NEW IRIDIUM WAITING FOR FCC TO ACT ON LICENSE TRANSFERS
New Iridium still is awaiting FCC approval of license transfer, months after offering service under new ownership (CD June 7 p3). Space System License, Inc., Wireless SP and Motorola are waiting for Commission to act on Sept. 6 request for consent to assignment of licenses previously used by bankrupt predecessor. “It’s under review,” FCC official said: “We will take action when we finish our review.” Companies said license transfer would serve public interest because they would facilitate rejuvenation of Iridium System from bankruptcy court process and serve vital national defense needs.
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Companies filed for transfer in March. Iridium has been able to continue operating while transfer request is pending because of agreement with Motorola. “Motorola is the licensee,” FCC spokesman said, “it’s a management contract with Boeing. As long as we have someone we can call, Iridium can operate.” Globalstar, FBI and Dept. of Justice (DoJ) opposed transfer. FBI and DoJ cited concerns about national security.
Iridium proposed that it receive authorizations for 2 Telemetry, Tracking and Control (TT&C) earth stations (in Chandler, Ariz., and Sunset Beach, Hawaii) from Motorola. License for commercial gateway earth station at Tempe, Ariz., would be assigned to Iridium. In addition, blanket handset license for authority to operate up 200,000 mobile earth stations for Iridium system, 150,000 terminals for Iridium Carrier Services and 50,000 terminals for Iridium Satellite are included. Iridium Carrier would operate terminals on common carrier basis primarily for its authorized service provides and Iridium Satellite would operate terminals on noncarrier basis primarily for use by Dept. of Defense. International Sec. 214 Authorization would be assigned to Iridium Carrier. Final approval of licenses is last step in bankruptcy proceeding.
New Iridium reiterated plan to operate system primarily as industrial wholesaler for global niche market in remote areas that require “reliable, secure communications to and from remote areas of globe, including commercial, industrial, military, aviation, maritime, oil and gas, forestry and emergency services.” Plans also call for company to provide service to underserved and remote areas of U.S. and underdeveloped 3rd World countries, filing said. Iridium doesn’t intend to market services to general public.
Company is expected to play large part with military in upcoming war against terrorists, industry source said. Iridium has DoD contract to provide military with 20,000 handsets and system is well-suited for DoD because it will provide global communications using secure gateway without interconnecting to public switched telephone network, source said. Iridium system also will help “relieve serious pressure on the military satellite telecom network, which is oversubscribed by 250%,” filing said. “With impending war in Middle East, particularly in Afghanistan, their system is really going to be put to the test,” official said: “If they are successful, it could be a great boon to the company, in fact to the entire satellite industry. Globalstar is in the same position.”
Iridium Holdings and Iridium Carrier Holdings have common investors, according to FCC documents, but ownership percentages are slightly different. For most part company has kept ownership and financial information under wraps since coming out of bankruptcy. Iridium Holdings plans fully diluted capitalization of $150 million at outset, with equity to be split 70% Class A stock, 30% Class B stock. Under limited liability company agreement, control is vested in Class A members by virtue of their exclusive authority to elect members to board. Class A members include Syndicated Communications and Syncom-Iridium Holdings, which hold 26.139% interest. Foreign interests are held by Saudi Arabia resident who owns Baralonco (26.139%), Bareena Holdings of Australia (26.139%), Inepar spinoff Millport Assoc. of Brazil (8.713%). Class B nonvoting units are being used as corporate incentives or in exchange for in-kind contributions.
Iridium Carrier Holdings is expected to have capitalization of $500,000 and will be controlled by same 4 members as control Iridium Holdings. Each of 4 Class A investors is entitled to appoint one director. Syncom owns 26.925%, Baralonco, 24.279%, Bareena 26.925%, Millport 8.97%. Indirect foreign ownership of Iridium Carrier will exceed benchmark of 25%, triggering Commission discretion under Sec. 310(b)(4) of Communications Act. Foreign investment by companies from World Trade Organization (WTO) member countries is “presumptively approved” and such investment doesn’t count against 25% benchmark.