FCC Debates Whether New Satellite Plan Will Fly

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FCC Debates Whether New Satellite Plan Will Fly

By Shannon Henry

Staff Writer

The satellite communications industry is just about to take off - literally - according to those in the business.

Since the World Trade Organization pact, which opened telecommunications markets in 70 countries, was signed in February, technologies have improved and people all over the world are trying to get faster and better Internet access.

Many industry watchers and analysts have long wondered if the handful of companies chasing elaborate and costly satellite constellations will succeed even though they are competing for what is estimated to be a $500 billion global telecom market.

The Federal Communications Commission is now debating whether to let another company compete with the current players - Iridium, Teledesic, Globalstar and Odyssey. These four alliances were granted licenses by the FCC over the past few years to launch their global communication systems.

The potential competitor, Constellation Communications Inc., or CCI, Reston, Va., was previously turned down by the FCC in its proposal to launch a global satellite constellation on the scale of these players. The FCC rejected the plan because it said CCI did not have enough financial strength to continue with the project.

But CCI, which is a private company founded in 1991, appealed the decision and expects a judgment by the FCC in the next month.

This time around, CCI is pointing out that Bell Atlantic Corp. and Raytheon Co. have thrown their financial support behind the company. CCI's three primary investors are SpaceVest, a Reston, Va., venture capital company, Philadelphia-based Bell Atlantic and Lexington, Mass.-based Raytheon. CCI has also formed partnerships with communications companies Telabras in Brazil and PT Citra Sari in Indonesia. In addition, CCI plans to round up more money from investment banks and public markets as the plan goes forward.

While it's waiting, CCI has been building another smaller-scope system called ECCO, in which the first satellite would be launched in April 2000.

"We're not letting any grass grow under our feet," said Frank DiBello, vice chairman and general partner of SpaceVest. DiBello also acts as CCI's chief executive officer.

The 12 ECCO satellites would be used for the larger global project that would offer worldwide voice and data communications, said DiBello. ECCO will offer service to rural areas in countries such as Brazil, Indonesia and the Philippines.

"We aren't going after the wealthy end," said DiBello.

While ECCO is a $550 million project, CCI's global venture calls for a $1.15 billion investment.

DiBello claims that CCI will compete as a low-cost provider of communications such as public telephone facilities, and other worldwide communications services via wireless phones.

CCI is about a month away from announcing a manufacturer for the satellites, although DiBello said the choice has been narrowed to about three companies, including Lockheed Martin Corp., Bethesda, Md.

If the FCC allows CCI to be added to the short list, there will still be more than enough business to go around, he said. "If all five systems were up, you still wouldn't meet all the demand," DiBello said.

Still, the other companies have a head start. The 48-satellite constellation Globalstar, which is being built by Loral Space & Communications Ltd., is expected to be operational by 1999. Giant 840-satellite Teledesic, run by Bill Gates and Craig McCaw, is expected out in 2000. Odyssey, owned by TRW and Teleglobe Inc., plans for its 12 satellites to be operational by 2000. And Iridium, a Motorola venture, has promised to launch service from its 66-satellite constellation in 1998.


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