[Federal Register Volume 81, Number 210 (Monday, October 31, 2016)]
[Rules and Regulations]
[Pages 75338-75344]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25935]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 25
[IB Docket No. 02-34; FCC 16-108]
Amendment of the Commission's Space Station Licensing Rules and
Policies, Second Order on Reconsideration
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: The Federal Communications Commission addresses the remaining
petitions for reconsideration of the First Space Station Licensing
Reform Order, and amends, clarifies, or eliminates certain provisions
to streamline its procedures and ease administrative burdens on
applicants and licensees.
DATES: Effective November 30, 2016.
FOR FURTHER INFORMATION CONTACT: Jay Whaley, 202-418-7184, or if
concerning the information collections in this document, Cathy
Williams, 202-418-2918.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second
Order on Reconsideration, FCC 16-108, adopted on August 15, 2016 and
[[Page 75339]]
released August 16, 2016. The full text of the Second Order on
Reconsideration is available at https://apps.fcc.gov/edocs_public/attachmatch/FCC-16-108A1.pdf. It is also available for inspection and
copying during business hours in the FCC Reference Information Center,
Portals II, 445 12th Street SW., Room CYA257, Washington, DC 20554. To
request materials in accessible formats for people with disabilities,
send an email to [email protected] or call the Consumer & Governmental
Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (TTY).
Synopsis
In the First Space Station Licensing Reform Order, 68 FR 51499, the
Commission adopted new satellite licensing procedures intended to
enable the Commission to issue satellite licenses more quickly without
allowing satellite license applicants to abuse the Commission's
licensing procedures. In response, a number of petitions for
reconsideration were filed. The Commission addressed those petitions
that were focused on the satellite bond requirements in the First Order
on Reconsideration and Fifth Report and Order. This Second Order on
Reconsideration addresses the remaining petitions for reconsideration
of the First Space Station Licensing Reform Order and amends the
Commission's rules in order to streamline these new satellite licensing
procedures, and to clarify and reaffirm safeguards against subversion
of the licensing process, thus furthering the goals of the First Space
Station Licensing Reform Order to develop a faster satellite licensing
procedure while safeguarding against speculative applications, thereby
expediting service to the public.
NGSO-Like Processing Round Procedure
We revise section 25.157(e) of the current rules to eliminate the
requirement that the Commission withhold spectrum for use in a
subsequent processing round if fewer than three qualified applicants
file applications in the initial processing round, known as the
``three-licensee presumption.'' We find that the ``three-licensee
presumption'' is overly restrictive for its intended purpose. We agree
with petitioners that a specific frequency band does not necessarily
equate to a market, and thus having fewer than three licensees in a
band does not necessarily indicate a harmful lack of competition in
some market that we should attempt to remedy. We find it common that
licensees in different bands compete with each other in the provision
of satellite-based services in broader markets, and we note that there
are numerous NGSO-like system operators that currently compete across
frequency bands.
We also recognize that in cases where one or more applicants in a
processing round request less spectrum than they would be assigned if
all the available spectrum were divided equally among all the qualified
applicants, some spectrum would remain unassigned, thus we retain the
procedure that the Commission adopted in the First Space Station
Licensing Reform Order, to redistribute the remaining spectrum among
the other qualified applicants who have previously applied for the
spectrum. If spectrum still remains, then interested parties would be
free to apply for that unassigned spectrum in another processing round.
Procedures for Redistribution of Spectrum
We clarify the procedures that apply when we redistribute spectrum
among the remaining NGSO-like systems after an authorization for a
NGSO-like system has been canceled or otherwise becomes available. This
redistribution procedure applies only in cases where spectrum was
granted pursuant to a processing round, and one or more of those grants
of spectrum is lost or surrendered for any reason. In these cases, the
Commission will issue a public notice or order announcing the loss or
surrender of such spectrum, and will then propose to modify the
remaining grants to redistribute the returned spectrum among the
remaining system operators that have requested use of the spectrum. The
returned spectrum will generally be redistributed equally among the
remaining operators that requested the spectrum, although no operator
will receive more spectrum on redistribution than it requested in its
application. Additionally, if an operator has not requested use of a
particular spectrum band, it will not receive spectrum in that band. If
the Commission is unable to make a finding that there will be
reasonably efficient use of the spectrum, we will consider on a case-
by-case basis whether to open a new processing round for the returned
spectrum, leave it unassigned at that point, or repurpose it for
another use.
