Tim Warren

A group of TerreStar affiliates filed for Chapter 11 bankruptcy protection in an effort to restructure hefty debt obligations, the company said. EchoStar, the largest secured debt-holder, will provide $75 million in debtor-in-possession (DIP) funding allowing TerreStar to continue operations and backstopping a $100 million rights offering, raising speculation by industry analysts of increased EchoStar involvement in future operations. TerreStar warned investors this summer it was considering filing for bankruptcy (CD Aug 10 p5). The filing Tuesday may allow for large spectrum acquisitions in the 2 GHz band, observers said.

An FCC order Tuesday increased Sirius XM’s role in deciding which bodies will use channels set aside as a condition of the XM-Sirius merger in 2008. Eligibility for the set-aside, which originally reserved 4 percent of the channels for minorities, was broadened to allay constitutional concerns about specifically benefiting ethnic groups. The order didn’t change in major ways after it began circulating in September (CD Sept 7 p2). The FCC originally set a December 2008 deadline for meeting the merger conditions, but commission action on the set-aside has long been delayed as officials worked through the constitutional issues.

Fiber use for content distribution by programmers and broadcast networks will continue to increase, executives said in a Satcon panel discussion. Satellite companies will need to embrace the technology instead of trying to fight it off, they said. The consolidation of cable headends is contributing to increased reliance on fiber, they said. Expect “fiber to play a role in distribution,” said Brent Stranathan, CBS vice president of broadcast distribution. While satellite distribution has been good, “when you look at what fiber has done, networks would be doing a disfavor if they didn’t look at that,” he said.

Enterprise satellite communications are becoming more intertwined with terrestrial services, said Spacenet CEO Andreas Georgiou. “As alternative technology companies provide more competitive technologies for the enterprise world” the satellite-based market “has to contract,” he said on a panel at Satcon in New York. Very small aperture terminal network deployment has fallen as a result and Spacenet has started combining services, he said. The company uses hybrid networks to accommodate the terrestrial and satellite needs for customers.

Successful government partnerships with commercial satellite operators for hosted payloads will require the government to step back and let the commercial processes move forward effectively, said CEO Tip Osterhaler of SES World Skies Government Solutions. Governmental oversight procedures can slow the efficiency, he told the Satcon conference in New York. For example, the Wideband Global SATCOM system, which is being built by Boeing, has allowed around 500 government employees access at the facility, Osterhaler said. “That’s a lot of oversight."

The military and commercial satellite operators need to improve communications and planning to make sure Defense Department satellite requirements don’t “outstrip” the available capacity, said Rebecca Cowen-Hirsch, president of Inmarsat Government Services. Reactive leasing by the government leaves industry and military needs out of sync, she said at the Washington Space Business Roundtable Thursday. There has been an “awakening” in recent months in the defense environment that things need to change and discussion has increased in recent months on how to break down the “impediments” to effective satellite communications policy, Cowen-Hirsch said.

The 2nd U.S. Circuit Court of Appeals issued a stay on the consummation of DBSD’s bankruptcy reorganization plan Tuesday, preventing the company from emerging from bankruptcy as planned. If the court rules against the bankruptcy plan, approved by the Southern District of New York, DBSD may have to start the reorganization planning all over again, said an executive familiar with the case. Both Sprint Nextel’s and Dish Network’s motions for stays were granted by the court and neither company was required to post bond. The court didn’t offer any more information on the decision.

Harbinger Capital Partners will sell a large chunk of its stake in Inmarsat and is no longer interested in acquiring the company, the private investment firm said Monday. Harbinger sought to buy in 2008 but pulled back after regulatory hurdles proved too high. The firm, which owns 28 percent of Inmarsat, didn’t give a reason for the sell-off. Harbinger’s LightSquared separately said it would accelerate plans to use Inmarsat spectrum for its wholesale terrestrial wireless network based on early demand.

The FCC unanimously approved a declaratory ruling and a report and order that clarify rules on broadcast auxiliary spectrum (BAS) relocation expenses incurred by Sprint Nextel. The ruling probably will help Sprint go ahead with a lawsuit against MSS licensees in the 2 GHz band, where the carrier cleared the spectrum. FCC Commissioner Mignon Clyburn, who partially concurred, said she wishes the order had gone further in deciding liability. “The Commission has a strong institutional interest in ensuring that its relocation and cost reimbursement policies are correctly applied to the specific factual issues in this case,” she said. “I believe that the public interest would have been better advanced by having the Commission decide the particular issue of whether ICO Global is liable to Sprint Nextel."

Talk at the FCC of Universal Service Fund reform to include broadband services has satellite companies concerned over the possibility of increased contribution rates without any subsidy in return, industry executives said. Under the current system, companies pay into the USF based on their interstate and international end-user telecom revenue and generally leave satellite companies out of the running for subsidies. If a future version of the USF includes broadband, as proposed by the FCC and tentatively named the Connect America Fund (CAF), satellite companies could be left paying for expansion of competing technologies again, executives said.