Licensing Under Title III of the Communications Act of 1934. as amended, of Private Transmit/Receive Earth Stations Operating with the INTELSAT Global Communications Satellite System

3 FCC Red No. 6

Federal Communications Commission Record

FCC 88-92

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of

Licensing Under Title III of the

File No. I-S-P-86-006

Communications Act of 1934. as

amended, of Private Transmit/Receive

Earth Stations Operating with the

INTELSAT Global Communications

Satellite System

DECLARATORY RULING

Adopted: March 1, 1988;

Released: March 15, 1988

By the Commission:

1. Reuters U.S., Inc. (Reuters) has requested that the

Commission issue a declaratory ruling that it has the

authority under Title III of the Communications Act of

1934

to

license

private,

non-common

carrier,

transmit/receive earth stations in the International Fixed

Satellite Service for use with the satellites of the Interna

tional

Telecommunications

Satellite

Organization

(INTELSAT). Comments on Reuters' petition were filed

by Comsat International Communications. Inc. (CICI);

ITT World Communications Inc. (ITT); Overseas Tele

communications, Inc. (OTI); TRT Telecommunications

Corporation (TRT); Satellite Transmission and Reception

Specialists (STARS); Equatorial Communications Services

(Equatorial); and Capital Cities/ABC, Inc., CBS and NBC,

in a joint petition (the television networks). Reply com

ments were filed by Reuters and OTI.'

2. Reuters is the indirect, wholly-owned United States

subsidiary of Reuters Limited, a United Kingdom corpora

tion engaged in providing news, photo and information

services to newspapers and financial institutions through

out the United States and worldwide. Reuters states that

its existing trans-Atlantic communications requirements

are of sufficient volume and specialization to justify, on

economic and operational grounds, the lease of full-time

INTELSAT circuits from the Comsat Space Communica

tions Division, and the construction and operation of a

private, dedicated earth station facility for use with IN-

TELNET and IBS services

ates and worldwide. Reuters states that

its existing trans-Atlantic communications requirements

are of sufficient volume and specialization to justify, on

economic and operational grounds, the lease of full-time

INTELSAT circuits from the Comsat Space Communica

tions Division, and the construction and operation of a

private, dedicated earth station facility for use with IN-

TELNET and IBS services. Reuters currently operates

private earth station facilities for the domestic and au

thorized transborder distribution of its services and has

technically qualified personnel available to operate dedi

cated international earth station facilities. Accordingly,

Reuters seeks a determination that the Commission has

the authority to license private, non-common carrier earth

stations for operation with the INTELSAT system under

Title III of the Communications Act of 1934. notwith

standing Section 201(c)(7) of the Communications Satellite

Act of 1962 (Satellite Act), 47 U.S.C. §721(c)(7). which

provides that the Commission shall license "satellite termi

nal stations" used with the INTELSAT satellite system

either to Comsat or to one or more authorized common

carriers.^

SUMMARY OF ARGUMENTS

3. Reuters contends that, absent an independent limita

tion on the Commission's authority under Title III of the

Communications Act. the Commission is empowered to

license earth stations on either a private or common car

rier basis as may be consistent with the public interest,

convenience and necessity. Reuters claims that the Com

mission's decision to permit the offering of transponder

capacity by separate satellite systems on both a common

carrier and non-common carrier basis contemplates the

licensing of non-common carrier earth stations pursuant to

Title III authority

tations on either a private or common car

rier basis as may be consistent with the public interest,

convenience and necessity. Reuters claims that the Com

mission's decision to permit the offering of transponder

capacity by separate satellite systems on both a common

carrier and non-common carrier basis contemplates the

licensing of non-common carrier earth stations pursuant to

Title III authority. ^ Reuters argues that, "while the issue

was not squarely addressed," the availability of private

earth stations used in connection with separate satellite

system transponder capacity suggests that the Commission

proposes to license earth stations in the International

Fixed Satellite Service on a non-common carrier basis,

with INTELSAT space stations as authorized points of

communication.

