81_FR_75548 81 FR 75338 - Amendment of the Commission's Space Station Licensing Rules and Policies, Second Order on Reconsideration

81 FR 75338 - Amendment of the Commission's Space Station Licensing Rules and Policies, Second Order on Reconsideration

FEDERAL COMMUNICATIONS COMMISSION

Federal Register Volume 81, Issue 210 (October 31, 2016)

Page Range75338-75344
FR Document2016-25935

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.

Federal Register, Volume 81 Issue 210 (Monday, October 31, 2016)
[Federal Register Volume 81, Number 210 (Monday, October 31, 2016)]
[Rules and Regulations]
[Pages 75338-75344]
From the Federal Register Online  [www.thefederalregister.org]
[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



                                           75338            Federal Register / Vol. 81, No. 210 / Monday, October 31, 2016 / Rules and Regulations

                                           shall not be presumed primarily to serve                accordingly. Likewise, LSC will                          (d) The requirements of this section
                                           a public interest.                                      aggregate multiple requests for                       shall not apply if:
                                              (3) Where LSC has determined that a                  documents received from the same                         (1) LSC determines upon initial
                                           fee waiver or reduction request is                      requester within 45 days.                             review of the requested confidential
                                           justified for only some of the records to                                                                     commercial information that the
                                           be released, LSC shall grant the fee                    § 1602.15    Submitter’s rights process.              requested information should not be
                                           waiver or reduction for those records.                     (a) When LSC receives a FOIA request               disclosed;
                                              (4) Requests for fee waivers and                     seeking the release of confidential                      (2) The information has been
                                           reductions shall be made in writing and                 commercial information, LSC shall                     previously published or officially made
                                           must address the factors listed in this                 provide prompt written notice of the                  available to the public; or
                                           paragraph as they apply to the request.                 request to the submitter in order to                     (3) Disclosure of the information is
                                              (h) Requesters must agree to pay all                 afford the submitter an opportunity to                required by statute (other than FOIA) or
                                           fees charged for services associated with               object to the disclosure of the requested             LSC’s regulations.
                                           their requests. LSC will assume that                    confidential commercial information.                     (e) Whenever a requester files a
                                           requesters agree to pay all charges for                 The notice shall reasonably describe the              lawsuit seeking to compel disclosure of
                                           services associated with their requests                 confidential commercial information                   a submitter’s information, LSC shall
                                           up to $25 unless otherwise indicated by                 requested and inform the submitter of                 promptly notify the submitter.
                                           the requester. For requests estimated to                the process required by paragraph (b) of                 (f) Whenever LSC provides a
                                           exceed $25, LSC will consult with the                   this section.                                         submitter with notice and opportunity
                                           requester prior to processing the                          (b) If a submitter who has received                to oppose disclosure under this section,
                                           request, and such requests will not be                  notice of a request for the submitter’s               LSC shall notify the requester that the
                                           deemed to have been received by LSC                     confidential commercial information                   submitter’s rights process under this
                                           until the requester agrees in writing to                wishes to object to the disclosure of the             section has been triggered. Likewise,
                                           pay all fees charged for services.                      confidential commercial information,                  whenever a submitter files a lawsuit
                                              (i) No requester will be required to                 the submitter must provide LSC with a                 seeking to prevent the disclosure of the
                                           make an advance payment of any fee                      detailed written statement identifying                submitter’s information, LSC shall
                                           unless:                                                 the information which it objects to LSC
                                              (1) The requester has previously failed                                                                    notify the requester.
                                                                                                   disclosing. The submitter must send its                 Dated: October 20, 2016.
                                           to pay a required fee within 30 days of
                                                                                                   objections to the Office of Legal Affairs
                                           the date of billing, in which case an                                                                         Stefanie K. Davis,
                                                                                                   or, if it pertains to Office of Inspector
                                           advance deposit of the full amount of                                                                         Assistant General Counsel.
                                                                                                   General records, to the Office of
                                           the anticipated fee together with the fee                                                                     [FR Doc. 2016–25832 Filed 10–28–16; 8:45 am]
                                                                                                   Inspector General, and must specify the
                                           then due plus interest accrued may be
                                                                                                   grounds for withholding the information               BILLING CODE P
