FCC Record, Volume 2, No. 1, Pages 1 to 409, January 5 - January 16, 1987 Page: 234

                                
Federal Communications Commission Record

7. Neverthless, MCI's request will be considered on its
merits. MCI's acquisition of SBS together with the authorizations
for six SBS satellites is not a circumstance
"beyond its control." Although MCI states it "has had to
make business judgments based upon SBS service offerings
and transmission technology before it could reasonably
be expected to commit hundreds of millions of
dollars toward acquiring additional satellite capacity,"8
these judgments were the result of a business decision
undertaken to benefit MCI. MCI has not suggested that
the "complexities" surrounding the merger were anything
other than the necessary and routine matters involved in
such an, albeit large, transaction. The additional time is
sought, in essence, to provide MCI with the opportunity
to determine whether implementation of the SBS satellites
it acquired is economically advisable. Not only
could this determination have been made earlier, but
independent business judgments based upon economic
considerations traditionally have not been considered circumstances
beyond a licensee's control and thus have not
justified extensions of time.9 No other overriding factors
are present here that would justify an extension. Permitting
MCI additional time simply to decide whether to
proceed with its satellite construction program would
undercut the rationale for implementation milestones and
could impede other qualified applicants in implementing
their own plans. Thus, :o the extent that MCI's request is
based upon the MCI-SBS merger, it will be denied.
8. MCI also argues that the launch situation caused
delays in its construction program. While the unprecedented
series of launch failures has created some uncertainty
in the industry, and in other extension requests has
been found to constitute circumstances beyond the licensee's
control,'0 MCI's failure to meet the December
1985 construction date for SBS-7 occurred before the first
launch disaster at the end of January 1986. Thus, the
launch situation could not have impacted MCI's construction
schedule for SBS-7 and is not a sufficient basis on
which to grant a nunc pro tunc extension for that satellite.
MCI has not demonstrated that delay in meeting the
December 1985 deadline for SBS-7 was due to circumstances
beyond its control. Its authorization to construct
and launch this satellite is therefore, by its terms as
accepted by MCI, null and void.
9. Because the launch situation may have played a part
in MCI's failure to begin construction of SBS-8 by the
required March 1986 date, MCI will be granted its requested
extension to commence construction of SBS-8. In
addition, because of the time involved in processing its
application, MCI will be afforded an additional forty-five
days, until February 17, 1987, to finalize satellite design
and procurement plans for this satellite.
10. In granting MCI this extension, it is emphasized that
no further extensions of the required commencement of
construction date for SBS-8 will be granted. While satellite
design decisions and choices of launch vehicles may
be interrelated, it is technically possible to design satellites
to be compatible with more than one type of launch
vehicle. Although some additional costs, including constraints
on satellite capacity, may be incurred by designing
a satellite to be compatible with the different physical
dimensions and other characteristics of two or more types
of launch vehicles, these economic considerations do not
normally justify extensions of time." Arianespace has
announced its plans to resume launches in the first half
of 1987. Western Union has signed a letter of intent with

the Great Wall Industry Corporation for launch of its
Westar VI-S satellite on a Long March vehicle in the first
quarter of 1988.12 Other launch vehicles also are expected
to become available in the 1989-1990 time frame.13 Given
the three year implementation period between execution
of a contract to manufacture a satellite and launch of the
satellite, the current disruption in launch services will not
be permitted to serve as a continued justification for MCI
to delay commencement of construction of SBS-8. Nor
will the availability of a particular launch vehicle be a
permissible justification for further delay. To verify that
MCI is in compliance with the required milestone, it will
be required to submit to the Commission a copy of its
construction contract with the spacecraft manufacturer,
including any relevant amendments and notices to proceed,
no later than five days after February 17, 1987.
Failure to respond within this time frame will subject the
authorization for SBS-8 to immediate revocation.
11. Finally, MCI is granted its requested extensions of
the other milestone dates for SBS-8. Given the revised
construction commencement date, a December 1989 completion
date and a March 1990 launch date are reasonable.
However, we will not, as MCI suggests, consider the
launch date as a target only. MCI will be required to
adhere to this deadline. Failure to launch SBS-8 by the
required date will automatically render the SBS-8 authorization
null and void. Any request for extension of
the launch date must be timely filed and demonstrate that
the deadline cannot be met due to circumstances beyond
MCI's control.
CONCLUSION AND ORDERING CLAUSES
12. MCI has not met the required construction
milestone for its SBS-7 satellite nor has it demonstrated
that an extension of time to meet that deadline is justified.
Thus, by its terms as accepted by SBS and subsequently
transferred to MCI, the authorization for the SBS-7 domestic
satellite is null and void. Although MCI has also
failed to meet the required construction milestone for
SBS-8, it will nevertheless be granted its requested extension
of the implementation dates for this satellite based
upon its claim that additional time is needed due to, in
part, the unforeseen and unprecedented disruption in
launch services. MCI has now had the time to reevaluate
its plans and should be in a position to finalize its
construction program.
13. Accordingly, IT IS ORDERED, pursuant to Section
0.291 of the Commission's rules on delegations of authority,
that the authorization granted to Satellite Business
Systems, in Satellite Business Systems, 103 FCC 2d 856
(1985) for the SBS-7 satellite and later transferred to MCI
Communications Corporation in Satellite Business Systems,
Mimeo No. 2629 (released February 14, 1986) IS
DECLARED NULL AND VOID.

234