Subject: [NEXTEL-1] Satellite phone plan expected to get OK

From: Marcel <[email-masked]>
Date: Tue, 17 Dec 2002 14:06:56 -0500

Posted 12/16/2002 11:49 PM
Satellite phone plan expected to get OK
By Paul Davidson, USA TODAY

A controversial plan to resuscitate the global satellite phone industry — by supplementing
the offerings with land-based cellular service — is expected to win the approval of
federal regulators.

The proposal would pave the way for mobile phone services that work virtually anywhere,
from the Gobi Desert to New York City. It also could bring fast Internet services to
remote areas.

The Federal Communications Commission's staff is recommending approval of the plan, with
conditions to ensure the satellite firms don't abuse it as a back-door way to provide
land-only services, people close to the situation say.

Despite cries of foul from cellular carriers, the five-member commission is expected to
give its nod within weeks.

In the 1990s, companies including Iridium and Globalstar offered satellite phones that
erased the need to build costly cell towers in the hinterlands. But both companies failed
as cellular companies marched farther than expected. Also, their brick-heavy $3,000 phones
cost as high as $7 a minute to use and didn't work in cities because of interference from
tall buildings.

But satellite players didn't give up. They say that cellular service will never be
ubiquitous and that globetrotting business people want worldwide coverage.

Three firms — New ICO, backed by wireless phone pioneer Craig McCaw, Globalstar and Mobile
Satellite Ventures (MSV) — plan to shrink the phones to cell phone size by putting the
antenna in a separate unit.

They hope to shrink the bill to as low as 30% above cell phone prices, in part by
expanding their market by providing service that works in cities, too.

To do that, the companies plan to erect cell towers in top urban areas to fill in spotty
satellite coverage. But they need FCC approval to use their satellite airwaves, which they
are granted free, for cell phone services.

Current cellular players note they paid billions for their land-based spectrum and fear
the upstarts could forgo the costly satellite service and just offer a discount cellular
service in large cities.

"They're pulling a bait and switch," says Travis Larson of the Cellular Telecommunications
and Internet Association.

The satellite companies say they are aiming only for a niche market that needs both remote
and urban coverage, such as the military, mining companies and some rural residents.
Globalstar and MSV now offer limited rural service.

Under the proposed conditions, the companies would have to offer service nationally, not
just in top urban markets. They could not provide land-based service until all their
satellites were up, and some of their spectrum is expected to be auctioned to cellular
companies for wireless broadband services.

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