SkyTerra (Canada) Inc.

300 Slater Street
Ottawa, Ontario
K1A 0C8

Our File: 46215 — 1 (163846 PL)

January 20, 2010

Mr. Bahman Azarbar
Vice-President, Regulatory Affairs
SkyTerra (Canada) Inc.
1601 Telesat Court
Gloucester, ON K1B 5P4

Dear Mr. Azarbar:

I refer to your letter and application of July 25, 2008 for a spectrum licence to provide mobile satellite service (MSS) in Canada using Canadian and American coordinated L-band spectrum on the MSV-1 satellite to be operated by SkyTerra USA pending the launch of the MSV-2 satellite and in conjunction with MSV-2. I regret the delay in replying to you.

In reviewing your application, the Department has noted that the use of the MSV-1 satellite and the spectrum described above will permit the early introduction of new and more advanced MSS services, ensure continuity of services to Canadian users until the commercial service launch of the MSV-2 satellite and the efficient use of spectrum resources once both satellites are operational. Accordingly, I am pleased to grant this approval in principle to SkyTerra Canada Inc. for the use of the MSV-1 satellite at the 101.3°W orbital position. This approval is limited to the use of Canadian and American L-band spectrum coordinated internationally for use onboard the MSV-1 and MSV-2 satellites. This approval in principle is also granted subject to SkyTerra Canada Inc.’s written acceptance, within 30 days from the date of this letter, of the conditions noted in the attachment.

With respect to your request for the Department’s concurrence that no additional approvals are required for SkyTerra Canada Inc. to use Canadian and American coordinated spectrum on MSV-1 and MSV-2, a response will be provided under separate cover.

In accordance with our commitment to fair, open and transparent licensing processes, Industry Canada will make this letter and the attached conditions available to the public. Should you have any questions regarding this letter, please contact me at (613) 998-3819 or Paul Lajoie at (613) 998-3775.

Yours sincerely,

Chantal Beaumier
Director, Space Services


Attachment

Conditions of Licence to Provide Mobile Satellite Services in Canada via the MSV-1 Satellite

1. Eligibility

SkyTerra (Canada) Inc. (SkyTerra Canada) shall conform with eligibility criteria as set out for a radiocommunication service provider in section 10.1(3)(b) of the Radiocommunication Regulations.

2. Licence Transferability

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

3. Laws, Regulations, and Other Obligations

  1. SkyTerra Canada is subject to and must comply with the ITU Radio Regulations, the Canadian Radiocommunication Act and the Radiocommunication Regulations, and Canada’s spectrum policies pertaining to its authorized radio frequency bands and satellite orbital positions.
  2. The operation of the facilities and services being provided shall be in conformity with relevant Canadian laws and regulations.

4. Service to all Regions of Canada

SkyTerra Canada shall make fair and reasonable efforts to provide mobile satellite services to all regions of Canada within the coverage contour and service availability of the MSV-1 satellite.

5. Research and Development

SkyTerra Canada shall invest a minimum of 2 percent of their adjusted gross revenues resulting from the provision of mobile satellite services via the MSV-1 satellite on satellite-related research and development activities. This investment may be averaged over a 5 year period, with the first averaging period beginning with the commencement of service provision in Canada. This investment shall be in addition to any investment required as a result of the authorization issued to provide services via the MSAT-1 and MSAT-2 satellites.

Eligible research and development is that which meets the definition adopted by the Canada Customs and Revenue Agency. Adjusted gross revenues are defined as total service revenues less intercarrier payments, bad debts, third party commissions and provincial and goods and services taxes collected.

Licensees with less than $5 million in annual gross operating revenues are exempt from research and development expenditure requirements, except where they have affiliations with licensees that hold other licences with the research and development condition of licence and where the total annual gross revenues of the affiliated licensees are greater than $5 million.

6. Lawful Interception

  1. SkyTerra Canada shall provide and maintain lawful interception capabilities as authorized by law. The requirements for lawful interception capabilities are provided in the publication entitled Solicitor General’s Enforcement Standards for Lawful Interception of Telecommunications. These standards may be periodically amended following consultation with the Minister of Public Safety Canada and the licensees.
  2. SkyTerra Canada may request the Minister to forbear from enforcing certain assistance capability requirements for a limited period. The Minister, following consultation with the Minister of Public Safety Canada, may exercise his power to forbear from enforcing a requirement or requirements where in the opinion of the Minister, the requirement(s) is (are) not reasonably achievable. Forbearance requests must include specific details and dates when compliance to requirement(s) can be expected.

7. Subscriber Earth Stations

  1. Subscriber earth stations are authorized to operate in Canada only. Any roaming into other countries shall respect the licensing regimes of those countries. To ensure compliance, SkyTerra Canada shall provide its subscribers with a copy of this condition.
  2. Subscriber earth stations shall meet all applicable Canadian radio equipment standards and be type-approved for use in Canada.
  3. The operation of subscriber earth stations shall not cause harmful interference to the radio astronomy service operating in the same or adjacent frequency bands.
  4. Subscriber earth stations shall comply with Health Canada’s Limits of Human Exposure to Radiofrequency Electromagnetic Fields in the Frequency Range from kHz to 300 GHz — Safety Code 6.

8. Operational Frequency Requirements

  1. Service link operations shall be restricted to those band segments allotted to SkyTerra by means of:
    • the 1999 Operating Agreement for Geostationary Mobile-Satellite Systems Operating in the Bands 1525-1544/1545-1559 and 1626.5-1645.5/1646.5-1660.5 MHz, originally established at Mexico City, Mexico, in June 1996, or any subsequent amendments to this operating agreement, and
    • the 2008 Understanding between the Department of Industry (Canada), the Federal Communications Commission (USA) and the Office of Communications (UK) for the Coordination of Satellite Networks Operating in the L Frequency Band.
  2. In accordance with No. 5.357A of the ITU Radio Regulations, in the bands 1545-1555 MHz and 1646.5-1656.5 MHz, stations of mobile satellite systems shall give priority to accommodating the spectrum requirements of the aeronautical mobile-satellite (R) service providing transmissions of mess`ages with priorities 1 to 6 as described in Article 44.
  3. In accordance with No. 5.353A of the ITU Radio Regulations, in the bands 1530-1544 MHz and 1626.5-1645.5 MHz, maritime mobile-satellite distress, urgency and safety communications shall have priority access and immediate availability over all other mobile-satellite communications. Communications with stations not participating in the global maritime distress and safety system (GMDSS) shall not cause unacceptable interference to, or claim interference from, distress, urgency and safety communications of the GMDSS.

9. Annual Reports

SkyTerra Canada must submit an annual report for each year of operation indicating continued compliance with these conditions, including:

  • an update on the status of the mobile satellite service, including the relative growth of the services provided, and the numbers of fixed and mobile subscriber stations operating within Canada;
  • a statement of gross operating revenues and, where applicable, under condition 5 above a statement of adjusted gross revenues, and an audited statement of research and development expenditures;
  • further to condition 8 (a) above, an update on the spectrum being used to provide services in Canada;
  • a copy of any existing corporate annual report for your fiscal year with respect to this authorization.

These reports are to be submitted in writing within 120 days of your fiscal year end to the Manager, Authorization Policy, Space Services Directorate.

10. Licence Fees

SkyTerra Canada must pay the applicable annual authorization fees on or before March 31 of each year.

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