Federal Communications Commission Record DA 94-37

9 FCC Red No. 2 Federal Communications Commission Record DA 94-37

which would then be redeployed to replace INTELSAT V Before the series satellites in the Indian Ocean Region (IOR) at 66 E Federal Communications Commission and in the POR at 180 , which are reaching the end of Washington, D.C. 20554 their design lifetimes and are operating in inclined orbit. 4. In its December 22, 1992 Supplement, Comsat in formed the Commission that the Board of Governors, at its In the Matter of September, 1992 meeting, decided to purchase two INTELSAT VIII satellites from the GE Astro Space Di COMSAT Corporation File No. CSS-92-004 vision (GE Astro) of General Electric Technical Services Company (GETSCO) and to exercise an option to its cur For Authority to Participate in rent contract with the Space Systems Loral (Loral) for an additional INTELSAT VII-A satellite. The Board concurred a Program Involving Construction with INTELSAT Management©s (IM) recommendation that of Certain Additional INTELSAT Satellites, Arianespace be selected to provide launch services for the and Provision of Authorized Services two INTELSAT VIII spacecraft on order, with options for two additional launches subject to further negotiations, and approved a contingent contract with China Great Wall MEMORANDUM OPINION, ORDER AND Industry Corporation (CGWIC) for launch services for the AUTHORIZATION additional INTELSAT VII-A satellite. 5. In its February 24, 1993 submission, Comsat advised Adopted: January 7,1994; Released: January 21,1994 the Commission that the Director General intended to present a recommendation to the March 1993 Board of By the Acting Chief, Common Carrier Bureau: Governors meeting for procurement of an additional INTELSAT VII satellite from Loral. Comsat indicated that 1. The Commission has before it an application filed by despite substantially reduced cost figures for optional the COMSAT Corporation (Comsat) seeking authority, spacecraft from Loral it did not foresee a great likelihood pursuant to Section 201(c) of the Communication Satellite that a favorable decision would be taken at the March 1993 Act of 1962, as amended, 47 U.S.C. § 721(c), and Section meeting. However, on April 20, 1993, Comsat reported that 214 of the Communications Act of 1934, 47 U.S.C. § 214, in view of the production of additional demand and capac to participate in the program of construction and use of ity analyses, significantly reduced cost figures for optional two additional INTELSAT ©VIII satellites, one additional spacecraft from Loral and early delivery of an additional INTELSAT VII-A satellite and one additional INTELSAT INTELSAT VII, the Board decided to exercise an option VII satellite by the International Telecommunications Sat for one more INTELSAT VII spacecraft (709). ellite Organization (INTELSAT). The satellites are to be 6. The procurement of two INTELSAT VIII. one used commencing in 1996 in the Atlantic Ocean Region INTELSAT VII-A and one INTELSAT VII satellites is (AOR) and the Pacific Ocean Region (POR) to replace and based on the Director General©s Demand Forecasts. The augment existing satellites that will reach the end of their trend data show that demand will increase for voice at an design life in the 1995-97 time frame. annual rate of 4%, international business services (IBS) at 2. Application File No. CSS-92-004 was filed on July 24, 6%, video at 16%, and other leased services at 17%, 1992, supplemented on December 22, 1992 and February through year 2001. The overall demand for total 24, 1993, and amended on April 20, 1993. Pan American INTELSAT capacity is 5% higher in the 1992 forecast than Satellite (PAS) filed comments on August 31, 1992, seeking projected in 1991. In its Application, Comsat demonstrated additional support data and reserving the right to formally the need for a 7 + 4 + 3 configuration by 19962 requiring object to the application later. 1 three additional spacecraft to meet the continuity needs of the 57 E, 66 E and 180 E orbital locations. Comsat states that the current 7 + 2 + 2 system configuration will be I. APPLICATIONS maintained until 1995 by the successful launch and deploy 3. By its initial application, Comsat sought authority to ment of the seven previously procured and authorized participate in the procurement of two INTELSAT VIII INTELSAT VII/VH-A spacecraft, allowing for two failures, satellites (F-l at 174& East Longitude (E), POR; F-2 at 177 whether occurring at launch or in orbit. After 1995, three E, POR), one INTELSAT VII-A satellite (F-8 at 342 E, additional replacement spacecraft are required for the AOR) and one INTELSAT VII satellite (709 at 329 E, 7 + 4 + 3 configuration. Comsat further indicates that the AOR) for service in the 1995-96 time frame. In its applica continuity needs of the 66 E and 180 E locations were to tion supplement, Comsat included updated traffic projec be met by the deployment of two INTELSAT VIII satellites tions and operational design modifications, as well as to the POR, i.e., to 174 E and 177 E. to free INTELSAT information indicating that INTELSAT©s Director General VII satellites for redeployment to 66 E and 180 E. Further, might seek approval for the procurement of the satellites at the procurement of an additional INTELSAT VII-A sat the September, 1992 Board of Governors meeting. The two ellite for deployment to the AOR at the 342 E location INTELSAT VIII satellites were projected to replace two would free up an INTELSAT VII for redeployment to INTELSAT VII satellites in the POR at 174 E and 177 E, 57 E. By year-end 1995, the systemwide and regional utili-

1 Comsat, in its Supplement and Amendment, offered the addi tion-kept operational satellites (x), the system spare (y) and the tional information sought by PAS. PAS filed no further com number of satellites in inclined orbit (z). Now, however, the ments. We therefore consider Comsat©s application unopposed. numbers refer to the operational satellites in the three ocean 2 In previous filings the x-y-z notation reflected the fully sta regions, AOR (x), IOR (y) and POR (z).