4. Reuters maintains that Section 201(c)(7) of the Sat

ellite Act is not an independent limitation on the Commis

sion's

licensing powers under

Title

III

of the

Communications Act. Reuters avers that the plain lan

guage and relevant legislative history of the Satellite Act

indicate that its provisions were intended to supplement

rather than supplant the Commission's Title III licensing

authority, and that the specific legislative history of Sec

tion 201(c)(7) reveals that Congress' sole concern was that

common carriers such as AT&T not be preferred over

Comsat in the granting of licenses to operate earth station

facilities. Reuters contends that there is no indication that

Congress affirmatively intended to prohibit the licensing of

private earth stations for operation with the INTELSAT

system, since Congress did not envision the development

of satellite communication technologies and economies

that would support the implementation of private earth

station facilities. Reuters cites a recent Commission ruling''

for the proposition that, in situations not clearly addressed

by Congress in the Satellite Act. the Commission must be

guided by its plenary Title III authority to regulate inter

national earth station operations.

5

development

of satellite communication technologies and economies

that would support the implementation of private earth

station facilities. Reuters cites a recent Commission ruling''

for the proposition that, in situations not clearly addressed

by Congress in the Satellite Act. the Commission must be

guided by its plenary Title III authority to regulate inter

national earth station operations.

5. In addition, referring to the Commission's liberaliza

tion of its earth station ownership policy to permit the

construction and operation of earth stations by common

carriers outside of the Earth Station Ownership Commit

tee (ESOC), Reuters alleges that identical economic and

policy considerations support private earth station licens

ing. Reuters states that private earth stations will enable

users to meet communications requirements at lower costs

and to design and implement customized and innovative

technologies. Reuters contends that the Commission may

license private IBS earth stations pursuant to the technical

classification scheme adopted in the Earih Station Owner

ship proceeding,^ where it concluded that "with respect to

.

. IBS earth station applications the issue of technical

inefficiency is generally irrelevant." Finally, Reuters points

out that the Commission's main concern in the Earth

Station Ownership proceeding was the potential division of

the market for multi-purpose earth station services, divert

ing traffic from the existing ESOC earth stations. Reuters

maintains that a private international earth station by

definition would not provide multi-purpose earth station

services in competition with ESOC, since it would not be

connected with the public switched network.

1585

rth

Station Ownership proceeding was the potential division of

the market for multi-purpose earth station services, divert

ing traffic from the existing ESOC earth stations. Reuters

maintains that a private international earth station by

definition would not provide multi-purpose earth station

services in competition with ESOC, since it would not be

connected with the public switched network.

1585

FCC 88-92

Federal Communications Commission Record

3 FCC Red No. 6

6. Equatorial and the television networks support Reu

ters' position that the Commission possesses the statutory

authority to grant licenses to non-common carrier users to

construct and operate international transmit, receive earth

stations. They argue that licensing of INTELSAT earth

stations to non-carriers is consistent with recent Commis

sion actions in the Authorized User." Earth Siatton Owner

ship. [nternuttonal Compeiittve Carrter

and Separate

Systems proceedings, through which flexibility and com

petitive opportunities were introduced into the interna

tional communications environment. They claim that it

makes little economic or technical sense, in situations

where a user intends to dedicate an on-premise earth

station to its own purposes and where that user is techni

cally competent to transmit to a satellite, to require the

Imposition of a carrier "middleman" between the user and

the INTELSAT system. The television networks claim that

experienced users will benefit from private licensing of

earth stations through the ability to control the facility

location, through the reduction of interconnection costs,

and through the ability to tailor and modify the earth

station to meet specialized needs. Equatorial urges that the

Commission broaden the scope of its declaratory ruling to

include INTELNET II transmit earth stations as well as

IBS and television earth stations.

7. CICI, LIT. OTI. TRT and STARS oppose Reuters"

request

control the facility

location, through the reduction of interconnection costs,

and through the ability to tailor and modify the earth

station to meet specialized needs. Equatorial urges that the

Commission broaden the scope of its declaratory ruling to

include INTELNET II transmit earth stations as well as

IBS and television earth stations.

