Addendum 03 27, 2009

0022-EX-TU-2008 Text Documents

Inmarsat, Inc.

2009-03-27ELS_97120

March 27, 2009

FILED ELECTRONICALLY

Marlene H. Dortch, Secretary
Federal Communications
Commission
445 12th Street, S.W.
Washington, D.C. 20554
Re: SES-STA-20080822-01085; 0022-EX-TU-2008
Dear Ms. Dortch:

On March 26, 2009, in response to a request from the Commission’s staff, a
revised, stand-alone narrative was submitted to be associated with the above-referenced
applications seeking the Commission’s consent to transfer control of Inmarsat Hawaii
Inc., and Inmarsat, Inc. An incorrect version of Annex 1 to Attachment B of the
narrative was included with the filing. Please replace the narrative that was filed on
March 26 with the attached narrative, which has the correct version of Annex 1.

Marlene H. Dortch, Secretary
March 27, 2009
Page 2

Please direct any questions regarding this submission to the undersigned.

Respectfully submitted,

/s/ Henry Goldberg /s/ Bruce D. Jacobs
____________________________ _______________________________________
Henry Goldberg Bruce D. Jacobs
Joseph A. Godles Pillsbury Winthrop Shaw Pittman LLP
Goldberg, Godles, Wiener & Wright 2300 N Street, N.W.
1229 19th Street, N.W. Washington, DC 20037-1122
Washington, DC 20036 Counsel for SkyTerra Communications, Inc.
Counsel for the
Harbinger Capital Partners Funds

cc: Jim Ball (FCC)
Howard Griboff (FCC)
Francis Gutierrez (FCC)
Arthur Lechtman (FCC)
Susan O’Connell (FCC)
Neil Dellar (FCC)
Jodi Cooper (FCC)
Jennifer Balatan (FCC)

Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554

In the matter of )
)
The Current Shareholders of ) File No. _____________________
Inmarsat plc )
Transferor, )
)
Harbinger Capital Partners Funds, )
Transferee, )
)
Applications for Authority to Transfer Control of )
Inmarsat Hawaii Inc. and Inmarsat, Inc. )
)
)
)
)
)
)
)
)
)
)
)

NARRATIVE

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TABLE OF CONTENTS

I. INTRODUCTION AND SUMMARY-------------------------------------------------- 3

II. DESCRIPTIONS OF THE TRANSACTION------------------------------------------ 6

A. The Parties ------------------------------------------------------------------------- 6

(1) SkyTerra------------------------------------------------------------------- 6

(2) Inmarsat ------------------------------------------------------------------- 7

(3) Harbinger ----------------------------------------------------------------- 7

B. The Transactions ------------------------------------------------------------------ 9

C. Sequence of Transactions and Requested Waivers -------------------------- 10

(1) Waiver of the Commission’s Signature Requirement--------------- 22

(2) Waiver of the Time by Which the Transaction Must be
Consummated------------------------------------------------------------ 23

III. STANDARD FOR REVIEW ----------------------------------------------------------- 23

IV. COMPLIANCE WITH THE COMMUNICATIONS ACT AND THE
COMMISSION’S RULES--------------------------------------------------------------- 25

V. THE PROPOSED TRANSACTION WILL YIELD SUBSTANTIAL
PUBLIC INTEREST BENEFITS------------------------------------------------------- 26

A. The Proposed Merger Will Unlock the Full Promise of L-Band
Spectrum for MSS-ATC Services to Benefit Public Safety Entities,
People in Rural Areas, and the Public at Large ----------------------------- 28

B. The Proposed Transaction Will Create More Rapid, Lower Cost
Deployment of ATC to the Benefit of Rural and Public Safety
Users as well as Traditional Terrestrial Wireless Consumers ------------- 32

C. The Transaction Will Generate Additional Operating Efficiencies ------- 33

(1) More Efficient Use of Satellites and Orbital Resources ----------- 33

(2) Administrative, R&D, and Other Cost Savings --------------------- 34

D. Existing Services ----------------------------------------------------------------- 35

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VI. THIS TRANSACTION WILL NOT HARM COMPETITION -------------------- 36

A. The Commission’s Method of Analysis: Identify Where the
Parties Compete and Analyze Whether the Combination Would
Adversely Affect That Competition ------------------------------------------- 36

B. Current MSS Services: The Few Areas of Overlap Are
Characterized By Thriving Competition That Will Not Be
Adversely Affected By the Proposed Transaction --------------------------- 38

C. Future Directions----------------------------------------------------------------- 42

D. Department of Justice Determination------------------------------------------ 43

VII. PROCEDURAL MATTERS ------------------------------------------------------------ 44

A. Pending Applications and Petitions-------------------------------------------- 44

B. Request for Permit-But-Disclose Ex Parte Status --------------------------- 44

VIII. CONCLUSION --------------------------------------------------------------------------- 44

Attachment A List of licenses
Attachment B Petition for Declaratory Ruling (copied from SkyTerra
transfer of control application; submitted here for
informational purposes)
Attachment C U.K. Panel case
Attachment D Organizational charts

Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554

In the matter of )
)
The Current Shareholders of ) File No. _____________________
Inmarsat plc )
Transferor, )
)
Harbinger Capital Partners Funds, )
Transferee, )
)
Applications for Authority to Transfer Control of )
Inmarsat Hawaii Inc. and Inmarsat, Inc. )
)
)
)
)
)
)
)
)
)
)
)

NARRATIVE

This Narrative is a revised version of a Narrative that was filed on August 22, 2008. The

reasons that the Narrative has been revised are described below.

In the version of the Narrative that was initially filed, Harbinger Capital Partners Funds 1

(collectively referred to herein as “Harbinger”) and SkyTerra Communications, Inc.

1
These funds consist of Harbinger Capital Partners Master Fund I, Ltd. (the “Master Fund”) and Harbinger Capital
Partners Special Situations Funds, L.P. (the “Special Situations Fund”). The exact percentages to be held by each
fund will vary depending upon market conditions and other factors. Both funds are, however, under the same
ultimate control, so changes in the two funds’ relative percentages would have no material impact on the transfers of
control that are proposed herein. Currently, another Harbinger fund, Harbinger Capital Partners Fund I, L.P. (the
“Partners Fund”) has an interest in SkyTerra, but it is contemplated that the Master Fund and the Special Situations
Fund will absorb that interest by the time of the occurrence of either transaction. A fourth fund, Harbinger Co-
(footnote cont’d on next page)

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(“SkyTerra”) requested 2 Federal Communications Commission (“FCC” or “the Commission”)

consent to the following transactions:

(i) the transfer of control of SkyTerra Subsidiary, LLC (“SkyTerra Sub”), 3 from

SkyTerra (as it is currently controlled) to Harbinger; 4 and

(ii) the transfer of control of Inmarsat Hawaii Inc. and Inmarsat, Inc. from the

current shareholders of Inmarsat plc (“Inmarsat”) 5 to Harbinger. 6

In the version of the Narrative that was filed last August, the parties requested that all of

the above-mentioned transfer of control applications be processed as a group. On March 4,

2009, however, the parties requested instead, based on changes in the financial markets and the

need to maintain maximum flexibility, that the Commission separate processing of the

Investment Fund, L.P. (the “Co-Investment Fund”), currently created, but unfunded, may also acquire an interest in
SkyTerra as part of a funding vehicle for the Inmarsat transaction. Both the Partners Fund and the Co-Investment
Fund are under common control with the Master Fund and the Special Situations Fund. If either the Partners Fund
or the Co-Investment Fund would be involved in the purchase of SkyTerra shares that is associated with either
transaction, amendment(s) showing a pro forma change in ownership would be filed to the appropriate individual
applications.
2
This narrative is included with each of a series of related applications seeking consent to transfer control of the
licenses identified in Attachment A hereto. It is respectfully requested that the applications be processed as a group.
3
The company names used in this Narrative reflect the fact that various subsidiaries of SkyTerra have changed their
names since the date that the original version of this Narrative was filed by replacing “Mobile Satellite Ventures” in
the company name with “SkyTerra.”
4
Following Commission consent, Harbinger would control SkyTerra, which would, in turn, remain the parent
company of SkyTerra, L.P., which wholly owns SkyTerra Sub, as set forth in Section II.A(1) below.
5
At the time the original version of this Narrative was filed, there was pending an application requesting
Commission consent to the transfer of control of Stratos Global Corporation (“Stratos”) from Robert M. Franklin to
Inmarsat. See Robert M. Franklin, Trustee, and Inmarsat plc Seek FCC Consent to the Transfer of Control of Stratos
Global Corporation, and its Subsidiaries from an Irrevocable Trust to Inmarsat plc, Pleading Cycle Established,
Public Notice, IB Docket No. 08-143, 2008 FCC Lexis 5360 (rel Aug. 13, 2008) (the “Stratos Transfer of Control
Application”). The Stratos Transfer of Control Application subsequently was granted. See Memorandum Opinion
and Order, DA 09-117 (Int’l Bur., Jan. 16, 2009). Should the Inmarsat/Stratos transaction be consummated, the
application for consent to transfer control of Inmarsat to SkyTerra will be amended as appropriate to take the FCC
authorizations presently held by Stratos into account.
6
At the time the original version of this Narrative was filed, Harbinger had an option to acquire, subject to prior
FCC consent, a controlling equity interest in TVCC One Six Holdings LLC (“TVCC”), which had entered into an
FCC-approved de facto lease of 1670-1675 MHz spectrum with the licensee of that spectrum, OP LLC. It was
contemplated at the time that Harbinger would contribute its interest in the lessee to SkyTerra pursuant to a pro
forma transfer of control. Subsequently, however, it was reported that although Harbinger has exercised its option,
it no longer intends to contribute its interest to SkyTerra. See letter, dated September 26, 2008, from Joseph A.
Godles, counsel for Harbinger, to Marlene H. Dortch, FCC.

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applications proposing to transfer control of SkyTerra Sub from the applications proposing to

transfer control of Inmarsat Hawaii Inc. and Inmarsat, Inc. They also sought expedited

processing of the applications proposing to transfer control of SkyTerra Sub.

In light of this development, the initially-filed Narrative has been split into two stand-

alone Narratives. The instant version of the Narrative addresses considerations related to the

applications proposing to transfer control of Inmarsat Hawaii Inc. and Inmarsat, Inc., and should

be associated with those applications. A contemporaneously-filed version of the Narrative

addresses considerations related to the applications proposing to transfer control of SkyTerra

Sub, and should be associated with those applications. Each of the revised Narratives also takes

into account material changes, principally relating to the ownership of Harbinger and SkyTerra,

since the original application was filed. 7

I. INTRODUCTION AND SUMMARY

As set forth herein, the combination of SkyTerra and Inmarsat would yield enormous

public interest benefits. It would enhance spectrum efficiency in the L-band, while solidifying

the foundation for the development of an integrated satellite-terrestrial communications network

that would provide critical public safety services, essentially immune to local disasters, and

coverage for consumer handsets both to the most rural and underserved areas of this country and

Canada and to urban centers.

By combining the resources and expertise of SkyTerra and Inmarsat, and the financial

strength and investment of Harbinger, there would be created a stronger, more operationally

7
On March 4, 2009, the parties filed: (1) two pages from the August 2008 Narrative that had been revised to take
into account these ownership changes; and (2) a Narrative limited to the public interest considerations associated
with the transfer of control of SkyTerra Sub. Based on subsequent discussions with the staff of the International
Bureau, it has been determined in the interest of clarity that two separate, stand-alone versions of the Narrative
should be filed. The two versions of the Narrative filed today supersede the Narrative revisions filed on March 4.

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efficient organization of global reach that would be better able to realize the promise of

ubiquitous wireless coverage of North America through an integrated satellite-terrestrial

communications network. More than it is possible to achieve pursuant to the companies’

Cooperation Agreement, 8 the combination of these entities would facilitate the more rapid roll

out of the innovative mobile satellite services-ancillary terrestrial component (“MSS-ATC”)

services envisioned today, with both advanced satellite and terrestrial services being the result.

As a combined company, they would have the resources and the technical and operational

efficiencies to make the most of contiguous blocks of spectrum and increased technical and

operational flexibility, unencumbered by the limitations on the coordination of shared spectrum

by two companies with divergent business interests and to develop innovative technologies in the

future.

As demonstrated herein, there will be no adverse effect on competition. Much of

SkyTerra’s and Inmarsat’s businesses are complementary: For example, Inmarsat reports that

over 60% of its sales are for global maritime and aeronautical services, which SkyTerra does not

offer. Moreover, Inmarsat’s leading land mobile service is a satellite high speed data service

(BGAN), while SkyTerra offers only low speed (4.8 kbps) service today. SkyTerra on the other

hand provides a “push-to-talk” functionality that Inmarsat does not offer, and is focusing on the

future on its ATC business model aimed primarily at the mass-market while Inmarsat has not

pursued ATC over its network. In all events, as the Commission has recognized, satellite

8
Cooperation Agreement between and among Mobile Satellite Ventures, L.P., Mobile Satellite Ventures (Canada)
Inc., SkyTerra Communications, Inc., and Inmarsat Global Limited (Dec. 20, 2007), available at
http://www.sec.gov/Archives/edgar/data/756502/000114420407068694/v097951_ex10-1.htm (included in a
February 28, 2008 SkyTerra Communications, Inc., Form 10-K Filing with the Securities and Exchange
Commission) (“Cooperation Agreement”). Since the time that the Cooperation Agreement was executed, “Mobile
Satellite Ventures” has been changed to “SkyTerra” in the company names of the first two parties to the agreement.

