On July 22, 2026, the Federal Communications Commission unanimously adopted the Report and Order (R&O) in its Space Modernization proceeding, marking the next major step in the agency’s effort to modernize its satellite licensing rules. As discussed in our February 2026 GT Alert, the Commission’s rulemaking efforts have been unfolding alongside legislative proposals aimed at streamlining satellite and spectrum regulation. The rules discussed in the R&O replace the Commission’s longstanding Part 25 satellite licensing framework with an entirely new regulatory regime under Part 100.
The proceeding represents the Commission’s most comprehensive rewrite of its satellite licensing rules in decades — a scope reflected in the item’s nearly 300 pages. Given the breadth of substantive and procedural reforms addressed in the R&O, this GT Alert is the first in a series examining those changes, beginning with the Commission’s revised surety bond and deployment milestone requirements.
Part 100 dramatically narrows the FCC’s surety bond requirements by eliminating them altogether for geostationary satellite orbit (GSO) operators, non-GSO (NGSO) systems licensed outside a processing round, and Variable Trajectory Space Station (VTSS) missions, while retaining a reduced, de-escalating bond only for NGSO operators that voluntarily participate in a processing round. The new rules also replace the current one-size-fits-all milestone framework with deployment schedules tailored to the type of authorization, including an ITU-aligned milestone regime for non-processing-round NGSO systems while preserving the traditional six- and nine-year milestones for processing-round systems and the five-year deployment requirement for GSO satellites. Existing licensees may also be eligible to transition to portions of the new framework once the rules take effect.
Surety Bonds: From Universal Safeguards to Targeted Incentives
The FCC’s surety bond requirements were designed to discourage speculative filings and ensure that applicants sought licenses only when they had credible plans to deploy their systems. But the satellite industry has changed dramatically since the bond requirement was implemented: today’s space ecosystem includes numerous large NGSO constellations, growing reliance on spectrum-sharing mechanisms, substantial private investment, and a far broader range of satellite business models than existed when the current rules were adopted.
Given these changes, the R&O concludes that the existing bond framework should no longer apply uniformly across all satellite systems. Instead, the Commission reasons that the surety bond’s financial “stick” should primarily apply where operators receive the benefit of spectrum priority through participation in an NGSO processing round.
A. Current Part 25 Framework
Under today’s Part 25 rules, all space station licensees must post a surety bond covering potential liability to the U.S. Treasury if they surrender an authorization without deploying the licensed facility, or if they miss a required milestone deadline. Thus, licensees generally must:
- post a surety bond within 30 days of license grant[1] in an amount determined by formulas set forth in the Commission’s rules; and
- meet a six-year milestone demonstrating deployment of 50% of authorized satellites (for NGSO systems) or deploy a GSO satellite within five years of grant.
Failure to meet the 50% NGSO or five-year GSO deployment milestone (as applicable) results in forfeiture of the surety bond. Once the milestone is met, however, the bond obligation is released. The current formula escalates the surety bond amount over time, thereby increasing a licensee’s potential payment liability over time in the event of a default.
B. The Part 100 Framework Narrows and Simplifies the Bond Requirement
Rather than treating surety bonds as a universal prerequisite for satellite licensing, the Commission in the R&O instead takes the view that bonds should be utilized as a mechanism for protecting the integrity of NGSO processing rounds. Because processing-round participants receive the benefit of defined spectrum priority vis-à-vis later licensed systems, the Commission concludes that those applicants should continue to be subject to the bond requirement.
Accordingly, implementation of Part 100 would see the elimination of the surety bond requirement for the majority of satellite licensees. Specifically, the new rules would:
- eliminate surety bonds entirely for GSO space stations;
- eliminate surety bonds for NGSO systems that do not participate in a processing round;
- retain bonds only for applicants that voluntarily elect to participate in an NGSO processing round; and
- confirm that VTSS[2] systems are not subject to surety bond requirements.
Under Part 100, NGSO systems participating in a processing round would need to post a flat $10 million surety bond within 30 days of license grant. That amount would then decrease as deployment progresses, under a formula set forth in the rules, reaching zero once 90% of the authorized constellation has been deployed. (Licensees still would be required to deploy 100% of the authorized space stations under the milestone obligations but would be relieved of the surety bond obligation upon 90% deployment.)
The Commission explains that this approach better aligns incentives: operators that deploy quickly can reduce their financial obligations more rapidly, while speculative applicants still face a substantial upfront commitment.
Milestones: Different Strokes for Different Folks
Like surety bonds, the R&O also significantly revises how deployment milestones operate. Rather than applying a uniform set of deployment requirements to all satellite systems, the Commission proposes tailoring milestone obligations to the licensing framework under which an operator is authorized. In doing so, the FCC seeks to preserve incentives for timely deployment while recognizing that not every system presents the same spectrum management concerns.
