PARIS — U.S. regulators on July 15 proposed making it easier for terrestrial wireless broadband providers to get their hands on radio spectrum now reserved for mobile satellite services. But they left in place most hurdles that mobile satellite companies must clear before using their spectrum for ground-based networks.
In a proposed rulemaking, the Federal Communications Commission (FCC) specifically did not drop a requirement that mobile satellite operators using their satellite spectrum to roll out ground-based networks need to maintain spare satellite capacity before being allowed to start the terrestrial service.
Whether easing this requirement would be enough to stimulate the businesses of struggling mobile satellite providers DBSD North America, formerly ICO North America, and TerreStar Networks — both of which are in difficult financial circumstances — is unclear.
The FCC is being pulled in two directions with respect to mobile satellite operators.
On the one hand, it looks at the recent history of mobile satellite services deployment in the United States and sees companies unable to maximize the use of spectrum that has been reserved for them, particularly in the S-band portion of the radio spectrum. The agency concludes that these companies should be encouraged to surrender some of their spectrum assets.
On the other hand, U.S. policy remains one of encouraging mobile satellite services in places and circumstances in which a terrestrial alternative is non-existent, such as in rural areas and during disaster recovery efforts.
“We intend to modify our rules in a way that both expands terrestrial mobile broadband and ensures that America has a robust mobile satellite capability,” FCC Chairman Julius Genachowski said in a statement accompanying the proposed rulemaking.
The U.S. National Broadband Policy has identified 90 megahertz of spectrum now reserved for satellite services that should be considered for terrestrial broadband use — 40 megahertz in the 2-gigahertz S-band spectrum used by DBSD and TerreStar; 40 megahertz in L-band, used by SkyTerra and Inmarsat; and 10 megahertz in the so-called “Big LEO” spectrum used by Globalstar and Iridium.
The question for the FCC is how to make this spectrum available for terrestrial broadband networks without further weakening the satellite players whose business models are already so shaky that the survival of one or more is in doubt.
In its notice of proposed rulemaking, the FCC floats several ideas and is asking interested parties to comment by mid-August, with replies to the initial comments due by September.
Among these ideas:
- Allow licensed mobile satellite companies to return part of their spectrum to the FCC for what the FCC calls an “incentive auction” in which the satellite company would share in the proceeds.
- Permit satellite license holders to lease their spectrum to pure terrestrial players that have no satellite plans of their own.
- Establish a policy stating that S-band spectrum held by a licensed mobile satellite operator whose business fails will not be distributed to any satellite companies still in business, but returned to the FCC and made available for terrestrial mobile broadband.
While the FCC’s proposal acknowledges that development of S-band mobile satellite services has been “a slow process,” it says current licensees “must continue to comply with all the commission’s existing … rules” for deploying ground-based networks using satellite spectrum.
The FCC has spent a decade trying to create a regulatory environment that maintains a mobile satellite services industry even if many of its participants ultimately view the satellite component of their business as a kind of tax on their main business of providing ground-based mobile broadband.
The most noteworthy attempt by the FCC to force a mobile satellite service onto a reluctant market is the agency’s decision to permit mobile satellite operators to obtain licenses to use their spectrum for ground-based networks called Ancillary Terrestrial Components, or ATCs.
Instead of having to purchase this spectrum at auction, terrestrial broadband operators could use it free of charge, with the condition that they maintain what the FCC calls “a substantial satellite service.”
This policy drove the creation of several mobile satellite services companies financed by Wall Street speculation that, sooner or later, a terrestrial operator would arrive with the several billion dollars needed to deploy an ATC network across the United States. But that has not happened.
Two events in the business world have nonetheless given the FCC reason to hope that things might develop as intended.
The first is the agreement between “Big LEO” spectrum licensee Globalstar of Milpitas, Calif., and regional wireless broadband provider Open Range Communications of Greenwood Village, Colo., to deploy an ATC network using Globalstar spectrum.
The second is the recent purchase by hedge fund Harbinger Capital Partners of SkyTerra Communications, which is launching two large L-band mobile communications satellites in the next two years. New York-based Harbinger has promised the FCC that it would spend several billion dollars to deploy an ATC network in the United States using the SkyTerra spectrum, with at least 100 million people covered by the end of 2012.
Harbinger has yet to announce strategic partnerships that the company is seeking to share in the investment.
