Federal Communications Commission FCC 11-96 FCC REPORT TO CONGRESS AS REQUIRED BY THE ORBIT ACT TWELFTH REPORT Adopted: June 14, 2011 Released: June 15, 2011 By the Commission: Federal Communications Commission FCC 11-96 1 FCC REPORT TO CONGRESS AS REQUIRED BY THE ORBIT ACT TWELFTH REPORT This report is submitted in accordance with the requirements of the Open-Market Reorganization for the Betterment of International Telecommunications Act (the “ORBIT Act”)1 which has an objective of ensuring that INTELSAT and Inmarsat are privatized in a pro- competitive manner. To this end, the Act requires the submission of annual reports to Congress as noted below. Section 646 states: (a) ANNUAL REPORTS - The President and the Commission shall report to the Committees on Commerce and International Relations of the House of Representatives and the Committees on Commerce, Science, and Transportation and Foreign Relations of the Senate within 90 calendar days of the enactment of this title, and not less than annually thereafter, on the progress made to achieve the objectives and carry out the purposes and provisions of this title. Such reports shall be made available immediately to the public. (b) CONTENTS OF REPORTS - The reports submitted pursuant to subsection (a) shall include the following: (1) Progress with respect to each objective since the most recent preceding report. (2) Views of the Parties with respect to privatization. (3) Views of the industry and consumers on privatization. (4) Impact privatization has had on United States industry, United States jobs, and United States industry’s access to the global marketplace.2 I. Progress as to Objectives and Purposes The purpose of the ORBIT Act is “to promote a fully competitive global market for satellite communication services for the benefit of consumers and providers of satellite services and equipment by fully privatizing the intergovernmental satellite organizations, INTELSAT3 and Inmarsat.”4 1 47 U.S.C. § 701 (2000). 2 47 U.S.C. § 765(e). 3 The intergovernmental satellite body INTELSAT later created Intelsat LLC, a privately-held U.S. corporation that became the licensee of those satellite assets formerly held by INTELSAT. See infra at 3-4. As a result of an internal reorganization consummated in January 2011, Intelsat LLC was eliminated as a subsidiary company, and the majority of licenses are now held by Intelsat License LLC. See n.44, infra, (continued) Federal Communications Commission FCC 11-96 2 The ORBIT Act, as originally passed in 2000, (1) mandates the privatization of INTELSAT and Inmarsat, (2) establishes criteria to ensure a pro-competitive privatization, (3) requires the Commission to determine whether INTELSAT, Inmarsat, and the INTELSAT spin-off New Skies Satellites N.V. (“New Skies”), have been privatized in a manner that will harm competition in the United States, (4) requires the Commission to use the privatization criteria specified in the ORBIT Act as a basis for making its competition determination, and (5) directs the Commission to “limit through conditions or deny” applications or requests to provide “non-core” services to, from, or within the United States if it finds that competition will be harmed.5 The Act provides for certain exceptions to limitations on non-core services in the event of such a determination. The Act also prohibits the Commission from authorizing certain “additional” services pending privatization consistent with the criteria in the Act.6 In addition, the Act directs the Commission to undertake a rulemaking proceeding to assure users in the United States the opportunity for direct access to the INTELSAT system. In October 2004, Congress amended the ORBIT Act, adding Sections 621(5)(F) and (G), to provide a certification process as an alternative to the initial public offering (“IPO”) requirements under Sections 621(5)(A) and (B). In July 2005, Congress further amended the ORBIT Act, striking certain privatization criteria for Intelsat separated entities, removing certain restrictions on separated entities and successor to Intelsat and for other purposes.7 The Commission made its first report to Congress on its actions to implement the ORBIT Act on June 15, 2000, following enactment of the Act on March 17, 2000.8 The Commission made its second report on June 15, 2001;9 its third report on June 14, 2002;10 its fourth report on Continued from previous and accompanying text. 4 47 U.S.C. § 761 NOTE. 5 The Act defines “non-core” services as “services other than public-switched network voice telephony and occasional-use television” with respect to INTELSAT, and as “services other than global maritime distress and safety services or other existing maritime or aeronautical services for which there are not alternative providers” with respect to Inmarsat. 47 U.S.C. § 769(a)(11). 6 The Act defines “additional” services as direct-to-home (“DTH”) or direct broadcast satellite (“DBS”) video services, or services in the Ka or V bands for INTELSAT and as “those non-maritime or non- aeronautical mobile services in the 1.5 and 1.6 GHz band on planned satellites or the 2 GHz band” for Inmarsat. 47 U.S.C. § 769(a)(12). 7 Open-Market Reorganization for the Betterment of International Telecommunications Act, Pub. L. No. 106-180, 114 Stat. 48 (2000), as amended, Pub. L. No. 107-233, 116 Stat. 1480 (2002), as amended, Pub. L. No. 108-228, 118 Stat. 644 (2004), as amended, Pub. L. No. 108-371, 118 Stat. 1752 (October 25, 2004), as amended, Pub. L. No. 109-34, 119 Stat. 377 (July 12, 2005). In the July 2005 amendment to the ORBIT Act, Congress added a requirement that the Commission submit to Congress a separate annual report that analyzes the competitive market conditions with respect to domestic and international satellite communications services. The first Annual Report was released on March 26, 2007. FCC Annual Report and Analysis of Competitive Market Conditions with Respect to Domestic and International Satellite Communications Services, IB Docket No. 06-67, Report, 22 FCC Rcd 5954 (“Satellite Competition Report”). The second Annual Report was released on October 16, 2008. Second Annual Report and Analysis of Competitive Market Conditions with Respect to Domestic and International Satellite Communications Services, IB Docket No. 07-252, Report, 23 FCC Rcd 15170 (2008) (“Second Satellite Competition Report”). 8 FCC Report to Congress as Required by the ORBIT Act, Report, 15 FCC Rcd 11288 (2000). 9 FCC Report to Congress as Required by the ORBIT Act, Report, 16 FCC Rcd 12810 (2001). Federal Communications Commission FCC 11-96 3 June 11, 2003;11 its fifth report on June 15, 2004; 12 its sixth report on June 15, 2005;13 its seventh report on June 15, 2006;14 its eighth report on June 15, 2007;15 its ninth report on June 13, 2008, 16 its tenth report on June 15, 2009,17 and its eleventh report on June 15, 2010.18 In anticipation of this twelfth report, the Commission issued a Public Notice on February 25, 2011 inviting comments related to the development of this Report to Congress. 19 Intelsat License LLC20 and Inmarsat PLC filed comments.21 A. Commission Actions and Activities Since August of 2000, the Commission has undertaken a number of actions either required by the ORBIT Act, or related to its objectives and purposes. The Commission has taken the actions described below to ensure that INTELSAT, Inmarsat, and New Skies have been privatized in a pro-competitive manner, consistent with the privatization criteria of the ORBIT Act.22 The Commission has also taken actions to implement certain deregulatory measures in the ORBIT Act.23 INTELSAT · In August 2000, the Commission granted conditional licensing authority to Intelsat LLC, (“Intelsat”), a separate, privately held U.S. corporation, created by INTELSAT Continued from previous 10 FCC Report to Congress as Required by the ORBIT Act, Report, 17 FCC Rcd 11458 (2002). 11 FCC Report to Congress as Required by the ORBIT Act, Report, 18 FCC Rcd 12525 (2003). 12 FCC Report to Congress as Required by the ORBIT Act, Report, 19 FCC Rcd 10891 (2004). 13 FCC Report to Congress as Required by the ORBIT Act, Report, 20 FCC Rcd 11382 (2005). 14 FCC Report to Congress as Required by the ORBIT Act, Report, 21 FCC Rcd 6740 (2006). 15 FCC Report to Congress as Required by the ORBIT Act, Report, 22 FCC Rcd 11347 (2007). 16 FCC Report to Congress as Required by the ORBIT Act, Report, FCC 08-152 (2008). 17 FCC Report to Congress as Required by the ORBIT Act, Report, 24 FCC Rcd 8686 (2009). 18 FCC Report to Congress as Required by the ORBIT Act, Report, 25 FCC Rcd 7834 (2010). 19 International Burea Information: Report to Congress Regarding the ORBIT Act: Pleading Cycle Established, DA 11-333, IB Docket No. 11-30, Report No. SPB-236, Public Notice (Int’l Bur., rel. February 25, 2011). 20 Comments of Intelsat License LLC, filed on March 28, 2011 (“Intelsat Comments”). 21 Comments of Inmarsat PLC, filed on March 28, 2011 (“Inmarsat Comments”). 