*Pages 1--5 from Microsoft Word - 53924.doc* PUBLIC NOTICE Federal Communications Commission 445 12 th St., S. W. Washington, D. C. 20554 News Media Information 202 / 418- 0500 Internet: http:// www. fcc. gov TTY: 1- 888- 835- 5322 FCC 05- 213 Released: December 21, 2005 DIRECT BROADCAST SATELLITE (DBS) SERVICE AUCTION NULLIFIED: Commission Sets Forth Refund Procedures for Auction No. 52 Winning Bidders and Adopts a Freeze on All New DBS Service Applications The Commission hereby nullifies the results of Auction No. 52, an auction of Direct Broadcast Satellite (“ DBS”) licenses conducted on July 14, 2004. Specifically, the Commission sets forth below instructions for payors of record to receive refunds of the winning bids that were paid to the Commission. In addition, as explained below we adopt a freeze on all new DBS applications. In Auction No. 52, two winning bidders, Rainbow DBS Company LLC (“ Rainbow DBS”) and EchoStar Satellite L. L. C. (“ EchoStar”), won three DBS licenses. Rainbow DBS won a license to operate on 32 channels at the 175º W. L. orbital location and a license to operate on 32 channels at the 166º W. L. orbital location. EchoStar won a license to operate on 29 channels at the 157º W. L. orbital location. 1 Both winning bidders timely submitted long- form applications and paid their winning bids in full. 2 On June 21, 2005, the United States Court of Appeals for the D. C. Circuit held in Northpoint Technology, Ltd. v. FCC that Auction No. 52 was unauthorized. 3 In light of this holding, the Commission adopts a freeze on all applications for new DBS authorizations to use the 12.2- 12.7 GHz band and associated feeder links in the 17.3- 17.8 GHz band pending Commission consideration of the appropriate processing rules for applications to provide DBS in the United States, and sets forth refund procedures. 1 Public Notice, Direct Broadcast Satellite Service Licenses Auction Closes; Winning Bidders Announced, Report No. AUC- 04- 52- I, 19 FCC Rcd 13193 (2004) (“ Auction 52 Closing PN”); See also Auction of Direct Broadcast Satellite Licenses, Order, 19 FCC Rcd 820 (2004) (“ DBS Auction Order”). 2 Under 47 C. F. R. § 25. 148, DBS auction winners were required to file FCC Form 312, a satellite service application. Rainbow DBS and EchoStar filed their respective applications (FCC Main Form 312 and Schedule B) on September 17, 2004 (IBFS File Nos. SAT- LOA- 20040917- 00182, SAT- LOA- 20040917- 00183, and SAT-LOA- 20040917- 00184). The applications were placed on public notice on December 20, 2004. See Satellite Space Applications Accepted for Filing, Policy Branch Information, Public Notice, Report No. SAT- 00260 (rel. Dec. 20, 2004). No comments were filed on any of the applications. EchoStar filed an amendment to its application on May 13, 2005. Pursuant to the Closing PN, winning bidders were required to pay their winning bids in full by August 16, 2004. Information regarding winning bids is contained in Attachment B of the Auction 52 Closing PN. 3 Northpoint Technology, Ltd. v. FCC, No. 04- 1052 (D. C. Cir. June 21, 2005). In its decision, the appellate court vacated and remanded the section of the DBS Auction Order that concluded that DBS is not subject to the auction prohibition of the Open- Market Reorganization for the Betterment of International Telecommunications Act, Pub. L. No. 106- 180, 114 Stat. 48 § 647 (enacted Mar. 12, 2000), codified at 47 U. S. C. § 765f (ORBIT Act). 1 2 DBS Freeze. The freeze on DBS applications applies to any application for authority to provide DBS service to the United States using the 12.2- 12.7 GHz band and associated feeder links in the 17.3- 17.8 GHz band, including unassigned channels at orbit locations assigned to the United States under the International Telecommunication Union (ITU) Region 2 4 Broadcasting Satellite Service 5 and feeder- link Plans, 6 as well as applications for DBS service from space stations located at orbital locations not assigned to the United States in the ITU Region 2 BSS and feeder- link Plans. This freeze is limited to applications for licenses for new space stations or for new requests for market access by foreign- licensed space stations. The freeze does not apply to applications for replacement satellites, modifications to existing satellite licenses, or requests for special temporary authority, unless such applications seek authority to operate on frequencies and/ or orbital locations not previously authorized for operation by that licensee. The freeze also does not apply to amendments to pending DBS license applications unless the amendment would add frequencies or orbital locations that were not in the original license application. Refund Procedures. Refunds of the winning bids submitted to the Commission will be paid to the payors of record. On September 22, 2005, EchoStar requested a refund of its winning bid of $5, 800,000 plus interest from June 18, 2004, the date it submitted these funds as part of its upfront payment, 7 to the date of the refund “calculated at the applicable rate for overpayments under Section 6621 of the Internal Revenue Code.” 8 The Commission, however, does not have the authority to pay interest to license applicants on monies it refunds to them. 9 Therefore, the winning bids currently on deposit with the Commission in connection with Auction No. 52 will be refunded to the payors of record without interest. To receive a refund to which it is due, each payor of record must comply with the following procedures: 10 4 ITU Region 2 includes North, Central, and South America and Greenland. See Article 5, Section I of the ITU Radio Regulations. 5 BSS is the international term used for a radiocommunication service in which signals transmitted or retransmitted by space stations are intended for direct reception by the general public. See 47 C. F. R. § 2.1. DBS is the term used in the United States to describe the domestic implementation of the BSS international service. 6 The Regional Administrative Radio Conference in 1983 (RARC- 83) developed and adopted the Region 2 BSS and feeder- link Plans. It was not until 1985, at the World Administrative Radio Conference (WARC Orb- 85), that the Region 2 Plans were adopted internationally worldwide and became a part of the ITU's Radio Regulations. The ITU Region 2 BSS Plan is comprised of the Plan for BSS in the band 12. 2- 12.7 GHz in ITU Region 2, as contained in Appendix 30 of the ITU Radio Regulations, and the associated Plan for the feeder- links in the frequency band 17. 3-17. 8 GHz for the broadcasting- satellite service in Region 2, as contained in Appendix 30A of the ITU Radio Regulations. 7 See supra note 2. 8 Letter from Pantelis Michalopoulos, Counsel for EchoStar Satellite L. L. C., to Marlene H. Dortch, Secretary, Federal Communications Commission, dated September 22, 2005, at 2. 9 See, e. g., Library of Congress v. Shaw, 478 U. S. 310 (1986) (applying the “no- interest rule,” under which interest cannot be recovered from the U. S. government in the absence of an express congressional authorization of the award of interest). See also 31 U. S. C. § 1341( a)( 1)( B) (prohibiting any officer or employee of the United States Government from involving the government in an obligation for the payment of money before an appropriation is made unless authorized by law); 47 U. S. C. § 309( j)( 8) (requiring the Commission to deposit any upfront payments by qualified bidders in an interest- bearing account and to transfer the accrued interest to the Telecommunications Development Fund within 45 days of the conclusion of an auction). 10 In its request of September 22, 2005, EchoStar provided information for the wire transfer of the refund of its winning bid. However, EchoStar did not supply all of the information the Commission needs to make this refund. Winning bidders in Auction No. 52 must comply with all of the procedures described in this Public Notice to receive a refund of their winning bid( s). 2 4 4 5 5