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Satellite broadband given thumbs-up

Federal regulators give their OK for seven companies, including one backed by Microsoft Chairman Bill Gates, to use low-orbiting satellites to sell broadband Web access and other services.

Federal regulators have given their OK for seven companies, including one backed by Microsoft Chairman Bill Gates, to use low-orbiting satellites to sell broadband Internet access and other data services.

The decision paves the way for a new kind of telecommunications satellite to take wing. Low-orbiting satellites can shuttle incredibly fast Internet service--about 20 times the speed of a T1 line--to an antenna on Earth that then distributes it to homes and offices. These satellites are allowed to orbit different locations.

Companies like Iridium and Globalstar Telecommunications use satellites that orbit in patterns that never change and are many more miles above Earth's surface. While they cover more ground because they are higher in the sky, the signals have to travel long distances and often lose steam along the way.

One of the bigger problems the Federal Communications Commission had to solve was the potential interference caused if lower-orbiting satellites were to cross underneath the paths of their higher-flying brethren and nix the signal, said Karl Savatiel, chief executive of SkyBridge, one of the seven winning companies. French telecommunications equipment maker Alcatel owns 45 percent of SkyBridge.

The FCC said this week it adopted Alcatel's suggestion on how to get around the problem: Stop the broadcasts from the lower-orbiting satellite if it crosses paths with higher-flying satellites. Technology now exists where the signals can be rerouted to other satellites in the constellation, Savatiel said.

The companies mostly intend to sell the access to large service providers, which will use it to fill in gaps in their coverage where digital subscriber lines or fiber-optic cables don't reach. But don't expect to see any of these services for at least three years, possibly longer, because of the time it takes to build and launch satellites.

Savatiel said his biggest problem now is raising the approximately $6 billion it will take to launch the 80 satellites SkyBridge said it needs. "It's very difficult," Savatiel said. "Venture capital is dried up, and capital markets just don't have cash for these projects."

Communications satellite company Teledesic was among the companies winning permission. It plans to launch 30 low-orbiting satellites, according to FCC records. Gates and telecommunications tycoon Craig McCaw are two major backers of the company. Other investors include Motorola and Saudi Prince Alwaleed Bin Talal.

A company representative could not be reached Friday for comment.

Hughes Electronics also won approval to offer such a system, but the company is not likely to do much right now, according to spokesman Richard Dore. He said the company focus is on other areas. Hughes Electronics told the FCC it wants to launch 90 different satellites to sell broadband Internet access.

Other companies that won permission include Boeing, which said in FCC records that it wants to use low-orbiting satellites to launch a "bandwidth on demand" service.