22 47 U.S.C. §§ 761, 763, 763a, 763b, 763c, and 765g. 23 47 U.S.C. §§ 765 and 765d(1). Federal Communications Commission FCC 11-96 4 to hold U.S. satellite authorizations and associated space segment assets.24 Under this licensing authority, the Commission permitted Intelsat’s licenses to become effective upon "privatization," meaning the transfer of INTELSAT’s satellites and associated assets to Intelsat and the transfer of its International Telecommunication Union (“ITU”) network filings to the U.S. registry. Intelsat received conditional U.S. authorizations for INTELSAT’s existing satellites, planned satellites, and planned system modifications associated with INTELSAT’s frequency assignments in the fixed satellite services (“FSS”) C- and Ku-bands existing as of privatization.25 · Later in 2000, INTELSAT adopted plans to distribute shares in Intelsat to its Signatories on July 18, 2001.26 In May 2001, the Commission found that, although the initial public offering (“IPO”) required under the privatization requirements of the ORBIT Act had not yet been completed, INTELSAT would privatize in a manner consistent with the non-IPO privatization provisions of the ORBIT Act, upon completion of its plans to distribute Intelsat shares to its Signatories.27 INTELSAT later distributed shares to its Signatories, as it had planned. · On July 28, 2003, Loral Satellite Inc. (“Debtor-in-Possession” or “DIP”), and Loral SpaceCom Corporation (DIP), and Intelsat North America, LLC filed an application seeking authority to assign five non-common carrier space station licenses to Intelsat North America. On February 11, 2004, the Commission granted authority to assign those licenses subject to certain conditions and limitations.28 Loral was providing 24 Application of Intelsat LLC for Authority to Operate, and to Further Construct, Launch, and Operate C- band and Ku-band Satellites that Form a Global Communications System in Geostationary Orbit, Memorandum Opinion, Order and Authorization, 15 FCC Rcd 15460, recon. denied, 15 FCC Rcd 25234 (2000), further proceedings, 16 FCC Rcd 12280 (2001) (“Intelsat Licensing Order”). 25 See generally Intelsat Licensing Order, supra, n.24. The conventional C-band refers to the 3700- 4200/5925-6425 MHz frequency bands. Intelsat is also authorized to operate in the extended C-band frequencies 3625-3700/5850-5925/6425-6650 MHz on certain satellites at certain orbital locations. In addition, Intelsat is authorized to operate in the extended C-band frequencies 3420-3625 MHz on the Intelsat-805 satellite at 55.5º W.L. and in the 3400-3625 MHz band on the Intelsat 25 satellite at 31.5 º W.L. for service to non-U.S. locations. The 3400-3600 MHz portion of this frequency band is not a satellite band in the United States and is operated by Intelsat outside the United States subject to potential interference from worldwide shipborne U.S. military radar operations. The conventional Ku-band refers to the 11.7-12.2/14.0-14.5 GHz frequency bands. Intelsat is also authorized to operate in the extended Ku- frequency bands 10.95-11.2/11.45-11.7/12.5-12.75/13.75-14.0 GHz on certain satellites at certain orbital locations. 26 Upon privatization, former INTELSAT Signatories and non-Signatory investing entities were issued shares in Intelsat Ltd. according to their March 2001 investment shares in INTELSAT. 27 Application of Intelsat LLC for Authority to Operate, and to Further Construct, Launch, and Operate C- band and Ku-band Satellites that Form a Global Communications System in Geostationary Orbit, Memorandum Opinion, Order and Authorization, 16 FCC Rcd 12313, 12290 ¶ 71 (2001) (“Intelsat LLC ORBIT Act Compliance Order”). 28 Loral Satellite, Inc. (Debtor-in-Possession) and Loral SpaceCom Corporation (Debtor-in-Possession), and Intelsat North America, LLC, Applications for Consent to Assignments of Space Station Authorizations and Petition for Declaratory Ruling Under Section 310(b)(4) of the Communications Act of 1934, as amended, Authorization and Order, 19 FCC Rcd 2404 (Int’l Bur. 2004) (“Loral/Intelsat Order”). On (continued) Federal Communications Commission FCC 11-96 5 services, such as Direct-to-Home (“DTH”), that are “additional services” as defined in the ORBIT Act. Intelsat was granted authority to provide additional services to the then-existing Loral customers.29 · Intelsat was originally required by the ORBIT Act to conduct an IPO by October 1, 2001, in order to “substantially dilute” ownership by former INTELSAT Signatories.30 Subsequently, in 2002 and 2004, Congress amended the ORBIT Act to extend the deadline for Intelsat to conduct its IPO.31 In October 2004, Congress added Sections 621(5)(F) and (G) to the ORBIT Act, to provide a certification process as an alternative to the IPO requirements under Sections 621(5)(A) and (B).32 · On December 22, 2004, the Commission authorized the transfer of control of Intelsat’s licenses and authorizations to Zeus Holdings Limited (“Zeus”),33 a private equity group, organized under the law of Bermuda, which would acquire 100 percent of the equity and voting interests of Intelsat (“Zeus/Intelsat Transaction”).34 Continued from previous March 4, 2004, the Commission adopted a Supplemental Order clarifying the date the Special Temporary Authority was to commence. Loral Satellite, Inc. (Debtor-in-Possession) and Loral SpaceCom Corporation (Debtor-in-Possession), and Intelsat North America, LLC, Applications for Consent to Assignments of Space Station Authorizations and Petition for Declaratory Ruling Under Section 310(b)(4) of the Communications Act of 1934, as amended, Supplemental Order, 19 FCC Rcd 4029 (Int’l Bur. 2004). 29 Loral/Intelsat Order, 19 FCC Rcd at 2429 ¶ 65. 30 Pub. L. No. 106-180, 114 Stat. 48 (2000). Congress also gave the Commission discretion to extend the IPO deadline to no later than December 31, 2002. INTELSAT Request for Extension of Time Under Section 621(5) of the ORBIT Act, Order, 16 FCC Rcd 18185 (2001). 31 Pub. L. No. 107-233, 116 Stat. 1480 (2002) (extending Intelsat's IPO deadline to December 31, 2003, and giving the Commission the discretionary authority to further extend the deadline to no later than June 30, 2004); Public Law No. 108-228, 118 Stat. 644 (2004) (extending Intelsat’s IPO deadline to June 30, 2005, and giving the Commission the discretionary authority to further extend the deadline to no later than December 31, 2005). 32 Public Law No. 108-371, 118 Stat. 1752 (2004). 33 Zeus Holdings Limited subsequently changed its name to Intelsat Holdings, Ltd. See infra, n.34. 34 Intelsat, Ltd., Transferor, and Zeus Holdings Limited, Transferee, Consolidated Application for Consent to Transfers of Control of Holders of Title II and Title III Authorizations and Petition for Declaratory Ruling Under Section 310 of the Communications Act of 1934, As Amended, IB Docket No. 04-366, Order and Authorization, 19 FCC Rcd 24820 (Int’l Bur., Wireless Tel. Bur., and Office of Eng. Tech. 2004) (“Intelsat-Zeus Order”). In early 2005, the Commission granted authority to interpose Intelsat Subsidiary Holding Company Ltd. into the chain of ownership and modified its foreign ownership ruling to include new Bermuda-based intermediate parent Intelsat Subsidiary Holding Company Ltd. Intelsat, Ltd., File No. ISP-PDR-20050203-00004, Grant of Authority, Public Notice, Report No. TEL-00884, DA 05-479, 20 FCC Rcd 4052, 4053 (Int’l Bur., 2005); Intelsat North America LLC, File No. SAT-T/C-20050203-00022, and Intelsat LLC, File No. SAT-T/C-20050203-00023, Grant of Authority, Public Notice, Report No. SAT- 00276, DA 05-594 (Int’l Bur., 2005), at 1-2; Intelsat LLC, File Nos. SES-T/C-20050203-00138, -00139 and -00140, and Intelsat MTC LLC, File No. SES-T/C-20050203-00141, Grant of Authority, Report No. SES-00691 (Int’l Bur., 2005), at 26-27; Intelsat USA License Corp., File No. ITC-T/C-20050418-00279, Intelsat General Corporation, File No. ITC-T/C-20050418-00280, and Intelsat MTC LLC, File No. ITC- (continued) Federal Communications Commission FCC 11-96 6 · On April 8, 2005, the Commission determined that (a) Intelsat was in compliance with the alternative certification process under Sections 621(5)(F) and 621(5)(G) of the ORBIT Act; (b) that Intelsat can forgo the requirement for an IPO and the public listing of securities; and that (c) Intelsat was no longer subject to the provisions of Section 602 that prohibited Intelsat from providing “additional services.”35 · On May 24, 2005, the Commission granted Intelsat’s request for approval of the pro forma assignments of space station authorizations and related Tracking, Telemetry and Control (“TT&C”) earth station licenses, from Intelsat to Intelsat North America LLC.36 · On June 19, 2006, the Commission approved the merger of Intelsat Holdings, Ltd. with PanAmSat Holding Corporation (“PanAmSat”).37 The FCC action approving the transaction granted applications for the transfer of control, to Intelsat, of Commission-issued licenses and authorizations held by PanAmSat and its subsidiaries. Upon consummation of the transaction on July 3, 2006, PanAmSat became a wholly-owned subsidiary of Intelsat continuing operation as a separate corporate entity. · On December 19, 2007, the Commission granted a series of applications filed by Intelsat Holdings, Ltd. and Serafina Holdings Limited (“Serafina”) seeking consent to transfer of control of Intelsat Holdings, Ltd., and its six subsidiary licensees from Intelsat’s existing control group of four private equity firms to Serafina, a then newly-formed Bermuda company indirectly controlled by BC Partners Holdings Limited, a U.K.