Britain Petitions ITU To Evict Stalled ICO-P Satellite Project

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PARIS Britain’s telecommunications regulator has written the International Telecommunication Union (ITU) asking that a medium Earth orbit satellite telecommunications constellation be removed from ITU’s register because it has shown no development progress for years.

In a decision that took more than five years to conclude, Britain’s Office of Communications (Ofcom) has told the Geneva-based ITU that the ICO-P project should be stricken from the ITU’s Master International Frequency Register. Ofcom is ICO-P’s original regulatory sponsor at the ITU.

Ofcom has been trying to rid itself of ICO since 2009, arguing that the company’s 12-satellite S-band project has been stalled and has given no sign of being revived. But ICO successfully delayed Ofcom’s notification to ITU, and ultimately sought a Court of Appeal ruling to prevent the British regulator from removing its endorsement of the project.

The Court of Appeal issued its ruling in favor of Ofcom Oct. 11. The agency subsequently said it has sent its notification to the ITU.

ICO-P’s satellite assets were purchased earlier this year by Jay & Jayendra of South Africa, but it otherwise has been a dormant enterprise for several years.

A first satellite was launched in 2001, and the company had a full 12-satellite constellation under construction at Boeing Space and Intelligence Systems of El Segundo, Calif.

Ofcom, taking ICO at its word when the company said the remaining satellites were progressing toward launch, informed the ITU in January 2004 that the network had been “brought into use,” which in ITU terminology means it benefits from full regulatory protection against other systems that come later seeking to use the same radio spectrum.

Shortly after Ofcom’s formal endorsement of its project, ICO ended its construction contract with Boeing. ICO sued Boeing for fraud and breach of contract. The Los Angeles Superior Court in March 2009 confirmed a lower court’s judgment against Boeing valued at $603 million. Boeing has appealed the ruling.

ICO has said it has 10 satellites based on Boeing’s 601 platform in various stages of construction, with several nearly completed, in a California storage facility. It remains unclear what investment would be needed to refurbish the hardware and make it ready for launch.

A Jay & Jayendra official did not respond to requests for comment on what the company plans to do with the satellites.

In Europe, ICO’s dispute with Ofcom has further complicated efforts by the commission of the 27-nation European Union to organize a competition for S-band satellite spectrum to promote wireless broadband access for consumers and for government emergency-response teams.

Satellite fleet operator Inmarsat of London was granted a provisional license to operate a system but has said it would await co-investors and regulatory clarity before proceeding with its proposed EuropaSat project.

Fleet operators SES of Luxembourg and Eutelsat of Paris created a joint venture, Dublin-based Solaris Mobile, that launched a satellite with an S-band antenna in April 2009. The antenna has a defect that will make it difficult to meet European Commission requirements for power and coverage throughout Europe, but Solaris remains committed to starting up a digital radio service in Italy.

The EuropaSat and Solaris projects have both been slowed by the ICO dispute with Ofcom because ICO had argued that the commission had no right to issue licenses for spectrum that ICO had already obtained, through Ofcom, and registered with the ITU.

For these companies and others, the Ofcom-ICO dispute’s importance went beyond the fate of ICO as a company to test whether national telecommunications regulators, and the ITU, would make good on their pledge to clear nonfunctioning satellite projects from their books to make way for projects whose backers have the wherewithal to launch their services.

“This case highlights the role of Ofcom, as the national administration in the UK for interfacing with the ITU, in monitoring the use of spectrum assignments by satellite operators,” Joanne Wheeler, a partner in the London law firm CMS Cameron McKenna LLP, said in an analysis after the Court of Appeal ruling.

ICO had argued that its sole satellite was performing limited service and that an adverse Ofcom assessment would “waste 2 billion [British] pounds ($3.2 billion) of investment and cause the loss of many direct and indirect jobs.”

The Court of Appeal rejected ICO’s arguments, saying that Ofcom has every right to insist that satellite systems meet development milestones as a condition of retaining their licenses. The court also said Ofcom has an interest in setting an example to other national regulatory authorities that, in the future, may provide shelter to satellite systems whose existence on paper could slow or derail British-based companies’ plans.

The court agreed with Ofcom that the existence of a company desiring the ICO spectrum, the economic harm to ICO that could result from an adverse Ofcom ruling, and the ongoing Boeing lawsuit should not be taken into account when determining whether ICO had met the terms of its license.

Ofcom, the court said, cannot be faulted “for basing a decision on the clear and major default of the appellants in the context of an international regime requiring cooperation between states in the rational, efficient and economical use of limited natural resources.”