327 DA 94-37 Federal Communications Commission Record 9 FCC Red No. 2

zation figures are projected at 77% overall, with 74%, 86% for replacement spacecraft and failed launches, Comsat and 68% in the AOR. IOR and FOR. respectively. Utiliza adequately demonstrates utilization and demand levels war tion at key orbital locations, viz., 332.5 E, 335.5 E, 342 E ranting the authorization of an additional four satellites. and 359 E in the AOR; 60 E, 63 E, 66 E in the IOR; and 12. One factor the Commission has considered in earlier 174 E and 177 E in the FOR, according to Comsat, will be proceedings assessing the need for requested facilities con at or above the critical 80% utilization level.3 Comsat states cerns the accuracy of the traffic projections submitted with that by year 2002 the system utilization of the 7 + 4 + 3 the application. Notably, in INTELSAT VII order, supra, configuration is projected to be 89%. with 91% in the we ascertained that INTELSAT had taken the steps neces AOR, 90% in the IOR and 81% in the FOR. sary in its traffic projection methodology to minimize the 7. In its Amendment, Comsat reports that further analy risk of excess capacity resulting from overstated traffic pro sis by IM, working in conjunction with INTELSAT Signa jections. As further discussed in Additional INTELSAT VII tories, has quantified the "unmet demand" anticipated for order, supra, the Director General Forecasts were estab the AOR and IOR regions by year 2002. Based on these lished specifically to counterbalance the overly optimistic studies the projected utilization of the INTELSAT VII projections developed by the INTELSAT Global Traffic (709) at start of service should range between 41% on Meetings. Given the uncertainty inherent in traffic projec committed demand to 64% based on committed and fore tions generally, INTELSAT©s need to rely on the projec casted demand, with total utilization at 82% by year 2002, tions of its member countries, and increasingly robust when the new satellite will be only at one-half its useful marketplace competition, we believe that INTELSAT has life. In sum, the updated projected utilization for all sat provided acceptable demand and utilization forecasts in ellites in the 8 + 4 + 3 configuration in the AOR for year support of its applications, consistent with our earlier or 2002 will be at or above the critical overall utilization ders. level.

III. CONCLUSION AND ORDERING CLAUSES II. DISCUSSION 13. As set forth above, we find that the procurement of 9. The issue before us is whether there is need for the two INTELSAT VIII satellites, one additional INTELSAT procurement and operation of four INTELSAT satellites, to VII-A satellite and one additional INTELSAT VII satellite replace existing satellites that will reach the end of their to replace existing satellites approaching the end of design design lives in the 1995-1997 time frame and to accom life and to accommodate demand for services through year modate anticipated traffic demands. In earlier orders, the 2002 in the AOR, IOR and FOR is reasonable. We con Commission examined INTELSAT©s nominal deployment clude that Comsat©s participation in the procurement of plan in great detail to confirm the need for new satellites. these satellites will serve the public interest. We determined in those orders that the maintenance of 14. Accordingly, IT IS ORDERED that application File each orbital location was required by the particular traffic No. CSS-92-004 IS GRANTED, and Comsat IS AUTHO and connectivity requirements that each satellite at that RIZED, pursuant to Section 201(c) of the Communications location accommodated.4 With the maturation of the Act of 1962, as amended, 47 U.S.C. § 201(c), and Section INTELSAT network of satellites, competition in all mar 214 of the Communications Act of 1934, 47 U.S.C. § 214, kets by both separate satellite providers and transoceanic to participate in INTELSAT©s procurement of two fiber optic cables, we believe it sufficient to examine the INTELSAT VIII satellites, one INTELSAT VII-A satellite adequacy of the demonstration of need for the additional and one INTELSAT VII satellite to be deployed in the spacecraft Comsat seeks, and any other matters raised by AOR and FOR in the 1995/1996 time frame for the re the record. placement of existing satellites that will reach the end of 11. Comsat©s applications, as outlined herein, offer with design life and to accommodate increased service demand considerable specificity the anticipated demand for regional through the year 2002. routes and the plans under which unmet demand will be 15. This order is issued under Section 0.291 of the minimized and aging satellites removed to locations with Commission©s Rules and is effective upon release. Petitions less immediate expected growth. The Director General©s for reconsideration under Section 1.106 or applications for Demand Forecasts and trend data show that overall de review under Section 1.115 of the Commission©s Rules may mand will increase at a rate of some 5-7% through year be filed within 30 days of the date of public notice of this 2002.5 The IM-1992 forecasts and traffic projections order (see Section 1.4(b)(2)). through the remainder of the decade and beyond show increases over earlier Director General forecasts. The fig ures indicate that there is an increasing demand for the services provided by INTELSAT, as well as a continuing need to assure spacecraft spares for maintenance. Allowing

3 The 19Q1 forecasts were 77% overall, with 75%, 86% and 70% 5952 (1990). INTELSAT©s procurement of satellites throughout in the AOR, IOR and FOR, respectively. Comsat suggests that the 1990©s was based on the 9+l( + 3) nominal configuration. As the two utilization results, based on two forecasts, confirm the noted above, however, the "nominal" configuration designation need for the additional spacecraft at the 57 E, 66 E and 180 E has been changed to reflect the distribution of satellites in the orbital locations. three world regions, AOR, IOR and FOR. Our examination in 4 See Communications Satellite Corporation, 5 FCC Red 753 the subject order and in future orders will focus on the overall (1990) (INTELSAT Vll order); Communications Satellite Cor justification of the newly sought satellites, including their cost poration, 7 FCC Red 3430 (1992) (Additional INTELSAT VII and utilization forecasts. See n.2, supra. order); and Communications Satellite Corporation, 5 FCC Red 5 See paras. 6-7, supra.

328 9 FCC Red No. 2 Federal Communications Commission Record DA 94-37

FEDERAL COMMUNICATIONS COMMISSION

Kathleen Levitz Acting Chief, Common Carrier Bureau

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