-based investment firm organized under the laws of Guernsey, a British Crown Dependency.38 Serafina and Intelsat subsequently consummated the proposed transaction. Continued from previous T/C-20050418-0281, Grant of Authority, Public Notice, Report No. TEL-00931, DA 05-2192 (Int’l Bur., 2005), at 3-4. During 2005, Zeus Holdings Limited changed its name to Intelsat Holdings, Ltd. See, e.g., Intelsat USA License Corp., Report No. TEL-00931, at 3. 35 Intelsat, Ltd. Petition for Declaratory Ruling that Intelsat, Ltd. Complies With Section 621(5)(F) of the ORBIT Act, IB Docket No. 05-18, Memorandum Opinion and Order, 20 FCC Rcd 8604 (2005) (“Intelsat Certification Order”). 36 Intelsat LLC, Assignor, and Intelsat North America LLC, Assignee, Applications for Consent to Pro Forma Assignment of Space Station Authorizations and Related TT&C Earth Station Licenses, DA-05- 1545, Report No. SAT-00294, Public Notice (Int’l Bur., rel. March 27, 2005). 37 Constellation, LLC, Carlyle PanAmSat I, LLC, Carlyle PanAmSat II, LLC, PEP PAS, LLC, PEOP PAS, LLC, Transferors, Intelsat Holdings, LTD, Transferee, Consolidated Application for Authority to Transfer Control of PanAmSat Licensee Corp. and PanAmSat H-2 Licensee Corp., Memorandum Opinion and Order, 21 FCC Rcd 7368 (2006) (“Intelsat-PanAmSat Order”). 38 Intelsat Holdings, Ltd., Transferor, and Serafina Holdings Limited, Transferee, Consolidated Application for Consent to Transfer Control of Holders of Title II and Title III Authorizations, IB Docket No. 07-181, Memorandum Opinion and Order, 22 FCC Rcd 22151 (2007). Federal Communications Commission FCC 11-96 7 · On February 21, 2008, the Commission released an order39 modifying certain space station licenses held by Intelsat North America to include two conditions requested jointly by Intelsat and the International Telecommunications Satellite Organization (“ITSO”).40 The conditions were two of three conditions initially proposed by ITSO.41 The adoption of the two conditions was supported by the State Department, after consultations with NTIA.42 · On January 20, 2010, Intelsat General Corporation was granted a pro forma transfer of control of Intelsat General Corporation’s international Section 214 authority from Intelsat Global, Ltd. (Bermuda) to Intelsat Global, S.A. (Luxembourg), effective December 15, 2009. All of Intelsat’s (Bermuda) direct and indirect subsidiaries were migrated from Bermuda and reorganized as Luxembourg entities. There was no change in the ultimate ownership and control of Intelsat General Corporation.43 39 Petition of the International Telecommunications Satellite Organization under Section 316 of the Communications Act, as Amended, IB Docket No. 06-137, Order of Modification, 23 FCC Rcd 2764 (Int’l Bur., 2008) (Order of Modification). The modification implemented a Commission order, pursuant to Section 316 of the Communications Act of 1934, as amended, to impose the two conditions. See Petition of the International Telecommunications Satellite Organization under Section 316 of the Communications Act, as Amended, IB Docket No. 06-137, Order Proposing Modification, 22 FCC Rcd 20093 (Int’l Bur. 2007). Intelsat North America, while stating that it did not object to the proposed conditions in principle, filed a Limited Protest to Seek Clarification as to the circumstances in which the conditions would apply. Intelsat North America Limited Protest to Seek Clarification, IB Docket No. 06-137 (filed January 10, 2008) at 1-2. The request for clarification was granted in part, and denied in part, in the February 2008 modification order. 40 ITSO is the residual, post-privatization intergovernmental organization, governed by international agreement (“ITSO Agreement”) that oversees the Intelsat public service obligations established as part of the 2001 privatization. See Agreement Relating to the International Telecommunications Satellite Organization (ITSO Agreement) (November 17, 2000), Art. III(a) (“[T]he main purpose of ITSO is to ensure, through the Public Services Agreement, that the Company provides, on a commercial basis, international public telecommunications services, in order to ensure performance of the Core Principles.”), available at http://www.itso.int. The United States is a party to the ITSO Agreement, with the State Department serving as the U.S. representative. See Order of Modification, 23 FCC Rcd at 2764. The two conditions explicitly obligate Intelsat to remain a signatory to the Public Services Agreement between Intelsat and ITSO approved by the ITSO Twenty-fifth Assembly of Parties, and provide, for licensing purposes, that no entity can be considered a successor-in-interest to Intelsat under the ITSO Agreement unless the entity has undertaken to perform the obligations of the Public Services Agreement. 41 Petition of ITSO, IB Docket No. 06-137 (filed July 10, 2006) (“Petition”). 42 Letter from Ambassador David A. Gross, United States Coordinator, International Communications and Information Policy, U.S. Department of State, to the Honorable Kevin J. Martin, Chairman, Federal Communications Commission, IB Docket No. 06-137 (dated March 15, 2007) at 1, 3-4. See also Letter from Steven W. Lett, Deputy United States Coordinator, International Communications and Information Policy, U.S. Department of State to Helen Domenici, Chief, International Bureau, Federal Communications Commission, IB Docket No. 06-137 (dated February 1, 2008). 43 International Authorizations Granted, DA10-110, Public Notice (Int’l Bur., rel. January 21, 2010). Federal Communications Commission FCC 11-96 8 · In December 2010 and January 2011, the FCC authorized a number of internal transfers and assignments that resulted in the majority of Intelsat and its affiliated corporate entities’ FCC licenses and authorizations being held by a single subsidiary company, Intelsat License LLC.44 These transfers and assignments were consummated on January 12, 2011.45 · Pursuant to U.S. obligations as the notifying administration to the ITU46 for Intelsat’s fixed satellite service C- and Ku-band assignments transferred at privatization, the Commission has participated in a number of international satellite coordination negotiations as Intelsat’s licensing Administration. Since the 2010 Orbit Act Report to Congress, the Commission has participated in coordination meetings with China on behalf of Intelsat and a number of other U.S. licensees. Over the past reporting period, satellite coordination agreements have been concluded via correspondence with Singapore and Kazakhstan. · The United States has a separate process whereby U.S. operators may reach operational arrangements with operators of other Administrations. These operational arrangements are then submitted to the operators’ respective Administrations for approval. Once approved by both Administrations, the operational arrangements become, or form the basis for, a coordination agreement between the Administrations under the ITU procedures. Since the 2010 Orbit Act Report to Congress, Intelsat has concluded operational arrangements with operators licensed by the Administrations of Brazil and Israel. In due course, this process will lead to coordination agreements between the United States and the pertinent foreign Administrations. · Since the June 15, 2010 Eleventh Annual Report, Intelsat has filed a number of requests for license authorizations and modifications. The Commission has reviewed these requests and acted on them consistent with the Commission’s licensing rules and processes.47 44 IBFS File Nos. SES-ASG-20101203-01501, SES-ASG-20101206-01502, SES-T/C-20101203-01503, SES-ASG-20101203-01504, SES-ASG-20101206-01512, SAT-ASG-20101203-00251, SAT-ASG- 20101203-00252, SAT-T/C-20101203-00253, SAT-T/C-20101203-00254, and 0004520968. References to “Intelsat” in this document are, for the period following January 12, 2011, to Intelsat License LLC. 45 Letter from Jennifer D. Hindin, Counsel to Intelsat, to Marlene H. Dortch, Secretary, FCC, File No. SAT-ASG-20101203-00251 (dated January 18, 2011). 46 As the notifying administration on behalf of Intelsat, the Commission is responsible for discharging the obligation undertaken in the Constitution of the ITU, in the Convention of the ITU, and in the Administrative regulations. Article 1, Section 1.2, ITU Radio Regulations. 