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communication services are characterized by vibrant competition from numerous players

including new entrants and new technologies.

Two interrelated transactions, both of which are subject to FCC and other regulatory

approvals, are contemplated. Initially, Harbinger will become SkyTerra’s controlling

stockholder by exercising warrants to purchase additional SkyTerra common stock and

becoming the owner of SkyTerra shares that are currently held in escrow. This proposed

transaction is the subject of separate transfer of control applications, including a separate, stand-

alone narrative. Harbinger’s control over SkyTerra will also give it control over SkyTerra’s

operating subsidiary, SkyTerra LP, and SkyTerra LP’s wholly-owned FCC licensee subsidiary,

SkyTerra Sub. Then, upon successful conclusion of the offer by SkyTerra, under the control and

at the direction of Harbinger, for Inmarsat as proposed in the instant transfer of control

applications, SkyTerra will become Inmarsat’s sole shareholder. Harbinger will then proceed to

merge the operation of Inmarsat and SkyTerra. 9 The reasons and basis for this sequential

process and the associated waivers of the Commission’s rules that are requested are set forth in

Section II.C below.

9
Depending upon then-prevailing market conditions and other factors, Harbinger may, and is contractually entitled
to, make an offer for Inmarsat independently of SkyTerra, in which case Harbinger, not SkyTerra, would become
Inmarsat’s sole shareholder. Under this alternative, Sky Terra and Inmarsat would be commonly-controlled by
Harbinger. Harbinger would thereafter combine or otherwise coordinate the business operations of SkyTerra and
Inmarsat so as to achieve the advantages and public interest benefits described below. For the purposes of this
Narrative, however, it has been assumed that SkyTerra will be making the offer for Inmarsat under the control and at
the direction of Harbinger.

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II. DESCRIPTIONS OF THE TRANSACTION

A. The Parties

(1) SkyTerra

SkyTerra Sub is licensed by the Commission to operate AMSC-1 (also

known as MSAT-2), an L-band Mobile Satellite Service (“MSS”) satellite, at 101.3° W.L., and

to launch and operate a replacement satellite for AMSC-1, SkyTerra-1, at the same orbital

location. SkyTerra Sub holds an authorization to operate ATC facilities in conjunction with the

aforementioned satellites; various fixed and mobile earth stations licenses; Section 214

authorizations; various experimental licenses; and a mobile itinerant license, all associated with

the operation and development of the aforementioned satellites and the planned MSS-ATC

network.

SkyTerra is a joint venture partner of SkyTerra (Canada), Inc. (“SkyTerra

Canada”), which holds various Canadian authorizations to operate its own L-band MSS satellite

(MSAT-1) as well as a next generation replacement (SkyTerra-2) for that satellite. SkyTerra and

SkyTerra Canada currently provide certain land mobile services in the United States and Canada

via their existing satellites. SkyTerra and SkyTerra Canada are developing an integrated

satellite-terrestrial communications network, including proceeding with the construction of state

of the art replacement satellites, to provide seamless, transparent and ubiquitous wireless

coverage of the United States and Canada to consumer handsets. That network will reach both

underserved rural areas and heavily-populated areas, providing vital public safety and consumer

services. SkyTerra Canada is controlled by BCE, a Canadian corporation. Control of SkyTerra

Canada is unaffected by the transactions proposed herein.

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SkyTerra is a holding company that wholly owns its operating subsidiary,

SkyTerra L.P., a Delaware limited partnership, which in turn wholly owns SkyTerra Sub, a

Delaware corporation. The general partner of SkyTerra L.P. is SkyTerra GP Inc., a Delaware

corporation which is a wholly-owned subsidiary of SkyTerra. SkyTerra is also a Delaware

corporation.

(2) Inmarsat

Inmarsat is a U.K. company that (together with its subsidiaries) operates a

network of eleven geostationary satellites. Its satellite orbital locations are filed at the

International Telecommunication Union through the United Kingdom. Inmarsat is a leading

provider of global mobile satellite communications services, with the majority of its revenue

from global maritime and aeronautical communications services. Inmarsat also supports land

mobile voice and data applications, including in North America, which applications are

discussed further herein. Inmarsat, through its wholly-owned subsidiaries, Inmarsat Hawaii Inc.

and Inmarsat, Inc., holds the FCC authorizations identified in Attachment A hereto. Inmarsat

Hawaii Inc. is a Hawaii corporation and Inmarsat, Inc. is a Delaware corporation.

(3) Harbinger

The Harbinger Capital Partners Funds are investment funds founded in

2001 by Philip A. Falcone. The Master Fund is an exempted company organized under the laws

of the Cayman Islands. The Special Situations Fund is a Delaware limited partnership. A more

detailed description of these funds and their ownership structure is set forth in the Declaratory

Ruling Petition that has been filed as part of the applications seeking the Commission’s consent

to transfer control of SkyTerra to Harbinger. A copy of this Declaratory Ruling Petition is

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attached to this Narrative for informational purposes as Attachment B. Mr. Falcone, who is a

U.S. citizen, has ultimate control of the funds.

Based upon publicly-available information, Harbinger believes that it

currently holds approximately 29% of the issued and outstanding ordinary (voting) shares of

Inmarsat and also holds convertible bonds in Inmarsat. Harbinger also holds an approximately

49% equity interest and an approximately 48% voting interest in SkyTerra, 10 plus warrants for

additional voting shares of SkyTerra; and the right to acquire additional shares of SkyTerra out

of escrow once the Commission has consented to transferring control of SkyTerra Sub to

Harbinger. 11 In addition, Harbinger owns approximately 31% of the voting shares and

approximately 44% of the equity of TerreStar Corporation (“Terrestar”), as well as debt

instruments in TerreStar. TerreStar’s (approximately) 88% subsidiary, TerreStar Networks Inc.,

holds an FCC letter of intent (“LOI”) authorization for the launch and operation in the United

States of TerreStar-1, a Canadian-licensed S-band MSS satellite that will serve the United States

and Canada. Harbinger does not control TerreStar, nor would any of the proposed transactions

give Harbinger control of TerreStar.

In addition to their interests in Inmarsat and TerreStar, the Harbinger

Capital Partners Funds have interests in many companies, including minority interests in the

following telecommunications and media companies in which Harbinger holds an equity

10
These percentages include approximately 2% of SkyTerra’s voting common stock and approximately 14% of
SkyTerra’s equity which are currently owned by the Partners Fund and which, as indicated in note 1 hereto, are
contemplated to be distributed to the Master Fund and the Special Situations Fund.
11
These escrowed shares consist of: (1) voting shares amounting to 0.91% of SkyTerra’s voting stock and 0.41% of
SkyTerra’s total equity that were placed in escrow in connection with an April 2008 transaction in which Harbinger
acquired SkyTerra shares from various Apollo funds; (2) non-voting shares amounting to 7.27% of SkyTerra’s total
equity that were transferred to Well Fargo Bank, National Association (“Wells Fargo”) and placed in escrow in
connection with a September 2008 transaction in which Harbinger acquired SkyTerra shares from TerreStar
Corporation; and (3) voting shares amounting to 3.35% of SkyTerra’s voting stock and 1.50% of SkyTerra’s total
equity that were placed in escrow when Wells Fargo acquired them in January and February 2009.

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Under the contemplated structure, 17 Harbinger’s proposed control of Inmarsat

would be exercised through SkyTerra. 18 Harbinger’s ownership of up to 100% of SkyTerra’s

voting stock would give it control of SkyTerra, and SkyTerra’s ownership (directly or through a

wholly-owned subsidiary) of up to 100% of Inmarsat’s voting stock would give it control of

Inmarsat.

For clarification, three organizational charts are attached to this Narrative as

Attachment D. The first chart shows the current ownership structure, under which Harbinger has

a non-controlling interest in each of SkyTerra and Inmarsat. The second chart shows the

ownership structure that will be in place following consummation of the proposal to transfer

control of SkyTerra to Harbinger. At this time, Harbinger will continue to have a non-

controlling interest in Inmarsat. In the final contemplated stage (as shown in the third chart),

following consummation of the proposal to transfer control of Inmarsat, Harbinger will have

contributed its interests in Inmarsat to a Harbinger-controlled SkyTerra, which in turn, directly or

through a to be created subsidiary, will control Inmarsat.

C. Sequence of Transactions and Requested Waivers

Inmarsat is organized as a public limited company under the laws of England and

Wales, hence any offer for Inmarsat would be regulated by the Code as overseen by the U.K.

Panel on Takeovers and Mergers (the “Panel”). Proceeding in the manner proposed is necessary

because the process is shaped by the Code.

Under the Code, the normal procedure for making an offer is to announce a “firm

intention to make an offer” under Rule 2.5. Once such an announcement has been made, the

17
As stated in the Narrative submitted with the applications, this structure may change, in which case the
applications will be amended. See footnote 9.
18
But see footnote 9.

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offeror must proceed within 28 days of the announcement to make an offer at a price no less than

the price stated in the Rule 2.5 announcement. For this reason, the financial adviser to the

offeror will go through a “cash confirmation” process prior to the Rule 2.5 announcement, where

the financial adviser performs due diligence to assure itself that the offeror has obtained the

committed financing required to implement the offer. This financing is for all practical purposes

unconditional - unlike the normal financings for U.S. tender offers.

Following a Rule 2.5 announcement, the Code normally allows 109 days for an

offer to complete. The Code does, however, explicitly provide for circumstances where the offer

is referred “unexpectedly” for a lengthy review by the European Union (“EU”) or U.K.

competition authorities, with any offer being required to lapse under these circumstances (any

committed financing also being permitted to lapse at the same time). If the EU/U.K. competition

authorities approve the deal, the offeror has 21 days to make up its mind whether to announce a

new offer, 19 which is allowed its own period of 109 days in which to successfully complete.

Although this provision, by its terms, refers to clearances by the EU or U.K.

competition authorities, and does not apply to applications to other regulators (on the basis that

such application processes are less familiar to market participants in the U.K.), the Panel

suggested that Harbinger follow it with respect to U.S. regulatory approvals in this case and

Harbinger has committed to the Panel that it would do so. Accordingly, Harbinger will

announce its intention to make a firm offer or not for Inmarsat within 21 days of final U. S.

regulatory approval, unless a longer period for such announcement is authorized by the Panel.

19
Rule 12.2(ii) of the Code states that: “at the end of the competition reference period, if the offer is allowed to
proceed (whether conditionally or unconditionally), (A) any cleared offeror or potential offeror must, normally
within 21 days of the offer’s being allowed to proceed, clarify its intentions with regard to the offeree company by
making an announcement either of a firm intention to make an offer for the offeree company in accordance with
Rule 2.5 or that it does not intend to make an offer for the offeree company…”

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The U.K. Takeover Code (Rule 30.1(a)) would then normally allow 28 days from the

announcement of such firm intention for the actual offer to be issued to the target company

shareholders.

Under the Code, the Panel could permit more time for an announcement of a firm

intention to issue an offer, or for the issuance of such offer itself, but that would not be the

ordinary course, as the rules themselves reflect. Modest extensions for the issuance of offers

have been granted, for example, to accommodate court schedules for the approval of alternative

takeover schemes (discussed below), but Harbinger has been advised by U.K. counsel that the

grant of any such extension in the absence of the support of the target company would likely be

brief.

Under U.K. law, a possible alternative to a tender offer for acquiring control of a

company is a court approved cancellation scheme. Such a scheme of arrangement may be

effected under Section 899 of the U.K. Companies Act 2006.

In the context of takeover, a scheme of arrangement may take different forms.

One form is a “cancellation scheme,” under which all the issued shares of the target company not

already owned by the offeror are cancelled and the reserve arising on cancellation is capitalized

and applied in paying up new shares which are issued directly to the offeror in exchange for the

offeror paying cash and/or issuing its own securities to the existing shareholders of the target

company in proportion to their holdings. An alternative form is a “transfer scheme,” under

which all the issued shares of the target company not already owned by the offeror are

transferred to the offeror in exchange for the offeror paying cash and/or issuing its own securities

to the existing shareholders of the target company in proportion to their holdings. The third form

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is a “hybrid scheme,” under which some of the issued shares of the target company are cancelled

and the remainder are transferred.

While the scheme and tender offer processes have their differences, the end result

under all three procedures is the same. Instead of holding shares in the target company, the

existing shareholders of the target company will receive cash and/or hold securities in the offeror

in the same proportions as their existing holdings in the target company, and the target company

will become a wholly-owned subsidiary of the offeror.