Safeguards Against Speculation
In the First Space Station Licensing Reform Order, the Commission
eliminated the anti-trafficking rule for satellites, which prohibited
satellite licensees from selling ``bare'' satellite licenses for
profit, so as not to prevent a satellite license from being transferred
to an entity that would put it to its highest valued use in the
shortest amount of time. The Commission put in place certain
safeguards, including a determination of whether the seller obtained
the license in good faith or for the primary purpose of selling it for
profit, whether the licensee made serious efforts to develop a
satellite or constellation, and/or whether the licensee faces changed
circumstances. Petitioners expressed concern that by making this
determination, the Commission would undercut the public interest
benefits it identified in eliminating the anti-trafficking rule. We
reiterate that this limited exception does not undermine our
elimination of the anti-trafficking rule, and we require that parties
opposing a transaction based on a seller's motivation to provide, at a
minimum, substantial evidence that a satellite license was obtained for
purposes of selling the license for profit, thus preventing opponents
to a transaction from delaying the transaction on purely frivolous
grounds and ensuring that these transactions do not encounter any
unwarranted delay.
In the First Space Station Licensing Reform Order, the Commission
adopted a rule prohibiting sales of places in the queue as an
additional safeguard against speculation and revised its rules so that
an applicant proposing to merge with another company could do so
without losing its place in the processing queue. The revised rule
treated transfers of control as minor amendments, thus within the
queue, and major amendments to applications as newly filed
applications, thus moving to the end of the queue. We find that it is
not inconsistent to prohibit an applicant from selling its place in the
queue, while allowing an applicant that transfers control over itself
to a new controlling party to retain its place in the queue, especially
when the new company is better positioned to compete in the
marketplace, and that an applicant's transfer of control is less likely
to be used as an abusive strategy than selling its place in the queue.
Effect of License Surrender Prior to Milestone Deadlines on Application
Limit
Under section 25.159(d) of the rules, adopted in the First Space
Station Licensing Reform Order and commonly referred to as the ``Three-
Strikes'' rule, if a licensee misses three milestones in any three-year
period, it is prohibited from filing additional satellite applications
if it possesses two satellite applications and/or unbuilt satellites in
any frequency band. This limit remains
[[Page 75340]]
in force until the licensee demonstrates that it would be very likely
to construct its licensed facilities if it were allowed to file more
applications. The Commission reasoned that a licensee that consistently
obtains licenses but does not meet its milestones precludes others from
going forward with their business plans while it holds those licenses.
SES Americom (SES) maintains that the Commission should not
consider a licensee's relinquishing a license prior to the contract
execution milestone in determining whether to impose the limit on
satellite applications and/or unbuilt satellites on that licensee. As
an initial matter, we note that the milestone rules have been revised
in the Part 25 Review Second R&O to eliminate interim milestones. As a
result, there is no longer a contract execution milestone, and thus
SES's arguments are now moot in part. However, since we retained the
final milestone requirement, any authorization surrendered prior to
fulfilling the remaining milestone requirement will continue to be
subject to the ``Three-Strikes'' rule. For the reasons set forth in the
Part 25 Review Second R&O, we continue to believe that, on balance,
retaining this milestone and the resulting operation of the ``Three
Strikes'' rule best serves the public interest, and we see no
compelling justification to counter-balance the public interest
benefits in retaining the current requirements. Accordingly, we will
continue to presume that these licensees (i.e., those covered under the
``Three Strikes'' rule) acquired licenses for speculative purposes, and
we will restrict the number of additional satellite applications they
may file to limit the potential for future speculation while the
presumption is in effect.
Effects of Mergers on Application Limits
SIA asserts that it is unclear in the First Space Station Licensing
Reform Order how the limit on pending and licensed but unlaunched
satellites applies to satellite operators that would be formed by the
merger of two companies. We clarify that the limit on satellite
applications does not prevent the filing of an application for transfer
of control or assignment of licenses, even if the combined entities
would not meet the limits on pending applications and unbuilt stations
specified in the rule. Of course, any such approval of the transfer of
control will ultimately be conditioned on the entity coming into
compliance with the limits within a reasonable amount of time.\1\
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\1\ In ruling on proposed mergers, the Commission routinely
assesses ``whether the proposed transaction complies with the
specific provisions of the Act, other applicable statutes, and the
Commission's rules.''
