Northpoint: MDS Has Foreign Owners

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The fight over access to satellite spectrum headed in a new direction Friday
as one company contending for the airwaves accused another firm of having
foreign owners who likely are ineligible to hold a U.S. license.

Northpoint Technology Ltd. and MDS America are battling to win Federal
Communications Commission approval for access to direct-broadcast satellite
spectrum to provide video programming and high-speed Internet access from
terrestrial transmitters to consumers with small reception dishes.

In an FCC filing Nov. 2, Northpoint said MDS is 71.3 percent foreign-owned
and Sheik Ali al-Khalifa al-Sabah of Kuwait owned 47.5 percent of the
company.

Although the FCC has not established foreign-ownership limits for DBS
spectrum-sharing licensees, Northpoint said MDS would be ineligible to own a
broadcast station or operate a DBS system under current FCC rules.

Citing a May 21 Associated Press story, Northpoint said Sheik Ali is the
subject of two investigations in his country 'for embezzlement and financial
wrongdoing.' The company added, 'There is reason to believe [Sheik Ali]
exercises substantial control over MDS.'

On Friday, MDS America CEO Kirk Kirkpatrick confirmed Sheik Ali's ownership
stake but said the investigations stemmed from his time as oil and finance
minister of Kuwait and are no longer an issue.

'The highest court in Kuwait struck these down multiple times with
prejudice,' Kirkpatrick said, calling Northpoint's allegations a desperate move
to harm a business rival.

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