AT&T; Working to Regain Link With Satellite

With a multimillion-dollar deal hanging in the balance, AT&T; Corp. is struggling to regain its link with a satellite that is part of a communications business AT&T; has earmarked to be sold to Loral Space & Communications Ltd. this month for $712.5 million.

Telstar 401, which relays signals for a number of TV networks, including ABC, Fox and PBS, went down Saturday morning. No network was forced off the air by the outage that continued through Tuesday.

But AT&T; said that if it can’t reestablish contact with the satellite soon, customers who use the satellites for data transfer and video conferencing may soon be without a link until another Telstar satellite is launched in four months.

“We have to make sure that our customers are getting what they pay for, but it’s been hard to [make alternative arrangements] on the KU-band of the satellite which is used for data communications and video conferencing,” said Mike Granieri, an AT&T; spokesman.

Technical snafus are common in the booming satellite business. But this setback could prove significant for Loral, which in late September agreed to buy AT&T;’s Skynet Satellite Services. The service includes Telstar 401 and 401R, as well as a third Telstar satellite that has not yet been launched.

Loral spokeswoman Jeanette Clonan called it “premature for us to speculate yet on what impact it will have on the transaction.” Granieri echoed her sentiment.

Robert Kaimowitz, a satellite industry analyst at Unterberg Harris, an investment banking firm, said that if Telstar 401 is not restored to operation, the loss would be a rare but not necessarily catastrophic event. That’s because satellites are typically insured for in-flight loss.

Loral Space, the company left over when Lockheed Martin Corp. bought Loral Corp.’s defense businesses, is involved in a host of satellite ventures.