Craig McCaw lifts off

In about 2001, I pretty much excised the satellite communications industry from my beat. Except for the sporadic bankruptcy update and the occasionally sensational story about Iridium satellites potentially crashing down to earth, there wasn’t much left to beat out of that particular sector of telecom.

Now, I’ll have to rethink that decision. Suddenly the mobile satellite services (MSS) guys are starting to make waves (both figurative and radio -- oh, what depths of humor I’ve sunk to…). The key development was the FCC’s permission -- granted so many years ago -- to allow MSS license holders to use their spectrum on earth as well as in space. That spawned new plans for hybrid terrestrial-orbital networks that seemed improbable at first but now are appear to be becoming reality.

Terrestar -- you may remember them as Motient -- is building a satellite network augmented by ground-based Nokia Siemens Internet-High Speed Packet Access (also known as Evolved HSPA) network. But the cake definitely goes to our old friend Craig McCaw, who since taking over ICO Global in 2000 has transformed the would-be broadband provider into a company that rolls vehicle navigation, OnStar-like emergency communications and mobile TV all into one enchilada. Sounds far-fetched, I know, but on Monday at 4:12 PM ET, ICO pulled off a half-billion-dollar space launch that propelled its communications satellite into orbit. It’s hard not to take that seriously. (You can actually watch the launch at United Launch Alliance’s website if you don’t believe me.)

The technology ICO is deploying is Digital Video Broadcast-Satellite services to Handhelds (DVB-SH) -- as if DVB-H wasn’t an awkward enough acronym. Alcatel-Lucent is the technology provider, and unlike other McCaw technology ventures, this one isn’t operating in a standards vacuum. Trials of the technology are taking place all over Europe, Asia and Australia. ICO, however, is the only operator committed to full commercial launch, which is a position McCaw has to be comfortable in considering his ventures into uncharted technology territory with Nextel and Clearwire.

“Classic Craig McCaw,” said Current Analysis’ Peter Jarich, who summed up the entrepreneur’s business acumen in one thought: “‘I think this technology makes sense, so I can make it work.’”

But will it work? DVB-H was a dud here in the U.S. Qualcomm’s MediaFLO service quickly put an end to that technology’s ambitions here (and so far, MediaFLO isn’t doing all that hot, either). So why would DVB-H’s cousin fair any better? I suspect McCaw and ICO are betting they can make a better economic case than Aloha Partners and Crown Castle. One of MediaFLO’s key advantages is the high-power at which it can broadcast its signal, using the same spectrum and TV towers that your local ABC affiliates uses to ship “Desperate Housewives” to your boob tube. The original DVB-H business models required building cellular-footprint-like density, while Qualcomm claims it can get away with two or three towers in any large market.

By using a big reflector dish in the sky, ICO gets around that issue, supplying ubiquitous coverage all over the U.S. with a terrestrial network to add coverage in the nooks and crevices, much the same way the satellite radio providers operate their networks. Still, I wonder if the economics truly do balance out. ICO estimates it will take about 14 broadcast sites to cover Raleigh-Durham, while Qualcomm can likely cover it with one. Of course, ICO can cover every tobacco farm and hog ranch in North Carolina with its satellite, but is that enough to justify the $500 million expense of launching it?

Contact me at kfitchard@telephonyonline.com.