An important difference between a scheme and a tender offer is that a scheme

does not constitute an “offer” to the public: it takes effect by operation of law. It is an

arrangement between a target company and its shareholders which, if approved by the requisite

majority of target company shareholders and subsequently sanctioned by the court, becomes

binding on all the shareholders of the target company by operation of law whether they have

voted in favor of it or not. A scheme is, however, an “offer” for the purpose of the Code (see

paragraph 3(b) of the Introduction to the Code and the definition of “Offer”). The provisions of

the Code apply to an offer effected by means of a scheme of arrangement in the same way as

they apply to a tender offer, with certain specified exceptions (see Appendix 7 to the Code).

Under the Code, the normal procedure for making an offer by way of a scheme of

arrangement is to announce a “firm intention to make an offer” under Rule 2.5 of the Code (in

the same way as the procedure for a tender offer is commenced). The requirement for a “cash

confirmation” is precisely the same for the announcement of a scheme of arrangement as it is for

a tender offer. The announcement is followed by the posting of a scheme document to the target

company’s shareholders. Unlike the offer document in the context of a tender offer, the scheme

document is in fact the target company’s document (rather than the offeror’s document). The

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scheme document will contain a notice convening a meeting of the target company’s

shareholders to consider and vote upon the scheme of arrangement. Subject to the passing of the

necessary shareholders’ resolutions (the scheme must be approved by a 75% majority in value

and a 50% majority in number of each class of shareholders present and voting at the meeting),

application will then be made to the High Court of England and Wales to approve the scheme. If

the court approves the scheme, then the scheme becomes effective and the cancellation and/or

transfer referred to above will take place.

A variant of the above tender offer and scheme of arrangement approaches would

be to employ a trust structure as the acquisition vehicle for an offer for Inmarsat. Under this

approach, Harbinger and SkyTerra would announce a firm offer under Rule 2.5, as described

above, but with a trust as the initial acquiring entity that (following regulatory approvals) would

then transfer control to Harbinger/SkyTerra. Such a structure could benefit from the FCC’s

expedited review procedures for the initial step of transferring control to a trustee to facilitate

tender offers. 20 Under these procedures, there would be no need for the offer to lapse, or for the

offer price and financial commitments made to Harbinger and/or SkyTerra to be left in place for

a protracted period or for them to lapse and then be re-committed, as the offer could be

completed by transferring control to a trustee, within the allotted 109 days. However, Harbinger

and SkyTerra did not believe that the trust structure would be commercially feasible for the offer

that they propose to make for Inmarsat for the reasons described below and they did not wish to

progress an offer for Inmarsat using this structure.

The particular concern with the Commission’s tender offer mechanism is that a

trustee would be required to operate Inmarsat. Inmarsat is a very substantial company in the

20
In Re Tender Offers and Proxy Contests, Policy Statement, 59 R.R.2d 1536 (1986).

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U.K. 21 whose services and customer base are viewed by U.K. authorities as sensitive, and the

operation of Inmarsat by a trustee pursuant to the Commission’s tender offer mechanism would

effectively place Inmarsat in “hibernation” for an extended period of time.

Moreover, as noted above, any tender offer for Inmarsat will be subject to the

rules of the Code. One of the six General Principles of the Code is that “…holders of securities

of an offeree company must have sufficient time and information to enable them to reach a

properly informed decision on the bid.” 22 This General Principle is, in turn, reflected in the

specific Rules of the Code: “Shareholders must be given sufficient information and advice to

enable them to reach a properly informed decision as to the merits or demerits of an offer.” 23

It is contemplated that under any tender offer for the shares of Inmarsat, the

shareholders of Inmarsat would be given the choice of receiving cash or shares in SkyTerra, or a

combination of the two, so that they could, if they so wished, continue to participate in the

combined business of the companies. However, if Inmarsat were subjected to a trustee

mechanism, Harbinger and SkyTerra had questions as to their ability to give the Inmarsat

shareholders the information they needed to reach a properly informed decision, as the required

by the General Principles and Rules of the Code referred to above, given:

(i) Harbinger/SkyTerra’s lack of direct management control over the business of Inmarsat during

the pendency of the trustee mechanism; and (ii) the fact that such a large part of the combined

SkyTerra/Inmarsat business would be subject to the trustee mechanism for an extended period

and there would be the potential risk of forced divestiture of that part if the FCC transfer of

control application were not approved.

21
Inmarsat is a constituent member of the FTSE 100 Index, which is comprised of the 100 largest U.K. publicly-
listed companies.
22
U.K. City Code on Takeover and Mergers, General Principle 2.
23
U.K. City Code on Takeover and Mergers, Rule 23.

-17-

trustee’s hands as a result of the tender offer process. The market sale of shares in an

unlisted company would be unattractive to a broad base of investors. Alternatively,

relisting in London (the most attractive place for listing a U.K.-established company)

might well not be possible due to the requirements of Listing Rules 6.1.4 and 6.1.6

referred to above; or

• the number of shares amounting to control of Inmarsat could be sold privately to a

strategic investor. Such a new buyer would in turn then need to embark upon another

FCC-transfer of control process, thereby significantly extending the period in which

Inmarsat would remain under the operational control of a trustee.

Finally, SkyTerra’s and Harbinger’s concerns with respect to the Commission’s

trustee mechanism were not confined to the U.K. In addition to being regulated by the British

National Space Centre and Ofcom in the U.K., Inmarsat is subject to regulation in a number of

other jurisdictions. For example, there is a potential requirement for change of control approval

in various jurisdictions. Although, in order to comply with the confidentiality obligations under

the Code, SkyTerra and Harbinger did not approach any of the relevant regulatory authorities on

a named basis prior to the public announcement of their intention to make an offer for Inmarsat,

SkyTerra and Harbinger believe that use of the Commission’s trustee mechanism might

complicate the approval process in a number of these jurisdictions.

Another option under the Code would have been for Harbinger and SkyTerra to

make a Rule 2.5 announcement of a ‘pre-conditional offer’. This is an offer the making of which

(as contrasted with the closing of which) is expressly conditioned upon (i) achieving approval

(on acceptable terms) from the FCC; and (ii) (with the consent of the Panel) obtaining financing.

-18-

As such, under this structure, the firm offer would only formally be made once such pre-

conditions had been satisfied (when the normal 109 day timetable would commence).

However, with such a ‘pre-conditional offer’ Harbinger and SkyTerra would be

committed on announcement to the offer price stated in their offer announcement and to

proceeding at that offer price in the event that the stated conditions were satisfied.

In the United States, the right of the offeror to withdraw from an offer on the basis

of a material adverse change affecting the offeree company is a matter of contractual negotiation.

In contrast, in the U.K., for an offeror to be permitted to withdraw from an offer under the Code

on the grounds of a material adverse change affecting the offeree company “…requires an

adverse change of very considerable significance striking to the heart of the transaction in

question, analogous…to something that would justify frustration of a legal contract…” (Panel

Statement 2001/15). Having a pre-conditional offer open for an extended period to allow for

regulatory approval processes to be undertaken can therefore be particularly problematic in the

U.K.

As to financing commitments, Harbinger, SkyTerra and their financial advisers

would have had to confirm in writing to the Panel at the time of announcement that they were not

aware of any reason why financing should not be available within 21 days of receiving FCC

approval on satisfactory terms. Given that the announcement of a ‘pre-conditional offer’ would

be made immediately prior to the initiation of the FCC consent process, such a confirmation

could have been very difficult to obtain; moreover, the Panel might not have permitted Harbinger

and SkyTerra to later invoke the financing condition should the finance market deteriorate and

financing terms become less attractive, or should Inmarsat have suffered a material adverse

change, during the period of the FCC approval process. Accordingly, under this option

-19-

Harbinger and SkyTerra would have been tied both to an offer price (in the face of highly

uncertain equity markets) and to the potential requirement to proceed with such an offer in spite

of a material worsening in available financing terms or in the financial position of Inmarsat.

Notwithstanding their current intention to acquire Inmarsat, Harbinger and SkyTerra believe that

the risk involved in announcing an immediate offer, even pre-conditioned on FCC consents

being obtained, is too great, given the length of time that will likely be required for the FCC

review.

For this reason, although Harbinger and SkyTerra ultimately intend to seek the

recommendation of the Board of Inmarsat for a firm offer following receipt of FCC clearances,

they have yet to propose a firm offer to the Board.

Another approach under the provisions of the Code is for an offeror to make a

Rule 2.4 announcement of a “possible offer” for the target company. Such announcements are

relatively commonplace in U.K. takeover practice, for example during deal discussions between

offeror and offeree (particularly following leaks), and generally serve to update the market as to

the progress of these discussions. Such announcements do not compel a potential offeror to

proceed with a firm offer; however, a Rule 2.4 announcement will set a price “floor” for any

subsequent firm offer if the Rule 2.4 announcement alludes to a price (at the option of the

offeror).

During Harbinger and SkyTerra’s discussions with the Panel in relation to seeking

to reconcile the time required for the U.S. regulatory process with the requirements of the Code,

the Panel suggested the possible offer approach that was used in the case of the announcement of

a possible offer by Lyonnaise des Eaux for the Northumbrian Water Group, which is set forth in

Attachment C. In this approach, the possible offer (for which no potential offer price is stated) is

-20-

made explicitly subject to the obtaining of specified regulatory clearances, enabling the relevant

regulatory approval process to be completed satisfactorily prior to an offer being made (in the

case of the Northumbrian Water offer, this was a lengthy U.K. Water Act reference process: anti-

trust clearances were in fact requested and obtained after the firm offer was made, within the

normal Code timetable). Harbinger and SkyTerra have followed that suggestion, as reflected in

the public announcement regarding Harbinger and SkyTerra’s possible offer for Inmarsat which

was released on July 25, 2008.

The attraction to Harbinger and SkyTerra of this approach is that (a) no offer price

needs to be either agreed with Inmarsat or unilaterally proposed to its shareholders in the

immediate term and (b) no financing commitment needs to be kept in place and no letters

expressing confidence in obtaining financing need to be provided to the Panel, meaning that

Harbinger and SkyTerra are not exposed to volatile equity and financing markets, or any

potential material adverse change affecting Inmarsat, during the lengthy FCC review process. If

the FCC review process is completed successfully, Harbinger and SkyTerra will then be able to

launch a firm offer that will need to complete by the usual 109-day Code imposed deadline.

It is noteworthy that the U.S. Department of Justice considered the

Harbinger/SkyTerra possible offer to provide a sufficient basis for conducting its review of the

proposed Inmarsat transaction. On August 22, 2008, Harbinger submitted a Hart-Scott-Rodino

filing for the possible offer for Inmarsat, and on September 22, 2008, the 30 day Hart-Scott-

Rodino waiting period expired without any action from the U.S. Department of Justice’s

Antitrust Division. No second request was issued.

In the absence of receiving a firm offer at a price that can be recommended by the

Board of the offeree and agreement on other key offer terms, it would not be usual U.K. practice

-21-

for a company to pro-actively facilitate a possible offer. Accordingly, Inmarsat has indicated

that it is not prepared to sign the applications seeking the Commission’s consent to transfer

control of FCC authorizations held by subsidiaries of Inmarsat, nor to collaborate in any way

with Harbinger and SkyTerra regarding pre-offer regulatory clearances. However, Inmarsat has

stated in its announcement of July 25, 2008 that it intends to maintain a constructive relationship

with Harbinger and SkyTerra throughout the regulatory review process and will consider

carefully any future offer that may maximise value for Inmarsat’s shareholders as a whole.

Given the decision of Harbinger and SkyTerra to utilise the Northumbrian Water Group-style

announcement to initiate regulatory clearances, for the reasons provided above, such an offer

will not be forthcoming from Harbinger and SkyTerra unless the FCC approval process can first

be completed satisfactorily.

To facilitate the process described above, Harbinger and SkyTerra request,

pursuant to Section 1.3 of the Commission’s rules, 26 that the Commission grant the two waivers

described below. Waiver of the Commission’s rules is warranted when good cause is shown. 27

A waiver may be granted if the grant “would not undermine the underlying policy objectives of

the rule in question” and would serve the public interest. 28 All of these conditions are satisfied

in connection with the two waivers requested below because the waivers are consistent with the

purposes of the underlying rules and absent waivers Harbinger and SkyTerra would be unable to

obtain approval for and consummate transactions that are in the public interest.

26
47 C.F.R. § 1.3.
27
47 C.F.R. § 1.3; see also WAIT Radio v. FCC, 418 F.2d 1153, 1157 (D.C. Cir. 1969).
28
GE American, 15 FCC Rcd 3385, 3391 (1999).

-22-

(1) Waiver of the Commission’s Signature Requirement

Inmarsat has informed the parties that it is not prepared to sign the

applications seeking the Commission’s consent to transfer control of FCC authorizations held by

subsidiaries of Inmarsat. For similar reasons, it is not possible at this time to secure any

signature on the applications on behalf of the current shareholders of Inmarsat. The parties,

therefore, seek a waiver of Section 1.743, 29 which requires that applications filed by corporations

be signed by an officer or duly authorized employee of that corporation, and a waiver, to the

extent necessary, of any requirement that the applications be signed on behalf of the current

shareholders of Inmarsat.

