TR Daily SSOs, PSSI Ask Court to Overturn FCC’s C-Band Order
Tuesday, July 21, 2020

SSOs, PSSI Ask Court to Overturn FCC’s C-Band Order

Small satellite operators and PSSI Global Services LLC asked the U.S. Court of Appeals for the District of Columbia Circuit today to overturn the FCC’s C-band order, arguing that the FCC unlawfully modified their licenses.

In a joint brief filed in “PSSI Global Services L.L.C v. FCC” (consolidated cases beginning at 20-1142), SSOs ABS Global Ltd., Empresa Argentina de Soluciones Satelitales S.A., Hispamar Satélites S.A., and Hispasat S.A. argued that the FCC “did not merely ‘modify’ the SSOs’ licenses within the meaning of Section 316 when it barred them from using 300 of the 500 megahertz they had been licensed to use and placed new restrictions on their use of the remaining 200 megahertz. It fundamentally changed those licenses. Accordingly, the Commission was required to provide new spectrum or a means for compensating the SSOs. It provided none. The Commission has never imposed comparable restrictions without providing compensation, and it was unlawful for the Commission to do so here.

“The Commission contends that it permissibly modified the licenses because the SSOs will have sufficient spectrum to provide service to their ‘existing customers’ at the same level they currently provide service—a novel standard never before applied. But the SSOs are new entrants who invested hundreds of millions of dollars in satellites in order to provide service, and the commencement of this proceeding impeded their efforts to obtain customers. In any event, the SSOs’ licenses have been fundamentally changed, notwithstanding the effect on existing customers. The Commission has signaled that it understands that application of its new test would have disastrous effects on investment by suggesting that it will not apply the ‘existing customers’ test outside this case; the Court should not countenance that lawless approach,” the filing said.

“Even if the Commission may adopt its new ‘existing customers’ standard prospectively, it may not apply that standard to the SSOs because the Commission failed to provide fair notice that it would do so. Under this Court’s well-established fair-notice precedent, the SSOs were entitled to rely upon the Commission’s long-standing practice of finding replacement spectrum or providing other compensation when licensees’ spectrum rights are restricted. And that precedent has been applied frequently without respect to whether a licensee could continue to provide service to its existing customers or even had any existing customers,” the SSOs contended. “In contrast to its treatment of the SSOs, the Commission provided $15 billion in compensation to the five other satellite operators licensed to use the C-band. That is far more than is warranted. Indeed, the SSOs proposed an alternative approach that would achieve the Commission’s goal of accelerating relocation of existing services and also would provide fair compensation for all eight licensed C-band users—and do so for less than half of the $15 billion the Commission has allocated, resulting in billions of additional dollars for the U.S. Treasury. The Commission unreasonably brushed off that plainly superior alternative, and almost certainly did so because it did not achieve the Commission’s unstated goal of bailing out Intelsat, the largest satellite operator, which is currently in bankruptcy proceedings. Principles of reasoned decisionmaking required the Commission to consider the amount actually necessary to spur acceleration, but it did not do so.”

The filing continued, “Moreover, the Commission’s excessive generosity to the largest satellite operators is unlawful. Precedent establishes that any accelerated relocation payments must be ‘proportionate’ to the actual costs of relocation. The $9.7 billion in accelerated relocation payments authorized by the Commission are plainly disproportionate to those actual costs, which will total approximately $3 billion.”

For its part, PSSI said, “The Commission exceeded its authority under Section 316 of the Act by fundamentally altering PSSI’s licenses. The Commission initially evades this by claiming that PSSI has no licensed spectrum usage rights because it does not transmit in the C-band. Yet operations in the 3.7-4.2 GHz portion of the band provide ‘services incidental to such transmission’—which are encompassed within the statute’s definition of ‘transmission of energy,’ see 47 U.S.C. §§153(49) and (57)—by taking the signal from the satellite operators and permitting its distribution to earth. If a licensed Transportable did not provide a signal to a satellite in the C-band uplink, then no transmission in the C-band downlink would be transmitted back to Earth—and vice versa.

“Nevertheless, the Commission says it permissibly modified PSSI’s licenses because PSSI can continue to deliver substantially the same service after the modification as they were able to provide before the Order. In fact, removal of 60% of the usable spectrum in C-band and new 5G power sources in close proximity cause a ‘fundamental change.’ The ability of Transportables to use Occasional Use services for live broadcast coverage is dramatically reduced. Previously, PSSI’s licenses permitted use of 24 transponders, they will now permit use of only 10. There is nothing ‘similar’ about PSSI’s situation following the Order.”

PSSI also complained that the FCC “dismissed the objection that the ORBIT Act prohibits the auctioning of the C-band spectrum. The ORBIT Act states that the Commission ‘shall not have the authority to assign by competitive bidding … spectrum used for the provision of international or global satellite communications services.’ 47 U.S.C. §765f. Unlike in Northpoint Technology, Ltd. v. FCC, 412 F.3d 145 (D.C. Cir. 2005), C-band spectrum is currently used for international communications services. The Commission cannot do what Congress expressly prohibited.”

PSSI continued, “In the NPRM, the Commission expressly renounced modification of the ‘uplink’ portion of PSSI’s licenses. However, the Order de facto modifies that part of the license, which is inextricably linked to the downlink frequencies. The Commission cannot impose a sanction where inadequate notice is given. The Commission ignored reasonable alternatives proffered by PSSI to attempt to mitigate the damage caused by the Order without examining evidence of the problem or proposed solutions. The failure to do so was arbitrary and capricious.”

PSSI also argued that SES Americom, Inc., “has suffered no injury from the Order. Hence, it has no standing to appeal from the Order.”

SES had said it was appealing the order only as a precaution and it went on to opt-in to accelerated relocation payments.

“A party cannot appeal from an Order that grants what it seeks, i.e., payment for accelerated relocation. SES thus has not stated a presently existing injury or claim caused by the Order,” PSSI said. “The Constitution allows this Court ‘to rule only on tangible “Cases” or “Controversies,” not abstract hypotheticals or requests for advisory opinions.’” —Paul Kirby, [email protected]

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