Sprint Sues TerreStar, ICO for BAS Relocation Reimbursement
Sprint Nextel sued ICO Global Communications and TerreStar Networks, seeking to recover $100 million from both mobile satellite services operators for clearing the broadcast auxiliary service from the 2 GHz band. The BAS spectrum was swept up in the 800 MHz band reconfiguration, so Sprint is paying to move BAS off the spectrum that ICO and TerreStar Networks want to use.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
If Sprint keeps clearing the band and isn’t reimbursed by TerreStar and ICO, “the MSS entrants to the band would simply be free riders, with Sprint having unfairly borne the entire cost of clearing the band for the MSS entrants, contrary to FCC rules and precedent,” Sprint told the U.S. District Court in Alexandria, Va.
Sprint’s June suit didn’t come to light until late Tuesday when TerreStar alerted investors in a filing to the Securities and Exchange Commission. “TerreStar believes the claims against it are without merit and intends to vigorously defend against this suit,” it said in the filing. ICO’s reaction was similar.
Citing an FCC declaration that the MSS operators had to reimburse Sprint if they entered the band before June 26, TerreStar, beset by problems building its satellite (CD July 1 p3), long has denied any reimbursement obligation. “Under TerreStar’s invalid theory, it can avoid paying any reimbursements to Sprint by improperly waiting out the 36- month transition period,” Sprint said in its suit.
Sprint says both ICO, whose satellite launched in April, and TerreStar, still preparing for its MSS ancillary terrestrial component service, are in the band, triggering the reimbursement obligation. Entering the band is the standard, not offering service, Trey Hanbury, a Sprint attorney, told us. “The FCC knows how to say ‘offering service’ and they didn’t say that.”
“They went to court because they haven’t persuaded the FCC to change the rules,” said an ICO spokesman, referring to Sprint’s campaign (CD May 2 p3) to have the FCC require the MSS operators to pay Sprint. Sprint may have filed in several proceedings involving ICO and TerreStar, but the issues before the federal court in Virginia “are not before the FCC,” Hanbury said. ICO and TerreStar are expected to try to get the suit dismissed, sources said.