The U.S. Federal Communications Commission (FCC) has approved a request from mobile satellite providers that would allow satellite phone providers to fill in coverage gaps and offer a product similar to cellular phone service.

The FCC on Thursday issued an order allowing some satellite service providers to build land-based "terrestrial" towers enabling satellite phone providers to cover urban areas, where satellite signals are often blocked by buildings.

Satellite providers offering service in three frequency bands, the 2GHz, Big LEO and L-bands, can now build the land-based towers, contingent on a number of conditions. The operators must launch and operate their own satellite facilities, provide "substantial" satellite service to the public, and they cannot offer a terrestrial-only service to customers. Satellite providers must apply individually to the FCC for approval.

Mobile Satellite Ventures, a satellite service wholesaler and retailer based in Reston, Virginia, has been pushing for the rule change for two years, and company Chairman and Chief Executive Officer Gary Parsons praised the FCC decision. The change will allow the company to provide "reliable high-speed digital wireless services anywhere in North America," he said in a statement.

The FCC promoted the rule change as good for consumers, saying satellite providers would be more efficient at providing their own land-based service than would third-party partners. Some cellular operators had asked the commission to consider auctioning the terrestrial rights to land-based operators.

The Cellular Telecommunications & Internet Association (CTIA), which represents cellular carriers, called the FCC decision a "market-distorting mistake."

The satellite providers seem to contradict themselves, said Tom Wheeler, president and chief executive officer of the CTIA, because they claim they need land-based cell towers in order to compete, but at the same time, they say the new technical rights won't allow them to subsidize their satellite operations. "The FCC's decision to give failing satellite companies new technical rights is a gigantic giveaway that will cost taxpayers billions of dollars," Wheeler said in a statement. "The FCC seems bewitched by this twisted logic."

Mobile Satellite Ventures does not plan to compete directly with cellular phone providers, executives there said earlier this week, but the company plans to work on expanding its traditional markets, including emergency service workers and truckers, into urban areas. The price of satellite service and the phones themselves are higher than similar products offered by cellular phone providers, but other providers may be interested in competing with cellular service, company officials said.

Also on Thursday, the FCC reallocated 30 MHz of wireless spectrum at 2 GHz previously allocated for satellite use. That spectrum would be available for a number of new wireless services, including "third generation" wireless. "I believe that the highest-valued use of this spectrum is no longer for satellite service, and it is more prudent to explore other uses," FCC Chairman Michael Powell said in a statement.

ITworld.com

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