7. CICI, LIT. OTI. TRT and STARS oppose Reuters"

request. The principal argument against Reuters' proposal

is that the Commission does not possess the statutory

authority to license private earth stations to operate with

the INTELSAT system. They argue that the plain lan

guage of Section 201(c)(7) of the Satellite Act and its

legislative history preclude the licensing of INTELSAT

transmit/receive earth stations to entities other than au

thorized international common carriers and Comsat. They

contend that private earth station licensing is inconsistent

with the regulatory scheme of the Satellite Act, in that

only Comsat and the carriers are regulated entities under

the Act. The opponents further point, out that Congress

expressly authorized the licensing of private earth stations

in the 1978 amendments to the Satellite Act which imple

mented INMARSAT; they claim that Congress consciously

distinguished between INMARSAT and INTELSAT earth

stations and authorized non-carrier licensing of the former

but not of the latter. Similarly, reference is made to

Section 305 of the Satellite Act, pursuant to which Comsat

is authorized to make space segment available to carriers

and "other authorized entities." The opponents argue that

the absence of such language in Section 2()l(c)(7) dem

onstrates that Congress did not intend to permit the li

censing of private earth stations. The commenters also

point to Section 401 of the Act, which provides that in the

event of a conflict between the Satellite Act and the

Communications Act, the provisions of the Satellite Act

are controlling

r authorized entities." The opponents argue that

the absence of such language in Section 2()l(c)(7) dem

onstrates that Congress did not intend to permit the li

censing of private earth stations. The commenters also

point to Section 401 of the Act, which provides that in the

event of a conflict between the Satellite Act and the

Communications Act, the provisions of the Satellite Act

are controlling. Moreover, they contend that as a matter

of statutory construction, the more specific provision, here

Section 201tc)(7), overrides the general licensing provi

sions in Title III of the Communications Act.

8. The opponents further claim that, in its Authorized

User and Earth Station Ownership proceedings, the Com

mission has consistently identified its earth station licens

ing authority as deriving from Section 201(c)(7), which

names only Comsat and the carriers as potential licensees.

They claim that Reuters erroneously relies on the Separate

Systems Dectsion. which dealt with the establishment of

private commercial satellite systems separate from the IN

TELSAT system, not with the licensing of earth stations

within the INTELSAT system. Similarly, they distinguish

the Recetve - Only Earth Stattons ruling as involving a

limited class of small, non-standard, receive-only earth

stations used in connection with the INTELNET I service,

which the Commission found were not "satellite terminal

stations" to which Section 201(c)(7) applies.

9. The opposing parties also advance arguments against

grant of the Reuters request on public interest grounds.

They claim that Reuters has neither established a need for

private interntional earth station licensing, nor shown that

existing carriers cannot meet Reuters' communications re

quirements. The parties point out that the Commission

has recently streamlined the tariff and facility regulation

of non-dominant international carriers," and that Reuters

may become a common carrier with little difficulty and

operate an INTELSAT earth station on that basis

eed for

private interntional earth station licensing, nor shown that

existing carriers cannot meet Reuters' communications re

quirements. The parties point out that the Commission

has recently streamlined the tariff and facility regulation

of non-dominant international carriers," and that Reuters

may become a common carrier with little difficulty and

operate an INTELSAT earth station on that basis. They

contend that private licensing will harm existing IBS car

riers in that large users will construct private systems and,

as a result, small and medium-sized users will be harmed

if IBS carriers cannot remain economically viable. They

state that the INTELSAT system must be protected against

jamming and unauthorized reception caused by private

end users who might not comply with INTELSAT'S tech

nical and operational requirements.

10. Finally, the opposing commenters argue that, even if

the Commission were to possess statutory authority to

license private earth stations, it may not modify existing

policy without a formal Rule Making proceeding. CICI in

particular argues that there are unanswered public policy

questions concerning the impact of private licensing on

the earth station ownership policy, on ESOC dissolution

negotiations, on the implementation of operating agree

ments between existing carriers and overseas administra

tions, and on the Commission's ability to maintain

equitable access to the LNTELSAT system, which can only

be addressed in a Rule Making.

DISCUSSION

11. Reuters seeks a declaratory ruling that this Commis

sion has authority to authorize the construction and opera

tion of private, non-common carrier transmit/receive

international earth stations for use with the INTELSAT

system. After reviewing the pertinent statutes and the

comments of all parties, we conclude that the Satellite Act

does not preclude us from licensing such international

earth stations to entities other than Comsat and the car

riers for use with INTELNET and IBS services.

