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EchoStar's satellite plan out of orbit

The owner of Dish Network had been expected to be the first to offer commercial service using new Ka-Band satellites. But plans are off course because of an expired FCC license.

EchoStar Communications' plans to launch a new satellite and new services later this year appear to be up in the air now that federal regulators unexpectedly canceled a crucial license.

The owners of the Dish satellite television network had until January 2002 to begin building an orbital that uses spectrum EchoStar licensed from the Federal Communications Commission in 1997. But the company apparently missed the deadline, making the spectrum license "null and void," the FCC has ruled.

A spokesman for Littleton, Colo.-based EchoStar said the company will ask the FCC to reconsider the ruling, which a spokesman described as being the result of a misunderstanding over whether construction on EchoStar 9 had actually begun.

"We're confident once they look at the facts," they'll reverse themselves, the representative said.

The EchoStar 9 is part of a new generation of satellites that convert television channels or broadband Internet access into tiny beams of energy that connect directly to an antenna on a home or business. It's a faster method than current generations of satellites, which sends signals to a "hub," then to a home or office.

EchoStar was expected to be the first to offer a commercial service using these new satellites, known as Ka-Band. It has yet to announce what new services it would offer once the satellite was launched later this year.

Other satellite broadband and television companies that announced plan to use similar satellites are the Hughes Network System's SpaceWay, WildBlue Communications and Teledesic, backed by Microsoft Chairman Bill Gates and wireless veteran Craig McCaw.

"The FCC revocation of the license, at this late hour, based on an incorrect reading of the contract, will have a chilling effect on the U.S. satellite industry," an EchoStar representative said.

An FCC representative declined to comment. FCC records cite a letter from EchoStar attorney Pantelis Mchalopoulos, who reportedly told the FCC that part of the EchoStar 9 satellite using the Ka-BAND might never become operational and the company couldn't guarantee it ever would be.

"In this regard, the Ka-BAND package will be able to operate only under certain limited conditions that may never occur," Donald Abelson, chief of the FCC's international bureau, wrote in the recent order yanking the licenses.

"We do not question EchoStar's intent to build and operate a (Ka-Band) satellite," he adds. "We do not believe the Ka-Band portion of the contract shows sufficient commitment to meet our standards."