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Needs for Safeguards in Different Parts of the GSO Orbit
In its Petition, Hughes asserts that the limit on pending
applications and licensed-but-unlaunched satellites is not necessary
for those orbital locations not covering the United States.\2\ Hughes
also advocates eliminating the bond requirement for applicants for
satellites that will operate at non-U.S. orbital locations.\3\ Hughes
proposes to define ``U.S.'' orbital locations as those within the
orbital arc between 60[deg] W.L. and 140[deg] W.L., and to define
``non-U.S.'' locations as those outside that arc. Hughes argues that
the limit should not apply to the ``non-U.S.'' orbital locations
because other Administrations have international coordination priority
at many of those locations and because many other Administrations have
volatile economies. Hughes argues that the demand for such locations
has been ``reasoned and measured,'' so that the Commission can address
them in an orderly fashion.
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\2\ As noted above, the First Space Station Licensing Reform
Order established two limits on pending applications and/or unbuilt
satellites, the stricter of the two limits is applicable to
licensees that have established a pattern of missing milestones.
Hughes maintains that the stricter limit should not apply to orbital
locations not covering the United States. We also observed above
that the Part 25 Review Second R&O eliminated one of the two limits
on pending applications and/or unbuilt satellites and the bond
requirement. As a result, this issue is moot.
\3\ In the Part 25 Review Second R&O, the Commission adopted
significant revisions to the bond requirement adopted in the First
Space Station Licensing Reform Order. However, the Commission
continues to require a bond for all satellite licenses regardless of
the orbit location.
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The purpose of the safeguards in section 25.159 of the Commission's
rules is not to reduce the number of satellite applications to a
``reasoned and measured'' level. Rather, the Commission intended the
safeguards to discourage speculators from applying for satellite
licenses, thereby precluding another applicant from obtaining a
license, constructing a satellite, and providing service to the
customers. Hughes assumes that, because fewer applications are filed
outside of the arc from 60[deg] W.L. to 140[deg] W.L. than within that
arc, speculation is not a concern. Although demand may not be as great
for locations that cannot serve large portions of the United States, we
have licensed many satellites at orbital locations in this portion of
the arc that are subject to competition. We have also granted U.S.
market access to many non-U.S.-licensed satellites operating at those
locations to provide services to U.S. customers. Thus, allowing
operators to hold these orbital locations while they decide whether to
proceed with implementation could preclude other operators whose plans
also involve providing international service from going forward. For
these reasons, we will continue to apply the safeguards against
speculation, including the bond requirement, where appropriate,
regardless of orbital location.
Satellite System Implementation Requirements
In its petition for reconsideration, ICO asserts that the First
Space Station Licensing Reform Order does not state clearly that NGSO-
like licensees acquiring additional spectrum from other NGSO-like
licensees are permitted to implement a single, integrated NGSO system
under a single milestone schedule. ICO requests the Commission to
clarify that such licensees will not be required to construct multiple
separate satellite systems.
The Commission eliminated the anti-trafficking rule to allow NGSO-
like licensees in modified processing rounds to acquire rights to
operate on additional spectrum from other licensees if they feel it is
necessary to meet their business needs. It would be inefficient to
require these licensees to build two incompatible satellite networks,
each operating in only part of the spectrum rights that the licensee is
authorized to use. We therefore clarify that NGSO-like licensees
acquiring spectrum rights from other NGSO-like licensees are permitted
to build a single, integrated NGSO-like system operating on all
authorized frequency bands, under a single milestone schedule. These
cases are inherently fact-specific, and so we decline to adopt a
blanket approach about the milestone schedule that would apply in these
cases.\4\ If the milestone schedules of each license differ, we will
address, on a case-by-case basis, the particular milestone schedule
that will be imposed on the integrated system.
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\4\ For example, depending on the differences in the milestone
schedules, permitting licensees to adopt a schedule with
significantly more time might encourage licensees to acquire other
licensees merely to gain more time to fulfill their milestone
schedules. On the other hand, integrating additional spectrum into a
single network may legitimately require more time in some cases.
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Non-U.S.-Licensed Satellites
Under the terms of the World Trade Organization (WTO) Agreement on
[[Page 75341]]
Basic Telecommunication Services (WTO Telecom Agreement),\5\ WTO
signatories, including the United States, have made binding commitments
to open their markets to foreign competition in satellite services.\6\
Consistent with those commitments, the Commission adopted DISCO II in
1997 to establish procedures for non-U.S.-licensed satellite operators
seeking access to the U.S. market. In the DISCO II First
Reconsideration Order, the Commission streamlined those procedures.
