Satellite Companies Awarded FCC Licenses for New Service
In a setback for cellular phone carriers, federal regulators Tuesday awarded licenses to Seattle billionaire Craig McCaw and seven others to provide satellite phone access and other new communications services.
The action by the Federal Communications Commission came after months of wrangling with wireless carriers, which had sought the valuable airwaves to offer third-generation high-speed wireless phone service, or 3G. An agency official said satellite operators were chosen to help spur development of wireless phone service in remote areas.
“These innovative, technologically [mobile satellite] systems will promote greater competition among communications services, creating a wider range of choices for U.S. consumers,” said Donald Abelson, chief of the FCC’s international bureau.
The eight companies that will receive licenses are Boeing Co., Celsat America Inc., Constellation Communications Holdings Inc., Globalstar, Iridium, Mobile Communications Holding Inc., TMI Communications & Co., and McCaw’s ICO Services.
An official of the Cellular Telecommunications & Internet Assn. said the FCC’s decision was a setback for the industry and for the government, which could have gotten billions of dollars in bids if the airwaves were auctioned to wireless phone carriers instead of given away to satellite providers. The official held out hope that the agency might, upon reconsidering, award a part of the satellite’s spectrum for 3G use.
“We thought it would have made more sense to hold off on the licensing decision” to take a look at the 3G issue, said Diane Cornell, the CTIA’s vice president of regulatory policy. “But the decision does not preclude the commission from looking at this spectrum band issue” down the road.
Executives of the companies cheered the FCC’s decision and said they would move quickly to offer new satellite services.
“This decision provides an ideal way for us to extend basic telephone and Internet service to unserved areas,” said Tyrone Brown, vice chairman of Iridium.
Bob Ratliffe, vice president of McCaw’s holding company, praised the FCC but said the agency must go further and allow his firm to use the so-called terrestrial portion of the satellite airwaves to provide phone service from earth-based phone towers. “There is no viable business plan if you don’t have that terrestrial piece,” Ratliffe said.
Urged on by companies such as AT&T; Corp., Verizon Communications and others, the CTIA has been in a desperate search for airwaves to absorb the explosive demand for cellular phones as well as to launch 3G wireless service. The industry is signing up thousands of new wireless subscribers a week.
Because many of the companies that won licenses are financially rebuilding after brushes with bankruptcy, the FCC could find itself revisiting the issue soon.
The satellite companies must meet two deadlines during the next 24 months to prove they intend to offer new communications services. If they fail to meet the benchmarks, the FCC can take back the airwaves and give them to other communications providers.
