Non-U.S.-Licensed Satellites Providing Domestic and International Service in the United States

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 25

[IB Docket No. 96-111; CC Docket No. 93-23; FCC 97-399]

Non-U.S.-Licensed Satellites Providing Domestic and International

Service in the United States

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this final rule, the Federal Communications Commission

(Commission) adopts a new standard for foreign participation in the

U.S. satellite services market consistent with the United States'

obligations under the WTO Basic Telecom Agreement. The common sense

rules and procedures we establish will provide opportunities for

foreign entities to deliver satellite services in this country. The

liberalized market conditions that will result from the WTO Basic

Telecom Agreement will allow U.S. companies to enter previously closed

foreign markets. These joint initiatives will benefit U.S. consumers by

increasing the availability of various satellite services, providing

more alternatives, reducing prices, and facilitating technological

innovation. This new environment will encourage a more competitive

satellite market in the United States, as well as spur development of

broader, more global satellite systems. It will also foster greater

opportunity for communications across national boundaries by making it

easier for consumers worldwide to gain access to people, places,

information, and ideas.

DATES: These amendments contain information collection requirements

which are not effective until approved by the Office of Management and

Budget, subject to 5 U.S.C. 801(a)(3). FCC will publish a document in

the Federal Register announcing the effective date. Public and agency

comments on the modifications to the information collections are due on

or before February 2, 1998.

FOR FURTHER INFORMATION CONTACT: Linda Haller at (202) 418-0760, Tania

Hanna at (202) 418-0762, or Laurie Sherman at (202) 418-0429 of the

International Bureau. For additional information concerning the

information collections contained in this Report and Order, contact

Judy Boley at (202) 418-0214, or via the Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report

and Order in IB Docket No. 96-111; CC Docket No. 93-23; FCC 97-399,

adopted November 25, 1997 and released November 26, 1997. The complete

text of this Report and Order is available for inspection and copying

during normal business hours in the FCC Reference Center (Room 239),

1919 M Street, N.W. Washington, D.C., and also may be purchased from

the Commission's copy contractor, International Transcription Service,

Inc. (ITS, Inc.), 1231 20th Street, N.W., Washington, DC 20036,

telephone: 202-857-3800; facsimile: 202-857-3805.

This Report and Order contains a modified information collection.

The Commission, as part of its continuing effort to reduce paperwork

burdens, invites the general public and the Office of Management and

Budget (OMB) to comment on the information collections contained in

this Report and Order, as required by the Paperwork Reduction Act of

1995, Public Law 104-13. Public and agency comments are due on or

before February 2, 1998; OMB notification of action is due February 2,

1998. Comments should address: (a) Whether the collection of

information is necessary for the proper performance of the functions of

the Commission, including whether the information shall have practical

utility; (b) the accuracy of the Commission's burden estimates; (c)

ways to enhance the quality, utility, and clarity of the information

collected; and (d) ways to minimize the burden of the collection of

information on the respondents, including the use of automated

collection techniques or other forms of information technology.

This Report and Order contains modifications to approved

collections and has been submitted to the Office of Management and

Budget for review under Section 3507(d) of the Paperwork Reduction Act

(44 U.S.C. 3507(d)). For copies of the submissions contact Judy Boley

at (202) 418-0214. A copy of any comments filed with the Office of

Management and Budget should also be sent to the following address at

the Commission: Federal Communications Commission, Performance

Evaluation and Records Management Branch, Room 234, Paperwork Reduction

Project, OMB No. 3060-0678, Washington, D.C. 20554. For further

information contact Judy Boley, (202) 418-0214.

OMB Approval Number: 3060-0678.

[[Page 64168]]

Title: Commission's Rules and Regulations for Satellite

Applications and Licensing Procedures.

Form Number: 312.

Type of Review: Revision of existing collections.

Respondents: Businesses or other for profit organizations,

including small businesses, governments.

Number of Respondents: 1,310.

Estimated Time Per Response: The Commission estimates that all

respondents will hire an attorney or legal assistant to complete the

form. The time to retain these services is 2 hours per respondent.

Total Annual Burden: 2,620 hours.

