by Clayton Mowry

The thrill is gone. Our 15 minutes is over. Satellites are old news.

According to the word on the street, the hype and excitement that surrounded the commercial satellite industry two years ago has receded, and the government officials who decide the spectrum real estate we operate in are voicing a cautionary tone.

The bankruptcies declared last summer by Iridium and ICO marked the beginning of the industry’s slide. The long development cycles inherent in the construction of global satellite systems, as well as many broadband satellite service providers, are part of our problem as well. In addition, lawsuits and counter-suits among the direct-to-home (DTH) service providers in the United States have not helped the industry to become more popular.

The problems encountered by the first MSS provider to reach the market have highlighted several facts about satellites. Satellite services require large amounts of up-front capitol. The systems take several years to design and build before a single customer can sign-up for the service. And more importantly, they require a significant amount of radio spectrum to be assigned and licensed globally–or at least regionally–for GEO-delivered satellite services.

With all of these shortcomings, Iridium achieved major technical, regulatory and financial milestones, when it brought its $5 billion system to market. But our future problems do not reside with the investment banking industry or any failure to fund good business plans for new satellite services. To paraphrase an old political philosophy, “It’s the spectrum stupid.”

Today the commercial satellite industry is under assault from terrestrial wireless communications services that want access to the very same spectrum that our industry leaders worked so hard to obtain at past World Radio Conferences.

In the United States, The Federal Communications Commission is taking back spectrum assigned domestically and globally to satellite services across several bands–extended C- band, Ku-band, Ka-band, and V-band.

Terrestrial wireless interests are making a case for sharing in what was, up until now, exclusively satellite spectrum. They are promising regulators that they will deliver high-speed Internet to everyone and every corner of the world. So called fixed services say they will bridge the vaunted digital divide and provide a diversity of service heretofore unseen.

They just need the regulators to give them co-primary use of the satellite bands. Or better yet, just take chunks of spectrum from the bands where satellites currently operate or plan to go in the future. In the extended C-band, a freeze imposed by the FCC on all earth station licenses has already accomplished this goal–limiting the use of satellites by companies, including MCI Worldcom, to provide international long distance services. In the high-powered Ku-band, a fast track FCC plan to license terrestrial wireless services for a company called Northpoint Communications threaten to interfere with DBS offerings from incumbent service providers DirecTV and Echostar, and potentially broadband satellite services from Skybridge and Boeing. In Ka-band, we’re loosing spectrum rights with each passing day as regulators threaten to allocate only 180 MHz of the 250 MHz originally pledged to satellites in the 18/28 GHz range. Similarly, terrestrial services that originally shunned the V-band, claiming they could not operate at such a high frequency, are now battling with satellite interests for shared use of the spectrum.

Terrestrial wireless services including LMDS, MMDS, fixed microwave and the like have several advantages over the satellite industry that the regulators seem to like. First, they can roll out service incrementally, allowing a gradual build-up of service from highly profitable areas to less developed ones. They claim to compete against the entrenched phone companies and new digital cable services to offer high-speed Internet access. And perhaps more importantly, they can raise revenue for the government through high-flying spectrum auctions.

Services offered by companies like Windstar, Teligent, and MCI Worldcom are riding the wireless wave, using a model that first targets businesses, and then moves to serve consumers in suburban and potentially rural areas. It sure sounds easier than laying fiber to everybody’s house–at least that is what they’d like you to think.

Interestingly, nobody remembers a little company from the early 90s called TeleTV–a telecommunications joint venture consisting of Nynex, Bell Atlantic and Pacific Telesis. The RBOCs literally spent billions of dollars on TeleTV in an attempt to deliver wireless cable television across the United States. They failed miserably. Cost, technical concerns and line of sight problems plagued the terrestrial wireless service at every turn. They simply could not compete with cable in concentrated urban markets, let alone rural areas.

New terrestrial wireless services are likely to suffer from many of the same problems as they attempt to deliver high-speed Internet to homes and small offices–particularly in less populated areas. For most of the rural United States and the rest of the world where fiber will never be deployed, satellites will continue to be the main path to the wired world.

Satellite companies must fight the battle for spectrum in the here and now. We cannot wait for the failed promises of terrestrial wireless to come back and haunt them. We must do a better job of telling our success stories to regulators and anyone else who will listen.

Clayton Mowry is the executive director of the Satellite Industry Association. His email is [email protected].