FCC SUSPENDS CONSTELLATION SATELLITE LICENSE
FCC suspended license of Constellation Communications after company missed 2 milestones. Commission denied company request to modify authorization to construct, launch and operate Big LEO low-earth orbit mobile satellite system above 1 GHz. Under 1997 license, Constellation had to begin construction of first 2 satellites by July 1998 and remaining satellites by July 2001. System was to be fully operational by next July. FCC had warned Constellation that license would be revoked if it failed to meet milestone unless Commission extended schedule. Constellation becomes latest victim on FCC crackdown on milestone violations (CD Feb 11 p9).
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In June 30, 2000, letter to FCC, Constellation said financial and operational problems faced by other mobile satellite companies, including Iridium and Globalstar, caused it to question whether it could meet milestones. In Aug. 2000, it filed application to modify license by extending or waiving some of its remaining deadlines. Disruptions in financial marketplace and resulting reluctance of financial institutions to fund Big LEO projects made it necessary to seek extension, Constellation said.
FCC said Constellation’s application lacked sufficient grounds to justify extension of deadlines. Financial problems aside, it said, milestone exceptions are granted only when delay in implementation is due to circumstances beyond control of licensee or when there are unique and overriding public interest concerns that justify extensions. Commission said failure to attract investors or unfavorable business climate “have never been an adequate excuse for failure to meet a construction timetable.” Commission or licensees shouldn’t be expected to accommodate mistaken projections or modified expectations, FCC said.
FCC also didn’t buy Constellation argument that it had granted additional time to New Skies and Inmarsat under similar circumstances. There are obvious differences between Constellation and statutory duty of former intergovernmental satellite organizations (ISOs) to conduct IPOs under Orbit Act, FCC said. Orbit Act allows Commission to extend deadlines for public offerings by ISOs due to adverse business and market conditions. By contrast, no explicit market condition exception existed for Constellation and FCC said it had found that market conditions based on market conditions weren’t in public interest.
“It looks like selective enforcement,” said satellite attorney that represents interest of party close to case: “There are systems like Loral that haven’t been built and parties have filed to use that [Ku-band] slot at 37.5 degrees W, but no action has been taken. There is no one out there ready to build a system to replace Constellation, yet the [FCC] International Bureau pulls their license and allows Loral Orion continue to warehouse slot that they have had for more than 20 years.