Clarification Questions and Amendments to the Call for Applications to Develop and Operate Fixed-Satellite Space Stations in the 118.7° W Longitude Orbital Position
January 24, 2001
Spectrum Management and Telecommunications Policy
In accordance with Section 6.4 of the Call for Applications to Develop and Operate Fixed-Satellite Space Stations in the 118.7° W Longitude Orbital Position, Industry Canada invited questions seeking clarification of the procedure or policies set out in the Call for Applications.
Industry Canada received five such questions. These questions and the clarification responses are provided in this document. Also set out in this document are two amendments to the Call for Applications initiated by Industry Canada.
II. Clarification Questions and Industry Canada Responses
The following questions were received, and Industry Canada's responses are provided as follows.
The Call for Applications indicates that applications for each of the two licences will be assessed independently. If an applicant has a comprehensive business plan to deploy a satellite based on all three bands (C, Ku and Ka), how does the applicant reflect the interdependence of the business plans in its applications?
As stated in the Call for Applications, applications for each licence will be assessed independently from other applications. While an applicant may have a business plan based on an integrated satellite using all three bands (C, Ku, and Ka), an application for each licence is still required, and each application will be assessed independently and on a stand-alone basis. Further, to facilitate the selection of successful applicants, section 1.2 (first paragraph) of the Call for Applications is hereby amended to include the following: All applicants submitting two applications must clearly indicate in each application whether they will accept only the one licence referred to in the application.
In the Call for Applications, the Department has set out a requirement that the successful applicants will "... direct a minimum of two percent of the adjusted gross revenue resulting from the operation of the satellites, including any revenue resulting from the advanced sale or lease of satellite transponders or capacity, at serving public institutions in these underserved areas." In developing this requirement, has Industry Canada undertaken any studies identifying that such needs exist, and if so, will Industry Canada make such studies available to potential applicants to assist them in directing their efforts in consulting with the potential beneficiaries of this required expense?
The objective of this requirement is to advance the connectivity of Canadian public institutions (e.g. education and health) in areas that do not currently have access to high speed services. Industry Canada has been directly involved in Connecting Canadians programs such as Canada's SchoolNet, First Nations SchoolNet and LibraryNet for the past several years. In responding to the need for advanced communications services for certain types of schools and libraries, Industry Canada issued a Request for Information (RFI), Proposed Two-Way Multimedia Connectivity Service for Remote/Rural Schools and Libraries, in which Industry Canada identified potential scenarios intended to help move remote and rural schools and libraries to higher levels of connectivity. This Request for Information provided a description of the potential number of candidate schools that could benefit from the potential project as well as estimations for capacity requirements. The text of the RFI is available through the Internet at the following Website: http://www.ic.gc.ca/eic/site/smt-gst.nsf/eng/sf01692.html
Industry Canada's on-going involvement in programs related to schools and libraries, as well as its involvement with other departments, governments and remote communities in general, has made Industry Canada aware that there are also broader needs for advanced connectivity services for other public institutions (such as health institutions) in these same communities. However, while the Department is not aware of the availability of formal studies aimed at assessing present and future connectivity needs of public institutions in underserved areas, these needs are the subject of on-going discussions and information exchanges with other departments such as Health Canada, Indian and Northern Affairs Canada, and the Rural Secretariat (Agriculture and Agri-Food Canada).
Under the heading of "Satellite Capacity for Public Institutions", the Call for Applications requires that successful applicants direct at least two percent of their revenue at serving public institutions in underserved areas. Must this expenditure be directed at providing capacity for such institutions, or may the expenditure be directed in an equivalent form, for example, in the provision of services to public institutions, or by conducting research targeted at benefitting public institutions such as schools and hospitals in remote areas?
As indicated in the Call for Applications, successful applicants will be required to direct a minimum of two percent of their adjusted gross revenue resulting from the operation of the satellites, including any revenue resulting from the advanced sale or lease of satellite transponders or capacity, at serving public institutions in underserved areas of Canada. This requirement may be fulfilled in many ways, ranging from the provision of capacity to the provision of end-to-end services or other benefits. Applications will be assessed, however, not only on the amount of the commitment, but on their demonstration that comprehensive and sustainable benefits will meet identified needs of public institutions in underserved areas of Canada.
In Section 4.3.1 (b) concerning Canadian ownership and control requirements, the following statement appears: "In the event that an applicant does not, in the opinion of the Department, comply with the Canadian ownership and control requirements, the Department will require that the applicant make changes within a very short time frame, to be specified, taking into account the nature of the changes required, in order to become compliant." Please indicate whether the correspondence in this regard will be made public, or otherwise available, to all applicants.
Industry Canada recognizes that certain portions of the detailed applications may be considered confidential by an applicant. The Call for Applications indicates that while the Department would respect such information as confidential, all information identified as confidential might still be subject to release upon request under the Access to Information Act. Any departmental requests issued pursuant to Section 1.2 of the Call for clarification of issues arising from the evaluation of the detailed applications, including any departmental notification to make changes to comply with Canadian ownership and control requirements issued pursuant to Section 4.3.1, will be treated as confidential by the Department. However, these requests, and any associated responses received by the Department, might still be subject to release upon request under the Access to Information Act.
In the past, applications for fixed-satellite service (FSS) satellite spectrum were required to follow the set format of the Client Procedures Circular (CPC-2-6-02, dated May 1, 1997). Please indicate whether applications in response to the current call are required to adhere to the CPC-2-6-02 format in order to be compliant.
Detailed applications submitted in response to the Call for Applications are not required to follow a set format such as indicated above. All format requirements for the submission of detailed applications are set out in Section 6.1 of the Call for Applications.
III. Amendments to the Call for Applications
1. Responsibility for Payment of Processing Charges for Satellite Network Filings
The successful applicants will be responsible for payment of all International Telecommunication Union (ITU) processing charges for the satellite network filings. This responsibility for payment will include those charges associated with all satellite network filings submitted by the Department after November 7, 1998 to secure Canadian access to the spectrum. Thus, for the C and Ku band licence, the successful applicant will be responsible for the filing charges for the CANSAT 7 and CANSAT 18 filings that the Department has already submitted to the ITU as well as for any additional filings that may need to be submitted. For the Ka band licence, processing charges will only be applicable should additional filings be submitted, as the existing filings for CANSAT KA-5 and CANSAT KA-5 (modified) were submitted prior to the ITU implementation of cost recovery for satellite network filings.
To give effect to this policy, the following condition of licence is hereby added to those set out in Section 5.8 of the Call for Applications.
The licensee shall pay all processing charges associated with the ITU satellite network filings submitted to the ITU by the Department in order to secure access to the spectrum by the payment due date established by the ITU.
Details regarding the determination of these charges and payment due dates are available in the ITU's Radiocommunication Bureau Circular Letter CR/139, Implementation of cost recovery for satellite network filings and administrative procedures. The specific ITU processing charges for the systems identified above are not available at this time but are not expected to exceed 18,000 Swiss Francs per filing.
2. Satellite Capacity for Public Institutions
As indicated in Section 4.4.3 of the Call for Applications, successful applicants will be required to direct a minimum of two percent of the adjusted gross annual revenue resulting from the operation of the satellites, including any revenue derived from the advanced sale or lease of satellite transponders or capacity, at serving public institutions in underserved areas.
The term "adjusted gross revenues" in the context of this Call for Applications is defined as those revenues attributable to the use of the space segment capacity (including revenue from any pre-sold capacity and revenue arising from the sale of transponders), regardless of the intended service area, less inter-carrier payments, bad debts, third party commissions, and federal/provincial sales, goods and services taxes.
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