Attachment letter

letter

LETTER submitted by Inmarsat

letter

2005-11-16

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

IBFS_SATPPL2005092600184_467895

is tmean Srew . se tow wamgen.oc. mnoerine t« aonesram rex oonesram LATHAMeWATKINS« Tein e Arormk o Ni Hanouy Sintem November 16, 2005 hengrong Santnces on pogume Sunviney sman Srovee Via Hand ow Tase HewJoney Yiitegan.0C. Ms. Marlene H. Dortch Secretary FFederal Communications Commission RECEIVED 445 12" Street, S.W. N 6 Washington, DC 20554 oV 1 2005 FdwalCommuncaton Conmisson Re: File No. SAT—PPL—20050926—00184 OfiectSecnny 1B Docket Nos. 05—220, 05—221 Dear Ms. Dortch: In this lette, Inmarsat responds to the four exparte submissions made by TerreStar‘TMI and MSV in these proceedings on October 12, 17, and 25, 2005. In its ex parte submissions, TerreStar/TMI and its economist, Dr. Bruce Owen, largely repeat assertions made during the formal pleading eycle in TB Docket Nos. 05—220 and 05—221. Significantly, TerreStar/TMI stllfails to demonstrate that t currently has an inadequate 2 GHz spectrum assignment. Nor does TerreStar/TMI address the nascent and unique nature of the 2 GHe band that cautions against licensing a duopoly in the band. MSV‘s exparte letter largely rehashes arguments made in its September 14, 2005 submission, to which Inmarsat already has responded. Below, Inmarsat () corrects a number of factual and historical mischaracterizations in TerreStarTM‘s and MSV‘s recent filings, (i) reiterates the importance of licensing at least one additional MSS competitor at 2 GHz, and (ii) identifies three alternatives to licensing TerreStar/TMI and ICO to duopoly at 2 GHe. . TERRESTAR/TMI HAS NO ENTITLEMENT TO MORE 2 GHZ SPECTRUM TerreStar/TMI‘s submissions reflect a theme thatit has some entilement to a 250% increase in its current spectrum assignment, to a total of2 x 10 MHz. TerreStar/TMIis simply wrong.

Horember i. 2005 LATHAMeWATKINS« As an initial mater, ifMSV and TerreStar/TMI got as much of the 2 GHz band as they seck, those soon—to—be—sister subsidiaries ofMotient Corporation‘ would have almost twice as much MSS spectrum over the Americas as anyone else: ~46 MHz * 20 MHz at 2 GHz (2 x 10 MHz) * ~26 MHz at L Band (2 x ~13 MHz) In comparison, no one else comes even close.. Specifically, over the Americas: Inmarsat has ~28 MHz (2 x ~14 MHz) (L Band) Globalstar has ~28 MHz (11.35 MHz & 16.5 MHz) (Big LEO) Iridium has ~8 MHz (1 x 8.25 MHz) (Big LEO) 1CO would have 20 MHz (2 x 10 MHz at 2 GHz)(ifthe Commission provides 1CO what it seeks) TerreStar/TMI and MSV had no legitimate expectation that they would increase their considerable spectrum holdings by gaining access to even more ofthe 2 GH band. At the beginning of this year, TerreStar/TM shared the 2 GH band with four other MSS entities (each with a 2 x 4 MHz assignment). TerreStarTMentered into a spacecraft construction contract and related financing arrangements based on that 2 x 4 MH assignment, and it has indicated that this spacecraft will be launched in just two years. Morever, the Commission last determined. that 2 x 2.5 MHz is adequate to commence 2 GH MSS service," and recently reminded TerreStan/TMthat no decision had been made whether it would get additional 2 GHz spectrum if other 2 GHz providers tumed in their authorizations." The opportunity for TerreStar/TMI to increase its assignment beyond 2 x 4 MHz arose early this year oncethree companies turned in their 2 GHz MSS authorizations. Just four months ago, the Commission commenced a public process to determine what to do with the 2 x 12 MHz of 2 GHtz spectrum that became available, and it inguired about a number of options, including authorizing additional MSS providers in the band. In response to that request for comment, many commenters, including a variety of industries and companies, joined Inmarsatin urging the Commission not to provide TerreStan/TMI and ICO with a duopoly at 2 GHz, and a windfall 250% increase in their current 2 x 4 MHz spectrum assignments." In short,the record is ‘ See Exhibit 1. MSV and TMI have been incumbent MSS operators for almost a decade. Bell Canada‘s parent company, BCE Inc., controls both TMI and Telesat Canada. * The Establishment ofPolicies and Service Rulesfor Mobile Satellite Service in the 2 GHez Band, 15 FCC Red 16127, 16138 4 17 (2000). * TM] and TerreStar, 19 FCC Red 12603, 12621 at § 52, n.97 (2004). * See, eg.,the following submissions in TB Docket No. 05—221: Comments ofRF Marketing, Inc.,at 7 (Jul, 29, 2005); Comments of United States Cellular Corp.,at 6 (Jul. 27,2005); Comments of CTIA ~ The Wireless Association, at 9—12 (Ful. 29, 2005); Comments of Sirius Satellite Radio Inc.,at 14—16 (Ful, 29, 2005); Comments ofthe American Petroleum Institute (Jul. 29, 2005); Comments of the Society of Broadcast Engineers Inc. (Jul. 29, 205); Comments of Globalstar LLC, at i—i (Jul. 29, 2005); Letter from Intel Corporation (Jul. 29,

