On September 14, 2010, the Federal Communications Commission's (Commission) International Bureau, Wireless Telecommunications Bureau, and Office of Engineering and Technology (collectively, Bureaus) released an Order denying Globalstar's request for a 16-month extension of time to come into compliance with the Commission's Ancillary Terrestrial Component (ATC) rules. In the same Order, the Bureaus also issued Special Temporary Authority (STA) to Open Range Communications to continue to operate for 60 days its wireless broadband service on Globalstar's S-Band spectrum while it explores other spectrum opportunities.
In 2008, the Commission granted a waiver of the generally applicable ATC "gating criteria," providing Globalstar 16 months to come into compliance with the Commission's ATC rules. The Commission's ATC gating criteria require, among other things, that an MSS operator that wishes to deploy ATC MSS operator must be able to provide continuously available satellite service throughout its geographic service area and maintain spare satellites. The Commission also requires MSS-ATC licensees to integrate their offering of ATC with their offering of MSS. During the time of the waiver, Open Range Communications would be permitted to operate a wireless broadband service through a spectrum manager lease of Globalstar's ATC authority, despite the fact that Globalstar was not in compliance with the Commission's ATC rules. Under the terms of the waiver, Globalstar was required to meet the MSS coverage and spare-satellite gating requirements by July 1, 2010, and to begin production of high-speed MSS terminal chipsets and provision of service over dual-mode MSS/ATC user terminals in mid-2011.
On December 14, 2009, Globalstar filed a modification application asking that the Commission extend by 16 months the July 1, 2010 compliance deadline for meeting the coverage and spare-satellite requirements. Globalstar also seeks an extension of the deadlines for having high-speed MSS chipsets in production and for providing dual-mode MSS/ATC terminals to MSS subscribers into late 2012, as set forth in the table below.
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Globalstar asserted in its application that extension of these deadlines was warranted due to production delays caused by circumstances beyond its control. Globalstar contends that the circumstances beyond its control are: (1) the global economic market crisis that occurred after its ATC license was issued; (2) an earthquake in Italy that closed a production facility in L'Aquila used by its satellite manufacturer, Thales Alenia Space, for eight months, and that had a "cascading effect" on the delivery and launch schedules for Globalstar's 24 satellites; and (3) production delays for essential satellite thruster sub-system components. Globalstar also asserted that, due to the delay in producing and launching its next generation satellites, enforcement of the high-speed chipset and dual-mode handset requirements would be "pointless," and thus those deadlines should be extended as well.
On June 25, 2010, Open Range Communications Inc., which has been providing wireless home broadband services primarily in rural markets through a lease of Globalstar's ATC authority, filed a letter with the Commission seeking STA to continue operating on Globalstar's spectrum, despite the imminent passing of the compliance deadline. Open Range sought STA to continue operating its service over Globalstar's licensed spectrum for a period of 18 months, during which time it would explore access to alternative spectrum in its service areas and to make the changes necessary to accommodate a transition to different spectrum without a service interruption to its subscribers.
Bureaus deny Globalstar's request for 16 month extension of ATC waiver condition, suspend Globalstar's ATC authority until Globalstar comes into compliance.
The Bureaus found that Globalstar's asserted bases for extending the deadlines set forth in the ATC waiver Order were not supported by the record and would undermine the goals and intent of its rules.
The Bureaus discussed the intent behind its ATC "gating criteria," which were adopted to ensure that ATC remains ancillary to MSS rather than becoming a stand alone terrestrial service that operates separately from MSS. The Bureaus stated that a standalone terrestrial service would not serve the purposes of the ATC rules, which are to enhance MSS coverage and to enable MSS operators to extend service into areas that they were previously unable to serve, such as the interiors of buildings and high-density urban areas.
- Continuous MSS Coverage and Spare Satellite Requirements - the Bureaus rejected both the financial crisis and the earthquake justifications for Globalstar's request for an extension of time to come into compliance with the Continuous Coverage and Spare Satellite Requirements.
- Financial Crisis - The Bureaus said that its jurisprudence does not excuse licensees from the consequences of choosing to proceed without having secured sufficient funding and pointed out that many licensees went forward with space station implementations during this time, as evidenced by their posting of $3 million bond.
- Earthquake - While the closing from April to December of 2009 of the L'Aquila facility may have had some effect, the record does not support the assertion that it delayed delivery by 17 months and launch by 12 months. Delivery was well behind schedule before April 2009 due to work stoppages resulting from missed payments. Globalstar has not demonstrated how eight months of delay due to additional testing and processing required by creditors relate to the earthquake. The Bureaus found that a specific amount of delay was related to the non-payment related work stoppages, but it redacted this amount of time.
- Thruster Production Delay - the Bureaus also found that the inability to meet the deadline was not due to a delay in thruster production.
- Dual-Mode MSS/ATC Terminal Requirement - the Bureaus rejected Globalstar's assertion that moving forward with developing dual-mode handsets would be "pointless" at the current time and rejected the request to extend this deadline.
- The Bureaus noted that Globalstar's requested waiver would have delayed distribution of dual-mode terminals with high-speed MSS transceivers for another ten and a half months after that date and postpone provision of two-way MSS to users equipped with such terminals for another 12 months afterward. The Bureaus found that Globalstar offered not persuasive justification for delaying compliance with the integration gating requirement for a full year beyond the expected date for commencing second-generation MSS operation.
- Globalstar may recommence operations of ATC in the S-Band if it comes into compliance with the continuous coverage and spare satellite rules.
Bureaus issue 60 day STA in limited set of markets to Open Range to allow it to continue operating its wireless broadband service while it obtains access to other spectrum.
In granting only a 60 day STA, as opposed to the 18 months originally requested by Open Range, the Bureaus noted that the suspension of Globalstar's ATC authority was a foreseeable risk when Open Range entered into its agreement with Globalstar. In issuing the ATC waiver to allow the deployment of Open Range's system, the Commission made clear that the scope of the waiver was limited and that Open Range's authority was subject to termination if Globalstar failed to meet its compliance deadline. The Commission observed that Open Range recognized that the spectrum lease did not provide it with the right to use the licensed spectrum if Globalstar failed to meet the ATC gating criteria. Indeed, the express terms of the spectrum lease recognized that as a spectrum lessee, Open Range does not have any greater rights to use the spectrum than Globalstar, the licensee, would have. Moreover, Open Range has been on notice at least since December 2009 that Globalstar would not meet its deadline, and thus it has already had a significant amount of time to begin exploring other spectrum opportunities.
To minimize service disruption to Open Range's subscribers, the Bureaus granted 60 days for Open Range to continue operating pursuant to STA while it finds another solution. The STA is limited to "those markets in which Open Range either already is providing service or has projected that it will have launched by the end of this year." The appendix listing the specific markets in which Open Range is being granted STA is completely redacted.