Telesat Canada — Revised Conditions of Licence

December 28, 2006

Mr. Ted Ignacy
Chief Financial Officer
Telesat Canada
1601 Telesat Court
Gloucester, Ontario
K1B 5P4

Dear Mr. Ignacy:

I refer to your letter of December 21, 2005 requesting approval of Telesat Canada's Nimiq 5 satellite design pursuant to licence condition 5 as set out in Industry Canada's approval of December 17, 2003. I regret the delay in responding to you.

The Department has reviewed the design information provided in the request and hereby grants its approval of the satellite design subject to the attached revised conditions of licence.

Please note that nothing in this letter shall be construed as an approval of any application submitted by Telesat Canada pursuant to Industry Canada's ongoing satellite licensing initiative.

Yours sincerely,

 

Jan Skora
Director General
Radiocommunications and
Broadcasting Regulatory Branch


Conditions of Licence for Telesat Canada (Telesat) 12 GHz BSS Satellite Operating at 72.5° W Orbital Position

Licence Eligibility

1. Telesat shall conform on an on-going basis with the Canadian ownership and control requirements as set out for a radiocommunication carrier in section 10(2)(d) of the Radiocommunication Regulations.

Licence Transfer

2. This licence may not be transferred or assigned without full review of the application by the Department and the authorization of the Minister. For clarification and without limiting the generality of the foregoing, "transfer" includes any leasing, sub-leasing or other disposition of the rights and obligations of the licence, and also includes any change which would have a material effect on the ownership or control in fact of Telesat.

Serving Canadian Broadcasting Needs

3. a) Telesat shall operate the interim and new satellite facilities as a Canadian telecommunications common carrier.

b) Notwithstanding condition 3(a), Telesat may assign up to 50 percent of the capacity of the new satellite, to serve foreign broadcasting needs for the term of the licence.

c) Telesat shall retain a minimum of 50 percent of the capacity of the new satellite for Canadian broadcasting undertakings until the launch of the new satellite, and shall initiate a public "call for interest" to determine Canadian needs for this retained satellite capacity. This "call for interest" shall not close before the launch of the new satellite. Should the retained capacity exceed identified Canadian requirements, Telesat may assign such excess retained capacity for service in other countries for the term of the licence.

d) Should Telesat apply to the Department to license a replacement for the new satellite, the Department may review the applicability of conditions 3(b) and 3(c).

4. A minimum of 50 percent of the transponders on the new satellite to be operated under this licence shall be capable of serving all regions of Canada visible from the assigned orbital position, including Northern Canada.

Milestones

5. Telesat shall meet all implementation milestones by the respective dates set out in the following table:

Milestones
Milestones Date
1 Placement of an interim satellite into the authorized orbital position. 14 July 2005
2 Submission to Department for approval of final design specifications for a new satellite to be operated at the authorized orbital position. 31 December 2005
3 Final signature of contracts for (1) the construction of the new satellite, and (2) the launch of the new satellite into the authorized orbital position by milestone 4. 31 December 2006
4 Placement of the new satellite into the authorized orbital position. 31 December 2008

Capacity to Improve Connectivity

6. Telesat must direct a minimum of two percent of adjusted gross revenues resulting from the operation of its satellite at the 72.5° W orbital position towards special initiatives, such as the National Satellite Initiative being delivered by Industry Canada, aimed at improving connectivity in underserved areas of Canada. Such special initiatives will be developed with the Department.

Operational Requirements and International Coordination

7. Telesat shall operate the satellite within the provisions of the ITU Radio Regulations, Canadian legislative and regulatory requirements, and Departmental spectrum policies.

8. Telesat shall, at its own expense, participate with the Department to effect the successful modification of the Appendices 30 and 30A Region 2 Plan of the ITU Radio Regulations to incorporate the characteristics of the frequency assignments of the proposed Nimiq 5 satellite network; provide the Department, in a form acceptable to the ITU, with any required information; and be responsible for the payment of all ITU processing charges related to the submission of this information.

9. a) Until such time as Canada has successfully modified the Region 2 Plan of Appendices 30 and 30A of the ITU Radio Regulations pursuant to condition 8, Telesat shall operate the satellite in conformity with the Region 2 Plan.

b) Notwithstanding 9(a) above, to the extent that operations do not conform with the Region 2 Plan, such operations shall be on a no interference, no protection basis.

10. Telesat shall fulfill all commitments made by Canada pursuant to all international coordination arrangements for the operation of a direct broadcast satellite facility in the 72.5° W orbital position.

Industrial Benefits

11. Telesat must make fair and reasonable efforts to develop, promote and purchase satellite network components from Canadian manufacturers.

Reporting

12. a) Telesat must submit a detailed annual report to Industry Canada. This annual report must include:

  • An update indicating progress made in all areas respecting this licence;
  • An update indicating continued compliance with all licence conditions;
  • An update on any negotiations undertaken pursuant to condition 8;
  • An update on activities related to improving connectivity in underserved areas of Canada;
  • Copies of any existing report for Telesat's fiscal year with respect to this authorization; and
  • A current listing of all satellite capacity being made available through this authorization, the capacity assigned to Canadian service providers and others, including the parties to which it is assigned, and any unused capacity including the terms of its availability.

b) These annual reports are to be augmented with semi-annual interim reports providing an update on all aspects of design, procurement, construction, coordination and launch of the satellite facilities until the new satellite has been put into service.

Licence Fees

13. Telesat must pay applicable annual authorization fees in advance on or before March 31 of each year.

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