Administrations with lower ITU priority to coordinate their networks with the networks of Administrations with higher priority. In the event that a non- U. S.- licensed satellite operator is authorized to provide service in the United States, and that network is "affected," within the meaning of the ITU’s international Radio Regulations, by a satellite network with lower priority seeking access to the U. S. market, we would permit the lower priority network to access the U. S. market if the higher priority satellite has not been launched. In that case, the lower priority satellite would be authorized to access the U. S. market subject to proof of coordination with the higher priority satellite. Absent such a demonstration, the lower priority satellite would be required to cease service to the U. S. market immediately upon launch and operation of the higher 701 DISCO II, 12 FCC Rcd at 24161- 63 (paras. 154- 59); DISCO II Second Reconsideration Order, 16 FCC Rcd at 19798- 99 (paras. 11- 14). 702 Section VI. D. 7. above. 703 Section VI. C. 9. above. See also PanAmSat Corporation, Request for Special Temporary Authority to Operate a Space Station at 60º W. L., Order and Authorization, 15 FCC Rcd 21802, 21804- 05 (para. 11) (Int'l Bur., 1999); Application of Columbia Communications Corporation for Modification of Authorization to Permit Operation of Ku- band Satellite Capacity on the Columbia 515 Satellite Located at 37. 7° West Longitude, Memorandum Opinion and Order, 16 FCC Rcd 12480, 12486 (para. 16) (Int'l Bur. 2001)( The Commission has often permitted satellite operators to provide service on a temporary basis from orbit locations that are not regularly assigned to them, provided the temporary operations do not adversely impact regularly licensed satellite systems). 704 See KaStarCom World Satellite, LLC, Application for Authority to Construct, Launch, and Operate a Ka- band Satellite System in the Fixed- Satellite Service, Order and Authorization, 16 FCC Rcd 14322, 14330 (para. 25) (Int’l Bur. 2001) (KaStarCom Authorization Order). 111 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 112 priority satellite, or be subject to further conditions designed to address potential harmful interference to a satellite with ITU date precedence. 705 297. In summary, we reject Telesat's proposal to consider requests for U. S. market access based only on a showing of ITU date precedence and foreign authorization, because that would not enable us to determine whether the satellite meets our Part 25 technical requirements. Furthermore, nothing in the procedures we adopt today precludes us from considering ITU date precedence issues when reviewing requests from non- U. S.- licensed satellite operators for U. S. market. C. Information Requirements of Non- U. S.- Licensed Satellite Operators 1. Information Requirements for Coordinated Non- U. S. Satellites 298. Background. Under the DISCO II framework, we do not require operators of non-U. S.- licensed satellites to submit technical information concerning the satellite if they have completed international coordination. 706 We did so because we assumed that, through the coordination process, we would have obtained all the information necessary to make a finding as to whether the non- U. S. satellite complies with all Commission technical requirements. In the Notice, we noted that it can be very time- consuming or, in some cases, impossible to derive that technical information from international coordination agreements. 707 We also explained that the coordination process may not provide us with any technical information in those cases in which we do not need to obtain space station data from the foreign administration because the foreign satellite will not be close enough to any in- orbit or planned U. S. satellites to raise potential interference concerns. 708 We observed, however, that in these cases, we still need to determine whether the foreign space station meets our technical requirements to determine whether allowing the foreign satellite to access the United States could interfere with other countries' compliant satellites that are authorized to serve the United States or with future U. S. satellites that may be authorized at orbit locations adjacent to the foreign satellite. 709 We therefore proposed modifying our rules to require all non- U. S.- licensed space stations seeking initial access to the United States 705 New Skies Networks, Inc., Order, 18 FCC Rcd 896, 899 (para. 10) (Int'l Bur., Sat. Div., 2003). 706 47 C. F. R. § 25. 137( b); DISCO II, 12 FCC Rcd at 24175- 76 (para. 191), cited in Space Station Reform NPRM, 17 FCC Rcd at 3891 (para. 130). Specifically, we do not require those satellite operators to provide the information specified in Sections 25. 114( c)( 5) through (11) and (14). See 47 C. F. R. § 25. 137( b). 707 Space Station Reform NPRM, 17 FCC Rcd at 3891 (para. 130). We also explained that, when a non- U. S.- licensed satellite operator has relied on a coordination agreement and we cannot determine that a non- U. S.- licensed satellite can operate interference- free in a two- degree- spacing environment, we have required U. S.- licensed earth stations operating with that satellite to do so on a non-harmful interference basis. Space Station Reform NPRM, 17 FCC Rcd at 3891 (para. 130), citing Telesat Canada, Request for Declaratory Ruling or Petition for Waiver on Earth Stations' Use of ANIK E1 and ANIK E2 Satellite Capacity to Provide Basic Telecommunications Service in the United States, Order, 15 FCC Rcd 3649, 3654 (para. 14) (Int’l Bur., 1999) (First ANIK E1 and E2 Permitted List Order). 