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FCC Clears Way for New Satellite Communications Service

October 14, 1994

WASHINGTON (AP) _ Federal regulators cleared the way Friday for a new national and, eventually, global satellite service offering an array of two-way communications including phone and fax.

Unlike conventional satellites that orbit thousands of miles in space, the new service uses satellites that orbit close to the earth. The orbit is low enough for people on the ground to use special hand-held phones and other devices to send and receive calls, messages, pages and other services.

After nearly five years of work, the Federal Communications Commission completed a plan on how companies may provide the service. Specifically, the commission, with the help of industry, resolved how public airwaves will be shared among companies.

Six companies have requests before the FCC to provide service. Only five national licenses are available, FCC officials said. If the commission finds all six companies qualified, it will auction the licenses, said spokeswoman Susan Sallet.

The FCC’s action comes as companies race to build multimillion-dollar satellite communications systems.

According to the Personal Communications Industry Association, 4.11 million Americans, 1.4 percent of the U.S. population, will subscribe by 2003 to satellite-delivered communications services.

Applications before the FCC are in the names of Ellipsat Corp., Motorola Satellite Communications, Constellation Communications Inc., Loral Cellular Systems Corp./Qualcomm Partnership, TRW Inc. and AMSC Subsidiary Corp., FCC officials said.

The Motorola application is for a $3.4 billion venture, using 66 satellites to deliver worldwide voice, data and paging services.

Known by the name Iridium, the project is backed by a group of U.S. and foreign telecommunications companies, including Motorola Inc., Sprint Corp., Italy’s Telecom Italia, Bell Canada and a consortium of Japanese companies including DDI Corp.

The Loral/Qualcomm venture, called Globalstar, plans to use 48 satellites to provide worldwide communications services, including data, fax and messaging. Partners in the $1.8 billion venture include France’s Alcatel and Germany’s Deutsche Aerospace.

The AMSC application is part of a $550 million venture to provide data, fax and messaging service to North America.

Analysts have said the people most likely to buy the services will be business people on the go.

Initial prices could be limiting. Special phones used with the service could cost $1,000 and up. Per minute usage fees are also expected to much more expensive than existing cellular services, analysts have said.

Iridium’s phone initially is expected to cost between $1,500 and $3,000 and to work on existing cellular systems. Its average per minute charge worldwide will be $3, said spokesman John Windolph. He expects the industry to grow quickly, driving down consumer prices.

With Iridium, a customer could go to Europe, Japan or India and use his phone. The phone would work off a single number. ″Our primary market is the global business traveler,″ Windolph said.

An Iridium subscriber in the District of Columbia would place a phone call over the existing cellular network, he said.

Ellipsat and Constellation are small entrepreneurial ventures, analysts have said. No information was immediately available on TRW.

FCC spokeswoman Susan Sallet said the new low-orbit satellite could provide a wide range of services, including environmental monitoring and cargo tracing. ″It creates a whole new industry,″ she said.

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