Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C
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Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. In the Matter of HANNON ARMSTRONG KCS FUNDING, LLC, File No. SCL-LIC-2009-____________ and TRUESTONE, LLC, Application for a License to Land and Operate a Private Fiber-Optic Cable System Connecting the U.S. Army Kwajalein Atoll/Reagan Test Site, in the Republic of the Marshall Islands, and Guam for THE HANTRU1 SYSTEM JOINT APPLICATION FOR CABLE LANDING LICENSE— STREAMLINED PROCESSING REQUESTED Hannon Armstrong KCS Funding, LLC (“Hannon Armstrong,” FCC Registration Number 0018522391), and Truestone, LLC (“Truestone,” FCC Registration Number 0018522383) (together with Hannon Armstrong, “Applicants”), hereby jointly apply for a license to land and operate within the United States a private fiber-optic submarine cable network connecting the U.S. Army Kwajalein Atoll/Reagan Test Site, in the Republic of the Marshall Islands, with Guam.1 This non-common carrier cable system will be known as the HANTRU1 System (“HANTRU1”). The Applicants will operate HANTRU1 on a non-common-carrier basis 1 Hannon Armstrong and Truestone apply pursuant to “An act relating to the Landing and Operation of Submarine Cables in the United States,” codified at 47 U.S.C. §§ 34-39 (“Cable Landing License Act”); Executive Order No. 10,530, codified at 3 C.F.R. 189 (1954-1958), reprinted in 3 U.S.C. § 301 app. (1988); and to Section 1.767 of the Commission’s rules, 47 C.F.R. § 1.767. by providing bulk capacity to a single customer—the DITCO-PAC/PL711 arm of the Defense Information Systems Agency (“DISA”)—on individually-negotiated terms and conditions. HANTRU1 is custom-designed to meet the needs of the U.S. Army Space and Missile Defense Command at its facilities on Kwajalein Atoll. The Applicants intend to begin operation of HANTRU1 in the first or second quarter of 2010. Timely grant of a cable landing license is therefore of paramount importance for HANTRU1. The Applicants request streamlined processing for this application, as it raises no competition or other public-interest concerns. The Applicants request streamlined processing pursuant to Section 1.767(k)(1), as neither Applicant is affiliated with a foreign carrier in any of HANTRU1’s destination markets. An expeditious grant of this application will significantly advance the public interest by providing fiber-optic connectivity to critical U.S. military installations on Kwajalein Atoll. I. COMPLIANCE WITH SECTION 1.767 In accordance with Section 1.767 of the Commission’s rules and Executive Order No. 10,530, the Applicants submit the following information: (1) Applicants’ Names, Addresses, and Telephone Numbers2 The names, addresses, and telephone numbers of the Applicants are: HANNON ARMSTRONG KCS FUNDING LLC 1997 Annapolis Exchange Parkway Suite 520 Annapolis, Maryland 21401 +1 410 571 9860 tel +1 410 571 9894 fax 2 See id., § 1.767(a)(1). 2 and TRUESTONE, LLC 11320 Random Hills Road Suite 100 Fairfax , Virginia 22030 +1 703.766.8801 tel +1 703 766 6240 fax (2) Applicants’ Places of Incorporation3 Hannon Armstrong is a limited-liability company organized under the laws of the State of Maryland. Truestone is a limited-liability company organized under the laws of the State of Alaska. (3) Contact Information4 The Commission should address correspondence regarding this application to: Steven L. Chuslo General Counsel HANNON ARMSTRONG CAPITAL, LLC 1997 Annapolis Exchange Parkway Suite 520 Annapolis, Maryland 21401 +1 410 571 9860 +1 410 571 9894 [email protected] and Leslie Wheelock Senior Corporate Attorney NANA DEVELOPMENT CORPORATION 13873 Park Center Road Suite 400 N Herndon, Virginia 20171 +1 571 323 5467 tel +1 571 323 5201 fax [email protected] 3 See id., § 1.767(a)(2). 4 See id., § 1.767(a)(3). 3 with a copy to: Kent D. Bressie HARRIS, WILTSHIRE & GRANNIS LLP 1200 18th Street, N.W., Suite 1200 Washington, D.C. 20036-2516 +1 202 730 1337 tel +1 202 730 1301 fax [email protected] Counsel for Hannon Armstrong KCS Funding, LLC and Truestone, LLC (4) System Description5 HANTRU1 will consist of one segment of digital fiber-optic cable connecting the U.S. Army Kwajalein Atoll/Reagan Test Site with Guam. HANTRU1 will consist of two optical fiber pairs, with an initial configuration capacity of 20 Gbps (protected OC-192; 2 wavelengths) and a final design capacity of 160 Gbps (16 wavelengths). HANTRU1 will land at two existing buildings to be outfitted, refurbished, owned, and operated as cable stations by the U.S. Army Kwajalein Atoll/Reagan Test Site, and at an existing cable station owned and operated by Tata Communications (US) Inc. at Piti, Guam. HANTRU1 will also include two branching units (also owned by Hannon Armstrong and operated by Truestone) that will connect to two separate cable systems owned by the Federated States of Micronesia Telecommunications Corporation (“FSMTC”) and the Marshall Islands National Telecommunications Authority (“MINTA”). FSMTC has contracted separately with Tyco Telecommunications (US) Inc. (“Tyco Telecom”) for the supply and installation of a system between the western branching unit and Pohnpei, in the Federated States of Micronesia (“FSM System”). MINTA has contracted separately with Tyco Telecom for the supply and 5 See id., § 1.767(a)(4). 