Nornber ie zoos Paacs LATHAM®WATKINS« clear that diverse group of commenters strongly oppose TerreStar/TMI‘s request to split the 2 GHz band between them. Moreover, TerreStar/TMIis not, as t suggests, entiled to more spectrum because it is building a larger, higher—powered spacecraft than the Commission authorized. The FCC‘s anti—bootstrapping policy is clear that when (as here) an entity builds a substantially different spacecraft at ts own risk, the Commission will not take those effortsinto consideration when reviewing a request for modified Commission authority." TerreStar/TMI simply may not use its construction effortsfor such a spacecraft to bootstrap its way intoa larger spectrum assignment. 1f "build at your isk" has any meaning, it means that TerreStar/TMT‘s showing about its larger, higher—powered spacecraft is not probative in TerreStar/TMI‘s quest for more spectrum. IL TERRESTAR/TMI DOES NOT SHOW THAT 2 X 4 MHZ IS INADEQUATE TerreStarTMI simply does not demonstrate thatit needs 2 x 10 MHz (or anything more than 2 x 4 MHz for that mater) in order to have a viable 2 GHz MSS system. TerreStar/TMI has represented to the Commission that,under any set ofcircumstances, () its 2 GHz spaceeraft is well under construction, (i)it has raised substantial capital and is spending billions of dollars based on its 2 x 4 Mz MSS authorization, (ii)there is no question whother it will deploy its system, and (iv) TerreStar/TMI will meet its emaining milestones, including a Jaunch milestone in just two years (by November 2007).® Thus, by TerreStarTMI‘s own account, the design of TerreStar/TMI‘s MSS system is long—finalized, construction is well under way, and the resolution of this proceeding will not affect the completion of ts spacecraft. Rather than base is spectrum request on its core MSS requirements, TerreStarTMI focuses on the need for more spectrum to support ts desire to provide ATC. In fact, the revised statement of Dr. Owen, submitted on October 17, 2005, hinges on the presumption that TerreStar/TMI needs more than 2 x 4 MHz of 2 GHz MSS spectrum so that it can offer an ATC service as a close substitute for cellulan/PC$ service. Putting aside for the moment the Commission policy that precludes ATC plans from being used to warrant a greater 2003); Reply Comments of the United Telecom Council (Aug. 15, 2005); Reply Comments of Sprint Nextel Corporation, at i(Aug. 15, 2003). See Streanining the Commission‘s Rules and Regulationsfor Satellite Application and Licensing Procedures, 11 FCC Red 21581, 21585 4 9 (1996) (*1996 Streamlining Order") (unsuthorized construction will batthe applicant‘s own risk, and "we will not in any way considerthe status ofconstruction or expenditures made when acting on the underlying application."). * Ex parte letter from Jonathan D. Blake, Counsel for TerreStar Networks, Inc., to Marlene H. Dortch, Secretary, FCC, 1B Dockets Nos, 0$—220 and 05—221 & File No. SAT—PPL— 20050926—00184 (filed October 17, 2005), at 2. TerreStar/TMI‘s launch milestone is November 2007, a year before it is required to bring the spacecraft into service.

