Last week, Motorola delivered some glum news to Iridium customers, notifying users of the sat-phone offering that service could end this week unless a buyer steps up and rescues the bankrupt company. In a letter sent to customers who bought Iridium phones directly from Motorola, the telecommunications company said it would continue to support Iridium through Friday, March 17. After Friday, Iridium's latest funding package will run out of money. Motorola is the primary backer of Iridium, which filed for Chapter 11 bankruptcy protection last August. Cellular phone pioneer Craig McCaw presented a package that would have saved Iridium from collapsing, but he withdrew his support in early March.

---

DISH Complains About Retrans Deal

An unnamed broadcaster is demanding that EchoStar and its DISH Network DBS service pay up to $500 million for specialty programming in order to get retransmission consent of its local stations. The DBS provider made the allegation in a letter sent to the Federal Communications Commission last week. The letter doesn't name the broadcast company, its cable/satellite networks or its local stations. It's presented as information for the commission to consider during its implementation of the Satellite Home Viewer Improvement Act. According to the letter, the broadcaster wants a monthly 10 cent charge for each subscriber getting the group's affiliated cable/satellite networks. In addition, there's a requirement "of tying retransmission consent to EchoStar's purchasing, at a price in excess of $500 million, the distribution rights for other specialty programming that, while popular, may only be attractive to a percentage of EchoStar's subscribers." EchoStar pointed out in the letter that cable operators win retransmission consent without paying a penny by carrying networks affiliated with the broadcaster. "By its demands, the group seeks to impose draconian economic conditions on EchoStar, while at the same time, it extends its retransmission consent to cable operators on a far more favorable basis without an apparent competitive justification," EchoStar said. EchoStar tied the allegation to the need for strong "good faith" mandates, which are contained in new satellites rules. The FCC is working on a rulemaking on what defines good-faith negotiations between a broadcaster and a DBS company.

---

NRTC-C-Band Counts Are In

The National Rural Telecommunications Cooperative added roughly 28,000 subscribers for its DirecTV business in February, taking its total to 1.456 million. The NRTC sells DirecTV through participating affiliates. Pegasus and Golden Sly Systems, both of which are planning to merge, are the largest independent distributors of DirecTV through the NRTC. C-Band numbers dropped below 1.6 million, according to the Motorola/General Instrument Access Control Center. A net loss of 22,000 subscribers took the big dish total to 1.59 million.

---

Comsat/Intelsat Bill Passes House

Legislation aimed at privatizing Intelsat and giving U.S. companies direct access to its global satellite network passed the House late last week. President Clinton is expected to sign the bill into law. The legislation, which passed the House on a voice vote Thursday, will allow U.S. companies to bypass Comsat, which manages the U.S. interest of Intelsat, and get direct access to the global Intelsat consortium. The bill also will allow Comsat to merge with Lockheed Martin. Comsat and Lockheed Martin opposed earlier drafts of the legislation. Reportedly, both companies support the measure now heading to the White House.

---

SkyBOX: Will MSS Make It?

It's only Monday, but the week is already shaping up to be a tough one for mobile satellite services. For starters, the beleaguered Iridium could shut down this week, unless another backer comes in at the last minute and rescues the company. And it appears that's not likely. Iridium customers were notified by Motorola last week that service could end by Friday. SkyREPORT also has learned that Iridium account managers working through Motorola were pulled from sales or customer contact activities and placed on a program to find new positions within the company or elsewhere. Iridium has operated under bankruptcy since August. The Iridium debacle may be a blessing for its chief competitor, Globalstar. But the Loral-backed company is suffering troubles of its own. System shipment delays and distribution issues, lower subscriber targets and questions about price have spooked investors on Wall Street. The company admits there have been a some flaws since launch (a global debut six months ago and a commercial launch in the United States a few weeks ago). But executives, including Chairman Bernard Schwartz, insist Globalstar will work. When compared to Iridium, Globalstar has much lighter phones, lower prices and a radically different business plan. The company will deliver voice, short messaging and roaming. It also wants to get satellite-based phone service into remote areas that lack wired phone service. In the near future, the company hopes to add global positioning, facsimile and data transmission services. Observers say satellite telephony will eventually find a niche among consumers, but it may take some time. According to Morgan Stanley Dean Witter, sat-phone use could explode from a handful of users today to around 17 million by 2007. Unfortunately, Iridium will fade away, providing more lessons of what not to do. However, it may be early to jump to conclusions about Globalstar's fate. Do you have a comment or letter for SkyBOX? Write the editors at: editor@skyreport.com.

---

PEOPLE: Astrolink Gets Global Boss