Estimated Costs Per Respondent: This includes the charges for

hiring an attorney, legal assistant, or engineer at $150 an hour to

complete the submissions. The estimated average time to complete the

Form 312 is 11 hours per response. The estimated average time to

complete space station submissions is 20 hours per response. The

estimated average time to prepare submissions using non-U.S. licensed

satellites is 22 hours per response. The estimated average time to

complete the ASIA submission is 24 hours per response. Fee amounts vary

by type of service and application. Total fee estimates for industry

are approximately $5,800,000.00.

Needs and Uses: In accordance with the Communications Act, the

information collected will be used by the Commission in evaluating

applications requesting authority to operate pursuant to part 25 of the

Commission's rules. The information will be used to determine the

legal, technical, and financial ability of the applicants and will

assist the Commission in determining whether grant of such

authorizations are in the public interest.

Summary of Report and Order

1. In this Report and Order, the Commission takes an historic step

by implementing the market opening commitments made by the United

States in the World Trade Organization (WTO) Agreement on Basic

Telecommunications Services (WTO Basic Telecom Agreement).1

The WTO Basic Telecom Agreement, which will take effect on January 1,

1998,2 is the culmination of the efforts of the United

States and 68 other WTO Members to bring competition to global markets

for telecommunications services, including satellite services. The WTO

Basic Telecom Agreement is centered on the principles of open markets,

private investment, and competition. It covers nations that account for

90 percent of worldwide telecommunications services revenues. By

opening markets worldwide, the WTO Basic Telecom Agreement will allow

new entrants to deploy innovative, cost-effective technologies, and

thereby advance the growth of satellite services around the globe.

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\1\ The results of the WTO basic telecommunications services

negotiations are incorporated into the General Agreement on Trade in

Services (GATS) by the Fourth Protocol to the GATS (April 30, 1996),

36 I.L.M. 336 (1997) (the ``Fourth Protocol to the GATS''). These

results, as well as the basic obligations contained in the GATS, are

referred to in this summary as the ``WTO Basic Telecom Agreement.''

\2\ See para.3 of the Fourth Protocol to the GATS.

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2. The Commission is optimistic that global implementation of the

WTO Basic Telecom Agreement will result in significant worldwide

benefits to consumers and providers. At the same time, it recognizes

that much work needs to be done to ensure that the promise of the WTO

Basic Telecom Agreement is fulfilled. With this Report and Order and

the companion Foreign Participation in the U.S. Telecommunications

Market Report and Order,3 the Commission has implemented the

letter and the spirit of the market opening commitments made by the

United States. The Commission expects that foreign entities will begin

to enter and compete in the U.S. market soon after January 1, 1998. The

Commission also expects that U.S. providers will likewise be able to

enter and compete in previously-closed foreign markets.

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\3\ Foreign Participation in the U.S. Telecommunications Market

Report and Order, FCC 97-398 (released November 26, 1997) (Foreign

Participation Order).

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3. Under the terms of the WTO Basic Telecom Agreement, the United

States has committed to allow foreign suppliers to provide a broad

range of basic telecommunications services, including satellite

services, in the United States. In return, most of the world's major

trading nations have made binding commitments to move from monopoly

provision of basic telecommunications services to open entry and

procompetitive regulation of these services. In this Report and Order,

the Commission implements the United States' commitments to provide

access to the U.S. market for satellite services by establishing a

framework for assessing applications by non-U.S. licensed satellite

systems to serve the United States.

4. The common sense policies and rules the Commission adopts will

produce substantial public interest benefits for U.S. consumers. First,

they will facilitate greater competition in the U.S. satellite services

market. Enhanced competition in the U.S. market, in turn, will provide

users more alternatives in choosing communications providers and

services, as well as reduce prices and facilitate technological

innovation. In addition to encouraging a more competitive satellite

market in the United States, this new environment will spur development

of broader, more global satellite systems. These advancements will

foster greater global community benefits by providing users, ranging

from individual consumers and businesses to schools and hospitals,

increased access to people, places, information, and ideas worldwide.

5. In the companion Foreign Participation Order, the Commission

takes parallel steps to carry out the market opening commitments made

by the United States in the WTO Basic Telecom Agreement. That order

establishes a framework for facilitating entry into the U.S. market by

foreign entities for provision of telecommunications services (other

than satellite services). As in the companion order, in this Report and

Order the Commission adopts for satellite services an approach that

encourages foreign entry. Both decisions are guided by the common

objective of promoting competition in the U.S. market, and achieving a

more competitive global market for all basic telecommunications

services.