708 Space Station Reform NPRM, 17 FCC Rcd at 3891- 92 (para. 131). 709 Space Station Reform NPRM, 17 FCC Rcd at 3891- 92 (para. 131). 112 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 113 to submit all satellite- related technical information specified in Part 25, regardless of coordination status. 710 299. Discussion. Telesat and Inmarsat oppose the proposal that all non- U. S.- licensed operators submit all satellite- related technical information specified in Part 25, regardless of coordination status. 711 Inmarsat argues that such a requirement would be unduly burdensome, and constitute an additional licensing requirement. 712 Inmarsat alternatively proposes that the Commission obtain required information through the international coordination process. 713 Telesat suggests requiring non- U. S.- licensed satellite operators seeking U. S. market access to provide only the following technical information: (1) evidence of an authorization from the relevant administration; (2) the applicable coordination or notification ITU filing( s); and (3) a listing of the relevant coordination agreements. 714 Finally, Telesat assumes the Commission's proposal may indicate that the Commission plans to "verify" that non- U. S.- licensed satellite operators have coordinated with adjacent satellites, and opposes any such plans that the Commission may have. 715 300. We conclude that non- U. S.- licensed satellite operators seeking access to the U. S. market should provide the same information as U. S. satellite license applicants, regardless of whether they have completed international coordination. Based on our experience with requests for U. S. market access from non- U. S.- licensed satellite operators, we have found that it is often difficult or impossible to determine whether a non- U. S.- licensed satellite complies with our technical requirements based on international coordination agreements. 716 Furthermore, when a non- U. S.- satellite operator has relied on a coordination agreement and we cannot determine that a non- U. S.- licensed satellite can operate interference- free in a two- degree- spacing environment, we have required U. S.- licensed earth stations operating with that satellite to do so on a non- harmful interference basis. 717 In at least one of those cases, the non- U. S.- licensed satellite operator later provided adequate information to show that its satellites can operate interference- free in a two-degree- spacing environment. 718 Thus, both the foreign operator and Commission staff were forced to expend unnecessary time respectively preparing and processing multiple applications. By revising our rules, we should avoid this in the future. 710 Space Station Reform NPRM, 17 FCC Rcd at 3891- 92 (para. 131). 711 Telesat Comments 6- 7; Inmarsat Comments at 13- 14. 712 Inmarsat Comments at 13- 14. 713 Inmarsat Comments at 13- 14. 714 Telesat Comments at 6; Telesat Reply at 3. 715 Telesat Comments at 7. 716 See Space Station Reform NPRM, 17 FCC Rcd at 3891- 92 (para. 131). 717 See, e. g., First ANIK E1 and E2 Permitted List Order, 15 FCC Rcd at 3654 (para. 14). 718 Telesat Canada, Request to Eliminate Conditions On ANIK E1 and E2's Inclusion on The Permitted Space Station List, Order, 16 FCC Rcd 15979 (Sat. and Rad. Div., Int'l Bur., 2001). 113 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 114 301. Neither Telesat nor Inmarsat persuade us to take a different approach. To the extent that they recommend continuing to extract the necessary technical information from coordination agreements, neither commenter addresses our experience that this procedure can delay granting U. S. market access to non- U. S.- licensed satellite operators while we attempt to cull relevant information from the agreements, or that doing so will even provide us with all the information we need to make a determination as to whether the non- U. S. satellite complies with our technical rules. 719 To the extent that they maintain that requiring Part 25 technical information constitutes a U. S. licensing requirement, we have previously considered and rejected these arguments. 720 302. Finally, we have no plans or intent to use the technical information provided by non- U. S.- licensed satellite operators to verify international coordination agreements. Rather, we will use this information to determine whether the satellite complies with the technical requirements of Part 25. This is the same review we conduct when a U. S.- licensed satellite operator seeks authority to provide satellite service in the U. S. market. 2. Amendments of Letters of Intent 303. Background. With respect to non- U. S.- licensed satellite operators that wish to amend a proposal for a satellite system described in a Letter of Intent, the Commission proposed requiring an additional Letter of Intent describing the changes. 721 We also proposed treating such letters as we would treat amendments filed by a U. S. satellite applicant. In other words, if the planned changes constitute a "major amendment," the non- U. S. satellite operator would lose its status relative to later- filed applications. 722 We also invited comment on the effects, if any, of the process for filing modifications of ITU filings on our proposal for amendments of Letters of Intent. 723 304. Discussion. Telesat supports the proposal to treat amendments to Letters of Intent in the same way as amendments filed by a U. S. applicant. 724 We find that doing so will place non- U. S.- licensed satellite operators on an equal footing relative to U. S. satellite license applicants. We therefore adopt the proposal and will revise Section 25.137 accordingly. 