WASHINGTON-The Federal Communications Commission late last week granted idle 2 GHz mobile satellite service spectrum to ICO Satellite Services and TMI Communications and Co., a stinging defeat with potential competitive implications for the mobile-phone industry.
As part of its decision, the FCC agreed to divide the remaining 24 megahertz of 2 GHz MSS spectrum between ICO and TMI, the only 2 GHz MSS firms left standing from a field that boasted six licensees four-and-a-half years ago.
ICO and TMI end up with 20 megahertz each after the redistribution and the ability to leverage that spectrum to provide an array of offerings-including mobile-phone service-using hybrid networks combining satellites and land-based cellular networks. Cellular pioneer Craig McCaw, currently building his own wireless broadband business, has a major financial hand in ICO.
“The additional bandwidth will allow the two remaining 2 GHz MSS satellite operators to provide more robust services to public-safety officials and first responders, as well as offer broadband satellite services to rural America,” said the FCC.
The mobile-phone industry had been hammering away at the struggling MSS sector for years, trying with mixed success to have federal regulators reclaim the entire 70 megahertz of spectrum originally allocated to MSS at 2 GHz.
Despite being spared the huge capital expense of purchasing spectrum at auction-in contrast to mobile-phone operators-MSS companies found their business models ill-suited to the fast-growing wireless marketplace. Many MSS licensees were forced into bankruptcy. Some survived, but many did not.
In 2003, the FCC reclaimed 30 megahertz of spectrum from the 2 GHz MSS spectrum pool, but sought to give satellite licensees a boost by allowing them to supplement satellite operations with land-based cellular systems called an “ancillary terrestrial component.”
In the end, ICO and TMI were beneficiaries of circumstances and post-9/11 times in the United States.
The deadly and destructive Hurricane Katrina in late August and the powerful storms that followed highlighted the utility of satellite communications at a time when landline and mobile-phone services were severely disrupted. Satellite firms Globalstar L.L.C. and Iridium Satellite L.L.C., which operate in other satellite frequencies, made powerful statements by providing emergency communication links in Louisiana, Alabama and Mississippi when others where knocked out.
In doing so, they indirectly aided two non-operational competitors-ICO and TMI-by allowing them to secure stronger spectrum positions. ICO and TMI are expected to begin offering service in 2007 and 2008, respectively.
Weeks before Hurricane Katrina made landfall, influential Senate lawmakers were urging Homeland Security Secretary Michael Chertoff to use his muscle to convince the FCC to provide 2 GHz MSS licensees additional spectrum to enhance communications in case of a natural disaster or a terrorist attack.
ICO and TMI were also helped by support from public-safety, agriculture and realtor groups around the country.
In a related action Friday, the FCC’s International Bureau dismissed Inmarsat Global Ltd.’s petition for declaratory ruling seeking to reserve spectrum in the 2 GHz MSS band for a geostationary satellite. Inmarsat argued against an MSS duopoly at 2 GHz.