12

uction and opera

tion of private, non-common carrier transmit/receive

international earth stations for use with the INTELSAT

system. After reviewing the pertinent statutes and the

comments of all parties, we conclude that the Satellite Act

does not preclude us from licensing such international

earth stations to entities other than Comsat and the car

riers for use with INTELNET and IBS services.

12. The private, dedicated earth station facility proposed

by Reuters is located at Hauppauge, New York, and will

be used initially to establish INTELNET I service from the

U.S. to Latin America and the Caribbean within the west

hemispheric footprint of INTELSAT VA satellites in the

Atlantic Ocean Region.'" These INTELNET circuits will

be used for the point-to-multipoint, U.S.-outbound dis

tribution of

news-wire, news-photo, and financial-

information services to Reuters' subscribers. For the

news-wire and news-photo services, private-line, common-

carrier circuits will be used to connect Reuters' technical

center at Hauppauge with its news offices in the United

States and with its Picture Bureau in Washington, D.C.

For its financial-information service, Reuters will acquire

from carriers private-line circuits to feed data into Reu

ters' computers co-located with the proposed earth station

at Hauppauge. While Reuters is currently authorized to

provide domestic financial-information services using

1586

3 FCC Red No. 6

Federal Communications Commission Record

FCC 88-92

computer and earth station facilities located at the Haup-

pauge center. Reuters states that it will not interconnect

its domestic system with the proposed international earth

station. The foreign receive-only earth stations will gen

erally be located on the premises of Reuters" subscribers,

except in situations where the subscriber is required to

obtain private-line circuits from the local PIT.

13

omputer and earth station facilities located at the Haup-

pauge center. Reuters states that it will not interconnect

its domestic system with the proposed international earth

station. The foreign receive-only earth stations will gen

erally be located on the premises of Reuters" subscribers,

except in situations where the subscriber is required to

obtain private-line circuits from the local PIT.

13. Section 201(c)(7) of the Satellite Act provides that

"in its administration of the provisions of the Communica

tions Act [the Federal Communications Commission] shall

.

. . grant appropriate authorization for the construction

and operation of each satellite terminal station, either to

the corporation [Comsat] or to one or more authorized

carriers or to the corporation and one or more such

carriers jointly . . . without preference to either." The

language of Section 201(c)(7), however, does not confer

any special licensing authority upon the Commission.

Rather, the Commission's authority to license "satellite

terminal stations." just as with all other radio stations, falls

under Title III (Sections 301 through 310 of the Commu

nications Act)." Title III does not distinguish between

Comsat, the carriers, and private entities as qualified earth

station licensees. Accordingly, the narrow issue here is

whether Section 201(c)(7) limits the Commission's discre

tion under Title III to grant private international earth

station authorizations to "any applicant."" if the public

interest will be served thereby. In particular. Section 401

of the Satellite Act provides that in the event the provi

sions of the Satellite Act and the Communications Act are

inconsistent the former governs. Because no such inconsis

tency exists, we conclude that Section 201(c)(7) does not

pose such a limitation.

14

ate international earth

station authorizations to "any applicant."" if the public

interest will be served thereby. In particular. Section 401

of the Satellite Act provides that in the event the provi

sions of the Satellite Act and the Communications Act are

inconsistent the former governs. Because no such inconsis

tency exists, we conclude that Section 201(c)(7) does not

pose such a limitation.

14. As we stated in the Receive - Only Earth Stations

decision, supra, the purpose of Section 201(c)(7) was not

to limit our discretion but to make it clear that we have

complete discretion to license "satellite terminal stations"

without Congressional prejudgment." To understand Sec

tion 201(c)(7), one must read it in conjunction with Sec

tion 103(2) of the Satellite Act, 47 U.S.C. Section 702(2).

Section 103(2) slates that for purposes of Section 2Gl(c)(7)

a "satellite terminal station" is a "complex of communica

tions equipment . . .. operationally connected with one or

more terrestrial communications systems, and capable of

transmitting telecommunications to or receiving telecom

munications from a communications satellite." [Emphasis

added). "We have long held that the "terrestrial commu

nications system" language in Section 103(2) refers to the

networks of the then-existing U.S. international common

carriers (AT&T and the IRCs)." The legislative history

defines the term "operationally connected" as any connec

tion by wire or radio between a fixed or mobile satellite

terminal station and a terrestrial system - that is a com

mon carrier network."