The Commission has allowed the filing of applications without signature

in similar circumstances. In its Tender Offers Notice of Inquiry, the Commission cited with

approval previous cases in which the signature requirement had been waived, stating that it

“cannot reasonably allow the technical requirements of the application to make it impossible for

an outside party seeking control to file for and obtain prior approval.” 30 This principle applies

here. If Harbinger/SkyTerra were unable to file applications for transfer of control of Inmarsat’s

subsidiaries because Inmarsat’s signature is lacking, then the “technical requirements of the

application” will have made it “impossible” for them “to file for and obtain prior approval.”

Accordingly, and in keeping with its precedents, the Commission should waive the signature

requirement in connection with these applications.

29
47 C.F.R. § 1.743.
30
In Re Tender Offers and Proxy Contests, Notice of Inquiry, 1985 FCC LEXIS 2759, FCC 85-349 at ¶ 12 (rel.
Aug. 20, 1985) (quoting Continental Telephone Corporation, 41 F.C.C.2d 957, 959 (1973)). See also Continental
Telephone, 41 F.C.C.2d at 959 (“[W]e must act on such contingent applications so that a qualified buyer can legally
assume control in the event the tender offer is successful.”)

-23-

(2) Waiver of the Time by Which the Transaction Must be
Consummated

In addition, the Commission requires notification of the consummation of

a transfer of control within a specified number of days after the FCC consents to the transfer of

control. 31 For reasons that are discussed above, however, it is not feasible for

Harbinger/SkyTerra to commence a tender offer for Inmarsat in the U.K. until after FCC consent

has been obtained, and it is likely that the tender offer process will take significantly longer than

the amount of time parties typically are given by the Commission to consummate transfers of

control. Harbinger and SkyTerra, therefore, request that the FCC’s consent to a transfer of

control of Inmarsat’s subsidiaries run through the end of the period needed to complete the

tender offer process in the U.K. (or to complete the court-approved cancellation scheme of

arrangement if the offer is implemented by way of scheme).

III. STANDARD FOR REVIEW

The Commission will grant an application for transfer of control when, after considering

the benefits and harms to the public interest, on balance grant of the application will serve the

public interest, convenience and necessity. 32 The Commission first must assess whether the

proposed transaction complies with the applicable parts of the Communications Act of 1934 and

with any other applicable statutes, and with the Commission’s rules. 33 If so, then the

31
See, e.g., FCC Form 312, Schedule A, certification page (“The undersigned represents … that control will not be
transferred until the Commission’s consent has been received, but that transfer of control or assignment of license
will be completed within 60 days of Commission consent.”).
32
See 47 U.S.C. § 310(d) (requiring that transfer of control applications demonstration that the transaction will serve
the public interest, convenience and necessity).
33
See In the Matter of Application of News Corporation and The DirectTV Group, Inc., Transferors, and Liberty
Media Corporation, Transferee, for Authority to Transfer Control, Memorandum Opinion and Order, 23 FCC Rcd
3265, 3276 (2008) (“Liberty Media/Direct TV Order”); see also SBC Communications Inc. and AT&T Corp.
Applications for Approval of Transfer of Control, 20 FCC Rcd 18290, 18300 (2005) (“SBC-AT&T Order”); Verizon
Communications, Inc. and MCI, Inc. Applications for Approval of Transfer of Control, 20 FCC Rcd 18433, 18442-
43 (2005) (“Verizon-MCI Order”); Applications for Consent to the Assignment of Licenses Pursuant to Section
(footnote cont’d on next page)

-24-

Commission considers whether the transaction would result in any public interest harms “by

substantially frustrating or impairing the objectives or implementation of the Act or related

statutes.” 34 Finally, the Commission engages in a balancing test that weighs the potential public

interest benefits against the potential public interest harms of the proposed transaction. 35

Notably, in conducting its public interest review, the Commission considers “the broad

aims of the Communications Act,” including such matters as “enhancing competition in the

relevant markets, accelerating private sector deployment of advanced services, ensuring a

diversity of information sources and services to the public, and generally managing the spectrum

in the public interest.” 36 As the Commission has recognized, today’s telecommunications

marketplace is extraordinarily dynamic, 37 as is the satellite industry. 38 The Commission has

found that it should proceed cautiously prior to imposing regulatory burdens during periods of

technological change. 39

310(d) of the Communications Act from NextWave Personal Communications, Inc., Debtor-in-Possession, and
NextWave Power Partners, Inc., Debtor-in-Possession, to Subsidiaries of Cingular Wireless LLC, 19 FCC Rcd
2570, 2580-81 (2004); EchoStar Communications Corp., General Motors Corp. and Hughes Electronics Corp., and
EchoStar Communications Corp., Hearing Designation Order, 17 FCC Rcd 20559, 20574 (2002) (“EchoStar-
DIRECTV HDO”).
34
Liberty Media/Direct TV Order, 23 FCC Rcd at 3277.
35
Id. If the Commission determines that it cannot find that the transaction would serve the public interest, or if
substantial and material facts remain that must be resolved, the Commission will designate the application for a
hearing pursuant to Section 309(e) of the Act. 47 U.S.C. § 309(e).
36
See Liberty Media/Direct TV Order, 23 FCC Rcd at 3277-3278.
37
Review of the Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers, Report and Order and
Order on Remand and Further Notice of Proposed Rulemaking, 18 FCC Rcd 16978, 17372 (2003) (noting the
“continually evolving and dynamic nature of telecommunications networks”).
38
See generally The Satellite Industry Association, 2008 State of the Satellite Industry Report (June 2008)
(providing comprehensive satellite industry statistics), available at www.sia.org; In the Matter of Implementation of
Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993; Annual Report and Analysis of the Competitive
Market Conditions with Respect to Commercial Mobile Services, Twelfth Report, 23 FCC Rcd 2341, 2350 and
2345-2347 (2008) (summarizing use of mobile satellite services in the United States); and FCC Report and Analysis
of Competitive Market Conditions with Respect to Domestic and International Satellite Communications Services,
First Report, FCC 07-34, IB Docket No. 06-67 at ¶ 2 (rel. March 26, 2007) (concluding that “the market for
commercial communications satellite services is effectively competitive.”).
39
See, e.g., Implementation of Section 17 of the Cable Television Consumer Protection and
Competition Act of 1992; Compatibility Between Cable Systems and Consumer Electronics
(footnote cont’d on next page)

-25-

IV. COMPLIANCE WITH THE COMMUNICATIONS ACT AND THE
COMMISSION’S RULES

SkyTerra already holds a controlling interest in SkyTerra Sub, which has been approved

by the Commission. 40 The FCC qualifications of SkyTerra as presently owned, therefore, are a

matter of public record. The qualifications of Harbinger are set forth in: (1) the transfer of

control applications with which this Narrative is associated, which cover the FCC authorizations

listed in Attachment A hereto; and (2) the Declaratory Ruling Petition, a copy of which is

attached to this Narrative for informational purposes as Attachment B, that has been filed as part

of the applications seeking the Commission’s consent to transfer control of SkyTerra to

Harbinger.

Subject to a favorable Commission ruling on the waiver requests set forth in Section II.C

herein, the proposed transfers of control will be in conformity with all applicable provisions of

the Communications Act and the Commission’s rules. We note in this regard that the L-band

spectrum authorized to Inmarsat is and will remain coordinated by the U.K. The proposed

transaction does not add to the amount of U.S. coordinated or licensed spectrum. Accordingly,

no issue with regard to how much U.S. coordinated L-band spectrum might be licensed to a

single entity is raised.

The proposed transactions raise no national security or law enforcement concerns.

Inmarsat and SkyTerra Sub (and SkyTerra) have a long history of cooperating with the United

Equipment, First Report and Order, 9 FCC Rcd 1981, 1987 (1994) (“[T]he potential for [regulation to result in] a
constraining effect is substantially greater…where there is rapid development of new communications technologies
and services”); IP-Enabled Services, Notice of Proposed Rulemaking, 19 FCC Rcd 4863, 4867 (2004) (noting that
in competitive, evolving markets, the Commission should rely “wherever possible on competition and apply[ ]
discrete regulatory requirements only where such requirements are necessary to fulfill important policy
objectives.”).
40
In the Matter of Motient Corporation and Subsidiaries, Transferors, and SkyTerra Communications, Inc.,
Transferee, Application for Authority to Transfer Control of Mobile Satellite Ventures Subsidiary LLC,
Memorandum Opinion and Order and Declaratory Ruling, 21 FCC Rcd 10198 (2006).

-26-

States government on issues of national security, and under Harbinger and Sky Terra’s control,

the parties will continue to do so. The parties understand the importance of Executive Branch

concurrence that matters of national security and law enforcement will not be compromised by

the proposed transactions and the deference the Commission gives to such agencies relative to

the same. 41 The parties have every expectation that they will be able to satisfy any concerns that

these agencies may raise.

That leaves then a more general public interest analysis of the transactions which the

Commission must undertake. As demonstrated below, the proposed transactions will yield

substantial public interest benefits, allowing the parties to increase the efficient use of L-band

spectrum and to achieve otherwise unattainable savings and efficiencies in the provision of

integrated MSS and ATC services, operational efficiencies in satellite fleet operation, a

ubiquitous high-speed mobile telecommunication resource for national defense agencies, public

safety entities, and rural areas, and a strong foundation for continued development of new

technologies. These benefits would be achieved, moreover, as demonstrated below, without

competitive harm, because SkyTerra and Inmarsat focus on substantially different applications

and, where there is apparent overlap, they face thriving competition.

V. THE PROPOSED TRANSACTION WILL YIELD SUBSTANTIAL
PUBLIC INTEREST BENEFITS

The combination of SkyTerra and Inmarsat will generate significant public interest

benefits that flow first and foremost from their ability to achieve more efficient use of L-band

spectrum and other assets. As the Commission previously has found, mergers of satellite

operators can and do promote the “broad aims of the Communications Act” by generating public

41
See Rules and Policies on Foreign Participation in the U.S. Telecommunications Market, Report and Order and
Order on Reconsideration, 12 FCC Rcd 23891, 23919-21 (1997).

-27-

interests such as more efficient spectrum use, 42 fleet optimization and management 43 and the

deployment of an essential communication system for public safety, first responders and

emergency preparedness agencies. 44 The Commission has approved satellite transactions

because they enable the merging firms to realize economies of scale and scope, 45 increase

innovation 46 and generate significant cost savings. 47 Moreover, the Commission has concluded

that such mergers can enable satellite companies to achieve the scale, expertise, and resources

required to provide new and enhanced services at competitive prices. 48 As detailed below, the

consolidated operation of SkyTerra and Inmarsat will result in all of these pro-competitive

benefits and then some.

42
See Constellation, LLC, Carlyle PanAmSat I, LLC, Carlyle PanAmSat II, LLC, PEP PAS, LLC, and PEOP PAS,
LLC, Transferors, and Intelsat Holdings, Ltd., Transferee, Consolidated Application for Authority to Transfer
Control of PanAmSat Licensee Corp. and PanAmSat H-2 Licensee Corp., Memorandum Opinion and Order, 21
FCC Rcd 7368, 7391 (2006) (“PanAmSat/Intelsat Merger Order”).
43
Id. at 7390-7391; BCE Inc. and Loral Skynet Corp., Transferors/Assignors, and 4363205 Canada Inc., 4363213
Canada Inc., and Skynet Satellite Corp., Transferees/ Assignees, Application to Transfer Control or Assignment of
Licenses and Authorizations held by Telesat Canada, Able Infosat Communications, Inc., Loral Skynet Corp., and
Loral Skynet Network Servs., Inc. and Petition for Declaratory Ruling, Order, 22 FCC Rcd 18049, 18055-18056
(2007) (“BCE/Loral Skynet Merger Order”).
44
PanAmSat/Intelsat Merger Order, 21 FCC Rcd at 7391 and 7394.
45
General Electric Capital Corp. and SES Global S.A., Application for Consent to Transfer Control of Licenses and
Authorizations Pursuant to Sections 214(a) and 310(d) of the Communications Act and Petition for Declaratory
Ruling Pursuant to Section 310(b)(4) of the Communications Act, Order, 16 FCC Rcd 18878, (2001) (“GE/SES
Merger Order”); BCE/Loral Skynet Merger Order, at 18055; In the Matter of SBC Communications Inc. and AT&T
Corp. Applications for Approval of Transfer of Control, 20 FCC Rcd 18290,(2005) (“SBC/AT&T Merger Order”).
46
PanAmSat/Intelsat Merger Order, 21 FCC Rcd at 7386; SBC/AT&T Merger Order, 20 FCC Rcd at 18389.
47
Motient Corp. and Subsidiaries, Transferors, and Skyterra Communications, Inc., Transferee, Application for
Authority to Transfer Control of Mobile Satellite Ventures Subsidiary LLC, Order, 21 FCC Rcd 10198 (2006)
(“Motient/SkyTerra Order”).
48
E.g., PanAmSat/Intelsat Merger Order,21 FCC Rcd at 7375 (The merger would create a satellite company “with
the scale, expertise, and resources needed to pursue development of broadband by satellite at affordable prices that
are competitive with today’s cable model and DSL services.”); BCE/Loral Skynet Merger Order, 22 FCC Rcd at
18156 (determining that the merger would have a positive effect in terms of the quality of services or the provision
of new or additional services to consumers); see generally New Skies Satellites Holdings Ltd., Transferor, and SES
Global S.A., Transferee, Application to Transfer Control of Authorizations and Notification of Change to Permitted
Space Station List, Public Notice, 21 FCC Rcd 3194 (Int’l Bureau 2006) (“New Skies/SES Merger Order”).

