Rescue of Iridium's 66 satellites at $6 billion (Part III / Responses)

<<April 15, 2000>>

Gary Garriott <garyg@vita.org>

Mr. Jim Miller <jimmsl@aol.com>

Professor Sam Lanfranco <lanfran@yorku.ca>

John W. Hibbs <hibbs@bfranklin.edu>

Ben Hindley <ab367@sfn.saskatoon.sk.ca>

John L. Mack, CEO <jlmack@erols.com>

Professor Pat Hall <p.a.v.hall@open.ac.uk>

D.K. Sachdev <dsachdev@worldspace.com>

Dear Jim, Sam, John, Ben, John Mack, and Pat:
=============================================

(1) Many thanks for your msgs.

ATTACHMENT I from Jim Miller,

ATTACHMENT II from Sam Lanfranco,

ATTACHMENT III from John Hibbs,

ATTACHMENT IV from Ben Hindley,

ATTACHMENT V from John Mack,

ATTACHMENT VI from Pat Hall.

Dear Electronic Colleagues:
===========================

(2) My previous listserve distributions on this subjects were;

(a) Rescue of Iridium's 66 satellites at $5 billion - April 5, 2000,

(b) Rescue of Iridium's 66 satellites at $5 billion (Part II / Responses) - April 8, 2000

You can find them at;
<http://www.kagawa-jc.ac.jp/~steve/global-univ-2000.html>.

Dear Jim:
=========

(3) YES, it is the first step to "Ignore the telephony line side of the
equation" to rescue Iridium satellites, i.e., THINK DIFFERENT!!

This also includes the consideration of eliminating the use of Iridium's
expensive handsets.

(4) I am very glad to hear that technology now exists to develop inexpensive
equipment to utilize Iridium's satellite with Ka bandwidth.

Dear John Mack:
===============

(5) I'm very glad to receive your msg -- it has been a very long time since
your attendance at our mtg at the Academy for Educational Development in
D.C., in July, 1995.

(6) It is very encouraging to hear from Jim that the Iridium uplinking unit
can be very inexpensive, and your WS receiver can be an attachment to a
PC for only about $300/unit.

Your idea of combined uses of the Iridium satellites (for uplinking with
narrow-band) and the Worldspace satellites (for downlinking with
broadband), and also terrestrial broadband Internet between/among their
gateway stations is very intriguing and make a lot of sense!!

(7) Also, your prediction that videoconferencing can be made at 15
frames/sec is very attractive, since 12.5 frames/sec is the threshold of
acceptable video.

If this is the case, it may have a speed of almost same as 28.8 Kbps or
better. If so, it then means that if the use of video is suppressed, we
may be able to get good audio, too.

Dear Gary:
==========

(8) It seems getting very worthwhile to rescue Iridium satellites.

(9) I would suggest that you organize a day workshop with John Mack and D.K.
Sachdev of Worldspace. Pls let me know your decision.

(10) BTW, you may recall the start of PANAMSAT was to rescue a discarded
satellite -- alas, it went so good that it even forced INTELSAT to privatize!!

Best, Tak
****************************************
ATTACHMENT I

From: JIMMSL@aol.com
Date: Mon, 10 Apr 2000 16:05:19 EDT
Subject: Re: Rescue of Iridium's 66 satellites at $5 billion (Part II/Responses)
To: utsumi@columbia.edu
CC: Gary Garriott <garyg@vita.org>, Ben Hindley <ab367@sfn.saskatoon.sk.ca>,
"D.K. Sachdev" <dsachdev@worldspace.com>, JIMMSL@aol.com, "Peter H.
Rosen" <Peter@creativity.net>, David Josephson
<david@josephson.com>,"Stephen G. Tom"
<stephen_tom@email.msn.com>,"Prof. and Mrs. Edward C. DeLand"
<edeland@anes.ucla.edu>, "Bruce P. Chadwick" <bchadwick@mindspring.com>,
Rex Buddenberg <budden@nps.navy.mil>, Hans Kruse <hkruse1@ohiou.edu>,
Edward Dodds <dodds@home.com>

Tak -
Another consideration for Iridium.

