WASHINGTON -- Federal regulators took a significant step yesterday toward approving global satellite systems that would relay calls to and from hand-held wireless telephones, issuing final regulations to let five rival companies share a scarce number of available radio frequencies.
The decision, by the Federal Communications Commission, settled a long-running dispute between Motorola Corp., which wants to launch a fleet of 66 small satellites, and four competing companies that want their own systems.
All of the companies hope to provide a global wireless telephone service that will enable people with pocket-sized telephones to make and receive calls from almost any place in the world. The hand-held telephones would communicate directly with satellites in low-earth orbit, several hundred miles high.
Besides Motorola's Iridium project, the FCC has received applications from TRW, Loral and two start-up companies, Ellipsat and Constellation Communications.
FCC Chairman Reid Hundt said the new rules would provide room on the airwaves for all five companies and that the agency would issue the first licenses in January.
Motorola, which has raised about half of the $3.3 billion it needs to start its system, hopes to offer service by 1998. Loral Corp., which has raised more than $200 million of the $1.8 billion it will need, hopes to be operational within the next few years.
But the competition is likely to be intense. Inmarsat, the London-based international consortium that provides maritime communications, is raising money for a satellite telephone network that would use a smaller number of bigger spacecraft orbiting higher above the earth.
Bethesda-based Comsat Corp., a quasi-public satellite concern chartered by Congress, is a big investor in that system.
And American Mobile Satellite Corp. in Reston, Va., which is owned in part by Hughes Communications and AT&T Corp., is building a satellite telephone system using huge "geosynchronous" satellites, which orbit at the same speed as the earth's rotation at a height of 22,300 miles.
The low-earth-orbit systems use satellites that are smaller and easier to launch and can communicate with low-powered devices much more readily than geosynchronous systems. But the low-earth systems require many more satellites to provide complete coverage, and they require more coordination from ground-based tracking systems.
A big obstacle for low-earth systems has been a highly technical clash between companies over incompatible technologies. Motorola's technology required that Motorola get exclusive use of certain frequencies.
The other four companies employed an approach that would allow them to share frequencies, but required them as a group to control a large part of the available spectrum.
The companies have been haggling over the issue for several years, but until recently had not been able to reach agreement. The impasse finally broke last month, after FCC officials warned that they would impose their own solution by October if the companies did not come up with their own answer.
"We squeezed all the applicants into the same spectrum by, in effect, locking them into the same room and telling them they couldn't start building their satellites until they agreed," Mr. Hundt said. "Lo and behold, they came to an agreement."