Interesting News, a 2 edge sword for LOR
Wednesday April 23, 12:24 pm ET
By Jeremy Pelofsky
WASHINGTON, April 23 (Reuters) - Companies seeking U.S. satellite licenses will have to pony up a bond between $5 million and $7.5 million to ensure they will use the scarce resource, according to rules adopted by U.S. regulators on Wednesday.
Despite industry opposition, the Federal Communications Commission (News - Websites) decided to require bonds to prevent companies from buying up satellite slots to keep them from competitors or speculators who might hoard the valuable spectrum instead of actually using it.
The FCC approved the bond requirement at its monthly open meeting as part of a broader streamlining effort for the satellite licensing process, which included cutting the wait time to as little as six months compared to years as it often takes.
"I am hopeful that, taken together, all of these provisions put applicants on notice that our revised satellite process is intended to promote technology and innovation, not the filing of speculative applications," said FCC Commissioner Jonathan Adelstein.
The bond would have to be posted within 30 days of a company receiving the license and it would have to pay it if a license was revoked for missing a build-out milestone.
In addition to posting a bond, applicants will be limited to the number of pending requests for licenses and an attribution rule will bar applicants from skirting limits, according to the FCC.
Additional implementation milestones will be set and there will be stronger enforcement of such milestones, the agency said.
The concept of a bond requirement was proposed by Intelsat, which was set up by the U.S. government in the 1960s and privatized in July 2001, but opposed by most of the other major satellite industry players.
Lockheed Martin Corp. (NYSE:LMT - News), PanAmSat Corp. (NasdaqNM:SPOT - News), Loral Space & Communications (NYSE:LOR - News), Hughes Network Systems Inc. (NYSE:GMH - News) and SES Americom Inc. (SESF.LU), had argued such a bond would create additional barriers to market entry. They had urged the FCC if adopting such a rule, to cap the bond at $500,000.
The commission also adopted rules to establish a queue for reviewing applications in which requests for licenses will be considered under the FCC's public interest standard in the order which applications are filed.
The FCC will consider on a first come, first served basis applications for satellites that use directional beams to communicate with earth stations, known as geostationary systems and typically used for television, communications and weather.
For those licenses, the agency will consider applications for specific spectrum and orbit location based on the order in which they were filed.
For other satellites that cannot focus a narrow beam continuously, known as non-geostationary systems, the FCC will review all applications submitted by a set deadline and split the spectrum among qualified users. |