Hovnter ie zoo Paaes LATHAMeWATKINS« spectrum assignment,‘ neither the record ofthis proceeding, nor prior Commission decisions, supports Dr. Owen‘s presumption. Dr. Owen accepts without question TerreStar/TMIs "view" that it needs more 2 GHz spectrum so it may develop handsets that are cost—compotitive with cellular/PC$ equipment.* This premise—thatit will be necessary for MSS/ATC to compete with cellulaz/PCS providers on handsct pricing alone~——is simply not substantiated. To the contrary, consumers should be attracted to an MSS/ATC service because ofthe benefits MSS/ATC can offer that the cellulaz/PCS industry will not be in a position to offer, such as ubiquitous coverage of allrural areas in America, reliability when disasters render the terrestrial network useless or unreliable, and (with the launch ofInmarsat‘s global 2 GHz network) seamless service around the world. Tt is not surprising that the Commission twice concluded (once as recently as eight months ago) that an MSS/ATC system will likely compete more directly with other MSS/ATC systems than with the cellulanPC$ industry." Dr. Owen‘s analysis is more significant for what he is not willing to conclude, and for the absence of supporting dat, than for the general theories on which he relies. Dr. Owen provides very guarded suggestions about certain things that "could"occur, and risks that "may" arise, ifthe Commission authorized three or more 2 GHz MSS providers. However, Dr. Owen does not conclude that the presence of an additional MSS operatorin this specific set of eircunstances would lead to three non—viable MSS providers at 2 GHz."" Nor does Dr. Owen reconcile his position with the general observation by courts that a duopoly can afford both the opportunity and the incentive for the two participants to coordinate and increase prices." Moreover, Dr. Owen‘s supgestions are not based on any quantitative analysis: in one case, Dr. Owen simply assumes the correctness of a wholly unsubstantiated comment Bocing made about the amount 0f2 GHz spectrum that is desirable for an MSS network," while ignoring the * See Inmarsat Reply Comments, IB Docket No. 0$—221, at 36—37 (filed August 15, 2005). * Ex parte leter from Jonathan D. Blake, Counsel for TerreStar Networks, Inc., and Gregory C. Staple, Counsel to TMI,to Marlene H. Dortch, Secrctary, FCC, IB Docket Nos, 05—220 and 05—221 & File No. SAT—PPL—20050926—00184 (filed October 17, 2005), Owen Statement at9. * See Flexibiliyfor Delivery ofCommunications by Mobile Satellite Service Providers in the 2 GHz Band, the L—Band, and the 1.612.4 GHz Bands, 18 ECC Red 1962, 2072, at 4 229 (2003); Flexibilitfor Delivery ofCommunications by Mobile Satellte Service Providers in the 2 GHz Band, the L—Band, and the 1.6/2.4 GHz Bands, 20 FCC Red 4616 (2005) at § 10. !* Cf TerreStarTMI October 17 exparte, Owen Statement at Executive Summary, 12—14 ("‘Two strong firms in some markets may compete more effectively than three weaker ones .. .. "»emphasis supplied) "— See FTCv. HJ. Heine Co. and Milnot Holding Corp., 246 F.3d 708, 725 (D.C. Cir. 2001) : TerreStarTMI October 17 ex parte, Owen Statement at 13. In the Bocing comments that Dr. Owencites, Bocing expressly "does not take a position on whether the Commission should redistribute the remaining 2 GHz MSS spectrum to the two

