CAPITAL CURRENTS: Oops!
DirecTV misinterpreted an FCC rule regarding orbital slots.
It seems that DirecTV made a major blunder in interpreting an FCC technical rule, and as a result lost its place in line for a valuable broadcasting satellite slot.
I last wrote about the new 17 GHz DBS band in October 2007. At that time, the FCC had just adopted rules and decided to give the already-filed applications the top priority. Those applications were from DirecTV, EchoStar, Pegasus and Intelsat. Since then, a new applicant, Spectrum Five, arrived on the scene and challenged DirecTV for the valuable slot at 103 degrees – and won.
Spectrum Five, it turns out, didn't file 17 GHz orbital slot applications with the FCC. It filed them in the Netherlands, for numerous locations over the United States. But that's OK. Ever since 1999, the FCC has granted authority for foreign-licensed satellites to access the U.S. market. In fact, in late 2006, the FCC granted Spectrum Five a license to operate a 12 GHz DBS satellite over the U.S.
As I reported in my column, the FCC decided on 4 degree orbital spacing in the 17 GHz band, as compared with 9 degree spacing in the 12 GHz DBS band. So there are 35 orbital slots in the FCC's plan, from 43 degrees to 179 degrees. Spectrum Five applied for seven of them, between 95 degrees and 119 degrees, right over the middle of the United States.
The 22 applications submitted to the FCC by DirecTV, EchoStar, Pegasus and Intelsat conflicted with one another, and most didn't fall into one of the 35 slots the FCC defined. So the FCC set up a process to allow them to amend their applications by specifying a new location. That would ordinarily be considered a major amendment and would kick an application to the end of the normal processing line. But in this case, the FCC allowed these 22 applications to be amended but still retain their priority.
The FCC also allowed the applicants to choose orbital slots that were slightly offset from the slots defined by the FCC. Offset spacing was allowed to mitigate physical interference between satellites at the same orbital location but using different frequencies. A satellite at an offset location would be slightly farther than 4 degrees from one adjacent satellite, but slightly closer than 4 degrees from the other, and that might cause interference. To avoid interference, they would have to reduce power and submit an interference calculation showing that they would cause no more interference into Earth stations pointing at an adjacent satellite than they would cause if they were located in the FCC-defined slot.
DirecTV chose the location 102.825 degrees for the nominal 103 degree slot. (SES Americom has a C/Ku band satellite at 103 degrees.) And it submitted calculations showing no increase in interference to a satellite system operating at 99 degrees. But the DirecTV engineers did the calculation wrong! Or, at least, that was Spectrum Five's claim, and the FCC agreed.
The FCC rule says: "The power flux density at the Earth's surface produced by emissions from a 17/24 GHz BSS space station operating in the 17.3-17.7 GHz band for all conditions, including clear sky, and for all methods of modulation shall not exceed the regional power flux density levels defined below."
DirecTV interpreted the phrase "clear sky" to mean a sky clear of clouds, and so it included path attenuation due to atmospheric loss. Spectrum Five submitted a petition that argued that the phrase "clear sky" means "free space," and that atmospheric loss should not have been included. The FCC agreed. That difference, according to the FCC, means that the DirecTV satellite would operate with power levels 13 percent higher than allowed. That made the DirecTV application "defective," and under FCC rules it was dismissed.
Who is next in line for the 103 degree slot? Spectrum Five is next in line. But that doesn't mean they get the slot automatically. The FCC has to go through a proceeding to determine whether they are legally, technically and financially qualified to offer broadcast satellite service to the U.S. market.
Since the FCC already went through that for Spectrum Five's 12 GHz authorization, it should not be a problem. And the FCC will examine the Spectrum Five application to make sure it is not "defective." DirecTV will certainly appeal the decision to dismiss their application. That decision was made by the chief of the FCC International Bureau, a Kevin Martin appointee who has since resigned. DirecTV has the right to appeal to the FCC commissioners themselves. So it will be a while before this issue is finally settled.
I don't know how much one of these orbital slots is worth. The FCC isn't auctioning them; it's giving them away for free. But MCI once paid almost $700 million for a DBS slot. So DirecTV, with all of its technical experience and high-priced lawyers, certainly learned an expensive lesson this time.