- - - Iridium Defaults, Bankruptcy Next? - - -

Iridium World Communications defaulted on loans totaling more than $1.5 billion, pushing the troubled sat-phone operator closer to bankruptcy.

A third extension on a $800 million loan expired Wednesday, triggering the subsequent default on another $750 million loan. Iridium did not ask for another extension. The default comes as Iridium failed to meet subscriber and revenue targets established by creditors.

In addition to this week's deadline, Iridium is required to make a $90 million interest payment on its outstanding $1.45 billion in senior notes on Aug. 15.

Motorola, which holds about 18 percent of Iridium equity, was positioning to save the satellite company, but only as long as other partners also stepped up to bail out the service.

Willian Kidd of C.E. Unterberg, Towbin reiterated his "Sell" stand on Iridium's stock. "Bankruptcy may be awfully close," he said in a research note, "but banks may still give Iridium days to weeks to put forth an out-of-court restructuring plan or pre-packaged bankruptcy before taking matters in their own hands."

Armand Musey, senior satellite analyst with Banc of America Securities, said his firm is maintaining its "Underperform" rating on Iridium "due to the tremendous uncertainty over the restructuring outcome."

He added that speculation over the current restructuring proposal involves swapping $1.45 billion in bonds for new debt convertible into 44 percent of Iridium's equity. "Additionally, Motorola could put in another $400 million, and increase its stake to 25 percent," he said. "Existing equity holders would be significantly diluted, but still own around 4 percent of the company.

- - - Kennard Delivers FCC Strategic Plan - - -

Federal Communications Commission chairman William Kennard delivered to Congress a draft plan to revamp the agency, refocusing its efforts away from managing monopolies to addressing issues that can't be solved by the marketplace.

Part of the initiative includes a renewed emphasis on the management of the nation's airwaves and spectrum. A focus on consumer protection and enforcement also is presented throughout the draft plan.

Kennard said he also wants to consolidate rulemaking and licensing functions, which hopefully will streamline regulatory processes at the agency and provide one-stop shopping for license applicants.

And there could be some restructuring at the FCC. For example, the agency may combine media-related cable and mass media functions to create a media competition bureau. Enforcement, consumer information, licensing, competition and policy, and international communications are other offices that may be restructured. These functional areas could replace the current industry-specific bureaus at the FCC, Kennard said.

The FCC revamping should be completed in five years.

- - - Hughes Chases ICO Communications - - -

Hughes Electronics and other investors may buy a bigger stake in ICO Global Communications, the $4.7 billion sat-phone system reeling from the effects of the Iridium debacle, according to The Wall Street Journal.

That news comes as ICO failed to raise $600 million in financing.

Hughes is contracted by ICO for about $2.5 billion for the construction of 12 satellites, ground systems and handsets. Hughes has already invested $94 million in the London-based company for about a 4 percent minority ownership stake.

The Journal said Hughes's investment would "nearly triple" its ownership. One executive said Hughes's ownership share will range from 10 percent to 15 percent.

- - - Media Giants Eye Personal TV Systems - - -

Five media titans have formed a coalition to protect copyrights from evolving personal TV systems.

CBS Corp., Walt Disney Co., News Corp., Time Warner and Discovery Communications said their group - the Advanced Television Copyright Coalition - wants to protect program copyrights from personal television services that allow viewers to manipulate viewing habits and programming. They argue that companies such as TiVo and Replay Networks must be subject to negotiations similar to the way studios license shows to networks or basic DTH/cable channels grant carriage to local cable systems or DBS providers.

The media giants said they don't want to stop the emergence of personal TV recorders. In fact, CBS, Disney, Discovery and News Corp. affiliate TV Guide Interactive are minority investors in TiVo. TiVo also has won the attention of DirecTV, which plans to use the service inside advanced set-top boxes.

- - - PROGRAMMING: - - -

• BET To Debut Online Service -
  Microsoft, USA Networks, News Corp. and Liberty Media are all backing BET Holdings in a new online initiative. The service, which will be known at BET.com, will offer e-mail and chat communities, multiple content channels and shopping. The $35 million venture, which is meant to function like American Online or Go, will debut in November.

• DirecTV Scores Fox Sports Sky Box Deal -
  Under agreements announced Thursday, DirecTV will provide programming services in all Admirals Club lounges operated by American Airlines and new airport restaurants operated by Host Marriott Services. Under the Host Marriott deal, DirecTV programming will become an exclusive feature inside all Fox Sports Sky Box Bar and Grill locations. A Fox Sports Bar and Grill first opened inside Chicago's O'Hare International Airport. More than a dozen Fox Sports Sky Box establishments are expected to open by 2002.

• TVN Has ESPN Game Plan Promotion -
  TVN will deliver a special promotional offer to C-Band owners who subscribe to ESPN GamePlan. College football fans who subscribe through TVN will receive $10 off any on-line purchase of $75 or more at www.proamsports.com, a leading online source for officially licensed college merchandise, apparel and novelties. C-Band customers who order ESPN GamePlan will be sent a postcard explaining how to obtain their $10 discount. To order ESPN GamePlan from TVN, C-Band dish owners should call (800) 232-4TVN. The season package costs $89 for orders placed by Aug. 31, and $99 for orders placed beginning on Sept 1. ESPN GamePlan games can also be ordered on a per-day basis for $11.95.

• Travel Channel Explores Arctic Canada -
  In the premier of the Travel Channel's "Lonely Planet: Arctic Canada" this Sunday, Aug. 15, Host Ian Wright will journey from Montreal to within 50 miles of the North Pole. Wright will explore the frozen land's food, recreation, living and working conditions. The hour-long program begins at 8 p.m. ET/PT.

• Movie Channel Unveils Sexy Drama -
  On Saturday, Aug. 21 at 10 p.m. ET/PT, The Movie Channel will premiere "Shame, Shame, Shame," the story of a student of the human sexual psyche who cannot free her own sexual anxieties until she unlocks her past. The film is directed by Zalman King ("Red Shoe Diaries" and "9 1/2 Weeks") and stars Costa Mandylor ("Picket Fences").

• Recent Coups For Turner Broadcasting -
  TBS Superstation has acquired the broadcast network premiere rights to "Deep Blue Sea," which will air in 2002. TBS also announced this week that its network television premiere of "Vegas Vacation" on Aug. 8 garnered the honor of being the week's highest-rated movie on basic cable. And Cartoon Network announced this week that for the 10th consecutive week it set network ratings records that included being the second-highest ad-supported network in total day household rating for the week ending Aug. 8.