Ciel — Licence 28

Our file: 46215-1 (156301 RH)

June 27, 2008

Mr. David Lewis
President & Chief Executive Officer
Ciel Satellite Limited Partnership
240 Terence Matthews Crescent
Kanata, Ontario K4M 2C4

Dear Mr. Lewis:

This is further to Industry Canada's letter of June 15, 2007 advising you that Ciel was selected to develop and operate several satellites pursuant to Industry Canada's 2006 Call for Applications to License Satellite Orbital Positions.

I am pleased to provide Ciel with the Department's approval in principle to develop and operate a broadcasting service satellite as indicated in the table below.

Licence Orbital Position Frequency Bands
28 138°W 12.2-12.7 GHz (space-to-Earth)
17.3-17.8 GHz (Earth-to-space)

This approval is subject to Ciel demonstrating compliance with Canadian ownership and control requirements. This approval is also subject to the attached conditions.

Please note that the onus is on Ciel to demonstrate to the Department at its own expense, prior to the issuance of radio authorizations and commencement of service, their compliance with the applicable regulatory requirements, conditions and milestones applicable to the licence. Failure to meet any of the applicable regulatory requirements or any of the established implementation milestones may result in the withdrawal of an approval in principle for the related licence.

In keeping with our commitment to open, fair and transparent licensing processes, this letter will be posted on Industry Canada's spectrum and telecommunications website. If you have any questions regarding this letter, please contact Richard Hiebert, Manager of Satellite Authorization Policy, at (613) 998-4333.

Sincerely,

J. K. Lindsey
Acting Assistant Deputy Minister
Spectrum, Information Technologies and Telecommunications\

Attachment

Ciel Satellite Limited Partnership (Ciel)
Conditions to Obtain Authority to Operate a 12 GHz BSS Space Station at the 138°W Orbital Position

1. Eligibility

Ciel shall conform at all times with the Canadian ownership and control requirements as set out for a radiocommunication carrier in section 10(2)(d) of the Radiocommunication Regulations.

2. Licence Transferability

This licence may not be transferred or assigned without a full review of the application by the Department and without 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 Ciel.

3. Direction or Control of Spacecraft

Ciel shall ensure the satellite is under the direction or control of a Canadian entity as set out in section 3(3)(b) of the Radiocommunication Act. Ciel shall provide information to the Department demonstrating that the proposed satellite facilities will be under such direction or control prior to signing a contract for the procurement of the satellite.

4. Implementation Milestones

a) Ciel shall ensure that all implementation milestones and related requirements as set out below are met.

Milestone Date
1 Submission to Department for approval of final design specifications for a new satellite to be operated at the authorized orbital position. May 1, 2011
2 Final signature of contract for the construction of the new satellite. September 1, 2011
3 Final signature of contract for the launch of the new satellite into the authorized orbital position by milestone four. September 1, 2013
4 Placement and in-service of the new satellite into the authorized orbital position. September 1, 2014

b) Satellite Design Approval. Prior to entering into a contract for the procurement of the new satellite, Ciel shall demonstrate to the Department that the satellite design will meet all commitments made for serving Canada, and conform with the applicable provisions of the ITU Radio Regulations and with any applicable conditions of licence.

c) Contracts for Construction and Launch of Satellites. Ciel shall demonstrate to the Department by the applicable dates set out in the above table for milestones two and three, that it has entered into contracts for the construction and launch of the new satellite in a manner that is consistent with the placing of a satellite into the assigned orbital position and bringing spectrum into use by the date noted for milestone four.

5. Laws, Regulations, and Other Obligations

Ciel and its use of the spectrum assigned in this licence are subject to and must comply with the ITU Radio Regulations, the Radiocommunication Act, the Radiocommunication Regulations, and Canada's spectrum utilization policies pertaining to the licensed radio frequency bands.