                                           required (and the request will not be
                                                                                                   under FOIA or this part. In particular,
                                           deemed to have been received by LSC
                                                                                                   the submitter must demonstrate why the
                                           until such payment is made); or                                                                               FEDERAL COMMUNICATIONS
                                              (2) LSC determines that an estimated                 information is commercial or financial
                                                                                                   information that is privileged or                     COMMISSION
                                           fee will exceed $250, in which case the
                                           requester shall be notified of the amount               confidential. The submitter’s statement
                                                                                                   must be received by LSC within seven                  47 CFR Part 25
                                           of the anticipated fee or such portion
                                           thereof as can readily be estimated.                    business days of the date of the notice               [IB Docket No. 02–34; FCC 16–108]
                                           Such notification shall be transmitted as               from LSC. If the submitter fails to
                                                                                                   respond to the notice from LSC within                 Amendment of the Commission’s
                                           soon as possible, but in any event
                                                                                                   that time, LSC will deem the submitter                Space Station Licensing Rules and
                                           within five working days of receipt by
                                                                                                   to have no objection to the disclosure of             Policies, Second Order on
                                           LSC, giving the best estimate then
                                                                                                   the information.                                      Reconsideration
                                           available. The notification shall offer the
                                           requester the opportunity to confer with                   (c) Upon receipt of written objection
                                                                                                                                                         AGENCY:  Federal Communications
                                           appropriate representatives of LSC for                  to disclosure by a submitter, LSC shall
                                                                                                                                                         Commission.
                                           the purpose of reformulating the request                consider the submitter’s objections and
                                                                                                   specific grounds for withholding in                   ACTION: Final rule.
                                           so as to meet the needs of the requester
                                           at a reduced cost. The request will not                 deciding whether to release the                       SUMMARY:   The Federal Communications
                                           be deemed to have been received by                      disputed information. Whenever LSC                    Commission addresses the remaining
                                           LSC for purposes of the initial 20-day                  decides to disclose information over the              petitions for reconsideration of the First
                                           response period until the requester                     objection of the submitter, LSC shall                 Space Station Licensing Reform Order,
                                           makes a deposit on the fee in an amount                 give the submitter written notice which               and amends, clarifies, or eliminates
                                           determined by LSC.                                      shall include:                                        certain provisions to streamline its
                                              (j) Interest may be charged to those                    (1) A description of the information to            procedures and ease administrative
                                           requesters who fail to pay the fees                     be released and a notice that LSC                     burdens on applicants and licensees.
                                           charged. Interest will be assessed on the               intends to release the information;
                                                                                                                                                         DATES: Effective November 30, 2016.
                                           amount billed, starting on the 31st day                    (2) A statement of the reason(s) why
                                                                                                   the submitter’s request for withholding               FOR FURTHER INFORMATION CONTACT: Jay
                                           following the day on which the billing
                                                                                                   is being rejected; and                                Whaley, 202–418–7184, or if concerning
                                           was sent. The rate charged will be as
                                                                                                      (3) Notice that the submitter shall                the information collections in this
                                           prescribed in 31 U.S.C. 3717.
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                                              (k) If LSC reasonably believes that a                have five business days from the date of              document, Cathy Williams, 202–418–
                                           requester or group of requesters is                     the notice of proposed release to appeal              2918.
                                           attempting to break a request into a                    that decision to the LSC President or                 SUPPLEMENTARY INFORMATION:  This is a
                                           series of requests for the purpose of                   Inspector General (as provided in                     summary of the Commission’s Second
                                           evading the assessment of fees, LSC                     § 1602.13 (c)), whose decision shall be               Order on Reconsideration, FCC 16–108,
                                           shall aggregate such requests and charge                final.                                                adopted on August 15, 2016 and


