PARIS - The Loral Orion 2 telecommunications satellite launched Oct. 19 will be essentially homeless in orbit until Loral resolves a dispute with Eutelsat over an orbital slot for trans-Atlantic.communications.

Orion 2 will be tested in an unused orbital slot at 15 degrees west longitude over the Atlantic Ocean just off Africa' coast, for about two months. What happens after that is anyone's guess.

"We are still not precisely sure at this point where Orion 2 is going to end up, said Robert H. Cashel, marketing vie president for Loral Skynet of Bedminster N,J., which operates the Orion satellites. Cashel said in an interview that Eutelsat and Loral are continuing to negotiate a compromise "almost on a daily basis."

Orion 2 was launched by an Arian 44LP rocket.

The spacecraft is intended to boost the trans-Atlantic capacity now supplied b Orion 1, which was launched in 1995 said Lisa Koppel, a spokeswoman for Loral Orion of Rockville, Md., which sell satellite services. Orion 2 would expand Loral's reach into Eastern Europe, pro vide coverage of parts of the Middle East and Africa, and serve a large part of Lath America, she said.

However, a satellite operated by the 47 nation Eutelsat organization here, Eutelsat 2 F2, has taken up residence right next door to Orion 2's planned orbital slot of 12 degrees west longitude.

In addition, Eutelsat has contracted t have a new satellite launched to that position in mid-2001.

A half-degree of separation between two satellites operating in the same frequencies and serving overlapping geographic areas could cause crippling interference on one or both spacecraft, Loral and Eutelsat agree. But both sides have insisted they have 'a right to operate there, and neither has budged despite months of negotiations.

Authorities in Russia, which has, rights to several slots in the same orbital neighborhood, entered the Eutelsat-Loral negotiations recently and may play the role of peacemaker by permitting Loral to locate Orion 2 in an unused Russian position.

Russia has rights to the orbital slot at - 15 degrees west longitude, but has not placed - any . satellites there. There is potential conflict at that location as well, because Eutelsat s operates a spacecraft at 14.8 degrees west.

Three-way negotiations are now under way among Russian authorities, Loral and Eutelsat over who will be permitted to use the 15-degree position.

Eutelsat Director-General Giuliano Berretta told reporters during the Telecom 99 conference in Geneva that he remains open to negotiations with Loral.

But Berretta also said the global coordinator of satellite orbital slots and frequencies, the International Telecommunication Union (ITU) in Geneva, had clearly given Eutelsat the priority. "We are very respectful of the rules of the ITU," Berretta said. 'The ITU remains, the best place for satellite notification.

But I am not a man who likes endless war and it is true that today's competitor can become tomorrow's collaborator."

Loral Skynet received authorization from the U.S. Federal Communications Commission (FCC) to build and launch Orion 2.

Previously, the FCC authorized Loral to operate from the 12 degree west position, but that was before FCC officials became aware of the ITU approval given to Eutelsat.

Because of the dispute with Eutelsat, the FCC has withheld authorization from Loral to operate its satellite from the12-degree slot. Instead, Loral will test Orion 2 for about two months at a vacant position nearby as it awaits authority to station the satellite at its intended position.

Eutelsat petitioned the FCC to block the Loral launch.

But the FCC argued in an Oct. 18 decision that permission to launch is not permission to operate and that it would cost Loral at least $l0 million to delay the launch at the last minute.

The FCC made clear, however, that Loral was launching Orion 2 at its own risk, and that the company will have to, make new requests to, the FCC before being allowed to, operate the satellite.

"Loral ... shall not operate the Ku-band transponders on the Orion 2 satellite for any other purpose other than the in-orbit testing," the FCC said in its Oct. 18. decision.

The FCC also has withheld approval for several US based companies to use Eutelat's satellite pending a clarification of the situation.

Eutelsat is now serving North America from the 12.5-degree slot through an agreement with Teleglobe of Montreal.

Cashel, said Loral and Eutelsat have au equal interest in finding a compromise that permits both companies to meet their business goals.

Orion 2 is Loral's first wholly owned satellite serving Latin America, Koppel said. Loral also owns part of Satellites Mexicanos S.A. de C.V. (SatMex), operator of the SatMex 5 satellite.

Moreover, Loral rivals such as PanAmSat Corp., Greenwich, Conn., and Intelsat, Washington, own satellites serving Latin America. "Given the growth of the economy there, serving Latin America is key," Koppel said.

"What we both want is to be able to use fully both our satellites," Cashel said. Orion 2 is supposed to start commercial operations around Jan. 1, 2000, he said.

"I am reasonably optimistic that between now and then we can come to an arrangement with Eutelsat," he said.

One possible solution is for Loral to place Orion 2 slightly to the west of its intended 12degree position. Cashel said this would trim the coverage area of the satellite, but added that Loral officials continue to evaluate the precise consequences of a westward move.

Berretta said that as yet he had no quarrel with the U.S. government. "The delays in authorizations for U.S. companies to use our Atlantic Bird satellite are surely just bureaucratic," he said. "America is a complicated country where you have more lawyers than engineers. I am sure it is just a matter of time before our customers are authorized to, use our satellite."

Staff writer Sam Silverstein contributed to this report from Washington.