Hoventeis 0s Pss LATHAMeWATKINS« Commission‘s more studied conclusion that 2 x 2.5 MH is adequate to commence service in this band.. Furthermore, Dr. Owen‘s general abstractions do not address the reality that with a 2 x 4 MHz spectrum assignment, TerreStar/TMI (by its own admission) has been able to raise sufficient funds from the capital markets to construct its 2 GHz spacecraft, and to be in a position to deploy it by 2007, and already is spending "billions ofdollars® to do so.." Any given company would prefer to have access to more spectrum, and arguably would be better situated the more spectrum it has.. But it simply does not follow that the public interest would be best served by limiting the 2 GHz band to two competitors. To the contrary, authorizing atleast one additional 2 GHz provider would ensure that the public would have more competitive choices among providers of the services that can most effectively be provided using the 2 GHz band. Inmarsat, as a company with a demonstrable track record and commitment to MSS, would greatly enhance the competitive choices available to consumers,frst responders and other Homeland Security users if it were to have access to the same types (and the same quantity) of MSS spectrum resource as the incumbent TerreStar/TMand its affiliate, MSV, will control. HHL — THE COMMISSION SHOULD PROVIDE FOR AT LEAST THREE INITIAL 2 GHZ MSS COMPETITORS There are compelling policy reasons to authorize at least one additional entity to provide MSS at 2 GHz. First, and foremost, as the Commission itself has recognized, courts have gencrally condemned mergers that result in duopoly, particularly where additional market entry would be difficult."" Indeed, "{t}he creation of a durable duopoly affords both the opportunity and incentive for both firms to coordinate to increase prices. " TerreStan/TMtries to dismiss these concems about likely competitive harms by citing as potential future competition Globalstar‘s and Inmarsat‘s future ATC plans (in the Big LEO band and the L—Band, respectively)." That argument entirely misses the point. TerreStarTMIfails to address the fact that the 2 GHz band is wnigue among MSS bands in its ability to support high—data—rate, next—generation multimedia and broadband MSS offerings over mobile handheld devices, including in rural areas that may otherwise be unserved or underserved. remaining licensees or reassign the spectrum to one or more new MSS licensees." Comments ofThe Bocing Company, 1B Docket No. 05—221 at 4 (filed July 29, 2005). "— See TerreStar October 17, 2005 x parte at 2. Application ofEchoStar Communications Corporation, General Motors Corporation, and Hughes Electronies Corporation, 17 FCC Red 20559, 20604 (2002). !*. See FTC v. HJ, Heinz Co. and Milnot Holding Corp., 246 F.3d 708, 725 (D.C. Cir. 2001); see also id. t 724 n.23 ("supracompelitive pricing at monopolistic levels is a danger in a market with only two competitors") (citing Edward Hastings Chamberlin, The Theory of Monopolistic Competition: A Re—orientation of the Theory of Value 46—55 (8th ed. 1962)). "* See TerreStarTMI October 17 ex parte, Owen Statement at 5—8.

Hovmmber issoos Pace LATHAM®WATKINS« As Inmarsat has explained before, the greenfield that is 2 GHz promises exciting new opportunities for U.S. consumers. Specifically, the unique nature ofthe 2 GHz band —the large, contiguous spectrum segments that support wide—band channels,and the complete absence ofexisting satellite services—supports a range ofnew and innovative broadband and multimedia services that cannot be provided today (orin the foresceable future) in other MSS bands. In stark contrast to the L—Band, the 2 GHz band is not currently used for MSS. The following chart contrasts the developed nature of the L—Band with the greenfield that is 2 GHzMSS: Frequency T—omi Numberof Band Spaceerat Operators L—Band >20 10 2 oHe 0 0 This means that MSS services that are stll being planned for 2 GHz are entirely unconstrained by (i) existing spectrum sharing arrangements entered into around the world that govem the operations of the more than twenty in—orbit L—Band spacecraft, (1)the resulting high level ofband segmentation at L—Band, (ii) the unavailability oflarge contiguous spectrum segments to support wide—band channels, and (iv)the need to protect the operations ofhundreds of thousands of MSS customers who, in the aggregate, have invested billions of dollars in their terminal equipment and related communications infrastructures. A 2 GHz MSS system therefore is uniquely positioned to support new multicast, broadcast and video—on—demand applications, delivered seamlessly to low cost terminal equipment, and with the efficiencies inherent in "piggybacking"on technological developments that are being made to support terestrial 3G networks. Thatis Inmarsat‘s motivation for deploying a 2 GHz MSS system——bringing forth new services that are simply not feasible to deploy in other MSS bands."" Under these cireumstances, both the Commission‘s Hearing Designation Order in the DIRECTV/EchoStar proceeding,‘® and itssubsequent Space Station Licensing Reform Order,"" require that TerreStar/TMI and ICO demonstrate that licensing only TerreStar/TMI and 1CO in the 2 GHz band would provide "extraordinarily large, cognizable, and non—speculative efficiencies.""" That burden simply has not been met. To the contrary, the nascent nature of the ‘‘ OJ Letter from Randy S. Segal, MSV, to Marlene H. Dortch, FCC, IB Docket Nos. 05—220, 05—221 (filed Oct. 25, 2003). Application ofEchoStar Communications Corporation, General Motors Corporation, and Hughes Electronies Corporation, 17 FCC Red 20559 (2002). * Amendment ofthe Commission‘s Space Station Licensing Rules and Policies; Mitigation of Orbital Debris, 18 FCC Red 10760 (2003) * See id. at 10789—90.

