Bankruptcy, FCC Action Could Lead to S-Band Satellite Sales
The bankruptcies of S-band licensees DBSD and TerreStar and potential FCC action opening the spectrum to increased terrestrial service could mean several S-band satellites will be for sale in coming years. Currently, the two companies have a total of three satellites. Each has one geosynchronous in-orbit satellite and TerreStar has another nearly completed satellite on the ground. While much depends on how the FCC decides to handle the spectrum, TerreStar’s grounded satellite is likely more valuable than the in-orbit ones, officials said. The FCC isn’t expected to decide on the 2 GHz band spectrum for at least a year (CD Oct 27 p9). ProtoStar, which auctioned its two in-orbit satellites to Intelsat and SES as part of its bankruptcy last year, was able to raise some $395 million for its satellites, though the satellites had much broader uses.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
If mobile satellite services/ancillary terrestrial component spectrum continue to require a satellite capability, as is the case now, the new owners of the spectrum would likely be forced to keep the satellites operational. If the spectrum were opened up by lowering the satellite requirement, the spectrum licensees would have to decide if they want to continue the expensive task of controlling the satellites, said consultant Tim Farrar.
If an eventual owner of an 2 GHz license is solely interested in the terrestrial spectrum, they may have some trouble selling the in-orbit assets. Moving an on-orbit S-band satellite to another location would be difficult since the allocation isn’t the same worldwide, said an MSS executive. Also, changes in latitude would also make such a move difficult, said Farrar. Another option would be for a different satellite operator to purchase the satellite and use it as a slot holder, he said. Otherwise, satellites could be sent out to graveyard orbit, said Farrar.
Meanwhile, an unlaunched satellite would likely be more valuable due to its flexibility, officials said. “It might cost you some money,” but engineers could adjust the satellite to fit different needs, unlike the orbiting satellites, the executive said. TerreStar’s TerreStar-2 satellite is nearly 95 percent completed, though Space Systems/Loral, which is building the satellite, has stopped work as TerreStar goes through bankruptcy.
There isn’t a consensus that whoever ends up with the assets would necessarily be looking to part with them, said the executive. “I'm not in the camp that writes these satellite off,” the executive said. EchoStar or Dish Network could potentially use the system for mobile video somewhere down the line, the person speculated. Making use of the existing system would make deployment of a mobile TV standard cheaper. Speculation about Dish’s pursuit of a mobile TV product has surrounded CEO Charlie Ergen since he bought up $712 million of 700 MHz spectrum in 2008. Ergen recently said he remains uncertain how the company will use the spectrum. A combination S-band satellite/700 MHz system could be one way to make use of the Advanced Television Systems Committee mobile standard currently used by broadcasters. Dish’s active role in developing the standard has also fueled speculation it was interested in mobile service. A bankruptcy court recently approved a $75 million loan to TerreStar, leading some to believe Ergen is making a play for S-band spectrum.