6. While the United States was negotiating the WTO Basic Telecom

Agreement, the Commission was exploring measures to increase

opportunities for foreign entry in the United States satellite services

market. The Commission began this proceeding in May 1996 by issuing a

Notice of Proposed Rulemaking.4 The NPRM proposed a uniform

framework for permitting foreign-licensed satellite systems to serve

the United States. Adopted when only a few of the world's satellite

markets were open to competition by U.S. providers, the NPRM proposed

to evaluate the effective competitive opportunities (ECO) in the

country in which the foreign satellite was licensed (the ECO-Sat test)

prior to granting an application to serve the United States. After the

conclusion of the WTO Basic Telecom Agreement, the Commission issued a

Further Notice of Proposed Rulemaking revising its proposals based on

the

[[Page 64169]]

market-opening changes that should result from the

Agreement.5 Both the NPRM and the FNPRM reflect the

Commission's continuing objective to foster development of innovative

satellite communications services for U.S. consumers through fair and

vigorous competition among multiple service providers, including

foreign-licensed satellites.

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\4\ In the Matter of Amendment of the Commission's Regulatory

Policies to Allow Non-U.S. licensed Space Stations to Provide

Domestic and International Satellite Service in the United States,

Notice of Proposed Rulemaking, 11 FCC Rcd 18178 (1996), 61 FR 32398

(June 24, 1996) (NPRM).

\5\ Amendment of the Commission's Regulatory Policies to Allow

Non-U.S.-Licensed Space Stations to Provide Domestic and

International Satellite Service in the United States, Further Notice

of Proposed Rulemaking, FCC 97-252 (released July 18, 1997), 62 FR

40494 (July 29, 1997) (FNPRM).

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7. Specifically, in this Report and Order, the Commission adopts a

framework under which it will consider requests for access by non-U.S.

licensed satellites 6 into the United States. As required by

Title III of the Communications Act of 1934, as amended (Communications

Act), we will examine all requests to determine whether grant of

authority is consistent with the public interest, convenience and

necessity.7 In making this determination, we will consider

public interest factors such as the effect on competition in the United

States, spectrum availability, eligibility and operating requirements,

as well as national security, law enforcement, and trade and foreign

policy concerns raised by the Executive Branch. The Commission adopts a

presumption that entry by WTO Member satellite systems will promote

competition in the U.S. satellite services market. Opposing parties may

rebut the presumption by showing that granting the application would

cause competitive harm in the U.S. satellite services market. Although

we find that license conditions will generally provide sufficient

protection against anticompetitive conduct, we recognize the

possibility that circumstances might arise in which conditions might

not adequately constrain the potential for anticompetitive harm in the

U.S. market. In such cases, the Commission reserves the right to attach

additional conditions to a license grant, or in the exceptional case in

which grant would lose a very high risk to competition, deny an

application.

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\6\ The phrase ``non-U.S.'' licensed satellite system or

operator means one that does not hold a commercial space station

license from the Commission. By contrast, a ``U.S.'' satellite

system or operator means one whose space station is licensed by the

Commission.

\7\ 47 U.S.C. 301, et. seq.

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8. The Commission will apply the presumption that entry will

promote competition to affiliates of intergovernmental satellite

organizations (IGO) licensed by WTO Members. For applications from

COMSAT to provide U.S. domestic service via INTELSAT or Inmarsat, the

Commission will require COMSAT to waive its immunity from suit and

demonstrate that the service will enhance competition in the U.S.

market. For satellites licensed by non-WTO Members and for all

satellites providing Direct-to-Home (DTH), Direct Broadcasting

Satellite (DBS), and Digital Audio Radio Services (DARS), we will

examine whether U.S. satellites have effective competitive

opportunities in the relevant foreign markets to determine whether

allowing the foreign-licensed satellite to serve the United States

would satisfy the competition component of the public interest

analysis.

9. This new framework is based on consideration of over 100

comments submitted from parties around the world over the course of

more than a year, is grounded in the public interest requirements of

the Communications Act and the procompetitive principles of the WTO

Basic Telecom Agreement, sets forth clear criteria for entry into the

United States by various types of non-U.S. satellites, delineates the

applicable Commission rules and describes in detail the procedures for

applications to provide service in the United States using a non-U.S.

licensed satellite. This framework will largely replace the

Commission's current approach of reviewing applications involving non-

U.S. licensed satellites based on the individual circumstances before

it. The Commission expects that our new framework will encourage and

ease entry by non-U.S. satellites into the U.S. market and that the

occasional request the Commission receives today involving a non-U.S.

licensed satellite will become more common. At the same time, the

Commission plans to continue to look carefully at market opening

measures enacted by the rest of the world.

