Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
) In the Matter of ) ) CC Docket No. 96-45 Federal-State Joint Board on ) Universal Service ) )
REPLY COMMENTS OF MOTOROLA AND IRIDIUM NORTH AMERICA
Motorola Satellite Communications, Inc. ("Motorola") and Iridium, U.S.,L.P. ("Iridium North America" or collectively "MSC/INA") submit these reply comments in the above-captioned proceeding. Motorola holds the space system license for the IRIDIUMreg. System, a global personal communications satellite system.[1] Iridium North America is an IRIDIUM System authorized Gateway Operator that will be responsible for the bulk distribution of space segment capacity to service providers in the United States who, in turn, will provide IRIDIUM communications services to the general public.
Motorola and Iridium North America strongly support the universal service goals established by Congress and the Commission. MSS service providers who provide service directly to the general public should contribute to the universal service fund. However, Congress clearly intended to exclude the wholesale provision of satellite space segment capacity from this contribution obligation.
Several of the initial commenters in this proceeding have suggested that all satellite carriers be required to contribute to any universal service fund support mechanisms recommended by the Joint Board and ultimately adopted by the Commission. Bulk providers of either fixed satellite or mobile satellite space segment capacity are not "telecommunications carriers" nor do they provide "telecommunications services" in accordance with Section 254(d) of the Telecommunications Act of 1996.[2] This treatment is consistent with Congress' previous determination that bulk space segment providers need not be treated as CMRS providers or common carriers under Section 332(c)(5) of the Communications Act of 1934, as amended, as well as numerous Commission decisions implementing this statutory language.
MSC/INA is not a "provider of telecommunications" as defined by the 1996 Act that may be required to contribute to universal service mechanisms at the discretion of the Commission. However the public interest does not require that the Commission impose universal service contribution obligations upon bulk providers of space segment capacity since authorized IRIDIUM System service providers that offer service directly to the public will qualify as either telecommunications carriers or providers of telecommunications subject to Section 254(d)'s contribution requirements.
Motorola will be a wholesale supplier of Iridium's transmission capacity to network operators or service providers through U.S. gateways. These entities may provide services to end users or sell capacity in bulk to other service providers, or both.[4]
In the United States, Iridium North America, a partnership of Motorola, Inc., Sprint Corporation and Bell Communications Enterprises, Inc., will be the exclusive IRIDIUMreg. System Gateway operator in both the United States and Canada. This Gateway will provide the interface between the satellite constellation and terrestrial communications systems. Iridium North America will, in turn, sell space segment capacity in bulk to unaffiliated service providers. As such, it will be responsible for contracting with these service providers who will purchase the right to sell bulk IRIDIUM services to the general public.
The IRIDIUM service providers represent the primary interface with the subscribing public. MSC/INA expects that many existing cellular (or other CMRS) carriers will act in this capacity and offer IRIDIUM services as a complement to their existing cellular services. These service providers will also be the collection point for charges for IRIDIUMreg. System use by the public, with revenues being shared with the IRIDIUMreg. System space segment provider, the authorized Gateway operator (Iridium North America) and the various service providers.
In defining "telecommunications carrier," Congress included language that reflects a clear intent to exclude satellite space segment providers:
"A telecommunications carrier shall be treated as a common carrier under this Act only to the extent that it is engaged in providing telecommunications services, except that the Commission shall determine whether the provision of fixed and mobile satellite service shall be treated as common carriage.7
The statutory definition of "telecommunications service" further demonstrates that Congress intended to exclude wholesale communications offerings like those to be offered by MSC/INA.
The term "telecommunications service" means the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used."[8]
Congress apparently intended these statutory definitions to be synonymous with the generally accepted definition of common carriage, and authorized the Commission to continue determining on a case-by-case basis whether providers of bulk satellite space segment capacity are subject to common carrier regulation.[9] When the Commission concludes that a bulk provider of satellite space segment capacity is not a common carrier, this decision necessarily encompasses a finding that the provider is not a telecommunications carrier nor providing telecommunications services.
Nothing in the 1996 Act or its legislative history shows a congressional intent to make a distinction between "telecommunications service" and "common carriage." In fact, the statutory definition of "telecommunications service" is completely consistent with the currently-accepted meaning of common carriage.
Moreover, the 1996 Act's legislative history plainly reflects this consistency. The House explanatory language in the Conference Report defines "telecommunications service" as "services and facilities offered on a common carrier basis...."[10] The Senate explanatory language, ultimately adopted by the Conference Committee, first reiterates that the new statutory definition of "telecommunications carrier" is intended to amend the Communications Act "to explicitly provide that a 'telecommunications carrier' shall be treated as a common carrier,... but only to the extent it is engaged in providing telecommunications services."[11] The Senate language then adds context to the new statutory definition of "telecommunications service" by noting that this definition is "intended to include commercial mobile service ("CMS") ... to the extent [it is] offered to the public or to such classes of users as to be effectively available to the public."[12]
As discussed more fully below, these definitions are consistent with the existing statutory scheme under Section 332 of the Communications Act that allows the Commission the discretion to exempt providers of bulk MSS space segment from CMS or common carrier treatment. The Joint Board should therefore recommend that the Commission extend its statutory discretion to exclude bulk satellite space segment providers from treatment as "telecommunications carriers."
