Attachment letter

letter

LETTER submitted by TMI/TerreStar

letter

2005-10-12

This document pretains to SAT-PPL-20050926-00184 for Permitted List on a Satellite Space Stations filing.

IBFS_SATPPL2005092600184_459736

Received OCT 14 2005 October 12, 2005 Filed Blectronisally Poicy Brans RECEIVED Marlene H. Dortch, Secretary .. Intemational Bureau oct 1 2 2005 Federal Communications Commission 445 12th Street, S.N. communicatinsconnison Washinston, D.C. 20554 90 Cc sn Re: 1B Dockets 05—220, 05—221 File No. AT—PPL—20050926—00184 Dear Ms. Dortch: Intmarsat‘s September 28, 2005 response to the September 14, 2005 submission by TMITerrestar‘ is largely a reprise of familiae themes, It does not require a lengthy reply. We file this briefresponse only to address four points raised by Inmarsat. 1. MSS Competition. Inmarsat claims that authorizine a third 2 GHz MSS provider would enhance competition. Exactly the opposite is true. TMUTerreStar has shown in these proceedings that there is insufficient spectrum to support three fully competitive 2 GHz MSS systems, As noted economist Bruce M. Owen of Stanford University has explained, iding the limited amount of spectrum available for MSS in the 2 GHz band among three lieensees would lead toa less competitive MSS industry. "It is important to remember that the strength of competition in a particular market may not depend only on the number of competitors," Dr. Owen notes. "Two strong firms in some markets may compete more effectively than three weaker ones:"" ! TMI Communications and Company Limited Partnership and its affiiat, TerreStar Networks Inc. (cllectively, "TMUTerreStar®). TerreStar is the prospective assignee of TMI‘s 2 GHz MSS authorization and, pursuant to an agreement with TMI, has contracted with Space Systems!Loral Inc. fora satellte that will operate in this band, At the outset, it should be noted that Inmarsat incorreetly laims that TMUTerrestar and Mobile Satellte Ventures (°MSV")are one and the same company based on a proposed acquisition of certain interests by Motient Corporation (*Motient"). In fact, TMITerreStar now are managed separately. Unlike Inmarsat, which proposes to absorb additional2 GHz spectrum for its existing L—band system, TMI/TerreStar intends to operate its 2 GHz system separately from that of MSV so as to offer additional competitive choices to consumers: * See Owen, Economic Issues Related to the Number ofFirms Licensed to Use 2 GHe Spectrum for MSS Services (Exhibit 4 to TMUTerreStar Reply Comments, IB Docket No. 05—221, August 15,2003). * 14 ard.