-28-

A. The Proposed Merger Will Unlock the Full Promise of L-Band
Spectrum for MSS-ATC Services to Benefit Public Safety
Entities, People in Rural Areas, and the Public at Large
The L-band spectrum in which each of SkyTerra and Inmarsat currently operate

holds extraordinary promise, but full development of this valuable resource has yet to be

realized. Not the least of the new developments resulting from this transaction will be to

enhance and accelerate the creation of an integrated MSS-ATC network that will provide new

seamless and cost-effective wireless communications services. As the Commission has

recognized, such an integrated network would “enhance the ability of national and global

telecommunications systems to protect the public by offering ubiquitous service to law

enforcement, public aid agencies, and the public. . . .” 49 Such a service would be ideal for

public safety and homeland security organizations, as well as first responders, because it can

allow for communications to and from the public switched telephone network while also

providing Internet connections anywhere on the continent. By allowing seamless switching

between terrestrial and satellite components, the integrated network will work in times of

disaster when single-method networks are incapacitated. Such integrated satellite and

terrestrial service would be uniquely positioned to address the needs of public safety and

homeland security, while at the same time providing affordable, broadband communications to

the public from the largest cities to the most remote areas of the nation. Such hybrid satellite

and terrestrial service will further, as the Commission has recognized, result in “more efficient

use of spectrum and benefits not only MSS licensees but also consumers.” 50

49
In the Matter of Flexibility for Delivery of Communications by Mobile Satellite Service Providers in the 2 GHz
Band, the L-band, and the 1.6/2.4 GHz Bands, Memorandum Opinion and Order and Second Order on
Reconsideration, 20 FCC Rcd 4616, 4619 (2005) (“MSS Flexibility Order 2005”). .
50
In the Matter of Flexibility for Delivery of Communications by Mobile Satellite Service Providers in the 2 GHz
Band, the L-band, and the 1.6/2.4 GHz Bands, Report and Order and Notice of Proposed Rulemaking, 18 FCC Rcd
1962, 1977 (2003) (“MSS Flexibility R&O 2003”)

-30-

necessarily the outcome to the efficiency that can be achieved by a combined enterprise with

unified objectives. For example, while the Cooperation Agreement seeks to address coordination

issues in a forward-looking manner, technological advances, innovation, and public safety and

consumer requirements are constantly changing in ways that cannot possibly be entirely

foreseen.

The Commission recognized this problem in adjusting its rules in 2005 to facilitate the

development of ATC in the band. 53 In explaining the limitations as to what it could accomplish

by specific rules to foster ATC while protecting existing MSS services, the Commission stated,

“[w]e cannot predict what techniques may be invented or where such techniques will prove most

effective, in the MSS component or the ATC component of an MSS-ATC system.” 54 The

Commission therefore encouraged further private negotiations among the operators in an effort

to produce more “efficient interference levels than regulations based on largely hypothetical

cases.” 55

The parties have achieved much from the negotiations fostered by the Commission,

including agreement to use their best commercial efforts to negotiate revised satellite

coordination agreements as necessary to address changing technology and operational

requirements. 56 But as the experience of the Mexico City Memorandum of Understanding

demonstrates, 57 such ongoing arrangements among parties sharing use of spectrum with

divergent commercial interests are difficult to successfully implement long term and do not

53
MSS Flexibility Order 2005, 20 FCC Rcd 4616.
54
Id. at 4633.
55
Id.
56
Cooperation Agreement at p. 29.
57
Under the Mexico City Memorandum of Understanding, the L-band operators are supposed to meet annually to
adjust spectrum assignments to meet changing requirements, but such negotiations have not occurred since 1999.
MSS Flexibility Order 2005, at 4629 and n. 90.

-31-

necessarily ensure the most efficient outcome will result. Moreover, they do not lend themselves

to prompt resolution of pressing needs, as when emergency responders require an immediate

adjustment in spectrum assignments within the L-band or even when new technology creates a

window of opportunity.

While the parties have attempted to address the rebanding that will be necessary to

support ATC in their Cooperation Agreement, the complex mechanisms in that Agreement, the

associated financial and other conditions, and the multiple phased options and deadlines 58 reflect

at once the progress that has been made by such negotiations and the limitations that are inherent

to such agreements. As noted above, it is almost impossible to map out today the most efficient

path for transition to meet each party’s requirements, and even more so the public need, as those

requirements and needs, and technologies themselves are constantly and rapidly evolving.

In contrast, the proposed transaction will enable a combined enterprise, working in

concert with the respective administrations, to quickly make more efficient use of the L-band,

including as necessary for the rapid, cost-effective and price competitive deployment of MSS-

ATC and other future broadband solutions. Rather than trying to negotiate the path and pace of

that technology, the combined entity will have a unified incentive and ability to optimize the use

of all spectrum and orbital resources, along with the flexibility to manage spectrum and

resources most effectively. As such, the proposed transaction will enable the parties to achieve

far greater efficiencies than those achievable by the Cooperation Agreement or any other means.

58
Cooperation Agreement at pgs. 6-15.

-32-

B. The Proposed Transaction Will Create More Rapid, Lower Cost
Deployment of ATC to the Benefit of Rural and Public Safety Users as
well as Traditional Terrestrial Wireless Consumers

The successful introduction of MSS-ATC requires the development of integrated

satellite and terrestrial technologies on standard wireless handsets and other consumer devices

that are substantially similar to current PCS/cellular handsets in terms of aesthetics, cost, form

factor and functionality. To develop and bring the costs of such units down to the level enjoyed

by existing terrestrial wireless network operators and their customers, achieving economies of

scale in chipset and device manufacturing is a must.

The proposed transaction creates a unique ability to achieve scale economies necessary to

be price competitive with terrestrial wireless service. In particular, the consolidation of the

operations of SkyTerra and Inmarsat will provide economies of scale for chip and handset

manufacturers. The point is that, as a combined operation, SkyTerra and Inmarsat can dedicate

spectrum for particular purposes, without the uncertainty that can exist when spectrum is shared

among entities and without being subject to future shifts in assigned spectrum depending upon

the implementation of existing agreements, option exercises, and future coordination, etc.

Further, like other satellite transactions approved by the Commission, the proposed transaction

will result in an entity with a sufficiently large anticipated customer base to better attract chipset,

handset, and other equipment vendors interested in negotiating reasonable contracts as a result of

the creation of efficiencies in production costs. 59 Combined, the parties will be able to secure

larger volume discounts from suppliers, and pass those lower costs through to consumers in the

59
PanAmSat/Intelsat Merger Order, 21 FCC Rcd at 7391; see generally SBC/AT&T Merger Order, 20 FCC Rcd at
18388; see generally BCE/Loral Skynet Merger Order, at 18055; MSS Flexibility R&O 2003, 18 FCC Rcd at 1975
(recognizing that a handset that combines MSS and ATC functionality results in a “larger consumer market [which]
would, in turn allow providers to order larger production volumes, which further reduce the costs of producing
phones”).

-33-

form of lower end-user prices. As the Commission has recognized, large buyers typically are

able to negotiate significant discounts from hardware and software vendors. 60 In this way, the

transaction holds the potential to bring costs down for public safety users and speed the

deployment of MSS-ATC in rural areas across the nation.

MSS services will also benefit by creating a sufficient market to support the development

of more consumer friendly handsets at reduced cost. The Commission has acknowledged that

this expansion of satellite phone service into the mass market will “lead [ ] to economies of scale

and lower prices for consumers” 61 and also will “eliminate operational and transactional

difficulties and costs for MSS operators in negotiating separate terrestrial roaming

agreements.” 62 As a result of the anticipated “[u]rban penetration capability, lower-priced

phones, unified numbering, unified billing, and reduced transaction costs could reasonably be

expected to result in lower retail prices and greater consumer demand for MSS.” 63

C. The Transaction Will Generate Additional Operating Efficiencies

(1) More Efficient Use of Satellites and Orbital Resources

SkyTerra’s and Inmarsat’s anticipated fleet management activities would

create the opportunity to generate substantial efficiencies by transferring services to newer

satellites, optimizing usage of satellite network assets, and deploying higher-powered,

ATC-enhanced new satellites. Such efficiencies will, as the Commission has recognized in other

recent transactions involving the merger of satellite operators, allow for “greater redundancy”

and permit SkyTerra and Inmarsat to “maximize back-up capabilities” by repositioning their

60
See generally MSS Flexibility R&O 2003, 18 FCC Rcd at 1976.
61
MSS Flexibility Order 2005, 20 FCC Rcd at 4619.
62
Id.
63
MSS Flexibility R&O 2003, 18 FCC Rcd at 1977.

-35-

customer service and billing, IT services, sales and marketing, and other administrative

functions.

D. Existing Services

As much as new advances in services and technology are emphasized, it should

also be made clear that, should the transfer of control of Inmarsat occur, the applicants plan to

maintain Inmarsat’s commitments to Global Maritime Distress Safety System (“GMDSS”)

services as currently specified in the Public Services Agreement between IMSO and Inmarsat

and the continued evolution and enhancement of these services. The parties make a similar

commitment as to Ship Security Alert System (“SSAS”), Long Range Identification and

Tracking (“LRIT”), as well as Aeronautical Mobile Satellite Route Service (“AMS(R)S”) and

other aeronautical safety services. 68 Further, they commit to continuing to provide reliable

quality mobile satellite services to the U.S. government and the public at large.

More generally, the more efficient use of the L-band will make the combined

SkyTerra and Inmarsat better able to offer and make technologically more advanced traditional

MSS business and governmental communications products, while at the same time introducing

MSS-ATC services. That is because, by optimizing the use of the total spectrum and orbital

resources that SkyTerra and Inmarsat together would have available to their combined operation,

they would have greater resources, effectively more usable spectrum, than the two would have as

separately operated entities.

68
SkyTerra will also continue to abide by the protections it committed to in its ATC license application for Radio
Navigation Satellite Service (“RNSS”) protection.

-39-

Inmarsat also provides bulk capacity, with much of its bulk capacity revenue generated by the

U.S. Navy, again for maritime communications. In addition, Inmarsat provides significant

global service in aeronautical and land mobile high-speed data applications.

By contrast, SkyTerra operates primarily in North America, 81 including surrounding

coastal waters, where it currently provides only narrowband land mobile services, including

voice, packet data and private network services. SkyTerra does not provide trans-oceanic

maritime services, nor do its services include comparable aeronautical 82 or high-speed data

services. Thus, in primary segments served by Inmarsat, SkyTerra is not even a participant.

While SkyTerra and Inmarsat both support land-mobile services in North America, they

generally focus on different applications and operate in a highly competitive marketplace. For

example, SkyTerra’s voice service is enhanced by a push-to-talk feature for dispatch

communications among multiple users, which Inmarsat does not offer. As noted, SkyTerra

terminals support only low data speeds of 4.8 Kbps, suitable for faxes and text messages.

Inmarsat’s principal current-generation land-mobile service in North America is

”Broadband Global Area Network,” or “BGAN,” a high speed data service offering speeds up to

492 Kbps. BGAN is designed for internet access, multimedia file sharing, video broadcasting,

and high speed private network access in remote locations. While BGAN also supports voice

service, such voice service is ancillary to the high speed data applications.

With respect to satellite high speed data services for this application, Inmarsat competes,

not with SkyTerra which has no comparable offering, but with VSAT providers, like ViaSat,

Gilat, and Hughes, which provide users with over 1 Mbps on a mobile or transportable platform.

81
SkyTerra also provides limited service in northern South America, Central America, the Caribbean and Hawaii.
82
SkyTerra understands that a very few aeronautical units in North America may be served by its private network
service customers.

-41-

services. 84 Similarly as to private network capacity, there is a wide range of providers including

Iridium, Globalstar, Orbcomm and FSS operators.

