Tuesday's move by the FCC is meant to trigger more satellite phone service, mainly in rural areas of the United States, where cellular phone service is sparse or nonexistent, according to an FCC spokesman.
The decision ends a dogfight between the cellular phone industry, which uses land-based towers to offer wireless phone service, and the satellite phone industry, which offers mobile phone service using satellites orbiting the earth. Both industries had been fighting for years over the same slice of radio spectrum.
The lengthy infighting was noted in a statement from FCC Commissioner Michael J. Copps. "The issuance of these licenses brings to closure a regulatory process that began nearly a decade ago," Copps said. "This is simply too long to wait for a decision and my hope is that the commission will move ahead expeditiously on the many other important items awaiting its decision."
A spokeswoman for the Cellular Telephone & Internet Association (CTIA), which represents the traditional wireless companies, said she was disappointed by the decision. She chided the FCC for giving away the licenses for nominal costs to a struggling industry when the wireless players that are members of the CTIA were willing to pay billions of dollars for the licenses.
"We urgently need more spectrum," the spokeswoman said.
Both satellite and cell phone players have been hit by black eyes of late. Handset sales have slowed, and major wireless players have laid off employees and announced revenue shortfalls. The satellite phone industry has fallen on hard times, with companies funded by billions of dollars in financing now nearing or filing for bankruptcy.
In fact, several of the licenses issued Tuesday by the FCC were to companies that have acknowledged they were in severe financial difficulty. They include Iridium, regarded as one of the most spectacular business failures in recent years, which was recently revived out of bankruptcy.
Another winner Tuesday was Globalstar Telecommunications. The company was rumored to be filing for bankruptcy in April.
Copps in his statement noted that the licenses will allow "new services and technologies to be tested in the competitive marketplace, which will be the ultimate arbiter of their success."
Other companies to win licenses include Boeing and ICO Services, owned by Craig McCaw, the Seattle billionaire.
Celsat America, Constellation Communications Holdings, Mobile Communications Holding and TMI Communications were also granted FCC licenses to use the spectrum.