PARIS — Four companies are competing to win European Commission licenses to operate S-band mobile satellite systems in Europe to provide video, audio and data transmissions to hand- held and vehicle-mounted devices starting in 2011.

The bidders are demonstrating faith in a business model that has never been proven anywhere in the world at a time when the financial markets’ collapse will put debt financing out of the reach of some of them. They are offering television, radio, emergency-response communications and high-speed data links to businesses throughout

In an unusual twist, one of the four bidders, ICO Global Communications of Reston, Va., is suing the commission to stop the licensing process because the commission has refused to acknowledge ICO’s lone medium Earth-orbiting satellite, launched in 2001, as a legitimate S-band provider. The satellite was designed as part of a 12-satellite constellation that was never built.

ICO’s European bid hinges in part on the outcome of a $2.4 billion lawsuit against its former prime contractor, Boeing Satellite Systems International, which is now before a Los Angeles county Superior Court jury. A decision is expected as early as the week of Oct. 13.

Only one of the bidding companies, Solaris Mobile, a joint venture of cash-rich satellite-fleet operators SES of Luxembourg and Eutelsat of Paris, has a satellite in full construction in the metal-cutting sense of the word. The other three have satellite systems in the design phase and are waiting for the commission’s decision, expected by mid-2009, before making a full commitment.

“We cannot make a huge commitment on a satellite without first knowing whether we have been awarded a license, and then how much spectrum we will get,” said an official with one of the bidders. “I think we are all hoping that the commission will show flexibility in its milestone requirements.”

The commission has about 30 megahertz of S-band spectrum in each direction – ground to space and vice versa – to give away to companies that meet criteria including public service interest, coverage of all 27 European Union nations and construction milestones that all but Solaris may find impossible to respect, industry officials said. The winning bids will receive 18-year licenses from the commission.

In addition to Dublin, Ireland-based Solaris and ICO Global, the bidding companies that met the European Commission’s Oct. 7 filing deadline are TerreStar Europe Ltd. of , a subsidiary of TerreStar Corp. of , ; and veteran mobile satellite services operator Inmarsat of London.

The commission has set milestones that include a completed critical design review of the applicants’ satellite by February, and a launch in time to begin operations in June 2011 – just 24 months after a final selection is made.

Eutelsat and SES are spending a combined 150 million euros ($206 million) to attach an S-band payload, principally a large, unfurlable antenna, to the Eutelsat W2A satellite, scheduled for launch in early 2009.

Steve Maine, chief executive of Solaris Mobile, said the 150 million euros already committed is sufficient to take the company through the third quarter of 2009, including early operating costs of W2A. said Solaris forecasts that more than 1 billion euros in revenue from mobile television service will be generated in in the next five years. Solaris is accenting mobile television, but said the satellite can be tasked to provide radio and high-speed data links as well.

Inmarsat, also a profitable service provider but in the L-band portion of the radio spectrum, is entering the S- band competition to broaden its product line to offer dual-mode user devices to capture Inmarsat’s traditional L-band signal and the S-band frequency for high-speed data.

Inmarsat spokesman Christopher McLaughlin said mobile television and radio, and services to government agencies, are also part of Inmarsat’s S-band plans. The company has a preliminary contract with ThalesAlenia Space of , to build Inmarsat’sEuropa S-band satellite.

TerreStar, which is building two large satellites for an S-band mobile service in , recently has contracted with Space Systems/Loral of Palo Alto, , to build a TerreStar 3 satellite for , TerreStar Executive Vice President Ben Gore said.

Gore said an earlier TerreStar agreement with Astrium Satellites of Europe was shelved in favor of Loral out of concern that the Astrium satellite would be too sophisticated to be launched by the commission’s mid-2011 deadline.

“It’s a challenging schedule,” Gore said. He said Loral will be able to use a design similar to the first TerreStar spacecraft to help keep to the deadline. The first TerreStar satellite is scheduled for launch in mid-2009.

Gore said TerreStar’s European S- band business will be similar to its North American operation and focus on delivering high-speed data to government agencies.

ICO Global had promised its shareholders that it would challenge any European Commission S-band licensing process that did not recognize ICO as an existing service provider.

ICO announced Oct. 8 that it would be entering the European Commission’s selection process but, in parallel, had initiated proceedings with the European Court of First Instance to annul the procedure.

ICO spokesman Christopher Doherty said ICO wants to force the commission to “recognize ICO’s legacy rights to S-band spectrum.” ICO won British regulatory approval for the 12-satellite system and was registered with the based International Telecommunication Union (ITU) as an operating system in 2004.

But because the company has failed to launch the rest of the constellation, its British regulatory backing has been eroding. ‘s Ofcom regulatory authority has said it may take action to cancel ICO’s ITU registration. Doherty said Ofcom has agreed to await the results of the Boeing lawsuit before taking action.

ICO is developing a separate business in North America using the ICO G1 satellite that was launched into geostationary orbit earlier this year and is operating under U.S. Federal Communications Commission regulatory authority.

ICO’s satellite in medium Earth orbit was never intended to provide the necessary coverage to win European regulatory backing. ICO officials instead say they intend to launch the full 12-satellite constellation they originally designed.

ICO has 10 partially built satellites in storage and is battling with manufacturer Boeing Satellite Systems International of El Segundo, Calif., over who bears responsibility for the collapse of ICO’s constellation contract with Boeing.

The Los Angeles county Superior Court jury has been deliberating on the evidence since mid-September and is not expected to return a verdict until Oct. 14 at the earliest.