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\5\ The WTO came into being on January 1, 1995, pursuant to the
Marrakesh Agreement Establishing the World Trade Organization (the
Marrakesh Agreement). The Marrakesh Agreement includes multilateral
agreements on the trade in goods, services, intellectual property,
and dispute settlement. The General Agreement on Trade in Service
(GATS) is Annex 1B of the Marrakesh Agreement. The WTO Telecom
Agreement was incorporated into the GATS by the Fourth Protocol to
the GATS (April 30, 1996).
\6\ The United States made market access commitments for Direct-
to-Home (DTH) Service, Direct Broadcast Satellite (DBS) Service, and
Digital Audio Radio Service (SDARS), and took an exemption from
most-favored nation (MFN) treatment for those services as well.
Generally, GATS requires WTO member countries to afford MFN
treatment to all other WTO member nations.
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In the First Space Station Licensing Reform Order, the Commission
established a procedure for addressing changes in ownership of non-
U.S.-licensed satellites. Specifically, when the operator of such a
satellite undergoes a change in ownership, the Commission requires the
satellite operator to notify the Commission of the change. The
Commission then issues a public notice announcing that the transaction
has taken place and inviting comment on whether the transaction affects
any of the considerations made when the original satellite operator was
allowed to enter the U.S. market. In addition, if control of the
satellite was transferred to an operator not based in a WTO member
country, the Commission would invite comment on whether the purchaser
has satisfied all applicable DISCO II requirements. The Commission then
determines whether any commenter raised any concern that would warrant
precluding the new operator from entering the U.S. market, including
concerns relating to national security, law enforcement, foreign
policy, or trade issues.
According to SIA, the rule revisions adopted in the First Space
Station Licensing Reform Order to implement this satellite transfer
procedure do not state clearly that satellite operators are allowed to
notify the Commission of transfers of ownership of satellites after the
transfer takes place. SIA asks us to revise section 25.137(g) of the
Commission's rules to make clear that non-U.S.-satellite operators may
notify the Commission of a change of ownership after the transfer takes
place. We will do so. The Commission did not intend to require foreign
entities to notify the Commission of the transaction before it had been
completed. Rather, the Commission adopted its proposal in the Space
Station Licensing Reform NPRM to address such changes in ownership by
``issuing a public notice announcing that the transaction has taken
place.'' Therefore, we revise section 25.137(g) as SIA suggests, as set
forth in Appendix B of the Second Order on Reconsideration. We also
clarify that parties must notify the Commission within 30 days after
consummation of the transaction in order to enable the Commission to
perform the review described in the First Space Station Licensing
Reform Order in a meaningful and timely manner while the new foreign
operator is permitted to access the U.S. market.
Further, in the First Space Station Licensing Reform Order, the
Commission stated that operators requesting authority to provide
service in the United States from a foreign-licensed satellite must
file Form 312 (Application for Satellite Space and Earth Station
Authorizations). Hughes asserts that the electronic Form 312 does not
allow a non-U.S.-licensed satellite operator to indicate that it is not
seeking a Commission license, but is instead seeking U.S. market
access. Hughes also questions whether parties seeking U.S. market
access must file their requests electronically. First, contrary to
Hughes's assertion, the electronic version of Form 312 provides a place
to indicate that the applicant is filing for a petition for declaratory
ruling, which is the procedure for requesting U.S. market access.
Second, the Commission stated explicitly in the First Space Station
Licensing Reform Order that U.S. market access requests must be filed
electronically, and we continue to believe that mandatory electronic
filing serves the public interest by facilitating prompt receipt of
petitions for declaratory ruling and accurate recording of the time of
filing under the first-come, first-served processing procedure, and by
providing other administrative efficiencies.
ITU Priority
In the First Space Station Licensing Reform Order, the Commission
discussed the interrelationship between its domestic licensing
framework and the international coordination framework set forth in the
Radio Regulations of the International Telecommunication Union (ITU).
Hughes requests that we clarify how we will determine whether to grant
or deny market access requests from non-U.S.-licensed satellite
operators, particularly in cases where a non-U.S. operator has ITU
coordination date-filing priority, i.e., an earlier ITU protection
date, but is behind a U.S. applicant in the U.S. space station queue.
