Intelsat On The Defensive

Communications Today, Sept 25, 2000

Intelsat LLC offered sharp opposition Thursday to petitions filed by the largest private sector U.S. satellite operators, PanAmSat Corp. [SPOT] and GE Americom [GE], arguing that the FCC fairly issued an order granting authority for Intelsat to retain its existing orbital slots.

The planned privatization of Intelsat and its intention to become a Washington-based private sector satellite company, named Intelsat LLC, led it to seek FCC approval to operate its existing and proposed satellites, and the commission agreed.

Its rival operators argued in petitions for reconsideration, filed with the FCC earlier this month, that the agency granted Intelsat a special status and waivers from requirements that private operators, such as themselves, would face.

Intelsat's attorneys blasted the reasoning of PanAmSat and GE Americom, saying the order in no way grants Intelsat a "special status," and that the FCC's waivers are justified.

"Accordingly, the commission should deny the petitions," said Intelsat LLC in the response filed by its law firm, Wiley, Rein & Fielding. "Neither petition presents any new facts or changed circumstances, nor do the petitions provide any other basis for the commission to reconsider or modify the findings of fact and conclusions of law reached in the order.

"Rather, the petitions are simply a transparent attempt by competitors to cloud Intelsat LLC's license and to advance their private interests at the expense of the public interest," Intelsat said.

But Kalpac Gude, a vice president and associate general counsel of PanAmSat, said Intelsat asked for and received special treatment from the FCC, rather than following the same procedures as private sector U.S. satellite operators.

A key point of contention is Intelsat's claim that it would incur billions of dollars in additional costs if forced to redesign satellites that already have cleared that stage or entered production, Gude said.

"Satellite companies make modifications all the time, especially in the design phase," he said.

Potentially the most important issue deals with the FCC agreeing to accept the Intelsat slots with the condition that, unlike other U.S. slots, these could never be taken from Intelsat and reassigned to another U.S. licensee, Gude said.

"These Intelsat slots would automatically revert back to the ITU," Gude said. "Our concern with the issue is that with this condition, the FCC will forever have a different set of incentives with respect to Intelsat slots than all other U.S. slots," Gude said.

David Williams