15. We have also found that use of the "terrestrial

communications systems" language shows that Congress

was addressing the ownership of the large satellite termi

nal stations which would be built as part of the global

satellite system and which would become an integral part

of the terrestrial networks of the U.S. common carriers."

With respect to these common carrier earth stations

rier network."

15. We have also found that use of the "terrestrial

communications systems" language shows that Congress

was addressing the ownership of the large satellite termi

nal stations which would be built as part of the global

satellite system and which would become an integral part

of the terrestrial networks of the U.S. common carriers."

With respect to these common carrier earth stations. Sec

tion 201(c)(7) was intended to make clear that Congress

was not prejudging the question of who should be au

thorized to construct and operate them. S. 2814, the origi

nal Kennedy administration proposal for the establishment

of a satellite corporation, provided for ownership of the

entire system by Comsat, including the earth stations. The

carriers argued that they, as the entities responsible for the

end-to-end services the satellite system would carry,

should own the stations." While the legislative history

indicates Congressional sympathy for the carriers' posi

tion." Section 201(c)(7) was written into the bill to give

the Commission discretion to license satellite terminal sta

tions either to the carriers or to Comsat." Section

201(c)(7) requires the Commission to exercise this discre

tion "without preference to either." The intention of this

language:

"is to make clear that there is no legislative prejud

gement as to who shall establish a ground terminal

station. The Commission is authorized to give full

consideration to all relevant technological, economic

and operational factors in determining what meets

the public interest, convenience and necessity."

S. Rep. No. 1584 at 18.

Thus, even on the question of the large, common carrier

satellite terminal stations. Congress gave us the discretion

to balance carrier and Comsat interests in determining

which entities should own the "satellite terminal stations"

that were expected to be constructed as part of common

carrier service offerings. In short. Section 201(c)(7) only

deals with a limited type of earth station.

16

at 18.

Thus, even on the question of the large, common carrier

satellite terminal stations. Congress gave us the discretion

to balance carrier and Comsat interests in determining

which entities should own the "satellite terminal stations"

that were expected to be constructed as part of common

carrier service offerings. In short. Section 201(c)(7) only

deals with a limited type of earth station.

16. The question before us raises an entirely different

issue. The private international earth station proposed by

Reuters is not a "satellite terminal station" under Section

103(2) or 201(c)(7). It will not be "operationally con

nected" with a terrestrial communications system and will

not be used to provide common carrier services to the

public."'' Rather, the facility will be used solely for the

private business of Reuters and the transmission of news,

news photos and financial information directly to its sub

scribers in Latin America antl the Caribbean. The overseas

receive-only earth stations which will be used with the

earth station at issue here will be located principally at the

subcribers' premises. The fact that Reuters proposes to

lease private-line circuits to connect its computer center

with its proposed private earth station does not make

Reuters a common carrier or alter the private nature of its

satellite transmission. It is the use to which the line is put

(here, the private business of Reuters) and not the status

of the facility's provider (here, a common carrier) that

determines whether the facility is private or common car

rier.

17. Section 201(c)(7) and its legislative history are silent

as to how the Commission should treat earth stations to

be used by entities other than Comsat and the carriers.

However, it is clear that Congress could not have consid

ered every alternative or supplemental earth station licens

ing scheme when it enacted Section 201(c)(7). There is no

indication that Congress conceived of the private, non-

common carrier, transmit/receive earth stations under con

sideration here

mmission should treat earth stations to

be used by entities other than Comsat and the carriers.

However, it is clear that Congress could not have consid

ered every alternative or supplemental earth station licens

ing scheme when it enacted Section 201(c)(7). There is no

indication that Congress conceived of the private, non-

common carrier, transmit/receive earth stations under con

sideration here. The legislative history shows that the

witnesses and Congressional committee members consider

ing the Satellite Act legislation believed, based on the state

of satellite technology in 1962 and that expected to be

available for the foreseeable future, that the global satellite

system would be limited to the provision of traditional

common carrier services."' Satellite technolo^ was in its

infancy in 1962: use of the geostationary orbit was as yet

unproved; the expected life of a communications satellite

was three months; capacity was limited because existing

launch vehicles could only launch small satellites; and the

1587

FCC 88-92

Federal Communications Commission Record

3 FCC Red No. 6

only earth station in existence were the large horn an

tenna that AT&T had built at Andover. Maine for its

Telstar experiment and a smaller experimental station

built by ITT at Nutley, New Jersey. The capacity and

power limitations of the early satellites dictated that only

large, expensive earth stations would be feasible. Thus, the

possibility that the satellite system might be used for

direct-to-user transmissions, or that earth stations might be

small and inexpensive enough for use on customer prem

ises, was not considered by the drafters of the 1962 legisla

tion.^^ In short, the Satellite Act does not, nor was it

intended to, address private earth stations.

