NEW ICO WANTS TO ‘OPTIMIZE’ SPECTRUM WITH INNOVATIVE PLAN

Salemme said McCaw had discovered that business model of Iridium and Globalstar didn’t work and was attempting to maximize spectrum efficiency. Satellite telephone systems “have failed on their promise,” Salemme said: “We are investing billions of dollars to make sure we can provide service to rural and remote areas where mobile wireless people still haven’t built out terrestrial digital networks.” He said New ICO needed FCC to act “as quickly as possible.” Company is scheduled to start service in 2003.

It’s “last great hope” to build mobile satellite system and save satellite telephony industry following failures of Globalstar (CD May 8 p2), Iridium (CD March 29 p3) and New ICO predecessor, Salemme said. He said New ICO had 12 satellites “ready at the Boeing facility,” including launch scheduled for June 19. He said Globalstar “doesn’t cover the world” and “useful life” of Iridium satellites “is ending.” Salemme said it came back to basic premise that satellite telephone networks didn’t and couldn’t work. “We knew there were deficiencies in the business model” of failed Iridium, ICO and Globalstar, Salemme said. “We knew” satellite telephone companies “had to provide better service at higher speeds for voice and data.” Result has been technical development of 2-piece phone that replaced cumbersome model first advanced by Iridium. Satellite phone developed by New ICO will enable customers to receive coverage in areas where satellite phones don’t work and in remote areas that lack terrestrial networks. “You can use it at the top of a mountain in Alaska or New York City,” Salemme said.

“We put an antenna and Bluetoothed RF interface” that connects to phone through device similar to palm pilot,” he said. Using that method allows New ICO phones to pick up terrestrial and satellite signals, Salemme said: “That way, the phone could remain compact and the cost of manufacturing it was lower. You can take advantage of all silicon efficiencies. We changed the ingredient of high-end user costs.” Convinced new method would work, New ICO made its proposal to FCC. “In certain places we needed to provide ancillary terrestrial services where there difficulties with satellites,” Salemme said: “If you can do that, you can provide service anywhere in the world.” He said customers would “receive the best of both worlds.” New ICO doesn’t think idea is “radical” nor will it “take spectrum from other people.”

Salemme said company was meeting with cellular representatives in effort to work out solution to plan and its acceptance. FCC is on verge of issuing notice of proposed rulemaking (NPRM) on use of spectrum, which is coveted by cellular industry. Two sides are bracing for regulatory showdown on issue. with McCaw leading fight against cellular industry he pioneered. “We still think this is win-win,” Salemme said: “We want to work hand-in-hand with wireless companies. McCaw was a pioneer in the cellular industry and he doesn’t want to do anything to undermine its growth. If there is a spectrum grab, it’s being done by a cellular group.”

CTIA and some mobile phone carriers are expected to ask FCC to reallocate 2 GHz MSS spectrum to cellular industry. Such request would come amid ongoing review process by federal govt. on where to obtain spectrum for advanced wireless services such as 3G, with FCC reviewing 2.5 GHz band occupied by MMDS and Instructional TV Fixed Service licensees and NTIA overseeing 1.7 GHz band used mostly by military. Some in wireless industry have suggested that MSS spectrum should be reallocated to cellular industry. CTIA Pres. Thomas Wheeler told European Institute conference last week that FCC “should pull the plug and reallocate it” to cellular companies because of recurring financial problems of satellite telephony industry and failure of some companies to meet milestones and use allocated spectrum. CTIA also wrote to President Bush asking him to slow down regulatory process started by President Clinton that called for final FCC decision on 3G spectrum by July 30 and licensing of spectrum by Sept. 2002.

Verizon Wireless in recent filing at FCC balked at New ICO request for flexibility to offer terrestrial mobile services using MSS spectrum. Verizon told Commission that if request by New ICO were granted, it would violate Sec. 309(j) of Communications Act, which requires that spectrum used for terrestrial services be auctioned. Moreover, Verizon Wireless said, MSS spectrum poses “obvious opportunity” for potential 3G spectrum.

FCC International Bureau (IB) and Wireless Telecom Bureau have different views on issue, industry lawyer said. NPRM may address New ICO proposal as well as 3G, FCC source said. IB is leaning toward approving McCaw effort while Wireless officials apparently are completing rulemaking that would set aside more spectrum for 3G services, sources indicated. Commission also is trying to decide just how much spectrum New ICO should give up in exchange for approval of terrestrial service plan. Satellite industry official suggested FCC follow plan pushed by former Chmn. William Kennard in slicing up spectrum into 9 rather than 8 slots and giving wireless industry 9th slot. “That might be a solution.” FCC Chief of Satellite & Radio Telecom Div. Tom Tycz told same European conference attended by Wheeler that he hadn’t seen “the killer app that will convince the world 3G is a great thing.”