The addition ofa third provider would diminish, rather than enhance, the competitiveness of the MSS market. This could well be the resultsought by Inmarsat,which would be the prime beneficiary of a ess competitive 2 GHz MSS environment. If t2 GHtz MSS band is splintered among marginalized players, Inmarsat‘s admitted dominant position in L—band MSS will be safely insulated from price and service competition.* Butthis is not the result that will ffectuate the Commission‘s policies or serve the American public. Inmarsat has admitted that 2 GHz MSS and L—band MSS services are comperitive substitutes. When Inmarsat withdrew ts 2 GHz application in 2000, it represented to the Commission that,in lieu of ts proposed 2 GH MSS system, known as "Horizons," it would construct a new L—band system (BGAN) that "will provide the same functionalitis as the proposed Horizons system and more."* Today, Inmarsat‘s renewed interestin the 2 GHz MSS band is testament to the selfevident fact that multiple 2 GHz and L—band MSS systems will compete. Ifthis were not the case, Inmarsat would not be so determined to prevent TMI‘TerreStar from obtaining sufficient spectrum to provide effective, competitive service Given the fact that MSS providers using all MSS bands will compete,it makes no sense for Inmarsatto continue to claim that effectuating our proposal will resul ia "duopoly." TMI‘TerreStar‘s hybrid MSS/ATC system will add needed compeition to the North American mobile telecommunications marketplace and provide unparalleled benefits to rural America, homeland security, and firs responders.® These benefits cannot be achieved if the Commission does not provide sulficient spectrum forus to compete. 2. The significance Inmarsat attributes toitsfling ofa so—called *application.". Inmarsat asserts that ts just—submitted "application® demonstrates that it can "secure the timely deployment" of a 2 GHz MSS system. But this "application"is itle more than a lawyer‘s drafing exercise. Iis patently unacceptable for filing." It is either eight years too late because the window for MSS applications closed in 1997 or premature because, as even Inmarsat has acknowledged. such an application could be filed only in response to the Commission‘s opening of a new processing round." "If the spectrum available for MSS in the 2 GHz band is divided among three licensees, moreover,these weaker firms will be easiertakeover targetsfoInmarsat in the future, permitting it to extend is dominant position into the 2 GHtz band. 5 See Letter from Kelly Cameron, Powell, Goldstein, Frazer & Murphy, LLP, counsel to Inmarsat, to Magalie Roman Salas, Secretary, FCC (Nov. 21, 2000)— * See Comments of TMITerrestar, IB Docket No. 05—221 (July 29, 2005); Reply Comments of TMITerreStar,1B Docket No. 05—220 (July 25, 2005). " See TMIMTerrestar, Objection to Acceptance ofApplicationfor Filing, File No. SAT—PPL 20050926—00184 (filed October 6, 2005). * Altermatively, a non—U.S.entty that did not participate in the first 2 GHz MSS processing round could file for a blanket earth station license. However, an entity secking such market (continued...)

This "application" proves nothing save for one inescapable fact: Inmarsat‘s proposed entry into the 2 GHz MSS market would delay the iniiation of new service to the public. Inmarsat proposes a date for commencement of service of 2010 and hedges even that bet by making it conditional on a Commission grant in only a few months‘ time (despite Inmarsat‘s call for a full rulemaking and a new processing round procedure). Even this optimistic date of 2010 is two years later than the date on which TMI/TerreStar will come into commercial service. There is reason to question even this date, given candid public statements by Inmarsat‘s CEO that it would really expect to provide service no sooner than 2013, ever." If the Commission wishes to speed competitive MSS service to the American public, it should provide sufficient spectrum to TMI/TerreStar o commence servicein accordance with the milestones that the Commission has established and that TMITerreSta is mecting. 3. Inmarsat‘s blame ofCongress. Some five years afte Inmarsat abandoned its 2 GHz MSS application, it has ereated a new explanation for its motivation: Congress made us do it. Inmarsat‘s new claim is that the ORBIT Act "precluded Inmarsat from deploying a 2 GHz system until this year." The November 2000 statement Inmarsat filed with ts withdrawal ofits 2 GHz MSS application, however, shows thatthe withdrawal had nothing to do with the ORBIT Act." Rather, Inmarsat stated that it was "no longer in a position to launch and operate a mobile satelite system in the 2 GHz band consistent with the [Commission‘s] milestones" because of ts own decision to construct its BGAN L—band system. The Commission‘s dismissal of Inmarsat‘s application,likewise, makes no mention ofthe ORBIT Act."" In fact, Inmarsat elsewhere has asserted to the Commission that the ORBIT Act did not prevent it from offering "additional services" such as 2 GHz MSS." access mustfirst construct,launch and place its 2 GHz space station into operation. Inmarsat has taken none ofthese steps. * Comments of Andrew Sukawaty, CEO of Inmarsat, quored in Mark Holmes, Executive Q&A: Inmarsat CEO Happy with IPO Performance, Satelite News (Aug. 8, 2005). In particular,Mr. Sukawaty noted: "We fully contemplated going with L—band only spectrum and that is what we have planned for Ifwe were to dream up that next constellation to put it in the sky today, by the time it got designed. buil and Iaunched into commercialservice, you are tlking about a minimum of five—to six—year window. Add a litle bit onto thatfor lcensing and potentially fund raising for it, and you are talking between seven to nine years. So we may be looking beyond an eight— to 10—year horizon for this S—band." " See Letter from Kelly Cameron, supra n.5. "‘ See Satellite Policy Branch Information, Public Notice, Report No. SAT—00061 (Nov. 29, 2000). "* Even before Inmarsat had withdrawn its 2 GHz MSS application, it had submitted FCC filings through its distribators claiming that it had privatized consistent with the ORBIT Act. In October 2001, the Commission held that Inmarsathad, in fact, privatized consistent with the ORBIT Act and permitted it to provide "additional services" subject to Inmarsatconducting an i ! public offering. See Comsat Corporation, 16 FCC Red. 21,661, 4 62 (2001). After this decision,Inmarsat consistently told the Commiscion that it was eligible to provide "additional (continued...)

