News

FCC Yanks DBS License from EchoStar

7/02/2002 2:48 AM Eastern

Federal regulators Monday yanked a satellite license from EchoStar
Communications Corp., claiming that the firm failed to meet the January 2002
deadline to begin construction of a satellite scheduled for sea-based launch
later in the year.

The action by the Federal Communications Commission was not unprecedented. A
few years ago, the agency took back a prime direct-broadcast satellite license
from Advanced Communications Corp. and auctioned it for $682.2 million to News
Corp. and MCI Communications Corp.

EchoStar ultimately became the holder of that license.

EchoStar said it would ask the four FCC commissioners to review the decision
of International Bureau chief Donald Abelson, who ruled that the company
submitted a contract that showed no commitment to equip the satellite with
operational Ka-band transponders and, thus, breached the January 2002
deadline.

EchoStar has $100 million invested in the EchoStar IX satellite under
construction at Space Systems/Loral.

The satellite -- scheduled for a fourth-quarter launch from an ocean platform
-- is authorized to provide Ku-band and C-band services.

'EchoStar will file a petition for reconsideration. There is ample precedent
for the FCC to reverse itself. We are confident that once the FCC takes a closer
look at the facts, it will reverse its decision and will reinstate the Ka-band
portion of the licenses,' EchoStar spokesman Marc Lumpkin said.

EchoStar likely has an uphill battle, as key decisions by FCC bureau chiefs
are seldom reversed.

'EchoStar IX will be the first commercial Ka-band payload launched in the
United States, and for the FCC to revoke the license at this late hour based on
an incorrect reading of the [Loral] contract will have a chilling effect on the
U.S. satellite industry,' Lumpkin said.

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