305. Telesat further argues that amendments of Letters of Intent should be consistent with and contingent upon modifications of the relevant ITU filing. 725 Telesat also maintains that some ITU filings may not affect the service the satellite operator plans to offer in the United States. We agree. Just as U. S. license applicants are required to ensure that the information in 719 Space Station Reform NPRM, 17 FCC Rcd at 3891- 92 (para. 131). 720 DISCO II, 12 FCC Rcd at 24175 (para. 190) (Part 25 information requirements do not constitute a licensing requirement). 721 Space Station Reform NPRM, 17 FCC Rcd at 3894 (para. 137). 722 Space Station Reform NPRM, 17 FCC Rcd at 3894 (para. 137). See also Section VI. E. 3. above (treatment of major amendments in first- come, first- served procedure). 723 Space Station Reform NPRM, 17 FCC Rcd at 3894 (para. 137). 724 Telesat Comments at 8. 725 Telesat Comments at 8. 114 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 115 pending satellite applications is current and complete, 726 non- U. S.- licensed satellite operators should also ensure that the information in pending Letters of Intent is current and complete. This includes ensuring that the information in the Letter of Intent is consistent with that on file with the ITU. We will revise Section 25.137 accordingly. Nothing in the record suggests that any other revisions to Section 25.137 are necessary to reflect ITU filing amendment procedures. D. Financial Qualifications of Non- U. S.- Licensed Satellite Operators 1. Eliminating the Financial Qualification Requirement 306. Background. Currently, non- U. S.- licensed satellite operators who have not launched their satellites must meet our financial qualification rules when requesting access to the U. S. market. 727 In the Notice, however, we proposed to eliminate the financial qualification rules for both U. S.- licensed satellites and, similarly, for non- U. S.- licensed satellites seeking to access the U. S. market. 728 307. Discussion. Telesat supports the proposal to eliminate financial qualifications for non- U. S.- licensed satellites, consistent with any decision to eliminate the requirement for U. S. -licensed satellites. 729 We have eliminated the financial requirement for U. S.- licensed space station applicants in this Order. 730 We eliminate this requirement, as well, for non- U. S.- licensed space stations. 2. Posting of Bonds 308. In the Notice, the Commission proposed to modify the procedures applicable to operators of non- U. S.- licensed satellites seeking access to the U. S. market, to make them consistent with any revisions to the procedures for U. S.- licensed satellites that the Commission might adopt in this proceeding. 731 Such provisions are consistent with our WTO commitments to treat non- U. S.- licensed satellite operators no less favorably that we treat U. S. satellite operators. 732 The policy concern underlying our decision to require licensees to post bonds, discouraging speculative satellite applications, also applies to requests for access to the U. S. market. In other words, when a satellite operator seeks a license for speculative purposes rather than to construct a satellite system, it creates a risk that the spectrum assigned through the license 726 47 C. F. R. § 1.65. 727 Space Station Reform NPRM, 17 FCC Rcd at 3891 (para. 129), citing 47 C. F. R. § 25. 137( b); DISCO II, 12 FCC Rcd at 24175- 76 (para. 191). This information requirement does not apply to non- U. S.- licensed satellite operators seeking access to the U. S. market with an in- orbit satellite. 728 Space Station Reform NPRM, 17 FCC Rcd at 3891 (para. 129). 729 Telesat Comments at 5. 730 Section VII. B. 731 Space Station Reform NPRM, 17 FCC Rcd at 3890 (para. 125). 732 Space Station Reform NPRM, 17 FCC Rcd at 3890 (para. 127). 115 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 116 would not be put to any use until after the license were sold. 733 This potential for warehousing exists regardless of whether the satellite operator has a U. S. license or a non- U. S. license. 309. Therefore, non- U. S.- licensed satellite operators filing letters of intent to request U. S.- market access with a satellite that is not in orbit and operating also be required to post a bond in the amount of $7.5 million (U. S.) for NGSO- like satellite systems, or $5 million for GSO- like satellites, at the time they are granted access to the U. S. market. This bond will be payable if a non- U. S.- licensed satellite operator misses a milestone, and the operator will be allowed to reduce the bond amount, as are U. S. licensees, at the time it meets each milestone. We will also consider waivers of the bond requirement to the same extent that we consider waiver requests of U. S. licensees. We will not require non- U. S.- licensed satellite operators to post bonds if they request U. S. market access with an in- orbit satellite, because such operators are generally ready to begin offering service immediately, and such a request could not be speculative in those circumstances. E. Milestone Requirements of Non- U. S.- Licensed Satellite Operators 310. Background. We proposed requiring non- U. S.- licensed satellite operators to meet all milestone requirements we adopt for U. S.- licensed satellite operators in this proceeding. 734 311. Discussion. Telesat agrees that milestone requirements should apply to U. S. -licensed and non- U. S.- licensed satellites alike. 735 We will require non- U. S.- licensed satellite operators to meet the same milestone requirements we adopt in this Order for U. S. licensees. 736 This is consistent with our current policy. 