The FCC originally set aside the SkyTerra spectrum strictly for satellite use. The FCC encourages satellite systems because they aren't affected by hurricanes, earthquakes or other events that can knock out cell towers. The downside of satellites is that they don't provide good connections in cities, where buildings can block transmissions, and that all of the expense is upfront: SkyTerra's two satellites will cost $300 million each to build and launch, Credit Suisse analyst Chaplin says.
The SkyTerra spectrum became more valuable in November 2004, when the FCC ruled that its satellite system could be augmented with land-based cell towers, making it more attractive to mobile phone users.
Falcone still must launch satellites in order to comply with the FCC licenses. Lots of companies have tried to build satellite networks and failed. One of the first, Teledesic LLC, planned to dish up Internet service from space with 288 inexpensive satellites by 2002.
Wireless And Risk
It was backed by McCaw, Microsoft Corp. co-founder Bill Gates and, later, Saudi Arabian Prince Alwaleed Bin Talal. The backers halted funding, and the network never got built.
Falcone knows the risks. Yet he takes pride in never losing his calm. "You tell me I need a heart transplant and then I'll get stressed out," he says.
Galloway of Firebrand agrees that his friend keeps his cool. "He doesn't scare easily," Galloway says. "He does a lot of homework, makes a decision and doesn't look back."
Falcone better hope his investors don't scare easily either. The ride they're on could be bumpier than Falcone's cross-country trip in that battered Mercury.