Tim Warren

The FCC should revise its order on the Sirius XM channel set-aside to more directly promote the intended diversity of the 2008 order approving the deal, the Minority and Media Telecommunications Council said in a petition for reconsideration filed Thursday night. The group has said the recent implementation order undermines FCC Diversity Committee efforts to come up with a definition that promotes diversity without relying on race classifications. The diversity committee released its report soon after the latest order came out. MMTC President David Honig was on that committee. Concerned with constitutional issues, the commission revised the original condition on XM’s purchase by Sirius that had required a set-aside for minority-owned companies.

The bankruptcies of S-band licensees DBSD and TerreStar and potential FCC action opening the spectrum to increased terrestrial service could mean several S-band satellites will be for sale in coming years. Currently, the two companies have a total of three satellites. Each has one geosynchronous in-orbit satellite and TerreStar has another nearly completed satellite on the ground. While much depends on how the FCC decides to handle the spectrum, TerreStar’s grounded satellite is likely more valuable than the in-orbit ones, officials said. The FCC isn’t expected to decide on the 2 GHz band spectrum for at least a year (CD Oct 27 p9). ProtoStar, which auctioned its two in-orbit satellites to Intelsat and SES as part of its bankruptcy last year, was able to raise some $395 million for its satellites, though the satellites had much broader uses.

A group of TerreStar affiliates won court approval of a large loan from EchoStar, allowing the bankrupt mobile satellite services provider to continue operation for the immediate future. The U.S. Bankruptcy Court in Manhattan approved the $75 million debtor-in-possession (DIP) financing despite complaints from several creditors over the terms of the financing. EchoStar is also backstopping a $100 million rights offering.

A rare en banc review of an appeals court decision that could force EchoStar to shut down millions of set-top boxes renewed arguments over to what extent EchoStar had violated a TiVo patent and a court injunction. The oral argument before nine judges in the U.S. Court of Appeals for the Federal Circuit Tuesday raised questions on the standard for a contempt ruling against EchoStar for continued infringement of TiVo’s DVR patent. Previously, a district court judge found EchoStar to be in contempt because EchoStar used DVRs the judge said violate an injunction against future infringement. EchoStar has said it redesigned the DVRs in good faith to avoid infringement and a new trial should determine whether the work-around violates the patent.

The Republican gains in Washington create both risk and opportunity for Intelsat as the government looks to cut back on spending, said Intelsat CEO Dave McGlade during the company’s Q3 conference call Monday. The Congressional focus on lowering costs in general could “adversely affect” government capacity sales for the short-term, he said. But the move toward more cost-effective solutions may be a positive for Intelsat General, Intelsat’s government contracting operation, which can offer better prices than many competitors, he said. Government customers made up 19 percent of the companies’ revenue, up about 20 percent from Q3 last year, the company said. Intelsat revenue grew 4.3 percent to $644.3 million. Intelsat reported a net loss of $106.4 million for Q3, compared to a net loss of $94 million in the same quarter last year.

Dish Network remains uncertain of how it will use its large holdings of 700 MHz spectrum, Dish CEO Charlie Ergen said Friday during the company’s Q3 conference call. Dish paid about $712 million for 168 E-block spectrum licenses in 2008, covering most of the U.S. The company also recently encouraged the FCC to update spectrum bidding rules before the next auction, a possible indicator it’s considering bidding on more 700 MHz spectrum (CD Aug 27 p8). Some believe Dish plans to use the spectrum for mobile video, though Ergen raised the possibility of a sale of the spectrum somewhere down the road. Dish’s revenue grew 10.9 percent to $3.2 billion compared to Q3 last year. Net income more than tripled from the previous year to $245 million. The revenue and income gains came despite the fact that the company lost 29,000 net subscribers in the quarter.

The congressional power shift from Tuesday’s elections is expected to have several effects on national satellite policies, said industry executives and lawyers. They pointed to export control overhaul, mobile satellite services spectrum and the role of satellite broadband as the most obvious and immediate areas where changes could take place.

Eutelsat will be unable to use its just-launched W3B satellite due to a leak in the satellite’s propulsion system, the company said Friday. Soon after the satellite launched, the company learned of the debilitating leak in one of two propellant tanks, which has left the satellite unable to reach the necessary orbit. The satellite will remain in transfer orbit until Eutelsat and the satellite’s maker, Thales Alenia, decide what to do with it, said Eutelsat. The company declined to say how much it paid for the Ku- and Ka-band satellite and launch. Arianespace launched the satellite from French Guiana on an Ariane 5 launch vehicle.

The FCC recently sought comment on proposals to enable more flying of unmanned aerial vehicles (UAVs), a technology that could add to satellite capacity demand in coming years. The vehicles have grown increasingly common in the Middle East as wars in Iraq and Afghanistan progressed but are largely unused for civil operations, something that could change once a regulatory framework is in place. UAVs rely heavily on satellite and terrestrial communications, and some changes to spectrum allocations are likely required to ensure safety. The recommendations come from the advisory committee to the World Radiocommunication Conference of 2012 and have several steps to go before allowing for widespread use, satellite executives said.

The S-band spectrum allocated to mobile satellite service is largely expected to be lost as a primarily satellite band, satellite industry executives and lawyers said. The FCC proceeding involved isn’t a major source of interest to companies outside the bands, and there’s little concern over other domestic repurposing of satellite spectrum, they said.