Put simply, Inmarsat appears o have abandoned its 2 GHz MSS application becauseit losinterest in the service. It renewed its interest suddenly this year, after the Commission made clear ts intent torationalize the spectrum holdings in the 2 GHz MSS band so that competitive MSS services finally could be offered in that band. As Dr. Owen points out in his study, "competitors may utilice the Commission‘s procedures to restrict competition and to raise their rivals® costs, a well known and unfortunate side effect oregulation.""" Inmarsat‘s renewed interest, its new proposals, and ts new "application" should be seen for what they are —— the actions ofan entrenched spoiler,hoping to avoid or forestall competition. 4. Inmarsat‘s criicism of TM/TerreStar‘s "showings.". Inmasat, fesh from filingits "application," takes TMI/TerreStarto task for not yet amending its own authorization to specify the more fully featured satellite that TMI‘TerreStaris constructing. Inmarsat, however, cannot demonstrate that there is anything untoward, or even unusual, in a icensec making substantialimprovement to ts system, at ts own risk, as it moves forward with construction. TMI‘TerreStar will, ocourse, file for an appropriate modification ofits authorization in due course. The Commission faces a clear choiee. It can risk the 2 GH MSS band on proposals that will jeopardize financing prospects ofthe existing licensees, delay commercial launch to the next decade and continue to marginalize MSS services that neither the Commission nor the public now consider to be competitive with errestrial mobile services. As Dr. Owen concludes,the "use ofa full—blown regulatory proceeding to allocate this spectrum could weaken the ability othe 2 GHMSS licensees to compete and impose serious delays in the introduction of services, and consumers would likely bear most of this burden in foregone services and possibly in higher prices.""* Instead, the Commission can authorize sufficient spectrum for the innovative and entreprencurialservices proposed by TMUTerreStar, which will be in the hands of consumers, firsresponders and homeland security providers in three years‘ time. services" notwithstanding the ORBIT Act. See, eg, Consolidated Response of Inmarsat, FCC File No. SAT—MSC—20040210—00027, at 5 (April 20, 2004) (*Such a result is not mandated by the ORBIT Act"); Reply of Inmarsat, IB Docket 04—158, at 10 (May 14, 2004). " See Owen, supra n2, at 5. " td ar 6.

We ask that the Commission favor innovation over incumbency, commencement of satelite construction over the submission of paper promises, and speed over delay. It should grant TMI/TerreStar sufficient spectrum to operate its proposed system in the immediate future. Respectfully submitted. is! Gregory C. Staple /s! Jonathan D. Blake Gregory C. Staple Jonathan D. Blake Viison & Bucrns Kurt A. Wimmer 1455 Pennsylvania Avene, N.W. Matthew S. DelNero Washington, D.C. 20004—1008 Covnoron & Burtmo 1201 Pennsylvania Avenue, N.W. Washington, D.C. 20004—2401 TMl Communications and Company Limited Counselfor TerreStar Networks Inc. Partnership ces John P.Janks and Jeffrey A. Marks Counsel for Inmarsat


Document Created: 2005-10-14 17:53:14
Document Modified: 2005-10-14 17:53:14
© 2024 FCC.report
This site is not affiliated with or endorsed by the FCC