Hevenbeis ass Paoct LATHAMeWATKINS« 2 GHz band, and the complete absence of any MSS services in the band today, provide significant obstacles to concluding,at this juncture, that licensing only two initial competiors would not result in competitive harm. A complete absence of record support for such efficienies does not overcome the presumption that a 2 GHz duapoly will not serve thepublic interest. Regardless of what may have been the case four or five years ago when Inmarsat withdrew its inital 2 GHz proposal, intervening technological developments make clear that access to the L—Band is not a substitute for the 2 GHz band today."" TFit were, TerreStar/TMI itself would not be seeking access to 2 x 10 MHz of 2 GHz spectrum on top ofthe approximately 2 x 13 MHz of L—Band spectrum to which it and its affliates currently have access, and which they demonstrably are not fully using."" IV. INMARSATS 2 GHZ PLANS Well before the June 29, 2005 Public Notices in this matter, Inmarsat met with Commission staffto discuss ts interest in the 2 GHz band, and worked through its regulator, Ofeom, to submit appropriate 2 GHz flings at the ITU."* in September, Inmarsat applied for Commission authority to deploy a 2 GHe system in accordance with the Commission‘s five—year milestone schedule. And Inmarsat‘s CBO has confirmed the Company‘s intention to proceed with this system in personal meetings with Chairman Martin, Commissioners, and Commission staffover the past few weeks. Inmarsat has detailed why its application is consistent with the Commission‘s rules and precedent, and why the Commission can and should grant Inmarsat‘s request outside a processing round."" Moreover, Inmarsat‘s record of launching almost a dozen * Seeid. * Cf Ee parte letter from Jonathan D. Blake, Counsel for TerreStar Networks, Inc., and Gregory C. Staple, Counsel to TMI, to Marlene H. Dortch, Secretary, FCC, 1B Docket Nos. 05—220 and 05—221 & File No. SAT—PPL—20050926—00184 (fled October 12, 2005), at 2; TerreStar‘TMI October 17 exparte, Owen Statement at 7—8. . Despite having access to approximately 40% of the L—Band over North America, the combined TMIMSV venture is on pace to generate only some $30M ofrevente from that spectrum in 2005, as it has done for each of the prior three years. Motient Corp., Quarterly Report on Form 10—Q, forthe period ended June 30, 2005, at 38, Securities and Exchange Commission File No. 0—2304(fled Aug. 15, 2005); Amendment No. 1 to Registration Statement on Form S—1, at M—3, Securities and Exchange Commission File No. 333—121862 (Ailed Feb, 14, 2003). "*: TerreStat/TMT‘s assertions that Inmarsat‘s interest developed after the June 29 Public Notices issued are simply wrong. TerreStarTMOctober 12, 2005 ex parte at 4. "*: Thus, TereStar/TMI‘s assertions that this proposal is a "lawyer‘s drafting exercise‘is patently false. See TerreStar/TMI October 12, 2005 ex parte at 2. TerreStar/TMI‘s assertion that Inmarsat‘s application is procedurally deficient ignores the demonstrations to the contrary in Inmarsat‘s October 17, 2005 Consolidated Response to TerreStar/TMI‘s and 1CO‘s objections in File No. SAT—PPL—20050926—00184,