In sum, with respect to those applications where SkyTerra and Inmarsat offer similar

services, comparable and substitutable services are offered by numerous other operators in either

MSS or other spectrum bands (i.e., Ku-, C- and VHF and UHF bands). In this regard, MSS

providers are facing increasing competition from FSS operators. As noted above, smaller

antennas and advanced technology are increasingly used by FSS/VSAT services to support

vehicle mounted services. Announcements of new services, based upon the use of other MSS

and FSS satellites, are reported almost weekly. 85 Existing and new services coming on line will

only increase competition with the North American asset tracking and other land mobile services

84
For example, companies like Numerex, Jasper Wireless and Aeris Communications all provide asset tracking
services similar to those provided by Qualcomm, Orbcomm, and others by using GSM and CDMA wireless
networks together with GPS. See Product information on the Numerex Network, available at
http://www.numerex.com/M2M-Solutions/Numerex-Networx.aspx; product information sheet on the Jasper
Wireless Network, available at http://www.jasperwireless.com/services.php; and product information on the Aeris
network system, available at http://www.aeris.net/m2m_services.html. Numerex offers asset tracking over both
terrestrial wireless and satellite networks, using Globalstar’s Simplex service for the satellite component. See
http://www.numerex.com/M2M-Solutions/Numerex-Networx.aspx (describing satellite services through Orbit-One
division); http://www.orbit-one.com/PDF/GSP-Simplex%20Coverage.pdf (showing coverage map for services
offered by Numerex’s Orbit-One division).
85
See, e.g., VT iDirect Helps with Panasonic’s Fly High Broadband, Satnews Daily (Jul. 9, 2008) (representing a
nexgen in-flight broadband solution over Intelsat’s global Ku-band system); Insight… The Times, They Are A
Changin’… FAST! SatMagazine.com (Jul. 2008) (covering mobile solutions offered by Thuraya, Intelsat, and SES
Global); Alaska Airlines and Southwest Airlines Support Row 44’s Application, Communications Daily at 12 (Jul. 2,
2008) (proposing use of Ku-band capacity from Horizons I, AMC 2 and AMC 9 to provide in-flight broadband
service); SingTel Signs SES New Skies Capacity Deal, Satellite Today (Jun. 18, 2008) (extending suite of maritime
VSAT solutions over New Skies’ NSS-7, NSS-703, and NSS-5 satellites); Transforming Satellite Broadband,
SatMagazine.com (Jun. 2008) (discussing significant increases in satellite broadband capacity); Iridium and Vizada
Supply a Boat Load of Solutions, Satnews Daily (Jun. 5, 2008) (describing different OpenPort applications over
Iridium’s network for shipping and fishing fleets around the world); Iridium Sees Strong Growth in Maritime
Business, Satellite Today (Jun. 4, 2008) (citing double-digit growth in subscriptions and usage in the active maritime
sector); Satlynx Launches New Set of Maritime Services, Satellite Today (Jun. 2, 2008) (representing a new set of
maritime VSAT services across its Ku-, extended Ku-, and C-band platforms); Land Comm Mobility Aided by
Explorer 727, Satnews Daily (May 22, 2008) (featuring new mobile high speed data terminals over Inmarsat system
with data speeds approaching 432 kbps); Intelsat, Panasonic Partner for Airline Broadband Service, Satellite Today
(May 6, 2008) (leveraging Intelsat’s GlobalConnex Network Broadband Service for on-demand mobile
communications); SpeedCast CEO Confident of Strong Early Take-up for Maritime Service, Satellite News (Apr. 7,
2008) (expanding service to 100 ships with new global maritime broadband service over AsiaSat and Eutelsat);
Thuraya Expands Maritime Product Distribution, Satellite Today (Mar. 24, 2008) (initiating ThurayaMarine
solution for small- and medium-sized sea vessels to boost revenues in maritime arena over Thuraya-3 satellite).

-43-

launched a new satellite and holds an authorization to provide ATC; and TerreStar, 87 which has a

satellite under construction and has an application for an ATC authorization pending before the

Commission. As prices of such services are reduced, they are anticipated to be competitive with

terrestrial wireless services, with each acting as a competitive constraint on the other service.

By contrast, Inmarsat has not pursued ATC on its satellite network. First, Inmarsat does

not have a license to construct an ATC network, nor has it applied for one. Second, Inmarsat’s

fleet, including a number of recently launched satellites, is not designed with sufficiently large

antennae or with the ability to concentrate satellite signal power over sufficiently small land

areas to provide services to wireless handsets the size of conventional cell phones, an essential

feature for mass market appeal.

In short, Inmarsat and SkyTerra not only face vibrant competition from numerous other

providers today, indeed more competition from other players than they do from each other, but

they will continue to do so in the future. Thus, a combination of Inmarsat and SkyTerra will not

adversely affect competition.

D. Department of Justice Determination

The stance taken by the U.S Department of Justice further demonstrates that

combining Inmarsat and SkyTerra will not adversely affect competition. As stated above, on

September 22, 2008, the 30 day Hart-Scott-Rodino waiting period for the Inmarsat transaction

expired without any action from the U.S. Department of Justice’s Antitrust Division; no second

request was issued.

87
As noted in Section II.A (3) of this Narrative, Harbinger has a minority, non-controlling interest in TerreStar.
TerreStar does and would continue to operate independently of SkyTerra and Inmarsat.

-44-

VII. PROCEDURAL MATTERS

A. Pending Applications and Petitions

During the Commission’s consideration of these applications and the period

required for the consummation of the proposed transactions following approval, the entities

control of which is to be transferred may file additional applications or petitions, and the

Commission may grant currently pending applications or petitions (the “Interim Period”).

Accordingly, consistent with Commission precedent, the applicants request that the Commission,

in acting upon these applications, include authority for the transfer of control to Harbinger of

(i) all applicable authorizations issued during the Interim Period; and (ii) all applicable

applications (including applications for STA), petitions, or other filings that are pending at the

time of consummation of the proposed transfer of control.

B. Request for Permit-But-Disclose Ex Parte Status

The applicants request that the Commission designate the ex parte status of the

transfer of control application proceedings as “permit-but-disclose” under the Commission’s

rules. See 47 C.F.R. §§ 1.1200 et seq. Doing so will facilitate the development of a complete

record and is consistent with Commission decisions in other similar transactions. 88

VIII. CONCLUSION

For the foregoing reasons, Commission consent to the transfer of control of Inmarsat

Hawaii Inc. and Inmarsat, Inc. to Harbinger is hereby requested.

88
See, e.g., Stratos Transfer of Control Proceeding, 2008 FCC Lexis 5360, DA 08-1659.

Attachment A – List of Licenses

Approval is requested for the transfer of control of the following licenses and
authorizations held by subsidiaries of Inmarsat plc.:

Licenses Held by Inmarsat:

Licensee Authorization 1
Special Temporary Authority (Earth
Station)
Inmarsat Hawaii Inc. KA25
E080059
Experimental License
Inmarsat, Inc. WD2XWM

1All satellite earth station operations will be pursuant to special temporary authority until
consent to transfer control of associated earth station licenses has been obtained.

ATTACHMENT B

PETITION FOR DECLARATORY RULING

Introduction and Summary

This petition for declaratory ruling (“PDR”) 1 accompanies applications seeking the

Commission’s consent to transfer control of SkyTerra Subsidiary LLC (“SkyTerra Sub”) from

SkyTerra Communications, Inc. (“SkyTerra”) to Harbinger Capital Partners Master Fund I, Ltd.

(“Master Fund”) and Harbinger Capital Partners Special Situations Fund, L.P. (“Special

Situations Fund”) (collectively referred to as “Harbinger” or the “Harbinger Funds”). 2 The

parties to the applications respectfully request a declaratory ruling from the Commission,

pursuant to Section 310(b)(4) of the Communications Act of 1934, as amended, that it is

consistent with the public interest for Harbinger and any commonly-controlled funds 3 to own,

directly or indirectly, up to 100% of the issued and outstanding stock of SkyTerra, which has a

controlling interest in SkyTerra Sub. 4

In addition, in order to account for the possibility that Harbinger and commonly-

controlled funds will hold less than 100% of the issued and outstanding stock of SkyTerra

following consummation of the proposed transfer of control, 5 the parties request a declaratory

1
This PDR is a revised version of a PDR that was filed on August 22, 2008.
2
Contemporaneously filed applications seek the Commission’s consent to transfer control of
Inmarsat Hawaii Inc. and Inmarsat, Inc. (collectively, “Inmarsat”). This PDR is attached for informational purposes
as Attachment B to the narrative accompanying the Inmarsat transfer of control applications.
3
As stated in the transfer of control applications, it is possible that Harbinger Capital Partners Fund
I, L.P. and Harbinger Co-Investment Fund, L.P., which are under the same control as the Master Fund and the
Special Situations Fund, will have an ownership interest in SkyTerra.
4
SkyTerra wholly owns SkyTerra L.P., a Delaware limited partnership, which wholly owns
SkyTerra Sub, a Delaware corporation. SkyTerra Sub holds various common carrier licenses as well as
authorizations to provide common carrier services pursuant to Section 214 of the Communications Act.
5
It is likely that Harbinger’s interest in SkyTerra will be below 100% and that some or all of the
current non-Harbinger shareholders of SkyTerra will continue to have an interest in the company. The precise level
of Harbinger’s post-closing interest, however, will depend on market conditions and other factors at closing and
therefore cannot be determined at this time. For similar reasons, it is unknown at present what the relative levels of
ownership will be as between the Master Fund and the Special Situations Fund. Out of an abundance of caution, the

ruling permitting ownership, subject to the qualification in the sentence that follows, of up to

25% of SkyTerra’s equity and voting stock by foreign investors that are not identified in this

PDR. The parties are not, however, seeking authority that would permit any foreign investor that

is not identified in this PDR to acquire control of SkyTerra, or to acquire an equity and/or voting

interest in SkyTerra that exceeds 25%, without obtaining additional approval from the

Commission.

The Commission already has made a preliminary determination that it is consistent with

the public interest for Harbinger to have a substantial interest in SkyTerra. Last year, the

Commission released an Order and Declaratory Ruling granting Harbinger interim authority

pursuant to Section 310(b) to have an up to 49.99% equity interest and an up to 49.99% voting

interest in SkyTerra. 6 Harbinger has a pending request for the same relief on a permanent basis. 7

The parties demonstrate below that their proposal for Harbinger to increase its interest in

SkyTerra to up to 100% is supported by good cause. In particular, they show that the requested

declaratory ruling is warranted under the Commission’s policies because: (1) a U.S. citizen

controls the Master Fund and the Special Situations Fund; (2) each of the Harbinger Funds has

its principal place of business in the United States or a WTO member country; and (3) all but a

de minimis portion of the investments in the Harbinger Funds are made by investors from the

United States and other WTO Member countries.

parties are seeking authority herein for the range of possible foreign ownership levels associated with Harbinger’s
ownership of up to 100 percent of SkyTerra.
6
Mobile Satellite Ventures Subsidiary LLC and SkyTerra Communications, Inc., Order and
Declaratory Ruling, FCC 08-77 (March 7, 2008).
7
See ISP-PDR-20080129-00002.

2

In support of this PDR, the parties are attaching the following:

• Annex 1 provides information concerning the citizenship of investors in the Harbinger

Funds.

• Annex 2 provides principal place of business showings.

• Annex 3 consists of diagrams depicting the ownership of the Harbinger Funds.

• Annex 4 describes the control that Harbinger’s management has over sales of interests in

the Master Fund and the Special Situations Fund so that management can monitor and

enforce continuing compliance with Section 310(b).

• Annex 5 depicts the ownership structure of SkyTerra Sub that is proposed in the transfer

of control applications.

• Annex 6 depicts the foreign ownership of SkyTerra by the Master Fund, the Special

Situations Fund, Harbinger Capital Partners Fund I, L.P. (“Partners Fund”), TerreStar

Corporation, Well Fargo Bank, National Association (“Wells Fargo”), and various

Apollo funds.

• Appendix 1 identifies the interests in SkyTerra held by the Master Fund, the Special

Situations Fund, and the Partners Fund.

• Appendix 2 identifies the interests in SkyTerra that Harbinger has agreed to purchase but

that are being held in escrow pending action on the application seeking the Commission’s

consent to transfer control of SkyTerra Sub to Harbinger. These shares were placed in

escrow in connection with: (1) Harbinger’s acquisition of SkyTerra shares in April 2008

from various Apollo funds 8 ; (2) Harbinger’s acquisition of SkyTerra shares in September

8
The shares that were placed in escrow in connection with the April 2008 transaction, all of which
are voting shares, amount to 0.91% of SkyTerra’s voting stock and 0.41% of SkyTerra’s total equity.

3

2008 from TerreStar Corporation 9 ; and (3) Wells Fargo’s acquisition of SkyTerra shares

in January and February 2009. 10

Legal Standard

Section 310(b)(4) limits the ownership interests that foreign investors may have in any

corporation that controls the licensee of a common carrier radio station. Under Section

310(b)(4), no more than 25% of the capital stock of the corporation controlling the licensee may

be owned or voted by foreign citizens and their representatives, foreign governments and their

representatives, and corporations organized under the laws of a foreign country. However,

Section 310(b) authorizes the Commission to permit foreign investment in excess of this 25%

limit if the Commission determines that the foreign investment is not inconsistent with the public

interest.