Ignore the telephony line side of the equation - The Iridium network uses a
carrier in the Ka bandidth to transmit between satellites to carry from one
gateway to another Trunks), then can use terrestial lines for the final link.
There are 11 gateways in major countries around the world.

Depending on the Ka technology in the downlink, it is possible that an
inexpensive gateway can be developed in remote areas, providing the higher
carrier bandwidth via this downlink, i.e., the trunk side of the circuit.
Demultiplexing/muxing a trunk is simpler than trying to manage the multiple
call paths on the line side of this network. This also eliminates the
expensive handset that the Iridium spec says may handle 2400 bps. Ka antennas
are small >1Meter typically so this should be inexpensive and easily
installed.

The biggest issue is probably the lifetime of the constellation, unless it is
seen as a short term, early entry for Globestar or Teledesic - like systems,
but they have already reviewed this option. For humanitaran use, it would be
tragic to get it started and then see it dissolve in 5 years.

Your discussion group has once again shown that there are definite
application needs in developing, under-served areas for bandwidth and
comnnectivity. Keep up the good work.

Jim Miller
****************************************
ATTACHMENT II

Date: Mon, 10 Apr 2000 17:53:46 -0400 (EDT)
From: Sam Lanfranco <lanfran@yorku.ca>
To: Tak Utsumi <utsumi@friends-partners.org>
Subject: Re: Rescue of Iridium's 66 satellites at $5 billion (Part II/Responses)

Dear Tak,

Greetings from an old friend. Both as an economist and as someone with a
long interest in information and communication technology (ICT) I have
been following the Iridium story for a long time. I was one of those who
wrote to the U.S. Government in support of the broadcast license.

I am afraid that an Iridium rescue does not look sound either on economic
or technological grounds. There is something in economics called the fixed
cost argument. In short, it says what you paid for something is not a
measure of its worth. It's worth is based on its expected value from this
point forward. Even if Iridium is available to an appropriate NGO for
free, the marginal costs of using it and developing it for appropriate
uses - in the areas of health, education and development - seem to exceed
the benefits no matter what the scenario.

The three problems, even if it is available debt free, are (a) limited
bandwidth, (b) expensive devices, and (c) most important, efficient
competing technologies. If there were a way of expanding bandwidth by
multiples (compression, etc.) it might have a role as part of a backbone,
but unlikely as a wireless "last mile". In the absence of that, any
economic analysis seems to point to using available resoures to progress
with newer technologies.

I have seen nothing to suggest that Iridum has a future, especially on the
areas dear to our hearts (education, health, development) where we have to
wring every benefit we can from the limited dollars and labour we have.

Sincerely, Your friend,

Sam Lanfranco
****************************************
ATTACHMENT III

Date: Tue, 11 Apr 2000 14:23:19 -0700
To: gld@onenet.net
From: John Hibbs <hibbs@bfranklin.edu>
Subject: Iridium returns to earth
Cc: utsumi@columbia.edu

Tak Utsumi, among many others are sad to see this --

>Iridium to Fall to Earth
>
>In the coming months, Iridium LLC, the bankrupt global
>satellite telephone company, will begin sending 88 giant
>satellites spiraling toward Earth, where they will burn up
>in a fitting and fiery end to one of the colossal corporate
>failures in recent memory.
>
>http://www.nytimes.com/library/tech/00/04/biztech/articles/11iridium.html
****************************************
ATTACHMENT IV