737 312. Telesat also notes that non- U. S.- licensed satellites are bound by ITU bringing- into-use requirements. 738 U. S. satellite operators are also bound by ITU bringing- into- use requirements, and so Telesat's observation does not warrant any revision to our procedures for requesting access to the U. S. market. In the event that a U. S. licensee's ITU bringing- into- use date occurred before its launch milestone, it would be required to launch its satellite within the ITU date, or it would lose its ITU date precedence. If the licensee loses its ITU date precedence, it would be free to submit a new ITU filing and continue construction of its satellite if it so desired. If a non- U. S.- licensed satellite operator were in this situation, its licensing Administration has discretion to decide whether to allow its licensee to submit a new ITU filing. 733 Space Station Reform NPRM, 17 FCC Rcd at 3884 (para. 110). 734 Space Station Reform NPRM, 17 FCC Rcd at 3891 (para. 129), citing Pacific Century Group, Inc., Letter of Intent as a Foreign Satellite Operator to Provide Fixed Satellite Services in the Ka-band in the United States, Order, 16 FCC Rcd 14356, 14364 (paras. 25- 26) (Int'l Bur., 2001) (PCG Ka-band Licensing Order) (requiring non- U. S. satellite operator filing a Letter of Intent in a processing round to meet same milestones as U. S. participants in the processing round). 735 Telesat Comments at 5. 736 Section VII. C. 737 PCG Ka- band Licensing Order, 16 FCC Rcd at 14364 (paras. 25- 26). 738 Telesat Comments at 5. 116 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 117 F. Safeguards Against Speculation 313. Above, we adopted limits on the number of pending applications and unbuilt satellites for U. S. satellite licensees. 739 To make the procedures for U. S. and non- U. S. satellite operators consistent, and to discourage non- U. S. satellite operators from speculating in the U. S. market, we extend those limits to requests by non- U. S.- licensed satellite operators for U. S. market access. In other words, if a non- U. S.- licensed satellite operator files a Letter of Intent, and obtains a reservation of spectrum for a satellite to enter the U. S. market with a satellite that has not been built yet, that unbuilt satellite will be counted against that satellite operator. We will also apply the rule of attribution to non- U. S. satellite operators. If a non- U. S. satellite operator has more than a 33 percent interest in another entity with satellite applications pending before the Commission, that other entity's requests will be included in the limits. G. Mandatory Electronic Filing for Non- U. S.- Licensed Satellite Operators 314. In the Notice, the Commission proposed requiring non- U. S.- licensed satellite operators seeking access to the U. S. market to submit their requests electronically, in the event that we adopt a mandatory electronic filing requirement for U. S. satellite applicants. 740 Telesat supports a mandated electronic filing requirement. 741 We adopt our proposal, so that our treatment of non- U. S.- licensed satellite operators is consistent with our treatment of U. S.- licensed satellite operators. 742 H. Procedures for Modifications of Permitted List Satellite Parameters 1. Background 315. One of the procedures adopted in DISCO II for non- U. S.- licensed satellite operators seeking access to the U. S. market was to require the satellite operator to file a new earth station application identifying the non- U. S.- licensed satellite as a point of communication, or to ask a U. S. earth station operator to modify its license to add the non- U. S.- licensed satellite as a point of communication. 743 In the DISCO II First Reconsideration Order, the Commission streamlined this process in two ways. First, it allowed the operators of in- orbit non- U. S.- licensed satellites offering fixed- satellite service to request authority to provide space segment capacity service to U. S.- licensed earth stations in the United States. Under DISCO II, this request could be made only by an earth station operator. Second, it created the Permitted Space Station List (Permitted List) to facilitate access by the foreign satellite. Once a non- U. S.- licensed space station is permitted to access the U. S. market pursuant to a complete DISCO II analysis, it is placed on the 739 Section VII. E. 3. 740 Space Station Reform NPRM, 17 FCC Rcd at 3891 (para. 128). 741 Telesat Comments at 5. 742 The Commission also invited comment on requiring non- U. S.- licensed satellite operators to submit requests for U. S. market access on Schedule S. Space Station Reform NPRM, 17 FCC Rcd at 3890 (para. 127). We defer this issue to a future Order. We will also consider Telesat's proposal for "validation software" in that Order. See Telesat Comments at 5. 743 DISCO II, 12 FCC Rcd at 24174 (para. 186). See also Space Station Reform NPRM, 17 FCC Rcd at 3892 (para. 132). 117 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 118 Permitted List upon the applicant's request. This list includes all satellites with which U. S. earth stations with routinely- authorized technical parameters in the conventional C- and Ku- band (known as "ALSAT" earth stations) are permitted to communicate without additional Commission action, provided that those communications fall within the same technical parameters and conditions established in the earth stations' original licenses. 744 The Permitted List is maintained on our website, and is also available via fax or e- mail. 745 316. In the Notice, we pointed out that we have received a number of requests from non-U. S.