In particular, Hughes argues that the first-come, first-served
procedure should not ``block'' a non-U.S.-licensed satellite operator
with ITU priority.
The Commission discussed international coordination issues in the
First Space Station Licensing Reform Order. Specifically, the
Commission stated that it will license satellites at orbital locations
at which another Administration has ITU priority. In fact, if a later-
filed market access request--with or without ITU priority--is mutually
exclusive with an earlier-filed, granted application, it may be
dismissed absent a coordination agreement between the applicants. The
Commission further stated, however, that it will issue the earlier-
filed authorization subject to the outcome of the international
coordination process, and emphasized that the Commission is not
responsible for the success or failure of the required international
coordination. Absent such coordination, a U.S.-licensed satellite
making use of an ITU filing with a later protection date would be
required to cease service to the U.S. market immediately upon launch
and operation of a non-U.S.-licensed satellite with an earlier
protection date, or be subject to further conditions. We continue to
follow this general approach today.
Modifications
Hughes notes that the rule revisions adopted in the First Space
Station Licensing Reform Order require the Commission to treat
modification requests involving new orbital locations or new frequency
bands in the application processing queue, and other modification
requests outside of the queue. Hughes supports this approach, but
asserts that the Commission stated elsewhere in the First Space Station
Licensing Reform Order that, unless it could categorically classify
certain modification requests involving new frequencies or orbital
locations as ``minor,'' it would treat all such modification requests
in the processing queue\.\ Hughes requests the Commission to reconcile
these two statements.
In the First Space Station Licensing Reform Order, the Commission
revised its rules to adopt a clear, simple test for
[[Page 75342]]
determining whether to process a modification request in the processing
queue: modification requests involving new orbital locations or new
frequency bands are considered in the queue, and other modifications
are considered outside of the queue.\7\ We clarify here that nothing in
the text of the First Space Station Licensing Reform Order was intended
to alter the Commission's decision to consider modification requests in
this fashion. The Commission also suggested, however, that it could, at
a later date, adopt rules to define certain modification requests
involving new orbital locations as minor, and to consider such
modification requests outside the queue. In this regard, in the Second
Space Station Licensing Reform Order, the Commission decided to treat
certain fleet management modification requests involving orbital
reassignment of specific satellites outside the queue. We affirm,
however, that, absent a rulemaking finding public interest reasons to
create additional exceptions, we will continue to process orbital
reassignment and frequency modification requests as set forth in
section 25.117(d)(2)(iii).
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\7\ The Commission adopted this test instead of a more complex
proposal to place ``major'' modification requests in the queue, and
to define ``major'' modification requests as those that would
``degrade the interference environment.''
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Supplemental Final Regulatory Flexibility Analysis
As required by the Regulatory Flexibility Act (RFA), an Initial
Regulatory Flexibility Analysis (IRFA) was incorporated in the Further
Notice of Proposed Rulemaking in the Matter of Comprehensive Review of
Licensing and Operating Rules for Satellite Services. The Commission
sought written public comment on the proposals in the Further Notice,
including comment on the IRFA. No comments were received on the IRFA.
This Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.
Paperwork Reduction Act
This document does not contain new or modified information
collection requirements subject to the Paperwork Reduction Act of 1995,
Public Law 104-13. Therefore it does not contain any new or modified
``information burden for small business concerns with fewer than 25
employees'' pursuant to the Small Business Paperwork Relief Act of
2002, Public Law 107-198. Thus, on October 14, 2016, the Office of
Management and Budget (OMB) determined that the rule changes in this
document are non-substantive changes to the currently approved
collection, OMB Control Number 3060-0678. ICR Reference Number: 201610-
3060-011.
Pursuant to the Small Business Paperwork Relief Act of 2002, Public
Law 107-198, see 44 U.S.C. 3506(c)(4), we previously sought specific
comment on how the Commission might further reduce the information
collection burden for small business concerns with fewer than 25
employees. We received no comments on this issue. We have assessed the
effects of the revisions adopted that might impose information
collection burdens on small business concerns, and find that the impact
on businesses with fewer than 25 employees will be an overall reduction
in burden. The amendments adopted in this Second Order on
Reconsideration eliminate unnecessary information filing requirements
for licensees and applicants; eliminate unnecessary technical
restrictions and enable applicants and licensees to conserve time,
effort, and expense in preparing applications and reports. Overall,
these changes may have a greater positive impact on small business
entities with more limited resources.