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                                                            Federal Register / Vol. 81, No. 210 / Monday, October 31, 2016 / Rules and Regulations                                          75339

                                           released August 16, 2016. The full text                 bands compete with each other in the                  a satellite license from being transferred
                                           of the Second Order on Reconsideration                  provision of satellite-based services in              to an entity that would put it to its
                                           is available at https://apps.fcc.gov/                   broader markets, and we note that there               highest valued use in the shortest
                                           edocs_public/attachmatch/FCC-16-                        are numerous NGSO-like system                         amount of time. The Commission put in
                                           108A1.pdf. It is also available for                     operators that currently compete across               place certain safeguards, including a
                                           inspection and copying during business                  frequency bands.                                      determination of whether the seller
                                           hours in the FCC Reference Information                     We also recognize that in cases where              obtained the license in good faith or for
                                           Center, Portals II, 445 12th Street SW.,                one or more applicants in a processing                the primary purpose of selling it for
                                           Room CYA257, Washington, DC 20554.                      round request less spectrum than they                 profit, whether the licensee made
                                           To request materials in accessible                      would be assigned if all the available                serious efforts to develop a satellite or
                                           formats for people with disabilities,                   spectrum were divided equally among                   constellation, and/or whether the
                                           send an email to FCC504@fcc.gov or call                 all the qualified applicants, some                    licensee faces changed circumstances.
                                           the Consumer & Governmental Affairs                     spectrum would remain unassigned,                     Petitioners expressed concern that by
                                           Bureau at 202–418–0530 (voice), 202–                    thus we retain the procedure that the                 making this determination, the
                                           418–0432 (TTY).                                         Commission adopted in the First Space                 Commission would undercut the public
                                                                                                   Station Licensing Reform Order, to                    interest benefits it identified in
                                           Synopsis                                                redistribute the remaining spectrum                   eliminating the anti-trafficking rule. We
                                              In the First Space Station Licensing                 among the other qualified applicants                  reiterate that this limited exception does
                                           Reform Order, 68 FR 51499, the                          who have previously applied for the                   not undermine our elimination of the
                                           Commission adopted new satellite                        spectrum. If spectrum still remains, then             anti-trafficking rule, and we require that
                                           licensing procedures intended to enable                 interested parties would be free to apply             parties opposing a transaction based on
                                           the Commission to issue satellite                       for that unassigned spectrum in another               a seller’s motivation to provide, at a
                                           licenses more quickly without allowing                  processing round.                                     minimum, substantial evidence that a
                                           satellite license applicants to abuse the                                                                     satellite license was obtained for
                                           Commission’s licensing procedures. In                   Procedures for Redistribution of
                                                                                                   Spectrum                                              purposes of selling the license for profit,
                                           response, a number of petitions for                                                                           thus preventing opponents to a
                                           reconsideration were filed. The                           We clarify the procedures that apply                transaction from delaying the
                                           Commission addressed those petitions                    when we redistribute spectrum among                   transaction on purely frivolous grounds
                                           that were focused on the satellite bond                 the remaining NGSO-like systems after                 and ensuring that these transactions do
                                           requirements in the First Order on                      an authorization for a NGSO-like system               not encounter any unwarranted delay.
                                           Reconsideration and Fifth Report and                    has been canceled or otherwise becomes                   In the First Space Station Licensing
                                           Order. This Second Order on                             available. This redistribution procedure              Reform Order, the Commission adopted
                                           Reconsideration addresses the                           applies only in cases where spectrum                  a rule prohibiting sales of places in the
                                           remaining petitions for reconsideration                 was granted pursuant to a processing                  queue as an additional safeguard against
                                           of the First Space Station Licensing                    round, and one or more of those grants                speculation and revised its rules so that
                                           Reform Order and amends the                             of spectrum is lost or surrendered for                an applicant proposing to merge with
                                           Commission’s rules in order to                          any reason. In these cases, the                       another company could do so without
                                           streamline these new satellite licensing                Commission will issue a public notice                 losing its place in the processing queue.
                                           procedures, and to clarify and reaffirm                 or order announcing the loss or                       The revised rule treated transfers of
                                           safeguards against subversion of the                    surrender of such spectrum, and will                  control as minor amendments, thus
                                           licensing process, thus furthering the                  then propose to modify the remaining                  within the queue, and major
                                           goals of the First Space Station                        grants to redistribute the returned                   amendments to applications as newly
                                           Licensing Reform Order to develop a                     spectrum among the remaining system                   filed applications, thus moving to the
                                           faster satellite licensing procedure while              operators that have requested use of the              end of the queue. We find that it is not
                                           safeguarding against speculative                        spectrum. The returned spectrum will                  inconsistent to prohibit an applicant
                                           applications, thereby expediting service                generally be redistributed equally                    from selling its place in the queue,
                                           to the public.                                          among the remaining operators that                    while allowing an applicant that
                                                                                                   requested the spectrum, although no                   transfers control over itself to a new
                                           NGSO-Like Processing Round
                                                                                                   operator will receive more spectrum on                controlling party to retain its place in
                                           Procedure
                                                                                                   redistribution than it requested in its               the queue, especially when the new
                                              We revise section 25.157(e) of the                   application. Additionally, if an operator             company is better positioned to compete
                                           current rules to eliminate the                          has not requested use of a particular                 in the marketplace, and that an
                                           requirement that the Commission                         spectrum band, it will not receive                    applicant’s transfer of control is less
                                           withhold spectrum for use in a                          spectrum in that band. If the                         likely to be used as an abusive strategy
                                           subsequent processing round if fewer                    Commission is unable to make a finding                than selling its place in the queue.
                                           than three qualified applicants file                    that there will be reasonably efficient
                                           applications in the initial processing                                                                        Effect of License Surrender Prior to
                                                                                                   use of the spectrum, we will consider on
                                           round, known as the ‘‘three-licensee                                                                          Milestone Deadlines on Application
                                                                                                   a case-by-case basis whether to open a
                                           presumption.’’ We find that the ‘‘three-                                                                      Limit
                                                                                                   new processing round for the returned
                                           licensee presumption’’ is overly                        spectrum, leave it unassigned at that                    Under section 25.159(d) of the rules,
                                           restrictive for its intended purpose. We                point, or repurpose it for another use.               adopted in the First Space Station
                                           agree with petitioners that a specific                                                                        Licensing Reform Order and commonly
                                           frequency band does not necessarily                     Safeguards Against Speculation                        referred to as the ‘‘Three-Strikes’’ rule,
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                                           equate to a market, and thus having                        In the First Space Station Licensing               if a licensee misses three milestones in
                                           fewer than three licensees in a band                    Reform Order, the Commission                          any three-year period, it is prohibited
                                           does not necessarily indicate a harmful                 eliminated the anti-trafficking rule for              from filing additional satellite
                                           lack of competition in some market that                 satellites, which prohibited satellite                applications if it possesses two satellite
                                           we should attempt to remedy. We find                    licensees from selling ‘‘bare’’ satellite             applications and/or unbuilt satellites in
                                           it common that licensees in different                   licenses for profit, so as not to prevent             any frequency band. This limit remains


