Mobile satellite operators will enjoy expanded opportunities to develop viable businesses and to meet consumer needs following a landmark decision by the Federal Communications Commission last week allowing mobile satellite services to add wireless capabilities as an ancillary terrestrial component (ATC).

High-profile business failures by mobile satellite services (MSS) that built multi-billion dollar voice communications systems may have played a key role in sensitizing the FCC to the need to approve more flexible spectrum policies.

While many MSS operators failed to survive or never became operational, those that managed to stay in business, including some that successfully restructured, are in a position to benefit from the FCC’s new policies.

Specifically, the FCC now will permit certain mobile satellite services providers in three frequency bands to provide an ancillary terrestrial component, enabling them to offer more affordable mobile services on land, in the air and over oceans without using any additional spectrum resources beyond what already has been allocated, commission officials said. The three spectrum bands covered by the commission’s decision commonly are described as 2GHz, Big LEO and L-band.

William K. Coulter, a partner at the Coudert Brothers law firm, said the satellite industry can be “quite heartened” by the FCC action to allow satellite providers the option of using their assignments in the three bands for ancillary terrestrial and space applications.

“The opening of these bands to other users would have been disastrous,” Coulter said. The United States would have much to lose by such an approach, he added.

The commission’s order is the culmination of a complex proceeding involving a notice of proposed rulemaking and comments from petitioners on various alternatives for terrestrial and satellite uses of MSS spectrum.

The FCC concluded it would be more efficient, feasible and practical to permit MSS licensees to include a terrestrial component in their satellite systems to serve consumers than to award terrestrial rights in the band to third parties, commission officials explained. The decision “balances” the traditional goals of effective and efficient use of spectrum with preserving the optimal amount of spectrum needed for international satellite services, they added.

The commission opted not to grant shared usage of the same MSS frequency band to separate MSS and terrestrial operators in order to avoid compromising the effectiveness of both systems.

The commission’s authorization of ATC for the three MSS bands is designed to prevent use of the spectrum for a stand-alone terrestrial service, FCC officials said.

According to the FCC decision, an ATC service can only be offered if an MSS operator:

• Launches and operates its own satellite facilities;
• Provides substantial satellite service to the public;
• Demonstrates compliance with geographic and temporal satellite coverage requirements;
• Shows that the satellite system’s ATC will operate only within the licensee’s core spectrum;
• Limits ATC operations to a satellite system’s authorized footprint;
• Provides an integrated satellite and terrestrial service by, for example, demonstrating that it uses a dual-mode handset to provide the ATC service;
• Refrains from offering a terrestrial-only service to consumers; and
• Obtains handset certification for MSS ATC devices under the equipment authorization process contained in Part 2 of the commission’s rules.

FCC Chairman Michael Powell said the agency’s decision emphasizes the importance of would-be satellite operators to meet their construction milestones to keep their licenses and spectrum.

“The commission has long acknowledged that satellite-based communications present unique challenges,” Powell said. “Specifically there is often a tremendous lag time between the filing of an application and the actual provision of service.”

The International Telecommunication Union (ITU) satellite coordination regime further complicates the process, Powell said.

“We will continue to be vigilant that satellite licensees fulfill their obligations to build systems – or the spectrum will be returned and re-licensed,” Powell said. “Adherence to the obligation to construct new systems also advances our goal of multiple, facilities-based competitors in all sectors of the communications marketplace, including satellite services.”

Mobile satellite industry officials largely praised the FCC’s actions.

Ahmad Ghais, president of the Mobile Satellite Users Association (MSUA), said his group welcomes the FCC’s decisions, particularly in denying the proposal to reallocate internationally assigned MSS spectrum to terrestrial wireless services and open it up to auction.

“We’re glad that the commission is rejecting the decision to auction satellite spectrum,” Ghais said. “We also welcome the decision to authorize ATC under strict conditions.”

The association is keenly interested in ensuring that the commission mitigates the potential for interference, particularly with existing MSS systems, Ghais said.

“But the devil is in the details that we have not yet seen,” Ghais said.

The MSUA objected to the portion of the order that calls for reassigning spectrum in the 2 GHz band.

