TOTAL Telecom:
FCC Approves Proposal for Skybridge Satellite System
By Heather Fleming at Bloomberg News
20 November 1998
SkyBridge, a joint venture of Alcatel-Alsthom SA and Loral Space & Communications Ltd., came a step closer to launching its $4.2 billion global-satellite system under a proposal approved by U.S. regulators.
The U.S. Federal Communications Commission agreed on draft rules conforming with an agreement approved last year by the International Telecommunications Union's World Radio Conference, which oversees use of international airwaves. The rules, which are open to comment, would allow SkyBridge to share a block of airwaves with satellites delivering direct-to-home TV service and broadcast TV.
The FCC wants to ensure that new users don't create interference problems for U.S. companies already using the block of airwaves, such as DBS company DirecTV, a unit of General Motors Corp.'s Hughes Electronics.
Billions of dollars have been invested by U.S. companies already using this airwave slice and "these incumbent services must be protected from interference from the new services," FCC chairman William Kennard said.
Kennard urged all companies with a stake in the issue to file comments with the agency. The FCC's final decision "will rely heavily upon the technical studies and comments that are filed with us," he said.
While some companies will claim sharing airwaves will cause signal interference, "I think a lot of it will be motivated by competitive considerations rather than real technical concerns," said Phillip Spector, a lawyer for Skybridge.
The FCC also is seeking comment on a petition filed by Portsmouth, New Hampshire-based Northpoint Technology LP to use the same swath of airwaves as Skybridge and the direct-to-home satellites. Northpoint has developed a new technology that allows direct broadcast satellite companies, such as EchoStar Communications Corp., to air local TV stations.
Washington, D.C.-based Skybridge will link computer networks, high-speed Internet access and telecommuters through a network of 80 satellites. The system will be available to users by 2001.
Skybridge will act solely as a capacity provider, forming partnerships with telecommunications companies that provide services using the Skybridge network.
Skybridge, whose other shareholders include Toshiba Corp., Sharp Corp. and Mitsubishi Corp. of Japan, will target small and medium-sized businesses as well as larger businesses with small, regional sites. The company plans to conduct an initial stock sale in 2000.
Skybridge's main competitor will be Teledesic LLC, whose backers are Microsoft Corp. Chairman Bill Gates, cellular-phone pioneer Craig McCaw, Saudi Arabian billionaire Prince Alwaleed bin Talal, Motorola Inc., and Boeing Co.
Teledesic's 288 satellite system is scheduled to begin service in 2003. It's expected to cost $10 billion to launch, more than double Skybridge's cost.