Date: Tue, 11 Apr 2000 08:33:36 -0600 (CST)
From: Ben Hindley <ab367@sfn.saskatoon.sk.ca>
To: Tak Utsumi <utsumi@friends-partners.org>
cc: Gary Garriott <garyg@vita.org>,
John Shakespear <john.shakespeare@js.pentagon.mil>,
"Dr. Joseph N. Pelton" <ecjpelton@aol.com>,
"Peter T. Knight" <ptknight@attglobal.net>,
Steve Tom <stethen@teleportconsulting.com>,
Peter Marshall <pminhindon@aol.com>, Jim Casey <jcasey@ifc.org>,
Jim Casey <caseyja@gtlaw.com>, Demetri Heliotis <jheaps@fcc.gov>,
"Ms. Irene Flanner" <iflanner@fcc.gov>,
"Mr. Tony Trujillo" <tony.trujillo@intelsat.int>,
"Mr. Myron Nordquist" <myron_nordquist@burns.senate.gov>,
"D.K. Sachdev" <dksachdev@worldspace.com>,
Gracia Hillman <ghillman@worldspace.org>, John Mack <jlmack@erols.com>
Subject: Re: Rescue of Iridium's 66 satellites at $5 billion

Hi!

Enclosed is an article that was in the Newspaper.

Why can we not as a group go to the President of the United States ask to
take over the satellites for humanatarian use.

This statement could be also one of the main factors.

" In another example why we should just trust marketplace forces, Iridium,
the bankrupt global satellite telephone company, will begin spiraling 88 giant
satellites toward Earth and a fiery death. [Don't you worry, we believe
they'll all crash in Schaumburg, IL] "

This statement could be the answer to take over the satellites.

(Don't you worry, we believe they'll all crash in Schaumburg, IL] "

I will have a hard time sleeping at night and will be watching the sky to
see if one of these satellites will come crashing down on me or the people
of the World.

Save the EARTH USE THE SATELLITES FOR THE WORLD.

Comments Please:

Ben Hindley
ICT@CCESS FOR ALL
Saskatoon, Saskatchewan, Canada
=================================
SATELLITES

IRIDIUM, BANKRUPT, IS PLANNING A FIERY ENDING FOR ITS 88 SATELLITES
Issue: Satellites In another example why we should just trust marketplace
forces, Iridium, the bankrupt global satellite telephone company, will begin
spiraling 88 giant satellites toward Earth and a fiery death. [Don't you
worry, we believe they'll all crash in Schaumburg, IL] Total cost for the
system which promised anytime communication with anyone, anywhere: over $5
billion. Total subscribers: ~55,000 -- not enough to pay the interest on the
start-up costs. "It was a technology that didn't live up to its hype or its
billing," said James Grant, editor of Grant's Interest Rate Observer, who has
chronicled Iridium's problems, noting that the telephones could not even be
used indoors. "People chose to overlook the risks because they were bedazzled
by the technology and the promoters or sponsors."
[SOURCE: New York Times (C1), AUTHOR: David Barboza]
(http://www.nytimes.com/library/tech/00/04/biztech/articles/11iridium.html)
****************************************
ATTACHMENT V

Date: Wed, 12 Apr 2000 04:56:46 -0400
From: John Mack <jlmack@erols.com>
To: utsumi@friends-partners.org
Subject: Re: Rescue of Iridium's 66 satellites at $5 billion (Part II/Responses)

Tak,

Just prior to Iridium's demise, I had initiated talks between Iridium
and WorldSpace (my former employer), to combine their systems to provide
virtually global Internet. The Iridium system would provide the thin
uplink and the Worldspace (WS) system the relatively fast downlink.
Utilizing the WS receiver (cost about $300) attached to a computer would
provide the ability to do telemedicine, distance education, etc., as
well as provide commercial possibilities for entities to have video
conferencing (15 frames/sec) virtually anywhere. The humanitarian
aspects could be approached through the WS foundation
<www.worldspace.org> with income from the commercial side
<www.worldspace.com> offsetting some (all?) of the operational costs.
Since Iridium collapsed I don't know where these talks ended but it
might be worth exploring the technological feasibility of such an
approach for VITA's mission as well as the mission of others who have
shown interest.

