Fixed Satellite Systems

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 25

[IB Docket No. 95-41; FCC 95-146]

Fixed Satellite Systems

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Commission is hereby proposing rules that would eliminate

the distinction between our Transborder Policy and Separate

International Satellite Systems (Separate Systems) Policy and to treat

all U.S.-licensed geostationary fixed-satellites under a single

regulatory scheme. Our action is in response to applications from

[[Page 24818]] domestic and international satellite system operators

for authority to provide both domestic and international services. In

addition, the Executive Branch has recommended that all U.S.-licensed

fixed-satellites be subject to the same regulatory scheme. Permitting

U.S. operators to provide the widest range of service offerings

technically feasible will allow them to use their satellites more

efficiently and to provide innovative and customer-tailored services.

DATES: Comments must be submitted on or before June 8, 1995 and reply

comments must be submitted on or before June 23, 1995.

ADDRESSES: Comments and reply comments should be submitted to Federal

Communications Commission, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: John M. Coles, Attorney, Satellite

Policy Branch, International Bureau (202) 739-0731.

SUPPLEMENTARY INFORMATION:

Notice of Proposed Rulemaking

Adopted: April 5, 1995.

Released: April 25, 1995.

By the Commission:

1. The Commission is hereby proposing rules that would eliminate

the distinction between our Transborder Policy and Separate

International Satellite Systems (Separate Systems) Policy and to treat

all U.S.-licensed geostationary fixed-satellites under a single

regulatory scheme.

II. Background

2. The Transborder and Separate Systems Policies both involve the

use of non-Intelsat satellites for the provision of international

services. Both policies are based on the Communications Satellite Act

of 1962 (``Satellite Act'') which provides for U.S. participation in

the global commercial communications satellite organization that became

Intelsat, but also specifically provides that additional satellite

systems may be authorized if ``required to meet unique governmental

needs or if otherwise required in the national interest.''\1\ The

Transborder and Separate Systems Policies evolved from these general

principles at different times and in response to different

circumstances.

\1\See 47 U.S.C. 701(d). Additionally, Congress has declared it

to be U.S. policy ``to make available to consumers a variety of

communications satellite services utilizing the space segment

facilities of Intelsat and any additional such facilities which are

found to be in the national interest'' and which are technically

compatible with and avoid significant economic harm to the Intelsat

system. Pub. L. 99-93, 99 Stat. 425 (1985) (quoted in Historical and

Statutory Notes to 47 U.S.C.A. 701).

---------------------------------------------------------------------------

A. Transborder Policy

3. The Transborder Policy was established in 1981 and permits

domestic fixed-satellite operators (``domsats'') to provide

international public telecommunications services within the coverage

areas (``footprints'') of their satellites where: (1) Intelsat cannot

provide the service; or (2) it would be clearly uneconomical or

impractical to use Intelsat facilities.\2\ Most of the applications

approved for transborder services have involved instances where use of

the Intelsat system would be clearly uneconomical or impractical, i.e.

use of Intelsat facilities would require multiple satellite hops,

terrestrial facilities, and co-located domestic and international earth

stations, which would significantly increase the cost of providing the

service.\3\ Typically, services authorized under the uneconomical or

impractical standard have been characterized as ``incidental'' to

domestic services already being provided.

\2\Letter from James L. Buckley, Under Secretary of State for

Security Assistance, Science and Technology, to F.C.C. Chairman Mark

Fowler (July 23, 1981) (``Buckley Letter'') (printed in Appendix to

Transborder Satellite Video Services, 88 F.C.C.2d 258, 287 (1981)).

\3\Id. at 280.

---------------------------------------------------------------------------

4. U.S. domsats have provided more extensive services (i.e., point-

to-point and two-way services) between the U.S. and Mexico and between

the U.S. and Canada because Intelsat has not traditionally provided

service between the U.S. and these points. Thus, a wider range of

services was permitted between the U.S. and contiguous locations (i.e.,

Canada and Mexico) than between the U.S. and non-contiguous locations.

