Subject: [NEXTEL-1] MSS GROUP NEARS APPROVAL FOR TERRESTRIAL SERVICE

From: Marcel <[email-masked]>
Date: Tue, 10 Dec 2002 23:43:15 -0500

MSS GROUP NEARS APPROVAL FOR TERRESTRIAL SERVICE

 Lynnette Luna

 Telephony, Dec 9, 2002

 The terrestrial wireless and mobile satellite services (MSS) industries have locked horns
on Capitol Hill for nearly two years
 over the satellite industry's quest to offer terrestrial services. Now, much to the
chagrin of the terrestrial wireless industry, the
 FCC is poised to grant the satellite industry's request in early 2003, according to
several MSS executives.

 More than a year ago, 2 GHz MSS operators Motient and New ICO petitioned the FCC to allow
them to incorporate an
 ancillary terrestrial component (ATC) that would allow them to offer cellular-like
terrestrial service along with mobile satellite
 service to underserved rural markets.

 The FCC appears likely to release some MSS spectrum and reallocate it to mobile wireless,
which should ease some of the
 tension. Analysts at Legg Mason said the FCC would issue a spectrum reallocation order
for about 30 MHz of MSS'
 spectrum soon after issuing the ATC order.

 Executives at Motient and New ICO said ATCs are the only way the MSS industry can
survive. “The problem is there is not
 enough traffic to support these [satellite] systems,” said Walter Purnell, president and
CEO of Motient.

 ATCs would make satellite systems more useful on the ground by allowing signals to
penetrate buildings. MSS providers
 already can follow customers as they travel, offering a consistent set of services. The
FCC's pending decision is important to
 Motient's 25% owned company Mobile Satellite Venture, which is designed to offer
next-generation satellite services in North
 America. Incorporating ATCs would attract investors needed to build the next generation
of services, Purnell said.

           WHY MSS PLAYERS SEE ATCs AS CRITICAL TO THEIR SURVIVAL

ATCs solve the chronic coverage problems that have plagued MSS projects to date.

ATCs will improve service to rural and underserved areas and for commercial, military and
public safety applications, by improving service quality and pricing.

ATCs will allow 2 GHz MSS operators to use spectrum more efficiently by designing
integrated MSS networks that          reuse spectrum already assigned to them.

           Source: New ICO's filing

 Wireless industry mogul Craig McCaw, who bailed ICO out of bankruptcy, has spent the last
two years drumming up
 influential supporters on Capitol Hill who see ATC proposals as a solution to bridging
the digital divide in rural areas.

 “There is a recognition by many at the commission that if you provide more flexible use
for satellite spectrum, you can enhance
 delivery and economics to help rural areas of America that rely on satellite service,”
said Gerry Salemme, senior vice president
 of New ICO. The company has been spending money in anticipation of the FCC's ruling, he
said. New ICO launched one
 satellite last year and has plans to launch 11 others.

 However, terrestrial wireless operators such as Verizon Wireless, Cingular Wireless and
AT&T Wireless vehemently object
 to ATCs, arguing that the FCC gave the MSS industry free spectrum to provide satellite
services — not terrestrial services
 that could potentially compete with them. What's more, the Communications Act specifies
that spectrum for terrestrial use
 must be auctioned. The Cellular Telecommunications & Internet Association reminded the
FCC of that fact last month in a
 letter to Chairman Michael Powell.

 But FCC approval of ATCs is not a slam dunk for the MSS industry. One sticky issue is
defining the parameters of ATCs.
 The wireless industry wants MSS licensees to be required to use a substantial portion of
their satellite systems — not just
 funnel traffic onto cheaper terrestrial systems. And MSS players fear the FCC could place
too many restrictions on terrestrial
 services and render commercial offerings uneconomical.

 The wireless industry would challenge the FCC's decision if the commission allows ATCs
without restrictions, said Brian
 Fontes, vice president of federal relations with Cingular Wireless. “We would be very
disturbed if the commission said they
 could do what they wanted,” Fontes said.

http://currentissue.telephonyonline.com/magazinearticle.asp?magazinearticleid=161924&magazineid=7&siteID=3&releaseid=10760&mode=print

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