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                                           75340            Federal Register / Vol. 81, No. 210 / Monday, October 31, 2016 / Rules and Regulations

                                           in force until the licensee demonstrates                compliance with the limits within a                      are subject to competition. We have also
                                           that it would be very likely to construct               reasonable amount of time.1                              granted U.S. market access to many non-
                                           its licensed facilities if it were allowed                                                                       U.S.-licensed satellites operating at
                                                                                                   Needs for Safeguards in Different Parts
                                           to file more applications. The                                                                                   those locations to provide services to
                                                                                                   of the GSO Orbit
                                           Commission reasoned that a licensee                                                                              U.S. customers. Thus, allowing
                                           that consistently obtains licenses but                     In its Petition, Hughes asserts that the              operators to hold these orbital locations
                                           does not meet its milestones precludes                  limit on pending applications and                        while they decide whether to proceed
                                           others from going forward with their                    licensed-but-unlaunched satellites is not                with implementation could preclude
                                                                                                   necessary for those orbital locations not                other operators whose plans also
                                           business plans while it holds those
                                                                                                   covering the United States.2 Hughes also                 involve providing international service
                                           licenses.
                                                                                                   advocates eliminating the bond                           from going forward. For these reasons,
                                              SES Americom (SES) maintains that                    requirement for applicants for satellites                we will continue to apply the safeguards
                                           the Commission should not consider a                    that will operate at non-U.S. orbital                    against speculation, including the bond
                                           licensee’s relinquishing a license prior                locations.3 Hughes proposes to define                    requirement, where appropriate,
                                           to the contract execution milestone in                  ‘‘U.S.’’ orbital locations as those within               regardless of orbital location.
                                           determining whether to impose the limit                 the orbital arc between 60° W.L. and
                                           on satellite applications and/or unbuilt                140° W.L., and to define ‘‘non-U.S.’’                    Satellite System Implementation
                                           satellites on that licensee. As an initial              locations as those outside that arc.                     Requirements
                                           matter, we note that the milestone rules                Hughes argues that the limit should not                     In its petition for reconsideration, ICO
                                           have been revised in the Part 25 Review                 apply to the ‘‘non-U.S.’’ orbital locations              asserts that the First Space Station
                                           Second R&O to eliminate interim                         because other Administrations have                       Licensing Reform Order does not state
                                           milestones. As a result, there is no                    international coordination priority at                   clearly that NGSO-like licensees
                                           longer a contract execution milestone,                  many of those locations and because                      acquiring additional spectrum from
                                           and thus SES’s arguments are now moot                   many other Administrations have                          other NGSO-like licensees are permitted
                                           in part. However, since we retained the                 volatile economies. Hughes argues that                   to implement a single, integrated NGSO
                                           final milestone requirement, any                        the demand for such locations has been                   system under a single milestone
                                           authorization surrendered prior to                      ‘‘reasoned and measured,’’ so that the                   schedule. ICO requests the Commission
                                           fulfilling the remaining milestone                      Commission can address them in an                        to clarify that such licensees will not be
                                           requirement will continue to be subject                 orderly fashion.                                         required to construct multiple separate
                                                                                                      The purpose of the safeguards in                      satellite systems.
                                           to the ‘‘Three-Strikes’’ rule. For the                  section 25.159 of the Commission’s
                                           reasons set forth in the Part 25 Review                                                                             The Commission eliminated the anti-
                                                                                                   rules is not to reduce the number of                     trafficking rule to allow NGSO-like
                                           Second R&O, we continue to believe                      satellite applications to a ‘‘reasoned and
                                           that, on balance, retaining this                                                                                 licensees in modified processing rounds
                                                                                                   measured’’ level. Rather, the                            to acquire rights to operate on
                                           milestone and the resulting operation of                Commission intended the safeguards to
                                           the ‘‘Three Strikes’’ rule best serves the                                                                       additional spectrum from other
                                                                                                   discourage speculators from applying                     licensees if they feel it is necessary to
                                           public interest, and we see no                          for satellite licenses, thereby precluding
                                           compelling justification to counter-                                                                             meet their business needs. It would be
                                                                                                   another applicant from obtaining a                       inefficient to require these licensees to
                                           balance the public interest benefits in                 license, constructing a satellite, and
                                           retaining the current requirements.                                                                              build two incompatible satellite
                                                                                                   providing service to the customers.                      networks, each operating in only part of
                                           Accordingly, we will continue to                        Hughes assumes that, because fewer
                                           presume that these licensees (i.e., those                                                                        the spectrum rights that the licensee is
                                                                                                   applications are filed outside of the arc                authorized to use. We therefore clarify
                                           covered under the ‘‘Three Strikes’’ rule)               from 60° W.L. to 140° W.L. than within                   that NGSO-like licensees acquiring
                                           acquired licenses for speculative                       that arc, speculation is not a concern.                  spectrum rights from other NGSO-like
                                           purposes, and we will restrict the                      Although demand may not be as great                      licensees are permitted to build a single,
                                           number of additional satellite                          for locations that cannot serve large                    integrated NGSO-like system operating
                                           applications they may file to limit the                 portions of the United States, we have                   on all authorized frequency bands,
                                           potential for future speculation while                  licensed many satellites at orbital                      under a single milestone schedule.
                                           the presumption is in effect.                           locations in this portion of the arc that                These cases are inherently fact-specific,
                                           Effects of Mergers on Application                          1 In ruling on proposed mergers, the Commission
                                                                                                                                                            and so we decline to adopt a blanket
                                           Limits                                                  routinely assesses ‘‘whether the proposed
                                                                                                                                                            approach about the milestone schedule
                                                                                                   transaction complies with the specific provisions of     that would apply in these cases.4 If the
                                              SIA asserts that it is unclear in the                the Act, other applicable statutes, and the              milestone schedules of each license
                                           First Space Station Licensing Reform                    Commission’s rules.’’                                    differ, we will address, on a case-by-
                                                                                                      2 As noted above, the First Space Station
                                           Order how the limit on pending and                                                                               case basis, the particular milestone
                                                                                                   Licensing Reform Order established two limits on
                                           licensed but unlaunched satellites                      pending applications and/or unbuilt satellites, the      schedule that will be imposed on the
                                           applies to satellite operators that would               stricter of the two limits is applicable to licensees    integrated system.
                                           be formed by the merger of two                          that have established a pattern of missing
                                                                                                   milestones. Hughes maintains that the stricter limit     Non-U.S.-Licensed Satellites
                                           companies. We clarify that the limit on
                                                                                                   should not apply to orbital locations not covering
                                           satellite applications does not prevent                 the United States. We also observed above that the
                                                                                                                                                              Under the terms of the World Trade
                                           the filing of an application for transfer               Part 25 Review Second R&O eliminated one of the          Organization (WTO) Agreement on
                                           of control or assignment of licenses,                   two limits on pending applications and/or unbuilt
                                                                                                   satellites and the bond requirement. As a result, this
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                                                                                                                                                              4 For example, depending on the differences in
                                           even if the combined entities would not                 issue is moot.                                           the milestone schedules, permitting licensees to
                                           meet the limits on pending applications                    3 In the Part 25 Review Second R&O, the               adopt a schedule with significantly more time
                                           and unbuilt stations specified in the                   Commission adopted significant revisions to the          might encourage licensees to acquire other licensees
                                           rule. Of course, any such approval of the               bond requirement adopted in the First Space              merely to gain more time to fulfill their milestone
                                                                                                   Station Licensing Reform Order. However, the             schedules. On the other hand, integrating additional
                                           transfer of control will ultimately be                  Commission continues to require a bond for all           spectrum into a single network may legitimately
                                           conditioned on the entity coming into                   satellite licenses regardless of the orbit location.     require more time in some cases.