5. Another significant feature of the Transborder Policy is that it

does not prohibit voice services through the public switched network

(``PSN''), as did our Separate Systems Policy initially. Until recent

modifications in the Separate Systems Policy permitting interconnection

with the PSN, the ability of domsats to provide public switched

services under the Transborder Policy was the main distinguishing

feature between the two policies.

B. Separate Systems Policy

6. The Separate Systems Policy was established in response to a

1984 Presidential Determination that satellite systems separate from

Intelsat, providing service between the U.S. and international points,

``are required in the national interest.''\4\ In response to the

Presidential Determination, the Secretaries of State and Commerce

jointly advised the Commission to authorize separate systems provided

that (1) each system be restricted to providing services through the

sale or long-term lease of capacity for communications not

interconnected with public switched message networks (except for

emergency restoration service);\5\ and (2) each system gain approval

from the foreign authority with which communications links are being

established and enter into consultation procedures in accordance with

Article XIV(d) of the Intelsat Agreement to ensure technical

compatibility and to avoid significant economic harm to Intelsat.\6\

\4\Presidential Determination No. 85-2 (Nov. 28, 1984), 49 F.R.

46,987. The Separate Systems Policy is written into law as part of

the Foreign Relations Authorization Act, Fiscal Years 1986 and 1987,

Pub. L. 99-93, section 146(g), 99 Stat. at 426.

\5\At the time, the restriction against interconnection with the

PSN was deemed necessary to protect the core revenue base of

Intelsat which consisted of switched voice and other services.

\6\Letter from George P. Shultz, Secretary of State, and Malcolm

Baldridge, Secretary of Commerce, to F.C.C. Chairman Mark S. Fowler

(Nov. 28, 1984).

---------------------------------------------------------------------------

7. In 1985, we authorized several applicants to build separate

satellite systems to provide international public telecommunications

services under these condition.\7\ Since many of the orbital positions

requested by separate systems applicants were deemed to be critical,

limited resources for the provision of particular international

services, we decided we would not permit separate systems operators to

divert this capacity for domestic communications. However, we decided

that separate system licensees could provide domestic service within

the U.S. on an ``ancillary'' basis, which permits licensees to use

their separate system facilities for domestic communications that are

reasonably related to their use of the facilities for international

communications. This was intended to accommodate those international

customers who have limited domestic communications needs related to

their international uses.

\7\Establishment of Satellite Systems Providing International

Communications, 50 FR 42266 (1985) (``Separate Systems Dicision''),

recon., 61 RR2d 649 (1986), further recon., 1 F.C.C. Rcd 439 (1986).

---------------------------------------------------------------------------

C. Recent Developments

8. Since we first began to license separate systems, Intelsat has

continued to evaluate the risk of economic harm posed by these systems

and has concluded that the provision of limited switched services over

systems consulted under Article XIV(d) would [[Page 24819]] not cause

it significant economic harm.\8\ The Executive Branch advised us to

modify our Separate Systems Policy accordingly. The cumulative effect

of these modifications is a phased relaxation of the restrictions

against interconnection with the PSN--from no circuits in 1985 to 8,000

circuits today--with a goal of complete elimination of all

interconnection restrictions by January 1997.\9\

\8\Most recently, the Nineteenth Assembly of Parties of Intelsat

determined that the interconnection of up to 8,000 64-kbps

equivalent circuits via each separate system satellite would not

cause significant economic harm to the Intelsat system. The

Executive Branch has not yet notified the Commission that the

Separate Systems Policy should be modified accordingly.

