The U.S. Federal Communications Commission (FCC) Dec. 9 issued an order assigning unused spectrum in the 2-GHz Mobile Satellite Services (MSS) bands to TMI/Terrestar Networks Inc. and ICO Satellite Services (ICO), allowing the two companies to move ahead on their business plans.

The spectrum assignment “opens the door [for us] to start rolling out our business,” Terrestar CEO Robert Brumley told Satellite News. “It brings us the certainty of what our business is going to be and what it can be. … We now know what we have, and we are building accordingly.”

The FCC chose to adopt an International Bureau order that modified the spectrum reservations of Terrestar and ICO so they were each assigned a total of 20 megahertz (10 megahertz for the uplink and 10 megahertz for the downlink) in the 2-GHz MSS band. In a separate order, the FCC rejected an Inmarsat Global Ltd. petition for a declaratory ruling seeking to reserve spectrum in the band for a geostationary satellite to be located at 113 degrees West.

From Eight Companies To Two

The spectrum assignments date back to July 2001, when the FCC authorized eight companies to use the 2-GHz band with provisions that certain satellite construction milestones be met. Six companies have since forfeited their authorizations, which left 12 megahertz of the 20 megahertz allocated for MSS without a system operator.

The commission in June released a pair of public notices concerning the possible reassignment or reallocation of the spectrum, and Terrestar and ICO requested that the available spectrum be reassigned to the two companies.

Inmarsat also sought access to some of the available spectrum in order to provide MSS by 2010 using a proposed spacecraft operating at 2 GHz as part of a planned next-generation global system. But the FCC reasoned it did want to start an additional proceeding that would be required if it granted Inmarsat’s request for a declaratory ruling.

Inmarsat officials did not return requests for comment.

The Next Step

With regulatory questions regarding spectrum now answered, Terrestar will focus on building its business, which will address the homeland security/first responder markets, wireless industry and rural users.

“We had made a commitment in this process early on that homeland security [communications, either as a primary or backup system] at the federal, state and local level was going to be a focus of our business and it remains that,” Brumley said.

Terrestar will be looking to position itself as a wholesale provider of service to the wireless industry rather than becoming a competitor. Terrestar’s offering will provide three capabilities to wireless carriers: the ability to fill in dead spots in wireless networks without the need for additional ground infrastructure; extend service into markets where wireless carriers are not available through satellite and ancillary terrestrial component infrastructure; and give the wireless carriers better roaming agreements then they would get from competing wireless carriers.

“I think the wireless carrier community will find its way to us because we don’t want to compete with them,” Brumley said.

Breaking into the wholesale services market will require wireless carriers to integrate Terrestar technology into their handsets.

“We are offering a service through a chipset, and the chipset would be something that we would like to see hit the mass market as fast as possible because when that chipset is incorporated into [wireless phones offered from major carriers], that … will drive cost of service significantly below current satellite service and make it more analogous to standard cell service,” Brumley said. “That will open the door to any American getting a phone with satellite capability and not having to pay high rent for it. In addition, he has a handset that looks like anybody else’s handset.”

The chipset also can be used in mobile radios, allowing first responders access to the satellite network if terrestrial towers are unavailable, Brumley said. “The technology becomes transparent in a variety of applications that we don’t own and we don’t control, but the larger purchases do and that drives the scale.”

Inmarsat also claimed it was interested in the unused spectrum “to meet communications needs of first responders and homeland defense personnel” and to enable “the establishment or restoration of a communications network in times of crisis.” With the near-completion of an existing $1.5 billion satellite network project, Inmarsat is currently working on plans – via development partnerships with technology, service and content companies – for a state-of-the-art MSS system at 2 GHz.

A representative from ICO was not available to speak with Satellite News.

–Gregory Twachtman & Frank Barbetta

(Patricia McMurray, Terrestar, 202/530-4667)