18. Under these circumstances, no conflict between the

two statutes appears to exist

e satellite system might be used for

direct-to-user transmissions, or that earth stations might be

small and inexpensive enough for use on customer prem

ises, was not considered by the drafters of the 1962 legisla

tion.^^ In short, the Satellite Act does not, nor was it

intended to, address private earth stations.

18. Under these circumstances, no conflict between the

two statutes appears to exist. Thus, we do not believe that

Section 201(c)(7) forecloses Commission licensing of pri

vate earth stations which are not "satellite terminal sta

tions" within the meaning of the Satellite Act, if issuance

of a license is found to be in the public interest under

Title III of the Communications Act.

19. Moreover, as a matter of policy, it would be particu

larly inappropriate in the present matter to adopt a re

strictive

reading of Section

201(c)(7). Under our

Authorized User II policy,^^ Reuters and other private

users may take outbound IBS and INTELNET space seg

ment directly from Comsat without an intervening carri

er.

Since this arrangement is clearly permissible under

the Satellite Act, it would be anomalous to find that the

statute nevertheless requires Reuters to obtain earth sta

tion service from a common carrier that otherwise would

have no operational role in the service. There is no policy

reason to require such a "straw" carrier. INTELNET and

IBS services were expressly designed by INTELSAT for

multiple antennas and for location on customer premises.

As a result, there is no need to limit the number of earth

stations used with the services or. as in the case of the

large, multi-purpose U.S. earth stations, to consider

whether the existence of multiple antennas could adverse

ly affect INTELSAT system efficiency.^' Also, because IN

TELNET is a new and very limited service offering, we

fail to see how the licensing of private, non-common

carrier earth stations for this particular service will ad

versely affect the economic viability of IBS carriers in

general.

20

rge, multi-purpose U.S. earth stations, to consider

whether the existence of multiple antennas could adverse

ly affect INTELSAT system efficiency.^' Also, because IN

TELNET is a new and very limited service offering, we

fail to see how the licensing of private, non-common

carrier earth stations for this particular service will ad

versely affect the economic viability of IBS carriers in

general.

20. From a technical standpoint, it is not necessary to

limit

operation

of

these

IBS

and

INTELNET

transmit/receive antennas to carriers in order to carry out

our duty to prevent harmful interference with other uses

of the radio spectrum. Because these stations do have a

transmit capacity and thus have a potential for interfer

ence, we are not proposing to deregulate them. We will

license them just as we now license carrier-owned earth

stations under Title III of the Communications Act and

Part 25 of our rules. There is no reason to assume that

private users will be any more likely to violate our rules

than carriers. In any event. Title III gives us the same

authority over all classes of users and the same power to

order a cessation of violations.

21. Accordingly, we find that we have the authority

under Title III to license private, non-common carrier,

transmit/receive earth stations for use with INTELNET

and IBS services. Our action here is limited to this find

ing.^® We do not consider whether the public interest will

be served by authorization of any particular private earth

station for the provision of these services. Other issues

raised by the commenters in this regard should be consid

ered within the framework of the application process and

need not be resolved in this proceeding.

22

INTELNET

and IBS services. Our action here is limited to this find

ing.^® We do not consider whether the public interest will

be served by authorization of any particular private earth

station for the provision of these services. Other issues

raised by the commenters in this regard should be consid

ered within the framework of the application process and

need not be resolved in this proceeding.

22. Accordingly, the request of Reuters U.S., Inc., for

declaratory ruling that the Commission has the authority

under Title III of the Communications Act to license

private, non-common carrier transmit/receive earth sta

tions in the International Fixed Satellite Service, with

INTELSAT space stations as authorized points of commu

nication, for use with INTELNET and IBS services. IS

GRANTED.