The Commission has adopted a presumption that foreign investment by individuals or

entities from WTO Member countries should be permitted without limit under Section

310(b)(4). 11 It uses a “principal place of business” test to determine whether the nationality or

“home market” of a foreign investor is a WTO Member. 12

9
The shares that were placed in escrow in connection with the September 2008 transaction, all of
which are non-voting shares, and all of which have been transferred to Well Fargo, amount to 7.27% of SkyTerra’s
total equity.
10
The shares that were placed in escrow in connection with the January and February 2009
transactions, all of which are held by Wells Fargo, amount to 3.35% of SkyTerra’s voting stock and 1.50% of
SkyTerra’s total equity.
11
See Rules and Policies on Foreign Participation in the U.S. Telecommunications Market, Report
and Order and Order on Reconsideration, FCC 97-398, 12 FCC Rcd 23891, 23896 ¶ 9, 23913 ¶ 50, and 23940 ¶¶
111-112 (1997) (“Foreign Participation Order”), Order on Reconsideration, FCC 00-339, 15 FCC Rcd 18158
(2000).
12
Foreign Participation Order, 12 FCC Rcd at 23941 ¶ 116 (citing Market Entry and Regulation of
Foreign-Affiliated Entities, Report and Order, FCC 95-475, 11 FCC Rcd 3873, 3951 ¶ 207 (1995)).

4

Ownership of Harbinger Funds

The diagrams in Annex 3 depict the ownership of the Master Fund and the Special

Situations Fund. This ownership is summarized below.

Master Fund. The Master Fund is a Cayman Islands Exempted Company. Because the

Cayman Islands are a British protectorate, they are deemed to be a WTO signatory. Harbinger

Capital Partners Offshore Fund I, Ltd. (“Offshore Feeder”), a Cayman Islands entity, and

Cayman Islands entities co-owned by the Offshore Feeder and redeemed investors, collectively

own 83.72% of the voting shares of Master Fund. The remaining 16.28% of the voting shares of

Master Fund are owned by Harbinger Capital Partners Fund I, L.P., a Delaware limited

partnership, and Delaware entities co-owned by Harbinger Capital Partners Fund I, L.P., and

redeemed investors.

Annex 1 provides information concerning the citizenship of investors in the Master Fund.

All of the direct and indirect holders of the Master Fund are either U.S. citizens or citizens of

WTO signatories, except for: (1) seven investment funds from the Bahamas holding in the

aggregate interests amounting to 0.53% in the Offshore Feeder; and (2) three investment funds

from the Bahamas that collectively have a .01% interest in a Cayman entity that is co-owned by

the Offshore Feeder and redeemed investors and a .01% interest in a Delaware entity that is co-

owned by Harbinger Capital Partners Fund I, L.P., and redeemed investors.

Special Situations Fund. The Special Situations Fund is a Delaware limited partnership.

The general partner of the Special Situations Fund is Harbinger Capital Partners Special

Situations GP, LLC, a Delaware limited liability company, which has management control over

the Special Situations Fund. All of the limited partners are U.S. citizens, except for:

(1) Harbinger Capital Partners Special Situations Offshore Fund, L.P. (“Special Offshore Fund”),

5

which is a Cayman Islands limited partnership holding a 62.25% equity interest in the Special

Situations Fund; and (2) Harbinger Capital Partners SSF CFF, Ltd., which is a Cayman Islands

Exempted Company holding a 1.62% equity interest in the Special Situations Fund. The general

partner of Special Offshore Fund is a Delaware limited liability company, which, in turn, is

wholly owned by another Delaware limited liability company that is wholly owned by Philip A.

Falcone. The limited partners of the Special Offshore Fund are widely dispersed and all have a

less than 10% interest in the Special Situations Fund.

Annex 1 provides information concerning the citizenship of investors in the Special

Situations Fund. All of the ownership interests are held by U.S. citizens or citizens of WTO

signatories.

Control of Harbinger Funds

A U.S. citizen, Philip A. Falcone, has ultimate control of the Harbinger Funds.

Master Fund. The Master Fund and the Offshore Feeder have delegated broad

investment management authority under an Investment Management Agreement to Harbinger

Capital Partners LLC, a Delaware LLC (the “Offshore Manager”). Philip A. Falcone has a 100%

voting interest in the Offshore Manager. 13

Over 80% of the Master Fund’s shares, all of which are voting shares, are held by

Harbinger Capital Partners Offshore Fund I, Ltd. (the “Offshore Feeder”) and entities co-owned

by the Offshore Feeder and redeemed investors. No investor owns more than 50% of the voting

securities of the Offshore Feeder or more than 50% of the voting securities of the entities co-

owned by the Offshore Feeder and redeemed investors.

13
Mr. Falcone has a 50% voting interest personally and is the sole member of Harbinger Holdings,
LLC, which also has a 50% voting interest.

6

Three persons – a US citizen, a UK citizen, and a citizen of Ireland - serve as the

directors of both the Master Fund and the Offshore Feeder. Any director can be removed and

replaced by majority vote of either the shareholders or the directors.

Special Situations Fund. The Special Situations Fund is a Delaware limited partnership

whose General Partner is Harbinger Capital Partners Special Situations GP, L.L.C. (“SSGP”), a

Delaware LLC. Philip A. Falcone has a 100% voting interest in SSGP: 14

Principal Places of Business

Annex 2 consists of principal place of business showings for the Master Fund, the Special

Situations Fund, Harbinger Capital Partners Offshore Fund I, Ltd., and Harbinger Capital

Partners Special Situations Offshore Fund, L.P. In every case, the principal place of business is

either the United States or a country that is a WTO signatory.

Conclusion

Under the Commission’s policies and precedents implementing Section 310(b)(4) of the

Communications Act, up to 100% ownership of SkyTerra by Harbinger would be consistent with

the public interest because: (1) a U.S. citizen controls the Master Fund and the Special

Situations Fund; (2) each of the Harbinger Funds has its principal place of business in the United

States or a WTO member country; and (3) all but a de minimis portion of the investments in the

Harbinger Funds are made by investors from the United States and other WTO Member

countries.

14
Mr. Falcone has a 50% voting interest personally and is the sole member of Harbinger Holdings,
LLC, which also has a 50% voting interest.

7

Annex 1 to Petition for Declaratory Ruling:
Investor Interests in the Harbinger Funds
Harbinger Capital Partners Offshore Fund I, Ltd.
Category of Investor Aggregate Country of Citizenship/Country of
% Equity Organization/Principal Place of Business of
Beneficial Owner of Equity Interest
Individuals that are citizens of the 0.05% United States
United States
Individuals that are citizens of 0.37% Canada, China, South Africa,
foreign countries United Kingdom, Switzerland
Banks, insurance companies, pension 4.20% United States
plans and foundations/endowments
organized in the United States and
controlled by U.S. citizens
Banks, insurance companies, pension 19.46% Australia, Bermuda, Cayman
plans and foundations/endowments Islands, Channel Islands, China,
controlled by foreign citizens or Finland, Hong Kong, Ireland, Isle
organized in foreign countries of Man, Luxembourg, Norway,
Sweden, Switzerland, France,
The Netherlands, United
Kingdom
Private equity and mutual funds that 0.0% United States
are organized in the United States
and have their principal place of
business in the U.S.
Private equity and mutual funds that 0.0%
are organized in a foreign country or
have their principal place of business
in a foreign country
Any investors that do not fall into 0.66% United States
one of the foregoing categories that
are organized in the United States
and have their principal place of
business in the U.S.
Any investors that do not fall into 75.26% Arab Emirates, Australia,
one of the foregoing categories that Bermuda, Brazil, British Virgin
are organized in a foreign country or Islands, Canada, Cayman
have their principal place of business Islands, Channel Islands, Chile,
in a foreign country China, France, Hong Kong, Italy,
Isle of Man, Ireland, Japan,
Luxembourg, Norway, Panama,
Portugal, Singapore, Spain,
Sweden, Switzerland,
Netherlands Antilles, The
Bahamas, The Netherlands,
United Kingdom

Annex 1 to Petition for Declaratory Ruling:
Investor Interests in the Harbinger Funds

Harbinger Capital Partners Fund I, L.P.
Category of Investor Aggregate Country of Citizenship/Country of
% Equity Organization/Principal Place of
Business of Beneficial Owner of
Equity Interest
Individuals that are citizens of the 6.74% United States
United States
Individuals that are citizens of 0.0%
foreign countries
Banks, insurance companies, pension 13.01% United States
plans and foundations/endowments
organized in the United States and
controlled by U.S. citizens
Banks, insurance companies, pension 0.0%
plans and foundations/endowments
controlled by foreign citizens or
organized in foreign countries
Private equity and mutual funds that 0.0%
are organized in the United States
and have their principal place of
business in the U.S.
Private equity and mutual funds that 0.0%
are organized in a foreign country or
have their principal place of business
in a foreign country
Any investors that do not fall into 80.25% United States
one of the foregoing categories that
are organized in the United States
and have their principal place of
business in the U.S.
Any investors that do not fall into 0.0%
one of the foregoing categories that
are organized in a foreign country or
have their principal place of business
in a foreign country

2

Annex 1 to Petition for Declaratory Ruling:
Investor Interests in the Harbinger Funds

Harbinger Capital Partners Special Situations Fund, L.P.
Category of Investor Aggregate Country of Citizenship/Country of
% Equity Organization/Principal Place of
Business of Beneficial Owner of
Equity Interest
Individuals that are citizens of the 5.90% United States
United States
Individuals that are citizens of 0.0%
foreign countries
Banks, insurance companies, pension 3.98% United States
plans and foundations/endowments
organized in the United States and
controlled by U.S. citizens
Banks, insurance companies, pension 0.0%
plans and foundations/endowments
controlled by foreign citizens or
organized in foreign countries
Private equity and mutual funds that 0.0% United States
are organized in the United States
and have their principal place of
business in the U.S.
Private equity and mutual funds that 0.0%
are organized in a foreign country or
have their principal place of business
in a foreign country
Any investors that do not fall into 25.77% United States
one of the foregoing categories that
are organized in the United States
and have their principal place of
business in the U.S.
Any investors that do not fall into 64.35% Cayman Islands 1
one of the foregoing categories that
are organized in a foreign country or
have their principal place of business
in a foreign country

1 Information regarding the investors in this fund is set forth on p. 4 of this Annex 1.

3

Annex 1 to Petition for Declaratory Ruling:
Investor Interests in the Harbinger Funds

Harbinger Capital Partners Special Situations Offshore Fund, L.P.
Category of Investor Aggregate Country of Citizenship/Country of
% Equity Organization/Principal Place of
Business of Beneficial Owner of
Equity Interest
Individuals that are citizens of the 0.12% United States
United States
Individuals that are citizens of 0.36% Channel Islands, Germany,
foreign countries Switzerland
Banks, insurance companies, pension 14.04% United States
plans and foundations/endowments
organized in the United States and
controlled by U.S. citizens
Banks, insurance companies, pension 17.44% Cayman Islands, Finland,
plans and foundations/endowments Luxembourg, Netherland
controlled by foreign citizens or Antilles, Switzerland, The
organized in foreign countries Netherlands,
Private equity and mutual funds that 0.0% United States
are organized in the United States
and have their principal place of
business in the U.S.
Private equity and mutual funds that 0.0%
are organized in a foreign country or
have their principal place of business
in a foreign country
Any investors that do not fall into 1.97% United States
one of the foregoing categories that
are organized in the United States
and have their principal place of
business in the U.S.
Any investors that do not fall into 66.07% British Virgin Islands, Channel
one of the foregoing categories that Islands, Canada, Cayman
are organized in a foreign country or Islands, Finland, Germany,
have their principal place of business Gibraltar, Guernsey, Ireland,
in a foreign country Italy, Liechtenstein, Luxembourg,
Norway, Panama, Switzerland,
The Netherlands

4

Annex 1 to Petition for Declaratory Ruling:
Investor Interests in the Harbinger Funds

Harbinger Capital Partners SSF CFF Fund, LTD
Category of Investor Aggregate Country of Citizenship/Country of
% Equity Organization/Principal Place of
Business of Beneficial Owner of
Equity Interest
Individuals that are citizens of the 0.0%
United States
Individuals that are citizens of 0.0%
foreign countries
Banks, insurance companies, pension 0.0%
plans and foundations/endowments
organized in the United States and
controlled by U.S. citizens
Banks, insurance companies, pension 20.41% Cayman Islands
plans and foundations/endowments
controlled by foreign citizens or
organized in foreign countries
Private equity and mutual funds that 0.0%
are organized in the United States
and have their principal place of
business in the U.S.
Private equity and mutual funds that 0.0%
are organized in a foreign country or
have their principal place of business
in a foreign country
Any investors that do not fall into 35.45% United States
one of the foregoing categories that
are organized in the United States
and have their principal place of
business in the U.S.
Any investors that do not fall into 44.14% Cayman Islands
one of the foregoing categories that
are organized in a foreign country or
have their principal place of business
in a foreign country

5

Annex 2 to Petition for Declaratory Ruling:
PRINCIPAL PLACE OF BUSINESS SHOWINGS

Harbinger Capital Partners Master Fund I, Ltd.