John
****************************************
ATTACHMENT VI

Date: Fri, 14 Apr 2000 10:54:55 +0100
To: Tak Utsumi <utsumi@friends-partners.org>
From: Pat Hall <p.a.v.hall@open.ac.uk>
Subject: Rescue of Iridium's 66 satellites at $5 billion (Part
II/Responses)

Dear Tak,

Great action, saving Iridium for the people, may I wish you well. If there
is any support I could drum for you here in the UK, ask me and I will see
what I can do.

best wishes

Pat
****************************************

Return to Global University System Early 2000 Correspondence

ATTACHMENT V

Excerpt from
<http://www.nytimes.com/library/tech/00/04/biztech/articles/11iridium.html>

April 11, 2000

Iridium, Bankrupt, Is Planning a Fiery Ending for Its 88 Satellites

By DAVID BARBOZA

*Two PHOTOs here*
Scott Troyanos for The New York Times
Satellites built for Iridium's system by Motorola were controlled by people
like Bill Greenen, foreground, and Alex Pescaru.
-----------------------------

[C] HICAGO -- The jokes about the government using the satellites for "Star
Wars" target practice don't seem so funny anymore.

In the coming months, Iridium LLC, the bankrupt global satellite telephone
company, will begin sending 88 giant satellites spiraling toward Earth, where
they will burn up in a fitting and fiery end to one of the colossal corporate
failures in recent memory.

After spending more than $5 billion on a system that promised to communicate
"with anyone, anytime, virtually anywhere in the world," Iridium could muster
only about 55,000 subscribers, not enough even to pay interest on its start-up
costs.

The company's shares plummeted months ago, and banks, bondholders and
investors are left to wince at their staggering losses. Motorola, which
started it all, has written off more than $2.5 billion.

Now, the company finds itself fumbling through a messy and sometimes comic
liquidation. Customers are angry, half the system is shut down, the other half
is apparently still operating, and Iridium is still holding out the hope that
someone will buy the satellite network before it goes up in flames.

One thing is clear, though: rarely has a company so ambitious, and so heavily
financed, fallen so hard and so quickly.

"It was a technology that didn't live up to its hype or its billing," said
James Grant, editor of Grant's Interest Rate Observer, who has chronicled
Iridium's problems, noting that the telephones could not even be used indoors.
"People chose to overlook the risks because they were bedazzled by the
technology and the promoters or sponsors."

Two satellite networks are trying to keep the idea alive: ICO Global
Telecommunications, which is trying to climb out of bankruptcy under its new
owner, Craig O. McCaw, the cellular phone pioneer; and Globalstar LLC, the
venture backed by Loral Space and Communications and led by Bernard Schwartz,
who once called Iridium a "three-legged horse."

But as they do, here is what it looks like to shut down a global satellite
service that officially lasted 474 days.

According to Motorola, whose engineers conceived the idea in the Arizona
desert in 1987, time and marketing failures hurt the project.

"This was a technology that worked," said Scott Wyman, a spokesman for
Motorola, at headquarters in Schaumburg, Ill., near Chicago. "But Iridium
management pursued a marketing plan that in retrospect may not have been
targeted at the most attractive available market."

Iridium itself has little to say, with all calls referred to the deputy
general counsel. The chief executive resigned quietly on March 17 -- the day
Iridium, in a letter to subscribers, declared itself dead.

Now, under the scrutiny of a bankruptcy judge, a few remaining executives,
lawyers and accountants are trying to safely dismantle a service that took 12
years to create, and less than two to destroy.

The company has vacated its Washington headquarters, tried to sell its
building in Landsdowne, Va., held a job fair for employees, and talked to the
U.S. Space Command Center in Colorado Springs, Colo., about the proper time to
dispose of a constellation of low-earth-orbit satellites traveling at 17,000
miles an hour. While a few executives hold out hope that someone might buy the
satellites, this seems increasingly unlikely.

A few loyal subscribers still get free service in North America. Motorola sent
out notices saying that service would end at 11:59 p.m. on March 17. But the
company continues to offer limited service, largely because the federal
government, an early investor, is still trying to wean itself away from the
global network.

Some of those who lost service are not happy. For Jack Conroy, who flies an
ambulance helicopter in Anchorage, Alaska, Iridium phones were a lifeline.
"Communications up here is real difficult," he said. "If I'm in a canyon, it's
hard to get service. With Iridium, you could."

