The FCC has had conversations with Qualcomm (s qcom) and Skyterra in the last few weeks about an effort to use a combination of satellites and a terrestrial network known as ATC (Ancillary Terrestrial Component), which could make 100 MHz of spectrum available for mobile broadband. Given that both the wireless industry and the FCC are unified in calling for more spectrum for mobile data services, the satellite companies are setting themselves up for a potential payday, but I still think it’s a sucker’s bet.
The FCC is interested in learning more about ATC, Dean Brenner, VP of government affairs for Qualcomm, told me. SkyTerra’s VP of regulatory affairs, Jeff Carlisle, said he was meeting with the FCC to point out that companies holding ATC licenses could get 100 MHz of spectrum online within the next couple of years. Back in 2003, the FCC overruled objections from the CTIA and the wireless industry, and told satellite companies holding spectrum in the L and S bands that they could offer broadband as long as it had a both a satellite and a terrestrial network component. Companies with this ATC approval promptly went out and raised billions to create such networks.
However, the cost of launching a satellite, and a lack of partners to help offset the price of a terrestrial network, means that for now, there are satellites but no terrestrial component. Another issue is the fact that a handset would need to operate on both networks, and so far the efforts to produce one that would appeal to consumers look pretty lame. One of the bigger beneficiaries of the ATC decision, a company called TerreStar, appears to have switched its goal from providing broadband to offering satellite communications as a backup to existing cellular network — a strategy I still question. TerreStar could not be reached for comment.
SkyTerra’s Carlisle believes a consumer-serving combination network has value, but that the likeliest route to the spectrum will be from existing carriers that license it from the satellite companies and then build out the terrestrial component. At that point, the satellite may become an albatross given the challenges of creating a dual-mode handset and the fact that all of the real speed and action will be delivered via the terrestrial network. (Satellite broadband speeds so far are unimpressive.) Carlisle pitches the bird as a nice form of backup service that public safety professionals and even consumers would still find valuable.
Yet that’s not going to stop the CTIA, which has been against ATC and satellite broadband for years. In a filing with the FCC last week it asked the commission for more spectrum, including that used by satellite providers. From its filing:
Finally, CTIA urges the Commission to undertake an examination of spectrum allocated to U.S. satellite providers. CTIA believes that a review of current satellite authorizations, coupled with an assessment of whether such providers are fully and efficiently utilizing their spectrum allocations, will inform whether this spectrum should be reallocated for licensed CMRS wireless broadband use.
The CTIA is asking the FCC for 800 MHz and isn’t afraid of going up against broadcasters to get it, so this plea for a rethink on satellite may just be the organization’s effort to throw everything including the kitchen sink, at the spectrum issue. And even if the industry accepts that it needs the 100 MHz of spectrum that SkyTerra claims is available, it comes attached with some pretty big risks.
Image courtesy of SkyTerra
This article also appeared on BusinessWeek.com.