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                                                             Federal Register / Vol. 81, No. 210 / Monday, October 31, 2016 / Rules and Regulations                                         75341

                                           Basic Telecommunication Services                        Commission’s rules to make clear that                 Regulations of the International
                                           (WTO Telecom Agreement),5 WTO                           non-U.S.-satellite operators may notify               Telecommunication Union (ITU).
                                           signatories, including the United States,               the Commission of a change of                         Hughes requests that we clarify how we
                                           have made binding commitments to                        ownership after the transfer takes place.             will determine whether to grant or deny
                                           open their markets to foreign                           We will do so. The Commission did not                 market access requests from non-U.S.-
                                           competition in satellite services.6                     intend to require foreign entities to                 licensed satellite operators, particularly
                                           Consistent with those commitments, the                  notify the Commission of the                          in cases where a non-U.S. operator has
                                           Commission adopted DISCO II in 1997                     transaction before it had been                        ITU coordination date-filing priority,
                                           to establish procedures for non-U.S.-                   completed. Rather, the Commission                     i.e., an earlier ITU protection date, but
                                           licensed satellite operators seeking                    adopted its proposal in the Space                     is behind a U.S. applicant in the U.S.
                                           access to the U.S. market. In the DISCO                 Station Licensing Reform NPRM to                      space station queue. In particular,
                                           II First Reconsideration Order, the                     address such changes in ownership by                  Hughes argues that the first-come, first-
                                           Commission streamlined those                            ‘‘issuing a public notice announcing                  served procedure should not ‘‘block’’ a
                                           procedures.                                             that the transaction has taken place.’’               non-U.S.-licensed satellite operator with
                                              In the First Space Station Licensing                 Therefore, we revise section 25.137(g) as             ITU priority.
                                           Reform Order, the Commission                            SIA suggests, as set forth in Appendix                   The Commission discussed
                                           established a procedure for addressing                  B of the Second Order on                              international coordination issues in the
                                           changes in ownership of non-U.S.-                       Reconsideration. We also clarify that                 First Space Station Licensing Reform
                                           licensed satellites. Specifically, when                 parties must notify the Commission                    Order. Specifically, the Commission
                                           the operator of such a satellite                        within 30 days after consummation of                  stated that it will license satellites at
                                           undergoes a change in ownership, the                    the transaction in order to enable the                orbital locations at which another
                                           Commission requires the satellite                       Commission to perform the review                      Administration has ITU priority. In fact,
                                           operator to notify the Commission of the                described in the First Space Station                  if a later-filed market access request—
                                           change. The Commission then issues a                    Licensing Reform Order in a meaningful                with or without ITU priority—is
                                           public notice announcing that the                       and timely manner while the new                       mutually exclusive with an earlier-filed,
                                           transaction has taken place and inviting                foreign operator is permitted to access               granted application, it may be dismissed
                                           comment on whether the transaction                      the U.S. market.                                      absent a coordination agreement
                                           affects any of the considerations made                     Further, in the First Space Station                between the applicants. The
                                           when the original satellite operator was                Licensing Reform Order, the                           Commission further stated, however,
                                           allowed to enter the U.S. market. In                    Commission stated that operators                      that it will issue the earlier-filed
                                           addition, if control of the satellite was               requesting authority to provide service               authorization subject to the outcome of
                                           transferred to an operator not based in                 in the United States from a foreign-                  the international coordination process,
                                           a WTO member country, the                               licensed satellite must file Form 312                 and emphasized that the Commission is
                                           Commission would invite comment on                      (Application for Satellite Space and                  not responsible for the success or failure
                                           whether the purchaser has satisfied all                 Earth Station Authorizations). Hughes                 of the required international
                                           applicable DISCO II requirements. The                   asserts that the electronic Form 312                  coordination. Absent such coordination,
                                           Commission then determines whether                      does not allow a non-U.S.-licensed                    a U.S.-licensed satellite making use of
                                           any commenter raised any concern that                   satellite operator to indicate that it is             an ITU filing with a later protection date
                                           would warrant precluding the new                        not seeking a Commission license, but is              would be required to cease service to
                                           operator from entering the U.S. market,                 instead seeking U.S. market access.                   the U.S. market immediately upon
                                           including concerns relating to national                 Hughes also questions whether parties                 launch and operation of a non-U.S.-
                                           security, law enforcement, foreign                      seeking U.S. market access must file                  licensed satellite with an earlier
                                           policy, or trade issues.                                their requests electronically. First,                 protection date, or be subject to further
                                              According to SIA, the rule revisions                 contrary to Hughes’s assertion, the                   conditions. We continue to follow this
                                           adopted in the First Space Station                      electronic version of Form 312 provides               general approach today.
                                           Licensing Reform Order to implement                     a place to indicate that the applicant is
                                                                                                                                                         Modifications
                                           this satellite transfer procedure do not                filing for a petition for declaratory
                                                                                                   ruling, which is the procedure for                       Hughes notes that the rule revisions
                                           state clearly that satellite operators are
                                                                                                   requesting U.S. market access. Second,                adopted in the First Space Station
                                           allowed to notify the Commission of
                                                                                                   the Commission stated explicitly in the               Licensing Reform Order require the
                                           transfers of ownership of satellites after
                                                                                                   First Space Station Licensing Reform                  Commission to treat modification
                                           the transfer takes place. SIA asks us to
                                                                                                   Order that U.S. market access requests                requests involving new orbital locations
                                           revise section 25.137(g) of the
                                                                                                   must be filed electronically, and we                  or new frequency bands in the
                                              5 The WTO came into being on January 1, 1995,        continue to believe that mandatory                    application processing queue, and other
                                           pursuant to the Marrakesh Agreement Establishing        electronic filing serves the public                   modification requests outside of the
                                           the World Trade Organization (the Marrakesh             interest by facilitating prompt receipt of            queue. Hughes supports this approach,
                                           Agreement). The Marrakesh Agreement includes            petitions for declaratory ruling and                  but asserts that the Commission stated
                                           multilateral agreements on the trade in goods,
                                           services, intellectual property, and dispute            accurate recording of the time of filing              elsewhere in the First Space Station
                                           settlement. The General Agreement on Trade in           under the first-come, first-served                    Licensing Reform Order that, unless it
                                           Service (GATS) is Annex 1B of the Marrakesh             processing procedure, and by providing                could categorically classify certain
                                           Agreement. The WTO Telecom Agreement was                other administrative efficiencies.                    modification requests involving new
                                           incorporated into the GATS by the Fourth Protocol
                                           to the GATS (April 30, 1996).
                                                                                                                                                         frequencies or orbital locations as
                                                                                                   ITU Priority                                          ‘‘minor,’’ it would treat all such
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                                              6 The United States made market access

                                           commitments for Direct-to-Home (DTH) Service,              In the First Space Station Licensing               modification requests in the processing
                                           Direct Broadcast Satellite (DBS) Service, and Digital   Reform Order, the Commission                          queue. Hughes requests the Commission
                                           Audio Radio Service (SDARS), and took an                discussed the interrelationship between               to reconcile these two statements.
                                           exemption from most-favored nation (MFN)
                                           treatment for those services as well. Generally,
                                                                                                   its domestic licensing framework and                     In the First Space Station Licensing
                                           GATS requires WTO member countries to afford            the international coordination                        Reform Order, the Commission revised
                                           MFN treatment to all other WTO member nations.          framework set forth in the Radio                      its rules to adopt a clear, simple test for


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                                           75342             Federal Register / Vol. 81, No. 210 / Monday, October 31, 2016 / Rules and Regulations

