- The Washington Times - Thursday, August 31, 2000

The White House and the Federal Communications Commission are trying to convince Motorola Corp. to keep the satellite network in orbit above Earth that bankrupt Iridium LLC put in space.

But Motorola, which owned 19 percent of District of Columbia-based Iridium and now controls the satellites, continues to work on a plan to deorbit them.

"We were trying for some time to have Motorola keep an open mind about selling [the constellation], because it's a valuable commercial resource," said a White House official who spoke on the condition of anonymity.

An Iridium official said yesterday the FCC continues to push Motorola to salvage the constellation by selling the 72 satellites. The small satellites were used to support Iridium's calling and paging services that began in November 1998.

Motorola spokesman Scott Wyman declined to talk about details of the company's discussions with federal agencies.

"We aren't going into any discussions that have been held. We've been talking to various agencies going back at least to March," he said.

Some of the discussions between Motorola and the federal agencies, including the Federal Aviation Administration and National Aeronautics and Space Administration, have been about the company's plan to destroy the satellites.

Since Motorola hasn't completed the deorbiting plan, it's still not clear when it will send the first satellite hurtling toward Earth to burn up as it re-enters the atmosphere.

The company has had approval since March from the U.S. Bankruptcy Court in Manhattan to destroy the satellites, and it has worked on a plan for deorbiting its 66 active and six backup satellites since then.

The FCC yesterday declined to comment on its interest in seeing the satellites sold to another company so they remain in operation. But the Iridium official said the federal agency has tried to convince Motorola to work out details of an agreement to transfer operations to defense contractor and aerospace company Boeing Co.

A main sticking point is whether the new owner would offer full indemnification protection for Motorola.

Boeing would act as a subcontractor for an unnamed buyer and operate the satellites, but wouldn't take a stake in the satellite network.

An FCC spokeswoman said she doesn't know who Motorola is talking with and the agency hasn't participated in any negotiations between Motorola and prospective buyers.

Boeing declined to name the company it's working with.

"We are continuing to support that company in its pursuit of the Iridium assets," Boeing Space and Communications spokeswoman Anne Eisele said.

Boeing's name surfaced in May when New York investment bank Castle Harlan Inc. submitted a $50 million bid to buy the satellites.

Mr. Wyman said the last serious bid it considered came from Castle Harlan, which backed out July 28, saying it couldn't find a way to affordably operate the network.

The FCC isn't the only federal agency hoping Motorola finds a buyer.

Other departments that have been in contact with Motorola during its voluntary effort to share details of its deorbiting plan have expressed concern that the satellites will be destroyed.

"The government was hopeful a successful sale could be achieved and the satellites could be used. We're trying to assist parties involved in any way we can," Justice Department spokeswoman Chris Watney said.

Potential buyers likely have walked away from the $5 billion constellation of satellites because of the cost involved in operating the system. Motorola filed a brief with U.S. Bankruptcy Court in July the day Castle Harlan decided it could not make money if it bought the satellites saying it pays $10.1 million a month to operate the satellites.

Iridium filed for Chapter 11 bankruptcy protection in August 1999 because it was unable to make payments on an estimated $4.4 billion in debts.

A bid was filed last week by CMC International, a California company that offered $30 million for Iridium's satellites.

Mr. Wyman said Motorola hasn't entered negotiations with the new bidder.

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