Novenber 18. 2005 LATHAMeWATKINS« spacecraft over the past two decades demonstrates that it is feasible for Inmarsatto deploy that system by the end of 2010. Contrary to Mr. Brumley‘s mischaracterization of Inmarsat‘s plans,"* the only *about Inmarsat‘s 2 GHz plans that needs to be resolved involves the dismissal of TerreStar/TM‘s spurious procedural challenges to the competitive altemnative that Inmarsat secks to offer. TerreStarTMI questions the impact ofthe passage ofthe ORBIT Act on Inmarsat‘s ability to have deployed a 2 GHz system before now. Coming from an entity that blamed Canadian laws for ts failure to meet U.S. milestone requirements," this is more than ironic. To set the record straight, Inmarsat withdrew its 2 GHz proposal in 2001, in the midst of a dead IPO market, and after the ORBIT Act mandated that Inmarsat conduct an IPO prior to deploying a 2 GHz system. Inmarsat indicated that it could not implement at 2 GHz under the Commission‘s milestones, withdrew its application, and reserved the right o refile "if market conditions and regulatory policies should warrant it.""" Both circumstances have now occurred. Inmarsat hardly can be criticized for withdrawing an application, rather than accepting an authorization and asking for milestone extensions based on market or regulatory circumstances, as TerreStar/TMI and ICO have done. That Inmarsat declined to play that game forthe past five years does not preclude it from secking to deploy at 2 GHz today. The Commission can and should consider Inmarsat‘s 2 GHz application, both on its own merits, and in 1B Docket Nos. 05—220 and 05—221. The filing of Inmarsat‘s market access application puts to rest TerreStar/TMI‘s prior arguments that Inmarsat‘s 2 GHz plans were too inchoate to be considered. Inmarsat‘s 2 GHz MSS market access application, containing a detailed system architecture and specific implementation schedule, has been submitted into the record in TB Docket Nos. 05—220 and 05—221 and should be taken into account v.— MSV‘S ALLEGATIONS ABOUT THE L—BAND MSV‘s unsubstantiated claims about the design of the 1—4 L—Band spacecraft are mere fabrications. The Inmarsat—4 L—Band spacecraft that launched on November 8, 2005, and which will begin providing broadband service to the U.S. early next year, is the most powerful and advanced spacecraft in its class to date.. With 200 narrow spot beams, 19 wide spot beams, and a single globalbeam, and the abilityto reconfigure the service areas ofthe beams in orbit, — 4 is uniquely suited to adjust to changing market demands. This spacecraft is more than an order ofmagnitude more spectrum efficient and powerful than Inmarsat‘s previous generation. The 1—4 design therefore is able to provide MSS service at data rates ofapproximately halfa megabit per second, toterminals one third the price, weight and size ofexisting Inmarsat terminals. * TerreStar October 17, 2005 ex parte at 2. * TM] and TerreStar, 19 FCC Red at 12618, 941. "* See Letter from Kelly Cameron, Powell, counsel to Inmarsat, to Magalie Roman Salss, Secretary, FCC, File No. 190—SAT—LOL97 (Nov. 21, 2000).

LATHAMWATKINS« Unlike MSV, who has been promising a second generation spacecraft since 1998, and who has been warchousing L—Band spectrum in the meantime, Inmarsat is not waiting to test the ATC marketplace before it invests further in its MSS inffastructure. Rather,Inmarsat is completing a S15 billion capital expenditure program to ensure the fature ofMSS. Inmarsat fully intends, as a next step, to move forward with ATC plans using the 1—4 design, and MSV has simply no basis on which to speculate about how Inmarsat may choose to satisty the ATC gating criteria in the future. In actuality, MSV‘s complaints about the unresolved issues that exist in the L~ Band are nothing more than a self—indictment. MSV‘s concemns should be addressed in the context of the multi—national agreement that governs the use ofthe L—Band over North America. "This is a process in which MSV historically has refused toparticipate, because MSV is hoarding L—Band spectrum that it is afraid to lose but has yet to use."" The gridlock that exists in the L~ Band cannot be overcome unless MSV ends is intransigence and complies with the L—Band spectrum assignment policies and procedures that the U.S. championed."" V 2 GHZ MSS LICENSING SOLUTIONS The Commission has far better options than creating a duopoly at 2 GHz. There are three main alternatives to providing TerreStarTMI and ICO with more spectrum before they have completed construction of, or launched, a single satelite: 1. The Commission could open the newly available 2 GHz MSS spectrum (2 x 12 MHz) for a processing round to accommodate new entrants. > The first step would be to examine the amount ofMSS spectrum that should be assigned to any MSS system before it is launched. > If the Commission were to determine thatthe appropriate amount of spectrum is more than 2 x 4 MHz, the Commission could allow TerreStarTM and ICO to * MSV has a history of holding on to licenses for L—Band spacecraftthat it never launches. See, eg., Letter from Lon C. Levin, Vice President, Mobile Satellite Ventures, to Marlene H. Dortch, Secretary, FCC (Jun. 30, 2003) (surrendering authorizations for L—Band MSS spacceraft at 62° W.L. and 139° W.L). * The Commission has a clear policy that access to the L—Band is to be revisited annually, based on actual usage and short—term projections offuture need.. See Public Norice, FCC Hails Historic Agreement on International Satellite Coordination, Report No. TN 96—16 (rel. June 25, 1996). Despite Inmarsat‘s urging, MSV has doggedly refused to participate in that annual process forthe past seven years. For example, in October 2001, Inmarsat urged MSV (then Motient)and the Commission, in writing, t reinitite the annual operator mectings. See Comments of Inmarsat Ventures, PCC IB Docket No. 01—185, at 23 (filed Oct. 22, 2001). Inmarsatalso suggested a meeting of all operators in three letters to MSV over the past two years.

