PARIS — The Craig McCaw-backed Teledesic satellite broadband constellation project, which took the space industry by storm in the late 1990s and persuaded prospective contractors to invest about $1 billion in preparatory research, has surrendered its sole remaining asset.
In a letter to the U.S. Federal Communications Commission (FCC), the Bellevue, Wash., company said it was giving up its license to use a massive swath of radio spectrum — 500 megahertz uplink, and 500 megahertz downlink.
At just three paragraphs, the June 27 letter from Teledesic’s lawyer, Mark A. Grannis, is as short and clear as the Teledesic story is long and complicated.
Why Teledesic decided to make the move now is unclear. The company has been little more than a shell for at least a year, and its would-be contractors had long since stopped working on the project.
From its beginnings in 1991 and its formal FCC application in 1994, Teledesic evolved from a system proposing a low-orbiting constellation of 840 satellites, to one with 288 satellites, and finally to a medium Earth orbit constellation of 30 satellites.
Grannis, a partner in the Washington law firm of Harris, Wiltshire & Grannis LLP, said the decision to abandon all claims on the radio spectrum was made in part because Teledesic was facing a January 2004 FCC deadline to show firm progress in building its satellites.
"In the current funding environment, that was not going to be possible," Grannis said in a July 11 interview. "Teledesic was a magnificent dream, and I was a true believer all along — one of the last true believers."
International frequency regulations assign licenses to nations, not to companies. The licensed administration then sorts out which company has access. With Teledesic abandoning its rights, FCC officials now are mulling whether to return the frequencies to the common global pool managed by the International Telecommunication Union (ITU), a United Nations affiliate based in Geneva.
"We’re still looking at this to determine what to do," said an FCC official July 11. "It might be better just to let the license expire. At this point, does anybody care about it? We want to find out. We have other applicants that want to use this spectrum."
But the FCC official acknowledged that the other applicants, while alive in a regulatory sense, have shown no recent motivation to develop their systems. Ironically, the week after Teledesic’s letter to the FCC, the agency issued a broad order setting out its proposal for how Teledesic would share its frequencies with the several other satellite-broadband proposals that had applied for the spectrum in a second round of applications. Teledesic was the lone licensee in the first round.
The FCC official said that order, dated July 9, was issued despite the Teledesic decision because it has value as a precedent for settling future conflicts between first-round licensees and second-round applicants for spectrum.
"We’re going to do an honest evaluation," the FCC official said. "For now, as far as we’re concerned the other applicants have not informed us that they are no longer interested."
At the height of its reputation, Teledesic marshaled the lobbying power of the U.S. government to persuade other governments to grant the company access to its radio frequencies. Several European governments feared that Teledesic, which for a time also appeared to have the support of Microsoft Chairman Bill Gates, would create a global broadband monopoly.