Congressional Review Act
The Commission will send copies of this Second Order on
Reconsideration to Congress and the General Accountability Office
pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A).
Effective Date
The effective date for the rules adopted in this Second Order on
Reconsideration is 30 days after date of publication in the Federal
Register.
Need for, and Objectives of, the Rules
This Order adopts minor changes to part 25 of the Commission's
rules, which governs licensing and operation of space stations and
earth stations for the provision of satellite communication
services.\8\ We revise the rules to, among other things, further the
goals of the First Space Station Licensing Reform Order to develop a
faster satellite licensing procedure while safeguarding against
speculative applications, thereby expediting service to the public.
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\8\ 47 CFR part 25, Satellite Communications.
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This Order revises two sections of part 25 of the rules.
Specifically, it revises the rules to:
(1) Eliminate the ``three-licensee presumption'' that applies to
the NGSO-like processing round procedure, and also revise the
procedures that we will apply when we redistribute spectrum among
remaining NGSO-like licensees when a license is cancelled for any
reason.
(2) Clarify that non-U.S.-satellite operators may notify the
Commission of a change of ownership after the transfer takes place.
Summary of Significant Issues Raised by Public Comments in Response to
the IRFA
No party filing comments in this proceeding responded to the IRFA,
and no party filing comments in this proceeding otherwise argued that
the policies and rules proposed in this proceeding would have a
significant economic impact on a substantial number of small entities.
The Commission has, nonetheless, considered any potential significant
economic impact that the rule changes may have on the small entities
which are impacted. On balance, the Commission believes that the
economic impact on small entities will be positive rather than
negative, and that the rule changes move to streamline the part 25
requirements.
Response to Comments by the Chief Counsel for Advocacy of the Small
Business Administration
Pursuant to the Small Business Jobs Act of 2010, the Commission is
required to respond to any comments filed by the Chief Counsel for
Advocacy of the Small Business Administration, and to provide a
detailed statement of any change made to the proposed rules as a result
of those comments. The Chief Counsel did not file any comments in
response to the proposed rules in this proceeding.
Description and Estimate of the Number of Small Entities to Which the
Rules May Apply
The RFA directs agencies to provide a description of, and, where
feasible, an estimate of, the number of small entities that may be
affected by the rules adopted herein. The RFA generally defines the
term ``small entity'' as having the same meaning as the terms ``small
business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small business concern'' under the Small Business
Act. A small business concern is one which: (1) Is independently owned
and operated; (2) is not dominant in its field of operation; and (3)
satisfies any additional criteria established by the Small Business
Administration (SBA). Below, we describe and estimate the number of
small entity licensees that may be affected by the adopted rules.
[[Page 75343]]
Satellite Telecommunications and All Other Telecommunications
The rules adopted in this Order will affect some providers of
satellite telecommunications services. Satellite telecommunications
service providers include satellite and earth station operators. Since
2007, the SBA has recognized two census categories for satellite
telecommunications firms: ``Satellite Telecommunications'' and ``Other
Telecommunications.'' Under the ``Satellite Telecommunications''
category, a business is considered small if it had $32.5 million or
less in annual receipts. Under the ``Other Telecommunications''
category, a business is considered small if it had $32.5 million or
less in annual receipts.
The first category of Satellite Telecommunications ``comprises
establishments primarily engaged in providing point-to-point
telecommunications services to other establishments in the
telecommunications and broadcasting industries by forwarding and
receiving communications signals via a system of satellites or
reselling satellite telecommunications.'' For this category, Census
Bureau data for 2007 show that there were a total of 512 satellite
communications firms that operated for the entire year. Of this total,
482 firms had annual receipts of under $25 million.
The second category of Other Telecommunications is comprised of
entities ``primarily engaged in providing specialized
telecommunications services, such as satellite tracking, communications
telemetry, and radar station operation. This industry also includes
establishments primarily engaged in providing satellite terminal
stations and associated facilities connected with one or more
terrestrial systems and capable of transmitting telecommunications to,
and receiving telecommunications from, satellite systems.
Establishments providing Internet services or voice over Internet
protocol (VoIP) services via client-supplied telecommunications
connections are also included in this industry.'' For this category,
Census Bureau data for 2007 show that there were a total of 2,383 firms
that operated for the entire year. Of this total, 2,346 firms had
annual receipts of under $25 million. We anticipate that some of these
``Other Telecommunications firms,'' which are small entities, are earth
station applicants/licensees that will be affected by our adopted rule
changes.