- licensed satellite operators to reflect changes in the operating parameters of satellites on the Permitted List. 746 Some of these revisions would require a license modification if the satellite were licensed in the United States. 747 We have also received a request to place a replacement satellite on the Permitted List, 748 and to reflect a transfer of control of the satellite on the Permitted List. 749 Accordingly, in the Notice¸ we proposed procedures to address revisions satellites on the Permitted List. 750 We address each of these proposals below. 2. Permitted List Satellite Modifications 317. Background. We pointed out in the Notice that placing a satellite on the Permitted List has the legal effect of modifying all ALSAT- designated earth station licenses so that those earth stations are authorized to communicate with that satellite at that orbit location under the 744 DISCO II First Reconsideration Order, 15 FCC Rcd at 7214- 16 (paras. 16- 20). "ALSAT" means "all U. S.- licensed space stations." Originally, under an ALSAT earth station license, an earth station operator providing fixed- satellite service in the conventional C- and Ku- bands could access any U. S. satellite without additional Commission action, provided that those communications fall within the same technical parameters and conditions established in the earth stations' licenses. See DISCO II First Reconsideration Order, 15 FCC Rcd at 7210- 11 (para. 6). The DISCO II First Reconsideration Order expanded ALSAT earth station licenses to permit access to any satellite on the Permitted List. DISCO II First Reconsideration Order, 15 FCC Rcd at 7215- 16 (para. 19). 745 DISCO II First Reconsideration Order, 15 FCC Rcd at 7215- 16 (para. 19). 746 Space Station Reform NPRM, 17 FCC Rcd at 3893 (para. 133). 747 Space Station Reform NPRM, 17 FCC Rcd at 3893 (para. 133), citing Telesat Canada, Petition for Declaratory Ruling For Inclusion of ANIK F1 on the Permitted Space Station List, Order, 15 FCC Rcd 24828 (Intl. Bur., 2000) (ANIK F1 Permitted List Order). 748 Space Station Reform NPRM, 17 FCC Rcd at 3893 (para. 133), citing European Telecommunication Satellite Organization (EUTELSAT); Petitions for Declaratory Ruling To Add EUTELSAT Satellites ATLANTIC BIRD™ 1 at 12. 5° W. L and ATLANTIC BIRD™ 2 at 8° W. L to the Commission's Permitted Space Station List, Order, 16 FCC Rcd 15961 (Int’l Bur., Sat. and Rad. Div., 2001). 749 On March 1, 2001, Empresa Brasileira de Telecomicaçöes S. A. filed a letter with the Commission indicating that 19.9 percent of its company had been purchased by Societe Europeenne des Satellites S. A., and the company was renamed "STAR ONE S. A." See Space Station Reform NPRM, 17 FCC Rcd at 3893 (para. 133), citing Satellite Policy Branch Information, Public Notice, Report No. SAT-00076 (released July 20, 2001). 750 Space Station Reform NPRM, 17 FCC Rcd at 3893 (para. 133). 118 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 119 terms and conditions on the Permitted List and in the earth station licenses. 751 We explained further that, if a Permitted List satellite operator relocates its satellite to a new orbital location, it must request a revision of its Permitted List entry to enable ALSAT earth stations to continue communicating with that satellite after the relocation. 752 Furthermore, we must be able to determine that operation of the satellite at the new location would not cause harmful interference to other satellite systems after the relocation. 753 318. Therefore, we invited comment on a procedure for cases in which a non- U. S. -licensed satellite operator plans to modify its operations in a way that would require prior Commission authorization in the case of a U. S.- licensed satellite operator. 754 Specifically, we proposed requiring the non- U. S.- licensed satellite operator to file a petition for declaratory ruling that would supply the information required of U. S. satellite operators seeking license modifications. 755 In other words, the non- U. S.- licensed satellite operator would be required to provide the same information as required in a new space station application, but only those items of information that change need to be submitted, provided the applicant certifies that the remaining information has not changed. 756 319. Discussion. Telesat opposes requiring that non- U. S.- licensed satellite operators modifying their operations file the relevant changes in technical information. 757 Rather, Telesat proposes that the Commission simply require the applicant to amend the authorization with an attestation that the modification has been carried out in accordance with the appropriate coordination process with the adjacent operators. 758 320. We conclude that we must consider the revised technical parameters in order to determine whether the changes to the non- U. S.- licensed satellite will affect the operations of other satellites authorized to serve the United States. We require U. S.- licensed operators to provide this information for this reason. Moreover, merely requiring non- U. S.- licensed space station operators to attest that they have completed coordination may not be sufficient in all cases to determine whether the satellite as modified will comply with the technical requirements of Part 25. Accordingly, we will revise Section 25.137 to require non- U. S.- licensed satellite operators modifying their operations to provide the same information as required in a new space station 751 Space Station Reform NPRM, 17 FCC Rcd at 3894 (para. 137). 752 Space Station Reform NPRM, 17 FCC Rcd at 3893 (para. 134). 753 Space Station Reform NPRM, 17 FCC Rcd at 3893 (para. 134). 