FEDERAL COMMUNICATIONS COMMISSION

H. Walker Feaster III

Acting Secretary

FOOTNOTES

'

The Commission also requested additional information from

Reuters concerning its technical proposal, and Reuters replied by

letter dated September 19, 1986. OTl and ITT submitted letters

commentingon Reuters' response to our inquiry.

For the purpose of this ruling, satellite terminal stations are

earth stations, and for simplicity we will often refer to them as

such. However, not all earth stations used for this system are

necessarily satellite terminal stations as defined at paragraph 14,

infra.

'

Establishment of Satellite Systems Providing international

Communications (Separate Systems Decision), 101 FCC 2d 1046

r inquiry.

For the purpose of this ruling, satellite terminal stations are

earth stations, and for simplicity we will often refer to them as

such. However, not all earth stations used for this system are

necessarily satellite terminal stations as defined at paragraph 14,

infra.

'

Establishment of Satellite Systems Providing international

Communications (Separate Systems Decision), 101 FCC 2d 1046

(1985).

Deregulation of Receive-Only Satellite Earth Stations Operat

ing with the INTELSAT Global Communications Satellite System

(Receive-Only Earth Stations), FCC 86-214, released May 19,

1986. There, the Commission deregulated the use of receive-only

earth stations operating with the INTELSAT Global Communica

tions System to provide INTELNET 1 service.

'

Modification of Policy on Ownership and Operation of U.S.

Earth Stations that Operate with the INTELSAT Global Commu

nications Satellite System (Earth Station Ownership proceeding),

100 FCC 2d 250, 269 (1984).

'

Authorized Users and Authorized Entities, 4 FCC 2d 421

(1966); Proposed Modification of the Commission's Authorized

User Policy Concerning Access to the International Satellite Ser

vices of the Communications Satellite Corporation, 90 FCC 2d

1394 (1982) and 100 FCC 2d 177 (1985) (collectively referred to

as Authorized User proceeding).

^ International Competitive Carrier Policies (International Com

petitive Carrier proceeding), 102 FCC 2d 812 (1985).

'

Equatorial notes that, unlike IBS and video transmit earth

stations, a typical INTELNET 11 transmit earth station does not

operate independently but is controlled by a master "hub" earth

station. Also, because the INTELNET service uses spread spec

trum modulation that operates as a kind of coding, INTELNET

transmissions cannot be intercepted by unauthorized users. Equa

torial contends that these factors justify licensing of INTELNET II

earth stations to non-common carriers.

'

International Competitive Carrier Policies, supra.

1588

ndently but is controlled by a master "hub" earth

station. Also, because the INTELNET service uses spread spec

trum modulation that operates as a kind of coding, INTELNET

transmissions cannot be intercepted by unauthorized users. Equa

torial contends that these factors justify licensing of INTELNET II

earth stations to non-common carriers.

'

International Competitive Carrier Policies, supra.

1588

3 FCC Red No. 6

Federal Communications Commission Record

FCC 88-92

Equatorial Communications Services is authorized to con

struct and operate an international earth station at Hauppauge,

New York to provide INTELNET service to Reuters. Equatorial

Communications Services, 2 FCC Red 1926 (1987).

"

We note in this connection that the Satellite Act applies only

to the international satellite system and that there is no statute

expressly dealing with domestic satellite systems. Our authority to

license domestic systems comes solely from Title 111 of the Com

munications Act.

Section 307 of the Communications Act, 47 U.S.C. Section

307.

Receive-Only Earth Stations, iupra, at paras. 14-15 and notes

14-19.

'■* See Earth Station Ownership, 2 FCC 2d 658, 663 (1966).

Neither the Satellite Act nor its legislative history expressly de

fines the term "terrestrial communications systems," but the Sen

ate Report on the language which eventually became Section

103(2) made it clear that it was intended to refer to the "domestic

network of a common carrier." S. Rep. No. 1584, 87th Cong., 2d

Sess. 12 (1962).

Id. at 14.

Receive-Only Earth Stations at para. 14. This is clear from S.

Rep. No. 1584; During the hearings on this legislation the ques

tion of whether the operation of satellite terminal stations by the

corporation or the common carriers or a combination of both

would best serve the public interest was the subject of extensive

discussion

rrier." S. Rep. No. 1584, 87th Cong., 2d

Sess. 12 (1962).

