[Federal Register Volume 62, Number 233 (Thursday, December 4, 1997)]
[Rules and Regulations]
[Pages 64167-64173]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-31800]


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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]
BILLING CODE 6712-01-P