The U.S. Treasury would lose $1 billion in revenue if Northpoint Technology
Ltd. is allowed to occupy spectrum without paying for at it auction, according
to the direct-broadcast satellite industry's trade association.
Northpoint wants the spectrum free-of-charge, claiming that no other
legitimate bidders with tested technology exist.
Northpoint also argued that many current federal licensees -- including No. 1
DBS carrier DirecTV Inc. -- operate using spectrum obtained from the Federal
Communications Commission without charge.
In a Jan. 28 letter, the Satellite Broadcasting & Communications
Association told the FCC failure to auction the spectrum would represent a $1
billion windfall for Northpoint.
The SBCA arrived at the $1 billion estimate by comparing auction revenue for
similar wireless services.
'Giving Northpoint preferential treatment by granting it this valuable
resource would limit competition and would cost the U.S. Treasury an estimate $1
billion over five years,' the trade group said in the two-page letter.
The SBCA is fighting Northpoint's application along with its two largest DBS
members, DirecTV and EchoStar Communications Corp.
Since 1994, Northpoint has lobbied the FCC to allow it to share DBS spectrum
to deploy a ground-based service that would include video-programming channels
and high-speed Internet access.
Northpoint disputed the DBS industry's claim that spectrum sharing by
Northpoint would disrupt DBS reception in millions of homes.
The FCC was supposed to have the issue decided by December, but the agency
missed that deadline. Both the SBCA and Northpoint have used the additional time
to press their arguments in meetings with agency officials.
The FCC is expected to decide two matters: Whether Northpoint can share the
spectrum without harmful interference to DBS consumers and whether by law
Northpoint must participate in an auction for the spectrum.
Recent reports have indicated that the commission is leaning toward allowing
Northpoint to provide service. Less clear is whether it will mandate an auction
and adopt rules aimed at dealing with potential interference
issues.