The death knell was actually sounded more than a month ago, when McCaw decided
against bailing out the company and creating a larger satellite network with
ICO Global.

--------------------------
The big thinkers are
still baffled: How could
so promising a venture go
so wrong?
--------------------------

On March 2, Ronald Brouckman, Iridium's chief operating officer, briefed the
staff on what life would be like once McCaw took over. But later that night,
an employee said, "McCaw called our COO and said, 'I've changed my mind."'

Many employees were already demoralized. In the final months, they say, John
Richardson, the chief executive, rarely showed up at headquarters. Richardson,
a former executive at Barclays Bank, was unavailable for comment.

Many who held on were dubbed "Iridiots," and they felt that way. Employees say
they often sat in quiet offices playing computer solitaire or perfecting their
Microsoft PowerPoint presentations.

"The whole thing was surreal," a former employee said. "We were just waiting
for the clock to run out."

Motorola has stopped making Iridium phones at its Libertyville, Ill., plant
and has closed its satellite communications division in Phoenix.

Eleven independent gateway companies that sold service around the world are
being dismantled. Iridium North America, whose investors besides Motorola
include Sprint and BCE of Canada, had 30,000 subscribers at its peak. The
company, based in Chandler, Ariz., is offering free service until Motorola
pulls the plug, but has trimmed its staff to 30 from 175.

The Defense Department, which had a $200 million contract to participate in
the project, also continues to use the service. It says it spent $140 million
building its own gateway in Hawaii and paying Motorola to run it, and buying
3,000 satellite handsets. Now the Pentagon is looking for alternatives. "We're
going to have to evaluate our next step," a Defense Department spokeswoman,
Susan Hanson, said.

The Iridium network is controlled by the Satellite Network Operations Center,
in Landsdowne, which is operated by Motorola. About 100 staff members are
still on hand, monitoring the satellites, taking calls and coordinating with
the Space Command Center to bring the satellites down.

The command center, a sort of traffic cop that tracks objects in space,
including tiny debris, will essentially offer guidance to Motorola about where
and when to deorbit the satellites.

"We're actively tracking 8,200 objects -- 8,120 to be exact," said Capt.
Steven Ramsay. "We even track an astronaut's glove from a Gemini mission in
the 1960s."

According to the Space Command Center, Iridium will probably deorbit the
satellites four at a time, firing their thrusters to drop them into the
atmosphere, where they will most likely burn up. But "they expect to have some
parts survive because these are pretty big satellites," a spokesman, Maj.
Perry Nouis, said.

It took 12 years and more than 20 million lines of computer code to build the
system, but less than two years to realize that not enough people wanted to
use it. It will take two years more to pull the satellites out of orbit.

Iridium has few other assets, with a skeleton staff of about 60 employees --
mostly accountants, lawyers and other administrative people. After McCaw
pulled out, Iridium told the bankruptcy court that no one had put up the $10
million necessary to qualify as a serious bidder, and he laid off 175 people.

There were plenty of inquiries, but some seemed almost comical. Some did not
have the money, Iridium officials say, others did not have even a proper
telephone number. They keep coming. "I still get 50 calls a day," said Robert
N. Beury, Iridium's deputy general counsel. "Some people want to go up with
space tugs, and move the things somewhere else."

Looking back, no one can make sense of it. Wall Street loved Iridium; there
were supposed to be 1.6 million subscribers this year, and 27 million by 2007.
Sure, there were bulky handsets, technical glitches and a poor marketing
effort, analysts say, but how could they have been this wrong?

Easy, others say.

"Everyone in the industry has looked at Iridium as the pioneers of satellite
phone service," said Rikki Lee, editor of Wireless Week. "And when they
couldn't find anyone to pay $3,000 for a phone and $7 a minute for service, it
was like -- duh! There aren't all that many people who track up to the North
Pole."

