Satellite Industry Surprised by International Bureau’s EchoStar Decision

The FCC International Bureau’s decision to decline EchoStar’s application for a new C-band satellite on the basis of a pattern of speculative applications (CD July 30 p9) was a surprisingly strict move by the bureau, said satellite industry executives. While the bureau’s decision limits the number of applications the company can file, it remains unclear how it will affect its bottom line, the company said. EchoStar will respond to the action within the next month, it said. It’s thought to be the first time the bureau had used the rule as the basis for declining an application, the executives said.

FCC rules say if satellites licensee miss three milestones within three years, it’s presumed the licensee obtained at least one of the licenses for speculation. As a result, the FCC limits to two the number of pending applications and licensed but unlaunched satellites that a company can have. “This limit remains in effect until the licensee provides adequate information to demonstrate that it is very likely to construct its licensed facilities if it were allowed to file more applications,” the FCC told EchoStar in a letter last year. The International Bureau didn’t respond to a request for comment.

EchoStar has several paths forward to reverse the decision if it feels it was unfair, said an executive. EchoStar can ask for a petition for reconsideration because it was a bureau action rather than action by the full commission. Also, the company can apply for another satellite authorization with additional information to rebut the presumption of speculation. While the company was warned of the possible action by the bureau, EchoStar responded by pointing out it was a large corporation with an operating satellite business rather than a start-up company that would look for investors following license approval. The company also said its business plans can change and result in the need for different satellite licenses.

The International Bureau action may be trying to make a larger point, said another executive. That point remains unclear, though, because the rules, originally put in place to stop rampant satellite license speculation, have been largely effective, they said.