47 See, e.g., Application of Intelsat North America LLC to Modify Authorization for Intelsat 706, File No. SAT-MOD-20100511-00098 (grant stamp on Mar. 22, 2011, with conditions); Application of PanAmSat Licensee Corp. to Modify Authorization for Galaxy 11, File No. SAT-MOD-20101102-00229 (grant stamp on Mar. 8, 2011, with conditions); Application of Intelsat North America LLC to Modify Authorization for Intelsat 709, File No. SAT-MOD-20091106-00117 (grant stamp on Feb. 11, 2011, with conditions); Application for Authority to Launch and Operate Intelsat 17, a Replacement Satellite with New Frequencies, at 66.0° E.L., File No. SAT-LOA-20100726-00167 (grant stamp on Nov. 17, 2010, with conditions); Application of PanAmSat Licensee Corp. to Modify Authorization for Galaxy 12, File No. (continued) Federal Communications Commission FCC 11-96 9 Inmarsat · Inmarsat privatized on April 15, 1999, prior to enactment of the ORBIT Act. The ORBIT Act specified a number of criteria for determining whether Inmarsat’s privatization is pro-competitive. On October 9, 2001, the Commission released an Order in which it concluded that Inmarsat had privatized in a manner consistent with the non-IPO requirements of Sections 621 and 624 of the ORBIT Act.48 · In its decision, having found that Inmarsat had privatized in a manner consistent with the non-IPO requirements of the Act,49 the Commission granted Comsat Corporation, Stratos Mobile Networks, LLC, SITA Information Computing Canada, Inc., Honeywell, Inc., Marisat Communications Network, Inc., and Deere & Company regular earth station authority to use certain Inmarsat satellites for communications services to, from, or within the United States. · The ORBIT Act originally required Inmarsat to conduct an IPO no later than October 1, 2000.50 Subsequently, Congress amended the ORBIT Act several times to extend the deadline for Inmarsat to conduct an IPO.51 Ultimately, in October 2004, Congress amended the ORBIT Act, extending the IPO deadline until June 30, 2005 and adding Sections 621(5)(F) and (G) to provide a certification process as an alternative to the IPO requirements under Sections 621(5)(A) and (B).52 · On June 14, 2005, the Commission determined that Inmarsat was in compliance with the alternative certification process under Sections 621(5)(F) and 621(5)(G) of the ORBIT Act, that Inmarsat could forgo the requirement for an IPO and the public listing of securities, and that Inmarsat was no longer subject to the provisions of Section 602 that prohibited Inmarsat from providing additional services.53 Continued from previous SAT-MOD-20100120-00013 (grant stamp on Oct. 15, 2010, with conditions); Application of Intelsat North America LLC to Modify Authorization for Intelsat 801, File No. SAT-MOD-20100208-00024 (grant stamp on Sept. 23, 2010, with conditions); Application of PanAmSat Licensee Corp. to Modify Authorization for Intelsat 1R, File No. SAT-MOD-20090720-00073 (grant stamp on Aug. 5, 2010, with conditions). 48 Comsat Corporation et al., Memorandum Opinion, Order and Authorization, 16 FCC Rcd 21661 (2001) (“Inmarsat ORBIT Act Compliance Order”). 49 47 U.S.C. § 761(a), which precludes Commission authorization of additional services by Inmarsat until Inmarsat has privatized in accordance with the Act. 50 Pub. L. No. 106-180, 114 Stat. 48 (2000). 51 On June 30, 2003, Congress extended Inmarsat’s IPO deadline to June 30, 2004, and gave the Commission discretion to further extend this deadline to no later than December 31, 2004. ORBIT Technical Corrections Act of 2003, Pub. L. No. 108-39, § 763, 117 Stat. 835 (2003). Inmarsat Ventures Limited Request for Extension of Time under Section 621(5) of the Communications Satellite Act of 1962, as amended by the Open-Market Reorganization for the Betterment of International Telecommunications Act, Order, 19 FCC Rcd 11387 (2004). 52 Public Law No. 108-371, 118 Stat. 1752 (October 25, 2004). 53 Inmarsat Group Holdings Limited Petition for Declaratory Ruling that Intelsat, Ltd. Complies With (continued) Federal Communications Commission FCC 11-96 10 · Beginning in 2005, resellers of Inmarsat satellite services filed applications to continue or, in some cases, to commence operations of mobile earth terminals (“METs”) and gateway land earth stations (“LESs”) in the United States via various Inmarsat satellites not covered by existing coordination agreements for the L-band over North America, including Inmarsat’s fourth generation (“I-4”) satellites.54 These applications were opposed by Mobile Satellite Ventures Subsidiary LLC (“MSV”), the U.S.-licensed mobile satellite service (“MSS”) operator in the L-band. In order to permit continuity of service to existing Inmarsat customers55 and to allow use of its new Broadband Global Area Network (“BGAN”) 56 services in support of emergency operations, the Commission granted limited authority to resellers to operate the I-4F2 satellite via an I-4 satellite while their applications for permanent authorization were under consideration.57 · On December 21, 2007, Inmarsat and MSV signed a “Spectrum Coordination and Cooperation Agreement” that resolved outstanding differences between the parties regarding use of the L-band.58 According to the parties, the agreement addresses operations in the L-band in North America, including re-banding of spectrum, Continued from previous Section 621(5)(F) of the ORBIT Act, IB Docket 04-439, Memorandum Opinion and Order, 20 FCC Rcd 11366 (2005) (“Inmarsat Certification”). Section 681(2) of the ORBIT Act defines “additional services” for Inmarsat as the non-maritime and non-aeronautical services in the 1.5 and 1.6 GHz bands on planned satellites in the 2 GHz band. See Pub. L. 106-180 § 602(a) (precluding Commission authorization of additional services by Inmarsat until it has privatized in accordance with the Act). 54 The first two Inmarsat I-4 satellites were launched in 2005. See "About Inmarsat: Our Satellites," available online at http://www.inmarsat.com/About/Our_satellites/default.aspx. The third I-4 satellite was launched on August 18, 2008. Press Release, “Successful Launch for Third Inmarsat-4 Satellite,” dated August 18, 2009, available online at http://www.inmarsat.com/about/investors/ Press_releases. 55 The Commission had previously authorized the requested operations via the third generation Inmarsat 3F4 satellite. 56 BGAN service is a mobile or portable application that supports both Internet protocol (“IP”) packet- switched data and circuit-switched applications. Inmarsat indicates that BGAN data transmission rates allows customers to access to e-mail, local area networks, the Internet, intranet/extranet, video conferencing services, video-on-demand, and voice communications (including Voice over IP) from almost anywhere in the world. 57 See Actions Taken, Satellite Communications Services Information, Public Notice, Report No. SES- 00788 (Int’l Bur., rel. January 25, 2006); Actions Taken, Satellite Communications Services Information, Public Notice, Report No. SES-00821 (Int’l Bur., rel. May 17, 2006); Actions Taken, Satellite Communications Services Information, Public Notice Report No. SES-00835 (Int’l Bur., rel. July 5, 2006); Actions Taken, Satellite Communications Services Information, Public Notice, Report No. SES-00990 (Int’l Bur., rel. December 19, 2007). 58 Press Release, “SkyTerra, Mobile Satellite Ventures and Inmarsat Sign Spectrum Coordination and Cooperation Agreement,” December 21, 2007, available online at http://www.msvlp.com/media/press- releases-view.cfm?id=158&yr=2007. MSV subsequently changed its name, first to SkyTerra, and then to its current name, LightSquared. See Press Release, “Introducing LightSquared: Revolutionizing the U.S. Wireless Industry,” dated July 20, 2010, available online at http://www.skyterra.com/media/press- releases.cfm. Federal Communications Commission FCC 11-96 11 coordination of next generation Inmarsat and MSV satellites, resolution of pending regulatory issues in the United States and Canada, and greater system technical flexibility. · On March 26, 2008, the Commission reached government-to-government satellite coordination agreements with the United Kingdom and Canada, based upon the “Spectrum Coordination and Cooperation Agreement” of Inmarsat and MSV. In light of these developments, on March 27, 2008, the Commission granted nearly all pending applications for regular authority to continue existing services via Inmarsat satellites.59 The Commission also granted one reseller’s applications for regular authority to provide new BGAN services via the I-4F2 satellite on April 1, 2008.60 An additional reseller’s application for regular authority to provide BGAN services via the I-4F2 was granted on January 14, 2009.61 · In June 2008, Inmarsat filed an application seeking approval of the indirect transfer of control of Stratos Global Corporation and its wholly-owned subsidiaries from an irrevocable trust to Inmarsat. In January 2009, the Bureau granted this application for transfer of control.62 Vizada initially sought review of the Bureau’s grant of the Stratos transfer, but withdrew their request on December 23, 2010.63 · On October 21, 2008, the Commission released an Order making administrative changes to the way in which the Commission specifies authorized points of communication in licenses for L-band MSS user terminals using Inmarsat space stations.64 Specifically, the Commission established a list of Inmarsat satellites approved to serve the United States in the L-band (the “ISAT List”). The list includes all Inmarsat satellites that have been found to meet the Commission’s legal, technical, and policy requirements to access the U.S. market. As a result, earth station licensees and applicants may seek authority to communicate with all Inmarsat satellites on the ISAT List by listing “ISAT” as the point of communication, rather 59 Actions Taken, Satellite Communications Services Information, Public Notice, Report No. SES-01021 (Int’l Bur., rel. April 2, 2008). 