                                           determining whether to process a                        to the currently approved collection,                 when a license is cancelled for any
                                           modification request in the processing                  OMB Control Number 3060–0678. ICR                     reason.
                                           queue: modification requests involving                  Reference Number: 201610–3060–011.                      (2) Clarify that non-U.S.-satellite
                                           new orbital locations or new frequency                     Pursuant to the Small Business                     operators may notify the Commission of
                                           bands are considered in the queue, and                  Paperwork Relief Act of 2002, Public                  a change of ownership after the transfer
                                           other modifications are considered                      Law 107–198, see 44 U.S.C. 3506(c)(4),                takes place.
                                           outside of the queue.7 We clarify here                  we previously sought specific comment
                                           that nothing in the text of the First                   on how the Commission might further                   Summary of Significant Issues Raised
                                           Space Station Licensing Reform Order                    reduce the information collection                     by Public Comments in Response to the
                                           was intended to alter the Commission’s                  burden for small business concerns with               IRFA
                                           decision to consider modification                       fewer than 25 employees. We received                    No party filing comments in this
                                           requests in this fashion. The                           no comments on this issue. We have                    proceeding responded to the IRFA, and
                                           Commission also suggested, however,                     assessed the effects of the revisions                 no party filing comments in this
                                           that it could, at a later date, adopt rules             adopted that might impose information                 proceeding otherwise argued that the
                                           to define certain modification requests                 collection burdens on small business                  policies and rules proposed in this
                                           involving new orbital locations as                      concerns, and find that the impact on                 proceeding would have a significant
                                           minor, and to consider such                             businesses with fewer than 25                         economic impact on a substantial
                                           modification requests outside the queue.                employees will be an overall reduction                number of small entities. The
                                           In this regard, in the Second Space                     in burden. The amendments adopted in                  Commission has, nonetheless,
                                           Station Licensing Reform Order, the                     this Second Order on Reconsideration                  considered any potential significant
                                           Commission decided to treat certain                     eliminate unnecessary information                     economic impact that the rule changes
                                           fleet management modification requests                  filing requirements for licensees and                 may have on the small entities which
                                           involving orbital reassignment of                       applicants; eliminate unnecessary                     are impacted. On balance, the
                                           specific satellites outside the queue. We               technical restrictions and enable                     Commission believes that the economic
                                           affirm, however, that, absent a                         applicants and licensees to conserve                  impact on small entities will be positive
                                           rulemaking finding public interest                      time, effort, and expense in preparing                rather than negative, and that the rule
                                           reasons to create additional exceptions,                applications and reports. Overall, these              changes move to streamline the part 25
                                           we will continue to process orbital                     changes may have a greater positive                   requirements.
                                           reassignment and frequency                              impact on small business entities with
                                           modification requests as set forth in                   more limited resources.                               Response to Comments by the Chief
                                           section 25.117(d)(2)(iii).                                                                                    Counsel for Advocacy of the Small
                                                                                                   Congressional Review Act                              Business Administration
                                           Supplemental Final Regulatory
                                           Flexibility Analysis                                      The Commission will send copies of                     Pursuant to the Small Business Jobs
                                                                                                   this Second Order on Reconsideration to               Act of 2010, the Commission is required
                                             As required by the Regulatory                         Congress and the General
                                           Flexibility Act (RFA), an Initial                                                                             to respond to any comments filed by the
                                                                                                   Accountability Office pursuant to the                 Chief Counsel for Advocacy of the Small
                                           Regulatory Flexibility Analysis (IRFA)                  Congressional Review Act, 5 U.S.C.
                                           was incorporated in the Further Notice                                                                        Business Administration, and to provide
                                                                                                   801(a)(1)(A).                                         a detailed statement of any change made
                                           of Proposed Rulemaking in the Matter of
                                           Comprehensive Review of Licensing and                   Effective Date                                        to the proposed rules as a result of those
                                           Operating Rules for Satellite Services.                   The effective date for the rules                    comments. The Chief Counsel did not
                                           The Commission sought written public                    adopted in this Second Order on                       file any comments in response to the
                                           comment on the proposals in the                         Reconsideration is 30 days after date of              proposed rules in this proceeding.
                                           Further Notice, including comment on                    publication in the Federal Register.                  Description and Estimate of the Number
                                           the IRFA. No comments were received                                                                           of Small Entities to Which the Rules
                                           on the IRFA. This Final Regulatory                      Need for, and Objectives of, the Rules
                                                                                                                                                         May Apply
                                           Flexibility Analysis (FRFA) conforms to                    This Order adopts minor changes to
                                           the RFA.                                                part 25 of the Commission’s rules,                       The RFA directs agencies to provide
                                                                                                   which governs licensing and operation                 a description of, and, where feasible, an
                                           Paperwork Reduction Act                                                                                       estimate of, the number of small entities
                                                                                                   of space stations and earth stations for
                                             This document does not contain new                    the provision of satellite communication              that may be affected by the rules
                                           or modified information collection                      services.8 We revise the rules to, among              adopted herein. The RFA generally
                                           requirements subject to the Paperwork                   other things, further the goals of the                defines the term ‘‘small entity’’ as
                                           Reduction Act of 1995, Public Law 104–                  First Space Station Licensing Reform                  having the same meaning as the terms
                                           13. Therefore it does not contain any                   Order to develop a faster satellite                   ‘‘small business,’’ ‘‘small organization,’’
                                           new or modified ‘‘information burden                    licensing procedure while safeguarding                and ‘‘small governmental jurisdiction.’’
                                           for small business concerns with fewer                  against speculative applications, thereby             In addition, the term ‘‘small business’’
                                           than 25 employees’’ pursuant to the                     expediting service to the public.                     has the same meaning as the term
                                           Small Business Paperwork Relief Act of                     This Order revises two sections of                 ‘‘small business concern’’ under the
                                           2002, Public Law 107–198. Thus, on                      part 25 of the rules. Specifically, it                Small Business Act. A small business
                                           October 14, 2016, the Office of                         revises the rules to:                                 concern is one which: (1) Is
                                           Management and Budget (OMB)                                (1) Eliminate the ‘‘three-licensee                 independently owned and operated; (2)
                                           determined that the rule changes in this                presumption’’ that applies to the NGSO-               is not dominant in its field of operation;
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                                           document are non-substantive changes                    like processing round procedure, and                  and (3) satisfies any additional criteria
                                                                                                   also revise the procedures that we will               established by the Small Business
                                              7 The Commission adopted this test instead of a
                                                                                                   apply when we redistribute spectrum                   Administration (SBA). Below, we
                                           more complex proposal to place ‘‘major’’
                                           modification requests in the queue, and to define       among remaining NGSO-like licensees                   describe and estimate the number of
                                           ‘‘major’’ modification requests as those that would                                                           small entity licensees that may be
                                           ‘‘degrade the interference environment.’’                 8 47   CFR part 25, Satellite Communications.       affected by the adopted rules.


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                                                            Federal Register / Vol. 81, No. 210 / Monday, October 31, 2016 / Rules and Regulations                                         75343

