WASHINGTON-Top mobile-phone operators told a federal appeals court the Federal Communications Commission went astray of the law by awarding additional mobile satellite service licenses despite the sector’s desperate financial condition.
In its opening brief, AT&T Wireless Services Inc., Cingular Wireless L.L.C. and Verizon Wireless also accused the FCC of evading key policy implications arising from the agency’s subsequent decision allowing MSS operators to use satellite spectrum-acquired free-for land-based cellular service.
With wireless carriers hunting for more frequencies to accommodate data-rich third-generation wireless systems and hoping to force MSS operators to surrender more-if not all-their spectrum, the stakes are big for the six U.S. nationwide mobile-phone operators. The stakes are also huge for mobile satellite operators, fighting their way out of bankruptcy and seeking new leases on life in the form of a controversial regulatory change giving them terrestrial transmission rights in the form of an “ancillary terrestrial component.”
Who sought ATC, the subject of a separate industry challenge in the same U.S. Court of Appeals for the District of Columbia Circuit? Billionaire cellular pioneer Craig McCaw, a lead investor in ICO Global Communications Ltd., one of the MSS licensees.
In a March 2001 letter to the FCC, McCaw said satellite-only MSS was doomed unless some frequencies could be diverted to land-based networks. ATC, among other things, is supposed to save MSS capital costs and reduce the size of big satellite phones.
Wireless carriers failed to get the two appeals consolidated, a big break for MSS licensees. While the satellite litigation plays out, McCaw is hedging his bets by investing in various wireless Internet ventures.
Industry sees the FCC, which invested years in getting MSS off the ground, willing to push the edge of the legal envelope to salvage the foundering mobile satellite industry. MSS proponents strongly disagree.
The FCC’s 2 GHz mobile satellite licensing order, issued by the FCC a year ago this month, “found that MSS would bring service to rural and underserved areas, and that is clearly a laudable goal,” stated AT&T Wireless, Cingular and Verizon Wireless in their brief.
“However,” they continued, “the question was not whether service to rural and underserved areas was in the public interest, but whether it served the public interest to dedicate valuable spectrum to individual MSS systems and away from other more pressing needs when an MSS applicant admitted that standalone MSS systems were not viable and would not bring service to rural and underserved areas.”
The outcome of the MSS licensing appeal potentially impacts ICO, Boeing Co., Celsat America Inc., Globalstar L.P. and Iridium LLC. Several 2 GHz MSS licensees had their permits reclaimed by the FCC in early 2002 for failing to meet certain milestones.
The ATC spat affects not only 2 GHz MSS licenses, but other mobile satellite companies as well.
But Lon Levin, president of Mobile Satellite Ventures L.P., said he does not see lingering legal questions about ATC getting in the way.
“The FCC did nothing wrong,” said Levin, saying the agency was well within its authority in approving ATC.
Levin said MSV is busy rounding up funding and talking to vendors. “I’m not worried about it,” he said.
The mobile-phone industry, which since the mid-1990s has spent billion of dollars acquiring licenses from the federal government, claims the FCC is duty bound to auction frequencies dedicated to ATC. Wireless carriers suspect MSS operators will exploit FCC rules by simply launching one satellite into orbit, while effectively using most satellite frequencies and capital resources for terrestrial networks. The MSS satellite spectrum is likely worth billions of dollars.
“This is not a change of allocation from satellite to terrestrial,” said Levin.
The FCC’s brief is due Jan. 22. Oral argument is slated for May 7.
While the commission does not feel compelled to auction ATC frequencies, the agency opposes giving Northpoint Technology Ltd. frequencies-normally used by broadcast satellite firms-for terrestrial-based wireless Internet and video services.
