WASHINGTON-After filing his complaint against American Mobile Satellite Services more than four years ago, Gary Noreen, chairman and chief executive officer of La Canada, Calif.-based Radio Satellite Corp., will get his jury trial Nov. 25 in the U.S. District Court for the District of Columbia.
Charging mobile satellite service licensee American Mobile Satellite Corp., based in Reston, Va., with 10 counts of violating antitrust laws and the Communications Act of 1934, Noreen seeks an award of at least $100 million in costs and damages as payment for the failure of his start-up “cable radio” satellite service. Saying that part of AMSC’s mandate as the only MSS licensee in the country was to be a “carriers’ carrier,” Noreen cited AMSC with impeding competition, violating common carrier rules, predatory pricing, interference with ongoing contract talks with Telesat Mobile Inc. of Canada, restraint of trade, injury to business and property, monopolistic behavior, and breach of good faith and fair dealing.
Noreen, an original founder and board member of AMSC, sought in 1989 to provide nationwide subscription music, data, location and navigation, and voice services using AMSC’s satellite system and a “super car radio” to be developed by Noreen’s company. After trying to negotiate contract terms for more than two years, Noreen gave up, folded his company and decided to take AMSC to court.
“They never seriously considered it or came up with a reasonable proposal [for pricing],” Noreen said. “Evidence will be submitted in court that our petition for a price quote never was worked on. All they wanted to do was develop conventional voice traffic and to provide a scaled-down version of Inmarsat.” Noreen could have petitioned the FCC for relief, but he could not have asked for damages.
“AMSC and its controlling shareholders McCaw Cellular, Mobile Telecommunication Technologies Corp., and Hughes Communications Inc., have conspired to deny RadioSat an agreement, a memorandum of understanding or a quotation from AMSC and from TMI and to prevent RadioSat from implementing a competing, independent ground system,” the four-year-old complaint still reads. “The private network services requested by RadioSat for the RadioSat system were within the scope of the services for which AMSC received its exclusive MSS license.”
AMSC spokeswoman Orly Lopez said her company would not comment on the upcoming case until after the jury trial was over.
RadioSat’s problems with AMSC began in 1989, when AMSC was granted a sole U.S. MSS license. According to RadioSat’s statement submitted to the court June 30, 1992, the Federal Communications Commission hoped the company would allow entrepreneurs to rent space on AMSC’s satellite to provide innovative new services. Noreen first requested space on AMSC’s system, which had not been constructed at that point, in June 1989, at which time he was told the company would have a draft agreement ready shortly. On Aug. 23, he received a letter outlining AMSC’s refusal to enter into an agreement with AMSC at that time.
Months and months of letters, meetings and procrastination passed, with no agreement signed; AMSC said it would be ready to talk pricing in January 1992. Because he could not solicit investors without satellite capacity in hand, Noreen’s RadioSat company kept falling behind financially and developmentally. AMSC, on the other hand, was signing agreements with other companies for transponder time and was thinking about developing a system similar to Noreen’s as a business opportunity.
As a last resort, Noreen worked out a deal to provide his service in Canada via TMI’s satellite. When AMSC, TMI’s North American partner, was told of the agreement, pressure was put on TMI to amend the contract to reflect AMSC’s terms, Noreen said. RadioSat ceased business operations Dec. 31, 1991.
