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Globalstar close to pact with FBI over wiretaps

The satellite phone firm is close to an agreement with federal law enforcement officials who had threatened to delay its service if federal officials couldn't wiretap transmissions.

A satellite phone firm is close to an agreement with federal law enforcement officials who had threatened to delay its service if the FBI couldn't wiretap phone conversations, company officials say.

Officials at the Federal Bureau of Investigation have been concerned that Globalstar and other satellite phone companies could undermine their ability to listen in on suspected criminals' telephone calls by sending the transmissions across national borders--and outside U.S. jurisdiction.

The issue had threatened to hold up Globalstar's long-awaited launch date, scheduled for later this month. FBI officials had even raised the possibility that the company would have to move several of its expensive land-based transmission stations from Canada into the United States--an option that would have dramatically raised costs and delayed service for the fledgling firm.

The FBI's scrutiny of the satellite phone business has proved rocky for the struggling industry. Few providers can afford to restructure their network to satisfy law enforcement concerns, and many in the industry are watching Globalstar to see if a cheap technical solution to federal demands can be found.

After several months of negotiations with U.S. and Canadian officials, the company may have found a way to deal with the law as well as stay financially afloat. In a recent meeting, FBI officials and Globalstar executives agreed to pursue a technological fix that appears likely to satisfy the FBI's needs to tap into the satellite calls, company officials now say.

"We have tentatively agreed on a technical solution," said Andy Radlow, a spokesman for Vodafone AirTouch, the company that is managing Globalstar's North American operations. "We don't get any indication that they intend to hold us up."

An FBI spokesman confirmed that the agency is in discussions with satellite phone providers, but declined to comment specifically on negotiations with Globalstar.

Aside from federal concerns, Globalstar is just the latest player to enter an industry that has seen two of its early pioneers fall by the wayside. The firm's largest competitor, Iridium, has already filed for bankruptcy protection and is undergoing a company reorganization. Another smaller competitor has also filed for bankruptcy protection.

Not quite a borderless world
Globalstar is run by a coalition of companies including Loral Space and Communications, Vodafone AirTouch, and Qualcomm, among others. With satellites already in orbit around earth, the company has said it plans to begin offering telephone service by the end of September. By the time its $3.9 billion satellite system is complete, the company will be able to serve customers almost anywhere on Earth.

But before it can begin serving customers in the United States, it needs to win approval from the Federal Communications Commission--and that's where the trouble starts.

The FCC has already held up a license for at least one smaller Canadian satellite phone company based on concerns that the FBI would not be able to tap and trace telephone calls made over the system. FCC officials say they have wanted to allow negotiations between the phone companies and the FBI to proceed before acting on the license requests.

In Globalstar's case, two of the four ground stations--places where equipment sends calls to and from the satellite network--serving the United States will be located across the border in Canada.

This has worried FBI officials, who don't want to have to seek approval from foreign governments when tapping telephones. Seeking permission from Canadian officials to conduct surveillance of U.S. suspects--a likely outcome if the FBI had to physically put taps in Globalstar's Canadian stations--would be a serious breach of national security, officials say.

The fix that Globalstar and the FBI are reportedly discussing would allow law enforcement officials a way to tap into the satellite system without having to cross the U.S. border. The technical details are still being finalized, but Qualcomm--the company that provides the land station and handset equipment to Globalstar--has assured the Justice Department that the fix will satisfy their concerns, Radlow said.

"We feel we're going to continue to have a good relationship on the federal and local level with law-enforcement," Radlow said. Once the FBI has officially signed off, Globalstar can go to the FCC for its license without much fear of delay.

The company is running up against its own stated deadline to begin rolling out service this month, however. But the North American version of the service still plans a "soft launch" this November and appears likely to make this deadline despite the wiretap concerns.