60 Id. 61 Actions Taken, Satellite Communications Services Information, Public Notice, Report No. SES-01103 (Int’l Bur., rel. January 14, 2009) (granting authority to provide BGAN services via Inmarsat 4F2 to MVS Fed, LLC). 62 Application of Robert M. Franklin (transferor) and Inmarsat plc (transferee) Consolidated Application for Consent to Transfer of Control of Stratos Global Corporation and Its Subsidiaries from an Irrevocable Trust to Inmarsat, plc., Memorandum Opinion and Order and Declaratory Ruling, 24 FCC Rcd 449 (Int'l Bur. 2009). 63 Letter from Karis A. Hastings, Counsel for Vizada, Inc. and VIZADA Services LLC to Ms. Marlene H. Dortch, Secretary, FCC, IB Docket No. 08-143 (dated December 23, 2010), available at http://fjallfoss.fcc.gov/ecfs/document/view?id=7021024681. 64 Inmarsat, Inc., Order, 23 FCC Rcd 15268 (Int’l Bur. 2008). Federal Communications Commission FCC 11-96 12 than having to seek authorization to communicate with Inmarsat satellites on a satellite-by-satellite and orbital-location-by-orbital-location basis. · Four Inmarsat satellites were included in the original ISAT List.65 Since the creation of the ISAT List, three Inmarsat satellites have been added to the ISAT List,66 and the orbital location of one satellite on the ISAT List has been changed to a different location.67 In addition, on October 22, 2009, Inmarsat’s application to operate METs with satellites on the ISAT List was granted.68 · In April 2009, Inmarsat’s prior distribution arrangements expired and Inmarsat entered into new arrangements with its distributors.69 Inmarsat also completed the acquisition of the shares of Stratos Global Corporation.70 · Since the June 15, 2010 Eleventh Annual Report, the Commission has granted several earth station applications to communicate with Inmarsat’s satellites as a point of communication.71 65 The Inmarsat satellites included in the original ISAT List were the I-3F2 at 15.5° W.L., the I-3F3 at 178° E.L., the I-3F4 at 142° W.L., and the I-4F2 satellite at 52.75° W.L. See id. 66 Satellite Communications Services Information Re: Actions Taken, Public Notice, Report No. SES- 01097 (Int’l Bur., rel. December 24, 2008) (adding Inmarsat 4F1 at 143.5° E.L. and Inmarsat 4F3 at 97.65° W.L. to ISAT List). On September 8, 2009, Inmarsat 2F1 at 142° W.L. was added, subject to conditions, to the ISAT list. See File Nos. SAT-PPL-20081219-00235 and SAT-APL-20090609-00068 (grant stamp on Sept. 8, 2009, with conditions). 67 Inmarsat plc, Petition for Declaratory Ruling to Modify ISAT List to Reflect Resumed Operations of I- 3F4 at 54° W.L., File No. SAT-PPL-20090107-00003; SAT-APL-20090115-00005 (grant stamp on April 6, 2009, with conditions). 68 Inmarsat Hawaii Inc., Application for Inmarsat Hawaii Blanket MET License, File No. SES-LIC- 20090217-00184 (grant stamp on October 22, 2009, with conditions). 69 Inmarsat Group Limited, Form 20-F, Annual Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 for the fiscal year ended December 31, 2008, April 29, 2009, at 22, 41, available at http://www.sec.gov/Archives/edgar/data/1291396/000119312509091361/d20f.htm. 70 Inmarsat Press Release, “Inmarsat completes acquisition of Stratos Global and implements new distribution terms with partners,” April 15, 2009, available at http://www.inmarsat.com/About/Newsroom /Press/00024905.aspx. 71 See, e.g., SkyWave Mobile Communications, Corp., Application Modification, File Nos. SES-LIC- 20101229-01640 (grant stamp on April 19, 2011, with conditions); Vizada, Inc., Application Modification, File No. SES-MOD-20110128-00069 (grant stamp on March 10, 2010, with conditions); ISAT US Inc., Application Modification, File No. SES-MOD-20101101-01391 (grant stamp on February 1, 2011, with conditions); Vizada, Inc., Application License, File No. SES-LIC-20070416-00479 (grant stamp on December 29, 2010, with conditions); Vizada, Inc., Application Modification, File No. SES-MOD- 20100628-00835 (grant stamp on September 21, 2010, with conditions); Vizada, Inc., Application Modification, File No. SES-MOD-20100517-00615 (grant stamp on August 16, 2010, with conditions); LXE Inc., Application Modification, File No. SES-MOD-20100528-00661 (grant stamp August 6, 2010, with condition); Vizada, Inc., Application Modification, File No. SES-MFS-20100119-00089 (grant stamp on August 5, 2010, with conditions); Inmarsat Hawaii Inc., Application Modification, File No. SES-MFS- (continued) Federal Communications Commission FCC 11-96 13 New Skies Satellites · New Skies is the Netherlands-based INTELSAT spin-off, created in 1998 as INTELSAT’s first step toward privatization. On March 29, 2001, the International Bureau’s Satellite and Radiocommunication Division added four satellites operated by New Skies to the Commission’s Permitted Space Station List72 (“Permitted List”) with conditions to remove secondary status requirements for certain New Skies satellites.73 This action enabled New Skies to provide satellite services to, from, and within the United States via all routinely authorized U.S. earth stations.74 · On June 25, 2004, the Commission granted an application to transfer control of Commission licenses and authorizations held by New Skies Satellites N.V. and New Skies Networks, Inc. to New Skies Satellites B.V.75 · On March 29, 2006, the Commission approved the transfer of control from New Skies Networks, Inc. (“NSN”) to SES GLOBAL S.A. of licenses for six non- common carrier earth stations for communication with non-U.S. licensed satellites that have been added to the Commission’s Permitted List.76 The Commission also approved the transfer of control of three non-U.S. satellites operated by New Skies Continued from previous 20091105-01418 (grant stamp on August 5, 2010, with conditions); ISAT US Inc., Application Modification, File No. SES-MOD-20100323-00347 (grant stamp on August 2, 2010, with conditions); Inmarsat Hawaii Inc., Application Miscellaneous, File No. SES-MSC-20100415-00483 (grant stamp on July 13, 2010, with conditions); Vizada, Inc., Application Modification, File No. SES-MFS-20100210- 00175 (grant stamp on July 9, 2010, with conditions); Amtech Systems LLC, Application Modification, File No. SES-MOD-20100414-00445 (grant stamp on July 2, 2010, with conditions); Amtech Systems LLC, Application Modification, File No. SES-MOD-20100414-00444 (grant stamp on July 2, 2010, with conditions); Vizada, Inc., Application License, File No. SES-LFS-20050930-01352 (grant stamp on June 14, 2010, with conditions). 72 The Permitted List denotes all satellites and services with which U.S. earth stations with “routinely” authorized technical parameters operating in the conventional C- and Ku-bands (“ALSAT” earth stations) are permitted to communicate, without additional Commission action. Those communications must fall within the same technical parameters and conditions established in the earth stations’ licenses. Amendment of the Commission’s Regulatory Policies to Allow Non-U.S.-Licensed Space Stations to Provide Domestic International Satellite Service in the United States, First Order on Reconsideration, 15 FCC Rcd 7207 (1999). 73 New Skies Satellites, N.V., Order, 16 FCC Rcd 7482 (Int'l Bur., Sat. and Rad. Div. 2001). 74 New Skies Satellites, N.V., Petition for Declaratory Ruling, Order, 16 FCC Rcd 6740 (Int'l Bur., Sat. and Rad. Div. 2001). 75 Application of New Skies Satellites N.V. (Transferor) and New Skies Satellites B.V. (Transferee) Transfer Control of FCC Licenses and Authorizations Held by New Skies Satellites N.V. and New Skies Networks, Inc., 19 FCC Rcd 21232 (2004). 