[Federal Register Volume 68, Number 92 (Tuesday, May 13, 2003)]
[Notices]
[Pages 25609-25611]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-11848]


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

FEDERAL COMMUNICATIONS COMMISSION

[CC Docket No. 90-571; FCC 03-92]


Petition for Declaratory Ruling That the Provision of INTELSAT 
Space Segment by COMSAT Is Not an Interstate Service for Purposes of 
the TRS Fund

AGENCY: Federal Communications Commission.

ACTION: Notice.

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

SUMMARY: In this document, the Commission grants an Application for 
Review filed by COMSAT Corporation, acting through its business unit 
COMSAT World Systems (COMSAT). The Commission finds that, because the 
lease of space segment capacity does not constitute a 
telecommunications service, COMSAT was not required to contribute to 
the Telecommunications Relay Services (TRS) Fund on the basis of such 
services. The Commission therefore grants the application for review, 
and orders that COMSAT be refunded its prior TRS Fund contributions 
based on the provision of leased satellite space segment capacity.

DATES: Effective June 12, 2003.

FOR FURTHER INFORMATION CONTACT: Diane Law-Hsu, Deputy Division Chief, 
Wireline Competition Bureau, Telecommunications Access Policy Division, 
(202) 418-7400, TTY (202) 418-0484.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
in CC Docket No. 90-571 released on April 24, 2003. The full text of 
this document is available for public inspection during regular 
business hours in the FCC Reference Center, Room CY-A257, 445 12th 
Street, SW., Washington, DC 20554.

I. Introduction

    1. The Commission grants an Application for Review filed by COMSAT 
Corporation, acting through its business unit COMSAT World Systems 
(COMSAT). COMSAT challenges a ruling by the former Common Carrier 
Bureau (Bureau), which concluded that COMSAT is required to contribute 
to the TRS Fund a portion of its revenues from the lease of satellite 
space segment capacity. COMSAT also seeks a refund of its prior TRS 
Fund contributions based upon

[[Page 25610]]

revenues from the lease of satellite space segment capacity. The 
Commission finds that, because the lease of space segment capacity does 
not constitute a telecommunications service, COMSAT was not required to 
contribute to the TRS Fund on the basis of such services. The 
Commission therefore grants the application for review, and order that 
COMSAT be refunded its prior TRS Fund contributions based on the 
provision of leased satellite space segment capacity.

