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 Federal  Communications  Commission  FCC  06-  85 
 CONCURRING  STATEMENT  OF  COMMISSIONER  JONATHAN  S.  ADELSTEIN 


 Re:  Constellation,  LLC,  Carlyle  PanAmSat  I,  LLC,  Carlyle  PanAmSat  II,  LLC,  PEP  PAS,  LLC,  and  PEOP  Pas,  LLC,  Transferors  and  Intelsat  Holdings,  Ltd.,  Transferee, 
 Consolidated  Application  for  Authority  to  Transfer  Control  of  PanAmSat  Licensee  Corp.  and  PanAmSat  H-  2  Licensee  Corp.;  IB  Docket  No.  05-  290 


 This  is  a  significant  merger,  and  I  think  it  is  important  that  the  decision  was  reviewed  by  the  full  Commission  in  light  of  the  unique  position  of  these  two  companies  in  the  fixed  satellite 
 service  (FSS)  industry.  Given  the  lack  of  opposition  in  the  record,  I  am  willing  to  allow  the  merger  to  proceed  in  the  hope  that  the  new  company  will  truly  promote  the  development  of 
 innovative  products,  including  competitive  satellite  broadband  services,  as  asserted  by  the  applicants. 


 I  can  only  concur  to  this  item,  however,  because  I  remain  troubled  by  the  significant  consolidation  in  the  FSS  market  that  will  result  from  this  transaction.  For  example,  post-  merger, 
 two  companies  will  control  approximately  80%  of  the  transponder  capacity  sales  market  in  North  America.  It  is  likely  that  these  market  shares  are  much  higher  for  the  U.  S.  market,  but  most  of 
 the  data  in  this  item  curiously  is  not  provided  on  the  national  level.  While  I  recognize  that  the  satellite  industry  is  an  international  one,  we  should  not  turn  a  blind  eye  to  the  competitive  effects 
 of  consolidation  on  American  businesses  and  the  consumers  they  serve. 
 I  believe  that  our  item  disproportionally  relies  on  the  bargaining  power  of  larger  customers  to  explain  away  the  obvious  public  interest  harm  that  stems  from  the  loss  of 
 competition  with  the  merger  of  two  of  the  three  largest  providers  of  FSS  video,  network,  and  government  services.  Ultimately,  it  is  unclear  to  me  if  the  public  interest  benefits  of  this  merger 
 truly  outweigh  the  possible  harms.  But  the  comments  in  this  proceeding  do  not  clearly  demonstrate  a  potentially  negative  impact  on  the  provision  of  FSS  services  as  a  result  of  the 
 merger,  which  prompts  my  concurrence  to  the  Order. 
 I  also  have  a  concern  with  the  dispute  between  ITSO  and  Intelsat  regarding  the  obligations  and  responsibilities  of  Intelsat  that  stem  from  the  “core  principles”  that  are  contained 
 in  the  ITSO  Agreement,  of  which  the  United  States  is  a  party,  and  implemented  through  the  Public  Services  Agreement.  I  look  forward  to  working  with  the  State  Department  post-  merger  to 
 ensure  that  the  various  obligations  that  came  out  of  the  privatization  of  Intelsat  remain  intact.  Indeed,  as  the  item  rightly  points  out,  Section  316  of  the  Communications  Act  may  be  a  more 
 appropriate  vehicle  for  ITSO  to  seek  Commission  action  outside  of  this  merger  proceeding. 
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