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by Theresa Foley
Broadband satellite projects will find it difficult, if not impossible, to raise the large amounts of capital this year necessary to build out their systems, which cost anywhere from hundreds of millions to many billions of dollars, depending on their architecture. The gloomy economy, the general malaise of the capital markets and a growing investor distaste for satellites have combined to leave nearly a dozen satellite broadband hopefuls with few options for financing in 2001, leaving most to play a survival game.
Remember the old Beach Boys song that goes, "Catch a Wave, Sitting on Top of the World"? Phil Spector, a satellite industry lawyer who focuses often on broadband issues, says that in 2001, the satellite industry is not riding the wave but is buried beneath two of them. The bankruptcies of some of the most prominent mobile-satellite players represent the first tidal disaster to hit; and, trouble in the terrestrial broadband business, which has not rolled out smoothly or provided good news for stock investors, is the second wave of bad news to crash down on satellite broadband players. "Companies are trying to make it in satellite and broadband (at a time) when neither is a good place to be," Spector says.
Just how severe the wreckage will be by year-end is anybody's guess but in early 2001, there were numerous signs that the happy-go- lucky days...