Id. at 14.

Receive-Only Earth Stations at para. 14. This is clear from S.

Rep. No. 1584; During the hearings on this legislation the ques

tion of whether the operation of satellite terminal stations by the

corporation or the common carriers or a combination of both

would best serve the public interest was the subject of extensive

discussion. It was urged by some that the common carriers should

establish and maintain the ground stations in the United States, as

such facilities would be an integral part of the domestic network

of a common carrier and that the common carriers were directly

responsible for service to the public. To do otherwise, it was

contended, would produce divided responsibility in making ser

vice available directly to the public. S. Rep. No. 1584 at 12. See

also id. at 18.

'■ See , e. g.. Hearings on S. 2650 and S. 2814 Before the Senate

Committee on Aeronautical and Space Sciences, 87th Cong., 2d

Sess. (1962) [cited hereafter as Aerospace Hearingsl at 79,115

(RCA); 215 (HTC); 290, 297-8 (ITT); 309, 313, 318-9 (AT&T).

See S. Rep. No. 1319, 87th Cong., 2d Sess. 5 (1962).

Congress stated that: Your committee feels that no preference

should be given to either the corporation or the common carirers

and has appropriately amended Section 201(c)(7) and has estab

lished the public interest, convenience, and necessity as the cri

teria the Commission should follow in making a determination [as

to who should own a satellite terminal station]. S. Rep. No. 1584

at 12.

Congress was concerned in Section 201(c)(7) only with the

satellite terminal stations which would become an "integral part

of the domestic network of a common carrier," S. Rep. No. 1584

at p. 12, and which would be used to exchange the carrier s

common carrier traffic with the global satellite system

aking a determination [as

to who should own a satellite terminal station]. S. Rep. No. 1584

at 12.

Congress was concerned in Section 201(c)(7) only with the

satellite terminal stations which would become an "integral part

of the domestic network of a common carrier," S. Rep. No. 1584

at p. 12, and which would be used to exchange the carrier s

common carrier traffic with the global satellite system. The fact

that Reuters connects a common carrier-supplied private-line to

its proposed private earth station would not make that earth

station an integral part of a carrier's domestic common carrier

network.

See , e. g.. Aerospace Hearings, supra, at 18-19 (Colloquy

between Senator Stuart Symington and Dr. Hugh Dryden of

NASA). The only non-common carrier service discussed was the

possibility that the satellte system might be used for international

television transmission. However, Dr. Dryden testified that direct-

to-user television service would not be available for "quite a long

time" due to the limited power and capacity of the early satellites.

Id.

22

(Iq j.jq^ believe that Congressional authorization of private

earth stations in the 1978 INMARSAT amendments to the Sat

ellite Act indicates that Congress considered and rejected the

possibility of private earth station licensing in 1962. Nothing in

the legislative history of those amendments reflects such a delib

eration. Rather, the difference between the two statutes is a result

of their timing. When the 1978 amendments were adopted, mari

time communications technology had developed to a point where

private, user-operated stations were feasible. Therefore, Congress

merely took action to provide for licensing of such stations to

non-commoncarriers.

" 100 FCC 2d 177 (1985).

The downlink on outbound INTELNET or IBS service is

outside the United States and will be provided under the terms of

INTELSAT'S IBS and INTELNET 1 offerings

mari

time communications technology had developed to a point where

private, user-operated stations were feasible. Therefore, Congress

merely took action to provide for licensing of such stations to

non-commoncarriers.

" 100 FCC 2d 177 (1985).

The downlink on outbound INTELNET or IBS service is

outside the United States and will be provided under the terms of

INTELSAT'S IBS and INTELNET 1 offerings.

See Earth Station Ownership, 100 FCC 2d at 269, where we

determined that earth stations dedicated to providing IBS and/or

television services do not raise the same concerns about impact

on the INTELSAT system that are raised by multi-purpose sta

tions.

2® No Rule Making is necessary to decide the merits of Reuters

request for a declaratory ruling. Here we are answering a particu

lar legal question as to our statutory authority to license private,

non-common carrier earth stations. We are not adopting any

particular rules. Therefore, a declaratory ruling is an appropriate

vehicle to decide this issue.

1589