wormnter is 20 LATHAMeWATKINS« increase their current holdings through the same licensing process to be used to accommodate new entrants. > In order to authorize the limited number of new entrants that likely could be accommodated in the available 2 x 12 MFHz ofspectrum, the Commission could use a modified licensing process to award spectrum rights, based on the first entities to actually launch, until the band is fully subscribed by launched spacecraf. 2. Should the Commission determine to award TerreStar/TMI and ICO 2/3 of the 2 GHz band now, as proposed in the June 29 Public Notice in IB Docket No. 05—221, the Commission has two altemmative ways to license the remaining 1/3 for MSS: > Provide Inmarsat access tothat remaining 1/3 (an amount equal in size to TerreStar/TM‘s and ICO‘s), for the reasons stated in Inmarsat‘s pending market access request to provide U.S. MSS service at 2 GHz:"" > Open a "modified" processing round for the final 1/3, assigning that remaining third ofthe band to the first applicant to actually launch a 2 GHz MSS system. 3. Alternatively, the Commission could simply initate a rulemaking proceeding to determine how best to assign the retured 2 GHz unlicensed spectrum in the future. > Developing a full record for assigning this spectrum would make sense, given how valuable this band is,and given that neither TerreStar/TMI nor ICO has yet completed construction of is spaceeraft. Under no circumstance, however, should the Commission create a 2 GHz duopoly by dividing the entire band between TerreStar/TMI and ICO. The Commission‘s spectrum management and competition policies warrant providing a chancefor meaningful MSS competition to develop in the 2 GHz band. There simply is no basis for the "parade ofhorribles" that TerreStaz/TMI asserts might result both in the U.S. and abroad if the Commission does not immediately provide TerreStar/TMI and ICO each with access to 2 x 10 MHz of the 2 GHz band. *‘ See Inmarsat Global Limited, Petition for Declaratory Ruling to Provide Mobile Satellite Service to the United States Using the 2 GHz and Extended Ku Bands, File No. SAT—PPL— 20050926—00184 (filed Sep. 26, 2005). 10

Hoventer tsae Pacs LATHAMeWATKINS« P ces Chairman Kevin J. Martin Commissioner Kathleen Q. Abemathy Commissioner MichaelJ. Copps Commissioner Jonathan S. Adelstein Daniel Gonzalez Emily Willeford Fred Campbell John Branscome John Giusti Barry Ohlson Sam Feder Donald Abelson Bruce A. Franca Roderick Porter Anna Gomez Richard Engelman Gardner Foster Cassandra Thomas Robert Nelson Fem Jamulnek Karl Kensinger Steve Spacth William Bell M