76 Permitted List available online at http://www.fcc.gov/ib/sd/se/permitted.html. Federal Communications Commission FCC 11-96 14 that the Commission authorized to provide service to the United States pursuant to the Permitted List.77 The merger was consummated on March 30, 2006. · On September 7, 2009, SES S.A. announced that the operations of its subsidiaries New Skies Satellites B.V. and SES Americom would be conducted under the single brand name, SES WORLD SKIES.78 This change did not affect the underlying legal entities that hold Commission authorizations or U.S. market access rights. · Currently, four New Skies satellites are on the Permitted List.79 Earth station operators with ALSAT authority continue to have authority to access New Skies satellites on the Commission’s Permitted List.80 · An earth station must seek specific authority to communicate with a space station if the earth station does not meet the technical requirements for an ALSAT designation and/or if the earth station seeks to communicate with a satellite in frequency bands other than the conventional C- and Ku-bands. In the last year, the Commission granted numerous earth stations specific authority to communicate with a New Skies satellite.81 77 New Skies Satellites Holdings LTD, Transferor, and SES Global S.A., Transferee, Applications to Transfer Control of Authorizations Held By New Skies Networks, Inc. and Notification of Change to Permitted Space Station List, IB Docket No. 06-23, Public Notice, 21 FCC Rcd 3194 (Int’l Bur. 2006). 78 See http://www.ses-worldskies.com/worldskies/news_and_events/news_archive/ 2009/index.php? pressRelease=/pressReleases/archive-by-year/2009/09-09-07/index.php. 79 The four New Skies satellites on the Permitted List are: NSS-5 at 20 W.L., NSS-7 at 42 W.L., NSS 806 at 40.5 W.L., and NSS-9 at 177 W.L. One New Skies satellite, NSS-5, was removed from the Permitted List in 2009 after it was moved to a location where it no longer served the United States. New Skies filed a request in December 2009 that the NSS-5 be placed back on the Permitted List at the 20.0° W.L. (340.0° E.L.) orbital location, which was subsequently granted. See New Skies Satellites, B.V., IBFS File Nos. SAT-PPL-20091208-00142, SAT-APL-20100219-00034 (grant stamp dated June 4, 2010). 80 Any of the over 8360 earth stations that have ALSAT authority can communicate with New Skies satellites that appear on the Permitted List, in the conventional C- and Ku- bands, without any further authorization. See supra, n.72. 81 See, e.g., Newcom International, Inc., Application Modification, File No. SES-MOD-20110418-00473 (grant stamp on April 20, 2011, with conditions); Newcom International, Inc., Application Modification, File No. SES-MOD-20110418-00472 (grant stamp on April 20, 2011, with conditions); Vizada, Inc., Application Modification, File No. SES-MOD-20110128-00069 (grant stamp on March 10, 2010, with conditions); Intelsat License LLC, Application Modification, File No. SES-MFS-20101213-01544 (grant stamp on March 11, 2011, with conditions); Newcom International, Inc., Application Modification, File No. SES-MFS-20100430-00497 (grant stamp on February 4, 2011, with conditions); ABS-CBN International, Inc., Application Modification, File Nos. SES-MFS-20100927-01200 (grant stamp on February 3, 2011, with conditions); Arqiva, Inc., Application Modification, File No. SES-MOD-20101203- 01497 (grant stamp on January 28, 2011, with conditions); Intelsat License LLC, Application Modification, File No. SES-MOD-20101004-01271 (grant stamp on December 29, 2010 with conditions); ABS-CBN International, Inc., Application Modification, SES-MFS-20100618-00714 (grant stamp on November 9, 2010, with condition); Intelsat License LLC, Application Modification, File No. SES-MOD-20100625- 00837 (grant stamp on September 21, 2010, with conditions); Glacier Technologies LLC, Application (continued) Federal Communications Commission FCC 11-96 15 Status of Comsat · The ORBIT Act terminated ownership restrictions on COMSAT Corporation (“Comsat”), as mandated by the Communications Satellite Act of 1962. As a result, Lockheed Martin and Comsat jointly filed an application with the Commission for transfer of control of Comsat’s various licenses and authorizations. On July 31, 2000, the Commission found that Lockheed Martin’s purchase of Comsat was in the public interest and authorized Comsat to assign its FCC licenses and authorizations to a wholly-owned subsidiary of Lockheed Martin Corporation.82I a · On December 18, 2001, the Commission granted requests by Lockheed Martin Global Telecommunications, COMSAT Corporation, and COMSAT General Corporation, together with Telenor Satellite Services Holdings, Inc., Telenor Satellite, Inc., and Telenor Broadband Services, to assign certain Title II common carrier authorizations and Title III radio licenses held by COMSAT to Telenor.83 The assignment was in connection with Telenor's acquisition of Comsat Mobile Communications (“CMC”), a business unit of COMSAT Corporation. On January 11, 2002, Telenor completed its purchase of substantially all of the assets of CMC, and all of CMC's licenses and authorizations were transferred to Telenor pursuant to Commission authorization.84 · On October 25, 2002, the Commission granted Comsat and Lockheed Martin’s jointly filed applications to assign four non-common carrier earth station licenses and an Experimental License to Intelsat.85 Continued from previous License, File No. SES-LIC-20100615-00698 (grant stamp on September 8, 2010, with conditions); MTN License Corp., Application Modification, File No. SES-MOD-20100505-00555 (grant stamp on August 23, 2010, with conditions); Vizada, Inc., Application Modification, File No. SES-MOD-20100517-00615 (grant stamp on August 16, 2010, with conditions); Intelsat License LLC, Application Modification, File No. SES-MFS-20100129-00134 (grant stamp on July 20, 2010, with conditions); STM Networks Inc., Application Modification, File No. SES-MFS-20100514-00592 (grant stamp on June 30, 2010, with condition. 82 Lockheed Martin Corporation, Comsat Government Systems, LLC, and Comsat Corporation, Applications for Transfer of Control of Comsat Corporation and Its Subsidiaries, Licensees of Various Satellite, Earth Station, Private Land Mobile Radio and Experimental Licenses, and Holders of International Section 214 Authorizations, Order and Authorization, 15 FCC Rcd 22910 (2000), erratum, 15 FCC Rcd 23506 (2000); recon. denied, 17 FCC Rcd 13160 (2002). 83 Lockheed Martin Global Telecommunications, Comsat Corporation, and Comsat General Corporation, Assignor and Telenor Satellite Mobile Services, Inc. and Telenor Satellite, Inc., Assignee, Applications for Assignment of Section 214 Authorizations, Private Land Mobile Radio Licenses, Experimental Licenses, and Earth Station Licenses and Petition for Declaratory Ruling Pursuant to Section 310(b)(4) of the Communications Act, Order and Authorization, 16 FCC Rcd 22897 (2001), erratum, 17 FCC Rcd 2147 (2002). 84 Comments Invited on Telenor Satellite Services Holdings, Inc. Petition for Declaratory Ruling on Inapplicability of Cost Accounting Requirements, Public Notice, 17 FCC Rcd 2444 (2002). 85 Lockheed Martin Corporation, COMSAT Corporation, and COMSAT Digital Teleport, Inc., Assignors, and Intelsat, Ltd., Intelsat (Bermuda), Ltd., Intelsat LLC and Intelsat USA License Corp., Application for (continued) Federal Communications Commission FCC 11-96 16 · On October 29, 2004, Intelsat, Ltd completed the acquisition of the COMSAT General businesses from COMSAT General Corporation, COMSAT New Services, Inc., and Lockheed Martin. 86 The Commission approved the acquisition subject to compliance by Intelsat subsidiaries with the terms of the Intelsat Commitment letter with the Criminal Division of the U.S. Department of Justice, the U.S. Department of Homeland Security, and the Federal Bureau of Investigation.87 Direct Access · Section 641(a) of the ORBIT Act requires that users and service providers be permitted to obtain Level 3 direct access to INTELSAT capacity.88 Previously, the Commission decided in a rulemaking proceeding, that Level 3 direct access is in the public interest.89 The concept of direct access became moot with INTELSAT privatization on July 18, 2001, because Intelsat, as a private company, does not have Signatories. · Prior to INTELSAT’s privatization, the Commission implemented the requirement in Section 641(b) of the ORBIT Act that the Commission complete a rulemaking “to determine if users or providers of telecommunications services have ‘sufficient opportunity’ to access INTELSAT space segment directly from INTELSAT to meet their service or capacity requirements.”90 In September 2000, the Commission released a Report and Order requiring Comsat to “enter into negotiation with direct Continued from previous Assignment of Earth Station and Wireless Licenses and Section 214 Authorizations and Petition for Declaratory Ruling, IB Docket No. 02-87, Order and Authorization, 17 FCC Rcd 27732 (Int'l Bur. & Wireless Tel. Bur. 2002) (“Lockheed/Comsat/Intelsat Order”). 86 Intelsat, Ltd. Form 20-F, Annual Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 for the fiscal year ended December 31, 2004, at 94. 