10. Policy Objectives. The purpose of this Report and Order is to

establish a new framework to facilitate competitive entry in the U.S.

satellite services market by non-U.S. licensed satellites, consistent

with the WTO Basic Telecom Agreement. Providing opportunities for non-

U.S. licensed satellites to deliver services in this country should

bring U.S. consumers the benefits of enhanced competition and afford

greater opportunities for U.S. companies to enter previously closed

foreign markets, thereby stimulating a more competitive global

satellite services market.

11. WTO Members. The Commission adopts an open entry standard for

applicants seeking to access satellite systems licensed by WTO Members

to provide satellite services covered under the WTO Basic Telecom

Agreement. An open entry policy will enable U.S. consumers to enjoy the

benefits of increased competition in U.S. markets. The Commission

presumes that entry will enhance competition in light of the fact that

so many WTO Members have committed to lifting entry restrictions and

adopting competitive safeguards. Where necessary to constrain the

potential for anticompetitive harm in the U.S. market for satellite

services, the Commission reserves the right to attach conditions to a

grant of authority, and in the exceptional case in which an application

poses a very high risk to competition, to deny an application.

12. Non-WTO Members. The Commission continues to be concerned about

effective competitive opportunities for U.S. satellite systems in non-

WTO Member markets. It finds that the market conditions that existed

when the Commission proposed to adopt an ECO-Sat test, which determines

whether there are effective competitive opportunities for U.S.

satellites in the foreign market, have not changed sufficiently with

respect to countries that are not members of the WTO. The Commission

therefore finds that it will serve the goals of our international

satellite policy to apply the ECO-Sat test in the context of

applications from non-WTO Member entities and encourage such countries

to open their markets to competition.

13. Services Not Covered by the WTO Basic Telecom Agreement. The

Commission finds that circumstances that existed when it proposed to

adopt an ECO-Sat test have not changed sufficiently with respect to DTH

services, DBS services, and DARS. Commitments made as part of the WTO

Basic Telecom Agreement were not sufficient to enable it to adopt a

presumption of entry for these services. The Commission will apply the

ECO-Sat test to applications to provide these services through all

satellite systems, whether or not they are systems of WTO Members.

14. Intergovernmental Satellite Organizations (IGOs) and IGO

Affiliates. Prior to acting on any application from COMSAT to provide

domestic service via INTELSAT or Inmarsat, the Commission will require

COMSAT to make an appropriate waiver of its immunity from suit,

including suit under the U.S. antitrust laws. The Commission will then

look to COMSAT to show that entry into the domestic market would

promote competition and would otherwise be in the public interest. The

Commission will treat IGO

[[Page 64170]]

affiliates that are licensed by WTO Members as it would similar systems

licensed by WTO Members. In evaluating the competition component of an

application involving an IGO affiliate, the Commission will consider

any potential anticompetitive or market distorting consequences of a

continued relationship or connection between an IGO and its affiliate.

15. Additional Public Interest Factors and Operating Requirements.

In evaluating requests to serve the United States using a non-U.S.

satellite, the Commission also will consider additional public interest

factors, including spectrum availability, eligibility requirements such

as legal, technical and financial qualifications, operating

requirements, and national security, law enforcement, foreign policy

and trade policy concerns. In applying these factors, the Commission

will treat non-U.S. satellites as it would U.S. licensed satellites at

the request stage, as well as after a system is operational. Thus, non-

U.S. systems will be required to comply with the same financial,

technical and legal qualifications, observe the prohibition against

exclusive service arrangements and comply with other generally-

applicable service rules.

16. Access Procedures. In implementing this framework, the

Commission will not require space stations licensed by another country

or administration to obtain separate and duplicative U.S. space station

licenses. Rather, the Commission will license earth stations in the

United States to operate with these satellites. Further, the Commission

will permit operators of existing or planned non-U.S. space stations to

participate in U.S. space station processing rounds, where the

Commission considers competing applications to operate space stations

that will offer a specific satellite service in particular frequency

bands. In addition, earth station entities may file an earth station

application either in a processing round or separately where the non-

U.S. satellite is already in orbit.