6. Capacity to Meet Needs of Users and Service Providers in Canada

a) Ciel shall adhere to all commitments made in its application for providing satellite capacity and services, on a non-discriminatory basis, to users and service providers in Canada.

b) Prior to receiving approval by the Department of the final design specifications for the new satellite under Milestone 1, Ciel shall demonstrate to the Department's satisfaction that it has made reasonable efforts to make capacity on the new satellite available to Canadian satellite users and service providers. To this end, Ciel shall initiate a public "call for interest" to determine Canadian needs for capacity on the new satellite.

c) Should Ciel apply to the Department to license a replacement for the new satellite, the Department may review the applicability of conditions 6(a) and 6(b).

7. Capacity or Other Benefits for Under Served Communities

a) Ciel shall direct a minimum of 2 percent of adjusted gross annual revenues resulting from the operation of the new satellite, or, subject to the prior approval of Industry Canada, satellite capacity or services of an equivalent value to the foregoing, toward special initiatives, such as the National Satellite Initiative being delivered by Industry Canada, aimed at improving connectivity in under served areas of Canada. Such special initiatives will be developed with the Department.

b) Notwithstanding condition 7(a), Ciel shall fulfill the commitment made in its applications pursuant to the 2006 Call for Applications to License Satellite Orbital Positions to direct an additional one half percent of its adjusted gross revenue (or equivalent satellite capacity or services if approved) toward the special initiatives set out in condition 7(a), for the third and every additional licence granted to Ciel in the above-noted licensing process.

c) The term "adjusted gross revenues" in this context is defined as those revenues attributable to the use of the space segment capacity, including any pre-sold capacity and revenues arising from any sale of transponders, less inter-carrier payments, bad debts, third party commissions, and provincial and federal sales, goods and services taxes.

8. Orbital Debris Mitigation

The satellite, at the end of its life, shall be removed from the geostationary satellite orbit region in a manner consistent with Recommendation ITU-R S.1003 Environmental Protection of the Geostationary Satellite Orbit.

9. International Satellite Coordination

Ciel shall, at its own expense, participate with the Department to effect the successful modification of the BSS frequency assignment plans of Appendix 30/30A of the ITU Radio Regulations, 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.

Ciel shall operate its satellites in accordance with the successful modification to the Appendix 30/30A plan and shall fulfill all commitments made by Canada pursuant to all international coordination and any other arrangements for the operation of a direct broadcast satellite facility in the 138°W orbital position.

10. Domestic Satellite Coordination

Ciel shall coordinate the satellite network with other potentially affected Canadian satellite and terrestrial services, and the satellite must be operated in a manner consistent with any arrangements made to facilitate domestic satellite coordination.

11. Satellite Licensing Information

Ciel shall submit the administrative licensing information, set out in Annex B of CPC-2-6-02, at least 60 days in advance of the anticipated launch date of the satellite. Ciel must also submit a traffic report for the satellite every three months thereafter.

12. Earth Station Licensing

All earth stations in Canada communicating with the satellite, except those exempted from the licensing requirement pursuant to the Radiocommunication Act and Radiocommunication Regulations, shall be licensed prior to operation pursuant to Client Procedure Circular, CPC-2-6-01, Procedure for the Submission of Applications to License Fixed Earth Stations and to Approve the Use of Foreign Fixed Satellite Service (FSS) Satellites in Canada.

13. Reporting

a) Ciel shall provide the Department with a detailed annual report outlining progress made in all areas respecting the approved satellite project, including:

  • an update on all aspects of the design, procurement, construction, coordination and launch of the satellite until all proposed satellites have been put into service;
  • an update demonstrating continued compliance with all licence conditions;
  • a current listing of all satellite capacity 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; and
  • a copy of any existing corporate annual report for its fiscal year with respect to this authorization.

b) These annual reports are to be submitted, in writing, within 120 days of your fiscal year end, to the Director, Space and International Regulatory Activities, Radiocommunication and Broadcasting Regulatory Branch. These annual reports are also to be augmented with semi-annual interim reports providing an update on all aspects of the design, procurement, construction, coordination and launch of the satellite until the proposed satellite has been put into service.

c) In providing the reports set out in conditions 13 (a) and 13 (b), Ciel may amalgamate the reports with other reports required pursuant to other licences.