----------------------------------------------------------
Ask Technology questions and tell other readers what you know. Join Abuzz, a
new knowledge network from The New York Times.
Copyright 2000 The New York Times Company
****************************************

Return to Global University System Early 2000 Correspondence

List of Distribution

Gary Garriott
Director, Informatics
Volunteers in Technical Assistance (VITA)
1600 Wilson Blvd., Suite 500
P.O. Box 12438
Arlington, VA 22209-8438
703-276-1800 X19
Fax: 703-243-1865
garyg@vita.org
vita@vita.org
ECONET: VITA
Telex: 440192 VITAUI
Cable: VITAINC
www.vita.org/satvitpo.htm -- Press release on Consorcio SAT/SatelLife/VITA
www.vita.org/consort.htm -- Press release on satellite-users coalition
www.vita.org/slife.htm -- Press release on SatelLife-VITA

Mr. Jim Miller
President
SYNECTICS, Ltd.
2 Nickerson Street, Suite 100
Seattle, WA 98109-1652
206-283-9420
206-283-4136
Mobile: 206-619-2144
Fax: 206-283-4538
Paging: 206-955-1036
ShareVision: 206-283-4538 (call 206-283-9420 first)
ISDN Equipped - 206-218-0027/8 (call 206-283-9420 first)
jimmsl@aol.com
jwm@synecticsltd.com
http://synecticsltd.com
E-Rate SPIN - 143004591
74640.2214@compuserve.com

Professor Sam Lanfranco (Fax: 416-736-5737)
Director, Distributed Knowledge Project
York University, 240 YL - CERLAC
4700 Keele Street
Tronto, Ontario
CANADA M3J 1P3
416-736-5237
416 816-2852
(cell/ans_mach)
Fax: 416-946-1087
lanfran@yorku.ca
SLanfranco@dkglobal.org
http://www.dkglobal.org

John W. Hibbs
Director
Benjamin Franklin Institute of Global Education
2529 Front Street
San Diego, California 92103
USA
Tel: +1-619-230-0212
Fax: +1-619-270-2667
hibbs@bfranklin.edu
http://www.bfranklin.edu

Ben Hindley
ICT Consultant, Distance Education Consultant
President
TeleMED International, Canada
H. Peace and K. Barn (ICT STORE) International Limited
201-502 Tait Crescent
Saskatoon, Saskatchewan
Canada, S7H 5L2
(306) 374-0346
ab367@sfn.saskatoon.sk.ca

John L. Mack, CEO
John L. Mack & Associates
International Telecommunications Investment Consultant
P.O. Box 567
Upper Marlboro, MD 20773-0567
301-627-2188
Fax: 301-627-2188
jlmack@erols.com

Professor Pat Hall
Computing Department
Open University
Milton Keynes, MK7 6AA
U.K.
tel: 01908 652694 (work at OU)
0181 980 4720 (home and work - 020 8980 4720 from 22nd April)
p.a.v.hall@open.ac.uk

D.K. Sachdev
Senior Vice President
Engineering & Operations
Worldspace Corporation
2400 N Street, NW
Washington, D.C. 20037 USA
Tel: 202 969 6000
Direct: 202 969 6210
Fax: 202 969 6003
dsachdev@worldspace.com
**********************************************************************
* Takeshi Utsumi, Ph.D., P.E., Chairman, GLOSAS/USA *
* (GLObal Systems Analysis and Simulation Association in the U.S.A.) *
* Laureate of Lord Perry Award for Excellence in Distance Education *
* Founder of CAADE *
* (Consortium for Affordable and Accessible Distance Education) *
* President Emeritus and V.P. for Technology and Coordination of *
* Global University System (GUS) *
* 43-23 Colden Street, Flushing, NY 11355-3998, U.S.A. *
* Tel: 718-939-0928; Fax: 718-939-0656 (day time only--prefer email) *
* Email: utsumi@columbia.edu; Tax Exempt ID: 11-2999676 *
* http://www.friends-partners.org/GLOSAS/ *
**********************************************************************

Return to: Global University System Early 2000 Correspondence
Web page by Steve McCarty, World Association for Online Education President>