17. This Report and Order contains a modified information

collection. As part of its continuing effort to reduce paperwork

burdens, the Commission invites the general public and the Office of

Management and Budget (OMB) to comment on the information collections

contained in this Report and Order, as required by the Paperwork

Reduction Act of 1995, Public Law 104-13. Public and agency comments

are due on or before February 2, 1998. OMB comments are due on or

before February 2, 1998. Comments should address: (a) Whether the

proposed collection of information is necessary for the proper

performance of the functions of the Commission, including whether the

information shall have practical utility; (b) the accuracy of the

Commission's burden estimates; (c) ways to enhance the quality,

utility, and clarity of the information collected; and (d) ways to

minimize the burden of the collection of information on the

respondents, including the use of automated collection techniques or

other forms of information technology.

18. Written comments by the public on the proposed and/or modified

information collections are due to Commission on or before February 2,

1998. In addition to filing comments with the Secretary, a copy of any

comments on the information collections contained herein should be

submitted to Judy Boley, Federal Communications Commission, Performance

Evaluation and Records Management Branch, Room 234, 1919 M Street,

N.W., Washington, D.C. 20554, or via the Internet to [email protected] and

to Timothy Fain, OMB Desk Officer, 10236 NEOB, 725 17th Street, N.W.,

Washington, DC 20503 or via the Internet to [email protected]. NOTE:

OMB is required to make a decision concerning the modified collection

of information contained in this Report and Order between 30 and 60

days after publication of this document in the Federal Register.

Therefore, a comment to OMB is best assured of having its full effect

if OMB receives it within 30 days of publication.

Final Regulatory Flexibility Analysis

19. As required by Section 603 of the Regulatory Flexibility Act, 5

U.S.C. Sec. 603 (RFA), the Commission prepared an Initial Regulatory

Flexibility Analysis (IRFA) in the NPRM in IB Docket No. 96-

111.8 After the conclusion of the WTO Basic Telecom

Agreement, the Commission released the FNPRM requesting comment on the

proposals in the FNPRM, including the IRFA.9 The

Commission's Final Regulatory Flexibility Analysis (FRFA) in this

Report and Order conforms to the RFA, as amended by the Contract with

America Advancement Act of 1996 (CWAAA), Public Law 104-121, 110 Stat.

847 (1996).10

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\8\ See supra n.4.

\9\ See supra n.5.

\10\ See 5 U.S.C. Sec. 603. The RFA, see 5 U.S.C. Sec. 601 et.

seq., has been amended by the Contract with America Advancement Act

(CWAAA) of 1996, Public Law 104-121, 110 Stat. 847 (1996). Title II

of the CWAAA is the Small Business Regulatory Enforcement Fairness

Act of 1996 (SBREFA).

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I. Need for, and Objectives of, the International Satellite

Services Report and Order

20. In this Report and Order, the Commission promulgates rules for

non-U.S. licensed satellites to provide satellite services in the

United States. This action will advance the growth of global satellite

services and create greater competition in the U.S. satellite market.

Enhanced competition in the U.S. market will benefit U.S. consumers,

including small businesses, by increasing the availability of various

satellite services, providing more alternatives in the selection of

communications services, reducing prices, and facilitating

technological innovation. The Commission adopts these rules in part to

reflect the liberalized market environment that will result from the

WTO Basic Telecom Agreement. Specifically, the Commission adopts an

open entry standard for applicants seeking to access satellite systems

from WTO Members providing satellite services covered by the U.S.

Schedule of Commitments under the WTO Basic Telecom Agreement (Fixed

Satellite Services and Mobile Satellite Services (MSS)).11

The Commission presumes that entry will be competitive in these cases.

The Commission reserves the right, however, to attach conditions to a

grant of authority or, in exceptional circumstances, where conditions

may not adequately constrain the potential for anticompetitive harm in

the U.S. market, to deny an application. In deciding whether to grant

non-WTO country satellites access to the U.S. market or whether to

allow any non-U.S. satellite to provide non-covered services in the

United States, the Commission adopts the ``ECO-Sat test.'' This test

requires that U.S. satellite operators have ``effective competitive

opportunities'' in the foreign market before allowing a satellite

licensed by that country access into the United States.