yorrnter is asos Paie LATHAMeWATKINS« Exhibit 1 12

Pross Release Source: Mient Corporation; Mobile Satelite Ventures; TerreStar Netwotks Motient Announces Transaction with Owners of Mobile Satellite Ventures and TerreStar Network Thersday September 22 521 pm ET Restructuring and Simplification of Ownership Structure to Provide MSV and TerreStar Enhanced Access to Capital and Strategic Partners LINCOLNSHIRE, L. and RESTON, Va., Sept 22 PRNewswre—FistCall —— Motlnt Corporation (Pnk Shoats: News) and Moble Satelite Ventures LP (MSV) announced todaythat Motienthad executed a nor—bindinglaterof intent with STerra Communications Ic. (OTC Buletin Boord: SKYT — News) and TMI Communications & Company, among others,to consoldatethe ownership of MBV and TerreSlar Networks Inc. wihin Motent, The partes antcipate thatthese ransactions,if consummated, wl simplly the ounership and govemance of each of MSV and TerreStar, better enabling each of hem to pursue more efectvely telrloyment of separate hyid satelite and terestial based communications networks providing ubiqutauswreless coverage across alof Notth Amerca in e L—band and S—band,respectvly. * Chvistopher Downie, Chif Operatng Oficer of Motient said, "We are taking tese steps to simplly the ounership stucture of these aesets and improve thei ablity to buid valve for shareholders. We beleve that is ransaction posltons Motent‘sshareholdersinto a more direct and immediate ounership postion of MSV and TerreStar, and brings with t signiicant resuting benefts." Alex Good, ChiefExecutve Offcer and Vice Chaiman of MSV Ne are ata criical stage i the development of a triy ubiqulous virelss communicaions nebwork for North America. The simplficaon of MSVounership stucture provides MSV much greater visly, anwill enhiance access to catal while improving our abllty o accommodate polentalsrategc parners. MSV enthusiastcaly applauds the retructuring and s drect and immediate benefts to the buidout o he naton‘s frt, and best,hybrid neworks® "The leter ofintentseis outthe basicterms of the proposed tansaction, which nclude, among othertings, he folowing: * tm connection with a11 the transections conterplated by the letter of ntent, Motient vould Seave or comnit to ferse approximately 77 shareeof comen atock in exchange for the cuestanting n int not aizenty owned by Notient, and appronimately 26 militon shared the ouertanding rerzester aniree not alzeaty ouned by Hotient. * A12 of the outstanding MBV and TerreStar {nterests not atzendy ouned by Motient, other than thore held by TZ, vould be tranaferzed to Motient at cloring. * mit vould receive the right to exchange ite interests in MV and nerveitar at any time at the same exchange ration that are being offered to the other ahareholdere and vould eubscribe for shares of a new ciase of Motient preferzed stock with noninal econontc velue but having voting ights in Notient equivalent to thore TE vould receive upon exchange of ite PV and Terretar intereste for Notient comon stock. * Skyterra veuld dividend to its securitybotdere snares of a neuty formed company that would hold al1 of ite aesete other than tte intereste in MEW and Terrestz, and then SkyTera, which vould then consist only of dte staken in NV and Terrester, would mesge in a tac—tree reorganization vith and into a mnbsidiary of Motient. Mn a rerult, in addition to the divident, SiyTersa‘s atockboidere would receive Notient comon atock at an exchange ratio reflecting equivalent econontc value for N9u/Terrestar an received by the other NBW/Terrestar stockbolders. In total, Styzerza comon and preferzed stocinolders would receive approxinately 26 miliion shares of Motient comon etock.. SiyTerra‘s preferzed stock vould be retized in exchange for Motient comon stock with a value equal to the 1iquldation preference of the preferzed stock and Siyzerza‘s comon stockholders vould receive the balance of the Motsent snares.

* mhe parties anticipate that, after the closing of the transsction, Terrestar vourd 2ikely be epuncoff to the sharehoidere of Hotient (inctuding those receiving shares in connection with th tranenctions) . Mowever, this spin—off would be evalusted following the eloeing of the other transactions, and would onty be executed it it 4s Judged by Motient‘s Board of Dizectors to be in the beat intereste of fte anarebcidere at that time. in the event of spin off of Terreftac, the exchange ration applicable to THT‘® exchange right vould be moditied accordingly. * the boarde of Motent and MBY vould be reconntituted vith nine mesbers mtually acceptable to the partien and in coupMiance with the independence rules and requlations of XAGOAD. Terrestar vould have a simitarty structured board after the completion of the transaction, sepasate ot Motient and nav. * The parties anticipate that Alex Good, CB0 of MBY, would becose Motient‘s new CBo after the transaction. The partien also anticipate that Robert Brumtey, CBO of TerreStaz, vould continse in that role after the transaction with TerreStar maintaining ite on nanagement team. Consummation ofthe ransactions wil reauire successful compleion of ue cllgence, negotlaion and execution of defiitve documentaton, Motient and SkyTerra board and shareholder pproval, and varlous requlaloy approvals. Because th leter ofintent is non—binding, the paries have no abliation to negolate such documentation or cthenise consummale the transacions. Therefore, e paries can provide no assurances thatthe vansactions wil be consummated on the currenty proposed terms or wil ever be consummated, o tat the required comporate or requiatoy approvals wil be obtained.


Document Created: 2005-11-22 13:32:35
Document Modified: 2005-11-22 13:32:35
© 2024 FCC.report
This site is not affiliated with or endorsed by the FCC