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EchoStar Invests in TerreStar

TerreStar Networks, a mobile satellite service that plans to use broadcasters’ BAS spectrum for its wireless service, announced this week that several companies, including DBS operator EchoStar Corp., have entered into a series of separate agreements which together amount to a $300 million investment in TerreStar.

Along with EchoStar, investors include Harbinger Capital Partners Master Fund I Ltd., Harbinger Capital Partners Special Situations Fund LP and several other companies. Approximately $200 million was available to TerreStar on Feb. 7, and the balance is dedicated to funding the TerreStar-2 satellite.

As many broadcasters know, TerreStar holds mobile satellite service (MSS) licenses that include frequencies in the 1990 MHz and 2025 MHz spectrum, which was previously allocated to the 2 GHz Broadcast Auxiliary Service (BAS). TerreStar will use an ancillary terrestrial component (ATC) to provide additional coverage from ground-based stations. In addition to financing, TerreStar also obtained separate rights to certain 1.4 GHz spectrum currently held by EchoStar and Harbinger.

“These strategic investments will help drive long-term shareholder value and ensure that TerreStar has access to the requisite capital to achieve its operational launch by the end of 2008,” said Robert Brumley, TerreStar president and CEO. “Also, the enhanced nationwide spectrum footprint can help TerreStar accomplish its mission to offer reliable, interoperable satellite-terrestrial communications and next-generation applications for the commercial, government, rural and public safety sectors throughout North America.”

The Terrestar announcement said the financing will be used in part to fund the completion and launching of TerreStar-1. Satellite manufacturer Space Systems/Loral reported that the main body of TerreStar-1 is100 percent complete and reference performance testing is underway. Additional testing will be completed in April 2008. Arianespace has confirmed it can launch the satellite during the Dec. 2008—Feb. 2009 launch window under an innovative “launch on demand” contract with TerresStar.

Doug Lung is one of America's foremost authorities on broadcast RF technology. He has been with NBC since 1985 and is currently vice president of broadcast technology for NBC/Telemundo stations.