                                           Satellite Telecommunications and All                    applicants and licensees. Space station               of a change of ownership before the
                                           Other Telecommunications                                applicants and licensees, however,                    transfer takes place. Thus, we revise our
                                              The rules adopted in this Order will                 rarely qualify under the definition of a              rule to state clearly that non-U.S.-
                                           affect some providers of satellite                      small entity. Generally, space stations               satellite operators are allowed to notify
                                           telecommunications services. Satellite                  cost hundreds of millions of dollars to               the Commission of transfers of
                                           telecommunications service providers                    construct, launch and operate.                        ownership of Permitted List satellites
                                           include satellite and earth station                     Consequently, we do not anticipate that               after the transfer takes place. Thus,
                                           operators. Since 2007, the SBA has                      any space station operators are small                 these satellite operators are relieved of
                                           recognized two census categories for                    entities that would be affected by our                any additional burden that could result
                                           satellite telecommunications firms:                     actions.                                              from a delay in completing a transfer of
                                                                                                                                                         Permitted List satellites pending
                                           ‘‘Satellite Telecommunications’’ and                    Description of Projected Reporting,
                                                                                                                                                         Commission approval.
                                           ‘‘Other Telecommunications.’’ Under                     Recordkeeping, and Other Compliance
                                           the ‘‘Satellite Telecommunications’’                    Requirements for Small Entities                       Steps Taken To Minimize Significant
                                           category, a business is considered small                   The Order adopts a number of rule                  Economic Impact on Small Entities, and
                                           if it had $32.5 million or less in annual               changes that will affect reporting,                   Significant Alternatives Considered
                                           receipts. Under the ‘‘Other                             recordkeeping and other compliance                       The RFA requires an agency to
                                           Telecommunications’’ category, a                        requirements for space station operators.             describe any significant, specifically
                                           business is considered small if it had                  These changes, as described below, will               small business, alternatives that it has
                                           $32.5 million or less in annual receipts.               decrease the burden for all businesses                considered in reaching its proposed
                                              The first category of Satellite                      operators, especially firms that are                  approach, which may include the
                                           Telecommunications ‘‘comprises                          applicants for licenses to operate NGSO-              following four alternatives (among
                                           establishments primarily engaged in                     like space stations.                                  others): ‘‘(1) the establishment of
                                           providing point-to-point                                   We simplify the rules to facilitate                differing compliance or reporting
                                           telecommunications services to other                    improved compliance. First, the Order                 requirements or timetables that take into
                                           establishments in the                                   simplifies information collections in                 account the resources available to small
                                           telecommunications and broadcasting                     applications for NGSO-like space station              entities; (2) the clarification,
                                           industries by forwarding and receiving                  licenses. Specifically, the Order                     consolidation, or simplification of
                                           communications signals via a system of                  eliminates reporting requirements that                compliance and reporting requirements
                                           satellites or reselling satellite                       are more burdensome than necessary.                   under the rules for such small entities;
                                           telecommunications.’’ For this category,                For example, the Order removes the                    (3) the use of performance rather than
                                           Census Bureau data for 2007 show that                   ‘‘three-licensee presumption,’’ a                     design standards; and (4) an exemption
                                           there were a total of 512 satellite                     rebuttable presumption that assumes,                  from coverage of the rule, or any part
                                           communications firms that operated for                  for purposes of the modified processing               thereof, for such small entities.’’
                                           the entire year. Of this total, 482 firms               round procedure for NGSO-like space                      The Commission is aware that some
                                           had annual receipts of under $25                        station applications, a sufficient number             of the revisions may impact small
                                           million.                                                of licensees in the frequency band is                 entities. The First Space Station
                                              The second category of Other                         three, and if the processing round                    Licensing Reform Order sought
                                           Telecommunications is comprised of                      results in less than three applicants, 1⁄3            comment from all interested parties, and
                                           entities ‘‘primarily engaged in providing               of the spectrum in the allocated band                 small entities were encouraged to bring
                                           specialized telecommunications                          will be reserved for an additional                    to the Commission’s attention any
                                           services, such as satellite tracking,                   processing round. To rebut this                       specific concerns they may have with
                                           communications telemetry, and radar                     presumption, a party must provide                     the proposals outlined in the First Space
                                           station operation. This industry also                   convincing evidence that allowing less                Station Licensing Reform Order. No
                                           includes establishments primarily                       than three licensees in the frequency                 commenters raised any specific
                                           engaged in providing satellite terminal                 band will result in extraordinarily large,            concerns about the impact of the
                                           stations and associated facilities                      cognizable, and non-speculative                       revisions on small entities. This order
                                           connected with one or more terrestrial                  efficiencies. Thus, applicants for NGSO-              adopts rule revisions to modernize the
                                           systems and capable of transmitting                     like space stations will not need to                  rules and advance the satellite industry.
                                           telecommunications to, and receiving                    expend resources, both technical and                  The revisions eliminate unnecessary
                                           telecommunications from, satellite                      legal, to demonstrate that their NGSO-                requirements and expand routine
                                           systems. Establishments providing                       like systems are designed to provide                  processing to applications in additional
                                           Internet services or voice over Internet                such efficiencies in order to rebut the               frequency bands, among other changes.
                                           protocol (VoIP) services via client-                    three-licensee presumption.                           Together, the revisions in this Order
                                           supplied telecommunications                             Furthermore, in cases where spectrum                  lessen the burden of compliance on
                                           connections are also included in this                   was granted pursuant to a processing                  small entities with more limited
                                           industry.’’ For this category, Census                   round, and one or more of those grants                resources than larger entities.
                                           Bureau data for 2007 show that there                    of spectrum is lost or surrendered for                   The adopted changes for NGSO-like
                                           were a total of 2,383 firms that operated               any reason, the rules now allow for the               space station licensing clarify
                                           for the entire year. Of this total, 2,346               returned spectrum to be redistributed                 requirements for NGSO-like modified
                                           firms had annual receipts of under $25                  without automatically triggering a new                processing rounds. Each of these
                                           million. We anticipate that some of                     processing round and the corresponding                changes will lessen the burden in the
                                           these ‘‘Other Telecommunications                        costs and paperwork involved, thus                    licensing process. Specifically, this
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                                           firms,’’ which are small entities, are                  reducing the administrative burdens on                Order adopts revisions to reduce filing
                                           earth station applicants/licensees that                 those applicants.                                     requirements and clarify the procedures
                                           will be affected by our adopted rule                       Another example is that we see no                  for redistribution of surrendered
                                           changes.                                                reason to require non-U.S.-satellite                  spectrum in such a way that applicant
                                              We anticipate that our rule changes                  operators with satellites on the                      burden will be reduced. Thus, the
                                           will have an impact on space station                    Permitted List to notify the Commission               revisions will ultimately lead to benefits


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                                           75344            Federal Register / Vol. 81, No. 210 / Monday, October 31, 2016 / Rules and Regulations

