TRW, PEGASUS WANT FCC TO DENY VISIONSTAR-ECHOSTAR TRANSFER
FCC can help settle Ka-band spectrum debate by ruling against VisionStar-EchoStar license transfer, rivals TRW and Pegasus said in petitions filed with Commission last week. Pegasus Vp John Hane said proposal “violated trafficking laws” that prohibit satellite companies from selling licenses before launching satellites and operating system. Pegasus and TRW want VisionStar orbital slot made available for reassignment in 2nd Ka-band processing round. VisionStar slot at 113 degrees W is next to slots owned by EchoStar. Hane said: “You're not supposed to sell a satellite license you received for free for profit If the FCC denies this petition along with the Motorola-Teledesic transfer, the 2nd round allocation dispute can be resolved.” CAI Wireless, DirectCom, Hughes, Motorola, PanAmSat and WildBlue are among companies seeking Ka-band slots in 2nd round (CD Feb 1 p2).
Pegasus petition to deny accused VisionStar of failing to meet commencement milestones and trafficking Ka-band license: “Despite holding the license for 4 years, VisionStar has accomplished nothing toward construction of the satellite and has utterly failed to comply with even the simplest and least burdensome requirement” of its license. Pegasus said Orbital construction contract was nothing more than ruse and company had no intention of fulfilling obligations. VisionStar never spent “single dollar” for down payment, Pegasus said.
In its petition to deny, TRW said VisionStar “failed to comply” with FCC rules, “failed to meet the commencement milestone condition” and was “seeking to profit” by selling Ka-band license. “In substance, the transaction is not, as the parties characterized it, an infusion of capital to permit deployment of the VisionStar system, as licensed, but an effort by EchoStar to leapfrog the long-pending 2nd round Ka-band applicants and secure an orbital slot left undeveloped by VisionStar, which seeks to reap whatever it can from a project that it abandoned long ago.” VisionStar’s lone shareholder, CEO Shant Hovnanian, “brings nothing to the table but the license itself,” TRW petition said. It said Commission shouldn’t allow EchoStar to improve its “competitive chances” by obtaining VisionStar’s “undeveloped authorization to trample” rights of 2nd round Ka-band applicants.
Attorney for industry rival said it would seem to be “inequitable” for FCC to “allow someone to be bailed out at the last minute” to save first-round licensee trying to “resolve” financial problems: “You have an obligation to build. I can’t blame EchoStar for trying. Whether it makes sense from a policy standpoint is an entirely different issue.”
VisionStar allegedly turned down $10 million offer from Pegasus 2 years ago after setting price at $20 million for same license it’s selling now for $3 million, industry source said. “I heard… Hovnanian hung the phone up” on Pegasus “when an offer of $10 million was made,” source said. Source also questioned “side loans” to VisionStar by EchoStar in deal.