We anticipate that our rule changes will have an impact on space
station applicants and licensees. Space station applicants and
licensees, however, rarely qualify under the definition of a small
entity. Generally, space stations cost hundreds of millions of dollars
to construct, launch and operate. Consequently, we do not anticipate
that any space station operators are small entities that would be
affected by our actions.
Description of Projected Reporting, Recordkeeping, and Other Compliance
Requirements for Small Entities
The Order adopts a number of rule changes that will affect
reporting, recordkeeping and other compliance requirements for space
station operators. These changes, as described below, will decrease the
burden for all businesses operators, especially firms that are
applicants for licenses to operate NGSO-like space stations.
We simplify the rules to facilitate improved compliance. First, the
Order simplifies information collections in applications for NGSO-like
space station licenses. Specifically, the Order eliminates reporting
requirements that are more burdensome than necessary. For example, the
Order removes the ``three-licensee presumption,'' a rebuttable
presumption that assumes, for purposes of the modified processing round
procedure for NGSO-like space station applications, a sufficient number
of licensees in the frequency band is three, and if the processing
round results in less than three applicants, \1/3\ of the spectrum in
the allocated band will be reserved for an additional processing round.
To rebut this presumption, a party must provide convincing evidence
that allowing less than three licensees in the frequency band will
result in extraordinarily large, cognizable, and non-speculative
efficiencies. Thus, applicants for NGSO-like space stations will not
need to expend resources, both technical and legal, to demonstrate that
their NGSO-like systems are designed to provide such efficiencies in
order to rebut the three-licensee presumption. Furthermore, in cases
where spectrum was granted pursuant to a processing round, and one or
more of those grants of spectrum is lost or surrendered for any reason,
the rules now allow for the returned spectrum to be redistributed
without automatically triggering a new processing round and the
corresponding costs and paperwork involved, thus reducing the
administrative burdens on those applicants.
Another example is that we see no reason to require non-U.S.-
satellite operators with satellites on the Permitted List to notify the
Commission of a change of ownership before the transfer takes place.
Thus, we revise our rule to state clearly that non-U.S.-satellite
operators are allowed to notify the Commission of transfers of
ownership of Permitted List satellites after the transfer takes place.
Thus, these satellite operators are relieved of any additional burden
that could result from a delay in completing a transfer of Permitted
List satellites pending Commission approval.
Steps Taken To Minimize Significant Economic Impact on Small Entities,
and Significant Alternatives Considered
The RFA requires an agency to describe any significant,
specifically small business, alternatives that it has considered in
reaching its proposed approach, which may include the following four
alternatives (among others): ``(1) the establishment of differing
compliance or reporting requirements or timetables that take into
account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance and
reporting requirements under the rules for such small entities; (3) the
use of performance rather than design standards; and (4) an exemption
from coverage of the rule, or any part thereof, for such small
entities.''
The Commission is aware that some of the revisions may impact small
entities. The First Space Station Licensing Reform Order sought comment
from all interested parties, and small entities were encouraged to
bring to the Commission's attention any specific concerns they may have
with the proposals outlined in the First Space Station Licensing Reform
Order. No commenters raised any specific concerns about the impact of
the revisions on small entities. This order adopts rule revisions to
modernize the rules and advance the satellite industry. The revisions
eliminate unnecessary requirements and expand routine processing to
applications in additional frequency bands, among other changes.
Together, the revisions in this Order lessen the burden of compliance
on small entities with more limited resources than larger entities.
The adopted changes for NGSO-like space station licensing clarify
requirements for NGSO-like modified processing rounds. Each of these
changes will lessen the burden in the licensing process. Specifically,
this Order adopts revisions to reduce filing requirements and clarify
the procedures for redistribution of surrendered spectrum in such a way
that applicant burden will be reduced. Thus, the revisions will
ultimately lead to benefits
[[Page 75344]]
for small NGSO-like space station operators in the long-term.
Report to Congress
The Commission will send a copy of this Second Report and Order,
including this FRFA, in a report to be sent to Congress pursuant to the
Congressional Review Act. In addition, the Commission will send a copy
of this Order, including this FRFA, to the Chief Counsel for Advocacy
of the SBA. A copy of this Report and Order and FRFA (or summaries
thereof) will also be published in the Federal Register.