                                           for small NGSO-like space station                       Certification, to the Chief Counsel for               ■ 3. Amend § 25.157 by revising
                                           operators in the long-term.                             Advocacy of the Small Business                        paragraph (e) and removing paragraph
                                                                                                   Administration.                                       (g)(3) to read as follows:
                                           Report to Congress
                                                                                                     It is further ordered, that the Chief,              *      *      *    *     *
                                             The Commission will send a copy of                    International Bureau is delegated                        (e)(1) In the event that there is
                                           this Second Report and Order,                           authority to modify satellite licenses                insufficient spectrum in the frequency
                                           including this FRFA, in a report to be                  consistent with the provisions of this                band available to accommodate all the
                                           sent to Congress pursuant to the                        Order above.                                          qualified applicants in a processing
                                           Congressional Review Act. In addition,                    It is further ordered, that this                    round, the available spectrum will be
                                           the Commission will send a copy of this                 proceeding is terminated pursuant to                  divided equally among the licensees
                                           Order, including this FRFA, to the Chief                section 4(i) and 4(j) of the                          whose applications are granted pursuant
                                           Counsel for Advocacy of the SBA. A                      Communications Act, 47 U.S.C. 154(i)                  to paragraph (d) of this section, except
                                           copy of this Report and Order and FRFA                  and (j), absent applications for review or            as set forth in paragraph (e)(2) of this
                                           (or summaries thereof) will also be                     further appeals of this Second Order on               section.
                                           published in the Federal Register.                      Reconsideration.                                         (2) In cases where one or more
                                           Legal Basis                                             Federal Communications Commission.                    applicants apply for less spectrum than
                                                                                                   Marlene H. Dortch,                                    they would be warranted under
                                             The action is authorized under
                                                                                                   Secretary.                                            paragraph (e)(1) of this section, those
                                           sections 4(i), 7(a), 303(c), 303(f), 303(g),
                                                                                                                                                         applicants will be assigned the
                                           and 303(r) of the Communications Act                    List of Subjects in 47 CFR Part 25                    bandwidth amount they requested in
                                           of 1934, as amended, 47 U.S.C. 154(i),
                                                                                                     Administrative practice and                         their applications. In those cases, the
                                           157(a), 161, 303(c), 303(f), 303(g), and
                                                                                                   procedure, Earth stations, Satellites.                remaining qualified applicants will be
                                           303(r).
                                                                                                                                                         assigned the lesser of the amount of
                                                                                                     For the reasons discussed in the
                                           Ordering Clauses                                                                                              spectrum they requested in their
                                                                                                   preamble, the Federal Communications
                                              It is ordered, that pursuant to sections                                                                   applications, or the amount of spectrum
                                                                                                   Commission amends 47 CFR part 25 as
                                           4(i), 301, 302, 303(r), 308, 309, and 310                                                                     that they would be assigned if the
                                                                                                   follows:
                                           of the Communications Act, 47 U.S.C.                                                                          available spectrum were divided equally
                                           154(i), 301, 302, 303(r), 308, 309, and                 PART 25—SATELLITE                                     among the remaining qualified
                                           310, and section 1.429 of the                           COMMUNICATIONS                                        applicants.
                                           Commission’s rules, 47 CFR 1.429, the                                                                         *      *      *    *     *
                                           petitions for reconsideration listed in                 ■ 1. The authority citation for part 25               [FR Doc. 2016–25935 Filed 10–28–16; 8:45 am]
                                           Appendix A to the Second Order on                       continues to read as follows:                         BILLING CODE 6712–01–P
                                           Reconsideration are granted in part,                      Authority: Interprets or applies 47 U.S.C.
                                           denied in part, and dismissed as moot                   154, 301, 302, 303, 307, 309, 310, 319, 332,
                                           in part, to the extent indicated above.                 605, and 721, unless otherwise noted.                 NATIONAL AERONAUTICS AND
                                              It is further ordered, pursuant to                   ■ 2. Revise § 25.137(g) to read as                    SPACE ADMINISTRATION
                                           sections 4(i), 7(a), 303(c), 303(f), 303(g),            follows:
                                           and 303(r) of the Communications Act                                                                          48 CFR Parts 1801, 1843 and 1852
                                           of 1934, as amended, 47 U.S.C. 154(i),                  § 25.137 Requests for U.S. market access
                                                                                                   through non-U.S.-licensed space stations.             RIN 2700–AE35
                                           157(a), 303(c), 303(f), 303(g), 303(r), that
                                           this Second Order on Reconsideration                    *      *    *    *      *                             NASA Federal Acquisition Regulation
                                           in IB Docket 02–34 is hereby adopted.                      (g) A non-U.S.-licensed satellite                  Supplement: Remove NASA FAR
                                              It is further ordered, that part 25 of the           operator that acquires control of a non-              Supplement Clause Engineering
                                           Commission’s Rules is amended as set                    U.S.-licensed space station that has been             Change Proposals (2016–N030)
                                           forth in Appendix B of the Second                       permitted to serve the United States
                                           Order on Reconsideration and section                    must notify the Commission within 30                  AGENCY:  National Aeronautics and
                                           25.157 is revised to remove the ‘‘three-                days after consummation of the                        Space Administration.
                                           licensee presumption’’ as well as the                   transaction so that the Commission can                ACTION: Final rule.
                                           requirement that the Commission                         afford interested parties an opportunity
                                                                                                   to comment on whether the transaction                 SUMMARY:   NASA is issuing a final rule
                                           withhold spectrum for use in a
                                                                                                   affected any of the considerations we                 amending the NASA Federal
                                           subsequent processing round if fewer
                                                                                                   made when we allowed the satellite                    Acquisition Regulation Supplement
                                           than three qualified applicants are
                                                                                                   operator to enter the U.S. market. A                  (NFS) to remove the Engineering Change
                                           licensed in the initial processing round.
                                                                                                   non-U.S.-licensed satellite that has been             Proposals (ECPs) basic clause with its
                                              It is further ordered, that section
                                                                                                   transferred to new owners may continue                Alternate I & II and associated
                                           25.137(g) is amended to clarify that
                                                                                                   to provide service in the United States               information collection from the NFS.
                                           satellite operators are allowed to notify
                                           the Commission of transfers of                          unless and until the Commission                       DATES: Effective: November 30, 2016.
                                           ownership of Permitted List satellites                  determines otherwise. If the transferee               FOR FURTHER INFORMATION CONTACT:
                                           after the transfer takes place.                         or assignee is not licensed by, or seeking            Andrew O’Rourke, telephone 202–358–
                                              It is further ordered, that all rule                 a license from, a country that is a                   4560.
                                           revisions will be effective on the same                 member of the World Trade                             SUPPLEMENTARY INFORMATION:
                                           date, which will be announced in a                      Organization for services covered under
Lhorne on DSK30JT082PROD with RULES




                                           Public Notice.                                          the World Trade Organization Basic                    I. Background
                                              It is further ordered, that the                      Telecommunications Agreement, the                       NASA published a proposed rule in
                                           Consumer Information Bureau,                            non-U.S.-licensed satellite operator will             the Federal Register at 81 FR 54783 on
                                           Reference Information Center, shall                     be required to make the showing                       August 17, 2016, to amend the NFS to
                                           send a copy of this Order, including the                described in paragraph (a) of this                    remove contract clause 1852.243–70,
                                           Final Regulatory Flexibility                            section.                                              Engineering Change Proposals (ECPs)


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Document Created: 2018-02-02 12:13:36
Document Modified: 2018-02-02 12:13:36
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesEffective November 30, 2016.
ContactJay Whaley, 202-418-7184, or if concerning the information collections in this document, Cathy Williams, 202-418-2918.
FR Citation81 FR 75338 
CFR AssociatedAdministrative Practice and Procedure; Earth Stations and Satellites

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