4 installation of a system between the eastern branching unit and Majuro, in the Republic of the Marshall Islands (“RMI System”). FSMTC and MINTA will own, control, construct, and operate the FSM System and RMI System, respectively. FSMTC and MINTA have each entered into IRU agreements with Hannon Armstrong to provide onward dark-fiber connectivity to Guam. Although the FSM System and the RMI System are beyond the scope of the Cable Landing License Act, as neither will land in the United States, FSMTC and MINTA may require separate authority under Section 214 of the Communications Act of 1934, as amended, and Section 63.18(e) of the Commission’s rules, to the extent they provide telecommunications services to or from the United States.6 Exhibit A of this application provides a route map for HANTRU1. The Applicants anticipate that HANTRU1 will enter into commercial service in the first or second quarter of 2010. (5) Landing Points7 HANTRU1’s specific landing points are located as follows: 1. Kwajalein Atoll • Glass Beach beach manhole: 08˚-43.260 N Latitude, 167˚-43.044 E, Longitude • Kwajalein cable stations: o Street address for power feed equipment (“PFE”) site: HQ Transmitter Building, BCB FAC 1017 o Geographic coordinates for PFE site: 08˚-43.408 N Latitude, 167˚-43.172 E Longitude 6 See 47 U.S.C. §§ 34, 214; 47 C.F.R. § 63.18(e). 7 See id., § 1.767(a)(5). 5 o Street address for transmission equipment site: Range Operations Building, FAC 1010 o Geographic coordinates for transmission equipment site: 08˚- 43.17 N Latitude, 167˚-43.46 E Longitude 2. Guam • Beach manhole (Agat): Lot Nos. 301-A-1 and 301-A-2, Telyfac, 13º 21' 40.32" N Latitude, 144º 38' 57.69" E Longitude • Piti cable station: o Street address: Lot 14, Shell Tank Farm, Piti o Geographic coordinates: 13º 24' 56.24" N Latitude, 144º 41' 16.35" E Longitude Maps of these specific landing points are provided in Exhibit B to this application. (6) Regulatory Status8 The Applicants will operate HANTRU1 on a non-common carrier basis. Non-common carrier status of the proposed system is consistent with established Commission policy and judicial precedent, and will advance the public interest. First, the Commission should not subject HANTRU1 to common carrier regulation because HANTRU1 will not operate on a common carrier basis as defined in NARUC I.9 The courts have stated that “[t]he primary sine qua non of common carrier status is a quasi-public 8 See id., § 1.767(a)(6). 9 See National Ass’n of Regulatory Utility Commissioners v. FCC, 525 F.2d 630, 642 (D.C. Cir.) (“NARUC I”) (stating that the court must inquire “whether there are reasons implicit in the nature of . [the] operations to expect an indifferent holding out to the eligible user public”), cert. denied, 425 U.S. 992 (1976). See also Virgin Islands Telephone Corp. v. FCC, 198 F.3d 921 (D.C. Cir. 1999) (affirming FCC’s use of NARUC I test for distinguishing common-carrier and private-carrier services following enactment of the Telecommunications Act of 1996). 6 character, which arises out of the undertaking ‘to carry for all people indifferently.’”10 On HANTRU1, however, the Applicants will not sell capacity indifferently to the user public. Instead, the Applicants will provide bulk capacity through an individually-negotiated, sole- source contract already executed with a single customer, DISA, for the benefit of the U.S. Army Kwajalein Atoll/Reagan Test Site. Thus, capacity on HANTRU1 has been assigned pursuant to individualized negotiations, depending on the characteristics and needs of a particular capacity purchaser. The Commission has previously found that such offerings do not make an applicant a common carrier.11 Second, the Commission should not subject HANTRU1 to common carrier regulation because there is no legal compulsion or other public interest reason for the Applicants to operate HANTRU1 in such a manner. Under the NARUC I test, the Commission must determine whether the public interest requires common carrier operation of the cable system.12 Traditionally, the Commission has focused on whether the applicant has sufficient market power to warrant common carrier regulation.13 But the Commission “is not limited to that reasoning” 10 National Ass’n of Regulatory Utility Commissioners v. FCC, 533 F.2d 601, 608 (D.C. Cir. 1976) (“NARUC II”). 11 See AT&T Corp. et. al, Cable Landing License, 13 FCC Rcd. 16,232, 16,238 (Int’l Bur.