Battle to Control the Skies : Global Systems Vie for Space on Radio Spectrum
A gritty battle for dominance may be about to erupt in the rarefied atmosphere where communications satellites orbit the Earth.
Monday’s official announcement that two high-tech moguls want to use low-orbiting satellites to launch a $9-billion global communications system adds a major new player to the increasingly competitive market for global communications services.
Bill Gates, co-founder of Microsoft Corp., the world’s biggest computer software company, and Craig McCaw, chairman of giant McCaw Cellular Communications, unveiled their plans to form a new company called Teledesic Corp. Teledesic will seek government authority to use radio waves to deliver wireless calling, video conferencing and other advanced services to people around the world.
But Teledesic is not alone. The National Aeronautics and Space Administration, Motorola Inc., Hughes Aircraft Co. and at least four other companies have already asked the Federal Communications Commission for approval to offer new telecommunications services over parts of the same precious radio spectrum sought by Teledesic.
“The whole issue of licensing has not been resolved,” said Michael D. Kennedy, director of regulatory relations for Motorola, which is a major investor in the Iridium Project, a $3.3-billion effort to build a global portable cellular telephone network using 66 satellites to transmit signals.
“One more party now has to be reckoned with, but we’re confident that there’s sufficient airspace to accommodate all existing requests,” countered Tom W. Davidson, a Washington communications lawyer who is shepherding Teledesic’s applications through the FCC.
The radio airwaves have emerged as a key battleground amid the rapid development of new technologies such as high-definition television, digital radio and wireless telephone services.
The new satellite services will compete with cable and fiber-optic phone lines for markets as the so-called information highway takes shape.
Interest in the radio spectrum is so high that the federal government estimates it can raise between $7 billion and $10 billion by auctioning space on it for the next generation of wireless telephone services alone.
As for the radio spectrum sought by Teledesic and others, the FCC has asked for industry comments on negotiating a resolution on how to divide up the limited space.
FCC officials have said they are unsure how they would go about allocating radio spectrum for new satellite communications services that have global reach. Congress has given the agency authority to auction space on the spectrum for most new telecommunications to the highest bidder, but so far the FCC has only examined rules for new wireless domestic communications services.
The Hughes Spaceway venture would utilize two satellites orbiting 23,000 miles above the Equator to offer wireless telephone, data and some video services in North America. Iridium would offer similar services around the world relying on airwaves that the FCC has already provisionally authorized it to use. But Iridium may need some of the disputed frequencies for so-called feeder links to its stations on Earth, FCC officials said.
In its voluminous application filed late Monday at the FCC, Teledesic proposed a global communications network that would offer phone, video and data services through 840 satellites orbiting just 435 miles above Earth.
The network will face relatively high maintenance costs because the Earth’s gravity would pull Teledesic satellites out of orbit in less than a decade. Higher satellites, such as those operated by NASA and proposed by Hughes, have 12- to 15-year life spans. But the low orbit would thwart the brief signal delays that plague conventional communications satellites that operate 23,000 miles up.
FCC commissioners were out of town Monday and could not be reached for comment. But an aide to agency Chairman Reed Hundt said Teledesic’s plan could represent an important step toward reaching one of the Clinton Administration’s most important policy goals: developing a global information superhighway that would link ordinary Americans with government, industry and schools.
Citing a speech Monday in Buenos Aires in which Vice President Al Gore called on foreign leaders “to help create a global information infrastructure . . . linking all human knowledge,” Blair Levin, Hundt’s chief of staff, said Teledesic’s global satellite communications system “absolutely reinforces the type of things the vice president is calling for.”
Nevertheless, the Teledesic venture may present several complications for regulators. Besides needing FCC approval, Teledesic hopes to forge partnerships with telephone companies around the world that would be willing to lease space on its network to provide service in a region.
Davidson said the company has already been in touch with officials from several developing countries and that their reaction was “very favorable.”
However, experts warn that foreign telephone companies and licensing authorities are not set up to deal with communications enterprises that cross traditional telecommunications boundaries. Moreover, many foreign telecommunications companies are government-owned monopolies that traditionally have been resistant to outside competition.
“Europe is just beginning to open its markets,” said Dimitri Ypsilanti, a telecommunications experts with the Organization for Economic Cooperation and Development in Paris.
Crowded Skies Various companies around the world are fiercely competing to build satellite-based mobile telcommunications systems. There are three basic types of systems: low earth orbit (LEO), which are cheaper to launch but last a shorter time in orbit; medium earth orbit (MEO), which are more expensive but last longer in orbit, and high-orbit systems, which have the greatest longevity and expense. Here’s a brief rundown on some major satellite projects: Teledesic: A $9-billion global communications system sponsored by Teledesic, a new partnership proposed by Craig McCaw of McCaw Cellular Communications and William H. Gates of Microsoft. It would link hundreds of satellites around the globe into a massive digital communications network. Iridium: A $3.-billion LEO system sponsored by Motorola, expected to begin operation in 1996. Its fleet of 66 satellites would provide a wireless global communications network. Project 21: Sponsored by London-based Inmarsat with backing by Swedish communications giant Ericsson. This network of satellites in 70 nations will be linked together to provide global phone service. Odyssey: An MEO system sponsored by TRW. Its $1.3-billion network of 12 satellites wouldcreate a cellular telephone system in the sky. Globalstar: A LEO system sponsored by Loral and Qualcomm for operation in 1997. It is a $1.2-billion series of 48 satellites that would provide digital communications. Ellipso: A LEO system sponsored by Ellipsat, a unit of Mobile Communications Holdings. It would provide a $250-million digital phone network based on about 12 satellites. Aries: A LEO system sponsored by Constellation Communications. It consists of about 45 satellites linked to provide telecommunication services. Sources: Phillips Business Information Inc.; Bloomberg Business News; Communications Daily; Times reports; wire reports. Researched by ADAM S. BAUMAN / Los Angeles Times
