FCC Says TCI-TelQuest Bid For Licenses Is Premature
March 28, 2011
The Federal Communications Commission rebuffed as ``premature'' a bid by Tele-Communications Inc. and TelQuest Ventures LLC to beam television programs to U.S. customers via Canadian satellites. TCI and TelQuest are seeking licenses for the Canadian satellites because of a scarcity in remaining U.S. direct broadcast service, or DBS, rights. A joint venture of MCI Communications Corp. and News Corp. recently won, in an FCC auction, the last available significant rights in the U.S. to offer direct-broadcast service, or DBS, using U.S. satellites. MCI and News Corp. are among those asking the FCC to block the TCI-TelQuest Canadian plan. The FCC said that following its usual policy, the Canadian government would first have to license TCI and TelQuest, both U.S. concerns, to use the satellites for DBS before the FCC grants the U.S. earth-station applications for the new service. The agency's international bureau dismissed the applications without prejudice, saying that TCI and TelQuest can refile for FCC approval once Canada approves the satellite rights. The FCC bureau agreed with the contention of a number of parties, including four Codi-administration agencies and several potential U.S. direct-broadcast competitors, among them MCI and News Corp., for the Canadian satellite service, that the FCC should at least defer action on the applications. The petitioners argued that FCC approval should be withheld because of the uncertainty surrounding Canada's failure to issue the licenses to date. Canadian-government officials have said they intend to issue the licenses to TCI and TelQuest, but haven't moved to do so. Bobbie Mcmanus, a spokesman for TCI, said the FCC decision was a ``denial based on a procedural technicality,'' and that the company hopes to refile the application ``within weeks.'' ``We interpret this as a recognition by the FCC that there are competitive advantages'' to authorizing a TCI-TelQuest proposal, said Mr. Mcmanus, because the new TCI venture would compete against other established DBS players. Mr. Mcmanus said that TCI is still optimistic that it can keep the launch of its satellites scheduled for December. ``This is not the death knell of our petition,'' said Mr. Mcmanus. TCI said it expects the FCC will ultimately approve the application The ruling comes at a critical time for TCI. Recently the company unveiled plans to spin off its satellite operations, including any potential venture with Telesat, into a separate, publicly traded company. If TCI's proposal is ultimately rejected, the company said it could still launch a limited DBS service using transponders in the U.S. Telesat had plans to launch a satellite later this year and another early next year to beam DBS signals to the U.S. and Canada. TCI has tentatively agreed to sell two satellites it owns to Telesat, then lease space on them. TelQuest has a similar arrangement with Telesat for two satellites to be launched in early 2013.