87 Applications of Comsat General Corporation, Lockheed Martin Global Telecommunications LLC, Comsat New Services, Inc., Intelsat LLC, and Intelsat MTC LLC to Assign Licenses and Authorizations and Request for a Declaratory Ruling on Foreign Ownership, Authorizations Granted, IB Docket No. 04-235, Public Notice, 19 FCC Rcd 21216 (2004). 88 47 U.S.C. § 765(a). "(a) ACCESS PERMITTED.--Beginning on the date of enactment of this title, users or providers of telecommunications services shall be permitted to obtain direct access to INTELSAT telecommunications services and space segment capacity through purchases of such capacity or services from INTELSAT. Such direct access shall be at the level commonly referred to by INTELSAT, on the date of enactment of this title, as 'Level III'.” Level 3 direct access permits non-signatory users and service providers to enter into contractual agreements with INTELSAT for space segment capacity at the same rates that INTELSAT charges its Signatories without having to use a Signatory as a middleman. Direct Access to the INTELSAT System, IB Docket No. 98-192, Report and Order, 15 FCC Rcd 15703 (1999) (“Direct Access Order”). 89 See generally Direct Access Order, supra, n.88. 90 47 U.S.C. § 765(b). Federal Communications Commission FCC 11-96 17 access customers on options to make capacity available where it is clear that there is insufficient capacity available that is not controlled by Comsat.”91 · On March 13, 2001, Comsat submitted a report detailing the results of its negotiations and maintaining that direct access opportunities are increasing for those who want them. For example, the negotiations resulted in a commercial agreement between Comsat and WorldCom. The Commission placed Comsat’s report on public notice, including Comsat’s request to terminate the proceeding.92 With INTELSAT’s privatization and Intelsat Ltd.’s purchase of Comsat,93 on November 21, 2002, the Commission released an Order that concluded that the underlying basis for Section 641(b) no longer existed, and terminated the proceeding.94 In terminating the proceeding, the Commission noted that the termination does not imply any abdication of the Commission’s appropriate oversight of Intelsat Ltd., and that as a U.S. licensee, Intelsat Ltd., will be subject to the same Commission oversight as any similarly-situated company authorized to provide services in the United States. Regulatory Fees · The ORBIT Act authorizes the Commission “to impose similar regulatory fees on the United States signatory which it imposes on other entities providing similar services.”95 On July 10, 2000, the Commission released an Order concluding that Comsat should pay a proportionate share of the fees applicable to holders of Title III authorizations to launch and operate geosynchronous space stations.96 Consistent with past decisions, the Commission stated that the costs attributable to space station oversight include costs directly related to INTELSAT signatory activities and are distinct from those recovered by other fees that Comsat pays, such as application fees, fees applicable to international bearer circuits, fees covering Comsat's non- Intelsat satellites, and earth station fees.97 In 2002, the Circuit Court of Appeals for the District of Columbia held that the Commission’s actions to impose regulatory 91 Availability of INTELSAT Space Segment Capacity to Users and Service Providers Seeking to Access INTELSAT Directly, IB Docket No. 00-91, Report and Order, 15 FCC Rcd 19160 (2000). 92 Satellite Policy Branch Information: Availability of Intelsat Space Segment Capacity to Users and Service Providers Seeking to Access Intelsat Directly, Public Notice, Report No. SPB-166 (Int’l Bur., rel. April 6, 2001). 93 On October 25, 2002, the Commission approved the assignment of various earth station licenses, private land mobile radio licenses and international 214 applications from Comsat Corporation to Intelsat, Ltd. 94 Availability of INTELSAT Space Segment Capacity to Users and Service Providers Seeking to Access INTELSAT Directly, IB Docket No. 00-91, Order, 17 FCC Rcd 24242 (2002). 95 47 U.S.C. § 765a(c). A 1999 decision of the United States Court of Appeals for the District of Columbia Circuit in PanAmSat Corp. v. FCC, 198 F.3d 890 (D.C. Cir. 1999) set aside and remanded the Commission’s 1998 fee order, which did not assess a fee against Comsat. 96 In re Assessment and Collection of Regulatory Fees for Fiscal Year 2000, MD Docket No. 00-58, Report and Order, 15 FCC Rcd 14478 ¶ 17 (2000). 97 Id. Federal Communications Commission FCC 11-96 18 fees on Comsat were justified on the basis that the underlying policy of Section 9 of the Communications Act of 1934, as amended, favoring recovery of regulatory costs gave the Commission good reason to require Comsat to bear its proportionate share of space station fees.98 · Post-privatization, Intelsat, as a U.S. licensee, has paid the required regulatory fees mandated by Section 9 of the Communications Act of 1934. B. Status of INTELSAT Privatization Intelsat privatized and became a U.S. licensee, as of July 18, 2001, transferring its assets to a commercial corporation. Pursuant to international agreement, an intergovernmental organization known as the International Telecommunications Satellite Organization (“ITSO”) remained. ITSO, through a “Public Services Agreement” with Intelsat, monitors the performance of the company’s public service obligations to maintain global connectivity and global coverage, provide non-discriminatory access to the system, and honor the lifeline connectivity obligation to certain customers, specifically, those customers in poor or underserved countries that have a high degree of dependence on Intelsat.99 Under these commitments, the privatized Intelsat has made capacity available to lifeline users at fixed pre-privatization costs for approximately 12 years. ITSO has no operational or commercial role. Upon privatization, substantially all of INTELSAT’s operational assets and liabilities were transferred to several companies within an affiliated group with a holding company structure. The record before the Commission showed that the companies created fiduciary Boards of Directors and the selection procedure for members of the Board of Directors of Intelsat, Ltd. resulted in a Board that is compliant with the ORBIT Act. The Commission found that privileges and immunities enjoyed by the pre-privatized INTELSAT had been terminated consistent with the requirements of the ORBIT Act.100 The licensed companies have licenses 98 See Comsat Corporation v. FCC and PanAmSat Corp., 283 F.3d 344 (D.C. Cir. 2002). 99 INTELSAT Assembly of Parties Record of Decisions of the Twenty-Fifth (Extraordinary) Meeting, AP- 25-3E FINAL W/11/00, at ¶¶6-8 (November 27, 2000) (“2000 Assembly Decision”). 100 47 U.S.C. § 763(3) states that “such preferential treatment includes – (A) privileged or immune treatment by national governments; (B) privileges or immunities or other competitive advantages of the type accorded INTELSAT and Inmarsat and their signatories through the terms and operation of the INTELSAT Agreement and the associated Headquarters Agreement and the Inmarsat Convention; and (C) preferential access to orbital locations. Access to new, or renewal of access to, orbital locations shall be subject to the legal or regulatory processes of a national government that applies due diligence requirements intended to prevent the warehousing of orbital locations. See also Intelsat Licensing Order, 15 FCC Rcd at 15463 (“As an intergovernmental organization, INTELSAT is immune from taxes and suits in national courts, unless it waives its immunity. Its treaty status helps ensure its access to the national markets of member countries.”). Federal Communications Commission FCC 11-96 19 through notifying Administrations in countries (the United States and the United Kingdom) that have effective competition laws and have commitments under the WTO Agreement that include non-discriminatory access to their satellite markets.101 These companies are subject to U.S. or U.K. licensing authorities and conduct satellite coordinations according to ITU procedures under the auspices of these authorities. Additionally, as detailed above, at the end of 2004 the Commission authorized the transfer of control of Intelsat’s licenses and authorizations to Zeus, and the transaction was consummated in 2005.102 Also in 2005, the Commission determined that Intelsat’s certification complied with the ORBIT Act and it could forgo an IPO and listing of securities.103 Thus, the Commission concluded that the provisions relating to additional services under Section 602 of the ORBIT Act were no longer applicable to Intelsat.104 II. Views of INTELSAT Parties on Privatization The Commission, in response to the Public Notice for this Report, has not received any views directly from the INTELSAT Parties105 regarding privatization. III. Views of Industry and Consumers on Privatization Inmarsat and Intelsat filed comments in response to the Commission’s February 25, 2011 Public Notice inviting comments related to the development of this Report to Congress. 