II. Discussion

    2. Before reaching the substantive issues before us, the Commission 
addresses procedural issues raised by COMSAT's Application for Review 
Supplement. Section 1.115(c) of our rules bars a party from presenting 
questions of law in an application for review that it did not raise in 
its pleading below. In its initial Petition, COMSAT only argued that 
its service was not an interstate service. Because it did not argue 
before the Bureau that the service did not qualify as 
telecommunications or a telecommunications service, Sec.  1.115(c) of 
the Commission's rules would ordinarily act as a bar to raising the 
argument now. In addition, COMSAT failed to raise the argument in its 
original Application for Review, presenting it only in the supplement 
that was filed in 1999, long after the time for filing such supplements 
had expired.
    3. The Commission has authority, however, to consider COMSAT's 
argument that its service did not constitute telecommunications or a 
telecommunications service on our own motion. In particular, the 
Commission has previously noted that it may use the pendency before it 
of a timely petition filed by a party as a basis for considering on the 
Commission's own motion arguments belatedly raised by the party. That 
circumstance is present here. COMSAT filed a timely application for 
review of the Bureau Decision. In addition, COMSAT reiterated its 
position when it submitted its TRS payments. Further, because the legal 
question of whether leased space segment is telecommunications has 
already been presented to and resolved by the full Commission, applying 
that ruling here is straightforward, consistent with the policy of not 
addressing arguments that have not previously been reviewed, and, as 
set forth, clearly dispositive of the pending matter. By contrast, were 
the Commission to ignore this issue, we would have to reach the legal 
question of whether COMSAT's lease of transponder capacity should be 
deemed an ``interstate'' service. The Commission therefore exercises 
our discretion to consider the ``telecommunications'/ 
``telecommunications service'' argument.
    4. Turning to the merits of COMSAT's Application for Review, the 
lease of bare space segment capacity can not constitute a 
``telecommunications service,'' because the Commission previously 
determined that it is not ``telecommunications'' and does not involve 
the transmission of information. Section 64.604(c)(5)(iii)(A) of the 
Commission's rules states that ``[e]very carrier providing interstate 
telecommunications services shall contribute to the TRS Fund on the 
basis of interstate end user telecommunications revenues.'' In the TRS 
III Order, 58 FR 39671, July 26, 1993, the Commission explained this 
rule by stating that ``[o]ur general approach is to identify all 
interstate common carrier services and to assess a contribution factor 
against the revenues from those services.'' Although the Act did not 
define ``common carrier services'' at that time, section 225 of the 
Communications Act, which governs TRS services, defines ``common 
carrier,'' in relevant part, as ``any common carrier engaged in 
interstate communication by wire or radio as defined in section 3 * * 
*'' Section 3, in turn, defines ``communication by radio'' as ``the 
transmission by radio of writing, signs, signals, pictures, and sounds 
of all kinds, including all instrumentalities, facilities, apparatus, 
and services * * * incidental to such transmission.''
    5. Applying these definitions to the facts at hand, the Commission 
finds that, leasing bare space segment capacity, under these 
circumstances, does not constitute a common carrier service, because 
the satellite operator ``merely provid[es] its customer with the 
exclusive right to transmit to a specified piece of hardware on the 
satellite.'' Therefore, entities, including COMSAT, are not required to 
include revenues derived from leasing bare space segment capacity in 
determining their TRS contributions. This would normally end our 
inquiry and the refunds in issue could be ordered.
    6. But because Congress mandated that COMSAT be regulated as a 
common carrier pursuant to section 401 of the Communications Satellite 
Act of 1962 (Satellite Act), a question exists about COMSAT's 
eligibility for refunds. All of the services COMSAT provides, even 
though some or all of them may involve the leasing of bare space 
segment capacity, are regulated as common carrier (i.e., 
telecommunications) services under Title II of the Act. Does this fact 
mean that revenues from COMSAT's lease of bare space segment capacity, 
which is treated as common carriage due to section 401 of the Satellite 
Act, must be included in COMSAT's TRS contribution calculations? For 
the reasons given, the Commission concludes that section 401 does not 
require that COMSAT include revenues derived from leasing bare space 
segment capacity in determining its TRS contributions.
    7. The Satellite Act authorized the formation of COMSAT and 
generally tasked it with the establishment of a single global 
telecommunications satellite system, which came to be known as 
INTELSAT. The Commission, in turn, was generally tasked by Congress to 
oversee COMSAT's implementation of the Satellite Act. Section 401 makes 
clear that the Commission was to exercise its statutory authority under 
the Communications Act to assure that COMSAT carried out the 
obligations imposed on it by Congress. The Commission was also to 
ensure ``nondiscriminatory use of, and equitable access to'' INTELSAT 
space segment ``under just and reasonable charges, classifications, 
practices, regulations, and other conditions.'' The common carrier 
regulation implemented pursuant to authority of section 401 over 
services COMSAT provides (even those such as lease of bare space 
segment capacity) afforded an effective and proven means to oversee 
COMSAT's special role and further the goals of the Satellite Act.
    8. By contrast, a decision to treat COMSAT's lease of bare space 
segment capacity as common carriage (telecommunications service) for 
the purpose of contributions to the TRS Fund, does not even pertain to 
COMSAT's special role or advance any goals of the Satellite Act. 
Therefore, it would be unreasonable to read into section 401 or any 
other Satellite Act provision a requirement that the contributions in 
issue be made to the TRS Fund. Because COMSAT's TRS contributions, paid 
under protest subject to the pending challenge, were not, in fact, 
required by the Communications Act, Satellite Act, or the Commission's 
rules, the Commission grants COMSAT's request for a refund and direct 
NECA to refund the full amount of COMSAT's prior contributions based on 
the provision of leased bare space segment capacity.

III. Ordering Clause

    9. It is ordered, pursuant to section 5(c)(5) of the Communications 
Act of

[[Page 25611]]

1934, as amended, 47 U.S.C. 155(c)(5), and Sec.  1.115 of the 
Commission's rules, that the Application for Review filed on March 17, 
1995 by COMSAT Corporation, through its business unit, COMSAT World 
Systems, is granted.
    10. It is further ordered that NECA refund to COMSAT World Systems 
its contributions to the Telecommunications Relay Services fund in the 
amount of $503,201.51.

Federal Communications Commission.
William F. Caton,
Deputy Secretary.
[FR Doc. 03-11848 Filed 5-12-03; 8:45 am]
BILLING CODE 6712-01-P