Legal Basis
The action is authorized under sections 4(i), 7(a), 303(c), 303(f),
303(g), and 303(r) of the Communications Act of 1934, as amended, 47
U.S.C. 154(i), 157(a), 161, 303(c), 303(f), 303(g), and 303(r).
Ordering Clauses
It is ordered, that pursuant to sections 4(i), 301, 302, 303(r),
308, 309, and 310 of the Communications Act, 47 U.S.C. 154(i), 301,
302, 303(r), 308, 309, and 310, and section 1.429 of the Commission's
rules, 47 CFR 1.429, the petitions for reconsideration listed in
Appendix A to the Second Order on Reconsideration are granted in part,
denied in part, and dismissed as moot in part, to the extent indicated
above.
It is further ordered, pursuant to sections 4(i), 7(a), 303(c),
303(f), 303(g), and 303(r) of the Communications Act of 1934, as
amended, 47 U.S.C. 154(i), 157(a), 303(c), 303(f), 303(g), 303(r), that
this Second Order on Reconsideration in IB Docket 02-34 is hereby
adopted.
It is further ordered, that part 25 of the Commission's Rules is
amended as set forth in Appendix B of the Second Order on
Reconsideration and section 25.157 is revised to remove the ``three-
licensee presumption'' as well as the requirement that the Commission
withhold spectrum for use in a subsequent processing round if fewer
than three qualified applicants are licensed in the initial processing
round.
It is further ordered, that section 25.137(g) is amended to clarify
that satellite operators are allowed to notify the Commission of
transfers of ownership of Permitted List satellites after the transfer
takes place.
It is further ordered, that all rule revisions will be effective on
the same date, which will be announced in a Public Notice.
It is further ordered, that the Consumer Information Bureau,
Reference Information Center, shall send a copy of this Order,
including the Final Regulatory Flexibility Certification, to the Chief
Counsel for Advocacy of the Small Business Administration.
It is further ordered, that the Chief, International Bureau is
delegated authority to modify satellite licenses consistent with the
provisions of this Order above.
It is further ordered, that this proceeding is terminated pursuant
to section 4(i) and 4(j) of the Communications Act, 47 U.S.C. 154(i)
and (j), absent applications for review or further appeals of this
Second Order on Reconsideration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
List of Subjects in 47 CFR Part 25
Administrative practice and procedure, Earth stations, Satellites.
For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR part 25 as follows:
PART 25--SATELLITE COMMUNICATIONS
0
1. The authority citation for part 25 continues to read as follows:
Authority: Interprets or applies 47 U.S.C. 154, 301, 302, 303,
307, 309, 310, 319, 332, 605, and 721, unless otherwise noted.
0
2. Revise Sec. 25.137(g) to read as follows:
Sec. 25.137 Requests for U.S. market access through non-U.S.-
licensed space stations.
* * * * *
(g) A non-U.S.-licensed satellite operator that acquires control of
a non-U.S.-licensed space station that has been permitted to serve the
United States must notify the Commission within 30 days after
consummation of the transaction so that the Commission can afford
interested parties an opportunity to comment on whether the transaction
affected any of the considerations we made when we allowed the
satellite operator to enter the U.S. market. A non-U.S.-licensed
satellite that has been transferred to new owners may continue to
provide service in the United States unless and until the Commission
determines otherwise. If the transferee or assignee is not 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, the non-U.S.-licensed
satellite operator will be required to make the showing described in
paragraph (a) of this section.
0
3. Amend Sec. 25.157 by revising paragraph (e) and removing paragraph
(g)(3) to read as follows:
* * * * *
(e)(1) In the event that there is insufficient spectrum in the
frequency band available to accommodate all the qualified applicants in
a processing round, the available spectrum will be divided equally
among the licensees whose applications are granted pursuant to
paragraph (d) of this section, except as set forth in paragraph (e)(2)
of this section.
(2) In cases where one or more applicants apply for less spectrum
than they would be warranted under paragraph (e)(1) of this section,
those applicants will be assigned the bandwidth amount they requested
in their applications. In those cases, the remaining qualified
applicants will be assigned the lesser of the amount of spectrum they
requested in their applications, or the amount of spectrum that they
would be assigned if the available spectrum were divided equally among
the remaining qualified applicants.
* * * * *
[FR Doc. 2016-25935 Filed 10-28-16; 8:45 am]
BILLING CODE 6712-01-P