\9\See Letter from Thomas J. Murrin, Deputy Secretary of

Commerce, and Lawrence S. Eagleburger, Deputy Secretary of State, to

F.C.C. Chairman Alfred C. Sikes (December 14, 1990)(100 64-kbps

circuits consistent with U.S. obligations). Letter from James Baker,

Secretary of State, and Robert Mosbacher, Secretary of Commerce, to

F.C.C. Chairman Sikes (November 27, 1991) (interconnection of

private lines to the PSN consistent with U.S. obligations and U.S.

goal of complete elimination of PSN interconnection restrictions by

January 1997). Letter from Bradley P. Holmes, United States

Coordinator for International Communications and Information Policy,

Department of State, and Gregory L. Chapados, Assistant Secretary,

Department of Commerce, to F.C.C. Chairman Sikes (January 8,

1993)(1,250 64-kbps circuits consistent with U.S. obligations). See

also Permissible Services of U.S. Licensed International

Communications Satellite Systems Separate from the International

Telecommunications Satellite Organization (Intelsat), 7 F.C.C. Rcd

2313 (1992), further modification, 9 F.C.C. Rcd 347 (1994); alpha

Lyracom d/b/a Pan American Satellite, el at., 9 F.C.C. Rcd 1282

(1994) (``PAS Modification Order''),

---------------------------------------------------------------------------

9. The Executive Branch has also notified the Commission that the

conditions identified in the Buckley Letter should be replaced by the

Separate System Policy.\10\ In addition, we have received applications

from domestic and international satellite system licensees for

authority to provide a full range of both domestic and international

services.

\10\Letter from Bradley P. Holmes, United States Coordinator for

International Communications and Information Policy, Department of

State, and Gregory L. Chapados, Assistant Secretary for

Communications and Information, Department of Commerce, to F.C.C.

Chairman Alfred C. Sikes (January 8, 1993).

---------------------------------------------------------------------------

Discussion

10. We propose to eliminate the transborder policy in its entirety

and to subject all U.S.-licensed geostationary satellite to a modified

version of the separate systems policy. Under the new policy, all such

satellites would be able to offer domestic services and any

international services they can successfully coordinate

internationally. These changes would allow major U.S. corporations to

meet their increasingly global communications needs without the delays

and uncertainties associated with the current policy of waiving parts

of the transborder or separate systems policies on a case-by-case

basis.

11. We tentatively conclude that permitting U.S. operators to

provide the widest range of service offerings technically feasible and

consulted by Intelsat will permit them to use their satellites more

efficiently and to provide innovative and customer-tailored services.

Domsat licensees will be able to provide these international services

without regard to whether these services are incidental to an existing

domestic network or whether Intelsat could provide the service.

consequently, subject to the approval of the affected foreign country

and successful consultation with Intelsat and ITU\11\ coordination with

other administrations with satellite systems that may be affected,

domsats would be able to provide services between the U.S. and non-

contiguous points on the same basis as separate systems.\12\ In order

to ensure that domsats and separate systems are subject to the same

regulatory scheme, we also propose removing the limitation that

separate systems may only provide domestic service on an ``ancillary''

basis.

\11\The ITU (International Telecommunications Union) is a

specialized agency of the United States Nations whose goal is to

promote international cooperation in the efficient use of

telecommunications, including the use of the radio frequency

spectrum.

\12\/Any domsat operators that need to change the technical

parameters of their proposed or authorized satellites in order to

provide co-primary international service must file a request to

amend the application or modify the license under Part 25

procedures. 47 CFR Part 25.

---------------------------------------------------------------------------

12. We do not expect the proposed policy changes to result in harm

to Intelsat. Intelsat has consulted more and more international

services over U.S. separate satellites, suggesting that these services

have not harmed it economically or technically.

13. We also request comment on whether the proposed policy changes

should apply to other U.S. satellite systems, such as mobile-satellite

service and direct broadcast service systems; whether Comsat, a U.S.

licensee, should be permitted to provide domestic service using

intelsat facilities; and whether and under what conditions non-U.S.

satellites should be permitted to serve the U.S. Domestic market.

14. The proposed policy changes will require certain changes to

Part 25 of our rules. Initially, we propose to eliminate all references

to ``transborder'', ``domestic'', ``separate'' and ``international''

satellite systems. These references are found in Secs. 25.110(b),

25.113 (b) and (d), 25.114(c), 25.115(c), 25.117(a), 25.130(d),

25.131(b), (g) and (j), 25.140 (a) and (b), 25.202(c), 25.210 (e), (f)

and (j), 25.211(b) and 25.276(c). We also propose to reconcile

differences in the financial qualification requirements for domsats and

separate systems, allow all U.S.-licensed satellite system operators to

elect whether they will operate on a common carrier or non-common

carrier basis, and make modifications to our earth station licensing

procedures. Finally, because the recent changes to Part 25 require

separate system operators to meet the same technical standards as

domsat operators, we proposed to eliminate Sec. 25.210(f) which permits

exceptions to the technical requirements in accordance with the

Separate Systems Decision.