754 Space Station Reform NPRM, 17 FCC Rcd at 3893 (para. 134). 755 Space Station Reform NPRM, 17 FCC Rcd at 3893 (para. 134). 756 Space Station Reform NPRM, 17 FCC Rcd at 3893 (para. 134), citing 47 C. F. R. § 25. 117( d). 757 Telesat Comments at 7. 758 Telesat Comments at 7. 119 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 120 application, but only those items of information that change need to be submitted, provided the applicant certifies that the remaining information has not changed. 759 3. Replacements of Permitted List Satellites 321. Background. In the Notice, we proposed a procedure for replacements of non- U. S. -licensed satellites on the Permitted List that is similar to our proposal for U. S. replacement satellite applications. 760 Specifically, if the non- U. S.- licensed satellite operator's orbit location remains available for a satellite licensed by the same Administration that licensed the currently operating satellite, and the proposed replacement satellite will have the same technical characteristics as the currently operating satellite, we would allow this satellite to access the United States. 761 If the petition for declaratory ruling seeking to put the replacement satellite on the Permitted List is unopposed, we proposed applying the same procedure we adopt for U. S. replacement satellites. 762 322. Discussion. Telesat supports streamlining the procedures for non- U. S.- licensed replacement satellites, and it specifically supports the "grant- stamp" approach. 763 Telesat encourages the Commission to apply the grant- stamp approach regardless of whether the technical characteristics of the replacement satellite are the same as those of the currently-operating satellite. 764 Also, Telesat argues that the Commission need not wait until the satellite is in orbit to place the replacement satellite on the Permitted list. 765 323. We adopt our proposed procedure for considering placement of non- U. S.- licensed replacement satellites on the Permitted List. This is substantially similar to the procedure for replacements of U. S.- licensed satellites we adopt in this Order. 766 We will revise Section 25.137 accordingly. 324. We afford non- U. S.- licensed satellites the same replacement expectancy as we do U. S.- licensed satellites. That is, we will permit the proposed replacement satellite to access the U. S. market provided that the location remains available to a satellite authorized by the Administration that authorized the existing satellite, and the technical characteristics of the proposed replacement allow it to be assigned to the location. We note that operators of non- U. S. - 759 In a future Order, we will consider proposals for a streamlined procedure for some space station modification requests. In the event we adopt any of those proposals, we will also determine at that time how best to extend that procedure to non- U. S.- licensed satellite operators. 760 Space Station Reform NPRM, 17 FCC Rcd at 3893- 94 (para. 135). 761 Space Station Reform NPRM, 17 FCC Rcd at 3893- 94 (para. 135). 762 Space Station Reform NPRM, 17 FCC Rcd at 3893- 94 (para. 135). 763 Telesat Comments at 7- 8. 764 Telesat Comments at 7- 8. 765 Telesat Comments at 7- 8. 766 Section VII. G. 120 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 121 licensed satellites that do not meet these criteria may still request access to the U. S. market through the standard DISCO II framework. 325. Finally, contrary to Telesat's assertion otherwise, we do not require satellites to be in orbit before placing them on the Permitted List. We require that all non- U. S.- licensed satellites, including replacements, be licensed by the host Administration before they are placed on the Permitted List, but we do not require that the satellite be in orbit. 4. Changes of Ownership of Satellites on the Permitted List 326. Background. The Commission proposed a very simple procedure for considering changes in ownership of non- U. S.- licensed satellites on the Permitted List. 767 We proposed issuing a public notice announcing that the transaction has taken place, and inviting comment on whether the transaction affects any of the considerations made when the original satellite operator was allowed to enter the U. S. market. 768 We would review any comments filed, and determine whether any commenter raised any concern that would warrant precluding the new operator from entering the U. S. market, including concerns relating to national security, law enforcement, foreign policy, or trade issues. 769 In addition, if control of the satellite were transferred to a non-WTO- country- based operator, we invited comment on whether we should require the purchaser to meet the ECO- Sat test. 770 327. Discussion. Telesat supports our proposed procedure for changes in ownership of non- U. S.- licensed satellites on the Permitted List. 771 We adopt our proposed procedure for considering transfers of control of non- U. S.- licensed satellites on the Permitted List, which provides a reasonable framework for considering any issues that might be raised by such a transfer. Furthermore, none of the commenters in this proceeding have recommended any other procedure. We will revise Section 25.137 accordingly. Permitted List satellites that have been transferred to new owners may continue to provide service in the United States unless and until the Commission determines otherwise. 5. Procedures for Non- U. S.- Licensed Satellites That Are Not on the Permitted List 328. Background. We observed in the Notice that non- U. S.