WASHINGTON-The Federal Communications Commission is considering auctioning low-earth-orbit mobile data satellite licenses from the remaining pool of applicants.
The prospect of auctions, a regulatory tool not used in global satellite licensing to date, could prompt little LEO applicants to partner or pull out of the running. The FCC is believed to be banking on that outcome as a result of the United States’ failure to secure more frequencies at the 1995 World Radio Conference in Geneva.
Holding an auction for little LEOs could create complications and uncertainties for applicants, regulators and investors because the systems are global and the spectrum slots purchased would be good only for U.S. coverage. As such, firms would have no assurance of getting comparable LEO channels in other countries and valuation of spectrum from one country to another would vary.
Moreover, the price for little LEO spectrum would add to the considerable capital costs of building mobile data satellite systems in a new, untested market. For this and other reasons, the FCC-despite its aggressive advocacy of auctions-has sidestepped competitive bidding for global satellite services.
The FCC last year issued little LEO licenses to Orbital Communications Corp., Starsys Global Positioning Inc. and Volunteers in Technical Assistance.
Still pending are applications from LEO One, CTA Commercial Systems, E-Sat Inc., Final Analysis Communications Service Inc. and GE American Communications Inc. In addition, the three existing little LEO licensees have filed for more frequencies. That brings the total number of applications in the second processing round to eight.
To winnow down that number and maximize competition, the FCC proposed to limit future little LEO licensing to new applicants and to apply strict financial qualifications. The tricky part for the FCC will be to supply new entrants with spectrum so that a competitive field of multiple little LEO operators can be realized. To do this, the FCC contemplates having new little LE0s share federal government spectrum.
Presently, little LEOs can offer mobile data worldwide to small, handheld devices in the 137-138 MHz, 148-149.9 MHz and 400.15-401 MHz bands via next-generation satellites that are smaller, less powerful and orbit at lower altitudes than today’s powerful, high-flying birds. Those characteristics enable subscriber equipment to be portable.
One of the early pioneers, Orbcomm, apparently continues to have problems getting satellites into space. Orbital Sciences Corp., the Dulles, Va.-based parent company, reportedly encountered another launch failure last week-its third in two years.
While little LEOs are limited to data, big LEO systems costing billions of dollars will offer pocket telephone service above 1 GHz worldwide.
Licenses for big LEOs have been granted to Motorola Inc., Loral Corp. and TRW Inc.
