Surety Bond Encyclopedia

Satellite Permit Bond - Federal Communications Commission (FCC) in All States

Brief Summary

An FCC space station license is void if the bond is not on file within 30 days of the grant. Lining up a Treasury listed surety before the grant lands keeps that deadline from becoming the thing that sinks a license you spent years getting.

Under 47 CFR 25.165, most FCC space station licensees must post a surety bond naming the U.S. Treasury as beneficiary within 30 days of the license grant. The amount escalates with time. A GSO bond runs from $1 million up to $3 million over five years, and an NGSO bond runs from $1 million up to $5 million over six years. Miss the filing and the license becomes null and void automatically.

We can help with all All States bonds!

How to Apply for a Satellite Permit Bond:

Confirm whether the license is GSO, NGSO or a mixed system, since that sets the bond formula.
Check whether the station qualifies as a replacement space station or SDARS, which are exempt.
Note the grant date. The bond is due within 30 days, or one year plus 30 days for stations licensed under 47 CFR 25.122 or 25.123.
Provide company financial statements for the surety's underwriting review.
Have the bond written by a Treasury listed surety naming the U.S. Treasury as beneficiary.
File a copy of the executed bond, with all details and conditions, with the FCC.

Detailed Information About the All States Satellite Permit Bond:

Who has to post this bond

The FCC requires a surety bond from space station licensees under 47 CFR 25.165. It applies to licenses issued after September 20, 2004, with exceptions for SDARS (satellite radio) space stations and for replacement space stations. A replacement satellite is one authorized at essentially the same orbital location or orbit, in the same frequency bands and coverage area, and timed to come into use no later than the station it replaces is retired.

The bond must be posted within 30 days of the license grant. Stations licensed under the streamlined small satellite and small spacecraft rules, 47 CFR 25.122 and 25.123, get a longer window of one year plus 30 days. If the bond is not posted on time, the license is automatically null and void.

How the amount is set

The bond is not a single flat figure. It grows the longer the license is held before the milestones are met, and the result is rounded to the nearest $10,000.

For a geostationary (GSO) licensee the formula is $1,000,000 plus $2,000,000 times D divided by 1,827, where D is the number of days from grant to surrender, capped at 1,827. That tops out at $3 million.

For a non geostationary (NGSO) licensee the formula is $1,000,000 plus $4,000,000 times D divided by 2,192, with D capped at 2,192. That tops out at $5 million. A system with both NGSO and GSO satellites in the same bands uses the NGSO formula.

What counts as a default

The bond pays the U.S. Treasury if the licensee surrenders the license before meeting a milestone in 47 CFR 25.164, or simply misses one. For a GSO station the milestone is launching, positioning and operating the satellite within five years of the grant. For an NGSO system it is having 50 percent of the authorized satellites launched and operating within six years. Once the FCC finds the milestones were met, the bond obligation is released.

The separate ITU filing bond

An applicant that asks the FCC to submit a Coordination Request or an Appendix 30B filing to the ITU under 47 CFR 25.110(b)(3) needs its own $500,000 bond. A copy must reach the FCC within 30 days after the public notice announcing the ITU submission, or the application is returned as defective. That bond goes into default if a complete license application is not filed within two years.

The surety and the filing

The surety must be one the Treasury accepts for federal bonds under 31 U.S.C. 9304, which in practice means a company on the Treasury's Circular 570 list. The licensee gives the Commission a copy of the bond with all of its terms and conditions. Premium is set by the surety after reviewing the licensee's financial strength and the size of the obligation, so confirm the current filing steps with the FCC Space Bureau before the bond is issued.

Eligibility and Requirements for an All States Satellite Permit Bond:

Surety company acceptable under 31 U.S.C. 9304 (Treasury Circular 570).
U.S. Treasury named as beneficiary.
Minimum amount set by the 47 CFR 25.165 formula, rounded to the nearest $10,000.
Up to $3 million for a GSO licensee and up to $5 million for an NGSO licensee.
A separate $500,000 bond for ITU Coordination Request or Appendix 30B filings.

All States Satellite Permit Bond FAQs:

How much is the bond for my satellite license?

It depends on the orbit and on time. A GSO bond starts at $1 million and scales up to $3 million over 1,827 days. An NGSO bond starts at $1 million and scales up to $5 million over 2,192 days. The figures come from the formulas in 47 CFR 25.165(a).

What happens if I do not post the bond on time?

The license becomes null and void automatically. For most licensees the deadline is 30 days after the grant.

Is any satellite exempt?

Yes. SDARS space stations and replacement space stations as defined in 47 CFR 25.165(e) do not post this bond. Licenses issued on or before September 20, 2004 are also outside the rule.

When is the bond released?

When the FCC finds that the licensee met its milestones under 47 CFR 25.164. For a GSO station that means the satellite is launched and operating within five years. For an NGSO system it means half the authorized satellites are operating within six years.

Who can write the bond?

Only a surety the Treasury accepts for federal bonds under 31 U.S.C. 9304. The bond must name the U.S. Treasury as beneficiary.