Amendment of the Commission's Space Station Licensing Rules and Policies, Second Order on Reconsideration, 75338-75344 [2016-25935]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 81, Number 210 (Monday, October 31, 2016)]
[Rules and Regulations]
[Pages 75338-75344]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25935]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 25

[IB Docket No. 02-34; FCC 16-108]


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

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: The Federal Communications Commission addresses the remaining 
petitions for reconsideration of the First Space Station Licensing 
Reform Order, and amends, clarifies, or eliminates certain provisions 
to streamline its procedures and ease administrative burdens on 
applicants and licensees.

DATES: Effective November 30, 2016.

FOR FURTHER INFORMATION CONTACT: Jay Whaley, 202-418-7184, or if 
concerning the information collections in this document, Cathy 
Williams, 202-418-2918.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Second 
Order on Reconsideration, FCC 16-108, adopted on August 15, 2016 and

[[Page 75339]]

released August 16, 2016. The full text of the Second Order on 
Reconsideration is available at https://apps.fcc.gov/edocs_public/attachmatch/FCC-16-108A1.pdf. It is also available for inspection and 
copying during business hours in the FCC Reference Information Center, 
Portals II, 445 12th Street SW., Room CYA257, Washington, DC 20554. To 
request materials in accessible formats for people with disabilities, 
send an email to FCC504@fcc.gov 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