Pentagon Acts to Rescue Communications Satellites

The Defense Department said Wednesday it was stepping in to prevent $5 billion worth of Iridium communications satellites from being destroyed and triggering possible “widespread anxiety” when they fall burning toward Earth.

The Pentagon awarded a contract to the satellite network’s prospective owners that is expected to cement the sale worked out in a New York bankruptcy court. The contract is expected to pay $72 million over two years.

The Iridium system, founded by Motorola Inc., the No. 2 maker of cell phones, filed for Chapter 11 bankruptcy after it could not attract enough customers for its bulky, $3,000 satellite phones.

After it could not find a buyer for the satellite system, Motorola said it would begin pulling the satellites from orbit, sending them to burn up in the atmosphere. The process was expected to take 14 months.

But a venture capital start-up--Iridium Satellite LLC led by Dan Colussy, former president of Pan American World Airways--won conditional court approval last month to buy the operating assets of the bankrupt company for $25 million.

The Pentagon contract was a condition for final approval of the asset transfer, a spokesman for the buyers said.

The prospective owners, headquartered in Arnold, Maine, have contracted with Boeing Co. to operate the system, Pentagon officials said.

“We expect the closing of the sale to take place within a matter of days,” said a spokesman.

The Pentagon already owns about 1,600 Iridium satellite phones. Under the contract it will receive unlimited air time for up to 20,000 federal government subscribers for $3 million a month.

Early next year, Iridium will be able to provide encrypted communications, the Pentagon said. That will ease the current overcrowding of some of the military’s communications networks, Oliver told reporters.

Currently, military communications satellites provide less than half the capacity required, crowding lower-priority users off the airways, Oliver said.

The government was also concerned about fears, however exaggerated, that the “mass de-orbit” of cast-off satellites would be dangerous, Oliver said. Some Iridium hardware, such as 2-by-3-foot titanium fuel tanks, would likely make it to Earth.

The National Aeronautics and Space Administration had estimated that the odds of someone being killed by falling debris were one in 279, Oliver said.

An interagency group led by the Justice Department studied the problem for six months and was “extremely unhappy at the prospect of a 14-month mass de-orbit,” according to a background paper.

“The group worried that this might create widespread anxiety and lead to a public outcry for ill-considered government action,” the background sheet said.