Section 332 of the Communications Act established a new regulatory regime for for-profit providers of mobile services to the public -- the Commercial Mobile Service ("CMS" or "CMRS") -- and required that such providers be treated as common carriers.[13] The Act defines CMRS as "any mobile service that is provided for profit and makes interconnected service available to the public or to such classes of eligible users as to be available to a substantial portion of the public".[14]
However, at Section 332(c)(5) of the Act, Congress specifically provided the Commission with broad discretion to exempt providers of space segment capacity from CMRS or common carrier treatment.
Nothing in this section shall prohibit the Commission from continuing to determine whether the provision of space segment capacity by satellite systems to providers of commercial mobile services shall be treated as common carriage.[15]
The Commission has concluded in its CMRS and LEO MSS rulemakings that bulk satellite space segment providers need not be treated as common carriers. Moreover, the Commission has concluded that MSS providers that choose to provide bulk space segment capacity to CMRS providers should not be treated as CMRS or common carriers. Most significantly, the Commission has made a specific finding to this effect for the IRIDIUM System.
First, in implementing Section 332(c)(5) of the Communications Act, the Commission concluded that it would extend non-common carrier treatment to "any entity that sells or leases space segment capacity, to the extent that they are not providing CMRS directly to end users."[16] At Section 20.9(a)(10) of its Rules, the Commission permitted this treatment for both the space station provider of bulk space segment capacity and other entities in the chain of distribution.
MSS will be treated as common carriage service and regulated as CMRS if it involves the provision of CMRS (by licensees or resellers) directly to end users, except that mobile satellite licensees and other entities that sell or lease space segment capacity, to the extent that it does not provide CMRS directly to end users, may provide space segment capacity to CMRS providers on a non-common carrier basis, if so authorized by the Commission.[17]
The Commission then applied this rule and its interpretation of Section 332(c)(5) of the Communications Act in the context of its MSS policies. In its Big LEO Report and Order, the Commission concluded that it may exercise its discretion to treat as non-common carriers (or private carriers) Big LEO space station licensees who offer space segment capacity to resellers or other entities that then offer CMRS to end users.[18] In the context of non-voice, non-geostationary MSS space station licensees ("Little LEOs"), the Commission also concluded that it would allow these licensees to provide system access to CMRS providers on a non-common carrier basis.[19]
The Commission has applied its Big LEO policies to the IRIDIUM System and other Big LEO MSS licensees intending to offer space segment capacity and found that they will not be providing CMRS or common carrier services. In its authorization to Motorola for the IRIDIUMreg. System, the Commission recognized that Motorola did not plan to provide space segment capacity directly to end users, and therefore need not operate as a common carrier.[20] The Commission based this determination on its discretion under Section 332(c)(5) of the Communications Act to treat as private carriers Big LEO space station licensees that will offer space segment capacity to resellers or others who then would offer CMRS to the public.[21] Similarly, the Commission has determined that TRW and Loral/Qualcomm may offer MSS space segment capacity on a non-common carrier basis.[22]
Most recently, the Commission provided Fixed-Satellite Service (FSS) licensees total flexibility to sell or lease transponder capacity on a common carrier or non-common carrier basis. The Commission concluded that an FSS licensee must operate on a common carrier basis only if it chooses to make indiscriminate offerings to the public under the NARUC I criteria.[23]
These repeated Commission grants of non-common carrier treatment to bulk providers of space segment capacity reflect the clear intent of Congress to treat such providers as private carriers.[24] The Joint Board should recommend to the Commission that it similarly find that bulk space segment providers are neither "telecommunications carriers" nor providing "telecommunication services" as defined in Section 254(d) of the 1996 Act.
The public interest would not be served by the imposition of this obligation on providers of bulk space segment capacity. These entities are not "interstate providers of telecommunications" as defined by the 1996 Act. However, the Commission is assured of a fair and equitable contribution from space-based MSS businesses through the local service provider(s) who ultimately will offer MSS directly to the general public.
As MSC/INA has previously noted, it and other MSS space segment providers do not intend to provide service directly to the public. As such, they are not telecommunications carriers, or providers of telecommunications or offering a telecommunications (or common carrier) service. In the case of MSC/INA, service to the public in the United States will be provided only through authorized service providers such as cellular entities under contract with Iridium North America to purchase bulk space segment and offer it to the public. The Commission recognized in its Big LEO Report and Order that when MSS services are ultimately offered to the public they would be subject to CMRS and common carrier regulation.[27] These CMRS providers will also be subject to Section 254(d) as telecommunications providers or telecommunications carriers. Like other interstate providers of CMRS, they will fully contribute to any universal service funding mechanisms ultimately adopted by the Commission.
Respectfully submitted,
MOTOROLA SATELLITE
COMMUNICATIONS, INC.
IRIDIUM NORTH AMERICA
______________________________
Michael D. Kennedy
Vice President and Director
Regulatory Relations
Barry Lambergman, Manager
Satellite Regulatory Affairs
MOTOROLA, INC.
1350 I Street, N.W., Suite 400
Washington, D.C. 20005
(202) 371-6900
Philip L. Malet
Alfred M. Mamlet
Brent H. Weingardt
STEPTOE & JOHNSON LLP
1330 Connecticut Avenue, N.W.
Washington, D.C. 20036
(202) 429-3000
Its Attorneys
May 7, 1996