“We lament the FCC decision to reallocate 10 MHz of globally harmonized spectrum in the 2 GHz band,” Ghais said. “We are gravely concerned at the impact this would have on the introduction of worldwide MSS services in this band.”

As part of its MSS order, the FCC is seeking comment on redistributing spectrum in the Big LEO band between two Big LEO licensees, Iridium and Globalstar. Ghais welcomed the opportunity for a possible new sharing plan. However, he said he needed to see details of how the redistribution would occur before commenting further.

Gino Picasso, president and CEO of Iridium Satellite LLC, said the FCC’s action modernizes the agency’s spectrum policies to permit new and improved services to the public. He credited the commission with recognizing the importance of revisiting “outdated spectrum band plans” to ensure that today’s allocations meet tomorrow’s needs. “Iridium is prepared to move forward to help make this vision a reality,” Picasso said.

“This is a bold and exciting decision by the FCC,” said Lon Levin, vice president of Mobile Satellite Ventures, a Reston, Va.-based mobile-satellite company previously named American Mobile Satellite Corp. (AMSC). The company has clawed its way up to reach the cash flow breakeven mark as a provider of mobile data, fax, voice and dispatch radio services in North America.

Mobile Satellite Ventures introduced the concept of ATC in January 2001 when it filed an application seeking FCC permission to add terrestrial services to its existing capabilities.

Levin praised the FCC decision as a “great opportunity” for the mobile satellite industry.

“Finally, the mobile satellite industry can make good on its promise to provide wireless services everywhere,” Levin said. His company plans to seize the new latitude given to MSS operators by the FCC to provide “far greater service” with smaller handsets and reduced prices.

Mobile Satellite Ventures already serves business market niches, such as public safety, mining and other extraction industries, maritime, homeland security, and transportation.

“Now we can build on that customer base to far better serve those markets,” Levin said.

With reduced prices allowed by the new capability, Mobile Satellite Ventures will for the first time be able to appeal to consumers who otherwise would not have found the service affordable, Levin said.

“Another great benefit of the FCC decision is that the entire country can now have access to high-quality, high-speed digital services that are currently only enjoyed in urban areas,” Levin said.

“This decision essentially will allow us to deliver universal service to all of North America.”

A favorable decision is expected shortly by the Canadian government on the same request, Levin added.

The Cellular Telecommunications & Internet Association (CTIA), which represents cellular phone companies, had opposed the use of ATC by mobile satellite voice services, but expressed support for the strict requirements the FCC included in its decision.

The CTIA’s greatest concern was that satellite operators could offer competing wireless phone services using spectrum that they had earlier obtained at no cost. Cellular companies, in contrast, have spent large sums of money to obtain spectrum through FCC auctions and would have been at a cost-disadvantage, said Diane Cornell, CTIA’s vice president for regulatory policy.

The CTIA expressed support for the FCC’s plans to enforce milestones on satellite companies that receive spectrum but fail to develop systems to use it.

CTIA members did win a victory with the FCC’s decision to grant them access to 30 MHz of spectrum that previously had been allocated in the 2 GHz band to mobile satellite services, Cornell said. That 30 MHz either had not been assigned to any satellite company or went to companies that missed deadlines for deployment of their proposed systems, she added.

Steps taken by the FCC to avoid interference problems for satellite and PCS (personal communications services) licensees also won praise. The key will be the “technical details” that the commission sets forth to accomplish the goal, Cornell explained.

–Paul Dykewicz

The FCC’s Decision:

• Improves the spectral utilization efficiency and is consistent with the basic thrust of the FCC’s recent Spectral Policy Task Force recommendations to give enhanced flexibility to use their allotted spectrum in the most efficient manner.
• Gives the satellite industry a chance to overcome its checkered record in the mobile services business sector by letting new entrepreneurs offer what is best for consumers. In the past, highly sophisticated space segment technology sometimes was deployed that was too costly to allow a profitable business to develop.
• Fosters the introduction of much more competitive services by mobile satellite operators that combine space and terrestrial pathways, as needed. Not only will this be in the interest of the consumer but it would also go a long way towards vindicating a critical role for satellites in the mobile arena, as well.

Source: D.K. Sachdev, president, SpaceTel Consultancy, Vienna, Va.