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\11\ Non-covered services are those not contained in the U.S.

Schedule of Commitments in the WTO Basic Telecom Agreement--Direct

to Home (DTH), Direct Broadcast Service (DBS) or Digital Audio

Service (DARS).

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II. Summary of Significant Issues Raised by Public Comments in

Response to the IRFA

21. No comments were filed in direct response to the questions

posed in the IRFA in either the NPRM or the FNPRM. In reply comments to

the NPRM, however, NATSAT argues that the Commission should not apply

the ECO-Sat test to applications filed on or before

[[Page 64171]]

July 15, 1996 by ``designated entities'' to resell MSS service in the

United States.12 It claims that such an exemption would be

consistent with the directive Section 309(j) to ensure that small

businesses and minority entrepreneurs have the chance to participate in

the provision of spectrum-based services. In the Report and Order, the

Commission does not adopt an ECO-Sat test with respect to WTO-Member

satellites providing WTO-covered services. Thus, small entities may

access a large percentage of non-U.S. satellites without conducting an

ECO-Sat analysis. Moreover, an ECO-Sat analysis is a minimal burden

when compared to the possibility that unrestricted entry by foreign-

licensed satellite systems would distort competition in the United

States market.

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\12\ NATSAT NPRM Reply Comments at 11-15 citing 47 U.S.C.

Sec. 309(j).

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III. Description and Estimate of the Number of Small Entities

Subject to the Rules

22. The Commission has not developed its own definition of ``small

entity'' for purposes of licensing satellite-delivered services.

Accordingly, we rely on the definition of ``small entity'' provided

under the Small Business Administration (SBA) rules applicable to

Communications Services, Not Elsewhere Classified.13 A

``small entity'' under these SBA rules is defined as an entity with

$11.0 million or less in annual receipts.

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\13\ 1987 Standard Industrial Classification Manual; 13 CFR part

121.

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IV. Summary of Projected Reporting, Record Keeping and Other

Compliance Requirements

23. This Report and Order requires foreign-licensed systems serving

the United States to comply with the same public interest standards

that the Commission applies to U.S. satellites. First, foreign-licensed

satellite systems must comply with the same technical requirements as a

U.S.-licensed satellite system. Without examining its technical

compatibility with U.S.-licensed satellites, a foreign-licensed

satellite system may cause unacceptable interference with U.S. systems

and possible service disruptions to customers.14 Second, the

Commssion requires foreign-satellite system applicants to comply with

our financial rules, established under Section 308(b) of the

Communications Act.15 Reserving orbit locations or spectrum

for future satellites without examining whether the operator is

financially qualified to build a system, which often costs hundreds of

millions of dollars, could block entry by other United States or

foreign companies that have the financial capability to proceed,

ultimately delaying service to the public. Third, foreign-licensed

satellite systems must comply with the Commissions legal qualifications

consistent with Sections 308 and 309 of the Communications

Act.16 The purpose of requiring compliance with legal

requirements is to ensure that entities providing satellite services in

the United States will abide by Commission rules. For example, certain

information may provide relevant indicia of compliance. Violations of

law by an applicant, particularly those relating to credibility, may be

evidence that it will not comply with Commission rules. Thus, it is

vital that the Commission obtain assurance that an applicant will

follow the rules that the Commission has established over the years to

maximize the development of efficient, compatible, and innovative

satellite systems.

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\14\ Report and Order at Section III.B.3.b.

\15\ Id.

\16\ Id.

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V. Significant Alternatives and Steps Taken By Agency to Minimize

Significant Economic Impact on a Substantial Number of Small

Entities Consistent with Stated Objectives

24. The Commission will apply the same rules to foreign-licensed

systems as have been applied to U.S. licensed systems. This approach

will not impose any additional burdens on foreign-licensed satellite

systems, small or large. Earth station operators seeking to access a

non-U.S. satellite will be required to provide the same information

regarding the satellite that U.S. satellite applicants must provide.

