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Echostar Communications has been planning to merge its popular Ku-band TV satellite service with Ka-band spectra that could add two-way broadbrand and interactive satellite Internet services, just like its competitors DirecTV and DirecPChave done. Operating on the 17.7 GHz, 21.2 GHz, 27.5 GHz and 31 GHz spectra, the KA-band slots would enable EchoStar's satellite to cover large areas with broadband service.

But last week, the FCC threw a major wrench into those plans by pulling EchoStar's Ka-band license because its records showed that the company had not yet started construction of a satellite that would use the Ka-band frequencies. Echostar had previously made arrangements with two other companies, Starband Communications and WildBlue, for broadband satellites, neither of which panned out.

The FCC says that EchoStar has 30 days to file a challenge, which the satellite provider claims is already in motion. EchoStar issued a statement last week that it "strongly believes the decision by the International Bureau of the Federal Communications Commission (FCC) canceling EchoStar's Ka-band license is wrong and should be reversed.

"The decision is based on the clearly inaccurate premise that EchoStar has not commenced construction of its first Ka-band satellite. The FCC apparently based that decision on an incorrect reading of EchoStar's satellite contract documents. In fact, there is no better demonstration of EchoStar's commitment and progress than the imminent launch by EchoStar this year of a satellite equipped with the first-ever commercial Ka-band satellite payload over North America."

EchoStar's Charles Ergen added, "If being the first in the US to construct and launch a commercial Ka-band satellite does not adequately demonstrate diligence, then there will be a significant chilling effect on the entire industry. Confidence in the regulatory process will be undermined."

Space Systems/Loral designs and constructs satellites for Echostar, and the company's Patrick DeWitt said, "The EchoStar IX design has always included an extensive Ka-band payload. I can say unequivocally that the satellite, scheduled to launch this year, has ample power and thermal resources to operate the entire Ka-band payload, concurrent with the other payloads on the satellite, for the more-than-15-year design life."

Echostar insists that the Ka-band payload on the EchoStar IX satellite being built by Loral is almost three years ahead of the launch date specified by the FCC. "That satellite also includes a Ku/FSS payload. Construction of that satellite, including the Ka-band payload, is complete, and we have made payments of approximately $75 million to date for the satellite."

The company claims the new satellite will "prove the concept of commercial use of Ka-band spectrum so that future Ka-band satellites are more likely to be financed, constructed, and launched throughout the industry. EchoStar intends to vigorously challenge the FCC staff decision and to supply the FCC with exhaustive additional documentation confirming that construction of the satellite is in fact complete. EchoStar is optimistic that once the FCC has the opportunity to evaluate all these facts thoroughly, it will reinstate EchoStar's license."