15. We also invite all interested parties to comment on any other

issues raised by the proposed changes, including considerations as to

how the proposed changes will affect orbital assignments, 2 deg.

orbital spacing between U.S. satellites in the geostationary orbit, the

need to reopen coordination with satellite systems from other

countries, and whether any special requirements should be placed on

satellite operators providing both domestic and international service.

Ex Parte Rules--Non-Restricted Proceeding

This is a non-restricted notice and comment rulemaking proceeding.

Ex parte presentations are permitted, except during the Sunshine Agenda

period, provided they are disclosed as provided in Commission rules.

See generally 47 CFR 1.1202, 1.1203, and 1.1206(a).

Initial Regulatory Flexibility Act

A. Reason for Action

This rulemaking proceeding is initiated to obtain comment regarding

proposed elimination of the Commission's Transborder Policy and removal

of certain restrictions on separate international satellite systems

with respect to domestic services in order to subject all U.S.-licensed

fixed-satellites to the same regulatory treatment.

B. Objectives

The Commission seeks to subject all U.S.-licensed fixed-satellites

to the same regulatory policy.

C. Legal Basis

The proposed action is authorized under Sections 4 and 303(r) of

the Communications Act of 1934, as amended, 47 U.S.C. 154, 303(r), and

Section 201 of the Communications Satellite Act of 1962, 47 U.S.C.

721(c). [[Page 24820]]

D. Reporting, Recordkeeping and Other Compliance Requirements

The proposed policy changes will not create additional burdens on

the public.

E. Federal Rules That Overlap, Duplicate or Conflict With These Rules

None.

F. Description, Potential Impact, and Number of Small Entities Involved

The proposed policy changes discussed in this Notice of Proposed

Rulemaking will enhance service options and price competition for any

small businesses involved in the provision of international

telecommunications services via U.S.-licensed satellites.

G. Any Significant Alternatives Minimizing the Impact on Small Entities

Consistent with the Stated Objectives

The Notice solicits comment on proposed policy changes necessary to

achieve Commission objectives. Any significant alternatives may be set

forth in comments to this Notice.

Comment Dates

Pursuant to applicable procedures set forth in Secs. 1.415 and

1.419 of the Commission's Rules, 47 CFR 1.415 and 1.419, interested

parties may file comments on or before June 8, 1995 and reply comments

on or before June 23, 1995. To file formally in this proceeding, you

must file an original and four copies of all comments, reply comments,

and supporting comments. If you want each Commissioner to receive a

personal copy of your comments, you must file an original plus nine

copies. You should send comments and reply comments to: Office of the

Secretary, Federal Communications Commission, Washington, DC 20554.

Comments and reply comments will be available for public inspection

during regular business hours in the F.C.C. Reference Center (Room 239)

of the Federal Communications Commission, 1919 M St., NW., Washington,

DC 20554.

Ordering Clauses

16. Accordingly, it is ordered That NOTICE IS HEREBY GIVEN of the

proposed regulatory action described above and that COMMENT IS SOUGHT

on the proposals in this Notice.

17. This action is taken pursuant to Sections 4 and 303(r) of the

Communications Act of 1934, as amended, 47 U.S.C. 154, 303(r), and

Section 201(c) of the Communications Satellite Act of 1962, 47 U.S.C.

721(c).

18. For further information on this Notice contact John M. Coles,

Attorney, (202) 739-0731.

List of Subjects in 47 CFR Part 25

Communications common carriers, Radio, Satellites.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

[FR Doc. 95-11286 Filed 5-9-95; 8:45 am]

BILLING CODE 6712-01-M