SKYBRIDGE PUSHES FCC FOR CONDITIONAL KA-BAND LICENSE
Skybridge is pushing FCC to quickly issue conditional licenses to 7 applications from 5 companies for Ka-band service because of rapidly “changing market conditions” and impending departure of 3 commissioners, Vp Mark MacGann told us in interview Tues. MacGann, Senior Vp-Business Development & Mktg. Charlene King and attorney Jeffrey Olsen addressed obstacles facing company following Commission announcement last Thurs. (CD May 4 p3) of proposed rulemaking for spectrum-sharing plan for nongeostationary satellite orbit (NGSO) and fixed satellite service (FSS) and to determine intraservice rules for new applications, including Internet, online access, data, video and telephony. MacGann said with much of company financing still expected to come from Wall St., Skybridge would like to show investors company was moving forward.
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Market conditions forced companies such as Skybridge “to begin producing revenue” faster, MacGann said. He said survival of Skybridge and others depended upon “financial markets, the success of IPO and high-yield bonds.” Company added “flexibility” to original business plan by leasing transponders on satellites to start service by end of year (CD Feb 23 p3), MacGann said: “The telecom industry is no longer the perfect paradise it was 2 years ago. You can’t sit on your hands” with money from investors. Backed by Alcatel, Boeing and Qualcomm, Skybridge has raised $1.5 billion for start-up service. “That investment is secure,” MacGann said. King said Skybridge was targeting telcos for additional investment as strategic partners. She said no deals had been signed, but Skybridge was involved in discussions with unspecified “number of U.S. companies.”
Commission said it would issue licenses to each applicant but gave no timetable when or what kind of licenses it would grant. Boeing, Denali, Hughes, Skybridge, Teledesic and Virtual GEO are expected to receive some type of conditional licenses while final rules and agreements are being considered. MacGann said conditional licenses would be “useful, legitimate and justifiable,” but “that no longer would be the case in one year.”
MacGann said start-up broadband satellite company is racing against clock to get license and additional financing. “Investors are very informed on the regulatory process” and “are very uncomfortable” financing projects that haven’t passed muster at FCC, MacGann said: “We want to show them technical and legal due diligence.” Despite protests from some rivals who discredit value of owning conditional license, Olsen said there “was plenty of precedent” for issuing such licenses, citing case of Teledesic, which received license before spectrum allocations “were done.” MacGann said it’s most important piece of Skybridge puzzle. “We want to take the license and do something with it,” he said: “If companies like Virtual GEO don’t think it’s worth anything, they can crumple it up and throw it in the trash.”
Changes at FCC could delay process. Comrs. Furchtgott-Roth, Ness and Tristani are expected to leave. Ness will depart next month, Furchtgott-Roth soon after that. “We would have to start the process all over again because everyone wants to make an informed decision,” Olsen said. Chmn. Powell and other commissioners “are certainly not bound by any commitments made by [former Chmn. William Kennard]. I can understand Michael Powell not wanting to set a precedent that crashes back in his face.” Meanwhile, MacGann and Olsen said Skybridge has begun preliminary talks with other applicants. Olsen said Skybridge was “comfortable and confident” agreement could be reached with Boeing. No serious talks have been held with others. “We can’t seem to get past the attorney with Hughes,” MacGann said: “If we could talk CEO to CEO, then maybe we could find some common ground, but they don’t seem to have any company personnel working on this.”