106 No other comments or reply comments were filed. A. Inmarsat Privatization Comments Inmarsat notes that in June 2005, the Commission found that Inmarsat had satisfied the requirement to effectuate a substantial dilution of former Signatory financial interests. Inmarsat further states that, shortly thereafter, Inmarsat completed a successful IPO, and that Inmarsat’s shares are traded on the London Stock Exchange. According to Inmarsat, no former Inmarsat 101 Applications of Intelsat LLC for Authority to Operate, and to Further Construct, Launch and Operate C-band and Ku-band Satellites that form a Global Communications System in Geostationary Orbit, Intelsat LLC Supplemental Information, at 3 (August 17, 2001). 102 See supra, n.34. 103 See supra, n.35. 104 See supra, n.6, for the definition of “additional services.” 105 The INTELSAT Parties are nations for which the INTELSAT agreement has entered into force. 47 U.S.C. § 769(a)(4)(A). Following privatization, the ITSO Agreement defines “Party” to mean a State for which the ITSO Agreement has entered into force or has been provisionally applied. See Agreement Relating to the International Telecommunications Satellite Organization, As Amended by the Twenty-Fifth (Extraordinary) Assembly of Parties in Washington, D.C. (November 17, 2000), at Art. I(p). 106 International Bureau Information: Report to Congress Regarding the ORBIT Act, Pleading Cycle Established, DA 11-333, IB Docket No. 11-30, Report No. SPB-236, Public Notice, (Int’l Bur., rel. February 25, 2011). Federal Communications Commission FCC 11-96 20 Signatory owns five percent or more of the company, and the aggregate ownership of foreign governments is nominal.107 Inmarsat outlines its investments in new technologies, including its deployment of its fourth generation, Inmarsat 4 (“I-4”) satellite network108 and new or evolved services that are being offered through that network. Inmarsat also cites its announced investment in three new I-5 Ka-band satellites to be launched starting in 2013 for a high bandwidth service.109 B. Intelsat Privatization Comments In its comments, Intelsat states that the privatization goals of the ORBIT Act have been fulfilled in that Intelsat: (1) operates as a fully privatized company; (2) no longer claims the privileges and immunities of an intergovernmental organization; (3) is neither directly nor indirectly owned or controlled by any government or former signatory; and (4) is regulated by the Commission on the same basis as the Commission regulates other providers of fixed satellite services.110 Intelsat states that its privatization has had a positive impact on the communications services market, and that it faces “intense competition” from satellite and terrestrial-based technologies.111 Intelsat states that, in response to these competitive forces, it is conducting a “significant capital expenditure” – totaling $3.5 billion during the period of 2008-2013 – designed to expand its opportunities in emerging markets and meet the needs of existing customers, including the development of IntelsatONE, a terrestrial network used to deliver video and internet protocol (“IP”) content.112 IV. Impact of Privatization Section 646 requires that the Commission report on the impact of privatization on U.S. industry, jobs, and industry access to the global market. A. Inmarsat Inmarsat’s privatization appears to have had a positive impact on the domestic market.113 In its comments, Inmarsat states that it has continued to invest in new technologies for mobile satellite service customers.114 As an example of this investment, Inmarsat points to its $1.5 billion investment in its fourth-generation (“I-4”) satellite network, which is currently providing 107 Inmarsat Comments at 1-2. 108 Id. at 3-4. 109 Id. at 4. See also Inmarsat’s August 6, 2010 press release at http://www.inmarsat.com/About/Newsroom/00036138.aspx. 110 Intelsat Comments at 1. 111 Id. at 2. 112 Id. at 3. 113 Inmarsat is the only commenter that discussed the impact of Inmarsat’s privatization. 114 Inmarsat Comments at 2. Federal Communications Commission FCC 11-96 21 mobile broadband services to the United States and globally, including its BGAN service.115 Inmarsat states that its BGAN service is being utilized in innovative ways by its customers, including in response to recent natural disasters.116 In August 2010, Inmarsat announced a $1.2 billion investment in three new I-5 Ka-band satellites for high bandwidth services to be launched beginning in 2013.117 Additionally, Inmarsat states that it remains committed to its support of global maritime distress and safety services (“GMDSS”) and notes its future plans to take its GMDSS and aero safety services to its next generation satellite platforms, ensuring the availability of these services beyond 2020.118 B. Intelsat In this and prior ORBIT Act reports, we acknowledged that Intelsat successfully transitioned from an intergovernmental organization to a fully privatized entity, and that privatization has enabled it to more effectively compete in providing services to U.S. commercial and governmental customers. The privatization of INTELSAT enabled it to compete freely for U.S. satellite business opportunities, led to more competitive choices in the U.S. market than existed before privatization, and continues to encourage the development of service offerings to U.S. customers. Commenters in the 2010 ORBIT Act proceeding, however, questioned whether certain practices of Intelsat post-privatization are anti-competitive.119 Those commenters disagreed with Intelsat’s conclusion that privatization has resulted in a competitive FSS marketplace, and disagree that the goals of the ORBIT Act have been achieved solely because Intelsat is no longer an intergovernmental organization. 115 See supra, n.56. BGAN provides voice and broadband service with speeds of almost half a megabit per second using “notebook sized” antennas that are one-third the size, weight and price of traditional Inmarsat antennas. See Inmarsat Comments at 2. Inmarsat has also offered similar services to its aeronautical and maritime customers under the names SwiftBroadband and FleetBroadband. Id. at 3. Other new services are described in Inmarsat’s Comments. Id. at 3-4. Inmarsat also outlines new services, including a modernized handset introduced in June 2010, the IsatPhone Pro, which will support satellite telephony, and which, in 2011, will also support text and e-mail messaging. Id. at 3-4. 116 For example, Inmarsat states that its BGAN technology played a critical role in supporting government and non-government agencies as well as international news organizations in response to global disasters including the recent Japanese earthquakes and tsunami, Chilean earthquake, Christchurch earthquake, Pakistan floods, Gulf of Mexico Oil spill and Chilean mine disaster. See Inmarsat Comments at 3 n10. Inmarsat further notes its formal agreement with the International Telecommunications Union to enable the United Nations to help countries prepare for and respond during disasters. Id.at 3. 117 Press Release, “Inmarsat Announces $1.2bn Investment in Next Generation Ka-band Satellite Network,” (rel. Aug. 6, 2010), available at http://www.inmarsat.com/About/Newsroom/Press/00036066.aspx. 118 See Inmarsat PLC Annual Report and Accounts 2010 at 6, available online at http://www.inmarsat.com/Downloads/English/Investors/Inmarsat_Annual_Report_2010.pdf. 119 See Report to Congress as Required by the ORBIT Act, Report, 25 FCC Rcd 7834 (2010). Federal Communications Commission FCC 11-96 22 No comments were filed by parties other than Intelsat and Inmarsat for this year’s ORBIT Act report. Comments similar to those raised in the 2010 ORBIT Act report were filed in the pending Satellite Competition Report proceeding and will be addressed in that proceeding.120 V. Summary The Commission has undertaken a number of proceedings required by or related to the ORBIT Act. On the whole, we believe that U.S. policy goals regarding the promotion of a fully competitive global market for satellite communications services are being met in accordance with the ORBIT Act. The Commission will continue to inform Congress of the actions it takes to implement the requirements of the ORBIT Act and the impact of those actions in its next annual report. 120 International Bureau Invites Comment for Fourth Annual Report to Congress on Status of Competition in the Satellite Services Industry, Public Notice, 25 FCC Rcd 10049 (2010) (“2009 Public Notice”). Federal Communications Commission FCC 11-96 23 APPENDIX Index of Filings: Comments, filed March 28, 2011 Comments of Inmarsat PLC, available at http://fjallfoss.fcc.gov/ecfs/document/view?id=7021235351 Comments of Intelsat License LLC, available at http://fjallfoss.fcc.gov/ecfs/document/view?id=7021235585