(i) Country of organization:
CAYMAN ISLANDS

(ii) Citizenship of investment principals, officers and directors:
UNITED STATES, IRELAND, UNITED KINGDOM

(iii) Location of world headquarters:
IRELAND

(iv) Location of tangible properties:
N/A

(v) Location of greatest sales and/or revenues:
N/A

Harbinger Capital Partners Special Situations Fund, L.P.

(i) Country of organization:
UNITED STATES

(ii) Citizenship of investment principals, officers and directors:
UNITED STATES

(iii) Location of world headquarters:
UNITED STATES

(iv) Location of tangible properties:
N/A

(v) Location of greatest sales and/or revenues:
N/A

-2-

Harbinger Capital Partners Offshore Fund I, Ltd.

(i) Country of organization:
CAYMAN ISLANDS

(ii) Citizenship of investment principals, officers and directors:
UNITED STATES, IRELAND, UNITED KINGDOM

(iii) Location of world headquarters:
IRELAND

(iv) Location of tangible properties:
N/A

(v) Location of greatest sales and/or revenues:
N/A

Harbinger Capital Partners Special Situations Offshore Fund, L.P.

(i) Country of organization:
CAYMAN ISLANDS

(ii) Citizenship of investment principals, officers and directors:
UNITED STATES

(iii) Location of world headquarters:
IRELAND

(iv) Location of tangible properties:
N/A

(v) Location of greatest sales and/or revenues:
N/A

-3-

Harbinger Capital Partners SSF CFF, Ltd.

(i) Country of organization:
CAYMAN ISLANDS

(ii) Citizenship of investment principals, officers and directors:
UNITED STATES, IRELAND, UNITED KINGDOM

(iii) Location of world headquarters:
IRELAND

(iv) Location of tangible properties:
N/A

(v) Location of greatest sales and/or revenues:
N/A

Annex 3 MASTER FUND OWNERSHIP DIAGRAM

11.40%
Michael D. Luce
U.S. Citizen
Raymond J. Harbert
U.S. Citizen Less than 10% Owners
All U.S. Citizens
54.98%

11.98%**

Less than 10% Owners Philip A. Falcone HMC Investors, L.L.C.
All U.S. Citizens U.S. Citizen (NY LLC)

Managing
28.02%** Member 100% 40%*
Seven Investment Funds
from the Bahamas Managing
Harbinger Holdings, Member 53% Equity* Limited Partners are
(Non-WTO) 53% Equity**
LLC 0% Equity 50% Voting widely dispersed U.S.
50% Voting
(DE LLC) 50% Voting Citizens all below 10%

0.53% Harbinger Capital Partners
Ownership is 50% Voting GP, L.L.C. 83.70%
widely dispersed U.S. Managing Member (DE LLC)
and WTO Citizens
all below 10%
GP 16.3%
99.47% Harbinger Capital Partners Less than 10%
LLC Owners
(DE LLC) All U.S. Citizens
Harbinger Capital Partners Investment Manager Harbinger Capital Partners
Offshore Fund I, Ltd. No Equity Fund I, L.P.
(Cayman Islands (DE Limited Partnership)
Exempted Company) 59.6%
Redeemed Redeemed
42.27% Investors++ Investors++
56.6% 53.9% 60.3% 8.61%
Investment 40.4%
46.1%
Manager
Redeemed Harbinger Class L Holdings No Equity Redeemed
Harbinger Class L Holdings
Investors++ (Cayman), Ltd. Investors++
(U.S.), LLC
(Cayman Islands
(DE LLC)
43.4% Exempted Company) 39.7%

2.56% 0.47%
Harbinger Class PE Holdings
Harbinger Class PE Holdings
(Cayman), Ltd.
(U.S.) Trust
(Cayman Islands
(DE Statutory Trust)
Exempted Company) Harbinger Capital Partners
38.9% Master Fund, Ltd.*** 7.2%
(Cayman Islands
Exempted Company)

Annex 3 SPECIAL SITUATIONS FUND OWNERSHIP DIAGRAM

Raymond J. Harbert Michael D. Luce
U.S. Citizen U.S. Citizen

54.98% 11.40%

Less than 10% Owners
All U.S. Citizens

Philip A. Falcone HMC Investors, L.L.C.
U.S. Citizen (NY LLC)

40%*
53% Equity*
Managing 50% Voting
Member
100%

Less than 10% Owners
Harbinger Holdings,
All U.S. Citizens
LLC
Limited Partners (DE LLC)
Widely Dispersed U.S. and
WTO Citizens
All Below 10% in Special Fund Managing Managing 7%
Member Member
100% 0% Equity
100%
50% Voting

Harbinger Capital Partners Special
Harbinger Capital Partners Special
Situations Offshore GP, L.L.C.
Situations GP, L.L.C.**
(DE LLC)
(DE LLC)

General Partner
No Equity
General
Partner Harbinger Capital Partners
Harbinger Capital Partners Special 9.3% SSF CFF, Ltd.
Situations Offshore Fund, L.P.
(Cayman Islands
(Cayman Islands Limited Partnership)
Exempted Company)

Harbinger Capital Partners Special
Situations Fund, L.P.
1.62% Limited Partners
62.25% (DE Limited Partnership) Widely Dispersed U.S. Citizens
Limited Partner All Below 10% in Special Fund
26.83%

* In 2009 and 2010, as the asset value and performance returns of the fund increase, Philip A. Falcone’s equity percentage increases and HMC Investors, L.L.C.’s equity percentage decreases. In 2011,
Philip A. Falcone’s equity percentage will be 73% and HMC Investors, L.L.C.’s equity percentage will be 20%. In 2012, Philip A. Falcone’s equity percentage will be 78% and HMC Investors, L.L.C.’s
equity percentage will be 15%. Thereafter, Philip A. Falcone’s equity percentage will be 93% and HMC Investors, L.L.C.’s equity percentage will be 0%.
** Until such time as the investors in the Special Situations Fund have had the opportunity to redeem their interests, the consent of HMC-New York, Inc., which was formerly the Managing Member of, and
had a 50% voting interest in, Harbinger Capital Partners Special Situations GP, L.L.C. (“Special Situations GP”), will be required to take certain actions with respect to Special Situations GP.

Annex 4 to Petition for Declaratory Ruling:
SALE RESTRICTIONS

Harbinger’s management has the ability to prevent limited partners from selling

their interests in the Master Fund and the Special Fund to third parties if the sales

would cause foreign ownership to exceed the levels permitted under Section 310(b) of

the Communications Act and declaratory rulings issued thereunder. Sales of limited

partnership interests in any of the following companies, and such sales are rare, are

subject to approval by Harbinger: Harbinger Capital Partners Fund I, L.P.; Harbinger

Capital Partners Special Situations Fund, L.P.; and Harbinger Capital Partners Special

Situations Offshore Fund, L.P. Similarly, sales of shares in Harbinger Capital Partners

Offshore Fund I, Ltd. are subject to approval by Harbinger.

Annex 5 to Petition for Declaratory Ruling:
PROPOSED CONTROL OF SKYTERRA SUB BY THE HARBINGER FUNDS

Master Fund
Special Fund

Controlling Interest
Up to
100% Equity
100% Voting

SkyTerra

100% Equity
100% Voting
100% Equity
0% Voting

SkyTerra GP

0% Equity
100% Voting

SkyTerra LP

100% Equity
100% Voting

SkyTerra Sub

ANNEX 6:
FOREIGN OWNERSHIP OF SKYTERRA BY THE HARBINGER FUNDS, TERRESTAR CORPORATION, WELLS
FARGO, AND APOLLO

Partners Fund
Wells Fargo Bank, National Association**
Equity in SkyTerra: 14.18%
Voting in SkyTerra: 2.08% Equity in SkyTerra: 8.77%
TerreStar Corporation*
Voting in SkyTerra: 3.35%
Foreign Equity: 0% Equity in SkyTerra: 0%
Foreign Voting: 0% Foreign Equity: 0%
Voting in SkyTerra: 0%
Foreign Voting: 0%
Foreign Equity: 0%
Apollo Funds** Foreign Voting: 0%
Equity in SkyTerra: 0.41%
Voting in SkyTerra: 0.91% Other Shareholders

Foreign Equity: De minimis*** Equity in SkyTerra: 41.73%
Foreign Voting: De minimis*** Voting in SkyTerra: 47.70%

SkyTerra Communications

Foreign Equity by SkyTerra Shareholders Shown = 18.51%
Foreign Voting by SkyTerra Shareholders Shown = 29.87%

100% Equity
100% Voting
Master Fund 100% Equity
0% Voting Special Fund
Equity in SkyTerra: 18.51%
Voting in SkyTerra: 29.87% Equity in SkyTerra: 16.40%
Voting in SkyTerra:16.09%
SkyTerra GP
Foreign Equity: 18.51%
Foreign Voting: 29.87% Foreign Equity: 0%
Foreign Voting: 0%

0% Equity
100% Voting

SkyTerra LP

100% Equity
100% Voting

SkyTerra Sub

__________________
* Through Motient Venture Holdings.
** Shares held in escrow.
*** In Mobile Satellite Ventures, LLC and SkyTerra Communications, Inc., Order and Declaratory Ruling, FCC 08-77 (Mar. 7, 2008),
Attachment 2, the foreign ownership in SkyTerra Communications attributable to the Apollo Funds was shown to be 0.63% foreign equity and
1.20% foreign voting. Since that time, the ownership interest of the Apollo Funds in SkyTerra Communications has decreased substantially.

Appendix 1

Harbinger Ownership in Master Fund Partners Fund Special Fund Total
SkyTerra Communications

Voting Equity 29.87% 2.08% 16.09% 48.04%

Total Equity 18.51% 14.18% 16.40% 49.09%

Appendix 2

SkyTerra Communications Shares to be Shares to be Shares to be Transferred Total
Shares Transferred to Transferred to to
in Escrow Master Fund Partners Fund Special Situations Fund
____
Voting Escrow 3.16% 1.10% 4.26%
____
Total Escrow 6.26% 2.92% 9.18%

Attachment C – U.K. Panel Case

Lyonnaise des Eaux for the Northumbrian Water Group

Attachment D, Chart #1
HARBINGER’S CURRENT (NON-CONTROLLING) INTERESTS IN SKYTERRA SUB, INMARSAT HAWAII, AND INMARSAT, INC.

Harbinger Master Fund
Harbinger Special Fund
Harbinger Partners Fund*

Non-Controlling
Interest
Up to Non-Controlling Interest
49.99% Equity 29% Voting (approx.)
49.99% Voting 29% Equity (approx.)

SkyTerra

100% Equity
100% Equity 100% Voting
0% Voting

Inmarsat
SkyTerra GP

0% Equity 100% Equity
100% Voting 100% Voting

SkyTerra LP

100% Equity Inmarsat Hawaii
100% Voting and
Inmarsat, Inc.
SkyTerra Sub

______
* As set forth in the Narrative, it is contemplated that interest of Harbinger Partners Fund in SkyTerra would be absorbed by the other listed Harbinger funds by the time of consummation of either transaction.

Attachment D, Chart #2
HARBINGER’S PROPOSED CONTROLLING INTEREST IN SKYTERRA SUB AND NON-CONTROLLING INTEREST
IN INMARSAT HAWAII AND INMARSAT, INC.
(Intermediate Position)

Harbinger Master Fund
Harbinger Special Fund

Controlling Interest
Up to Non-Controlling Interest
100% Equity 29% Voting (approx.)
100% Voting 29% Equity (approx.)

SkyTerra

100% Equity
100% Equity 100% Voting
0% Voting

Inmarsat
SkyTerra GP

0% Equity 100% Equity
100% Voting 100% Voting

SkyTerra LP

Inmarsat Hawaii
100% Equity
and
100% Voting
Inmarsat, Inc.

SkyTerra Sub

Attachment D, Chart #3
HARBINGER’S PROPOSED CONTROLLING INTERESTS IN SKYTERRA SUB, INMARSAT HAWAII, AND INMARSAT, INC.*

Harbinger Master Fund
Harbinger Special Fund

Controlling Interest
Up to
100% Equity
100% Voting

SkyTerra Potential SkyTerra
Subsidiary
Controlling
Interest
Up to
100% Equity 100% Equity
100% Equity 100% Voting 100% Voting
0% Voting

Inmarsat
SkyTerra GP

0% Equity 100% Equity
100% Voting 100% Voting

SkyTerra LP

100% Equity
100% Voting
Inmarsat Hawaii
and
SkyTerra Sub Inmarsat, Inc.

_______
* As discussed in the Narrative, the exact structure of the takeover has not been determined. As reflected in this Exhibit, for example, SkyTerra’s interests in Inmarsat could run through a to be created
subsidiary of SkyTerra.

Document Created: 2009-03-27 13:59:23
Document Modified: 2009-03-27 13:59:23

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