Hope Riding On Lawsuit


For Northpoint Technology Ltd., it's probably all over except for the lawsuits.

The spectrum-sharing innovator, which confronted a hailstorm of opposition, recently closed its Capitol Hill office after several attempts to gain favorable legislation collapsed.

Northpoint president Sofia Collier, an entrepreneur who made her first million bottling natural soda in Brooklyn, N.Y., is keeping a stiff upper lip.

"We have the courts. We can be patient and hold our cards and see what happens," Collier said in a recent interview. "I would definitely not write it off at this point. I certainly haven't."

Northpoint wanted the FCC to grant it a free license to provide cable programming and high-speed data in every U.S. market.

Collier's company has patents on a technology that allows ground-based transmitters, if positioned correctly, to use the same spectrum as direct-broadcast satellite providers.

The DBS industry — led by EchoStar Communication Corp. and DirecTV Inc. — complained that Northpoint was looking for a handout to deploy a competitive service that would harm their signals sent to millions of DBS customers.

In the end, the FCC backed Northpoint's claim that its technology could perform without harmful interference. But the agency refused to give Northpoint a license.

Instead, the agency opted to hold an auction, which began Jan. 14. As of Jan. 21, the FCC has received $133 million in bids.

Collier, who refused to participate in the auction, sued the FCC. But a final ruling could be years away.

Even if Northpoint wins its court case, there is no guarantee of a free license from the FCC, Collier acknowledged.

Some here are questioning whether Northpoint was treated fairly, and whether or not the auction was a signal to future spectrum-sharing innovators that someone else will ultimately exploit their advances.

Thomas Hazlett, an economist and a consult to Northpoint, EchoStar and DirecTV, argued two weeks ago in a column in The Financial Times that Northpoint deserved a free license.

"To deprive the victor of its fruits sends a clear message to wireless-technology markets: entrepreneurs need not apply," Hazlett wrote.

Jimmy Schaeffer, a DBS analyst with the Carmel Group, disagreed.

"That was great thinking three decades ago, but not today," Schaeffler said. "Times have changed. The problem is that there is too much competition out there."

Collier said the company spent more than $1 million lobbying the federal government, though Hazlett put the figure at $10 million.

Collier has other interests besides wireless technology. She runs a New Hampshire-based mutual fund company, Citizen Advisers Inc., which eschews the stock of firms that pollute, build weapons or fail to promote women and minorities.

Without a legal miracle, it appears Collier won't get her shot at competing in the pay-TV market.

"We had a vision of creating a Southwest Airlines of multichannel video, and it just fundamentally wasn't supported by the FCC," she said.

Collier is now free to roam the country for new business ventures.