This information is needed to ensure that transmissions from the space

station into the United States do not cause technical interference into

existing U.S. operations and that other Commission public interest

objectives are met. The Commission expects, however, that the satellite

information will be provided by the satellite operator to the earth

station applicant because of their mutual business objectives. Thus,

there will be no economic impact on small businesses because there are

no additional burdens being imposed. Certain information will not be

required. First, where the international technical coordination process

has been completed between the United States and the foreign satellite,

additional technical information about that foreign satellite is not

necessary. This is because the United States and the relevant foreign

administration exchange extensive technical data about their respective

systems during the course of the bilateral negotiations that lead up to

a coordination agreement. This technical information is sufficient for

us to determine whether the foreign satellite complies with Commission

technical rules. The Commission finds that this new framework will

benefit small businesses because earth station entities will have

greater choice of space stations to access and opportunity to benefit

from the other advantages of a more competitive market, such as reduced

prices. In addition, small, local programmers will have access to a

more competitive selection of satellite service providers. In this

regard, our measures will advance the small business goals of Section

257 of the 1996 Act.

25. Report to Congress: The Commission will send a copy of the

Report and Order including this FRFA, in a report to be sent to

Congress pursuant to the Small Business Regulatory Enforcement Fairness

Act of 1996, see 5 U.S.C. 801(a)(1)(A). A summary of the Report and

Order and this FRFA will also be published in the Federal Register, see

5 U.S.C. 604(b), and will be sent to the Chief Counsel for Advocacy of

the Small Business Administration.

Paperwork Reduction Act

26. This Report and Order contains new or modified information

collections. A request for clearance of the information collections

proposed in the FNPRM was submitted to Office of Management and Budget

(OMB) and approved on October 13, 1997.17 The changes to the

approved information collection adopted in this Report and Order will

be submitted to OMB and will become effective upon approval by OMB.

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\17\ See OMB No. 3060-0678.

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Conclusion

27. In this Report and Order, the Commission adopts a new framework

for foreign participation in the U.S. satellite services market,

consistent with the United States' obligations under the WTO Basic

Telecom Agreement. The common sense rules and procedures the Commission

establishes will provide opportunities for non-U.S. entities to deliver

satellite services in this country. The liberalized market conditions

that should result from the WTO Basic Telecom Agreement will allow U.S.

companies to enter previously closed foreign markets. These joint

initiatives will benefit U.S. consumers by increasing the availability

of various

[[Page 64172]]

satellite services, providing more alternatives, reducing prices, and

facilitating technological innovation. This new environment will

encourage a more competitive satellite market in the United States, as

well as spur development of broader, more global satellite systems. It

will also foster greater opportunity for communications across national

boundaries by making it easier for consumers worldwide to gain access

to people, places, information, and ideas.

Ordering Clauses

28. Accordingly, it is Ordered that, pursuant to Sections 1, 2,

4(i), 303(r), 308, 309, and 310 of the Communications Act of 1934, as

amended, 47 U.S.C. Secs. 151, 152, 154(i), 303(r), 308, 309, and 310,

the policies, rules and requirements discussed herein are adopted and

part 25 of the Commission's rules, 47 CFR part 25, is amended as set

forth below.

29. It is further ordered that authority is delegated to the Chief,

International Bureau as specified herein, to effect the decisions as

set forth above.

30. It is further ordered that the Commission's Office of Managing

Director shall send a copy of this Report and Order, including the

Final Regulatory Flexibility Analysis, to the Chief Counsel for

Advocacy of the Small Business Administration.

31. It is further ordered that the amendments to part 25 of the

Commission's rules, 47 CFR part 25, FCC Form 312 and the Commission's

policies, rules and requirements established in this Report and Order

shall take effect January 5, 1998, or in accordance with the

requirements of 5 U.S.C. Sec. 801(a)(3) and 44 U.S.C. Sec. 3507,

whichever is later. The Commission will publish a notice, following

publication of this Report and Order in the Federal Register,

announcing the effective date. The Commission reserves the right to

reconsider the effective date of this decision if the WTO Basic Telecom

Agreement does not take effect on January 1, 1998.

List of Subjects in 47 CFR Part 25

Satellites.

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

Rule Changes

Part 25 of Chapter I of title 47 of the Code of Federal Regulations

is amended as follows:

PART 25--SATELLITE COMMUNICATIONS

1. The authority citation for part 25 continues to read as follows:

Authority: Secs. 25.101 to 25.601 issued under Sec. 4, 48 Stat.