A. NGSO Systems Participating in Processing Rounds
For NGSO systems participating in processing rounds, the R&O largely preserves the familiar six-year and nine-year deployment schedule. Operators must deploy 50% of their authorized constellation within six years and complete deployment within nine years.
The consequences for missing those milestones, however, change considerably. Under today’s rules, failure to satisfy the six-year milestone generally results in the authorization being permanently capped at the number of satellites actually deployed.
The R&O replaces that approach with a more flexible remedy. Instead of permanently capping the constellation, an operator that misses the six-year milestone would lose its original processing-round priority and be reassigned to the processing round corresponding to the year in which the milestone was missed. The operator could continue deploying its constellation but would do so with a later processing-round priority.
The Commission characterizes this approach as more reasonable because it avoids leaving operators with permanently incomplete constellations while still ensuring that spectrum priority reflects actual deployment progress.
B. NGSO Systems Not Participating in Processing Rounds
The R&O also creates an entirely different milestone framework for NGSO systems that do not participate in processing rounds. Rather than imposing the existing Part 25 deployment schedule, milestone requirements under Part 100 would track the International Telecommunication Union’s milestone timetable. Specifically, operators would be required to:
- deploy and operate at least one satellite within seven years of the license grant, consistent with the ITU’s “bringing into use” requirement;
- deploy 10% of the authorized constellation within nine years;
- deploy 50% of the authorized constellation within 12 years; and
- complete deployment of the authorized constellation within 14 years.
The Commission reasons that, because non-processing-round applicants do not receive the benefits of processing-round priority, the stricter domestic milestone framework is unnecessary.
C. GSO, MSS, and VTSS Operators
Part 100 would retain the current five-year milestone deployment requirement for GSO operators. Here, the Commission appears to agree with commenters suggesting that a milestone requirement for GSO space stations acts as a necessary backstop against concerns of spectrum warehousing and inefficient deployment timelines.
The R&O leaves largely unchanged the Commission’s approach to milestone requirements for Multi-Orbit Space Station (MOSS) systems. Operators of systems that include both GSO and NGSO satellites would continue to be required to satisfy the applicable milestone requirements for each type of space station. Subsequent authorizations – for example, approvals allowing an operator to add satellites to an existing system – would not establish a new milestone timetable. Instead, the deployment deadlines established in the initial authorization would continue to govern the system as expanded.
The R&O takes a different approach for VTSS systems, declining to impose deployment milestone requirements altogether. The Commission reasons that, unlike traditional GSO and NGSO systems, VTSS missions – which include activities such as in-space servicing, orbital transfer, rendezvous and proximity operations, and cislunar missions – are generally mission-specific and limited in duration, presenting less risk of spectrum warehousing. Under Part 100, the Commission would continue to evaluate these missions through the terms and conditions of their individual authorizations rather than through standardized deployment benchmarks.
D. Conditional Grants
The R&O also clarifies how milestone deadlines apply to conditional grants. Specifically, the applicable milestone timetable would begin on the date the FCC issues the conditional grant – not when the applicant later satisfies the conditions and receives final operating authority. According to the Commission, this approach preserves the flexibility afforded by conditional grants while preventing applicants from using the conditional grant process to effectively extend their deployment deadlines.
Transition Relief for Existing Licensees
Finally, the R&O includes transition provisions for existing licensees. Subject to procedures the Space Bureau will establish in a future public notice, operators authorized outside of a processing round generally could elect to replace their existing milestone obligations with the new Part 100 milestone framework, while licensees authorized through a processing round would retain their existing milestone deadlines. The R&O also provides immediate relief from surety bond requirements for many existing non-processing-round licensees and small satellite operators and permits eligible processing-round operators to transition to the new de-escalating bond schedule once the Part 100 rules become effective. Importantly, the Commission makes clear that the new rules would apply prospectively, and existing licensees must continue to comply with their current milestone and surety bond obligations until the Part 100 rules take effect.
[1] NGSO systems granted under the section 25.122 and 25.123 small satellite procedures are afforded one year plus 30 days from the date of license grant to post the bond.
[2] Defined as: “A system of one or more space stations either operating beyond the geosynchronous orbit or operating without fixed or predictable orbital patterns over the course of its lifetime and operating under one space station call sign. Variable Trajectory Space Station systems may include, but are not limited to, space stations on orbital transfer vehicles, rendezvous and proximity operations platforms, in-space servicing systems, and missions involving transit to, orbiting of, or operations on the moon or other celestial bodies.”