Space Law TOP
Contents Intoroduction Preliminaries Chapter 1 Chapter 2
Chapter 3 Chapter 4 Appendix Index


(E) Summary of Conclusion


In this proceeding, we have considered a variety of issues that have been raised by the applications that have been filed with the Commission to construct and operate international communications satellite systems separate from INTELSAT. We have concluded that the proposed separate systems will offer substantial benefits to international communications users. Separate systems will provide users with special communications needs with currently unavailable means of packaging and transmitting information over satellite networks. Separate Systems will also stimulate technological innovation and service development, improve network efficiencies, reduce user costs, create new business and trade opportunities through improved international communications. Further, we have concluded that authorization of the proposed separate systems subject to the Executive branch service restrictions will provide reasonable assurance that INTELSAT will not incur significant economic harm. These service restrictions will protect INTELSAT's revenues obtained from supplying space segment capacity for international switched message services by prohibiting separate systems from interconnecting with public-switched networks. Public-switched services by far comprise INTELSAT's largest source of revenues. Only peripheral or "customized" services would be subject to competition between INTELSAT and separate systems. We believe that entry will stimulate the overall international satellite communications market beyond the levels anticipated by INTELSAT and that INTELSAT stands to benefit from such expansion. Entry of competing suppliers also will put pressures on INTELSAT to improve the efficiencies of its operations and provide services at minimum costs, consistent with reasonable service standards.


To implement the Executive branch service restrictions, we will condition the license for any separate system that we authorize to limit its operation to the provision of services through the sale or long-term lease of transponders or space segment capacity for communications not interconnected with public-switched message networks (except for emergency restoration service). No communications provided over a separate satellite system's space segment may interconnect with the public facilities of common carriers to provide switched message services such as MTS, telex, TWX, telegraph, teletext facsimile and high speed switched data services. The "no-interconnection" and "sale and long-term lease" restrictions apply not only to separate system operators, but also to all levels of resellers and users of the facilities. In view of the "sale and long-term lease" requirement, separate system licensees may not operate as common carriers. Finally, we have determined the following: (1) there is no need to establish a minimum unit of space segment capacity which a separate system must provide; (2) the minimum lease period for the "long-term lease" of capacity is to be one year; (3) space segment capacity may be obtained and resold by common carriers and enhanced service providers to provide communications services not interconnected with any public-switched message network; and (4) there is no basis to establish a "sunset" date for the Executive branch service restrictions absent a finding from the Executive branch that these restrictions are no longer necessary to fulfil U.S. international obligations.


In addition, consistent with the Presidential determination that separate systems are required in the national interest, we will not issue a license permitting any separate system applicant to begin operating its proposed system until the United States has completed coordination of that system with INTELSAT pursuant to Article XIV(d) of the INTELSAT Agreement and we have been informed by the Department of State that the United States has fulfilled its obligations under Article XIV(d). We will review applications to determine whether the proposals: (1) are consistent with the Executive branch service restrictions and the spectrum/orbit efficiency standards that we are adopting in this decision; (2) satisfy requisite legal, financial and technical standards; and (3) otherwise are in the public interest under the Communications Act of 1934. We will issue initial construction permits to those applicants initially satisfying legal, technical and minimum financial standards. However, no applicant may begin construction until it satisfies all financial standards. Those standards must be satisfied no later than 60 days after the State Department informs the Commission that the U.S. has fulfilled its Article XIV(d) obligations. An applicant meeting all legal, technical and financial standards prior to completion of the Article XIV(d) process may begin construction upon Commission order and at its own risk. However, no license will be issued until Article XIV(d) consultation is completed and the applicant demonstrates that it has completed construction pursuant to the terms of its construction permit.

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