- licensed satellite operators do not need to place their satellites on the Permitted List to gain access to the U. S. market. They can also gain access by being added as a point of communication to one or more U. S. earth 767 Space Station Reform NPRM, 17 FCC Rcd at 3894 (para. 136). The considerations we weigh when reviewing requests for U. S. market access include the effect on competition in the United States, spectrum availability, eligibility and operating (e. g., technical) requirements, and national security, law enforcement, foreign policy, and trade concerns. DISCO II, 12 FCC Rcd at 24107- 24172 (paras. 30-182). 768 Space Station Reform NPRM, 17 FCC Rcd at 3894 (para. 136). 769 Space Station Reform NPRM, 17 FCC Rcd at 3894 (para. 136), citing DISCO II, 12 FCC Rcd at 24170- 72 (paras. 178- 82). 770 Space Station Reform NPRM, 17 FCC Rcd at 3894 (para. 136). 771 Telesat Comments at 8. 121 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 122 station licenses. 772 This procedure is available for all non- U. S.- licensed satellites, not just conventional C- band and Ku- band satellites. We did not propose any new procedures for modifying such satellites. Instead, we proposed continuing to rely on our existing procedures for earth station modification procedures. 773 329. Discussion. No one commented on this issue. We conclude that our existing procedure for earth station license modification provides a sufficient means for reflecting modifications of non- U. S.- licensed space station operations. In addition, the earth station license modification procedure is very important in cases in which the non- U. S.- licensed satellite operator plans to operate in the extended C- band or extended Ku- band, because those operations often require coordination with terrestrial service providers and other service providers. Accordingly, as we proposed in the Notice, we will not adopt any revisions to that procedure at this time. IX. CONCLUSION 330. In this Order, we adopt substantial improvements to our satellite licensing procedures. For NGSO- like satellite system applications, we will continue to use processing rounds, and divide the available spectrum evenly among the qualified applicants in the processing round. For GSO- like satellite applications, we replace processing rounds with a first- come, first-served procedure. In both procedures, we adopt safeguards to limit speculative or frivolous applications. To help implement these procedures, we eliminate the anti- trafficking rule for satellites. In addition, eliminating the anti- trafficking rules yields other significant public interest benefits, such as expediting the transfer of licenses to entities that are more likely to provide service to the public in a timely manner. We also strengthen our milestone requirements, to expedite reassignment of satellite licenses in cases where a licensee is unable or unwilling to construct its satellite system. We also streamline the satellite licensing process, by replacing the requirement to provide financial information with a bond requirement, and by creating a new procedure for replacement satellite applications. Finally, we revise the framework for considering requests from non- U. S.- licensed satellite operators for access to the U. S. market. 331. All the procedural revisions we adopt today will greatly benefit both satellite service customers and satellite operators, because the new procedures will enable the Commission to issue satellite licenses significantly more quickly than was possible in the past. Expediting licensing procedures will lead to greater choice among satellite service providers. It will also allow satellite operators to begin operating much sooner than is often possible under our current satellite licensing procedures. Moreover, allowing negotiations to take place after licenses are issued should allow market forces to drive the business discussions with a minimum of Commission involvement. 332. In addition, strengthening milestone requirements will reduce the time scarce orbit and spectrum resources lie fallow. Thus, our procedures will allow more efficient use of that resource. More importantly, orbit and spectrum assignments will be based more on market forces and less on the Commission's administrative procedures, which in turn will result in more efficient orbit and spectrum assignments. X. FURTHER NOTICE OF PROPOSED RULEMAKING: BOND ISSUES 772 Space Station Reform NPRM, 17 FCC Rcd at 3894 (para. 138). 773 Space Station Reform NPRM, 17 FCC Rcd at 3894 (para. 138). 122 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 123 333. In the First Report and Order in this proceeding, the Commission required satellite licensees to post a bond, payable upon failure to meet a milestone, and without facing circumstances outside the licensee's control that warrant extension of the milestone. 774 We base this requirement on Intelsat's proposed bond requirement. 775 The purpose of this bond requirement is to create a disincentive for parties to apply for satellite licenses for speculative reasons. On an interim basis, we adopted a bond amount of $5 million for GSO- like licenses, and $7.5 million for NGSO- like licenses. 334. Here, we seek comment on some of the details of the bond requirement. First, we invite comment on the appropriate bond amount. This amount should be high enough to deter speculative applications, without discouraging new or innovative satellite applications. It is unlikely that we would find that bonds less than the interim amounts we adopted in the First Report and Order above would be sufficient to deter speculation, unless a commenter provides a convincing showing to the contrary. Intelsat proposed $10 million for all satellite applications. Commenters advocating a different amount should recommend a specific dollar amount, and explain in detail why they believe that the amount they recommend will deter speculation without discouraging new or innovative satellite applications. In particular, parties contending that a $10 million bond requirement would discourage new or innovative satellite applications should explain why, in detail. 