1066, as amended; 47 U.S.C. 154. Interpret or apply secs. 101-104,

76 Stat. 419-427; 47 U.S.C. 701-744; 47 U.S.C. 554.

2. Section 25.113 is amended by revising the first sentence of

paragraph (b) to read as follows:

Sec. 25.113 Construction permits, station licenses, launch authority.

* * * * *

(b) Construction permits are not required for satellite earth

stations that operate with U.S.-licensed or non-U.S. licensed space

stations. * * *

* * * * *

3. Section 25.115 is amended by revising the first sentence of

paragraph (c) to read as follows:

Sec. 25.115 Application for earth station authorizations.

* * * * *

(c) Large Networks of Small Antennas operating in the 12/14 GHz

frequency bands with U.S.-licensed or non-U.S. licensed satellites for

domestic services. * * *

* * * * *

4. Section 25.130 is amended by revising the first sentence of

paragraph (d) to read as follows:

Sec. 25.130 Filing requirements for transmitting earth stations.

* * * * *

(d) Transmissions of signals or programming to non-U.S. licensed

satellites, and to and/or from foreign points by means of U.S.-licensed

fixed satellites may be subject to restrictions as a result of

international agreements or treaties. * * *

* * * * *

5. Section 25.131 is amended by revising paragraphs (b) and (j) to

read as follows:

Sec. 25.131 Filing requirements for receive-only earth stations.

* * * * *

(b) Except as provided in paragraph (j) of this section, receive-

only earth stations in the fixed-satellite service that operate with

U.S.-licensed satellites may be registered with the Commission in order

to protect them from interference from terrestrial microwave stations

in bands shared co-equally with the fixed service in accordance with

the procedures of Secs. 25.203 and 25.251 through 25.256 of this part.

* * * * *

(j) Receive-only earth stations operating with non-U.S. licensed

space stations shall file an FCC Form 312 requesting a license or

modification to operate such station. Receive-only earth stations used

to receive INTELNET I service from INTELSAT space stations need not

file for licenses. See Deregulation of Receive-Only Satellite Earth

Stations Operating with the INTELSAT Global Communications Satellite

System, Declaratory Ruling, RM No. 4845, FCC 86-214 (released May 19,

1986) available through the International Reference Center, FCC, 2000 M

St. NW., Washington, DC 20554.

6. A new Sec. 25.137 is added to read as follows:

Sec. 25.137 Application requirements for earth stations operating with

non-U.S. licensed space stations.

(a) Earth station applicants or entities filing a ``letter of

intent'' requesting authority to operate with a non-U.S. licensed space

station to serve the United States must attach an exhibit with their

FCC Form 312 application with information demonstrating that U.S.-

licensed satellite systems have effective competitive opportunities to

provide analogous services in:

(1) The country in which the non-U.S. licensed space station is

licensed; and

(2) All countries in which communications with the U.S. earth

station will originate or terminate. The applicant bears the burden of

showing that there are no practical or legal constraints that limit or

prevent access of the U.S. satellite system in the relevant foreign

markets. The exhibit required by this paragraph must also include a

statement of why grant of the application is in the public interest.

This paragraph shall not apply with respect to requests for authority

to operate using a non-U.S. licensed satellite that is licensed by or

seeking a license from a country that is a member of the World Trade

Organization for services covered under the World Trade Organization

Basic Telecommunications Agreement.

(b) Earth station applicants, or entities filing a ``letter of

intent,'' requesting authority to operate with a non-U.S. licensed

space station must attach to their FCC Form 312 an exhibit providing

legal, financial, and technical information for the non-U.S. licensed

space station in accordance with part 25 and part 100 of this Chapter.

If the non-U.S. licensed space station is in orbit and operating, the

applicant need not include the financial information specified in

Secs. 25.114 (c)(17) and (c)(18) of this part. If the international

coordination process for the non-U.S.

[[Page 64173]]

licensed space station has been completed, the applicant need not

include the technical information specified in Secs. 25.114 (c) (5

through 11) and (c)(14) of this part, unless the technical

characteristics differ from the characteristics established in that

process.

(c) A non-U.S. licensed satellite system seeking to serve the

United States can be considered contemporaneously with other U.S.

satellite systems if it is:

(1) In orbit and operating;

(2) Has a license from another administration; or

(3) Has been submitted for coordination to the International

Telecommunication Union.

[FR Doc. 97-31800 Filed 12-3-97; 8:45 am]

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