335. Second, we invite comment on whether we should allow licensees to establish an escrow account, as an alternative to posting a bond. In the Private Paging Exclusivity Order, on which we in part base the bond requirement, the Commission gave licensees the option of posting a performance bond or establishing an escrow account. 776 We seek comment on whether to give satellite licensees this option as well. If we were to adopt an escrow account option, licensees selecting that option would be required to establish an escrow account equal to the final bond amount adopted by the Commission. Licensees would be required to turn over the escrow account to the U. S. Treasury upon missing a milestone without an adequate basis for extending the milestone. They would also be permitted to withdraw interest from the account at any time, and withdraw principle upon meeting each milestone, just as licensees posting bonds may reduce the amount of the bond. Parties supporting this option must explain how an escrow account will discourage speculative satellite applications. 336. Finally, we invite comment on revising the bond requirements applicable to non-U. S.- licensed satellite operators seeking access to the U. S. market, to be consistent with any other revisions to the bond requirement the Commission adopts in this proceeding. XI. PROCEDURAL MATTERS 337. Final Regulatory Flexibility Analysis. As required by the Regulatory Flexibility Act (RFA), 777 an Initial Regulatory Flexibility Analysis (IRFA) was incorporated into the 774 Section VII. C. 10. 775 Intelsat Comments at 10- 12. 776 Private Paging Exclusivity Order, 8 FCC Rcd at 8326. 777 See 5 U. S. C. §603. 123 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 124 Notice. 778 The Commission sought written public comments on the possible significant economic impact of the proposed policies and rules on small entities in the Notice, including comments on the IRFA. No one commented specifically on the IRFA. Pursuant to the RFA, 779 a Final Regulatory Flexibility Analysis is contained in Appendix D. 338. Initial Regulatory Flexibility Analysis. Appendix E to this document contains the analysis required for the proposals in this Notice of Proposed Rulemaking by the Regulatory Flexibility Act of 1980, see 5 U. S. C. § 603. 339. Paperwork Reduction Act Analysis. Except for the information collections associated with the contract execution and CDR milestones, and the bond requirement, the actions contained herein has been analyzed with respect to the Paperwork Reduction Act of 1995 and found to impose new or modified reporting and recordkeeping requirements or burdens on the public. Approval of the Office of Management and Budget (OMB) pursuant to the Paperwork Reduction Act has been obtained for many of those requirements. (OMB Control Nos. 3060- 0678, 3060- 1007 and 3060- 1013). 340. This Order contains new and modified information collections subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104- 13. It will be submitted to the Office of Management and Budget (OMB) for review under Section 3507( d) of the PRA. OMB, the general public, and other Federal agencies are invited to comment on the new or modified information collection( s) contained in this proceeding. Implementation of these new or modified reporting and/ or recordkeeping requirements will be subject to approval by the OMB, as prescribed by the Act, and will go into effect upon announcement in the Federal Register of OMB approval. 341. Ex Parte Presentations. This is a permit- but- disclose rulemaking proceeding. Ex parte presentations are permitted, provided they are disclosed as provided in Sections 1.1202, 1.1203, and 1.1206( a) of the Commission’s Rules, 47 C. F. R. Sections 1.1202, 1.1203, and 1.1206( a). 342. Comment. Pursuant to Sections 1.415 and 1.419 of the Commission’s Rules, 47 C. F. R. Sections 1.415 and 1.419, interested parties may file comments on or before 30 days following publication in the Federal Register, and reply comments on or before 60 days following publication in the Federal Register. Comments may be filed using the Commission’s Electronic Comment Filing System (ECFS) or by paper copies. See Electronic Filing of Documents in Rulemaking Proceedings, 63 Fed. Reg. 24,121 (1998). 343. Comments filed through the ECFS can be sent as an electronic file via the Internet to . Generally, only one copy of an electronic submission must be filed. If multiple docket or rulemaking numbers appear in the caption of this proceeding, however, commenters must transmit one electronic copy of the comments to each docket or rulemaking number referenced in the caption. In completing the transmittal screen, commenters should include their full name, Postal Service mailing address, and the applicable docket or rulemaking number. Parties may also submit an electronic comment by Internet e- mail. To obtain filing instructions for e- mail comments, commenters should send an e- mail to 778 Space Station Reform NPRM, 17 FCC Rcd at 3915- 17 (App. D). 779 See 5 U. S. C. §604. 124 FEDERAL COMMUNICATIONS COMMISSION FCC 03- 102 125 ecfs@ fcc. gov, and should include the following words in the body of the message, "get form